Recent Changes in Commission Rehearing Practice
Staff Presentation: September 17, 2020
Docket No. AD20-27-000
Item No. A-3
Good morning Mr. Chairman and Commissioners,
Today I will be presenting an overview of changes in the Commission’s practices concerning requests for rehearing following the recent decision of the U.S. Court of Appeals for the D.C. Circuit in Allegheny Defense Project v. FERC, 964 F.3d 1 (D.C. Cir. 2020) (en banc).
We will start with a brief overview of the rehearing and judicial review framework under the Natural Gas Act and the Federal Power Act. Both statutes require parties to seek rehearing before petitioning a court for review of Commission orders. Both statutes also provide that if the Commission does not “act” on the rehearing request within 30 days, the request may be deemed denied. When the Commission acts on rehearing, or the rehearing is deemed denied in this manner, aggrieved parties then have 60 days to file a petition for review of the Commission’s orders in an appropriate United States Court of Appeals. Up until the point that the Commission files the record on appeal with a reviewing court, both statutes provide the Commission with the authority to “modify or set aside, in whole or in part” the underlying order.
As a matter of practice, the Commission has in the past routinely acted on rehearing requests, by the 30th day, by issuing delegated orders – called tolling orders – through the Office of the Secretary. Those orders granted rehearing for the limited purpose of extending the time allowed for the Commission to consider the merits of a rehearing request. This practice allowed the Commission time to prepare comprehensive rehearing orders addressing the concerns raised by parties in nearly all cases, but also delayed the ability of parties to seek judicial review.
On June 30, 2020, in Allegheny Defense Project v. FERC, the full D.C. Circuit issued a decision addressing the timeliness of Commission action on requests for rehearing under the Natural Gas Act. The court recognized that the Commission’s responsibilities on rehearing are complex, and also that the tolling order practice had been affirmed by the courts in decisions dating back to 1969. But the court held that, under the plain language of the Natural Gas Act, tolling orders do not amount to action on rehearing requests, and thus do not prevent rehearing requests from being “deemed” denied after 30 days. The court also highlighted the Commission’s authority, even where rehearing has been deemed denied by operation of this statutory deadline, to “modify or set aside, in whole or in part” the underlying order until the record on appeal is filed with a reviewing court.
Beginning the day after the court’s decision, the Commission began implementing changes to its rehearing practices both to expedite consideration of rehearing requests and to keep the public apprised of the status of Commission proceedings. Although the Allegheny decision arose under the Natural Gas Act, because the Federal Power Act contains identical language, the Commission is applying its post-Allegheny approach to Federal Power Act proceedings.
First, the Commission no longer issues tolling orders in cases arising under the Federal Power Act or the Natural Gas Act. Instead, where the Commission is not acting on the merits of a rehearing request by the 30-day deadline, the Office of the Secretary generally will issue one of two types of notices no earlier than the 31st day after a rehearing request is received: a Notice of Denial of Rehearing by Operation of Law, or a Notice of Denial of Rehearing by Operation of Law and Providing for Further Consideration.
As the names suggest, these Notices have an important feature in common: they both acknowledge that, because the 30-day deadline in the Natural Gas Act or the Federal Power Act has passed, rehearing may be deemed denied by operation of law. The first type, a Notice of Denial of Rehearing by Operation of Law stops there and announces that the Commission does not intend to issue a merits order in response to the rehearing request. The second type of Notice – a Notice of Denial of Rehearing by Operation of Law and Providing for Further Consideration – takes an extra step. After indicating that rehearing may be deemed denied by operation of law, this Notice states the Commission’s intention to issue a further order addressing issues raised on rehearing, citing the Commission’s authority to “modify or set aside” the underlying order.
Importantly, neither of these Notices rule on the rehearing request; they simply announce the status of the proceeding as a means to keep the public informed. Since the court’s decision, the Commission has issued both types of Notices across a range of Natural Gas Act and Federal Power Act proceedings.
While these Notices are appropriate in cases arising under the Natural Gas Act and the Federal Power Act, the Commission also sometimes receives rehearing requests in cases arising under the Interstate Commerce Act. Unlike the Natural Gas Act and the Federal Power Act, under the Interstate Commerce Act, parties are not required to seek rehearing before appealing a Commission order to a court, and there is no applicable statutory deadline for Commission action on rehearing. However, the Commission’s regulations (18 C.F.R. § 385.713(f)) provide that a rehearing request is denied if not acted on within 30 days of receipt. Accordingly, where appropriate, the Commission may issue an order extending the deadline in that regulation, in order to allow additional time for further consideration of the matters raised on rehearing. The Secretary of the Commission issued such an Interstate Commerce Act tolling order last week, in TransMontaigne Partners, L.P. v. Colonial Pipeline Co., Docket No. OR19-23-001.
Second, turning back to Natural Gas Act and Federal Power Act matters, the Commission also is changing its approach to some merits rehearing orders. Rehearing orders issued by the 30th day after receipt of the rehearing request will look familiar; those orders continue to grant or deny rehearing and sometimes provide clarification of the underlying order.
By contrast, orders on rehearing issued after the 30-day mark now reflect the exercise of the Commission’s authority to “modify or set aside, in whole or in part” a prior order until the point that the record on appeal is filed in a reviewing court. As such these orders now use the statutory terms “modify or set aside” when describing the Commission’s determinations. The Commission voted out the first such orders at its July open meeting. These orders use the phrase “modifying the discussion” where the Commission is providing further explanation of the underlying order but is not changing the outcome of the underlying order. When the Commission’s rehearing order is changing the outcome, the Commission will use the phrase “set aside.” Standardizing this terminology is intended to provide guidance to parties in discerning whether the Commission’s order is final, such that aggrieved parties may proceed to court.
Third, and finally, with respect to the appellate process under the Natural Gas Act and the Federal Power Act, we recognize that decisions regarding if or when to file a petition for review may be complex, particularly in cases where the 30-day deadline has passed and the rehearing request may be deemed denied by operation of law, but the Commission, through a notice, has announced its intent to issue a further merits order. In all cases, aggrieved parties continue to have 60 days after the denial by operation of law to file a petition for review.
The changes in Commission practice discussed today, among others, are intended to allow appeals of Commission orders to proceed on a complete administrative record, including a rehearing order, in a timely manner. Nonetheless, this new dynamic, where an appeal may be filed before the Commission has issued a further merits order, may present a need for earlier coordination among parties to an appeal. To facilitate that coordination, staff encourages parties contemplating an appeal, if uncertain about how to protect their right to judicial review, to seek guidance from attorneys in the Commission’s Solicitor’s Office within the Office of the General Counsel.
This concludes the presentation. I would be happy to answer any questions.