Thus, FERC appears to be arguing that it does share authority with bankruptcy courts over breaching PPAs, although over different aspects of the contracts. Specifically, FERC declared that parties to PPAs it regulates must get its permission to “modify the filed rate” of the contracts, while the bankruptcy court has jurisdiction over whether or not to reject the contract.
As Meghan Mandel of Troutman Sanders LLP explains: “While acknowledging the unsettled state of the law, FERC concluded that FERC and the bankruptcy courts have concurrent jurisdiction to address wholesale power contracts sought to be rejected through bankruptcy. FERC explained that the filed-rate doctrine empowers FERC, and FERC alone, to judge whether a change to the filed rate is reasonable before the modified rate may be charged. FERC found that a bankruptcy court’s rejection of a FERC-jurisdictional contract alters the essential terms of that contract, i.e., the filed rate, which triggers FERC’s jurisdiction and requires FERC’s approval.”
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