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ARTICLE · 25 MAY 2013

FERC Rules That Competitive Transmission Trumps Negotiated Contract Rights

Day Pitney LLP
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In a May 17 order (the "New England Compliance Order") on the New England compliance filing in response to Order No. 1000 ("Order 1000"), the Federal Energy Regulatory Commission ("FERC") rejected efforts by the New England transmission owners to retain their exclusive rights to build new transmission in the region.

United StatesEnergy and Natural Resources
Michael D. Hornstein
Michael D. Hornstein
Eric Runge
Eric Runge
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In a May 17 order (the "New England Compliance Order") on the New England compliance filing in response to Order No. 1000[1] ("Order 1000"), the Federal Energy Regulatory Commission ("FERC") rejected efforts by the New England transmission owners to retain their exclusive rights to build new transmission in the region. In doing so, FERC declared its "plenary authority" to abrogate or substantially modify contracts - even those protected by the Mobile-Sierra doctrine[2] - if changes in FERC's jurisdictional industries warrant such actions. FERC's bold sweeping away of federal rights of first refusal ("ROFRs") or exclusive rights to build and own regional transmission, including one expressly protected by a Mobile-Sierra provision, will likely result in federal appeals that will further shape Mobile-Sierra law. In the meantime, FERC has reshaped the electric transmission industry to open it up to competitive transmission development.

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