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Illinois Commerce Commission v. Federal Energy Regulatory Commission

ELR Citation: 43 ELR 20124
Nos. 11-3421 et al., (7th Cir., 06/07/2013)

The Seventh Circuit upheld a FERC order allowing a regional electricity transmission system to apportion costs for new power lines necessary to bring power generated from wind farms in the Great Plains to urban centers among all the utilities drawing electricity from the grid. The costs would be allocated in proportion to each utility's share of the region's total wholesale consumption of electricity. Before 2010, the cost of expanding or upgrading the transmission grid was allocated to the utilities nearest the proposed transmission line, on the theory that they would benefit the most from the new line. But wind farms in the Great Plains can generate far more power than the sparsely populated region needs. So the system decided to allocate costs among all utilities drawing power from the grid according to the amount of electrical energy used, thus placing most of those costs on urban centers, where demand for energy is greatest. FERC issued an order approving the plan, and except for one issue concerning export costs to another regional system, the court upheld the order. Notably, Michigan argued that because the state's Clean, Renewable, and Efficient Energy Act forbids it to credit wind power from out of state against the state's required use of renewable energy by its utilities, it should be required to contribute only toward the costs incurred in Michigan. But Michigan cannot, without violating the Commerce Clause of Article I of the Constitution, discriminate against out-of-state renewable energy. This portion of the state law, therefore, is unconstitutional.