Summary
This D.C. Circuit opinion reviews a Federal Energy Regulatory Commission order denying Energy Harbor, LLC's complaint regarding over $12 million in nonperformance penalties assessed by PJM Interconnection. The court analyzes whether PJM correctly applied its Tariff's penalty exemption for generators undergoing approved maintenance outages during a severe winter storm. Finding that PJM properly calculated expected performance based on the facility's total installed capacity rather than individual generating units, the court affirms FERC's decision and denies Energy Harbor's petition for judicial review.
Topics
Practice areas
Questions Presented
- Whether PJM correctly applied the Section 10A(d) exemption to Energy Harbor’s performance shortfall.
- Whether the D.C. Circuit should defer to FERC’s interpretation of the tariff under the APA.
Holdings
- The court held that PJM correctly interpreted Section 10A(d); the maintenance outage was not the sole cause of the performance shortfall, so the exemption did not apply.
- The court affirmed that substantial deference is owed to FERC’s reasonable interpretation of ambiguous tariffs.
Key quotations
“PJM correctly evaluated whether the maintenance outage reduced the Sammis Plant’s Installed Capacity enough to constitute the “sole” cause of the Performance Shortfall.” (at end of opinion)
Factual background
PJM assessed $12.1 million in penalties against Energy Harbor for nonperformance during a winter storm, despite a maintenance outage and forced outages at the Sammis Plant. The dispute centered on whether Section 10A(d) of PJM's tariff excused the shortfall because of the maintenance outage.
Procedural history
Energy Harbor filed a complaint with FERC challenging PJM penalties; FERC denied the complaint and a rehearing request. Energy Harbor then petitioned the D.C. Circuit for review.