Xcel Energy Services Inc. v. Federal Energy Regulatory Commission, 421 U.S. App. D.C. 381

Background

SPP (a regional transmission organization) filed a §205 tariff revision to incorporate Tri‑County’s formula transmission rate into SPP’s OATT effective April 1, 2012. Tri‑County is non‑jurisdictional; SPP is a FERC‑jurisdictional public utility.
Xcel (through its subsidiary SPS) protested before the tariff became effective, arguing Tri‑County’s ATRR was unproven and asking that SPP’s filing be suspended or that Tri‑County commit to make refunds if rates proved unjust.
FERC accepted the filing to take effect April 1, 2012 despite finding material issues and admitting the proposed rate “may be” unjust and unreasonable, but did not suspend the rate or obtain a refund commitment.
On rehearing FERC conceded it erred under §205 by allowing the rate to take effect without refund protection, but concluded it lacked authority to order retroactive suspension/refunds and instead used §206 to require prospective relief (and later accepted Tri‑County’s forward‑looking refund commitment).
An ALJ later found Tri‑County failed to prove its facilities qualify as transmission facilities; FERC affirmed. Xcel sought judicial review seeking retroactive refunds for payments made April 1, 2012–Feb 22, 2013.

Issues

Issue	Xcel’s Argument	FERC / Intervenors’ Argument	Held
Whether FERC erred by allowing SPP’s rates to take effect without suspension or a voluntary refund commitment under §205	FERC violated §205’s mandate to protect consumers; it could and should suspend SPP’s rates or secure refunds (as SPP’s OATT rates charged consumers)	FERC lacked authority to order refunds from non‑jurisdictional Tri‑County and, citing 18 C.F.R. §2.4(a), could not retroactively suspend a rate schedule once in effect	Court held FERC conceded legal error under §205; remanded because FERC misapplied §2.4(a) and failed to consider equitable/remedial authority under §309
Whether FERC may remedially order refunds from the RTO (SPP) even though the underlying rate source is a non‑jurisdictional entity	Xcel: FERC may and should order relief against SPP (whose tariff and bills caused the overcharge)	FERC/Tri‑County: Commission cannot order refunds from non‑jurisdictional entities; remedy is §206 prospective relief only	Court: Distinguished Tri‑County vs SPP roles; noted SPP’s rates caused the charges and FERC’s argument that it lacked remedial power against SPP was not responsive to Xcel’s request; remand required for FERC to reassess remedies
Whether FERC’s reliance on 18 C.F.R. §2.4(a) (no suspension after rate took effect) bars retroactive relief on rehearing	Xcel: §2.4(a) inapplicable where FERC admitted it failed to perform required §205 review before allowing rate to take effect	FERC: §2.4(a) and precedent bar retroactive suspension/refunds on rehearing; §206 is the only remedy once rates took effect	Court: §2.4(a) reliance misplaced here because FERC’s circumstances (acknowledged legal error, contested timely protest raising material issues) differ from cases applying §2.4(a); remand required
Whether FERC’s remedial authority under §309 (and equitable principles) permits it to correct its §205 error and order retroactive relief	Xcel: §309 gives broad remedial power; agency can undo what it wrongfully did and consider equitable relief to protect consumers	FERC: Statutory framework (esp. limits in §206) and precedent constrain agency; it lacks authority to provide retroactive §206 relief	Court: §309 and equitable principles may permit correction of FERC’s ultra vires §205 action; FERC failed to justify why its §205 error was irremediable beyond prospective relief; remand for FERC to consider appropriate remedy

Key Cases Cited

Pac. Gas & Elec. v. FERC, 306 F.3d 1112 (D.C. Cir.) (FERC may review non‑jurisdictional rates as they affect jurisdictional transactions)
Transmission Agency of N. Cal. v. FERC, 495 F.3d 663 (D.C. Cir. 2007) (FERC cannot order refunds from non‑jurisdictional utilities)
United Gas Improvement Co. v. Callery Props., Inc., 382 U.S. 223 (1965) (agency/court may undo what it wrongfully did while order is reviewable)
Indiana & Mich. Elec. Co. v. FERC, 502 F.2d 336 (D.C. Cir.) (court addressed retroactive suspension and equitable correction of rates)
City of Anaheim v. FERC, 558 F.3d 521 (D.C. Cir. 2009) (limits on retroactive relief under §206)
Cities of Batavia v. FERC, 672 F.2d 64 (D.C. Cir. 1982) (remand to consider exercise of §205 suspension/refund jurisdiction where prior acceptance proved erroneous)
Nat. Gas Clearing House v. FERC, 965 F.2d 1066 (D.C. Cir. 1992) (agency remedial discretion and consumer protection considerations)
Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29 (1983) (arbitrary and capricious standard for agency action)