I concur in today’s order. I write separately to make two points.
First, in its decision applying the filed rate doctrine, the U.S. Court of Appeals for the Third Circuit “emphasize[d] that the equities play no role” in its determination.[1] The Court has spoken and, as always, the Commission will adhere to that ruling.
But I must equally emphasize that, for me, equity always matters. In this case, a “faulty assumption”[2] (the Court’s words) caused a more than four-fold increase in the market-clearing price that will, because of the Court’s order, cost customers in a small, rural area of Delaware more than $100 million[3] for which they will receive no appreciable benefit. I did not join this Commission in order to rubber stamp such patently inequitable outcomes. Congress created the Commission for the primary purpose of protecting consumers,[4] and I will continue to do everything that I can as Chairman to see to it that we fulfill that critically important mission.
Second, this proceeding should lead all stakeholders, including both PJM and the generators that will reap the more-than-$100-million windfall due to the Court’s decision, to take all necessary steps to ensure that we never find ourselves in this position again. That includes putting in place controls to ensure that a similar error does not reoccur and, should it somehow happen again, that PJM or the Commission has the authority to correct that error and protect customers from such a manifestly inequitable result. Basic equity, and the public interest, demand nothing less.
The court’s broad reading of the filed rate doctrine, and its endorsement of “predictability” as a higher virtue than equity,[5] is beyond troubling, and does not represent my views, or that of the other two sitting FERC Commissioners, both of whom voted as I did to approve what the court undid in March. One must ask: if the over $100 million result of a “faulty assumption” (and no one in this case argues that it’s not a faulty assumption) is somehow okay, what about a $1 billion faulty assumption, or a $1 trillion faulty assumption? Can we still conclude those are just and reasonable rates?
In several recent orders,[6] I and some of my colleagues have urged the RTOs/ISOs to take a hard look at their tariffs to develop cure periods or other corrective mechanisms to avoid the types of inequitable outcome ordained by the Third Circuit’s decision. I redouble that advice today. And as Chairman, I commit to fostering this and other efforts to seek to avoid the painful and unacceptable result we grapple with in today’s order.
For these reasons, I respectfully concur.
[1] PJM Power Providers Grp. v. FERC, 96 F.4th 390, 401 (3d Cir. 2024) (PJM Power Providers).
[2] Id. at 396.
[3] PJM Load Parties contend that, based on recent data published by PJM, the cost impact could be $177.7 million. PJM Interconnection, L.L.C., 187 FERC ¶ 61,065, at P 15 (2024). In the initial order accepting PJM’s proposed tariff amendment, we noted that the Maryland Office of People’s Counsel estimated that the average electric customer in the DPL-South Locational Deliverability Area could experience a bill increase of $24 per month for the 2024/2025 delivery year. See PJM Interconnection, L.L.C., 182 FERC ¶ 61,109, at PP 100, 178.
[4] E.g., Towns of Alexandria, Minn. v. FPC, 555 F.2d 1020, 1028 (D.C. Cir. 1977) (explaining that the Federal Power Act’s “‘primary aim is the protection of consumers from excessive rates and charges’”) (quoting Mun. Light Bds. v. FPC, 450 F.2d 1341, 1348 (D.C. Cir. 1971)); see also Elec. Dist. No. 1 v. FERC, 774 F.2d 490, 492 (D.C. Cir. 1985) (recognizing that the benefits of rate predictability, which are the “whole purpose” of the filed rate doctrine, ought to be considered in light of the “Federal Power Act’s primary purpose of protecting the utility’s customers”).
[5] PJM Power Providers, 96 F.4th at 402.
[6] See e.g. Moscow Dev. Co., 187 FERC ¶ 61,040 (Phillips and Clements, Comm’rs, concurring at P 5) (2024); Bear Ridge Solar LLC, 186 FERC ¶ 61,182 (Phillips and Clements, Comm’rs, concurring at P 5) (2024); Scioto Farms Solar Project, LLC, 186 FERC ¶ 61,096 (2024) (Phillips and Clements, Comm’rs, concurring at P 5); Hecate Grid Clermont 1 LLC, 183 FERC ¶ 61,011, at n.20 (2023); Sw. Power Pool, Inc., 174 FERC ¶ 61,205, at n.17 (2021), on reh’g, 181 FERC ¶ 61,077 (2022); see also Sw. Power Pool, Inc., 166 FERC ¶ 61,160 (Glick, Comm’r, concurring at P 3) (2019).