The Fourth Circuit allowed the NC commission to raise the issue of the 2010 policy change for the first time on appeal, observing that, “absent extraordinary prescience it could not” have raised the issue in its 2008 petition, and that the Federal Power Act did not permit the filing of a renewed petition. However, the court held that FERC exercised its discretion appropriately in declining to rehear the Incentives Order and apply the revised policy. Considerations included VEPCO’s reliance on the nearly four-year-old Incentive Order and the broader issue of regulatory certainty with regard to Section 219 incentives.
The Fourth Circuit also affirmed FERC’s decision to grant transmission incentives for the five challenged projects on the merits. Among these issues was the question of cost. Section 219 requires that projects be “economically efficient,” and the NC commission argued that there were cheaper alternatives to some of the projects. However, the court concluded that the statute does not require that FERC grant incentives only to the most inexpensive approach.
Copies of the Fourth Circuit’s opinion may be found here, and copies of FERC’s August 29, 2008 Order Granting Transmission Rate Incentives and its May 22, 2012 Order Denying Rehearing may be found here and here.
