On August 5, 2024, the United States Court of Appeals for the Eighth Circuit (“Eighth Circuit”) denied Associated Electric Cooperative, Inc.’s (“AECI”) petition for review of a Federal Energy Regulatory Commission (“FERC”) order upholding FERC’s decision to exercise primary jurisdiction over emergency energy sales between Southwest Power Pool, Inc. (“SPP”) and AECI during Winter Storm Uri and FERC’s decision that SPP properly compensated AECI pursuant to SPP’s Open Access Transmission Tariff (“Tariff”). The Eighth Circuit denied the AECI’s petition and upheld FERC’s determination that AECI was appropriately compensated according to the existing tariff rates filed with FERC and, accordingly, rejected AECI’s claims that SPP had breached an alleged oral contract with SPP personnel made during the storm.
During Winter Storm Uri, SPP requested emergency energy assistance from AECI to ensure energy reliability in the SPP service area. AECI argued that its operators received verbal assurances from SPP that any such emergency sales would, essentially, be entitled to additional compensation. AECI provided the necessary energy, and SPP compensated AECI based on the rates specified in their existing written contract and Tariff on file with FERC. On February 11, 2022, AECI filed a lawsuit in the United States District Court for the Western District of Missouri seeking additional compensation for the emergency energy it provided to SPP during Winter Storm Uri. According to AECI, SPP’s refusal to provide the additional compensation constituted a breach of the verbal contract made by SPP to AECI during the storm. In response, SPP filed a petition for a declaratory order at FERC, requesting that FERC assert exclusive or primary jurisdiction over the transaction and determine which agreement controlled.
On August 22, 2022, FERC issued an order asserting primary jurisdiction over the transaction and concluded that SPP had properly compensated AECI according to the terms of SPP’s Tariff governing such emergency transactions. On September 19, 2022, AECI filed a Request for Rehearing of FERC’s August 2022 order, arguing that FERC incorrectly used AECI’s execution of the Market Participant Agreement to apply SPP’s Tariff to the emergency energy transactions and ignored evidence of oral agreements between AECI and SPP during Winter Storm Uri. On October 20, 2022, FERC denied AECI’s Request for Rehearing by operation of law. However, on January 19, 2023, FERC issued an order addressing the arguments raised on rehearing. On
The Eighth Circuit affirmed FERC’s decision, emphasizing that the filed rate doctrine, which mandates that no seller of FERC-jurisdictional service may collect a rate other than the one filed with and approved by FERC, applied to the transaction. Accordingly, the court rejected AECI’s arguments that SPP breached its contractual obligations by compensating AECI per the filed-rate and not according to the alleged oral contract. The court also noted that the need for uniformity in the interpretation of such agreements and the FERC’s expertise justified the agency’s primary jurisdiction over the matter.
The Eighth Circuit opinion, issued in Case No. 22-3593, can be found here.
