6th Circuit orders FERC to rethink utility incentives

By Niina H. Farah | 01/23/2025 06:15 AM EST

The court said FERC should not have allowed two utilities in Ohio to charge higher rates in exchange for joining a regional transmission organization.

FERC headquarters.

Federal Energy Regulatory Commission headquarters in Washington. Francis Chung/E&E News

A federal appeals court has sent U.S. energy regulators back to the drawing board on their decision to offer incentives for some utilities in Ohio — but not others — to join the regional transmission organization PJM Interconnection.

The 6th U.S. Circuit Court of Appeals ruled last Friday that the Federal Energy Regulatory Commission appropriately denied Ohio-based Dayton Power and Light’s application for incentives because of a state law requiring utilities to participate in the regional transmission organization, which operates the regional electricity grid serving 13 states and the District of Columbia.

But the court also rejected FERC’s decision to grant those same incentives for Duke Energy and FirstEnergy, even though the commission did not show that there was a “meaningful distinction” explaining the difference in treatment.

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Known as an RTO adder, the incentive allows utilities to charge higher wholesale electricity rates if they join.

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