Court Orders FERC Over-collections Repaid

The United States Court of Appeals for the DC Circuit vacated FERC's decision to withhold over-collections payments from our clients. Agreeing with seven firm clients, the court found that FERC's directive that PJM recoup over $37 million in previously ordered refunds associated with transmission line loss overpayments was arbitrary and capricious. We argued that, because financial market participants pay transmission line loss charges, and for the period at issue also paid for the transmission system through the payment of transmission charges, they were entitled to a fair share of the over-collections paid back to all other participants. The court agreed and found unreasonable FERC's decision to deny an allocation to financial participants while they were paying transmission charges and also challenged FERC's decision to first order such payments and then almost two years later change its mind and seek to claw back the refund amounts. The Court remanded to FERC for reconsideration and explanation. Black Oak Energy, LLC v. FERC, No. 08-1386 (Aug. 6, 2013). The remand also led PJM to agree to a stay of Delaware state court proceedings initiated by PJM to collect the amounts from the three of the marketers.