Commissioner James Danly Statement
July 13, 2023
Docket No. ER23-1699-000
I concur with this order rejecting the California Independent System Operator Corporation’s (CAISO’s) request to waive pending or future financial penalties for inaccurate meter data submissions and related tariff provisions about how penalty funds will be distributed. The Commission appropriately denies CAISO’s waiver request.
I add to the majority’s analysis that CAISO’s requested waiver—like many of its prior requested waivers—also violates the filed rate doctrine and rule against retroactive ratemaking.[1] CAISO asserts that the elimination of metering penalties currently in the tariff with retroactive effect is not retroactive because
Tariff section 37.8.10 provides that, if CAISO determines a penalty is warranted, the market participant “may obtain immediate review of the CAISO’s determination by directly appealing to FERC.” CAISO contends that this portion of CAISO’s filed rate directly enables the Commission to perform its own after-the-fact review of penalties and provides notice at the outset that the rates being promulgated are provisional only and subject to later revision.[2]
CAISO’s contention is wrong. A tariff provision stating that market participants may seek Commission review of metering penalties does not provide sufficient notice that CAISO may freely disregard the entire metering penalty regime in the tariff with retroactive effect. Otherwise, any tariff would become “provisional” and subject to retroactive revision by—for example—simply including in the tariff a statement that parties have section 206 rights to file for Commission review of any tariff provision.[3]
To the contrary, the rule is that “no violation of the filed rate doctrine occurs when ‘buyers are on adequate [advance] notice that resolution of some specific issue may cause a later adjustment to the rate being collected at the time of service.’”[4] “Adequate” notice that all metering penalty rules are “provisional” requires greater specificity than stating a market participant’s individual review rights.
The majority opinion correctly denies CAISO’s waiver but also should squarely reject CAISO’s attempted filed rate violation. The Commission has no authority to grant permission to public utilities to retroactively rewrite their tariffs on the fly.
For these reasons, I respectfully concur.
[1] See, e.g., Cal. Indep. Sys. Operator Corp., 176 FERC ¶ 61,159 (2021) (Danly, Comm’r, dissenting) (explaining the filed rate doctrine and rule against retroactive ratemaking and CAISO’s unlawful efforts to retroactively rewrite its filed tariff).
[2] Cal. Indep. Sys. Operator Corp., 184 FERC ¶ 61,009, at P 15 (2023) (citing Waiver Request at 18-19 (citing Columbia Gas Transmission Corp. v. FERC, 895 F.2d 791, 797 (D.C. Cir. 1990))). CAISO made the same argument in a prior waiver request that the Commission granted over my dissent. See Cal. Indep. Sys. Operator Corp., 175 FERC ¶ 61,043, at P 18 (2021); see also id. (Danly, Comm’r, dissenting).
[3] 16 U.S.C. § 824e.
[4] Old Dominion Elec. Coop., Inc. v. FERC, 892 F.3d 1223, 1231 (D.C. Cir. 2018) (quoting Nat. Gas Clearinghouse v. FERC, 965 F.2d 1066, 1075 (D.C. Cir. 1992)).