United Power, Inc. v. FERC, No. 20-1256 (D.C. Cir. 2022)Annotate this Case
Tri-State Generation and Transmission Association, Inc., a generation and transmission cooperative, admitted Mieco, Inc., a natural gas supplier, as a member. The Federal Energy Regulatory Commission (FERC) concluded that owing to the admission of Mieco (1) Tri-State was subject to its jurisdiction and (2) the Commission has exclusive jurisdiction over the exit charge levied by Tri-State upon a member that leaves the cooperative. United Power, Inc., (United) a utility and member of Tri-State, opposed the admission of Mieco and wants United’s exit charge adjudicated in a state forum. United challenged the FERC’s conclusions as ultra vires and arbitrary and capricious.
The DC Circuit dismissed the petitions for review insofar as they raise objections that have not properly been exhausted before the agency, and denied the petitions in all other respects. The court first explained that it was reasonable for the FERC to conclude that providing such clarity was a prudent and efficient use of a declaratory order. Further, the FERC has exclusive jurisdiction over an exit charge. A state proceeding adjudicating whether an exit charge is just and reasonable is therefore preempted because it is “unmistakably and unambiguously directed” at something that is in “the FERC’s exclusive domain.”