D.C. Circuit Rules FERC's Approval of Southern Utilities' Scheme is Unlawful

A recent decision by the D.C. Circuit has dealt a significant blow to the Federal Energy Regulatory Commission (FERC) over its approval of the Southeast Energy Exchange Market (SEEM), a scheme proposed by some of the largest monopoly utilities in the country, including Southern Company, Duke Energy, and Dominion Energy. The court ruled that FERC had unlawfully approved SEEM, stating that it had failed to justify its approval under FERC's own Open Access Rules. The decision is a significant victory for independent clean energy producers, bill-paying families, and the environment of the Southeast.

Key Takeaways:

• The D.C. Circuit ruled that FERC's approval of SEEM was unlawful, agreeing with a coalition of environmental organizations, clean energy advocates, consumer advocates, and clean energy trade groups that the scheme was biased against renewables and inflated costs.
• The court held that FERC failed to explain how SEEM's exclusive, free transmission service was consistent with FERC's own Open Access Rules for transmission.
• FERC's approval of SEEM was criticized for privileging its utility members, allowing them to exclude independent clean energy generators and prop up their own expensive, carbon-intensive coal and gas resources.
• The court also revived other challenges to the SEEM proposal that FERC had rejected based on a statutory deadline, directing it to address the merits of those claims in further proceedings.
• A vacant FERC commissioner seat and the upcoming expiration of Commissioner Danly's term in January will impact critical decisions regarding the transition to lower cost, clean energy resources and ensuring a reliable and climate-resilient grid.
• The decision has significant implications for the energy market in the Southeast, where a diverse grid is essential for a reliable and climate-resilient energy system.
• Energy equity advocates, conservation groups, and renewable energy resources and trade groups from the region challenged the proposal, asking FERC to reject it for failing to comply with market design requirements that ensure a level playing field for all energy resources.
• The coalition argued that FERC should have critically evaluated SEEM to ensure that it did not benefit monopoly utilities at the cost of communities and the environment in the South.

Statistics:

• The D.C. Circuit ruled that FERC's approval of SEEM was unlawful.
• The court held that FERC failed to explain how SEEM's exclusive, free transmission service was consistent with FERC's own Open Access Rules for transmission.
• The proposed energy trading platform was challenged by environmental organizations, clean energy advocates, consumer advocates, and clean energy trade groups.
• The coalition sought rehearing of FERC's actions at the agency, which failed; they then petitioned for review in the D.C. Circuit.
• The decision has significant implications for the energy market in the Southeast, where a diverse grid is essential for a reliable and climate-resilient energy system.

Sources:

• Southern Environmental Law Center
• Earthjustice
• Natural Resources Defense Council (NRDC)
• Energy Alabama
• Sierra Club
• North Carolina Sustainable Energy Association
• South Carolina Coastal Conservation League
• Southern Alliance for Clean Energy
• Southface Energy Institute, Inc.
• Vote Solar
• Georgia Interfaith Power and Light
• Partnership for Southern Equity
• Advanced Energy United
• Solar Energy Industries Association
• Clean Energy Buyers Alliance