For good or ill, the filed rate doctrine has been introduced into the field of insurance. Learning the lessons from the field in which the FRD began, which is the field of utility regulation, is important. That might seem obvious, but perhaps because the FRD is so new to insurance, few insurance practitioners incorporate learning the lessons from the field of utility regulation into their insurance practice.
In Wabash Valley Power Ass'n v. Fed. Energy Reg. Comm'n, Nos. 20-1286 & 20-1348, 2022 WL 3036393 (D.C. Cir. Aug. 2, 2022), a utility lost its attempt to bar users from challenging its rate. The utility-rate-setter declared that a rate could not be challenged because the charge was "filed" in contracts written by the utility and submitted to the utility by the users who had to sign the contracts. The contracts contained a provision that the user agreed that the rates it paid to the utility under the contract were fair and reasonable.
The administrative agency, in this case the Federal Energy Regulatory Commission (FERC), rejected the utility's position, and the Circuit Court of Appeals for the District of Columbia affirmed.
The Court's summary was succinct. The Court's opinion went directly to the point:
This case presents a question of how to determine the reasonableness of rates for the sale of electricity from an energy cooperative to its individual member utilities. The rates are fixed by majority vote of the utilities. Contracts between the cooperative and certain members purport to impose a presumption that the rates are just and reasonable. In rejecting these contracts, the Federal Energy Regulatory Commission concluded that the rates are not entitled to a presumption of reasonableness under [Supreme Court decisions].
Wabash Valley Power Association, 2022 WL 3036393, at *1.
A rate can be challenged even if the party setting the rate makes the other parties sign contracts that declare the rate "just and reasonable." Those in the insurance field who have ears to hear, let them hear, to borrow a Biblical phrase.
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