Wire
Court says FERC can still order MISO refund payments
The D.C. Circuit said FERC could order refunds with interest even after earlier rate orders were vacated. The ruling lets the agency reach back to the period when the challenged charges were in effect.
Electric bills built on old transmission rates can still be unwound, at least in one corner of the power market. The D.C. Circuit said Friday that the Federal Energy Regulatory Commission, or FERC, could order backdated refunds tied to the Midcontinent Independent System Operator, or MISO, even after earlier rate orders were vacated.
For utilities and electric cooperatives on that grid, the ruling means the money does not stay locked in just because a rate decision later falls apart in court. The commission can still reach back and require repayment with interest when it is fixing its own mistake.
Why the money went back
The dispute centered on FERC's decision to set refunds based on a 9.98% base return and to make the relief run from Nov. 12, 2013, through Feb. 11, 2015, and again from Sept. 28, 2016, through the date of its order. That Sept. 28, 2016 effective date mattered. It let FERC line up the remedy with the period the court said had been improperly handled.
The panel said that when FERC is remedying its own errors after being reversed in court, it can order retroactive rate adjustments. The judges relied on earlier circuit precedent recognizing that authority.
Why the ruling matters
The practical effect is simple: a vacated rate order does not necessarily mean customers or rival market participants are stuck with the bill forever. If FERC can tie refunds to the period when the bad rate was in place, the agency keeps a way to make the wronged side whole.
That kind of backdating is unusual in ordinary consumer billing, where most prices move only going forward. In utility law, though, it can be the difference between a dead challenge and money actually coming back out of the system.