Public Citizen v. FERC (ISO-NE)

This case challenged a Federal Energy Regulatory Commission (FERC) action refusing to review the lawfulness of an increase in rates for wholesale electric capacity, which resulted from a noncompetitive auction conducted by the New England Independent System Operator. At the time, FERC had a vacancy and, therefore, only four commissioners. The four sitting commissioners deadlocked: Two would have set the issue of the rates’ lawfulness for a hearing, but two would have dismissed the challenge to the rates because of their view that FERC could not consider whether the actual rates resulting from an auction conducted under rules approved by FERC were lawful. Because FERC required a majority vote to proceed, the deadlock resulted in the rates’ going into effect.

Public Citizen, as well as Connecticut agencies and officials, filed petitions for review in the D.C. Circuit. FERC challenged the court’s jurisdiction, arguing that it issued no order and took no action subject to judicial review. Public Citizen’s briefs argued that the agency’s deadlock was a reviewable action because it effectively rejected the challenge to the rates, and that the rationale of the Commissioners who blocked the agency action—namely, that the agency lacked authority to review the lawfulness of the rates—was contrary to law.

The court ruled that it lacked jurisdiction because the FERC deadlock meant that the rates had gone into effect without any final order of the Commission and that a final order was required for the court to have jurisdiction. The court acknowledged that the interpretation of the Federal Power Act underlying the votes of the commissioners who found the rates reasonable “seems questionable at best” but stated that the court “lack[ed] the power to assess its validity.” The court stated that because its lack of jurisdiction was based on the text of the Federal Power Act’s jurisdictional provision, “it lies with Congress, not this Court, to provide that remedy.”

Because of its dissatisfaction with the outcome of this case, Congress subsequently amended the Act to provide the courts with jurisdiction over future challenges to rates resulting from FERC deadlocks.