By Tom Kleckner
The D.C. Circuit Court of Appeals last week dismissed the Kansas Corporation Commission’s appeal of a 2015 FERC ruling over formula rates, saying it lacked standing in the case (No. 16-1093, 16-1164).
The KCC argued before the court in November that FERC acted unlawfully by approving formula rates for future public utilities to use in operating electric transmission facilities. The Kansas commission asserted that FERC couldn’t determine that the formula rates for “not-yet-existing entities to implement at some point in the future” are just and reasonable.
Writing for the three-judge panel on Feb. 6, Judge Karen Henderson said the KCC had not suffered harm sufficient to establish standing. “A harm that will not occur unless a series of contingencies occurs at some unknown future time is not concrete, particularized, actual and imminent,” she said.
The Kansas commission was appealing a 2015 FERC decision, in which the agency granted Transource Energy’s request for formula rates for future affiliates by replicating approved rates for Transource Kansas. Transource formed the wholly owned subsidiary to compete for Kansas-based transmission projects in SPP and said it expected to create additional subsidiaries in the future.
FERC rejected the KCC’s rehearing request in 2016, ruling that preapproving a formula rate for Transource Kansas, which did not operate any active transmission facilities, was “no different” from preapproving a formula rate for future Transource affiliates.
The KCC’s appeal to the D.C. Circuit also included a similar FERC proceeding involving MPT Heartland Development, which formed Kanstar to compete for Kansas-specific projects. The federal agency in 2015 approved Kanstar’s request for a formula rate for its own use and that of future affiliates and later denied the KCC’s rehearing request.
The court consolidated the two appeals.
In November, the KCC lost another appeal in the D.C. Circuit when it attempted to challenge a 2014 FERC order approving SPP’s merger with the Integrated System. (See Court Rejects Challenge to SPP-Integrated System Merger.)
