Navigating the Post-Chevron Landscape at FERC: What Clean Energy Companies Really Need to Know

The seismic Supreme Court ruling striking down a 40-year-old doctrine that required court deference to federal agencies’ reasonable interpretations of statutes creates layers of regulatory uncertainty for clean energy companies.

On June 28, in Loper Bright Enterprises v. Raimondo (together with a companion case), the nation’s highest court overruled its landmark Chevron v. Natural Resources Defense Council decision, which was issued in 1984. Loper Bright calls for courts to make independent judgments as to whether an agency’s interpretation of a law falls within its statutory authority.

To provide up-to-date guidance on the possible impacts of Loper Bright on the Federal Energy Regulatory Commission (FERC) and clean energy interests, Mintz Member Steven Shparber and Associate Omar Bustami hosted a webinar on July 16. 

Although Loper Bright does not alter previous orders upheld under Chevron, in early July, the Supreme Court vacated and remanded nine decisions with pending Supreme Court petitions for certiorari. One of those cases is Solar Energy Industries Association v. FERC (Broadview Solar). On remand, the DC Circuit Court of Appeals will reconsider its decision regarding FERC’s interpretation of “power production capacity” under the Public Utility Regulatory Policies Act (PURPA).

Steven said energy companies should keep an eye on the DC Circuit case while continuing and maintaining regular filings with FERC. In Broadview Solar, he expects the DC Circuit to engage in an independent legal analysis based on Loper Bright, which could change some FERC requirements relevant to qualifying facilities.

“If you are in the process of developing projects and are contemplating a PURPA offtake arrangement, there are significant commercial risks you should be aware of, think about, and address,” Steven said.

Steven also provided an analysis of what Loper Bright means to FERC Order No. 1920, FERC’s landmark transmission planning and cost allocation rule that has already spurred over 50 requests for rehearing since it was issued in May. 

Steven said challenges are now likely to center on the question of whether the myriad of practices and reforms under Order No. 1920 fall under FERC’s “affecting jurisdiction” or whether FERC is regulating matters that should be left to the states. He also emphasized that the politics and the makeup of FERC are likely to play a significant role in the outcome of any future order reconsidering FERC Order No. 1920. 

As stakeholders address FERC actions in light of Loper Bright, there’s likely to be more litigation, venue shopping at the appellate level, and state challenges to FERC’s authority, Steven said.

“Look for more challenges to FERC’s authority and orders from FERC with robust discussions of their legal authority,” Steven said.

The “Navigating the Post-Chevron Landscape at FERC: What Clean Energy Companies Really Need to Know” webinar was the first of a series of Mintz-hosted virtual programs on the effects of the Court’s recent decisions involving regulated industries.

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