I vote with my colleagues on today’s rehearing order allowing East Tennessee to recover non-jurisdictional solar array costs in its rate base. Pipelines are entitled to recover their costs and to earn a reasonable return on their investments. To that end, the Natural Gas Act empowers the Commission to impose a rate under its conditioning authority when it finds the terms are “reasonable” and “require[d]” by the “public convenience and necessity.”[1] Although today’s order follows this statutory command, it departs from the Commission’s more common methods in applying it. I agree with that outcome because it is grounded in the specific facts before us—but write separately to underscore its limits.
Under the Commission’s cost-of-service ratemaking methodology, a pipeline’s rates are designed to recover the jurisdictional cost of providing service. The Commission has sought to exclude certain non-jurisdictional fixed costs in a pipeline’s initial rate base[2] unless those costs were incidental, like sewer lines or distribution poles.[3] But Commission precedent typically refuses to treat broader non-jurisdictional costs, including electricity usage and other variable costs, the same way.[4] For good reason. Declining to allocate non-incidental, non-jurisdictional costs in rate base for a section 7 recourse rate protects consumers from subsidizing costs unnecessary to providing the jurisdictional service or—because the Commission cannot police non-jurisdictional facilities—paying rates for facilities that may not ultimately get built.[5]
This ordinary approach still allows fair recovery for the costs of doing business. Usually, East Tennessee would be able to recover the electricity costs it pays to operate a compressor station through its electric power cost rate. But as explained in today’s order, East Tennessee’s and TVA’s unique circumstances make it impractical to follow that approach here. TVA is also fully on-board with the solar array facility and is the sole project shipper, which eases concerns about foisting additional costs on unwilling parties. So I agree that it is reasonable for East Tennessee to recover the costs of its non-jurisdictional solar array in rate base and that allowing these costs under these specific facts should not lead to harm in future cases.
Given those circumstances, I do not view today’s order as expanding our general policy of forbidding cost recovery for major non-jurisdictional facilities in section 7 proceedings. Holding that line and the principles behind it matters. Not long ago, for instance, the Commission cleared the way for controversial non-jurisdictional carbon offset mitigation for natural gas infrastructure.[6] We were right to course-correct for many reasons. One was that the Commission must ensure that our conditioning authority, including rate conditions, is not used in ways contrary to the NGA’s purposes. Enforcing that rule when it comes to disallowing cost recovery for large-scale non-jurisdictional facilities is part of that duty.
To my read, today’s order is a minor deviation in practice—but not principle—from our sensible and statute-based cost-recovery principles. The fact-specific grounding for our conclusion was critical to my vote.
For these reasons, I respectfully concur.[1] 15 U.S.C. § 717f(e).
[2] See E. Tenn. Nat. Gas, LLC, 192 FERC ¶ 61,153, at P 18 n. 53 (2025) (citing Williston Basin Interstate Pipeline Co., 76 FERC ¶ 61,066, 61,382 (1996) (“The non-jurisdictional costs are excluded because no non-jurisdictional costs should be included in a pipeline’s jurisdictional rates.”)); Pipeline Service Obligations and Revisions to Regulations Governing Self-Implementing Transportation; and Regulation of Natural Gas Pipelines After Partial Wellhead Decontrol, Order No. 636, FERC Stats. & Regs. ¶ 30,939, order on reh’g, Order No. 636-A, FERC Stats. & Regs. ¶ 30,950, order on reh’g, Order No. 636-B, 61 FERC ¶ 61,272 (1992), order on reh’g, 62 FERC ¶ 61,007 (1993), aff’d in part and remanded in part sub nom. United Distribution Cos. v. FERC, 88 F.3d 1105 (D.C. Cir. 1996), order on remand, Order No. 636-C, 78 FERC ¶ 61,186 (1997) (requiring unbundling of non-jurisdictional gas sales and jurisdictional transportation while allowing certain cost recovery of existing stranded assets).
[3] See, e.g., Tex. E. Transmission, LP, 185 FERC ¶ 61,038 (allowing rate recovery for certain fixed electric power substation costs) as amended 185 FERC ¶ 61,038 (2023).
[4] See, e.g., Transcon. Gas Pipe Line Co., LLC, 158 FERC ¶ 61,125 (2017) (accepting separate electric power charges); E. Tennessee Nat. Gas, LLC, 191 FERC ¶ 61,004, at P 35 (2025) (accepting recovery of electric power costs through a separate electric tracker); Dominion Carolina Gas Transmission, LLC, 157 FERC ¶ 61,070, at P 13 (2016) (“[T]he bedrock requirement for all variable cost trackers is that they assess shippers no more or less than the cost of service”).
[5] See Atlantic Refining Co. v. Public Service Comm’n., 360 U.S. 378, 391 (1959) (explaining that section 7(e) conditioning authority requires “a most careful scrutiny and responsible reaction” to initial rates); Mid-American Pipeline Co. v. FPC, 330 F.2d 226,228-29 (D.C. Cir. 1964) (recognizing under the NGA that the Commission’s rate and certificate jurisdiction are separate, and that finding rate jurisdiction does not necessarily lead to authority under the Commission’s certificate jurisdiction).
[6] Consideration of Greenhouse Gas Emissions in Nat. Gas Infrastructure Project Reviews, 178 FERC ¶ 61,108, at P 128 (2022), changed to draft status, Certification of New Interstate Nat. Gas Facilities, 178 FERC ¶ 61,197 (2022), terminating Consideration of Greenhouse Gas Emissions in Nat. Gas Infrastructure Project Reviews, 190 FERC ¶ 61,049 (2025) (order terminating proceeding).