Ferc

I. BACKGROUND

A. Statutory and Regulatory Background

The Federal Power Act (“FPA”), Pub. L. No. 66-280, 41 Stat. 1063 (codified as amended in scattered sections of 16 U.S.C.), provides that a utility may not charge rates that “make or grant any undue preference or advantage to any per- son or subject any person to any undue prejudice or disadvan- tage.” 16 U.S.C. § 824d(b). Similarly, under § 205(a) of the FPA, a utility may charge only rates that are “just and reason- able.” Pub. L. No. 74-333, 49 Stat. 803, 851 (codified as amended in 16 U.S.C. § 824d(a)). Utilities must submit their rate schedules to FERC for review and approval. 16 U.S.C. § 824d(c)-(e).

Historically, electric utilities operated as vertically inte- grated monopolies. New York v. FERC, 535 U.S. 1, 5 (2002). One utility offered a “bundled” service, whereby customers paid a single price for generation, transmission, and distribu- tion of electricity. Id. “Competition among utilities was not prevalent.” Id. Although the number of power suppliers has increased dramatically since the advent of federal regulation in the 1930s, until recently, public utilities continued to retain 6906 CAL DEP’T OF…