Commissioner Neil Chatterjee Statement
July 15, 2021
Docket No. ER20-1068-000
Order: E-10
I oppose today’s order denying Dayton Power and Light Company’s (Dayton) request for a 50-basis point adder to the authorized return on equity to reflect Dayton’s continued membership in PJM (RTO Adder). I have previously made clear my views on the RTO Adder’s critical importance in attracting and maintaining RTO/ISO membership, the substantial benefits RTOs/ISOs provide to consumers, and the vital role RTOs/ISOs will play in advancing the energy transition.[1] As I noted, in PJM alone, the benefits to consumers from RTO membership may be as much as $4 billion per year.[2]
I have serious procedural concerns about acting in this proceeding today. Since we issued our order establishing a hearing in this proceeding almost a year ago, the Commission has supplemented a pending generic proceeding to drastically reconsider the RTO Adder.[3] The April 2021 Supplemental NOPR explicitly teed up the very issue that is at the center of this proceeding by seeking comment on whether the RTO Adder should be available only to transmitting utilities that join a Transmission Organization voluntarily, how the Commission should determine whether a utility’s decision to join is voluntary, and whether there should be any exceptions to the voluntariness requirement.[4]
It makes little sense to move forward now in this narrow proceeding while those larger policy questions are still pending in Docket No. RM20-10-000. Parties to this proceeding reasonably requested that the Commission act expeditiously to implement the proposal in the March 2020 NOPR before ruling on Dayton’s request, correctly noting that the proposal would have resolved the issues raised in this proceeding.[5] I agree that acting on Dayton’s application now, before addressing the issues in that larger proceeding, creates unnecessary procedural disarray.[6] Given all the water under the bridge and the potential ripple effects of this outcome on other transmission owners, both within Ohio and beyond, I cannot support this approach.
I implore the Commission to move quickly to put in place a comprehensive transmission incentives policy, including an appropriate RTO Adder, that advances the Commission’s long-standing policy objectives and incentivizes what is needed now more than ever — investment in transmission infrastructure and robust organized markets.
For these reasons, I respectfully dissent.
[1] I discussed this at length in my dissent to the Commission’s April 2021 Supplemental NOPR. See Electric Transmission Incentives Policy Under Section 219 of the Federal Power Act, Supplemental Notice of Proposed Rulemaking, 175 FERC ¶ 61,035 (2021) (Transmission Incentives Supplemental NOPR) (Chatterjee, Comm’r, dissenting).
[2] Id. at P 6; see also Electric Transmission Incentives Policy Under Section 219 of the Federal Power Act, Notice of Proposed Rulemaking, 170 FERC ¶ 61,204, at P 93, errata notice, 171 FERC ¶ 61,072 (2020) (March 2020 NOPR) (stating that “PJM estimates that the total annual benefits and savings to PJM’s customers in the 13 states and the District of Columbia in which it operates to be between $3.2 and $4 billion”).
[3] See Transmission Incentives Supplemental NOPR.
[4] See id. at P 19. I support removing the voluntariness requirement because, as the Commission explained in the March 2020 NOPR, permitting some RTO/ISO members to receive the RTO Adder, while prohibiting other members from receiving that same incentive, creates an uneven playing field in the competition for investment capital. March 2020 NOPR at P 98.
[5] See EEI Initial Br. at 5; WIRES Initial Br. at 4; FirstEnergy Initial Br. at 9-11.
[6] I note that, because the majority chooses not to address the arguments raised regarding whether the Ohio law is preempted, it is also unclear whether Dayton will be owed refunds if a federal court were to invalidate the Ohio statute.