Commissioner James Danly Statement
December 5, 2022
ER23-480-000
Is the majority kidding? Today’s issuances mark a new low in the saga of the Commission’s disregard for the authority of the courts. Four orders, issued concurrently, grant unlawful retroactive waivers in face of invariant, unambiguous, and growing case law prohibiting such waivers.[1] I have written repeatedly about the limits of our authority under the filed rate doctrine and about the perils of granting unlawful waiver requests.[2]
My position is simple: stop granting illegal retroactive waivers that violate the filed rate doctrine. The courts have spoken; there is no discretion of any kind, regardless of how sympathetic the facts of a particular case are. The Supreme Court has required “strict adherence to the filed rate . . . despite its harsh consequences . . . .”[3] The D.C. Circuit has told us that “FERC has ‘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.’”[4] “When it applies, the filed rate doctrine is ‘a nearly impenetrable shield’ and does not yield, ‘no matter how compelling the equities.’”[5] Similarly, the D.C. Circuit has observed that “[o]nce a tariff filed, the Commission has no statutory authority to provide equitable exceptions or retroactive modifications to the tariff.”[6] And it does not matter whether the proposed change is to a rate or non-rate term. As the D.C. Circuit explained, the FPA “prohibits changes, not just to a rate, but also to ‘any such rate, charge, classification, or service, or in any rule, regulation, or contract relating thereto.’”[7] In other words, just like rates, “[n]on-rate terms within the tariff may not be changed retroactively.”[8] Humbly, I submit that I am not missing an unexpressed subtlety here. The D.C. Circuit would be hard pressed to have been any clearer in its commands to us.
Nevertheless, despite the law, the Commission insists upon arrogating discretion to itself that, by the D.C. Circuit’s plain language, we do not have. Resorting to standard litigation maneuvers, the majority seeks to draw irrelevant distinctions between the facts of this case and the facts of other, inapposite cases regarding the filed rate doctrine. These distinctions do not work. This order plainly grants a retroactive waiver. Here, a Commission-approved tariff provision imposed a deadline and prescribed the consequence for failing to meet the deadline. The deadline was missed; the tariff was violated. Since there is no other part of the tariff that provided notice that a change was later possible,[9] and the contract exception[10] is inapplicable here, we are powerless to do anything but enforce the tariff as written.
Despite these simple facts, the majority misrepresents the waiver request as prospective and grants relief. The basis of this finding? That the tariff deadline relates to averments that must be made in advance of the auction and, since the auction has not yet occurred, the waiver must be prospective.[11] But that is not what the tariff says. It merely provides a deadline and the predicate action that must be taken before that deadline.[12] The cases cited by the Commission are inapposite[13] and, just as importantly, were wrongly decided as my separate statements attached to those orders explain.[14] In the cases cited by the majority, the requesters sought waiver of the one-year notice requirement for rolling over long-term firm transmission service agreements under sections 2.2 and 2.3 of PJM’s Tariff, where existing transmission service had not yet expired. That is not what we are dealing with here. Here, in one proceeding, the requester submitted required certifications for four out of five units but it failed to submit the certification for the fifth unit and seeks waiver so that unit will not be subject to the MOPR.[15] In the three other proceedings, the wrong entity submitted the certifications and the requesters seek waiver to allow the correct entity to amend those certifications to avoid being subject to the MOPR.[16] In each of these proceedings, the tariff deadline has passed.
A better analogue would be the waiver request submitted in time bar cases in which a tariff provision sets forth unambiguous deadlines that the requester failed to meet and then suffered the tariff-proscribed consequences for that failure. Such was the case in Oklahoma Gas, our most recent appellate court issuance on the subject of the filed rate doctrine and tariff waivers and one in which, as I have explained above, the court declared that we lacked the authority to waive the tariff.
Allow me to draw the correct distinction between the two species of cases that the majority seeks to confuse. I have either supported or concurred in orders in which tariffs contained prior notice requirements in advance of the closing of a transaction or in advance of a deactivation.[17] Those cases are different. In those cases, a date-certain had not passed. Had the waiver requests been denied, the entity could have delayed the closing date or deactivation date such that no tariff violation would ever have occurred. If granted, the parties could provide notice shortly before closing, whenever that closing might happen. By granting the waiver, the Commission is informing all parties that the Commission will not require the advance notice specified in the tariff. Because no required deadline had passed, that actually is a prospective waiver request. But those are not the facts here, nor are they the facts in cases cited by the majority.
As if to compound the folly of today’s orders, the majority makes mention of the fact that the waiver requests were not protested or opposed.[18] This is irrelevant. The filed rate doctrine’s strictures are not imposed because of another party’s opposition. The filed rate doctrine establishes a limit on our powers—who the litigants are and what pleadings they file have no bearing on the matter. Moreover, in one of today’s cases, it is at least partially irrelevant for practical reasons. Parties who might have protested were limited in their opportunity to do so because we provided insufficient notice. We established the comment due date on an expedited basis a mere 25.5 business hours after noticing the filing (or four calendar days falling over a weekend).[19] For reference, the typical comment period is 21 days.[20] In reality, the only importance we can assign to the failure of parties to intervene is that, as a practical matter, there will be no party to the proceeding who can challenge the orders, perfect its appeal rights and pursue a petition for review. But, as I have stated before, the absence of opposition does not, and cannot, make the unlawful lawful.[21]
Lest there be any misunderstanding: I am sympathetic to the requesters in such cases—inadvertent error can lead to harsh consequences, but we cannot grant retroactive waivers, no matter how much sympathy we may have for the applicant and no matter the harm, however grave, that our denial works upon the applicant. Whether the requesting parties’ tariff violations were due to inadvertent error is simply beside the point and does not affect the applicability or inflexibility of the filed rate doctrine.
We cannot be selective in our adherence to judicial precedent, especially when the courts have spoken as clearly and invariantly as they have on the limits of our powers under the filed rate doctrine.
For these reasons, I respectfully dissent.
[1] Rolling Hills Generating, L.L.C., 181 FERC ¶ 61,190 (2022) (Rolling Hills); EDF Renewables, Inc., 181 FERC ¶ 61,189 (2022) (EDF); Savion, LLC, 181 FERC ¶ 61,188 (2022) (Savion); Lightsource Renewable Energy Development, LLC, 181 FERC ¶ 61,187 (2022) (Lightsource).
[2] See, e.g., Borough of Chambersburg, 179 FERC ¶ 61,014 (2022) (Danly, Comm’r, dissenting); AEP Energy Partners, Inc., 177 FERC ¶ 61,241 (2021) (Danly, Comm’r, dissenting); Allegheny Elec. Coop., Inc., 177 FERC ¶ 61,240 (2021) (Danly, Comm’r, dissenting); Cal. Indep. Sys. Operator Corp., 176 FERC ¶ 61,159 (2021) (Danly, Comm’r, dissenting); Long Island Power Auth., 176 FERC ¶ 61,118 (2021) (Danly, Comm’r, dissenting in part and concurring in part); Caney River Wind Project, LLC, 176 FERC ¶ 61,097 (2021) (Danly, Comm’r, dissenting); Viridity Energy Sols., Inc., 176 FERC ¶ 61,079 (2021) (Danly, Comm’r, dissenting); SunEnergy1, LLC, 176 FERC ¶ 61,004 (Danly, Comm’r, dissenting); Harbor Cogeneration Co., LLC, 175 FERC ¶ 61,232 (2021) (Danly, Comm’r, dissenting); Buchanan Cnty. Solar Project, LLC, 175 FERC ¶ 61,109 (2021) (Danly, Comm’r, dissenting); Rolling Hills Generating, L.L.C., 175 FERC ¶ 61,108 (2021) (Danly, Comm’r, dissenting); Novera Energy, LLC, 175 FERC ¶ 61,107 (2021) (Danly, Comm’r, dissenting); TGE Pa. 202, LLC, 175 FERC ¶ 61,080 (Danly, Comm’r, dissenting); Leeward Renewable Energy, LLC, 175 FERC ¶ 61,079 (2021) (Danly, Comm’r, dissenting); N. Nat. Gas Co., 175 FERC ¶ 61,059 (2021) (Danly, Comm’r, dissenting); Kinetica Deepwater Express, LLC, 175 FERC ¶ 61,048 (2021) (Danly, Comm’r, concurring in part and dissenting in part); Cal. Indep. Sys. Operator Corp., 175 FERC ¶ 61,043 (2021) (Danly, Comm’r, dissenting); Grove Hill Wind, LLC, 174 FERC ¶ 61,240 (2021) (Danly, Comm’r, dissenting); Midcontinent Indep. Sys. Operator, Inc., 174 FERC ¶ 61,202 (2021) (Danly, Comm’r, dissenting); Tri-State Generation & Transmission Ass’n, Inc., 174 FERC ¶ 61,168 (2021) (Danly, Comm’r, concurring in part and dissenting in part); Stoney Creek Solar LLC, 174 FERC ¶ 61,054 (2021) (Danly, Comm’r, dissenting); RRE Power LLC, 174 FERC ¶ 61,052 (2021) (Danly, Comm’r, dissenting); N. Border Pipeline Co., 174 FERC ¶ 61,038 (2021) (Danly, Chairman, dissenting); Sw. Pub. Serv. Co., 173 FERC ¶ 61,210 (2020) (Danly, Chairman, dissenting); Sw. Power Pool, Inc., 173 FERC ¶ 61,209 (2020) (Danly, Chairman, dissenting); NYC ENERGY LLC, 173 FERC ¶ 61,193 (2020) (Danly, Chairman, dissenting); CenterPoint Energy Hous. Elec., LLC, 173 FERC ¶ 61,170 (2020) (Danly, Chairman, concurring in part and dissenting in part); S. Cal. Edison Co., 173 FERC ¶ 61,128 (2020) (Danly, Comm’r, dissenting); S. Star Cent. Gas Pipeline, Inc., 173 FERC ¶ 61,066 (2020) (Danly, Comm’r, dissenting); Glidepath Ventures, LLC, 173 FERC ¶ 61,085 (2020) (Danly, Comm’r, dissenting); Columbia Gas Transmission, LLC, 173 FERC ¶ 61,064 (2020) (Danly, Comm’r, dissenting); Pub. Serv. Elec. & Gas Co., 173 FERC ¶ 61,056 (2020) (Danly, Comm’r, dissenting); Sunflower Elec. Power Corp., 173 FERC ¶ 61,054 (2020) (Danly, Comm’r, dissenting); Lightsource Renewable Energy Dev., LLC, 172 FERC ¶ 61,294 (2020) (Danly, Comm’r, dissenting); Mont.-Dakota Utils. Co., 172 FERC ¶ 61,278 (2020) (Montana-Dakota) (Danly, Comm’r, dissenting).
[3] Maislin Indus., U.S., Inc. v. Primary Steel, Inc., 497 U.S. 116, 132 (1990); accord Am. Tel. & Tel. Co. v. Cent. Off. Tel., Inc., 524 U.S. 214, 223 (1998) (explaining the applicability of the filed rate doctrine). These cases involved application of the filed rate doctrine to an industry outside of the Commission’s jurisdiction, but the requirement of strict adherence to the doctrine applies equally here.
[4] Okla. Gas & Elec. Co. v. FERC, 11 F.4th 821, 826 (D.C. Cir. 2021) (Oklahoma Gas) (citing Old Dominion Elec. Coop. v. FERC, 892 F.3d 1223, 1230 (D.C. Cir. 2018) (Old Dominion)) (emphasis added); see also Columbia Gas Transmission Corp. v. FERC, 895 F.2d 791, 794-97 (D.C. Cir. 1990) (Columbia Gas).
[5] Oklahoma Gas, 11 F.4th at 829-30 (citing Old Dominion, 892 F.3d at 1230).
[6] Id. at 824-25.
[7] Id. at 830 (citing 16 U.S.C. § 824d(d)).
[8] Id.
[9] Old Dominion, 892 F.3d at 1231; Nat. Gas Clearinghouse v. FERC, 965 F.2d 1066, 1075 (D.C. Cir. 1992); see also Seminole Elec. Coop., Inc. v. Fla. Power & Light Co., 139 FERC ¶ 61,254, at P 43 (2012), reh’g denied, 153 FERC ¶ 61,037 (2015), pet. for review denied, Seminole Elec. Coop., Inc. v. FERC, 861 F.3d 230 (D.C. Cir. 2017) (upholding Commission determination declining to refund overcharges beyond the 24-month time bar provision in the tariff).
[10] Consol. Edison Co. of N.Y. v. FERC, 347 F.3d 964, 969 (D.C. Cir. 2003) (Consolidated Edison); Columbia Gas, 895 F.2d at 795-97; City of Piqua v. FERC, 610 F.2d 950, 954-55 (D.C. Cir. 1979).
[11] Rolling Hills, 181 FERC ¶ 61,190 at P 11 (“we view this as a prospective waiver request”) (citations omitted); EDF, 181 FERC ¶ 61,189 at P 13 (same); Savion, 181 FERC ¶ 61,188 at P 13 (same); Lightsource, 181 FERC ¶ 61,187 at P 13 (same).
[12] Rolling Hills, 181 FERC ¶ 61,190 at PP 1-2 (PJM Interconnection, L.L.C. (PJM) secures capacity commitments under the Reliability Pricing Model (RPM) through a Base Residual Auction for a given delivery year. Pursuant to section 5.14(h-2)(1)(A) of Attach. DD to the PJM Open Access Transmission Tariff (Tariff or OATT), PJM, Intra-PJM Tariffs, OATT, Attach. DD, § 5.14 (Clearing Prices and Charges) (34.3.0), § 5.14(h-2)(1)(A), “[a]t least 150 days prior to the offer period of any RPM Auction conducted for the 2024/2025 Delivery Year and all subsequent Delivery Years, a Capacity Market Seller must certify for each Generation Capacity Resource whether or not the Capacity Market Seller acknowledges and understands that the Exercise of Buyer-Side Market Power is not permitted in RPM Auctions, and does not intend to submit a Sell Offer for their Generation Capacity Resource as an Exercise of Buyer-Side Market Power. Any Generation Capacity Resource for which a Capacity Market Seller fails to submit a timely certification shall be subject to the Minimum Offer Price Rule [MOPR].”) (footnotes omitted); EDF, 181 FERC ¶ 61,189 at PP 1-2 (similar); Savion, 181 FERC ¶ 61,188 at PP 1-2 (similar); Lightsource , 181 FERC ¶ 61,187 at PP 1-2 (similar).
[13] The majority recognizes this, at least in part, due to the use of a “Cf.” signal. See Rolling Hills, 181 FERC ¶ 61,190 at P 11 n.18 (citing AEP Energy Partners, Inc., 177 FERC ¶ 61,241; Allegheny Elec. Coop., Inc., 177 FERC ¶ 61,240); EDF, 181 FERC ¶ 61,189 at P 13 n.29 (same); Savion, 181 FERC ¶ 61,188 at P 13 n.31 (same); Lightsource, 181 FERC ¶ 61,187 at P 13 n.28 (same).
[14] AEP Energy Partners, Inc., 177 FERC ¶ 61,241 (Danly, Comm’r, dissenting); Allegheny Elec. Coop., Inc., 177 FERC ¶ 61,240 (Danly, Comm’r, dissenting).
[15] Rolling Hills, 181 FERC ¶ 61,190.
[16] EDF, 181 FERC ¶ 61,189; Savion, 181 FERC ¶ 61,188; Lightsource, 181 FERC ¶ 61,187.
[17] See, e.g., CPV Fairview, LLC, 174 FERC ¶ 61,029 (2021); UGI Dev. Co., 172 FERC ¶ 61,196 (2020).
[18] Rolling Hills, 181 FERC ¶ 61,190 at PP 9, 12; EDF, 181 FERC ¶ 61,189 at PP 11, 14; Savion, 181 FERC ¶ 61,188 at PP 11, 14; Lightsource, 181 FERC ¶ 61,187 at PP 11, 14.
[19] Commission Notice regarding EDF Renewables, Inc., December 2, 2022 Notice posted at 10:33:12 a.m., Docket No. ER23-543-000 (setting 12 p.m. noon on Dec. 5, 2022 as the comment due date for a December 1, 2022 request).
[20] See, e.g., Commission Notice regarding Rolling Hills Generating, L.L.C., August 30, 2022 Notice, Docket No. ER22-2742-000 (setting Sept. 16, 2022 as the comment due date for an Aug. 26, 2022 request, in the fourth waiver order proceeding at issue today).
[21] Neb. Pub. Power Dist., 181 FERC ¶ 61,077 (2022) (Danly, Comm’r, concurring at P 5).