The Federal Energy Regulatory Commission on Feb. 21 disclaimed jurisdiction over a power purchase agreement (PPA) between JEA and the Municipal Electric Authority of Georgia (MEAG Power).
Under the PPA, MEAG Power has agreed to sell JEA a portion of the output of Plant Vogtle Units 3 and 4, two new nuclear generation units under construction in Burke County, Georgia.
In a petition for a declaratory order filed at FERC in September 2018, JEA asked FERC to declare that it has jurisdiction “over the PPA (and the transactions therein) under Section 201(b)(1)” of the Federal Power Act (FPA), even though MEAG and JEA are each exempt from regulation by the Commission as “public utilities” under Section 201(f) of the FPA (Docket No. EL18-200).
FERC decision
In its order, which was approved at the Commission’s monthly meeting, FERC notes that its jurisdiction to review the rates, terms and conditions in wholesale power purchase agreements is derived from FPA sections 205 and 206. “With one limited exception not applicable here, these statutory provisions give the Commission jurisdiction only over wholesale sales in interstate commerce by ‘public utilities,’” it said.
The Commission said that the one limited exception not applicable in the JEA proceeding, FPA section 206(e)(2), authorizes FERC to require section 201(f) entities to make refunds of short-term sales made in organized markets. “This reference to the Commission’s limited authority over sales by section 201(f) entities in this single subsection reinforces the conclusion that the Commission otherwise lacks authority over sales by section 201(f) entities under FPA sections 205 and 206,” FERC said.
MEAG Power, the seller under the PPA, is a public corporation of the state of Georgia and a municipal entity that, under FPA section 201(f), is exempt from most provisions of the FPA, “‘unless such provision makes specific reference thereto,’” the order said.
FERC said that MEAG Power does not meet the definition of a “public utility” under the FPA. Because MEAG Power is not a public utility, it has no authority to review MEAG Power’s sales to JEA under the PPA under either FPA sections 205 or 206, the Commission said.
Courts have weighed in on FERC jurisdiction
The Commission noted that courts have addressed the issue of FERC’s authority over wholesale sales by section 201(f) exempt entities.
In a case involving the Bonneville Power Administration (Bonneville Pwr. Admin. V. FERC), the U.S. Court of Appeals for the Ninth Circuit in 2005 found that the general language of FPA section 201(b)(1) does not give the Commission authority over wholesale sales by section 201(f) entities when section 201(f) specifically exempts such sales from the Commission’s jurisdiction.
And, in a case involving the City of Vernon, California (Trans. Agency of N. Cal. V. FERC), the U.S. Court of Appeals for the D.C. Circuit in 2007 held that “FERC’s authority is based on the identities of the sellers, rather than the nature of the transactions.”
Prior to FERC’s order, public power and cooperative entities voiced opposition to the JEA petition.
