Public Utilities Reports

PUR Guide 2012 Fully Updated Version

Available NOW!
PUR Guide

This comprehensive self-study certification course is designed to teach the novice or pro everything they need to understand and succeed in every phase of the public utilities business.

Order Now

News Analysis

The transmission industry may have to wait even longer for a final decision on challenges to Order 2000 if FERC gets its way.
Fortnightly Magazine - January 1 2002


The challengers, though, see things a bit differently. As the Snohomish Co. (Washington) PUD charges in its court filing, "FERC's contention that petitioners could seek judicial review after raising cost issues in individual RTO proceedings places Snohomish in a Catch-22. If Snohomish cannot proceed now, but must seek review after a specific proceeding, the challenges raised here would be vulnerable to attack as time-barred by Section 313 of the Federal Power Act, which requires that challenges to FERC decisions be brought within 60 days, and as an impermissible collateral attack on Order No. 2000." .

Case Not Yet Ripe for the Picking?

The controversy centers on the legal doctrine of ripeness. Federal courts often refuse to decide the merits of cases that they perceive to be more theoretical than actual conflicts. In the Order 2000 appeal, FERC's argument is that the rules it has set forth are too generic for individual parties to challenge just yet. Since FERC did not act in Order 2000 against any particular company or entity, it claims, there is no specific injury that the courts can remedy. "Self-evidently, the transmission owner's aggrievement, if any, would not arise until [an individual RTO] proceeding is completed, rather than in this rulemaking before any RTO original agreement has even been established, much less fundamentally changed," FERC said in its brief. It continued by saying that non-public utility owners South Carolina Public Service Authority (Santee Cooper) and Snohomish PUD "cannot point to an immediate, concrete, non-speculative injury [that] either has suffered as a result of the sole substantive requirement under Order No. 2000: that public utilities file a proposal to participate in an RTO or describe efforts and plans to participate in one. As neither of these petitioners is a public utility, they are not obligated to satisfy Order No. 2000's filing requirements."

Before the oral argument, however, Snohomish PUD and Santee Cooper, along with the rest of the industry, seemed trapped between the proverbial rock and hard place when it came to challenging any of the ground rules of Order 2000. For example, in the RTO West proceeding, Snohomish PUD challenged the commission's determination that implementing RTOs will be universally beneficial. In the Pacific Northwest, Snohomish PUD argued that creating an RTO to replace the existing transmission scheme is likely to cost hundreds of million of dollars more than any potential benefits to customers, due to the unique circumstances of the region. The commission flatly rejected that challenge. "In Order No. 2000, the commission found that the benefits of RTO formation overall outweigh the costs, but it did not require individual cost benefit analysis in compliance filings. We will not reverse that determination here," it said. .

Similarly, in the GridSouth RTO proceeding, the commission turned away a challenge to the passive ownership rules outlined in Order 2000. Santee Cooper sought a generic ruling that the passive ownership proposals contemplated by Order 2000 were generally unacceptable, because they did not ensure sufficient independence of the RTO. But FERC dismissed that argument. "Santee Cooper's arguments are an impermissible collateral attack