On January 23, 2017, the U.S. House of Representatives passed H.R. 587, the Fair Ratepayer Accountability, Transparency, and Efficiency Standards Act, also known as the Fair RATES Act. This bill is intended to patch a perceived procedural flaw in the Federal Power Act (“FPA”). Under current law, public utility rate proposals submitted pursuant to Section 205 of the FPA will go into effect as proposed if the Federal Energy Regulatory Commission (“FERC”) takes no action within 60 days. The absence of official action by FERC precludes interested parties from pursuing rehearing or judicial review of the rate change, pursuant to Section 313 of the FPA.
The Fair RATES Act amends Section 205 of the FPA to permit an interested party to seek rehearing and subsequent judicial review of any rate change filed by a public utility that goes into effect without FERC taking official action. The Fair RATES Act would, in effect, treat such inaction as an order issued by FERC accepting the rate, thereby allowing a party to seek rehearing.
Vacancies at the Commission have increased the likelihood that public utility rate proposals submitted pursuant to Section 205 of the FPA or Section 4 of the Natural Gas Act could become effective due to FERC’s inability to take official action. With Commissioner Norman C. Bay’s January 26, 2017 announcement of his resignation, the Commission will lack a quorum as of February 6th. In 1993, the Commission also found itself without a quorum, prompting FERC to delegate certain authority to its staff in order to fulfill its statutory and regulatory obligations. Specifically, this delegated authority permitted the Secretary to grant requests for rehearing and to issue notices or orders to extend the time within which the Commission would otherwise be required to act. The full text of this order can be found here
; and more information on the FERC quorum can be found here
The full text of the Fair RATES Act can be found here
The Senate has yet to act on this issue.
For more information, please contact Bob Weinberg
, Jeff Genzer
, Thomas Rudebusch
, Michael Postar
, Peter Scanlon
, or Lisa Gast