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Suit challenges FERC authority to fine other federal agencies for reliability violations


From the February 27, 2013 issue of Public Power Daily

Originally published February 27, 2013

By Robert Varela
Editorial Director

The Department of Energy, the Department of Interior and the Southwestern Power Administration have asked a federal appeals court to review the Federal Energy Regulatory Commission’s orders finding that Section 215 of the Federal Power Act (FPA) authorizes both it and the North American Electric Reliability Corp. to fine a federal entity that violates a mandatory reliability standard. The commission’s July 19 and Dec. 20 orders also affirmed NERC’s imposition of a $19,500 penalty against the Southwestern Power Administration. The suit was filed Feb. 15 in the U.S. Court of Appeals for the District of Columbia Circuit.

FERC erred in concluding that Section 215 of the FPA "unequivocally and unambiguously" waives the federal government’s sovereign immunity against monetary penalties, and erred in concluding that Section 215 is a "separate grant of penalty authority" free from Section 316A, which limits penalties to persons, DOE and others said in filings in FERC proceedings.

Allowing a federal power marketing administration to be subject to monetary penalties that are then passed through to preference customers is inconsistent with the federal government's mandate to provide preference customers access to the energy at the "lowest possible rates," two groups representing PMA customers, the Southwestern Power Resources Association and Mid-West Electric Consumers Association, said in comments filed with FERC last year.

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Senior Vice President, Publishing 
Jeanne Wickline LaBella
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Robert Varela
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