What authority does FERC have in Westerns rate-setting process?
FERC’s review of Western’s rates is much more limited than the manner in which it regulates Investor Owned Utilities. FERC reviews Westerns rates to ensure that they are adequate to cover Westerns costs and may reject Western’s decisions only if it finds they are arbitrary, capricious or in violation of law or regulation. Western’s Administrator develops a final proposed rate, which is then sent to the Deputy Secretary of Energy to confirm, approve and either placed into effect on an interim basis or proceed directly to FERC for final approval. Next, the rate is sent to FERC. FERC may then confirm, approve and place the final rate in effect, reject it or send it back to Western for further study.
