E-19 Commissioner James Danly Concurrence Regarding Oklahoma Gas and Electric Company v. Southwest Power Pool, Inc.

Commissioner James Danly Statement
November 17, 2022
EL19-77-000

I concur in today’s order.[1]  I write separately to reiterate that, as the courts have repeatedly held, the edges of the file rate doctrine are sharp and its application stringent.  Nevertheless, the majority seeks to smooth those jagged edges through an appeal to its broad remedial authority and discretion under section 309 of the Federal Power Act (FPA).[2]  According to the majority, in Oklahoma Gas[3] the D.C. Circuit “determined that the Commission’s decision not to exercise its equitable authority in [that] situation ‘was not arbitrary and capricious.’”[4]  Despite the clarity of the courts’ direction, they are trying to lull people into believing we have more power than we do, in order to chip away at the filed rate doctrine.  This maneuver is, and will always be, unavailing.  We have no power to exercise discretion or to bend the rules established by the filed rate doctrine or the rule against retroactive ratemaking for equitable considerations of any kind under any circumstances—ever.  The Supreme Court has spoken in unmistakable terms, finding that it is necessary to require “strict adherence to the filed rate . . . despite its harsh consequences in some cases.”[5]  The D.C. Circuit agrees.  While “[t]he Commission may craft a variety of remedies under [s]ection 309 of the Federal Power Act,” the “filed rate doctrine . . . limits that remedial authority.”[6]  “Once a tariff is filed, the Commission has no authority to provide equitable exceptions or retroactive modifications to the tariff.”[7]  The D.C. Circuit explained that Old Dominion Electric Cooperative v. FERC “reinforced 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.’”[8]  “When it applies, the filed rate doctrine is ‘a nearly impenetrable shield’ and does not yield, ‘no matter how compelling the equities.’”[9]  Thus, FPA section 309 cannot be invoked to provide equitable exceptions or retroactive modifications to the filed rate.  In addressing the FPA section 309 arguments in Oklahoma Gas, the D.C. Circuit quoted CPUC as “explaining that if FERC’s actions ‘violated the filed rate doctrine or the rule against retroactive ratemaking, we would not then invoke the Commission’s assessment of the equities to overcome those violations.’”[10]  The court would not because it cannot, and neither can the Commission.  “The filed rate requirement is stringent and admits of no equitable adjustments by the Commission or [a] court.”[11]  It is not a matter of discretion.

For these reasons, I respectfully concur.