Mayer Brown and Stoel Rives secure favorable FERC ruling for McKenzie Electric Cooperative

A team of lawyers from Mayer Brown and Stoel Rives LLP secured a victory for electric utility cooperative McKenzie Electric Cooperative (MEC) in an initial decision from a Federal Energy Regulatory Commission (FERC) administrative law judge. The judge found that Basin Electric Power Cooperative, the nation’s largest cooperative, had improperly been including significant charges associated with one of its for-profit affiliates in customer rates.

In 2019, MEC filed a protest before the FERC over the rates Basin Electric has been requiring MEC and other Basin Electric cooperative customers to pay. Basin Electric has been including forecast losses and costs related to its for-profit subsidiary, Dakota Gasification Company (DGC), in its rates, which Mayer Brown and Stoel Rives contended is not lawful under the Federal Power Act.

In his initial decision issued June 11, 2024, a FERC administrative law judge determined that Basin Electric unlawfully included the financial performance of DGC when setting its member rates, making its utility customers, including MEC, pay substantial amounts for nonutility-related costs. The judge also found that Basin Electric was imprudent when it failed to consider replacing coal-fired power plants with less expensive generation.

Mayer Brown’s team was led by Salt Lake City-based Litigation & Dispute Resolution partner Cameron Sabin.