Energy Harbor, LLC v. FERC, 24-1092

PJM Interconnection, L.L.C. operates the largest competitive wholesale energy market in the U.S. and has an FERC-approved Tariff that penalizes electricity generators for underperformance during emergency periods.
Energy Harbor, LLC owns the W.H. Sammis Plant and was penalized over $12 million for failing to meet its capacity commitments during a severe winter storm in December 2022.
The penalties were based on PJM’s Tariff, which included a pay-for-performance model and a potential exception for shortfalls solely caused by planned or maintenance outages approved by PJM.
Energy Harbor filed a complaint with FERC, challenging PJM’s calculation and application of penalties, arguing for a broader interpretation of the outage exception.
FERC found PJM’s penalty calculations and construction of the Tariff appropriate and denied rehearing; Energy Harbor petitioned the D.C. Circuit for review.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Interpretation of Tariff’s maintenance outage exception (Section 10A(d))	Exception applies whenever capacity is unavailable due to approved maintenance, reducing penalties regardless of other causes	Exception only applies when maintenance outage solely causes the shortfall; forced outages count against exemption	Court sided with FERC: Outage must be sole cause of nonperformance.
Basis for shortfall calculation	Calculation should use only Resource Committed Capacity (adjusted for past outages), not total Installed Capacity	Tariff requires assessment of entire Installed Capacity, not just commitments	Court agreed with FERC: Installed Capacity underpins performance computation.
Unit-by-unit assessment for outages	Excusal should be assessed per generator unit, crediting maintenance at unit level	Excusal applies at facility (plant) level, not at individual units	Court adopted FERC’s view: exemption applies at plant level.
Adequacy of FERC’s rehearing process	Failure to issue a substantive order denying rehearing was arbitrary and capricious	FERC can decline by operation of law under statute and precedent	Court held FERC’s process was proper under governing law.

Advanced Energy Mgmt. Alliance v. FERC, 860 F.3d 656 (D.C. Cir. 2017) (upholding FERC approval of PJM's pay-for-performance penalty structure)
Keyspan-Ravenswood, LLC v. FERC, 474 F.3d 804 (D.C. Cir. 2007) (discussing calculation of installed and unforced capacity in PJM markets)
Allegheny Def. Project v. FERC, 964 F.3d 1 (D.C. Cir. 2020) (en banc) (affirming FERC's ability to issue rehearing denials by operation of law)