Commissioner James Danly Statement
September 21, 2023
Docket No. ER20-2705-001
It has recently come to my attention that some people misunderstand what it means when a separate statement is characterized as “concurring in the result.” I write separately to express my concerns with how this proceeding was conducted but pause first to explain the ultimate purport of this statement for the benefit both of those within the Commission and the broader public. The characterization of a separate statement as “concurring in the result” could prove critical because the validity of our orders, and their ultimate survival on review, is at stake.
To concur in the result means no more, and no less, than that the author agrees with the result, but does not support the reasoning in the Commission order justifying the result.[1] In this proceeding, that means that I agree with “treat[ing] [Mankato Energy Center, LLC and Mankato Energy Center II, LLC (Mankato Companies)], and other [IIF US Holding 2 LP (IIF US Holding 2)] subsidiaries and [J.P. Morgan Investment Management Inc. (J.P. Morgan Investment)] and its subsidiaries as affiliates under [18 C.F.R. § 35.36(a)(9)(iii)].”[2] To state the inverse: this also means that the author rejects the reasoning and findings by which the majority reached its result. Put another way, if the author had the pen, he or she would have drafted the order quite differently. This distinction is critical. The Commission is an administrative agency and we are bound to follow the requirements of the Federal Power Act, the Department of Energy Organization Act (DOE Organization Act),[3] the Administrative Procedure Act[4] and the case law interpreting these statutes, or we are liable to suffer reversal in the courts when our orders are appealed. The DOE Organization Act specifies that “[a]ctions of the Commission shall be determined by a majority vote of the members present.”[5] As the U.S. Court of Appeals for the District of Columbia Circuit (D.C. Circuit) has explained, the requirement that “‘[a]ctions of the Commission shall be determined by a majority vote’”[6] “comport with the ‘almost universally accepted common-law rule’ that only a ‘majority of a collective body is empowered to act for the body.’”[7] It is also axiomatic, as the D.C. Circuit has stated, “that an agency’s authority runs to it as ‘an entity apart from its members, and it is its institutional decisions—none other—that bear legal significance.’”[8] As an administrative agency, FERC’s orders are amenable to appeal. Courts sitting in review of an agency’s orders review the order’s reasoning.[9] Since the reasoning is an operative element of any agency order,[10] if the reasoning (or any part of the reasoning) fails to garner the vote of a majority of commissioners, the basis for the order is invalid and is correspondingly and severely vulnerable to appeal.[11]
I concur in the result here because, while I agree that we are correct in reaching our conclusion that there is affiliation, I disagree with the means by which we arrive at that conclusion. I do not believe that we need to disclose privileged information to the extent we do to justify our conclusion. We could and should, have been more measured.[12] I would have done things differently had I been the author of this order.
For these reasons, I respectfully concur in the result.
[1] See CONCUR, Black’s Law Dictionary (11th ed. 2019) (defining “concur” to mean “1. To agree; to consent. 2. In a judicial opinion, to agree with the judgment in the case (usu. as expressed in the opinion of another judge), or the opinion of another judge, but often for different reasons or through a different line of reasoning. 3. (Of a house in a bicameral legislature) to accept an amendment passed by the other house.”); RESULT, Black’s Law Dictionary (11th ed. 2019) (defining “result” to mean “1. A consequence, effect, or conclusion. 2. That which is achieved, brought about, or obtained, esp. by purposeful action; the answer to a problem, such as a legal problem resolved by a court. — Also termed (in senses 1 & 2) resultant. 3. Archaic. A decision, resolution, or final determination of a deliberate or parliamentary body.”).
[2] Mankato Energy Center, LLC, 184 FERC ¶ 61,170, at P 81 (2023). Under 18 C.F.R. § 35.36(a)(9)(iii), “[a]ffiliate of a specified company means . . . [a]ny person or class of persons that the Commission determines, after appropriate notice and opportunity for hearing, to stand in such relation to the specified company that there is liable to be an absence of arm’s-length bargaining in transactions between them as to make it necessary or appropriate in the public interest or for the protection of investors or consumers that the person be treated as an affiliate.”
[3] See 42 U.S.C. § 7171.
[4] See 5 U.S.C. § 706.
[5] 42 U.S.C. § 7171(e) (“Each member of the Commission, including the Chairman, shall have one vote. Actions of the Commission shall be determined by a majority vote of the members present.”) (emphasis added).
[6] Pub. Citizen, Inc. v. FERC, 839 F.3d 1165, 1169 (D.C. Cir. 2016) (quoting 42 U.S.C. § 7171(e)).
[7] Id. (quoting Fed. Trade Comm’n v. Flotill Prods., Inc., 389 U.S. 179, 183 (1967)).
[8] Id. (quoting Pub. Serv. Comm’n of N.Y. v. Fed. Power Comm’n, 543 F.2d 757, 776 (D.C. Cir. 1974)) (emphasis added).
[9] See SEC v. Chenery Corp., 318 U.S. 80, 95 (1943) (Chenery) (“We merely hold that an administrative order cannot be upheld unless the grounds upon which the agency acted in exercising its powers were those upon which its action can be sustained.”).
[10] Id. at 88 (explaining that the Court would “confin[e] [its] review to a judgment upon the validity of the grounds upon which the Commission itself based its action . . . .) (citation omitted); id. (“If an order is valid only as a determination of policy or judgment which the agency alone is authorized to make and which it has not made, a judicial judgment cannot be made to do service for an administrative judgment.”); id. (“For purposes of affirming no less than reversing its orders, an appellate court cannot intrude upon the domain which Congress has exclusively entrusted to an administrative agency.”).
[11] See FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515 (2009) (“[T]he requirement that an agency provide reasoned explanation for its action would ordinarily demand that it display awareness that it is changing position. An agency may not, for example, depart from a prior policy sub silentio or simply disregard rules that are still on the books.”) (emphasis in original) (citation omitted); Motor Vehicle Mfrs. Ass’n v. State Farm Mut. Auto. Ins. Co, 463 U.S. 29, 43 (1983) (requiring agencies to “articulate a satisfactory explanation for its action including a ‘rational connection between the facts found and the choice made”’) (quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962)). Thus the genesis of the Commission’s longstanding policy, one that dates back at least as far as my tenure as general counsel, that a concurrence in the result is considered a dissent when counting the votes for the operative reasoning of the order.
[12] Moreover, as I previously explained, the Commission could have issued a partially redacted order that protects privileged information in the public version of the order for this proceeding. Mankato Energy Center, LLC, 183 FERC ¶ 61,095 (2023) (Order Denying, In Part, Request for Privileged Treatment) (Danly, Comm’r, dissenting at P 2). During this very same agenda cycle, the Commission is issuing an Order on Initial Decision, W. Tex. Gulf Pipe Line Co., 184 FERC ¶ 61,182 (2023) (Order on Initial Decision), where the Commission acts on the West Texas Initial Decision, W. Tex. Gulf Pipe Line Co., 178 FERC ¶ 63,020 (2022) (West Texas Initial Decision). The West Texas Initial Decision actually was issued with both a public and non-public version. Compare West Texas Initial Decision (FERC eLibrary Accession No. 20220318-3042) (privileged issuance by Presiding Administrative Law Judge), with West Texas Initial Decision (FERC eLibrary Accession No. 20220318-3041) (public version of issuance by Presiding Administrative Law Judge with necessary redactions of privileged information). In fact, the D.C. Circuit has explicitly suggested that a redacted order is a potential option when the Commission needs to rely on privileged information to satisfy its obligation to engage in reasoned decision making under the Administrative Procedure Act. See In re NTE Conn., LLC, 26 F.4th 980, 988 (D.C. Cir. 2022) (NTE) (“FERC cryptically asserted that it could not explain its decision because ‘much of the pertinent information [was] filed on a non-public basis.’ . . . [I]t is unclear why, if confidentiality concerns prevented FERC from publishing a more complete analysis, it could not simply redact its order before public release, as federal courts routinely do, and as FERC has done in the past.”) (citing White Cliffs Pipeline, LLC, 168 FERC ¶ 63,033 (2019), aff’d, 173 FERC ¶ 61,155 (2020)) (internal citation omitted). Admittedly, the court’s suggestion was dicta, but it is nevertheless reassuring. And, as I explained, the issuance of a partially redacted order would not deprive parties of the opportunity to review the full order—any party that seeks to obtain the full, unredacted order can sign a protective agreement and be granted full access. See Order Denying, In Part, Request for Privileged Treatment, 183 FERC ¶ 61,095 (Danly, Comm’r, dissenting at P 2). See 18 C.F.R. § 388.112(b)(2) (“set[ting] forth the methods for filing and obtaining access to material that is filed as privileged in complaint proceedings and in any proceeding to which a right to intervention exists” and providing for the use of protective agreements). I also explained that the only recourse for Mankato Companies was to go to a U.S. district court to seek an injunction prior to the release—an option that Mankato Companies apparently did not pursue, for reasons that are unclear. See Fed. R. Civ. P. 65(b)(1)(A).