Commissioner James Danly Statement
May 13, 2022
Docket No. EL19-58-011
I dissent from this order.[1] As I have said before, I object to the process by which the instant filing has come before the Commission and I dissent on the merits.[2]
We find ourselves here, yet again, as a result of the Chairman’s direction to the FERC Solicitor’s Office to seek voluntary remand of orders pending appeal without the knowledge or acquiescence of his fellow Commissioners, which at least violated long-standing Commission practice and may have been unlawful.[3] On the merits, this order implements profound changes to fundamental aspects of the market administered by PJM Interconnection, L.L.C. (PJM) by restoring the historical E&AS Offset and does so recklessly, absent the benefit of additional briefing or supplementation of the record as to the consequences of these changes, especially in light of PJM’s numerous other recent tariff revisions.
Worse still, this order on compliance will not be the end. The order identifies several errors in PJM’s submission that will require yet another compliance filing and another order in a proceeding that the Commission never should have initiated in the first place.[4] Meanwhile, a separate PJM compliance filing, with an October 1, 2022 implementation date, remains pending in another sub-docket.[5]
PJM’s next base residual auction is scheduled for June 8, 2022. These protracted, unnecessary proceedings have caused unacceptable delays in PJM’s auction schedule.[6] We can only hope there will be no further delays. How can anyone expect a market to function correctly and efficiently in the face of the uncertainty the Commission has created over the last year? We cannot continue to take actions that will delay PJM’s auctions or throw its market rules into further chaos. Amidst such uncertainty, the promised benefits of the market will be diminished and will eventually be lost. PJM’s ability to ensure resource adequacy will be imperiled. Prices will rise and reliability will suffer. We cannot continue down this road and keep telling ourselves that the resulting rates are just and reasonable.
For these reasons, I respectfully dissent.
[1] PJM Interconnection, L.L.C., 179 FERC ¶ 61,104 (2022).
[2] See PJM Interconnection, L.L.C., 177 FERC ¶ 61,209, at P 2 (2021)
(Danly, Comm’r, dissenting (Jan. 20, 2022)) (arbitrarily reversing certain past Federal Power Act section 206, 16 U.S.C. § 824e, findings, including reverting the forward-looking energy and ancillary services offset (E&AS Offset) to a backward-looking approach, over the objections of PJM and third parties, without any new evidence to support those findings) (Voluntary Remand Order), order granting clarification, 178 FERC ¶ 61,085 (2022) (Danly, Comm’r, dissenting). Then-Commissioner Glick had supported as a “lone bright spot”—“[t]he forward-looking E&AS Offset adopted in [the] proceeding” stating it “should help reduce the adverse impacts on consumers by reducing capacity market revenue to reflect some of the increases in revenue earned through the energy and ancillary services markets . . . a step, albeit a small one, in the right direction.” PJM Interconnection, L.L.C., 173 FERC ¶ 61,123 (2020) (Glick, Comm’r, dissenting at P 22) (citation omitted).
[3] PJM Interconnection, L.L.C., 177 FERC ¶ 61,209 (Danly, Comm’r, dissenting at PP 1-8).
[4] PJM Interconnection, L.L.C., 179 FERC ¶ 61,104 at PP 1, 9-11.
[5] PJM Interconnection, L.L.C., Transmittal, Docket No. EL19-58-012, at 12 (filed Feb. 22, 2022) (compliance filing implementing revisions to the reserve market rules).
[6] PJM Interconnection, L.L.C., Transmittal, Docket No. EL19-58-011, at 3 (filed Feb. 18, 2022); see also PJM Interconnection, L.L.C., 178 FERC ¶ 61,122 (2022) (Danly, Comm’r, concurring).