Long Island Power Authority v. Federal Energy Regulatory Commission, No. 20-1033 (D.C. Cir. 2022)
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This case stems from a dispute over how to allocate the costs of high-voltage facilities to transmit electricity within the mid-Atlantic planning region. At issue is a contested settlement covering high-voltage projects approved between 2007 and 2013. LIPA and Linden petitioned for judicial review and several transmission owners and state regulatory commissions, as well as PJM, have intervened in support of FERC.
The DC Circuit rejected LIPA and Linden's contention that the settlement order and its hybrid allocations are arbitrary. Rather, each formula in the settlement is just and reasonable and is therefore reason enough to uphold it. Furthermore, the court noted that FERC reasonably concluded LIPA and Linden would not have done better through litigation. The court rejected the utilities' contention that the approval was inconsistent with the Seventh Circuit's decisions, with FERC's own precedent, and with an underlying cost-causation principle. The court agreed with Linden that, under the settlement, it need not make any of the payments set forth in the historical formula. Therefore, the court set aside FERC's ruling that Linden must pay Transmission Enhancement Charge adjustments and remanded for further proceedings. The court denied the petitions for review in all the respects.
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