A Road Paved With Good Intentions?: FERC’s Illegal War on State Electricity Subsidies

Most initial reviews of FERC’s order have offered scathing criticism of its negative policy consequences. Our critique adds two perspectives not represented thus far in the reaction to FERC’s order. First, we explain how the FERC majority got to the point where it felt compelled to take action against state subsidies and why that judgment, although understandable in some respects, is misguided. FERC’s action follows logically from a flawed policy adopted by a Democratic-majority Commission in 2011. Second, we explain why FERC’s order fails to create a mechanism for a just and reasonable price and violates both the Administrative Procedure Act and Federal Power Act. It is therefore likely to be set aside by a court during the judicial review process