The U.S. Court of Appeals for the D.C. Circuit has upheld a Federal Energy Regulatory Commission decision denying Kimball Wind, LLC’s request to order the Western Area Power Administration to pay for interconnection costs under section 211A of the Federal Power Act.
The June 13 decision affirms the limited scope of FERC’s authority under section 211A over non-jurisdictional utilities, including public power.
APPA, joined by the Large Public Power Council, filed an intervenor brief in the case in support of FERC, arguing that section 211A does not provide a vehicle of relief for entities that are neither current nor prospective transmission or interconnection customers of a non-jurisdictional transmitting utility.
In 2016, the Municipal Energy Agency of Nebraska selected Kimball Wind to upgrade an existing wind generation facility, which required Kimball Wind to interconnect to WAPA’s transmission system.
WAPA studied the interconnection and determined that a substation expansion would be required. Kimball Wind ultimately paid, under protest, around $6 million for the substation expansion.
Kimball Wind then filed a complaint at FERC under section 211A asking for reimbursement of those costs, either through a cash payment from WAPA or a three-party rate-crediting agreement between WAPA, MEAN, and Kimball Wind.
APPA and LPPC intervened in the proceeding before FERC, urging FERC to deny Kimball Wind’s request to avoid expanding the scope of section 211A into a general rate regulatory provision over public power utilities.
The Commission denied Kimball Wind’s request, because MEAN—not Kimball Wind—was WAPA’s transmission service customer and Kimball Wind was not seeking an order for transmission service from WAPA.
The court explained the limited scope of section 211A: the Commission may only order an unregulated transmitting utility to provide transmission services on comparable terms and rates.
Since Kimball Wind was seeking reimbursement, not transmission service, the court held that FERC was correct to deny Kimball Wind’s request.
The court was unpersuaded by Kimball Wind’s argument that an order to reimburse transmission system expansion costs is effectively an order to provide transmission service. Ordering WAPA to make a cash refund to Kimball Wind would not require WAPA to provide transmission service or modify the terms on which WAPA provides transmission services to any other party.
Similarly, an order requiring WAPA to grant MEAN a rate-credit that MEAN would use to rebate Kimball Wind not result in either WAPA or MEAN providing any transmission service to Kimball Wind.
APPA noted that public power is generally exempt from FERC’s ratemaking jurisdiction under sections 205 and 206 of the Federal Power Act and has successfully argued in the past that section 211A is a narrow exception to that general rule.
FERC has, indeed, rarely used its section 211A authority, APPA said.
The D.C. Circuit’s decision in Kimball Wind adds support for APPA’s position that section 211A’s scope is limited.
