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Mandatory Wheeling: Is the FERC Overstepping its Bounds?Donald B. Craven and Anthony F. Shelley

Fortnightly Magazine - October 15 1995

switches gears. It claims that FPA sections 205 and 206 are an independent source of wheeling authority, even if its power under sections 211 and 212 proves problematic. But this argument, too, might not be well taken. The legislative history to sections 211 and 212 leaves little doubt that Congress expected these provisions alone to form the basis for any wheeling order. When amending sections 211 and 212 in 1992, Congress noted that the FERC's lack of clear wheeling authority marked a major impediment to the development of independent power producers (IPPs): "Absent clarification of FERC wheeling authority, it can be expected that some utilities will try to exercise their monopoly power to block IPPs' and others' legitimate transmission requests."15

3. It Worked For Gas. Finally, the FERC relies heavily on a decision from 1987 that forced natural gas pipelines to provide transportation services to all would-be shippers. In that case, Associated Gas Distributors v. FERC (AGD), the D.C. Circuit distinguished Otter Tail and found that the Commission's authority to remedy discrimination included an expansive power to mandate interstate gas transportation.16 Now, in the electric NOPR, the FERC notes that the FPA was patterned after the Natural Gas Act (NGA), and that the AGD result should hold sway.17

But the FERC ignores entirely a passage in AGD in which the court noted explicitly that the open-access issue might demand different treatment under the FPA than under the NGA: "The legislative history of the two acts is, on this point, materially different."18 Moreover, the NGA contains no counterparts to FPA sections 211 or 212. Thus, in affirming the FERC's open-access policy for natural gas pipelines, the court did not face a situation (as in the FPA) in which Congress had acted first to afford a remedy and the FERC had not complied with the statute.

The courts will of course defer to the FERC on any permissible construction of the FPA. Nevertheless, there is good reason to suspect that they might view the Commission's broad reading of sections 205 and 206 (and its disregard for sections 211 and 212) as inconsistent with congressional intent. The outlook suggests an ardu- ous defense ahead for the Commission. t

Donald B. Craven and Anthony F. Shelley are members of Miller & Chevalier, Chartered, a law firm in Washington, DC. They practice in the firm's regulatory litigation group and specialize in energy issues.

FERC SHOULD ANTICIPATE THE INEVITABLE JURISDICTIONAL CHALLENGES, AND SHOULD LINK ITS AUTHORITY TO ACHIEVE BROAD SCALE OPEN ACCESS TO FPA SECTION 211 Strong Arguments Will Be Made That the Commission Lacks Authority Under FPA section 206 to Order Utilities to File Open Access Tariffs The Commission founds its authority to order utilities to file open-access tariffs on FPA section 206.[It] goes to considerable lengths in the NOPR to explain how it gleaned this authority from the case law. ...It is reasonable to assume that there are entitles that have not found the Commission's analysis of its authority under FPA section 206 to be persuasive. Although Edison is not now challenging the Commission's authority to