ELR Citation: 53 ELR 20120
No(s). 18-60575 (5th Cir. Aug 2, 2023)

The Fifth Circuit, 2-1, granted a petition to review FERC orders it previously vacated and remanded, which instructed utilities in the WestConnect transmission planning region on how to implement a cost allocation scheme for grid improvements in the region. A utility company argued the orders, which required public utilities in the region to plan and pay for transmission lines that would directly benefit other utilities outside of the region, violated the Federal Power Act (FPA) and Order No. 1000, which states that the “cost of transmission facilities must be allocated to those within the transmission planning region that benefit from those facilities in a manner that is at least roughly commensurate with estimated benefits.” The utility also argued that FERC failed to give an adequate explanation for the orders on remand. The court concluded the orders were incompatible with the FPA's mandate for just and reasonable rates and with Order No. 1000's application of the cost causation principle, and that FERC failed to adequately explain why it was forcing its jurisdictional utilities to assume the costs of providing service to non-jurisdictional utilities. It reversed the orders.