D.C. Circuit court hears CAC-led challenge to nuclear bailout

In 1996, CAC organized and participated in a coalition with Indianapolis Power Light Co., the Indiana Office of Utility Consumer Counselor and the Indiana Industrial Energy Consumers, to appeal both the wholesale and retail stranded cost recovery provisions of FERC Order 888 on the grounds that FERC lacked statutory authority under the Federal Power Act to order "stranded cost" recovery.

Order 888 directed the nation’s electric utilities to open their transmission systems to other suppliers of electricity in order to encourage competition in the wholesale power market. Order 888 also authorized utilities to recover from their customers, both wholesale and retail, investments in uneconomic generating facilities (primarily nuclear plants) which would be "stranded" (i.e. not recovered) in a competitive electric market.

In 1998, CAC was joined in this appeal by Public Citizen, U.S. Public Interest Research Group (U.S. PIRG), the Safe Energy Communication Council, Citizens for a Sound Economy, United Homeowners Association, and three Pennsylvania consumer/environmental groups. During the reporting period, CAC participated in the briefing and preparation for oral argument in this appeal. The final briefs in the appeal were filed in May, 1999.

On November 3, the United States Court of Appeals for the District of Columbia Circuit heard an all-day oral argument on various appeals of Order 888.

CAC had the rare opportunity to be represented in the oral argument by Stan Fickle, Barnes & Thornburg's premier appellate advocate, because IPL has joined with consumer groups to oppose stranded cost recovery. A decision from the D.C. Circuit regarding the legality of Order 888 and its stranded cost provisions is not expected until next year. However the Circuit Court decides, this case is almost certainly headed for the U.S. Supreme Court.

Go to Nuclear Issues Index