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Western Minnesota Municipal Power Agency v. Federal Energy Regulatory Commission

ELR Citation: 45 ELR 20224
Nos. 14-1153, (D.C. Cir., 11/20/2015)

The D.C. Circuit held that FERC violated the Federal Power Act (FPA) when it issued a preliminary permit for a hydroelectric project in Polk County, Iowa, to a private developer. The case involved FERC's interpretation of FPA §7(a), which grants preferential treatment to state and municipal applicants. Here, a municipality had also submitted an application for the project, but FERC concluded that the municipal preference under FPA §7(a) applies only to municipalities located in the "vicinity" of the water resources to be developed. It then held a random drawing and granted the permit to the private developer. The municipality then filed the instant petition, and the court held that FERC's geographic proximity test is an impermissible interpretation of the plain text of the FPA. Congress defined the word "municipality" broadly, leaving no indication that geographic considerations are relevant to an applicant's status as a municipality. Further, nothing in the text of §7(a) suggests that Congress' use of the phrase "shall give preference" is anything other than a mandatory directive to FERC. The court therefore granted the municipality's petition for review, vacated FERC's permit order, and remanded for further proceedings.