September 14, 2023
Docket No. ER23-2356-000
I dissent from this latest order approving a retroactive waiver of an expired deadline, this time of the critical path schedule to qualify capacity in the Forward Capacity Auction.[1] Wyman IV requests waiver of the requirement in section III.13.1.2.2.4 of the Tariff that would otherwise require NextEra Marketing to have elected to submit a critical path schedule for FCA 18 by April 6, 2023.[2] Three months after the deadline, FPL Energy Wyman IV LLC filed to waive it. The majority calls this a “prospective” waiver and grants it.[3]
The Commission is as powerless to grant this waiver as it is to travel back in time itself to ensure the deadline is met.[4] Of the two options, at least time travel is legal.
As I have explained in numerous similar filed rate violation cases,[5]
The filed rate violation in this case is straightforward. “The filed rate doctrine and the rule against retroactive ratemaking leave the Commission no discretion to waive the operation of a filed rate or to retroactively change or adjust a rate for good cause or for any other equitable considerations.”[6] I am dismayed how the court’s repeated declaration that we have “no discretion” continues to be misinterpreted by my colleagues, but I will restate what I have explained in numerous dissents to the Commission’s issuance of unlawful retroactive waivers,[7]
Unambiguous, uninterrupted and controlling judicial precedent holds that a utility can only charge the rate on file. This is called the filed rate doctrine.[8] It is a core tenet of utility regulation. The Commission also has no authority to permit utilities to charge rates other than those on file unless there is advance notice that the rate may change or the Commission has approved a tariff allowing the utility to charge different rates prospectively. This is called the rule against retroactive ratemaking.[9] This rule is also a core tenet of utility regulation and is a necessary adjunct to the filed rate doctrine. There would be little point in having rates on file if rate changes can be retroactively applied. Both the filed rate doctrine and the rule against retroactive ratemaking also apply to non-rate terms and conditions in filed tariffs.[10]
Section III.13.1.2.2.4 of the ISO New England Inc. (ISO-NE) Transmission, Markets and Services Tariff (Tariff)—the rate on file—requires that NextEra Marketing file a critical path schedule for FCA 18 prior to April 6, 2023, which was the Existing Capacity Retirement Deadline (i.e., the deadline to submit a critical path schedule).[11] NextEra Marketing did not so file. No recognized exception to the filed rate doctrine and rule against retroactive ratemaking applies.[12] Case closed.
I recognize that NextEra presents a sympathetic case. “Wyman IV states that waiver of the requirement would permit Yarmouth 4’s summer Qualified Capacity to be recalculated to reflect potentially an additional 160 MW in FCA 18, thus benefitting consumers.”[13] But the Commission has “no discretion” to approve a retroactive waiver.[14]
No one is likely to seek rehearing or appeal, so as in most of the Commission’s “precedent” granting similarly unlawful retroactive waivers, this result likely will stand. But imagine the regulatory chaos that could ensue when a federal court requires the Commission to stop waiving lapsed deadlines that are fixed in filed rates. What happens to all these unlawfully granted waivers? Probably nothing, but that does not give the Commission license to flout the law.
For these reasons, I respectfully dissent.
[1] FPL Energy Wyman IV LLC, 184 FERC ¶ 61,154 (2023) (Order).
[2] Id. at 10.
[3] Id. P 14 & n.23.
[4] I use the present tense “is met” because time travel assumes the Commission is back in April, 2023.
[5] See, e.g., PJM Interconnection, L.L.C., 182 FERC ¶ 61,109 (2023) (Danly, Comm’r, dissenting at P 5) (Danly Dissent) (footnote omitted).
[6] Id., Danly Dissent at P 5 n.10 (citation omitted); Old Dominion Elec. Coop., Inc. v. FERC, 892 F.3d 1223, 1230 (D.C. Cir. 2018) (citing Columbia Gas Transmission Corp. v. FERC, 895 F.2d 791, 794-97 (D.C. Cir. 1990)) (emphasis added); see also Ark. La. Gas Co. v. Hall , 453 U.S. 571, 578 (1981) (Arkla) (finding that “the Commission itself has no power to alter a rate retroactively”) (footnote omitted).
[7] Id., Danly Dissent at P 5 & n.11 (citation omitted); see, e.g., Cal. Indep. Sys. Operator, Corp., 176 FERC ¶ 61,159 (2021) (Danly, Comm’r, dissenting at P 2).
[8] Id., Danly Dissent at P 5 & n.12 (citing Cal. Indep. Sys. Operator, Corp., 176 FERC ¶ 61,159 (Danly, Comm’r, dissenting at P 2 & n.5) (citing Waiver of Tariff Requirements, 171 FERC ¶ 61,156, at P 5 & n.13 (2020) (Proposed Policy Statement) (citing Arkla, 453 U.S. at 577; Mont-Dakota Utils. Co. v. Nw. Pub. Serv. Co., 341 U.S. 246, 251-52 (1951))).
[9] Id., Danly Dissent at P 5 & n.13 (citing Cal. Indep. Sys. Operator, Corp., 176 FERC ¶ 61,159 (Danly, Comm’r, dissenting at P 2 & n.6) (citing Proposed Policy Statement, 171 FERC ¶ 61,156 at P 5 (citing Arkla, 453 U.S. at 578))).
[10] Id. Danly Dissent at P 5 & n.14 (citing Cal. Indep. Sys. Operator, Corp., 176 FERC ¶ 61,159 (Danly, Comm’r, dissenting at P 2 & n.7) (citing Proposed Policy Statement, 171 FERC ¶ 61,156 at P 6; Oklahoma Gas, 11 F.4th at 829-30 & n.3). See generally P3 Protest, Att. A, Aff. of the Hon. Joseph T. Kelliher, at PP 10-13 (Chairman Kelliher’s concise restatement of the law regarding the filed rate doctrine and rule against retroactive ratemaking)).
[11] Waiver Request at 7.
[12] See Exxon Co. U.S.A. v. FERC, 182 F.3d 30, 49 (D.C. Cir. 1999) (notice in the filed rate that the tariff is subject to retroactive adjustment); Holyoke Gas & Elec. Dep’t v. FERC, 954 F.2d 740, 744 (D.C. Cir. 1992) (parties contract to make the rate effective retroactively and show that doing so is not against the public interest).
[13] See Order P 10.
[14] See supra P 3.