58 F.4th 501
D.C. Cir.2023Background
- Ameren Illinois reported construction-related "plant materials and operating supplies" on line 8 (transmission-plant) of FERC Form 1 instead of line 5 (construction), inflating amounts recoverable under its pre-June 1, 2020 formula rate.
- The misreporting affected multiple years and resulted in approximately $11.5 million of alleged over-collections from transmission customers.
- Southwestern Electric Cooperative formally challenged Ameren’s 2020 informational filing, prompting FERC review and a refund order requiring Ameren to pay refunds for the misreported amounts.
- Ameren argued the reporting choice reflected common industry practice and that FERC abused its discretion in ordering refunds and failing to properly balance equities.
- FERC relied on the filed-rate doctrine, Form 1 instructions, and its remedial authority to require refunds; Ameren’s formula-rate revision effective June 1, 2020 permitted recovery going forward but did not apply retroactively.
- The D.C. Circuit affirmed FERC’s Refund and Rehearing Orders, finding FERC’s determination that Ameren lacked discretion to report those costs on line 8 was reasonable and not arbitrary or contrary to law.
Issues
| Issue | Ameren's Argument | FERC's Argument | Held |
|---|---|---|---|
| Authority to order refunds for misreported Form 1 costs (filed-rate compliance) | Refunds improper; Ameren contends it charged prudently incurred costs and industry practice justified reporting | FERC has statutory remedial power and may order refunds when filings violate the filed rate and Form 1 instructions | Court: FERC acted within its authority; refund order reasonable under filed-rate doctrine and § 309(h) remedial power |
| Whether Ameren had discretion to report construction materials on line 8 vs line 5 | Reporting reflected longstanding industry practice and Form 1 was ambiguous pre-Duke Energy Progress | Form 1 unambiguously assigned construction materials to line 5; prior practice and later clarifications do not excuse noncompliance | Court: FERC reasonably concluded Ameren lacked discretion and misreported costs; no ambiguity excusing Ameren |
| Whether FERC abused its discretion in balancing equities and caused an improper windfall to customers | FERC failed to balance investor and customer interests; refunds create unfair result | FERC balanced equities, and refunds correct unauthorized charges that benefitted Ameren | Court: FERC’s balancing was reasonable; refunds remedial, not arbitrary |
| Whether Ameren’s post–June 1, 2020 formula-rate revision should be applied retroactively to avoid refunds | The revised formula rate (effective June 1, 2020) should retroactively validate the prior reporting and negate refunds | The revised rate is prospective; prior filed rate governs prior period recoverability | Court: FERC properly declined retroactive application; refunds based on the then-effective filed rate |
Key Cases Cited
- New York v. FERC, 535 U.S. 1 (2002) (FERC has comprehensive jurisdiction over interstate wholesale electricity rates)
- Towns of Concord v. FERC, 955 F.2d 67 (D.C. Cir. 1992) (filed-rate doctrine prohibits charging rates other than those filed with the Commission)
- Ark. La. Gas Co. v. Hall, 453 U.S. 571 (1981) (filed-rate doctrine principle)
- Consol. Edison Co. of N.Y., Inc. v. FERC, 347 F.3d 964 (D.C. Cir. 2003) (FERC may order refunds for tariff violations)
- Newman v. FERC, 27 F.4th 690 (D.C. Cir. 2022) (description of formula rates and annual inputs to formula)
- FERC v. Elec. Power Supply Ass'n, 577 U.S. 260 (2016) (deference to FERC in technical rate-design matters)
- Motor Vehicle Mfrs. Ass'n v. State Farm, 463 U.S. 29 (1983) (arbitrary-and-capricious review framework)
- Exxon Mobil Corp. v. FERC, 571 F.3d 1208 (D.C. Cir. 2009) (limitations on retroactive alteration of filed rates)
- Verso Corp. v. FERC, 898 F.3d 1 (D.C. Cir. 2018) (broad remedial powers under Section 309(h))