Commissioner James Danly Statement
April 21, 2022
Docket No. PL20-3-000
I concur with today’s order[1] adopting the revisions that the Commission proposed in December 2020 to its Policy Statement on Natural Gas and Electric Price Indices.[2] As part of its charge to ensure just and reasonable rates,[3] the Commission should take actions that enhance the liquidity and transparency of the price indices that are used in jurisdictional tariffs.
I write separately to suggest that the Commission might have acted otherwise on its parallel proposal to codify its Safe Harbor Policy for Data Providers to Price Index Developers in Docket No. RM20-7-000 (Proposed Rule).[4] Doubtless, there are good reasons for the Commission to decline to act at this time.[5] However, the Commission offers none.
Initially, the Commission had found that “[b]ased on industry comments during and after the technical conference, we believe that incorporation of the Safe Harbor Policy into the Commission’s regulations will provide greater certainty to market participants and will lead to increased voluntary reporting to price index developers.”[6] All but one entity[7] commenting on the Proposed Rule agreed.[8] Though entitled to decline to take action, it would have been preferable for the Commission to have cited specific evidence and to have explained why it is now deterred from acting within our jurisdiction on a proposal that it had initially believed would improve the indices.
For these reasons, I respectfully concur.
[1] Actions Regarding the Commission’s Policy on Price Index Formation & Transparency, & Indices Referenced in Nat, Gas & Elec. Tariffs, 179 FERC ¶ 61,036 (2022) (Order).
[2] Actions Regarding the Commission’s Policy on Price Index Formation & Transparency, & Indices Referenced in Nat. Gas and Elec. Tariffs, 173 FERC ¶ 61,237 (2020).
[3] See 15 U.S.C. § 717c(a); id. § 717t-2; see also NAACP v. FPC, 425 U.S. 662, 669 (1976) (“[I]t is clear that the principal purpose of [the Natural Gas Act] was to encourage the orderly development of plentiful supplies of . . . natural gas at reasonable prices.”) (citations omitted).
[4] 173 FERC ¶ 61,238 (2020).
[5] See Order, 179 FERC ¶ 61,036 at P 106.
[6] Safe Harbor Policy for Data Providers to Price Index Developers, 173 FERC ¶ 61,238 at P 12 (citations omitted).
[7] See Public Citizen, Inc., Comments, Docket No. RM20-7-000 (filed June 1, 2021).
[8] See, e.g., Argus Media, Inc., Comments, Docket No. RM20-7-000, at 3 (filed June 1, 2021) (“Market participants consistently have voiced concerns to Argus that federal authorities including the Commission may pursue enforcement actions because of inadvertent errors in reporting transactions to price index developers despite the existence of the Safe Harbor Policy. Inadvertent errors could still lead to costly and disruptive enforcement investigations and audits. This is made even more risky for the data provider as there are not any ‘damage caps’ for investigative costs or potential liability.”); Energy Intelligence, Comments, Docket No. PL20-3-000, at 2 (filed Mar. 23, 2021) (“Energy Intelligence views the Commission’s parallel proposal (in Docket No. RM20–7–000) to codify into its regulations the ‘Safe Harbor Policy for Data Providers’ . . . as an essential component of the effort to encourage more market participants to report their transactions to price index developers. On numerous occasions, potential data providers have expressed a reluctance to report transactions due to perceived risks associated with inadvertently reporting something in error.”).