[1]Oneok, Inc. v. Learjet, Inc., 135 S. Ct. 1591 (2015) (“Learjet”); FERC v. Elec. Power Supply Ass’n, 136 S. Ct. 760 (2016) (“EPSA”); Hughes v. Talen Energy Mktg., LLC, 136 S. Ct. 1288 (2016).[2]Federal Power Act, 16 U.S.C. §§ 791a, et seq.[3]Natural Gas Act, 15 U.S.C. §§ 717, et seq.[4] 16 U.S.C. § 824.[5]Fed. Power Comm’n v. Florida Power & Light Co., 404 U.S. 153 (1972).

The Court found that Order No. 745 only addresses transactions occurring in RTO/ISO wholesale markets, and the fact that the order may have an impact on retail sales is “of no legal consequence.” Referring to the section of the FPA that prohibits FERC from regulating retail sales, 16 U.S.C. § 824(b), the Court stated that “[w]hen FERC regulates what takes place on the wholesale market, as part of carrying out its charge to improve how that market runs, then no matter the effect on retail rates, §824(b) imposes no bar.” The Court rejected arguments by the Electric Power Supply Association (“EPSA”) that FERC had usurped state power because the order “effectively” regulates retail rates by causing retail customers to consider both the cost of making such a purchase of power, and the cost of forgoing a possible demand response payment.

it to make appointments to Evergy’s board, those appointees are independent of and not compensated by Elliott. By contrast, Bluescape appointed one of its own directors to the Evergy board. FERC found that when an investor appointed a non-independent director to a public utility’s board, it would “treat that investor as an affiliate of the public utility or public utility holding company to which a non-independent director has been appointed.”22 Accordingly, FERC directed Evergy to provide additional information regarding Bluescape within 30 days and to update their asset appendix to include Bluescape’s energy affiliates.Neither TransAlta nor Evergy constitutes a major shift in FERC policy—FERC has suggested for years that the ability to appoint a non-independent director would likely make the companies involved affiliates and constitute a change in control. However, these orders have removed any ambiguity that remained regarding the significance of appointing board members.Footnotes 16 U.S.C. § 824(e). TransAlta Energy Marketing U.S. Inc., 181 FERC ¶ 61,055 (2022) (“TransAlta”) 16 U.S.C. § 824b. Evergy Kansas Central, Inc., 181 FERC ¶ 61,022 (2022) (“Evergy”).. 16 U.S.C. § 824d. Energy Policy Act of 2005, Public Law No. 109-58, 119 Stat. 594 (2005). FERC has established a number of blanket authorizations that may relieve companies in specific transactions of the obligation to make a submission under Section 203. See 18 C.F.R. § 33.1. TransAlta Energy Marketing U.S. Inc., 181 FERC ¶ 61,055 (2022) (“TransAlta”). TransAlta at P 28, quoting Public Citizen, Inc. v. CenterPoint Energy, Inc. 174 FERC ¶ 61,101, at P 33 (2021) (“CenterPoint”).TransAlta at P 29. CenterPoint at PP 32-33. See Cascade Investment, L.L.C., 129 FERC ¶ 61,011 (2009). Lack of ability to direct day to day operations is also a major factor in determining whether an investment in securities with limited voting and consent rights is “passive.” See Ad Hoc Renewable Energy Financing Group, 161 FERC ¶ 61,010, at PP 13-17 (

The National Gas Act, 15 U.S.C. §§ 717 et seq. ("NGA"), regulates interstate sales of natural gas for resale in much the same way the FPA regulates interstate sales of power. The language in the NGA regarding the requirement to file rates and FERC's power to fix unjust and unreasonable rates is nearly identical to the language in the FPA. Compare 16 U.S.C. § 824(e) (FPA) with 15 U.S.C. § 717c (NGA).In a series of cases (see United Gas Pipe Line Co. v. Mobile Gas Serv. Corp., 350 U.S. 332 (1956); Fed. Power Comm'n v. Sierra Pac. Power Co., 350 U.S. 348 (1956)), the U.S. Supreme Court articulated what is referred to as the "Mobile-Sierra doctrine." Under this doctrine, FERC must presume that a rate set by a freely negotiated wholesale-energy contract meets the "just and reasonable" requirement of the NGA and the FPA. That presumption may be overcome only if FERC concludes that the contract seriously harms the public interest.

Section 215 also grants FERC and NERC authority to impose civil penalties for an entity’s failure to comply with reliability standards, including the CIP standards. 16 U.S.C. § 824(e). Compliance with these reliability standards is consistently one of the highest priorities for FERC’s office of enforcement.

The NGA regulates interstate sales of natural gas for resale in much the same way the FPA regulates interstate sales of power. The language in the NGA regarding the requirement to file rates and FERC's power to fix unjust and unreasonable rates is nearly identical to the language in the FPA. Compare 16 U.S.C. § 824(e) (FPA) with 15 U.S.C. § 717c (NGA). In a series of cases (see United Gas Pipe Line Co. v. Mobile Gas Serv. Corp., 350 U.S. 332 (1956); Fed. Power Comm'n v. Sierra Pac. Power Co., 350 U.S. 348 (1956)), the U.S. Supreme Court articulated what is referred to as the "Mobile-Sierra doctrine."

Rates for purchases of power from a PURPA-qualified generator or “QF” cannot exceed the purchasing utility’s “avoided cost.” 16 U.S.C. § 824, et seq. (2018). We will refer to these arrangements together as “Net Energy Metering” in keeping with how FERC characterized these arrangements in the Order.

Given the differences between this case and others, it remains to be seen how this opinion might affect FERC’s ability to defend other orders affecting state jurisdiction, such as the MOPR order, where the true aim of FERC’s actions is sharply disputed.A copy of the D.C. Circuit’s decision in NARUC v. FERC may be found here. Petitioners in the consolidated case include the National Association of Regulatory Utility Commissioners, as well as American Public Power Association, National Rural Electric Cooperative Association, Edison Electric Institute, and American Municipal Power, Inc. 16 U.S.C. § 824(b)(1).See, e.g., Wholesale Competition in Regions with Organized Electric Markets, Order No. 719, FERC Stats. & Regs. ¶ 31,292 at P 47 (2009) (requiring RTOs and ISOs to amend their market rules to allow direct participation of demand response resources in RTO/ISO markets “unless the laws or regulations of the relevant electric retail regulatory authority do not permit a retail customer to participate”).See Slip Opinion at 13 (citing FERC v. Elec. Power Supply Ass’n, 136 S. Ct. 760, 772 (2016)).

On September 27, 2018, the Second Circuit Court of Appeals issued its decision in Coalition for Competitive Electricity v. Zibelman, 2nd Cir. No. 17-2654, 2018 U.S. App. LEXIS 27605 (Sep. 27, 2018).This decision, which follows the Seventh Circuit’s decision in Elec. Power Supply Assn. v. Anthony M. Star, summarized here, is the second decision in the span of two weeks to affirm a state’s subsidization of nuclear generation facilities.As in Star, the principal issue in Zibelman was whether the Federal Power Act, specifically 16 U.S.C. § 824(b)(1), which provides that the Federal Energy Regulation Commission (FERC) is to regulate the sale of electricity in interstate commerce, and the states are to regulate local distribution and the facilities used to generate power, preempts a state law that seeks to subsidize some of the state’s nuclear generation facilities in the form of zero emission credits (ZEC) credits.Following the Seventh Circuit’s lead, the Second Circuit held that the state program was not preempted by the Federal Power Act; however, the decision differed in two main respects.First, the court analyzed both implied preemption doctrines — field preemption and conflict preemption — and expressly ruled the state program was not preempted under either doctrine.As it relates to the field preemption argument, “a state law is preempted if ‘Congress has legislated comprehensively to occupy an entire field of regulation, leaving no room for the States to supplement federal law.’”The court held that the state law was not fiel

The decision — authored by the well-known jurist, Circuit Judge Frank Easterbrook — decided an issue that is very similar to an issue also currently pending before the United States Court of Appeals for the Second Circuit, the case of Coalition For Competitive Electricity, et al. v. Zibelman, et al., 2nd Cir. No. 17-2654. The issue in question is namely whether the Federal Power Act preempts a state law that sought to subsidize some of the state’s nuclear generation facilities.The Federal Power Act provision— 16 U.S.C. § 824(b)(1) — provides that the Federal Energy Regulatory Commission (FERC) is to regulate the sale of electricity in interstate commerce, whereas the states are to regulate local distribution and the facilities used to generate power. Also at issue is 20 ILCS 3855/1-75(d-5), which subsidizes failing nuclear generation facilities by providing them a “zero emissions credit.”