"We didn't file bankruptcy sooner as we still wanted to fight the case, and prove our innocence. As a matter of fact, we were exploring options for additional funding for the company and pro bono litigation services.  But, when the rubber hit the road, we couldn't make it work.  The best case scenario was that we'd win with a damning opinion from the court. So what? I'd never receive any consideration/reimbursement, and FERC would ignore the precedent in the future enforcement efforts anyway," said Gates.

"It's a negative feedback loop -- this type of outcome just emboldens the FERC and encourages them to file more frivolous/bogus lawsuits which will further weigh on the courts.  The only way to stop this to have someone go the distance and have someone from the FERC lose their law license, or something, to discourage abusive prosecution. Or structural changes within the courts (loser pays victors legal fees?), and certainly overhauling and perhaps eliminating the administrative state could help.  Until then, the government does whatever the government wants to do, and can do so with impunity."

"We got the sense that our judge didn't really want to try the case. She took two years to rule on de novo review several years ago (which could have been a ruling she could have made from the bench) and we felt pressure to make "business decisions".  As a citizen of the country, this makes me sad -- you expect to go into the courts and have a judge who wants to dole out justice.  But, in reality, I guess the system is overloaded and would simply crash if most actions didn't get settled. I heard that COVID exacerbated the problems -- apparently, the judges are up to their eyeballs in work and are just overwhelmed.  So, the courts are really set-up to at least encourage, if not directly push, people to settle," said Gates.

The Commission’s incentive policies— particularly the CWIP Incentive, which allows recovery of costs before a project has been put into service—run the risk of making consumers “the bank” for the transmission developer; but, unlike a real bank, which gets to charge interest for the money it loans, under our existing incentives policies the consumer not only effectively “loans” the money through the formula rates mechanism, but also pays the utility a profit, known as Return on Equity, or “ROE,” for the privilege of serving as the utility’s de facto lender. There is something wrong with this picture.

The DOJ complaint and audit staff’s discussions on internal controls during onsite interviews of FESC employees raised audit staff’s concerns about the existence of significant shortcomings in FirstEnergy and its subsidiary companies’ controls over financial reporting, including controls over accounting for the costs of civic, political, and related activities, such as lobbying activities, performed by and on behalf of FirstEnergy and its subsidiaries. Moreover, these controls may have been circumvented in ways designed to conceal the nature and purpose of expenditures made and, as a result, that led to the improper inclusion of lobbying and other nonutility costs in wholesale rate determinations.

Even more concerning, several factual assertions agreed to by FirstEnergy in DPA and the remedies FirstEnergy agreed to undertake, point towards internal controls having been possibly obfuscated or circumvented to conceal or mislead as to the actual amounts, nature, and purpose of the lobbying expenditures made, and as a result, the improper inclusion of lobbying and other nonutility costs in wholesale transmission billing rates.

"And so what I want you to know is that you took advantage of my good grace. All of you. I'm going to say FERC especially. They were the ones coming in and telling me, "Listen, we're going to do it. We're going to do it. We're going to settle the case. We're going to settle the case.
And I take at your word what the United States of America says to a federal judge. I used to represent the United States of America. And what you say is extremely meaningful. It would never occur to me that a United States agency would put a case on hold for more than a year telling the judge that they were going to settle when they weren't.  Now, I can tell you, I don't know who's being unreasonable, but it better not be FERC because I feel lied to. I'm going to tell you that."

What I am hearing is there is an entity who is being sued and is claiming it's broke. Now, that to me suggests what are you going to get? You're going to get years of litigating money that they say they don't have.

We're going to have a trial, and if you win,  you're going to get years of litigation about money that they say they don't have. And I can tell you I  know in this circumstance, not through anything I have heard from a magistrate judge, but from my nine years  of experience settling over 600 cases that somebody or more than one somebody is being completely unreasonable.

To so depart from "the regulation's obvious meaning" would "permit the [Commission], under the guise of interpreting a regulation, to create de facto a new regulation." Christensen v. Harris Cnty., 529 U.S. 576, 588 (2000); accord Chase Bank USA, N.A. v. McCoy, 562 U.S. 195, 211 (2011) (internal quotation omitted)

Petitioners initially succeeded—twice—on those claims.

... landowners and community groups represented solely by the undersigned Consumer Organizations are the elephant in the room that is ignored by nearly all other commenters.

No matter the new rules implemented through this proceeding, the Commission cannot avoid the elephant. All commenters support their own version of transmission utopia, with very few acknowledging that the transmission the new rules are designed to encourage can be made more expensive, delayed, or perhaps even cancelled, through opposition from affected landowners and communities. No rule made by the Commission can overcome the will of the people to join together to protect their interests against what may be seen as an invasion that jeopardizes their homes, health, heritage, and ability to earn a living.

the fair market value for the use of the transmission capacity, as determined by the Secretary, taking into account, as the Secretary determines to be necessary, the comparable value for the use of the transmission capacity of other electric power transmission lines; and (B) on a schedule and in such divided amounts, which may be a single amount, that the Secretary determines are likely to facilitate construction of the eligible project, taking into account standard industry practice and factors specific to each applicant, including, as applicable-- (i) potential review by a State regulatory entity of the revenue requirement of an electric utility; and (ii) the financial model of an independent transmission developer.

"I think members of Congress are overestimating the federal government's ability to approve transmission lines in a speedy manner while underestimating the controversy this will foment amongst constituents," said Tony Clark, a Republican former FERC chair.

But strengthening FERC's hand in permitting may not resolve those issues and could even create new ones, former FERC member Clark said. Intervenors will still be able to challenge new projects at the federal level, according to Clark. And allowing FERC to override states' decisions not to condemn private property in support of a transmission developer's plans could put the agency "in a difficult position."

"It looks to me like a nightmare scenario for FERC," Clark said.

Some market participants have also expressed concern with the anchor tenant program. Transmission developer ITC Holdings Corp. said the Senate improved the proposal by specifying that projects funded through the program should not conflict with projects emerging through the regional transmission organization stakeholder process. But the bill still risks subsidizing uneconomic projects, while overall program funding of $2.5 billion "is small," ITC's vice president of federal and regulatory affairs Nina Plaushin said.