Metropolitan Edison Co. v. Pennsylvania Public Utility Commission
22 A.3d 353
Pa. Commw. Ct.2011Background
- Consolidated petitions challenge a 2010 Public Utility Commission order reclassifying line losses as generation costs and barring TSC Rider recovery.
- MetEd and Penelec sought to recover PJM line losses via the TSC Riders; the Commission held line losses are generation-related and not recoverable through TSC Riders.
- OSBA cross-petitioned, challenging the allowance of carrying charges on under-collected transmission costs from unwinding generation contracts.
- ALJ recommended line losses be recoverable as transmission costs; the Commission rejected that view and adopted the line-loss, generation-related conclusion.
- The OSBA argued the Commission failed to provide adequate analysis under Section 703(e); remand was sought for the unwinding-generation-contract carrying charges.
- The court affirms the line-loss holding, but remands to address OSBA's Exception No. 2 regarding carrying charges on the unwinding of generation contracts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Are line loss costs transmission costs under 2803? | MetEd/Penelec: line losses are transmission costs; should be in TSC Riders. | Commission: line losses are generation-related, not transmission costs under 2803. | Line losses are generation-related; not recoverable as transmission costs. |
| Is the Commission's factual finding supported by substantial evidence on line losses being generation-related? | Companies assert the record shows line losses are transmission costs; the Commission mischaracterized evidence. | The Commission's findings are supported by substantial evidence and credible weight given to Customers' witnesses. | Yes; findings supported by substantial evidence. |
| Does the Order comply with the Filed Rate Doctrine and FERC precedent regarding line losses? | FERC decisions treat line losses as transmission-related; state rejection would violate the Filed Rate Doctrine. | FERC precedent is unclear; no direct conflict; state may interpret costs differently. | No inconsistency with FERC precedent or Filed Rate Doctrine. |
| Did the Commission adequately address OSBA's Exception No. 2 on carrying charges related to unwinding generation contracts under Section 703(e)? | OSBA, supported by NFG, requires detailed analysis of carrying charges; failure warrants remand. | Order and RD addressed arguments; remand permissible but not required for this issue. | Remand required to expressly address OSBA's Exception No. 2 consistent with this opinion. |
Key Cases Cited
- Metropolitan Edison Co. v. Pennsylvania Public Utility Commission, 960 A.2d 189 (Pa. Cmwlth. 2008) (congestion costs may be treated as transmission costs; MetEd I)
- Nantahala Power & Light Co. v. Thornburg, 476 U.S. 953 (Sup. Ct. 1986) (Filed Rate Doctrine; preemption concerns)
- Popowsky v. Pennsylvania Public Utility Commission, 550 Pa. 449 (1997) (judicial deference to agency findings; substantial evidence standard)
- ARIPPA v. Pennsylvania Public Utility Commission, 792 A.2d 636 (Pa. Cmwlth. 2002) (rate cap protections; cost-shifting principles)
- National Fuel Gas Distribution Corp. v. Pennsylvania Public Utility Commission, 677 A.2d 861 (Pa. Cmwlth. 1996) (remand for adequate analysis under Section 703(e))