...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.
The settlement judge in a formal challenge proceeding involving a subsidiary of investor owned utility AEP had submitted what are known as "Certified Questions" to the Commission on Oct. 13. A certified question is intended to seek the Commission's consideration and disposition of "any question arising in the proceeding, including any question of law, policy, or procedure." The Commission had 30 days to answer the questions posed, otherwise they would revert to the judge who posed them for decision. The questions posed were:
(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?
The judge had recommended that the Commission:
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.”
The Commission didn't see it that way, and yesterday they issued an Order that explained to the judge:
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.
So, the judge made a complete mess of a whole bunch of law in her rush to deny standing to a ratepayer. She also doesn't know the difference between "e.g." and "i.e." And AEP and the Judge need to kwitcherbitchin about how terribly hard and unfair it is to utilities to have their rates examined by those who pay them. Did they expect that the Commission was going to do away with annual reviews of formula rate inputs altogether? There's no way to limit participation. It's all in or nothing. And the Commission just can't legally go with shutting down rate transparency.
Perhaps there's also a lesson here for AEP, who did a whole bunch of whining about how burdensome and costly customer reviews of wholesale transmission could be as an excuse to escape rate review altogether. AEP has been down this road before as one of the parent companies involved in the PATH decision the Commission cited over and over in yesterday's Order. Shame on you, AEP! If someone suggested that you could steal from your grandmother and get away with it, would you do it? Even though you know full well stealing from Granny is wrong? I thought AEP was supposed to "do the right thing?" Here's a little advice from your own CEO to apply the next time you see an opportunity to do something that you know is wrong in order to take unfair advantage over someone who appears to be weaker than you:
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.
Karma.
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