ELR Citation: 51 ELR 20154
No(s). 20-1156 (D.C. Cir. Aug 6, 2021)

The D.C. Circuit granted in part and denied in part a challenge to FERC's orders addressing complaints over the results of a 2015 auction for electrical capacity in Illinois. A public interest group had complained the auction had resulted in electricity rates that were unjust and unreasonable, that a certain power company had illegally manipulated the market, and that the auction results should be reviewed to determine whether they actually produced just and reasonable rates. Following the complaints, FERC identified numerous problems with the existing auction rules and ordered that they be changed prospectively, but ruled that the results of the 2015 auction were just and reasonable, rejected the contention that the company manipulated the market, and rejected the argument that it must review individual final auction prices for justness and reasonableness before those prices go into effect. The group petitioned the court, arguing the Commission failed to meet its obligation under the Federal Power Act to ensure just and reasonable rates, that it failed to adequately explain its decision to close its investigation into market manipulation, and that it failed to adequately explain its conclusion that the auction results were just and reasonable. The appellate court rejected the group's argument that the market-based rate scheme required the Commission to approve each individual auction price, and found that it lacked the power to review the Commission's discretionary decision to close its investigation, but agreed that FERC failed to adequately explain why the problems it identified in the existing auction rules, and ordered to be fixed going forward, did not also affect the fairness of this auction. It therefore granted in part and denied in part the petition to review, and remanded to the Commission for further proceedings.