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Southwest Power Pool, Inc. v. Federal Energy Regulatory Committee

ELR Citation: 43 ELR 20259
Nos. 12-1158, (D.C. Cir., 12/03/2013)

The D.C. Circuit vacated a FERC decision allowing a power company to use a regional transmission organization's (RTO's) transmission lines in order to join another RTO network. The two RTOs involved in this case had entered a joint operating agreement that allowed both RTOs to use the other's transmission network to move electricity to another "entity." Because the power company will join one of the RTOs by the end of the year, the RTO wanted to use the competitor RTO's transmission lines to move some of the company's electricity. The competitor RTO argued that the RTOs could only use the other RTO's transmission lines for non-RTO entities. But FERC determined that "entity" could include any operating entity, whether or not it was part of one of the RTOs. In issuing its decision, however, FERC failed to provide a reasoned explanation. It "leapt to an interpretation" of one item of evidence without explaining its implicit rejection of alternative interpretations. In addition, it disregarded evidence that the applicable law required it to consider. As such, the decision was arbitrary and capricious. The court, therefore, vacated and remanded the decision.