Wholesale electricity customers who sued the Federal Energy Regulatory Commission do not have standing to pursue claims the agency improperly issued a nondiscrimination mandate, the Ninth Circuit ruled.
The Bonneville Power Administration sells electricity generated from dams in the Columbia River in the Pacific Northwest, largely to public and private utilities.
In 2011, the Administration enacted a policy that allowed it to curtail customers’ electricity generation through dispatch orders, in response both to expected high water levels in the Columbia River Basin, and an increase in wind power generation.
The policy was effective between May 2011 and the end of March 2012.
“Dispatch Orders were to be issued only as a last resort during ‘overgeneration events’ when spill limits were reached, water levels required Bonneville to generate electricity that outpaced demand, and excess hydropower could not be disposed of at low or zero prices or by curtailing non-wind generation,” wrote U.S. Circuit Judge Andrew Hurwitz on behalf of the three-judge panel.
In June 2012, a group of wind generators filed a complaint with the Federal Energy Regulatory Commission, seeking a order revising the administration’s policy. Several wholesale energy customers joined the complaint, claiming the administration could pass electricity costs onto customers in future proceedings.
Later that year, the commission approved an administration policy that allowed it to redispatch wind generation, called it “a balanced interim measure that addressed Bonneville’s oversupply problems,” but ordered the administration to propose a different cost-sharing plan.
FERC had previously concluded that the redispatch policy “results in noncomparable transmission service that unfairly treats non-Federal [i.e., wind] generating resources connected to Bonneville’s transmission system.”
After revisions, the commission found BPA’s methodology for oversupply costs complied with the commission’s nondiscrimination mandate.
A number of the administration’s “preference customers” and trade organizations representing their interests petitioned the FERC orders for review before the Ninth Circuit.
The petitioners argued that FERC’s nondiscrimination mandate exceeded the agency’s authority because the redispatch of generation involved generation, and not transmission. They also argued the commission did not give a reason for the mandate or consider relevant evidence.
While the judges found the petitioners “plainly” suffered imminent injury in the form of increased energy prices, they concluded the consumers do not have statutory standing under FERC rules.
“Ultimate consumers of energy plainly stand to benefit from open access and increased competition in energy markets,” Hurwitz wrote. “But the interests of Bonneville’s wholesale energy customers are different. They seek to reduce Bonneville’s costs, which are passed on to them by statutory mandate.”
The panel denied the petitioners’ petitions for review.
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