Commissioner Allison Clements Statement
October 21, 2021
Docket No. EL21-40, TX21-1
I dissent because the Commission has the authority to grant Petitioners’ request for transmission service under section 211A, and because granting their request would be in the public interest.
Section 211A of the Federal Power Act, entitled “Open access by unregulated transmitting utilities,”[1] states that the “Commission may . . . require an unregulated transmitting utility to provide transmission services . . . at rates that are comparable to those that [it] charges itself; and . . . on terms and conditions . . . that are comparable to those under which [it] provides transmission services to itself and that are not unduly discriminatory or preferential.”[2] As the U.S. Court of Appeals for the 9th Circuit recently explained in Northwest Requirements Utilities, “Section 211A was designed to foster an open and competitive energy market by promoting access to transmission services on equal terms.”[3] As “evident from the section’s title, which mentions ‘open access,’” section 211A “prevents anticompetitive behavior by utilities that seek to stifle competitors’ generation through control over transmission,” and represents a further “step in the legislative and administrative effort to progressively open energy markets.”[4]
TVA’s preferred interpretation, that section 211A applies only to “give FERC discretionary authority to oversee the rates, terms and conditions for transmission service” where such service is already “provided by an unregulated transmitting entity,”[5] would read open access out of the statute. It runs directly contrary to section 211A’s express statement that “the Commission may . . . require an unregulated transmitting utility to provide transmission services.”[6] This is further confirmed by section 211A(h), which states that “[t]he provision of transmission services under [211A](b) does not preclude a request for transmission services under section 211.”[7] As commenters explain, were wheeling service not available under 211A, this provision “would be rendered not only superfluous, but nonsensical.”[8]
Nor does anything in the Federal Power Act or the TVA Act compel a result contrary to this plain meaning. Protestors’ principal argument appears to be that section 212(j) of the FPA prohibits a section 211A order requiring TVA to provide service into what has become known as the “Fence.” But section 212(j), by its terms, clearly applies only to “order[s] issued under section 824j [211] of” the Federal Power Act.[9] As the Commission’s decision in East Kentucky makes clear, section 212(j) does not apply to orders issued under other parts of the FPA.[10] Far from the impenetrable barrier that TVA suggests, section 212(j) is more akin to a cattle fence that lets wildlife enter and exit unimpeded. In East Kentucky, the Commission ordered TVA to provide interconnection pursuant to section 210 of the FPA, emphasizing that “section 212(j) makes no prohibition upon the Commission ordering such coordination services to be provided by TVA.”[11] The Commission stated that section 212(j) was limited to section 211 and explained that “TVA has no statutory basis for objecting to provide [services] under” the other sections at issue.[12]
TVA suggests that Congress may have intended section 212(j) to apply to section 211A orders as well as those issued under section 211,[13] but this alternative is also contrary to the express words of the statute. Congress enacted section 211A after 212(j) was in place, and chose not to amend 212(j) to make it apply to 211A as well as 211. By contrast, Congress did amend section 201(b) to reference section 211A,[14] making clear that Congress understood that, consistent with standard principles of statutory interpretation, an additional statutory reference was necessary where it wanted a clause to apply to section 211A alongside section 211. In other words, understanding that the TVA Fence only blocks section 211 orders and nothing more, Congress chose not to build a new fence, or strengthen the existing one, to block section 211A orders as well.
TVA’s suggestion that the Commission’s ability to grant Petitioners’ requested relief under section 211A is constrained by the TVA Act is weaker still. As petitioners explain, the TVA Act prohibits TVA from serving electricity to entities outside the Fence, but it contains nothing to prohibit TVA from transmitting power from outside the Fence to serve customers within.[15] While TVA asserts a “direct conflict,” it relies instead on implausible extrapolations of very general provisions such as the TVA Act’s authorization for the TVA Board to “establish[] the broad goals, objectives and policies of [TVA]” and “to construct, lease, or purchase transmission lines.”[16] As Petitioners observe, to read such general grants of authority as exempting TVA from plainly applicable statutes would give TVA “carte blanche authority to take any action that may advance its general responsibilities even where that action may conflict with another federal agency’s statutory authority.”[17] The far more logical proposition is that the TVA Board must carry out its statutory mission within the confines of applicable law, such as the Clean Air Act, standards set by the North American Electric Reliability Corporation, and yes, Commission orders under section 211A.[18]
Nor should we interpret more generally applicable statutes such as section 211A in a manner contrary to their express terms, as TVA suggests, simply to avoid an asserted conflict with a policy adopted by the TVA Board. To compromise section 211A’s mandate with regard to all nonregulated transmitting utilities based on the unique determinations of the TVA Board would amount to declaring a new canon of tail wagging the dog statutory interpretation.
In Iberdrola, the Commission wisely rejected similar suggestions to subordinate section 211A’s mandate to another unregulated transmitting utility’s organic statute due to an asserted conflict. In that case, the Bonneville Power Administration (Bonneville) and its supporters argued that a straightforward application of section 211A conflicted with Bonneville’s Environmental Redispatch Policy, which they characterized as “a reasonable and non-discriminatory means for Bonneville to maintain reliability while complying with its environmental responsibilities.”[19] But the Commission explained that Bonneville’s responsibilities to comply with “numerous other environmental rules and regulations, including those promulgated under the Endangered Species Act and the Clean Water Act” must be reconciled with its duty to comply with Commission orders under section 211A.[20] Nor did the Commission suggest that FPA section 212(i) limitations on the Commission’s authority with regard to Bonneville under sections 210, 211, and 213, should be read to apply to section 211A, as protestors would have 212(j) application be extended beyond section 211 in this circumstance.[21]
Here, just as Bonneville was required to formulate a dispatch policy consistent with the terms of Section 211A while also meeting its responsibilities under its governing statutes, the TVA Board must adopt policies that follow its mandate to uphold the broad goals of the TVA Act in a manner that complies with any orders the Commission may issue under section 211A, which may include requirements that it provide comparable transmission service.
Finally, TVA suggests that the Commission must invent new statutory language while ignoring the words on the page because a more straightforward approach would render section 211 of the Federal Power Act a nullity. But while overcoming the plain text of sections 211, 211A, and 212 is already an extremely high bar that is not met here, section 212(e) specifically instructs readers of the FPA not to take this approach. It states: “Except as provided in section 824i [210], 824j [211], 824m [214] of this title, or this section, such sections shall not be construed as limiting or impairing any authority of the Commission under any other provision of law.”[22]
Moreover, interpreting section 211A in a straightforward manner does not render section 211 a nullity. As the Southern Alliance for Clean Energy explains, “Sections 211 and 211A are discrete grants of authority that employ different procedures, apply to different entities, and carry different remedies.”[23] Numerous features render each path distinct from the other, suggesting that different petitioners may under different circumstances pursue their remedies under one option or the other. For starters, section 211 is not restricted to unregulated transmitting utilities.[24] Further, section 211, unlike section 211A, authorizes the Commission to set rates according to a prescribed standard that resembles the just and reasonable standard codified in sections 205 and 206.[25] Section 211A, by contrast, provides no such authority for the Commission, and states instead that rates shall be “comparable to those that the unregulated transmitting utility charges itself.”[26] Accordingly, an entity seeking a type or rate of service that the transmitting utility does not charge itself may seek an order under section 211 despite the availability of section 211A. Moreover, section 211A and 211 have unique procedures and exceptions. For example, section 211A, unlike 211, authorizes the Commission to categorically exempt from section 211A’s reach unregulated transmitting utilities that fit “criteria the Commission determines to be in the public interest.”[27]
These are but a sampling of the distinctions between the statutory sections that give each one continuing relevance. Petitioners and parties supporting them offer several more.[28] What is clear is that there is no “positive repugnancy” between the sections that would render section 211 “wholly superfluous.”[29] Instead, as Petitioners aptly put it, section 211A “is simply a different tool in the Commission’s toolbox.”[30] Accordingly, we must read sections 211A, 212(j), and the other relevant provisions of the FPA as they are written.
Having concluded that the Commission has authority to require comparable service under 211A, I also believe that the Commission should exercise that authority here. Granting the petition would provide the customers of the relevant not-for-profit cooperative and municipal utilities access to lower cost power than TVA currently provides them with, supplying a modicum of competition and its associated benefits to the region.
Dissenting is not a decision I take lightly, considering the potential for impacts to TVA’s other customers. But while Petitioners have demonstrated the public interest benefits of granting their request, TVA has failed to persuasively show that granting the petitions would significantly impact its existing customers.[31] To the contrary, granting the Petition could benefit customers beyond those of the local power cooperatives who filed the Petition by providing impetus for TVA to more efficiently serve customers. Under these circumstances, the public interest warrants an order granting the Petitioners’ request.
For these reasons, I respectfully dissent.
[1] 16 U.S.C. § 824j-1.
[2] 16 U.S.C. § 824j-1(b).
[3] 798 F.3d 796, 808 (9th Cir. 2015).
[4] Id.
[5] TVA Protest at 36.
[6] 16 U.S.C. 824j-1. As the United States Supreme Court has observed, “[w]hen the statutory ‘language is plain, the sole function of the courts—at least where the disposition required by the text is not absurd—is to enforce it according to its terms.’” Hartford Underwriters Ins. Co. v. Union Planters Bank, N. A., 530 U.S. 1, 6 (2000) (quoting United States v. Ron Pair Enterprises, Inc., 489 U.S. 235, 241 (1989)). Nothing that TVA or any other protestor has raised comes close to demonstrating that the plain textual meaning of section 211A leads to absurd results.
[7] 16 U.S.C. § 824j-1(h).
[8] Southern Alliance for Clean Energy Comment at 5.
[9] 16 U.S.C. § 834k(j) (emphasis added).
[10] See E. Ky. Power Coop., 111 FERC ¶ 61,031, at PP 37-40 (2005) (East Kentucky I)); E. Ky. Power Coop., 114 FERC ¶ 61,035, at P 33 (2006) (East Kentucky II) (jointly, East Kentucky)).
[11] East Kentucky II, at P 33.
[12] Id.; East Kentucky I, at n. 17 (“Section 212(j), on the other hand, provides that with respect to an electric utility which is prohibited by federal law from being a source of power supply, either directly or through a distributor of its electric energy, outside an area set forth in such law, no order issued under section 211 may require such electric utility (or a distributor of such electric utility) to provide transmission services to another entity if the electric energy to be transmitted will be consumed within the area set forth in such federal law, unless the order is in furtherance of a sale of electric energy to that electric utility.”) (emphasis in original).
[13] See TVA Protest at 27 (“[A] conflict . . . would not exist if section 211A were properly interpreted not to grant separate authority to order wheeling (or, in any event, not to violate section 212(j))”).
[14] See 16 U.S.C. § 824(b)(2) (“Notwithstanding subsection (f), the provisions of sections 824b(a)(2), 824e(e), 824i, 824j [section 211], 824j-1 [section 211A], 824k, 824o, 824o-1, 824p, 824q, 824r, 824s, 824t, 824u, and 824v of this title shall apply to the entities described in such provisions . . .) (emphasis added).
[15] Petition at 15.
[16] TVA Protest at 28, 29, 30 (citing 16 U.S.C. §§ 831a(g)(1)(A), 831k).
[17] Petitioners’ Answer at 11 (emphasis in original).
[18] See id.
[19] Iberdrola, 137 FERC ¶ 61,185, at P 26 (2011), order on reh’g, Iberdrola, 151 FERC ¶ 61,233 (2012) (Iberdrola II).
[20] Iberdrola II, 141 FERC ¶ 61,233, at P 31 (2012), appeal dismissed sub nom. Nw. Requirements Utilities, 798 F.3d 796 (9th Cir. 2015). See also id., at n.51 (“[W]e equally did not find that section 211A and our authority therein, is inferior to, or can be subordinated to, Bonneville’s other statutory obligations.”).
[21] As Petitioners explain,
the Commission did not suggest that section 212(i) applied to section 211A orders or even mention section 212(i). Rather, the Commission simply noted that requiring Bonneville to provide comparable and non-discriminatory transmission service did not conflict with Bonneville’s other statutory responsibilities. Accordingly, TVA is wrong to suggest that the Commission implied section 212(i) applied to the section 211A analysis in that case and that, by extension, section 212(j) similarly applies to 211A in this case.
Petitioners’ Answer at 13, n. 37.
[22]16 U.S.C. § 824k(e)(1) (emphasis added). Note that this instruction also applies to section 212, meaning that the Commission should also not read section 212(j) beyond its plain terms to restrict the Commission’s authority elsewhere. The Commission has previously placed great weight on the savings clause contained in 212(e). In adopting Order No. 888, the Commission rejected a very similar argument that the Commission did not have authority pursuant to section 206 of the FPA to order open access because “‘mandatory wheeling is to be governed exclusively by section 211.”’ Southern Alliance for Clean Energy Comment at 5 (quoting Order No. 888, 61 Fed. Reg. 21,540, 21,569 (1996)). In doing so, the Commission reasoned that reading section 211 to impliedly restrict the Commission’s authority under sections 205 and 206 “would make the savings provision [of section 212(e)] meaningless.” Order No. 888, 61 Fed. Reg. at 21,570. That is true here as well.
[23] Southern Alliance for Clean Energy Comment at 5.
[24] See 16 U.S.C. § 824j(a) (authorizing the Commission to issue orders with regard to any “transmitting utility”).
[25] 16 U.S.C. § 824k(a) (“An order under section 824j of this title shall require the transmitting utility subject to the order to provide wholesale transmission services at rates, charges, terms, and conditions which . . . shall be just and reasonable, and not unduly discriminatory or preferential.”).
[26] 16 U.S.C. § 824j-1(b)(1).
[27] 16 U.S.C. § 824j-1(c)(3). By contrast, section 211 provides only for case by case determinations. See 16 U.S.C. § 824j(a) (providing that the Commission may issue an order in an individual case if it finds that such order “would otherwise be in the public interest”).
[28] See Petitioners’ Answer at 23-26; Southern Alliance for Clean Energy Comment at 5-9.
[29] Connecticut National Bank v. Germain, 503 U.S. 249, 253 (1992).
[30] Petitioners’ Answer at 27.
[31] See Petitioners’ Answer at 32-37 (detailing inconsistency between TVA’s assertion that the loss of 3.6% of TVA’s total load would cost its other customers $3.3 billion through 2040, and the statements of its CEO and other executive officers elsewhere that 10% loss of load would “not really [cause] a material impact” and wouldn’t “create a significant financial impact for us [or] create a significant rate issue for our customers”).