Allco Finance Limited v. Robert J. Klee, Commissioner, Connecticut Department of Energy and Environmental Protection, et al.

Under the Federal Power Act, 16 U.S.C. §§824 et seq., (the “FPA”) the Federal Energy Regulatory Commission (“FERC”) has exclusive jurisdiction to regulate interstate wholesale electricity sales. Congress carved-out one exception to FERC’s exclusive jurisdiction for certain generators known as “qualifying facilities” under section 210 of the Public Utility Regulatory Policies Act, 16 U.S.C. §824a-3. To qualify for that exception the generators must meet specific design standards set by Congress and the FERC. Petitioner is a developer of small solar energy qualifying facilities. Seeking to cause the construction of new power plants in Connecticut as well as in nearby States, Connecticut conducted a competitive procurement and directed its local utilities to enter into long-term wholesale electricity contracts with the bidders selected by Connecticut. Under those contracts, the State-selected bidder would sell the electricity at a fixed price for 20 years to the local utility, and the utility would, in turn, immediately sell the electricity into the FERC-supervised energy auction market. If the auction revenue received by the utility differs from what the utility paid the bidder, the utility credits, or charges, as the case may be, the difference to retail ratepayers. The Second Circuit panel interpreted this Court’s recent decision in Hughes v. Talen Energy Mktg., LLC, 136 S. Ct. 1288, 1292, 194 L. Ed. 2d 414 (2016) as eroding FERC’s exclusive jurisdiction under the FPA.