Victoria Strohmeyer on Sacramento Municipal Utility District v. FERC, 2010 U.S. App. LEXIS 15179 (D.C. Cir. July 23, 2010)

Victoria Strohmeyer on Sacramento Municipal Utility District v. FERC, 2010 U.S. App. LEXIS 15179 (D.C. Cir. July 23, 2010)

Victoria Strohmeyer   By Victoria Strohmeyer, Associate, SNR Denton

In this Emerging Issues Analysis, attorney Victoria Strohmeyer of SNR Denton discusses a 2010 D.C. Circuit decision that explores the boundaries of FERC's jurisdiction over non-jurisdictional governmental agencies that own transmission facilities within the context of the balancing authority area.

“In Sacramento Municipal Utility District v. FERC, 2010 U.S. App. LEXIS 15179 (D.C. Cir. July 23, 2010), the D.C. Circuit affirmed the Federal Energy Regulatory Commission's (FERC or Commission) approval of the California Independent System Operator Corporation's (CAISO) new market design,” writes Victoria Strohmeyer. “Through a series of orders from 2006 through 2008, FERC approved the elements of the CAISO new market design. As in any market situation, there were those market participants that perceived themselves to be losers in the new market design. In this case, Sacramento Municipal Utility District, Imperial Irrigation District, the City and County of San Francisco, and the San Diego Gas & Electric Company were among the numerous entities affected by the new market design that objected to CAISO's new tariff. One interesting aspect to this case is the exploration of the boundaries of FERC's jurisdiction over non-jurisdictional governmental agencies that own transmission facilities within the context of the balancing authority area. This case upholds FERC's decisions relating to CAISO's market design, finding that FERC supported its holdings with substantial evidence."

“This case provides support for FERC's ability to monitor and govern markets even when individual market participants perceive that they are harmed. The overall good seems more important in this context (a market redesign following the California energy crisis) than in the context of ensuring that each and every participant is satisfied,” the author explains. “FERC is tasked with ensuring that the market, as a whole, will function in such a way as to ensure just and reasonable rates and that transmission service is provided in a nondiscriminatory manner. As long as the Commission is properly applying the evidence supplied, an appellate court is reluctant to disturb the Commission's findings.”

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Victoria Strohmeyer is an associate at SNR Denton. Ms. Strohmeyer routinely counsels clients regarding their contractual and regulatory relations with numerous federal agencies. She also advises lenders, investors and power suppliers on regulatory issues relating to the acquisition and financing of power plants and public utilities and advises FERC-regulated utilities on FERC compliance issues.

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 Electric Power Plant and Transmission Lines