The D.C. Circuit Court of Appeals issued a decision Monday in *Maryland Office of People's Counsel v. FERC*, a case that highlights ongoing tensions between federal energy regulators and consumer advocacy groups over electricity pricing in the nation's largest power grid. The decision comes after the Third Circuit Court of Appeals previously vacated FERC's approval of controversial tariff amendments by PJM Interconnection.
The case centers on PJM Interconnection's request to the Federal Energy Regulatory Commission for permission to amend its tariff under section 205 of the Federal Power Act before finalizing a capacity auction. According to court documents, the proposed changes threatened to impose hundreds of millions of dollars in inflated electricity prices on consumers served by the PJM grid system.
PJM Interconnection operates the electrical grid serving approximately 65 million customers across 13 states and Washington, D.C., making it the largest regional transmission organization in the United States. The company manages electricity transmission and coordinates wholesale power markets across Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia, and the District of Columbia.
FERC initially approved PJM's tariff amendment request, allowing the grid operator to modify its pricing structure before conducting the capacity auction. However, this decision faced immediate legal challenges from multiple fronts, including consumer advocacy groups and power providers who argued the changes violated established regulatory principles.
The Third Circuit Court of Appeals dealt a significant blow to FERC's position in *PJM Power Providers Group v. FERC* (3d Cir. 2024), where the appeals court vacated FERC's approval of the tariff amendment. The Third Circuit ruled that the tariff changes violated the filed-rate doctrine, a fundamental principle in utility regulation that requires rates to be properly filed and approved before taking effect.
The filed-rate doctrine serves as a cornerstone of federal energy regulation, ensuring that utility rates are transparent, properly vetted, and legally established before being imposed on consumers. The Third Circuit's decision in the power providers case established important precedent regarding how FERC can approve tariff modifications in relation to pending capacity auctions.
In the current D.C. Circuit case, a coalition of consumer advocacy groups led by the Maryland Office of People's Counsel petitioned for review of FERC's orders. The petitioners were represented by Jeffrey A. Schwarz and a team of attorneys from multiple states, reflecting the multi-state nature of the PJM grid and the widespread consumer impact of the disputed regulatory decisions.
FERC defended its position through attorneys including Jason T. Perkins, with Acting General Counsel David L. Morenoff and Solicitor Robert H. Solomon also representing the commission. PJM Interconnection and other industry participants intervened in support of FERC's position, represented by Paul W. Hughes and a large team of attorneys.
The case was argued before a three-judge panel consisting of Circuit Judges Henderson, Pillard, and Garcia on Nov. 17, 2025. Circuit Judge Karen LeCraft Henderson authored the opinion for the court, which was decided Jan. 13, 2026.
The dispute reflects broader tensions in energy regulation between the need for grid operators to maintain system reliability and the imperative to protect consumers from excessive costs. Capacity auctions are critical mechanisms through which PJM ensures adequate electricity generation resources are available to meet future demand, but the pricing of these auctions directly impacts consumer electricity bills across the region.
Consumer advocacy groups have increasingly challenged FERC decisions that they argue prioritize utility and generator profits over ratepayer interests. State offices of people's counsel and attorney general offices have become more active in federal energy proceedings, arguing that FERC's traditional deference to utility requests often comes at consumer expense.
The case also highlights the complex interplay between different federal circuit courts in energy regulation. While FERC is headquartered in Washington and most challenges to its orders are heard by the D.C. Circuit, the Third Circuit's jurisdiction over PJM-related matters has created parallel tracks of litigation that sometimes reach conflicting conclusions.
The outcome of this case could influence how FERC approaches future tariff modifications and capacity auction procedures across all regional transmission organizations. With electricity costs remaining a significant concern for consumers nationwide, regulatory decisions affecting pricing mechanisms face increased scrutiny from both state officials and federal courts.
The decision represents the latest development in ongoing efforts by consumer advocacy groups to hold federal energy regulators accountable for decisions affecting electricity prices. As states continue to advocate for their residents' interests in federal energy proceedings, cases like this one will likely shape the balance between regulatory flexibility and consumer protection in electricity markets.