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RTO Government Affairs Expenses Survive ?Compelled Speech? Challenge

By Eric L. Lipman

In an interesting opinion issued on Tuesday of this week, a panel of the U.S. Court of Appeals for the District of Columbia Circuit turned away the challenge of three northeastern utilities to the tariff sheets submitted by their Regional Transmission Organization ? the ISO New England, Inc.br /br /Regional Transmission Organizations ? a href="http://www.ferc.gov/industries/electric/indus-act/rto.asp"RTOs/a ? consolidate operational control over electricity transmission services within a particular geographic area and are obliged to submit tariffs for review by the Federal Regulatory Energy Commission. The utilities complained that FERC should have disallowed $2 million in governmental affairs expenses that ISO New England sought to recover from its customer-utilities. The utilities argued that the Commission?s acquiescence to the recovery of such expenses obliged them to underwrite speech on legislative and regulatory issues with which they did not agree; in violation of the First Amendment.br /br /Disagreeing, the panel held that permitting recovery of such expenses by the larger organization did not violate the associational or free speech rights of the utilities. As the panel reasoned, ?a government may adopt rules making it very costly for a person to avoid membership in a group, and yet allow the group to charge members (including dissenters) for the costs of expressing views ?germane? to the group?s mission.?br /br /The panel?s complete analysis is accessible a href="http://pacer.cadc.uscourts.gov/docs/common/opinions/200812/04-1335-1154244.pdf"here/a.

Full post as published by Within the Scope on December 20, 2008 (boomark / email).