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Illinois Commerce Commission v. Federal Energy Regulatory Commission (ICC I)

576 F.3d 470 (2009)

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Illinois Commerce Commission v. Federal Energy Regulatory Commission (ICC I)

United States Court of Appeals for the Seventh Circuit

576 F.3d 470 (2009)

Facts

The Federal Energy Regulatory Commission (FERC) (defendant) approved a pricing scheme that allocated the costs of new transmission facilities with a capacity of 500 kilovolts (kV) or more to all utilities in the PJM Interconnection region on a pro rata basis based on total electricity sales. Previously, each utility contributed payment based on the benefits that it received from the new facility. For example, Commonwealth Edison (ComEd) (plaintiff) was asked to pay $480 million for Project Mountaineer, one of the transmission facilities, which would generate only about $1 million in benefits to ComEd. Under the old system, ComEd would have contributed nothing. FERC simply reasoned that the pro rata allocation was justified because some of PJM’s members had entered pro rata sharing agreements amongst themselves in the past (over 40 years ago) and that more 500 kV transmission lines would improve system reliability and benefit all the utilities. FERC’s decision was appealed to the United States Court of Appeals for the Seventh Circuit.

Rule of Law

Issue

Holding and Reasoning (Posner, J.)

Concurrence/Dissent (Cudahy, J.)

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