Authority of the Federal Energy Regulatory Commission to Fix Electricity Rates and Charges and to Require Refund Payment

Publication Date: January 2001

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Energy

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Abstract:

Sections 205 and 206 of the Federal Power Act concern rates and charges collected by a public utility in transmitting or selling electric energy in interstate commerce. These rates and charges are required to be just and reasonable. States retain jurisdiction over facilities for generation, distribution, or transmission of electric energy in intrastate commerce.

Section 205 requires a public utility to file a rate schedule with the Federal Energy Regulatory Commission (FERC or Commission). Rate changes are not permitted unless a new rate schedule has been filed.

Section 206 provides for the review of rates already in effect. The Commission has the authority to determine that an existing rate is unjust or unreasonable and set a new rate. In certain situations FERC may have authority to refund amounts paid in excess of just and reasonable rates. Case law is useful in determining when such a situation may exist.