Commissioner James Danly Statement
October 23, 2020
Docket No. ER20-1917
The Commission’s order issued in this docket grants a request for a retroactive waiver without ever acknowledging that a retroactive waiver is involved or discussing our legal authority to grant such a waiver.[1] As I explained in detail in my dissent in Sunflower, the grant of such a waiver violates two legal doctrines: the filed rate doctrine and the rule against retroactive ratemaking.[2] I dissent here for the same reasons.
I have additional concerns regarding any retroactive waiver request that, like this one, seeks waiver of a tariff deadline required for a project developer to maintain their position in an interconnection queue. The electric industry is suffering from large and ever-growing interconnection queues in many parts of the country. By way of example, the Midcontinent Independent System Operator, Inc. (MISO) has an interconnection queue which, as of September 15, 2019, included 590 projects totaling 91.6 gigawatts.[3] As the Commission gently put it when issuing Order No. 845, “many interconnection customers experience delays, and some interconnection queues have significant backlogs and long timelines.”[4] Queues of such size not only impose significant administrative burdens upon transmission providers, but they also make it difficult or impossible for developers with viable projects to successfully navigate the interconnection process.
Tariff provisions imposing deadlines by which developers must take certain actions are one of just a handful of critical tools by which to manage interconnection queues. In my view, the Commission should support utilities’ efforts to enforce these deadlines. Instead, in this proceeding and in the Commission’s recent Lightsource decision,[5] the Commission has blithely approved waivers of interconnection queue deadlines and found that such waivers result in no harm without even considering the effect of the waiver on the affected transmission provider’s interconnection queue. Indeed, in Lightsource, the Commission conducted a harm analysis[6] and found that no undesirable consequences attend from granting a retroactive waiver of a tariff queue deadline when interconnection customers in lower queue positions end up in the same position as they would have had the project developer not missed the deadline in the first place. Were that actually true, it would be impossible for the Commission ever to find that the waiver of an interconnection queue deadline would result in harm.
Project developers can always submit a sympathetic explanation for why they missed a deadline. I am concerned that the Commission’s apparent new practice of considering these sympathetic stories on a case-by-case basis, without consideration of the harm that would result to the administration of the interconnection queue, significantly reduces a project developer’s incentive to comply with tariff deadlines, thereby reducing or eliminating one of the few mechanisms available for queue management.
In my dissent in Sunflower, I noted that the way for the Commission to provide for retroactive waivers of tariff provisions without exceeding our legal authority is to allow utilities to include provisions in their tariffs providing notice that certain of their tariff provisions could be subject to waiver after the fact.[7] Such an approach is especially appropriate in the case of interconnection queue deadlines. Transmission providers that are required to manage large interconnection queues have a better understanding than the Commission of which interconnection queue deadlines are important enough to enforce vigorously and which are amenable to after-the-fact waiver.
For these reasons, I respectfully dissent.
[1] See Glidepath Ventures, LLC, 173 FERC ¶ 61,085 (2020).
[2] See Sunflower Elec. Power Corp., 173 FERC ¶ 61,054 (2020) (Danly, Comm’r, dissenting at P 5) (Sunflower).
[3] Midcontinent-Indep. Sys. Operator, Inc., 169 FERC ¶ 61,173, at P 9 (2019).
[4] Reform of Generator Interconnection Procedures and Agreements, Order
No. 845, 163 FERC ¶ 61,043, at P 24 (2018), errata notice, 167 FERC ¶ 61,123, order on reh’g and clarification, Order No. 845-A, 166 FERC ¶ 61,137 (2019), errata notice, 167 FERC ¶ 61,124, order on reh’g and clarification, Order No. 845-B, 168 FERC ¶ 61,092 (2019).
[5] See Lightsource Renewable Energy Dev., LLC, 172 FERC ¶ 61,294 (2020).
[6] See id. P 14.
[7] See Sunflower, 173 FERC ¶ 61,054 (Danly, Comm’r, dissenting at P 17).