Commissioner James Danly Statement
March 8, 2023
Docket No. ER23-1114-000
I dissent from this latest order approving a retroactive waiver of an expired deadline, this time of the project modification deadline to be eligible to participate in the California Independent System Operator Corporation (CAISO) process for allocating transmission.[1] The deadline for the completed application was December 5, 2022. Over three months after the deadline, American Kings Solar, LLC (American Kings), filed to waive it. The majority calls this a “prospective” waiver and grants it.[2]
The Commission is as powerless to grant this waiver as it is to travel back in time itself to ensure the deadline is met.[3] Of the two options, at least time travel is legal.
As I explained in a similar filed rate violation case I wrote about last month,[4]
The filed rate violation in this case is straightforward. ‘The filed rate doctrine and the rule against retroactive ratemaking leave the Commission no discretion to waive the operation of a filed rate or to retroactively change or adjust a rate for good cause or for any other equitable considerations.’[5] I am dismayed how the court’s repeated declaration that we have ‘no discretion’ continues to be misinterpreted by my colleagues, but I will restate what I have explained in numerous dissents to the Commission’s issuance of unlawful retroactive waivers,[6]
Unambiguous, uninterrupted and controlling judicial precedent holds that a utility can only charge the rate on file. This is called the filed rate doctrine.[7] It is a core tenet of utility regulation. The Commission also has no authority to permit utilities to charge rates other than those on file unless there is advance notice that the rate may change or the Commission has approved a tariff allowing the utility to charge different rates prospectively. This is called the rule against retroactive ratemaking.[8] This rule is also a core tenet of utility regulation and is a necessary adjunct to the filed rate doctrine. There would be little point in having rates on file if rate changes can be retroactively applied. Both the filed rate doctrine and the rule against retroactive ratemaking also apply to non-rate terms and conditions in filed tariffs.[9]
The CAISO Open Access Transmission Tariff—the rate on file—includes section 8.9 of Appendix DD, which requires American Kings to:
have had its Material Modification Assessment related to the proposed addition of a 73.8 megawatt (MW) energy storage battery . . . to an existing, operational solar facility completed by December 5, 2022, in order to be eligible to receive a deliverability allocation in CAISO’s upcoming annual Transmission Plan (TP) Deliverability Allocation Process.[10]
It did not. No recognized exception to the filed rate doctrine and rule against retroactive ratemaking applies.[11] Case closed.
I recognize that American King presents a sympathetic case. In fact, it appears that the party to blame for the missed deadline may be CAISO, as American King had provided the necessary materials in time for the deadline, but CAISO did not approve the application until January 4, 2023.[12] Record evidence states that the project’s power is needed.[13] But the Commission has “no discretion” to approve a retroactive waiver.[14]
No one is likely to seek rehearing or appeal, so as in most of the Commission’s “precedent” granting similarly unlawful retroactive waivers, this result likely will stand. But imagine the regulatory chaos that could ensue when a federal court requires the Commission to stop waiving lapsed deadlines that are fixed in filed rates. What happens to all these unlawfully granted waivers? Probably nothing, but that does not give the Commission license to flaunt the law.
For these reasons, I respectfully dissent.
[1] American Kings Solar, LLC, 182 FERC ¶ 61,151 (2023) (Order).
[2] Id. P 13.
[3] I use the present tense “is met” because time travel assumes the Commission is back in December, 2022.
[4] PJM Interconnection, L.L.C., 182 FERC ¶ 61,109 (2023) (Danly, Comm’r, dissenting at P 5) (footnote omitted).
[5] Old Dominion Elec. Coop., Inc. v. FERC, 892 F.3d 1223, 1230 (D.C. Cir. 2018) (citing Columbia Gas Transmission Corp. v. FERC, 895 F.2d 791, 794-97 (D.C. Cir. 1990)) (emphasis added); see also Ark. La. Gas Co. v. Hall , 453 U.S. 571, 578 (1981) (Arkla) (finding that “the Commission itself has no power to alter a rate retroactively”) (footnote omitted).
[6] See, e.g., Cal. Indep. Sys. Operator Corp., 176 FERC ¶ 61,159 (2021) (Danly, Comm’r, dissenting at P 2).
[7] Id. (Danly, Comm’r, dissenting at P 2 & n.5) (citing Waiver of Tariff Requirements, 171 FERC ¶ 61,156, at P 5 & n.13 (2020) (Proposed Policy Statement) (citing Arkla, 453 U.S. at 577; Mont-Dakota Utils. Co. v. Nw. Pub. Serv. Co., 341 U.S. 246, 251-52 (1951))).
[8] Id. (Danly, Comm’r, dissenting at P 2 & n.6) (citing Proposed Policy Statement, 171 FERC ¶ 61,156 at P 5 (citing Arkla, 453 U.S. at 578)).
[9] Id. (Danly, Comm’r, dissenting at P 2 & n.7) (citing Proposed Policy Statement, 171 FERC ¶ 61,156 at P 6; Oklahoma Gas, 11 F.4th at 829-30 & n.3). See generally P3 Protest, Att. A, Aff. of the Hon. Joseph T. Kelliher, at PP 10-13 (Chairman Kelliher’s concise restatement of the law regarding the filed rate doctrine and rule against retroactive ratemaking).
[10] Order P 1 (emphasis added).
[11] See Exxon Co. U.S.A. v. FERC, 182 F.3d 30, 49 (D.C. Cir. 1999) (notice in the filed rate that the tariff is subject to retroactive adjustment); Holyoke Gas & Elec. Dep’t v. FERC, 954 F.2d 740, 744 (D.C. Cir. 1992) (parties contract to make the rate effective retroactively and show that doing so is not against the public interest).
[12] Order P 3 (citation omitted).
[13] See id. P 11.
[14] See supra P 3.