Scott Johnson Assesses NARUC Resolution Urging FERC Deference to States

Foley & Larder LLP of counsel Scott Johnson discussed the National Association of Regulatory Utility Commissioners’ (NARUC) resolution urging the Federal Energy Regulatory Commission (FERC) to defer to states in the DailyEnergyInsider article, “New NARUC resolution urges FERC to mind states’ regulatory authority and avoid potential litigation.”

Johnson said it is no surprise FERC has received pushback from states. NARUC’s resolution follows a recent directive from the U.S. Department of Energy (DOE), which instructed FERC to speed large load interconnections, a move Johnson said “toes the historical federal/state jurisdictional boundary line established in the FPA, as interpreted by the courts, and likely will face legal challenges.”

“Historically, these disputes have been resolved by the courts, or, upon receiving direction from the courts, in FERC orders carefully tailored to limit what FERC is doing to transmission-level matters,” he explained.

Johnson noted that FERC has not always implemented DOE directives, but with the administration prioritizing the growth of data centers and manufacturing facilities, FERC is likely to follow DOE’s lead.

He shared that FERC does have options to avert conflict with states, including limiting any new large-load interconnection rules to transmission-level interconnections while not regulating distribution-level energy sales and services, allowing regional flexibility, and inviting greater participation from state regulators.

“Whatever direction they go, the NARUC resolution could sway FERC toward a narrower approach to large load interconnection than the DOE might prefer,” Johnson added.