Commissioner James Danly Statement
October 15, 2020
Docket No. AD20-14-000
The Commission issues a proposed policy statement today in this docket to “encourage” Regional Transmission Organizations (RTOs) and Independent System Operators (ISOs) to develop potential Federal Power Act section 205[1] filings proposing market rules to accommodate state-determined carbon pricing programs.[2] I dissent in part because I believe that the issuance of a policy statement on this subject—a wholly discretionary act—is unnecessary and unwise. I concur with that part of the policy statement noting that we have jurisdiction to entertain section 205 filings that seek to accommodate state carbon-pricing policies, which is a fundamental principle that cannot be doubted.
As to my concern that the Commission should not exercise its discretion to issue a policy statement, I expressed similar concerns in my recent dissent to Order No. 2222 requiring RTOs/ISOs to promulgate rules to accommodate distributed energy resource aggregators.[3] There I questioned the Commission’s seizure of authority at the expense of the States and advocated that “[w]e should allow the RTOs and ISOs . . . to develop their own DER programs in the first instance.”[4] “[T]hen the question of the Commission’s jurisdiction will be ripe.”[5]
This policy statement does not mandate that RTOs/ISOs adopt carbon-pricing accommodation regimes. I agree that the Commission should not issue such a mandate.
Instead, the policy statement “encourages” RTO/ISO rule changes. Without seeing a proposal, the Commission predetermines that any such proposal will be within the Commission’s jurisdiction and “would not in any way diminish state authority.”[6] That may well turn out to be true, but I would have waited until we had an actual 205 filing before us rather than pre-judging the issue based on unstated assumptions about how such programs might work. It is easy to imagine any number of RTO/ISO carbon-pricing proposals that would violate the Federal Power Act by impermissibly invading the authorities reserved to the States. This policy statement is not, as the majority’s order characterizes it “another example of the type of ‘program of cooperative federalism’ that the Court noted with approval in EPSA.”[7] There is no program. This is instead a non-binding, blanket dismissal of potential jurisdictional concerns.
As to the substance of the policy statement, I concur. I cannot do otherwise. The policy statement amounts to little more than a statement of fact: section 205 of the Federal Power Act has not been repealed and the Commission therefore has jurisdiction to entertain section 205 filings that seek to accommodate state carbon-pricing policies. Surely, that need not be stated. And to the extent the Commission feels the need to “clarify” the fact that we have the power to accept just and reasonable tariff revisions that are designed to include mandatory state charges in energy and capacity market offers, I am hard-pressed to identify a more settled area of Commission law.
For these reasons, I respectfully concur in part and dissent in part.
[1] 16 U.S.C. § 824d (2018).
[2] Carbon Pricing in Organized Wholesale Elec. Mkts., 173 FERC ¶ 61,062 (2020).
[3] See Participation of Distributed Energy Res. Aggregations in Mkts. Operated by Reg’l Transmission Orgs. & Indep. Sys. Operators, 172 FERC ¶ 61,247 (2020) (Danly, Comm’r, dissenting).
[4] Id. (Danly, Comm’r, dissenting at P 4).
[5] Id.
[6] Carbon Pricing in Organized Wholesale Elec. Mkts., 173 FERC ¶ 61,062 at P 12.
[7] Id. P 13 (quoting FERC v. Elec. Power Supply Ass’n, 136 S. Ct. 760, 779-80 (2016)).