On Friday, parties challenging FERC Order No. 841 filed non-binding statements of issues to be raised in the litigation. APPA, NRECA, EEI, and AMP (utilities) filed jointly, NARUC filed its own statement. The two filings are similar, but the utilities's filing is more succinct:
Issue 1: Did FERC act in excess of its statutory authority by deciding that it alone has jurisdiction to determine whether energy storage resources located on a distribution line or behind a retail meter may participate in wholesale electric markets?
Issue 2: Because of the impact of the Order 841 on the reliability, operations, and costs of local distribution systems and retail electric service, and because the FPA reserves these matters for state and local regulation [1/2]
[Issue 2, cont] did FERC act arbitrarily and capriciously, abuse its discretion, or otherwise act not in accordance with law by declining to give States an opportunity to opt out of the energy storage resource participation model created by the Order 841?
Issue 1 is about FERC's authority under federal law. Utilities are asking the court to draw a line that prohibits FERC from approving RTO tariffs that set rates for DERs, unless a local regulator permits DERs to participate in wholesale markets.
A FERC loss on Issue 1 will have repercussions for DER participation in wholesale markets. A broad ruling by the court could doom FERC's proposed DER aggregation rule. A narrower ruling might limit any future DER rule to states that are "wholesale DER friendly"
A FERC loss on Issue 2 would effectively remand distribution-level storage's participation back to FERC. FERC could issue an order that draws from the existing record to more fully explain why it's not providing an opt out. Or it could take comments on the issue first.
Whether or not there is an appetite at FERC to do either of those things will depend on who is sitting on the Commission. A loss on Issue 2 could have the effect of killing wholesale storage or DERs, even though it wouldn't change FERC's legal authority.
The challengers and FERC also jointly filed a proposed briefing schedule:
Correction to earlier Tweet: this lawsuit won't kill "wholesale storage." Order 841 is almost entirely safe and the only aspect challenged here is about distribution-level storage and whether FERC can require RTOs to accept bids from such resources.
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In 2015, a merchant transmission developer filed a complaint alleging that PJM was overcharging for network upgrades. A key aspect of its claims related to a lack of transparency about the study process.
In the course of the trial, PSE&G’s conduct took center stage.
FERC summarized the allegations. PSE&G: 1. "Conveyed false and misleading information" to inflate upgrade costs 2. "Hid facts" about the line and "misrepresented photographs" 3. Gave Exelon a $14M estimate and a $162M estimate to the developer for the same project
We’ve all had some fun with this latest “campaign promise,” but how does it intersect with Project 2025’s agenda about power markets and electric utilities?
A quick look at what Project 2025 says about interstate wholesale electric power markets…
Buried within a chapter about the Dept of Energy, Project 2025 dedicates 7 pgs to FERC, with 2 about natural gas pipelines and LNG facilities.
So I’m focusing on 5 pages here written by former FERC Comm’r McNamee. I'll take what I can get!
Project 2025’s main goal is to raise market prices received by coal, gas, and nuclear and/or raise market costs paid by wind and solar. Project 2025 calls this “reliability pricing” but it has only half-baked ideas (at best!) for how to implement it.
The utilities’ goal is to control regional transmission development.
Here’s how: 1) Give the PJM Board authority to change regional planning goals. 2) Gain power to preempt PJM actions or challenge them in secret before PJM acts. 3) Disempower PJM Members and everyone else.
First, PJM covers 20% of the US population and GDP. Only a few companies dominate high-voltage transmission in the region. There's a lot at stake.
(The brown regions in the map include Duke Energy, ConEd, PSE&G, PPL -- each another giant electric utility)
On item 1) on the utilities' wishlist (above), the utilities can’t actually give the PJM Board control over the regional planning rules. Now, PJM Members have that authority bc the utilities gave it them 27 years ago.
PJM has made a separate FERC filing to get this power.
After skimming 50 filings, I've filled in the scorecard. Many other entities are opposing this rule on other grounds. The chart highlights arguments that I see as most damaging to FERC's long-term ability to regulate transmission.
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Quick explanation of the top 3 rows:
Major Questions Doctrine was the product of a 2022 US Supreme Court case, WV v. EPA. Along with @PolicyIntegrity, I rebutted claims about MQD and this rule here - eelp.law.harvard.edu/wp-content/upl…
Row 2:
30 years ago, FERC started to set industry-wide transmission rules. Courts approved. Now, FERC's opponents are resurrecting the claim that FERC can only regulate utility-by-utility (or RTO-by-RTO) and can't set industry-wide rules in a single proceeding.
This meeting is starting with a staff presentation about the siting rule, Order No. 1977, leaving Order No. 1920 for the end. This is clearly an effort to juice ratings.
Scorching hot FERC take from 1976:
The Supreme Court's statement that the purpose of the Power and Gas Acts is to encourage plentiful supplies at reasonable prices is wrong and should be discarded. The Court's conclusion is poorly supported by precedent and history.
Above, the conclusion is repeated by states suing to end DOE's LNG pause and was said yesterday by future Commissioner See at the confirmation hearing.
Here's why it's wrong and why this matters:
Neither law is about maximizing energy production. Both laws are primarily about consumer protection. One element of protecting consumers is ensuring that new gas service (i.e., new pipelines) is needed. Neither law regulates energy production --- states primarily do that.