D.C. Circuit Concludes Again That FERC Has The Authority To Correct Its Own Errors

On May 19, 2017, the U.S. Court of Appeals for the D.C. Circuit issued a decision in TNA Merchant Projects, Inc. v. Federal Energy Regulatory Commission (FERC or the "Commission"),¹ holding that FERC has the authority to order a nonjurisdictional utility, such as Bonneville Power Administration (BPA), to return funds that it received due to an error by the Commission. The court also chose not to disturb FERC's original finding that a generator must have a rate on file if it is providing reactive power service—even if it is supplying that service for free.

Background

Chehalis Power Generating, L.P. ("Chehalis") provided reactive power service to BPA free of charge until 2005. In 2005, Chehalis filed a rate schedule with FERC under Section 205 of the Federal Power Act (FPA) setting forth the rates that it would henceforth charge BPA for reactive power service. Chehalis' submittal referred to the rate schedule as an "initial" rate, because Chehalis had not previously