Court lambasts FERC’s lengthy delay in ratemaking disputes

Source: By Barbara Grzincic, Reuters • Posted: Sunday, January 22, 2023

The Vermont Yankee nuclear power plant in Vernon, Vermont sits along the Connecticut River across from Hinsdale
Illustrative: The Vermont Yankee nuclear power plant in Vernon, Vermont sits along the Connecticut River across from Hinsdale, New Hampshire, August 27, 2013. Entergy Corp. announced it will will shut down the Vermont Yankee nuclear power plant in 2014 citing high costs tied to regulation and competition from cheap natural gas, bringing to an end a long battle with state politicians and environmentalists seeking to close the plant. REUTERS/Brian Snyder

(Reuters) – A U.S. appeals court chided the Federal Energy Regulatory Commission for taking four to six years – and counting – to resolve three complaints about the rates charged by the Entergy subsidiary that operates the Grand Gulf Nuclear Station in Mississippi.

The 5th U.S. Circuit Court of Appeals on Wednesday stopped short of setting a deadline for FERC to rule on the ratemaking disputes, in which the Louisiana Public Service Commission alleges that FERC-approved rates are overcharging consumers hundreds of millions of dollars.

However, the court rejected every attempt by FERC to justify its timeline, and gave the regulator just 21 days to provide “a meaningful explanation” – or “risk judicial intervention.”

While Congress “did not impose a hard and fast deadline for FERC to resolve complaints, it certainly anticipated greater alacrity than this,” Circuit Judge Patrick Higginbotham wrote for the unanimous three-judge panel.

Since FERC can only order refunds for 15 months of overcharges, every day over that limit results in “ongoing irreparable harm to consumers,” the court said.

FERC also put some of the blame on the D.C. Circuit Court of Appeals, saying that rulings in 2017 and 2022 had required it to change its methodology. But those two “speedbumps — five years apart — do not explain proceedings lasting four to six years,” Higginbotham wrote.

Finally, FERC argued that it was handling 13 ratemaking disputes involving the Entergy system, some of them older than Louisiana PSC’s remaining three cases, and it would be unfair to let Louisiana “jump the queue.” The 5th Circuit called that argument “unhelpful, given that LPSC really complains about the age of that wait list rather than its position in it.”

In an email Wednesday, Entergy spokesman Neal Kirby defended FERC’s pace “in light of the complexity of the cases” against Grand Gulf’s operator, System Energy Resources Inc.

FERC spokeswoman Mary O’Driscoll said the commission has a policy of “not commenting on court-related matters.”

Lawyers for the Louisiana PSC and two intervenors, the Arkansas PSC and the City of New Orleans, had no immediate response to requests for comment.

The case now returns to FERC, which is down to four members – two Democrats, two Republicans – after Senator Joe Manchin of West Virginia , a Democrat, refused to schedule a hearing on President Joe Biden’s renomination of Chairman Richard Glick for a five-year term. Biden elevated Commissioner Willie Phillips to Acting Chairman this month.

The case is In re: Louisiana Public Service Commission, 5th U.S. Circuit Court of Appeals, No. 22-60458.

For Louisiana PSC: Michael Fontham of Stone Pigman Walther Wittmann

For Intervenors: Harvey Reiter of Stinson LLP (Arkansas PSC) and Jennifer Anne Morrissey of Dentons (City of New Orleans)

For FERC: Matthew Glover of the U.S. Justice Department and Robert Solomon of FERC

For Intervenors Entergy Corp. and System Energy Resources Inc: Sanford Weisburst and Ellyde Thompson of Quinn Emanuel Urquhart & Sullivan