In recent months, the Federal Energy Regulatory Commission (FERC, or the Commission) has seen an increase in the number of contested settlements being reported to the Commission by Administrative Law Judges.  From July 1, 2022 through June 30, 2023, the Commission received 20 reports of contested settlements.  This is greater than the total number of contested settlements received by the Commission from for the prior four years (18 received from July 1, 2018 through June 30, 2022).  

Generally, when an offer of settlement is submitted to the Commission, it is first certified as uncontested by an Administrative Law Judge before being sent to the Commission for approval.  In many cases, the process is this straightforward.  However, when an offer of settlement is contested, it generally cannot be certified to the Commission, merely reported to the Commission as contested.  This leads to the question: What happens when an Administrative Law Judge determines that an offer of settlement is contested, and what criteria do they use to make that determination?  This white paper will provide an overview of the Commission Rules covering settlement proceedings, highlight the criteria utilized by Administrative Law Judges to make determinations about offers of settlement, and provide historical examples of how Administrative Law Judges and the Commission have approached contested settlements.