Illinois Commerce Commission v. Federal Energy Regulatory Commission
721 F.3d 764
| 7th Cir. | 2013Background
- Regional Transmission Organizations (RTOs) manage the nation’s grid; seven RTOs exist with MISO and PJM central to this case.
- MISO sought FERC approval to impose a tariff funding MVPs—high-voltage lines to integrate wind power from the Great Plains.
- MVPs aim to lower total grid costs by enabling long-distance wind power transmission and improving reliability; costs are allocated by total regional consumption.
- States in MISO’s region, notably Illinois and Michigan, have renewable requirements influencing MVP eligibility and cost impact.
- FERC approved the MVP tariff (with some exceptions); petitioners challenge proportionality, methodology, and potential interstate effects.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proportionality and cost-burden basis | Illinois: benefits/ costs not proportionate | FERC: benefits broadly distributed across region | Allowed; proportionality accepted with rough quantification |
| MVP cost allocation among utilities | Illinois: cross-zone and cross-utility benefits unaccounted | MISO/ FERC: broad system benefits justify allocation | Affirmed; crude but plausible method permitted |
| Export pricing to PJM (inter-RTO tariffs) | Export charges to PJM should be allowed | PJM/MISO border pricing prohibited; need joint rate | Remanded for further analysis; export pricing to PJM must be reconsidered |
| Departing MISO members’ liability | Departing members should be exempt from MVP costs | Liability persists; need final decision in separate proceeding | Premature to decide; dismissed as premature |
| Tenth Amendment challenges to state prerogatives | Tariff coerces states to approve MVPs | Federally authorized rate regulation; states retain siting power | Frivolous; affirmed on other grounds |
Key Cases Cited
- Midwest Independent Transmission System Operating, Inc. v. FERC, 373 F.3d 1361 (D.C. Cir. 2004) (cost-causation and MVPs; regional cost allocations)
- Morgan Stanley Capital Group, Inc. v. Public Utility District No. 1, 554 U.S. 527 ((U.S. 2008)) (cost allocation and benefit analysis in transmission pricing)
- New York v. FERC, 535 U.S. 1 ((U.S. 2002)) (limits of federal siting vs. pricing authority)
- Illinois Commerce Commission v. FERC, 576 F.3d 470 ((7th Cir. 2009)) (cost-benefit proportionality standards in MVP context)
- Blumenthal v. FERC, 613 F.3d 1142 ((D.C. Cir. 2010)) (written submissions adequate for factual resolution)