FERC on Thursday again rejected a challenge to Ameren Illinois’ formula rate while tamping down a rehearing request from Ameren itself (EL16-1169-001).

The ruling denying rehearing lays to rest a challenge by Southwestern Electric Cooperative and Southern Illinois Power Cooperative to Ameren’s 2015 $214.4 million projected net revenue requirement. FERC largely upheld the rate in a September 2016 order while ordering Ameren to change how it accounts for contributions in aid of construction; include net operating loss carryforward in its rate base; and exclude some charges for allowance for funds used during construction from its 2016 true-up. (See FERC Finds No Significant Problems in Ameren Rate Filing.)

Both Ameren and the cooperatives sought rehearing of the 2016 ruling, with the company arguing that FERC should have dismissed the cooperatives’ first challenge outright because of “nebulous and undocumented assertions.” The cooperatives said FERC had broken with commission precedent that allows “parties to challenge the inputs to the formula rate in the same way as they can challenge costs in a stated rate case” because the commission declined to investigate whether the challenged costs were recoverable.

FERC rejected both arguments. “The commission’s power to dismiss a pleading summarily is discretionary, and declining to exercise that power here is therefore not legal error,” it told Ameren. It told the cooperatives that their interpretation of commission precedent was inapplicable because they were challenging the rate itself and not seeking “after-the-fact corrections and updates.” Finally, the commission refused the cooperatives’ request to expand the proceeding into a broader investigation of Ameren’s expenses. Initiating such an investigation, FERC said, would be beyond the scope of the complaint.

― Amanda Durish Cook