The U.S. Court of Appeals for the District of Columbia Circuit ruled against Oklahoma Gas & Electric and other Southwest Power Pool utilities in a ruling that allows competitive bidding for transmission projects, according to a report published in The Oklahoman.
The three-judge panel issued its decision on July 1 after oral arguments on May 4. The appeals court upheld a Federal Energy Regulatory Commission ruling on “rights of first refusal” for developing transmission projects.
“As the Commission in its expert judgment already determined, the rights of first refusal created ‘a pre-existing barrier to entry’ for non-incumbent transmission owners,” the appeals court said in the 11-page decision written by Circuit Judge Robert Wilkins.
Both FERC and the appeals court did not agree with OG&E’s assertion that the utility’s rights of first refusal are preserved by the Regional Transmission Organization membership agreement associated with the Southwest Power Pool, which provides transmission service across eight states for nearly six million households.
Kimber Shoop, senior counsel for OGE Energy Corp., said the utility hasn’t decided if it will appeal the decision, according to The Oklahoman.
“Rather than promote competition, FERC found they created disincentives for non-incumbents to identify and commit resources to cost-effective solutions to transmission needs,” said the D.C. Circuit.
“The Seventh Circuit has gone so far as to describe such self-protective and anti-competitive agreements as cartel-like,” said the D.C. Circuit.
