Docket No. ER22-962-003
I concur with the order, consistent with my concurrence to the order on PJM’s original compliance filing,[1] but I must emphasize the serious and credible concerns raised by the Public Utilities Commission of Ohio (Ohio Commission) and Pennsylvania Public Utility Commission (Pennsylvania Commission) in their requests for rehearing. Their concerns are additional indicia of the practical problems created by Order No. 2222 and its ill-conceived overreach into state retail jurisdiction.
The requests for rehearing filed by the Ohio Commission on its own behalf and the Pennsylvania and Ohio Commissions jointly, essentially revolve around one fundamental issue: the Commission’s failure to respect “the jurisdictional boundaries of the Commission and the states[,]” which the Joint Request describes as a “critical component of successful implementation of Order [No.] 2222 . . . .”[2]
This fundamental issue raised by these two state commissions has, of course, been among the daunting practical challenges of implementing Order No. 2222 from the beginning because that order egregiously invaded the long-time authorities of the states and other relevant electric retail regulatory authorities (RERRAs) to regulate retail rates, as I pointed out in my dissent to Order No. 2222-A.[3] We are also beginning to see some of the other consequences, including the costs that consumers will now be forced to bear towards implementing Order No. 2222. This point is actually emphasized by today’s order. In response to the Ohio Commission’s argument that the First Compliance Order did not address cost allocation of the certain indirect costs related to Order No. 2222, today’s order states “Order No. 2222 does not prohibit an electric distribution company from seeking and obtaining cost recovery from the RERRA.”[4]
Distributed energy resources (DERs) – defined broadly to include everything from behind-the-meter generating resources and batteries to peak shaving and efficiency programs – clearly have tremendous positive potential on both the demand and supply sides of the resource matrix, if implemented thoughtfully. I do not dispute the potential of DERs, as I have made clear before.[5] DERs are, however – by definition – on the distribution grid, an undeniable fact which makes their implementation, management and deployment clearly challenges best suited for retail regulators. This is not just a matter of long-time legal principles under the Federal Power Act, but it is also a practical imperative. Retail regulators are simply far better suited in terms of their knowledge and expertise in their own uniquely local challenges to ensure DER deployment is managed successfully and, in particular, to ensure the potential costs to retail consumers are minimized and fairly allocated.
This Commission, as we all know, is not a retail regulator; states and other RERRAs are. So Order No. 2222 represented a huge and unwise overreach by the Commission into the retail regulatory space. The implementation consequences are only now beginning to reveal themselves as we get these many ludicrously complex compliance filings from the RTOs.[6] The implementation challenges so far are only previews of coming attractions. Equally true is that these challenges present both reliability as well as consumer cost implications.
Let me emphasize that in this proceeding I do not blame PJM at all for the problem. PJM and the other RTOs did not ask for Order No. 2222; they are just trying to implement it as they believe this Commission wants to see it done. That is the source of the problem that the Pennsylvania and Ohio Commissions identify in their requests for rehearing.
For these reasons, I respectfully concur.
[1] PJM Interconnection, L.L.C., 182 FERC ¶ 61,143 (2023) (Christie, Comm’r, concurring) (Christie Concurrence to First Compliance Order) (available at https://www.ferc.gov/news-events/news/commissioner-christies-concurrence-pjm-order-no-2222-compliance-filing-er22-962).
[2] Pennsylvania Commission and Ohio Commission March 31, 2023 Joint Request for Rehearing (Joint Request) at 3.
[3] Participation of Distributed Energy Resource Aggregations in Markets Operated by Regional Transmission Organizations and Independent System Operators, 174 FERC ¶ 61,197 (2021) (Christie, Comm’r, dissenting) (Christie 2222-A Dissent) (available at https://www.ferc.gov/news-events/news/item-e-1-commissioner-mark-c-christie-dissent-regarding-participation-distributed).
[4] PJM Interconnection, L.L.C., 184 FERC ¶ 61,019 at P 19 (2023); see Ohio Commission March 31, 2023 Request for Rehearing at 9.
[5] See, e.g., Christie 2222-A Dissent at P 8 (“Let me be clear: encouraging the development of DERs is a good thing; eviscerating the states’ historic authority in the name of encouraging DER development is not.”) (emphasis in original).
[6] This is something I made clear in my concurrence to the First Compliance Order. Christie Concurrence to First Compliance Order at P 6 (“[T]he order repeatedly admonishes PJM — 34 times, per a word search — that it only ‘partially complies’ or is only ‘partially compliant’ in its attempts to meet Order No. 2222 standards, leading to who knows how many more compliance filings resulting from today’s order and any future attempts by PJM to comply. Complexity does not even begin to describe the hard spot these RTOs, states and market participants are in.”). In PJM’s case, we know that that the Commission has already acted on two compliance filings and two requests for extension of time related to PJM’s making compliance filings. See, e.g., First Compliance Order, 182 FERC ¶ 61,143; PJM Interconnection, L.L.C., 183 FERC ¶ 61,157 (2023) (second compliance order); April 11, 2023 Notice of Extension of Time (granting 120-day extension of time as requested by PJM for a compliance filing resulting from the Commission’s First Compliance Order); PJM Interconnection, L.L.C., 175 FERC ¶ 61,013 (2021) (granting PJM, MISO and SPP’s motion for extension of time to file initial compliance in response to Order No. 2222). Who knows when this will end?