FERC Administrative Law Judge Releases Initial Decision

McKenzie Electric Cooperative (MEC) buys most of its power from Basin Electric Power Cooperative (Basin) through Upper Missouri Power Cooperative. In 2019, on behalf of our members, MEC filed a lawsuit, which is pending, and a protest before the Federal Energy Regulatory Commission (FERC) over the rates Basin has been requiring MEC and other electric cooperatives to pay. Basin includes forecast losses and costs related to its for-profit subsidiary, Dakota Gasification Company (DGC), in its rates.

MEC protested Basin's rates at FERC because Basin's inclusion of DGC's ongoing forecast losses and other costs in Basin's member rates is not just, reasonable, or lawful under the Federal Power Act.

In an initial decision issued June 11, 2024, a FERC administrative law judge determined that Basin unlawfully included the financial performance of DGC when setting its member rates, making its utility customers including MEC pay for nonutility-related costs. If and when the decision becomes final, Basin will be required to provide refunds to utility customers who were forced to pay nonutility costs.

We know there are still many steps yet to come in this process, but we are pleased with this initial decision.

The full text of the initial FERC decision can be found here:  eLibrary | File List (ferc.gov).