The Federal Energy Regulatory Commission (FERC)\u2014an independent agency tasked with ensuring \u201cjust and reasonable\u201d energy rates\u2014has begun to use energy market payment systems to prop up fossil fuels. FERC has issued orders that prevent renewables from competing with fossil fuels by forcing renewables to bid into energy markets at artificially high rates. FERC has argued that state clean energy subsidies distort energy markets by \u201csuppressing prices\u201d and pushing \u201cneeded\u201d fossil fuel generators out of the market. According to FERC, a federal intervention is necessary to protect \u201cmarket integrity\u201d and ensure that consumers can access reliable electricity.<\/p>\n\n\n\n
This Note argues that FERC\u2019s interventions are neither necessary nor legal. FERC, it seems, is simply intent on counteracting state clean energy policies. This Note shows that FERC\u2019s orders lack any theoretical justification because the markets FERC has developed would retain adequate energy generators to provide reliable electricity without FERC bailing out fossil fuels. In addition, this Note shows FERC\u2019s antirenewables interventions are arbitrary and capricious in violation of the Administrative Procedures Act. FERC gave an implausible explanation for its order because it claims it is trying to resolve the issue of unjust and unreasonable rates, but its decision exacerbates that problem. FERC\u2019s order makes consumers pay more for electricity unnecessarily. FERC also failed to consider critical aspects of the problem, including (1) reasonable alternatives that did not involve price inflation and (2) the existence of subsidies supporting fossil fuels.<\/p>\n\n\n\n