Commissioner James Danly Statement
June 15, 2023
Docket Nos. RM22-16-000, et al.
Last June, I concurred with the Commission’s Notice of Proposed Rulemaking (NOPR) requiring one-time informational reports on extreme weather vulnerability assessments.[1] I wrote separately to express that, while the question of the weather’s effect on reliability is a subject that doubtless merits study and planning, misguided government policies (not weather) have been the root cause of the impending reliability crises facing our markets.[2]
Today, I write separately, not to repeat my assessment that the United States is heading toward a reliability crisis (a prediction that is widely shared),[3] but to caution the Commission that it should not lose sights of the limits of its authority under the Federal Power Act (FPA). I acknowledge that the Final Rule generally adopts the NOPR without significant modification,[4] and that in my concurrence, I agreed that informational reports may help the Commission identify opportunities to avoid adverse rate impacts.[5] However, a question repeated by nearly a third of the commenters has given me pause and forced me to reconsider the information requested: How exactly does the Commission intend to use the information provided in the one-time informational reports?[6] In posing that question, one must also ask the question of whether the Commission can or should request that information in the first instance.
While FPA section 304[7] empowers the Commission to require special reports, it does not give the Commission carte blanche to require public utilities to file special reports disclosing anything it sees fit. The Commission must find that the special report is “necessary or appropriate to assist [it] in the proper administration” of the FPA[8]—that is, the information sought must “aid the Commission in exercising its powers.”[9] For instance, information on a public utilities’ community service, which had no effect on the rates charged, would not “aid[] the Commission in exercising its powers.”
In addition, the Paperwork Reduction Act requires that the Commission only collect information that is “necessary for the proper performance of the functions of the agency, including whether the information [will] have practical utility”[10] Can the agency “use [the] information” it collects?[11] If the information proposed to be collected by an agency is found “unnecessary[,] for any reason, the [Commission] may not engage in the collection of [the] information.”[12]
The Final Rule declares that the one-time informational report on policies and processes related to extreme weather vulnerability assessments is “necessary or appropriate” for the Commission to oversee the development and enforcement of reliability standards under FPA section 215 and to ensure that rates, terms, and conditions are just and reasonable and not unduly discriminatory or preferential under FPA sections 205 and 206.[13] A persuasive case can be made that most of the information to be collected in the one-time informational reports could aid the Commission in exercising these powers. However, the practical utility of the information sought from two of the questions is uncertain at best: first, question 8, which asks how a transmission provider identifies and engages “affected communities” and incorporates those communities’ feedback into its extreme weather vulnerability assessment,[14] and second, question 19, which asks how a transmission provider informs “affected communities” of identified extreme weather risks and selected mitigation measures.[15]
How exactly are “affected communities” relevant here, and under what provision of the FPA? FPA sections 205 and 206 empower the Commission to ensure that wholesale transmission rates, terms, and conditions are just and reasonable and not unduly discriminatory or preferential. FPA section 215 empowers the Commission to oversee the development and enforcement of mandatory standards to ensure the reliability of the bulk-power system, which “does not include facilities used in the local distribution of electric energy.”[16] A “community,” defined as a “neighborhood, vicinity, or locality,”[17] does not exactly evoke an image of a customer paying wholesale transmission rates. Rather, one imagines local retail customers paying the local utility to deliver electricity on a distribution line to power one’s business or dwelling.
I wonder what we expect to hear back in response. Under what circumstances would a wholesaler ever engage with and inform a retail customer? Would we expect a wholesale food vendor, Sysco, for example, to engage with a restaurant’s retail customers on how it plans for potential disruptions of the beef supply, and to then inform those customers when supplies have been disrupted and then further consult with them on how limited supplies will be allocated? No. Put in the terms of the FPA, would engaging retail customers in forecasting or informing retail customers of risks and mitigation measures render otherwise unlawful wholesale transmission rates just and reasonable? Doubtful. Could it be that the Commission envisions that transmission providers will submit information on some type of “flex alert” initiative that encourages retail customers to voluntarily conserve electricity, which may relate to the adequate reliability of the bulk-power system under FPA section 215? Perhaps. But if so, why not just make that clear.
The Commission ought to be more judicious in use of FPA section 304. Its powers are not without limit. Congress has declared that the burdens of these reports should be minimized, and that the usefulness of information collected by the government maximized.[18] We should better explain why we are asking for this data or not collect it at all. The Commission should not require transmission providers to file information for which it has no use or is unwilling to explain why it is being asked for in the first place.
For these reasons, I respectfully concur in the result.
[1] One-Time Informational Reports on Extreme Weather Vulnerability Assessments, 179 FERC ¶ 61,196 (2022) (Danly, Comm’r, concurring) (NOPR).
[2] Id. (Danly, Comm’r, concurring at PP 2-5).
[3] See Full Committee Hearing to Examine the Reliability & Resiliency of Elec. Servs. in the U.S. in Light of Recent Reliability Assessments & Alerts Before the S. Comm. on Energy & Natural Res., 118th Cong. (2023), https://www.energy.senate. gov/hearings/2023/6/full-committee-hearing-to -examine-the-reliability-and-resiliency-of-electric-services-in -the-u-s- in -light-of-recent-reliability-assessments-and-alerts (statements of North American Electric Reliability Corporation President and CEO Jim Robb and PJM Interconnection, L.L.C. President and CEO Manu Asthana in response to Senator Hoeven citing FERC Commissioners Mark Christie and Danly).
[4] See One-Time Informational Reports on Extreme Weather Vulnerability Assessments, Final Rule, 183 FERC ¶ 61,192 (2023) (Final Rule).
[5] NOPR, 179 FERC ¶ 61,196 (Danly, Comm’r, at P 2).
[6] See Edison Electric Institute, August 31, 2022 Initial Comments, at 3 (“the Commission should . . . clarify how the one-time informational reports will be used.”); id. at 7 (“The Commission should specify how it plans to use the information contained in the onetime reports. While the Commission notes that the reports ‘will enhance the Commission’s understanding of whether, and if so, how transmission providers are assessing risks to transmission assets and operations as a result of extreme weather events,’ and that ‘it is important for the Commission to understand whether and to what extent such assessments are being conducted to assist the Commission in the proper administration of the [Federal Power Act],’ it does not detail how it plans to utilize the information included in the reports to accomplish these ends.”) (footnote omitted); Eversource Energy Service Co., August 30, 2022 Comments, at 5 (“Eversource also respectfully requests that the Commission clarify how it will use the one-time reports and the information contained therein.”); PJM Transmission Owners, August 30, 2022 Comments, at 2 (“The Commission should provide clarification regarding how the one-time reports will be used for developing future transmission planning requirements.”); id. (“[T]he Indicated PJM Transmission Owners would like to better understand how the Commission intends to use this data.”); MISO Transmission Owners, August 30, 2022 Comments, at 2. (“[T]he MISO Transmission Owners encourage the Commission to explain in the final rule how it intends to act on the information provided by respondents.”[6]); id. at 4 (“The Extreme Weather Reports NOPR does not explain how these one-time reports will assist the Commission in accomplishing its goals.”); Xcel Energy Services, August 29, 2022 Initial Comments, at 5 (“the Commission should provide clarity about how it intends to use the information provided under this NOPR, if adopted”); id. at 6 (“[T]he manner in which the Commission intends to use information obtained through this NOPR, if adopted, is unclear.”).
[7] 16 U.S.C. § 825c(a).
[8] Id.
[9] FPC v. Panhandle E. Pipe Line Co., 337 U.S. 498, 505 (1949) (discussing the similar power set forth in section 10(a) of the Natural Gas Act (NGA)). “It is, of course, well settled that the comparable provisions of the [NGA] and the [FPA] are to be construed in pari materia.” Ky. Utils. Co. v. FERC, 760 F.2d 1321, 1325 n.6 (D.C. Cir. 1985) (citations omitted). Case law involving the FPA has stated similarly. See Duke Power Co. v. FPC, 401 F.2d 930, 947 & n.131 (D.C. Cir. 1968) (“utilities are required . . . to supply the Commission with essential information”) (emphasis added) (citing 16 U.S.C. §§ 825(b), 825(c)(a)).
[10] 44 U.S.C. § 3508; id. § 3502(11) (defining “practical utility” as meaning “the ability of an agency to use information, particularly the capability to process such information in a timely and useful fashion”).
[11] Id. § 3502(11).
[12] Id. § 3508.
[13] Final Rule, 183 FERC ¶ 61,192 at PP 20, 59.
[14] Id. App. A, Question 8.
[15] Id. App. A, Question 19.
[16] 16 U.S.C. § 824o (emphasis added).
[17] Community, Black’s Law Dictionary (11th ed. 2019).
[18] See 44 U.S.C. § 3501.