Statement of Commissioner James P. Danly
August 28, 2023
CP95-35-000
I agree with the Commission’s decision to grant the request made by EcoEléctrica, L.P. (EcoEléctrica) for authorization to increase the storage tank level at its liquefied natural gas (LNG) terminal in Peñuelas, Puerto Rico, from 84 feet to 91 feet.[1]
I am hopeful that today’s decision will assist with “stabiliz[ing] the power grid in Puerto Rico during [the current] hurricane season.”[2] The reliability and resource adequacy of Puerto Rico’s electric system is a matter of significant (and immediate) moment.[3] In prior separate statements, I have highlighted the reliability concerns expressed by both the Governor of Puerto Rico and the Puerto Rico Electric Power Authority (PREPA) arising from the operation of Puerto Rico’s natural gas system.[4] The record in this proceeding has underscored the importance of EcoEléctrica’s LNG import facility and its role in supporting the reliability of Puerto Rico’s electric system.[5]
Finally, I also write separately to express my continued misgivings regarding the Commission’s claim of ongoing authority to oversee the safety of LNG facilities.[6] Just because a commissioner,[7] the Commission,[8] or even a court for that matter, may want to exercise jurisdiction, does not mean that they enjoy the authority to do so.[9] Nor does the occurrence (and this should be obvious) of an “unprecedented situation”[10] confer jurisdiction upon an agency.[11] That is something that only Congress can do. What “is beyond serious question”[12] is the following: (1) “Extraordinary grants of regulatory authority are rarely accomplished through ‘modest words,’ ‘vague terms,’ or ‘subtle device[s]’”;[13] and (2) “Agencies have only those powers given to them by Congress, and ‘enabling legislation’ is generally not an ‘open book to which the agency [may] add pages and change the plot line.’”[14] Again, where in section 3 of the NGA do we find the words “safety” or “perpetual?”
For these reasons, I respectfully concur.
[1] EcoEléctrica, L.P., 184 FERC ¶ 61,114 (2023).
[2] EcoEléctrica, L.P. August 17, 2023 Request for Expedited Action at 1.
[3] NFEnergía LLC, 184 FERC ¶ 61,061 (2023) (Danly, Comm’r, dissenting at P 2).
[4] See EcoEléctrica, L.P., 179 FERC ¶ 61,038 (2022) (Danly, Comm’r, concurring) (citing Governor of Puerto Rico February 24, 2022 Letter at 2 (“Returning the EcoEléctrica LNG storage tank to full operation is critical to PREPA’s ability to reliably supply economic electric power to the people of Puerto Rico and to minimize risks of blackouts on the island.”); Puerto Rico Electric Power Authority February 24, 2022 Letter at 2 (“EcoEléctrica and Costa Sur units are also essential for maintaining the required operational reserve, which is key for the reliability and safety of Puerto Rico’s electrical system. A reduction in the available capacity of these units would adversely affect the reliability and safety of the electrical service.”)); EcoEléctrica, L.P., 180 FERC ¶ 61,054 (2022) (Danly, Comm’r, concurring at 2) (recognizing that “the hurricane season has begun and yet we still have no resolution regarding the level at which EcoEléctrica can safely operate its [LNG] storage tank and the potential consequences to the reliability of Puerto Rico’s electric system should problems arise” and noting comments in the docket that “raised serious reliability concerns”).
[5] See, e.g., Puerto Rico Elec. Power Authority October 21, 2022 Letter at 1 (“EcoEléctrica’s LNG supply is of the utmost importance for Puerto Rico’s electric system. EcoEléctrica’s power plant, together with PREPA’s Costa Sur Power Plant, supply almost 40% of the Island’s electricity demand . . . . They both depend on the fuel supplied from the EcoEléctrica LNG storage tank for their generation. EcoEléctrica produces more than 15% of the electricity supplied to our customers. Its units operate as base generation and provide ancillary services, such as frequency regulation, which is so important to the electrical system’s stability and reliability. PREPA’s Costa Sur Power Plant has the capacity of producing more than 20% of the electricity supplied to the citizens of Puerto Rico.”); see also EcoEléctrica July 5, 2023 Request to Increase Storage Tank Liquid Level & Technical Memorandum for the LNG Import Terminal under Docket No. CP95-35 (stating that “more than 70% of the natural gas that is imported into Puerto Rico comes through the EcoEléctrica facility”) (citing U.S. Dep’t of Energy, Office of Fossil Energy and Carbon Mgmt., Office of Res. Sustainability, LNG Monthly Report - December 2022 (Feb. 15, 2023), https://www.energy.gov/fecm/articles/lng-monthly-2022); EcoEléctrica June 8, 2023 Request to Increase Storage Tank Liquid Level for the LNG Import Terminal under Docket No. CP95-35 at 6 (explaining that the limitation placed on the storage tank level has resulted in an “operational scheme” that “considerably reduces the send-out and operational flexibility of the EcoEléctrica LNG storage tank from 15 days of supply to 8.5 days for the EcoEléctrica and Costa Sur power plants”).
[6] See EcoEléctrica, L.P., 180 FERC ¶ 61,054 (Danly, Comm’r, concurring at P 3) EcoEléctrica, L.P., 179 FERC ¶ 61,038 (Danly, Comm’r, concurring); EcoEléctrica, L.P., 177 FERC ¶ 61,164 (2021) (Danly, Comm’r, concurring); EcoEléctrica, L.P., 176 FERC ¶ 61,192 (2021) (Danly, Comm’r, concurring).
[7] I disagree with Commissioner Clements’ view that “the Commission’s authority to regulate operational safety at LNG facilities is beyond serious question.” EcoEléctrica, L.P., 184 FERC ¶ 61,114 (2023) (Clements, Comm’r, concurring at P 2). Simply put, I am not persuaded that the exercise of perpetual jurisdiction by the Commission over the operational safety of LNG facilities is what “Congress envisioned.” Id. (Clements, Comm’r, concurring at P 4).
[8] Cf. Algonquin Gas Transmission, LLC, 174 FERC ¶ 61,126 (2021) (Danly, Comm’r, dissenting at P 22) (“The current Commission may believe that the Commission, voting unanimously, acted improvidently in early 2017. They may believe that circumstances have changed. They may believe that the parties seeking rehearing were completely correct and that rehearing should have been granted. They may be right. Regardless, there is no basis in law to re-examine final orders.”) (citations omitted); id. (Danly, Comm’r, dissenting at P 29) (“[T]he Order Establishing Briefing impairs the finality normally enjoyed by certificate holders, based on issues well outside our jurisdiction.”).
[9] See Midship Pipeline Co., L.L.C. v. FERC, 45 F.4th 867, 877 (5th Cir. 2022) (vacating and remanding the Commission’s orders because “[t]he [Commission’s] interpretation of the [Natural Gas Act (NGA)] to give the agency power to determine ‘the reasonable cost’ of remediation efforts ‘change[d] the plot line’ of its enabling legislation . . . and was therefore erroneous” and finding that “[t]he [Commission] lacks such authority under the NGA, and it likewise lacked authority to order an ALJ to make such a determination indirectly”) (citation omitted); id. at 876-77 (finding that “FERC’s argument that it is necessary or appropriate under the NGA to develop[] a record as to the necessary measures and their cost in order to assist in evaluating what further remediation is required, . . . not only has no explicit support in the NGA’s text but also lacks support in the context of this case” because “‘while the [FERC] oversees the restoration to ensure compliance, the cost of completing such compliance tasks, or for that matter the specific method by which those tasks are completed . . . are irrelevant’”) (quoting Midship Pipeline Co., LLC, 179 FERC ¶ 61,096 (2022) (Danly, Comm’r, dissenting at P 7)) (internal quotation marks and citations omitted).
[10] EcoEléctrica, L.P., 184 FERC ¶ 61,114 (Clements, Comm’r, concurring at P 3).
[11] Cf. NFEnergía LLC, 184 FERC ¶ 61,061 (Danly, Comm’r, dissenting at P 5) (“[T]he need for infrastructure, no matter how acute, does not confer authority upon the Commission. For that, we need a statute. Nor does it allow us to skirt our obligations under other statutes . . . . Here, the Commission does not (and cannot) rely on any statutory authority to support its order. Instead, in a moment of admirable (or, perhaps, breathtaking) candor, the Commission plainly states that ‘[t]here is no explicit statutory authority for the Commission to issue the section 3 authorization sought by the NFEnergía because the existing LNG terminal is still pending authorization by the Commission.’”) (citations omitted).
[12] EcoEléctrica, L.P., 184 FERC ¶ 61,114 (Clements, Comm’r, concurring at P 2).
[13] West Virginia v. EPA, 142 S. Ct. 2587, 2609 (2022) (citation omitted).
[14] Id. (citation omitted).