FERC Wins Ruling Over New England Power Grid

(CN) - The Federal Energy Regulatory Commission can review prices and taxes for New England's bulk power system, and in doing so, it does not overstep its boundaries that bar it from overseeing individual generation plants, the D.C. Circuit ruled.

The Connecticut Department of Public Utility claimed that a FERC review of its so-called "Installed Capacity Requirement," a market-based mechanism to determine transmission tariffs and end-user costs in the New England bulk power system, was an improper regulation of electrical generating facilities under the Federal Power Act.

Judge Tatel found that FERC can set prices on capacity, and its review of the ICR system does not constitute regulating electrical generation facilities, over which it has no authority.

"Because ... the commission could directly set the price of capacity ... to incentivize procurement of resources," Tatel wrote, "and because this estimate necessarily affects prices but not necessarily new capacity construction, we see no direct regulation of generation facilities."

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