Maryland Public Service Commission v. Federal Energy Regulatory Commission

Summary

The United States Court of Appeals for the District of Columbia Circuit denied Maryland and New Jersey's petition challenging electricity rates established under the Federal Energy Regulatory Commission's Reliability Pricing Model. The court held that FERC adequately explained why the rates were just and reasonable and that substantial evidence supported its conclusion that price increases resulted from transmission constraints and legitimate market factors rather than supplier market power.

Holdings

1. FERC adequately explained why the challenged rates were just and reasonable; it was not limited to finding merely that the Reliability Pricing Model's provisions had been followed.
2. Substantial evidence supported FERC's conclusion that the price increases were attributable to legitimate causes, not the exercise of market power by electricity-capacity suppliers.
3. FERC's orders adopting and applying the Reliability Pricing Model were not arbitrary and capricious and should be upheld.
4. A petitioner challenging a rate need not propose an alternative rate that is itself just and reasonable; determining and fixing the replacement rate is FERC's responsibility.

Questions Presented

1. Whether FERC adequately determined that the challenged electricity-capacity rates were just and reasonable.
2. Whether substantial evidence supported FERC's finding that the challenged price increases resulted from legitimate factors, including transmission constraints and incentives for new capacity, rather than supplier market power.
3. Whether FERC's adoption and application of the Reliability Pricing Model was arbitrary and capricious.

Disposition

denied