States take US FERC to court over interconnection rule

Washington (Platts)--4May2004

State regulators officially filed a court appeal of the US Federal Energy
Regulatory Commission's recent generator interconnection rulemaking, claiming
that, in the final rule, FERC overstepped its jurisdiction. The appeal, filed
at the US Court of Appeals for the District of Columbia Circuit, was submitted
late Monday by the National Association of Regulatory Utility Commissioners,
the trade association representing state public service commissions. States
joining NARUC in the appeal are California, Kentucky, Washington, South
Carolina and North Carolina. According to NARUC, the Federal Power Act
explicitly delegated authority over all distribution facilities to the states.
Courts, NARUC said in its rehearing petition last year, have constantly
affirmed this finding. FERC, in its interconnection rule, said it would assert
authority over a distribution facility when one is used by a wholesale
customer engaged in interstate commerce.

Also, the interconnection rule blurs what had been a "bright-line" test FERC
used to delineate between transmission and distribution facilities, NARUC
said. "Petitioners seek an order and judgment that those specific aspects of
the FERC order are in excess of the commission's statutory jurisdiction,
authority, or limitations, or short of statutory right ..., and are arbitrary,
capricious, an abuse of discretion and otherwise contrary to law," the
petition said. The rule was issued last summer, and the commission upheld its
findings in its order on rehearing March 5 (RM02-1).

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