FERC refuses rehearing on Alcon case. (Federal Energy Regulatory Commission; backup power from Puerto Rico Electric Power Authority)

FERC Refuses Rehearing on Alcon Case

The Federal Energy Regulatory Commission has refused to reconsider its January decision granting backup power to Alcon Inc., a pharmaceutical company in Puerto Rico that gets its main electricity supply from a third-party cogeneration facility.

The utility involved, the Puerto Rico Electric Power Authority (Prepa), had asked FERC to rethink the January order, which reversed an August 1985 ruling that Alcon was not entitled to the backup because it neither owned nor operated the generating plant. Commissioner Anthony Sousa, who supported the 1985 decision, dissented from last week's order.

In its request for rehearing, Prepa argued that the benefit of backup power should be granted only to parties assuming the financial risks of building and operating an independent generation facility. But FERC countered that "risk is not the key to nondiscriminatory pricing of backup power. Rather, the key is the encouragement of cogeneration.'

FERC's refusal to reconsider the Alcon case leaves Prepa the option of either providing power to Alcon or taking the case to court. Based on Prepa's arguments in its request for rehearing that the commission had overstepped its statutory authority by granting the backup, many observers believe the utility will pursue the latter course. But Prepa's attorneys, contacted ...