Affirmed Energy, LLC v. Federal Energy Regulatory Commission, et al.

Ratemaking by federal agencies, including of interstate energy markets, is typically governed by the “filed rate doctrine.” The doctrine constrains regulated entities from charging a rate that is unjust or unreasonable, or that deviates from the terms officially on file with the regulating agency, including through a tariff. The doctrine, which extends to rate-related classifications, practices, and regulations, has long been held to prohibit retroactive changes by federal agencies, including, as relevant here, the Federal Energy Regulatory Commission. That prohibition is of paramount importance to maintaining the stability and predictability of the Nation’s multi-billion-dollar energy markets, among other things. In the decision below, the D.C. Circuit held, in conflict with the Third Circuit, that FERC’s approval of a change to a tariff governing certain wholesale energy capacity auctions was not retroactive, even though the change divested a participant in those auctions of a vested right it had acquired under the prior tariff rules. In doing so, the Circuits divided on the antecedent question of when a change in law is retroactive, a question with far-reaching implications beyond the filed rate doctrine. The question presented is: Whether, as the Third Circuit held, a legal change is retroactive if it eliminates an entitlement acquired under prior law through a completed past act, even if the entitlement would have been exercised only in the future, or whether, as the D.C. Circuit held, a legal change is retroactive only if it alters the past legal consequences of the completed act.