Part of the mission of the Federal Energy Regulatory Commission (FERC) is to: Ensure that rates, terms and conditions are just, reasonable and not unduly discriminatory or preferential.
Interstate transmission rates, such as PATH's, are under FERC's jurisdiction. FERC oversees PATH's formula rate administered under PJM's Open Access Transmission Tariff.
A formula rate is the filed rate charged to customers, although it begins as a blank template into which the company inserts different numbers each year. This allows the actual rate to change every year in accordance with the amount the company spends. A formula rate enables a company to continuously collect its rate without filing periodic rate cases. However, rate cases serve to provide for a review and challenge of the proposed rates by those who are forced to pay them. Because a formula rate allows rates to be set without the big production of a rate case, a formula rate is governed by protocols that allow (but do not require) those affected by the rate to review and challenge it if they believe it is unjust and unreasonable or unduly discriminatory or preferential.
When PATH's expenses were challenged at the WV Public Service Commission, PATH complained (and the PSC agreed) that the state had no jurisdiction over PATH's rates and therefore the PSC's hands were tied and it could not interfere or order PATH not to charge certain expenses to WV's consumers. The PSC has no jurisdiction because of the filed rate doctrine, which has been in place for decades. To make the filed rate doctrine as simple to understand as possible: a rate must be challenged in the venue in which it is set. A person cannot ask a regulator without jurisdiction to set a rate initially to modify it later. FERC has jurisdiction over interstate electric transmission rates, therefore, any challenge to the amount you are charged for transmission must come under FERC's exclusive jurisdiction. Otherwise, individual states could refuse to allow a transmission customer to recover a rate it must pay that is set by FERC, and the transmission customer would be unable to pass the rate it is required to pay for transmission on to its customers and would be stuck with an expense it could not recover.
Therefore, if a consumer wants to examine or challenge a transmission rate, they must do it in the venue in which it is set, which would be at FERC. This review and challenge of rates is what Keryn and Ali and some other consumers have been participating in for the last three years.
The first year, PATH welcomed the consumers to its review process and provided information requested by Ali and Keryn. PATH did this, not because they're such nice people, but because it was required to do so by its formula rate protocols because consumers are "interested parties" as defined in the protocols.
This consumer participation was quite unusual. Consumers had never reviewed rates or challenged them before. States and utilities would seem to be better equipped to do the review on behalf of their consumers or customers, however these entities were not reviewing rates with any real effort because it is too complicated, time consuming and expensive. Therefore, NOBODY was reviewing PATH's rates, which enabled PATH to charge whatever it alone determined was just and reasonable. FERC does not routinely review formula rates. FERC relies on the persons who pay these rates to raise the red flag if something is amiss with a rate.
Ali and Keryn filed a challenge to PATH's rate at FERC at the end of the first review process. When the second year's review process began, PATH carried out a series of ridiculous shenanigans that were intended to intimidate Ali and Keryn and prevent them from obtaining information under the protocols. After all, if they couldn't examine the rate, they couldn't challenge it, right? Wrong. A second challenge was filed at the end of the second review period. On June 1, 2012, the third year review process opened. PATH has refused to provide any information at all this year, and has even tried to ban consumers from an informational meeting about its rate.
One of the tactics PATH tried to utilize last year to make consumers go away was to change the definition of "interested party" in its protocols. Although the Commission granted the change (to read "any entity with standing under Sec. 206 of the FPA), it also informed PATH that consumers have a direct interest in the rates they are charged that are under FERC's jurisdiction (because, remember, the state does not have jurisdiction here, FERC is the only available venue for consumers).
On July 18, Keryn filed a complaint at FERC alleging that PATH had violated its formula rate protocols by refusing to provide information requested by an interested party.
The deadline for interventions and comments was Aug. 7.
Here's what turned up at FERC:
PSE&G, a utility from New Jersey, filed a doc-less motion to intervene, which merely preserves its right to participate in the case. PSE&G had no comments.
Patience Wait filed a motion to intervene and comments.
Alison Haverty filed a motion to intervene and comments.
PATH filed an answer to the complaint.
Keryn Newman filed a response to PATH's answer.
Will consumer rights be protected by FERC? Or will PATH manage to disenfranchise the consumers who pay its rates, and leave the consumers with no recourse other than to pay?
Interstate transmission rates, such as PATH's, are under FERC's jurisdiction. FERC oversees PATH's formula rate administered under PJM's Open Access Transmission Tariff.
A formula rate is the filed rate charged to customers, although it begins as a blank template into which the company inserts different numbers each year. This allows the actual rate to change every year in accordance with the amount the company spends. A formula rate enables a company to continuously collect its rate without filing periodic rate cases. However, rate cases serve to provide for a review and challenge of the proposed rates by those who are forced to pay them. Because a formula rate allows rates to be set without the big production of a rate case, a formula rate is governed by protocols that allow (but do not require) those affected by the rate to review and challenge it if they believe it is unjust and unreasonable or unduly discriminatory or preferential.
When PATH's expenses were challenged at the WV Public Service Commission, PATH complained (and the PSC agreed) that the state had no jurisdiction over PATH's rates and therefore the PSC's hands were tied and it could not interfere or order PATH not to charge certain expenses to WV's consumers. The PSC has no jurisdiction because of the filed rate doctrine, which has been in place for decades. To make the filed rate doctrine as simple to understand as possible: a rate must be challenged in the venue in which it is set. A person cannot ask a regulator without jurisdiction to set a rate initially to modify it later. FERC has jurisdiction over interstate electric transmission rates, therefore, any challenge to the amount you are charged for transmission must come under FERC's exclusive jurisdiction. Otherwise, individual states could refuse to allow a transmission customer to recover a rate it must pay that is set by FERC, and the transmission customer would be unable to pass the rate it is required to pay for transmission on to its customers and would be stuck with an expense it could not recover.
Therefore, if a consumer wants to examine or challenge a transmission rate, they must do it in the venue in which it is set, which would be at FERC. This review and challenge of rates is what Keryn and Ali and some other consumers have been participating in for the last three years.
The first year, PATH welcomed the consumers to its review process and provided information requested by Ali and Keryn. PATH did this, not because they're such nice people, but because it was required to do so by its formula rate protocols because consumers are "interested parties" as defined in the protocols.
This consumer participation was quite unusual. Consumers had never reviewed rates or challenged them before. States and utilities would seem to be better equipped to do the review on behalf of their consumers or customers, however these entities were not reviewing rates with any real effort because it is too complicated, time consuming and expensive. Therefore, NOBODY was reviewing PATH's rates, which enabled PATH to charge whatever it alone determined was just and reasonable. FERC does not routinely review formula rates. FERC relies on the persons who pay these rates to raise the red flag if something is amiss with a rate.
Ali and Keryn filed a challenge to PATH's rate at FERC at the end of the first review process. When the second year's review process began, PATH carried out a series of ridiculous shenanigans that were intended to intimidate Ali and Keryn and prevent them from obtaining information under the protocols. After all, if they couldn't examine the rate, they couldn't challenge it, right? Wrong. A second challenge was filed at the end of the second review period. On June 1, 2012, the third year review process opened. PATH has refused to provide any information at all this year, and has even tried to ban consumers from an informational meeting about its rate.
One of the tactics PATH tried to utilize last year to make consumers go away was to change the definition of "interested party" in its protocols. Although the Commission granted the change (to read "any entity with standing under Sec. 206 of the FPA), it also informed PATH that consumers have a direct interest in the rates they are charged that are under FERC's jurisdiction (because, remember, the state does not have jurisdiction here, FERC is the only available venue for consumers).
On July 18, Keryn filed a complaint at FERC alleging that PATH had violated its formula rate protocols by refusing to provide information requested by an interested party.
The deadline for interventions and comments was Aug. 7.
Here's what turned up at FERC:
PSE&G, a utility from New Jersey, filed a doc-less motion to intervene, which merely preserves its right to participate in the case. PSE&G had no comments.
Patience Wait filed a motion to intervene and comments.
Alison Haverty filed a motion to intervene and comments.
PATH filed an answer to the complaint.
Keryn Newman filed a response to PATH's answer.
Will consumer rights be protected by FERC? Or will PATH manage to disenfranchise the consumers who pay its rates, and leave the consumers with no recourse other than to pay?
RSS Feed