Supreme Court to Consider Challenges to Blocked FERC Decisions

On September 30, the Supreme Court is scheduled to consider a petition filed by the Ohio Public Utilities Commission earlier this year challenging a lower court decision that upheld a deadlocked FERC decision in 2021.

FERC is an independent agency composed of up to five commissioners appointed by the president that regulates the interstate transmission of electricity, natural gas, and oil. The commission has traditionally been comprised of people from both sides of the political spectrum, with each commissioner serving a five-year term. Changes in administration and term limits can often result in the commission being comprised of only four people, leading to tie votes.

That was the case with the 2021 decision in question, in which FERC issued its minimum offer price rule that aimed to increase renewable energy for the nation’s largest RTO, PJM Interconnection, according to E&E News.

Specifically, the rule removed pricing restrictions on renewable energy projects like solar, wind and nuclear, which were subsidized by states and participated in PJM’s wholesale auction. It came after PJM’s 2019 MOPR favored coal and natural gas. The agency didn’t get to vote on the rule, which ended in a 2-2 split, but the regulation went into effect anyway.

Last year, the U.S. Court of Appeals for the 3rd Circuit upheld the revised MOPR. The decision stems from the Federal Energy Act, amended by Congress in 2018, which allows courts to conduct judicial review of blocked decisions.

In deferring to FERC, the Ohio PUC argued that the court had undermined “the delicate balance of power between Congress, administrative agencies and the Court.” E&E News reported.

The PUC also reportedly argued that the court failed to hold the agency accountable for its actions, which would have expanded its authority. “By requiring an agency to provide a defensible justification for its actions, the agency reasoning requirement provides an important check on an agency’s power,” the appeal reads. “The Third Circuit has brushed aside that check.”

The petition to the Supreme Court follows a dissent by James Danly, one of the Republican FERC commissioners who opposed the 2021 rule.

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At the time, he said the 2019 MOPR revisions were “deliberately ineffective” in addressing the market impact of state-subsidized renewable projects on coal and gas. He also warned that treating a deadlocked FERC vote as approval “would present a handful of novel but foreseeable problems on appeal,” according to E&E News.

It is not yet clear whether the Supreme Court will take up the case in the coming weeks. The high court could announce as early as next month whether it will grant or reject a decision on the appeal.