Jump to Navigation
Jump to Content

Albany Eng'g Corp. v. Federal Energy Regulatory Comm'n

ELR Citation: 38 ELR 20286
Nos. No. 07-1162, (D.C. Cir., 11/28/2008)

The D.C. Circuit reversed and remanded a Federal Energy Regulatory Commission (FERC) order allowing states to regulate the reimbursement of "headwater benefits" from downstream hydropower plants to upstream dam operators. To enable upstream firms to recoup part of the cost of conferring headwater benefits to downstream licensees, Federal Power Act §10(f) directs FERC to require its downstream licensees to reimburse upstream operators "for such part of the annual charges for interest, maintenance, and depreciation thereon as the Commission may deem equitable." FERC held that §10(f) preempted state law only insofar as the state authorized charges for interest, maintenance, and depreciation. Thus it left the states free to authorize upstream firms to assess FERC licensees for all headwater improvement costs not fitting into the "interest, maintenance, and depreciation" categories. But in order to accomplish the full objectives of Congress, §10(f) must be understood to preempt all state orders of assessment for headwater benefits. Accordingly, FERC’s interpretation of §10(f) was unreasonable, and the case was remanded for reconsideration.