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National Ass'n of Regulatory Utility Commissioners v. Federal Energy Regulatory Commission

ELR Citation: 50 ELR 20173
Nos. 19-1142, (D.C. Cir., 07/10/2020)

The D.C. Circuit denied petitions to review FERC's order prohibiting states from barring electric storage resources (ESRs) on their distribution and retail systems from participating in federal markets. Utility groups argued that FERC exceeded its jurisdiction under the Federal Power Act by barring states from "broadly prohibiting" local ESRs from participating in regional transmission organization and independent system operator markets. The court found the order did nothing more than regulate matters concerning federal transactions and reiterate ordinary principles of federal preemption, and thus did not facially exceed FERC's jurisdiction under the Act. Some of the groups further argued that even if FERC had authority to prevent states from broadly prohibiting local ESR participation in federal markets, its decision to exercise that authority was arbitrary and capricious. The court disagreed, concluding that FERC's decision to reject a state opt-out was adequately explained. It thus denied the groups' petitions.