Academic journal article Energy Law Journal

Report of the Judicial Review Committee

Academic journal article Energy Law Journal

Report of the Judicial Review Committee

Article excerpt

This report sumarizes cases reviewing decisions made by the Federal Energy Regulatory Commission. The time frame covered by this report is January 2007 to December 2007.


A. Ripeness

The Federal Energy Regulatory Commission (FERC or the Commission), as lead federal agency in authorizing LNG facilities, issued a conditional authorization to Weaver's Cove Energy, LLC (WCE) to site, construct, and operate a liquefied natural gas (LNG) terminal in Fall River, Massachusetts.1 The FERC conditioned its approval on (1) approval by the U.S. Coast Guard (USCG) of WCE's transportation plan and (2) the Department of Interior finding that the project would not have a substantial adverse effect on the Taunton River's potential designation as a Wild and Scenic River.2 Opponents of the LNG terminal appealed the FERC's order.3 The Court declined "to review the merits of FERC's conditional project approval because it [was] not yet ripe for review."4 Noting that the "ripeness doctrine is designed to prevent courts from entangling themselves in abstract disagreements . . .' and from improperly interfering in the administrative decision-making process,"5 the Court stated, "WCE's proposed LNG project may well never go forward because FERC's approval of the project is expressly conditioned on approval by the USCG and the DOI."6

B. Choice of Law

Southern California Edison Company (SCE) contracted with Corona, California (Corona) to construct interconnection facilities and provide wholesale distribution service and filed the agreements with the FERC. The agreements required Corona to pay SCE for the interconnection facilities and for SCE to determine the actual cost of the facilities and provide Corona with a final invoice within twelve months of the in-service date. Twenty months after the contract deadline, SCE filed revised tariff sheets to collect interconnection facility costs for which it had never provided a final invoice.9 The FERC concluded that SCE's revised tariff sheets were contrary to the contract and rejected them.10 The contract included a choice of law provision that provided, "[e]xcept as otherwise provided by federal law, this Agreement shall be governed by and construed in accordance with, the laws of the state of California."11 SCE requested rehearing, asserting that the FERC should have analyzed the contract under California law, and argued that its failure to provide a timely invoice was not a material breach justifying Corona's failure to pay for the interconnections facilities.12 The FERC determined that it was appropriate to apply its precedent because SCE's request involved interpreting a jurisdictional agreement on file with the FERC and rejected SCE's arguments regarding the results about the outcome under California law as irrelevant and a red herring.13 SCE sought judicial review of the FERC's orders.14 The Court stated, "[t]hus, FERC appears to have selected federal law over California law simply because the Agreement was filed with the Commission, without identifying any difference between federal and California law to justify [the] selection under the [except as otherwise provided by federal law] clause of the choice of law provision."1 The Court ruled that the FERC must give effect to the unambiguous intent of the parties and that filing of the agreement did not alter the obligation to apply state law16 and remanded the matter to the FERC to enforce the choice of law provision.17

C. Agency Reasoning

In Connecticut Dept. of Public Utility Control v. FERCr,18 ISO New England, Inc. filed an installed capacity requirement (ICR) at the FERC under section 205 of the Federal Power Act. The Connecticut Department of Public Utility Control (CDPUC) intervened in the section 205 proceeding and asserted that the FERC lacked statutory authority to regulate generation resource adequacy.19 In both its initial order and its order denying rehearing, the FERC ruled that the ISO tariff and an agreement between participating utilities granted it the jurisdiction to accept the ICR. …

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