This Commission has not before endorsed the policy that the activities of non-decisional
intervenor groups be funded through a dedicated utility tariff under the auspices of the FPA. Yet here we are doing exactly that. Today’s order is couched in the language of
good intentions, but I find it troubling  precedent as both a matter of policy and prudence.

My public policy concern is that there is little that meaningfully differentiates these
organizations from a myriad of other state agencies and not-for-profit governmental
organizations or other interest groups that will now say, “what about my piece of the
pie?” CAPS entities argue they are uniquely situated. But aren’t state energy offices, in
their own way, also uniquely situated? What about state departments of environmental
quality? Do they, too, deserve a Regional Transmission Organization (RTO) funded
organization to finance their participation in stakeholder meetings? Furthermore, given
that CAPS includes at least one non-governmental non-profit, we now have cracked-open the lid of Pandora’s Box just a little wider yet. What is to stop any of the countless groups that intersect with the regulatory world from arguing that they are also uniquely situated to speak for any  number of communities of interest?

(a)
(1) There shall be an office in the Commission to be known as the Office of Public Participation (hereinafter in this section referred to as the “Office”).
(2)
(A) The Office shall be administered by a Director. The Director shall be appointed by the Chairman with the approval of the Commission. The Director may be removed during his term of office by the Chairman, with the approval of the Commission, only for inefficiency, neglect of duty, or malfeasance in office.
(B) The term of office of the Director shall be 4 years. The Director shall be responsible for the discharge of the functions and duties of the Office. He shall be appointed and compensated at a rate not in excess of the maximum rate prescribed for GS–18 of the General Schedule under section 5332 of title 5.
(3) The Director may appoint, and assign the duties of, employees of such Office, and with the concurrence of the Commission he may fix the compensation of such employees and procure temporary and intermittent services to the same extent as is authorized under section 3109 of title 5.
(b)
(1) The Director shall coordinate assistance to the public with respect to authorities exercised by the Commission. The Director shall also coordinate assistance available to persons intervening or participating or proposing to intervene or participate in proceedings before the Commission.
(2) The Commission may, under rules promulgated by it, provide compensation for reasonable attorney’s fees, expert witness fees, and other costs of intervening or participating in any proceeding before the Commission to any person whose intervention or participation substantially contributed to the approval, in whole or in part, of a position advocated by such person. Such compensation may be paid only if the Commission has determined that--
(A) the proceeding is significant, and
(B) such person’s intervention or participation in such proceeding without receipt of compensation constitutes a significant financial hardship to him.
(3) Nothing in this subsection affects or restricts any rights of any intervenor or participant under any other applicable law or rule of law.
(4) There are authorized to be appropriated to the Secretary of Energy to be used by the Office for purposes of compensation of persons under the provisions of this subsection not to exceed $500,000 for the fiscal year 1978, not to exceed $2,000,000 for the fiscal year 1979, not to exceed $2,200,000 for the fiscal year 1980, and not to exceed $2,400,000 for the fiscal year 1981.

The Office of Public Participation is also needed to provide support to communities involved with FERC-jurisdictional hydro and natural gas infrastructure proposals.

To approve negotiated rates for a transmission project, the Commission must find that the rates are just and reasonable. To do so, the Commission must determine that the merchant transmission owner has assumed the full market risk for the cost of constructing its proposed transmission project.

Rock Island meets the definition of a merchant transmission owner because it assumes all market risk associated with the Project and has no captive customers. Rock Island has agreed to bear all the risk that the Project will succeed or fail based on whether a market exists for its services.

Rock Island also argues that wind generators, whose energy the Project will likely transmit, present numerous risks that transmission project developers and investors must overcome. For example, Rock Island states that wind energy projects are typically constructed with shorter lead times than other generators and are less willing to commit to large transmission projects well in advance of generator construction. Rock Island argues that pre-subscription of capacity with creditworthy anchor customers can reduce financing obstacles because lenders demand to see a secure source of revenue as a predicate to project financing.

...the Commission concludes that, as courts have recognized, retail customers may file complaints and protest transmission rates and wholesale sales rates before the Commission.  Moreover, allowing retail customers to challenge such rates does not violate principles of federalism or interfere with states’ rights.

(1)  Shouldn’t section 306 of the Federal Power Act (FPA) be interpreted
in pari materia with section 201 of the FPA?  FPA section 201 gives the Commission jurisdiction over wholesale interstate rates and interstate transmission; therefore, retail ratepayers would not have the right to file complaints against wholesale rates.

(2) Wouldn’t an expansive interpretation of section 306 of the FPA (allowing retail ratepayers or end users to file complaints against interstate wholesale rates) violate the delicate balance of federalism; in other words, by giving complaint authority to retail rate customers, is the Commission interfering with states’ rights by asserting jurisdiction over retail rates?

answer the questions as follows: 
(1) “retail ratepayers are not permitted to bring an FPA section 205 complaint against wholesale sellers of electricity[;]” and (2) a different interpretation (i.e., allowing such retail ratepayer complaints) “would interfere with state jurisdiction over retail rates.”

Complaints may be filed under sections 206 and/or 306 of the FPA, 16 U.S.C. §§ 824e, 825e (2012).  While section 205(e) of the FPA refers to “complaints,” 16 U.S.C. § 824d(e) (2012), the Commission commonly refers to these filings as protests.  See 18 C.F.R. § 385.211 (2015).   

The plain language of the FPA and the Commission’s implementing regulations allow broad participation in proceedings before the Commission.  Specifically,
section 306 of the FPA explicitly authorizes “[a]ny person” to file a complaint with
the Commission. The Commission’s regulations are to a similar effect.  For example, Rule 206(a) of the Commission’s Rules of Practice and Procedures provides that “[a]ny person may file a complaint seeking Commission action against any other person alleged to be in contravention or violation of any statute, rule, order, or other law administered by the Commission or for any other alleged wrong over which the Commission may have jurisdiction.

Ms. Peine, an intervenor in this proceeding, is contesting the SWEPCO/AEP transmission formula rate inputs, and thus rates for transmission of electric energy in interstate commerce, which is within the Commission’s exclusive jurisdiction under Part II of the FPA.  These transmission inputs, i.e., costs, flow through to Ms. Peine’s retail electric bill.  Stated another way, Ms. Peine is an “end-use customer that will pay  . . . some portion of that [transmission] rate when flowed through [her] retail bill.” Thus, by challenging the transmission formula rate inputs, Ms. Peine has alleged injury in fact that can only be addressed by the Commission.  Under these facts, Ms. Peine is permitted to file a protest or a complaint and to participate in this proceeding by intervening.

This outcome is consistent with federalism.  Section 201 of the FPA recognizes the authority of the states over retail sales and facilities used in “local distribution.”  Ms. Peine’s formal challenges, however, go to the transmission formula rate inputs identified in the SWEPCO/AEP 2013 and 2014 Annual Updates.  Ms. Peine’s claims, therefore, go to the transmission of electric energy in interstate commerce and not to local distribution

Moreover, this issue is not a matter of first impression, as both the courts and the Commission have concluded previously that protecting consumers is one of the Commission’s primary responsibilities.

...the relevant definition of “interested parties” under the SWEPCO/AEP Protocols is not the version that was filed in 2007, but rather the version that was in effect when Ms. Peine filed her formal challenges under the Protocols, and that version did not include the examples that the Settlement Judge construed as limiting the definition of interested parties to exclude Ms. Peine.  Moreover, we disagree with the Settlement Judge’s interpretation of the parenthetical phrase in the earlier version of the SWEPCO/AEP Protocols.  The parenthetical phrase “(e.g., Transmission customers and affected state and federal regulatory authorities)” provided examples of categories of interested parties, and should not be read as exhaustive.  This parenthetical language would not preclude an end-use customer, like Ms. Peine, who will pay a portion of the transmission rate in her retail bill, from challenging the inputs to the SWEPCO/AEP transmission formula rate.

Lastly, as to the administrative efficiency concerns raised by the Settlement Judge and AEP, we note that the Commission’s Rules of Practice and Procedure provide appropriate measures to streamline Commission proceedings.

I urge you to make the concepts described in this book a regular point of reference for the manner in which you carry out your work and the treatment of others.

In March 2009, PJM followed the narrower approach, proposing to pay MLSA to all trades with paid transmission (physical or virtual). In response to that filing, no party suggested that UTC trading would be susceptible to the kind of perverse incentives that the Commission understood could apply to most virtual trades.

No party filed any comments rebutting this contention as to the narrow distribution method, and the Commission accepted it in September 2009. Black Oak Energy, LLC, et al. v. PJM Interconnection, L.L.C., 128 FERC ¶ 61,262 (2009).

In addition to airing her jurisdictional and standing concerns, the judge said permitting retail ratepayers to file such complaints "is at odds with promoting efficiency" because FERC could be faced with handling "potentially millions of individual complainants."

The groups, however, insisted that Cintron's position is "contrary to the plain language of the FPA," which states that "any person" has standing to file a complaint with FERC, as well as long-standing commission precedent holding that retail ratepayers have standing to challenge wholesale rates.

Citing a proceeding involving the abandoned Potomac Appalachian Transmission Highline project in which FERC found that "[a] complaint regarding a transmission rate can … be filed by any person, including an end-use customer that will pay some portion of that rate when flowed through its retail bill," the groups called Cintron's attempts to distinguish that situation from AEP's "unavailing." The judge relied on differences in the two companies' formula rate protocols to make her case, but the groups argued that "standing is a statutory right under the FPA, and whatever is said in the AEP protocol cannot overturn the statute."

As for Cintron's concerns about the regulatory burden that would be placed on FERC if retail ratepayers are allowed to challenge wholesale rates, the groups insisted that "administrative convenience is not a basis to eviscerate a statutory right." They said that "[i]n any event, this is a chimera — in the nearly 20 years since the commission issued Order 888, there has been a stream but not a deluge of … rate challenges."

Finally, among other things, the groups said the "novel viewpoint" expressed by Cintron "would reopen the … regulatory gap between federal and state jurisdiction that the FPA was designed to close."

"For consumers impacted by commission-jurisdictional transmission rates, there is no other effective remedy," the groups said.

Should retail electricity customers be barred from bringing cases before the Federal Energy Regulatory Commission, a decades-long practice? A FERC administrative law judge, Carmen Citron, last month recommended to the commission that it abandon its long-standing practice and deny retail customers standing before the agency.

Cintron’s mid-October recommendation came in a case involving an Arkansas lawyer, school teacher and activist (ER07-1069-006), Martha Peine of Eureka Springs, Ark. She challenged expenses AEP subsidiary Southwestern Electric Power Co. charged to consumers in lobbying for a new interstate power line. She argued at FERC that SWEPCO had stuck customers with some $92,000 in expenses that were improper. Her filing was under Section 205 of the Federal Power Act (FPA).

challenged Cintron’s reasoning as flipping “the fundamental purpose of the FPA on its head.”

Elcon asserted, “The purpose of the FPA is not to protect utilities from the burden of responding to consumers; rather, as the Supreme Court and other courts have recognized, it is ‘to protect power consumers against excessive prices.’”

Whether retail customers can continue their historic right to access to FERC also has political implications for the commission. In recent months, anti-natural gas activists have staged demonstrations at commission meetings, including interrupting proceedings (resulting in guard-escorted exits from FERC’s D.C. headquarters). The protesters have argued, often at high volume, that FERC cares only for the interests of big energy companies, and not those of people affected by the agency’s actions.

The commission has repeatedly said, as it opens its monthly public meetings, that it will consider arguments and protests to its activities from anybody, through normal FERC proceedings, including filings. Should the commission adopt Cintron’s recommendations, those statements will ring administratively and politically hollow.