During its January open meeting, the Federal Energy Regulatory Commission
denied rehearing on two orders affecting transparency in regional
transmission organization (RTO) and independent system operator (ISO)
processes, and clarified the commission’s jurisdiction over RTO and ISO
rules as “practices affecting” wholesale rates.
In August 2018, RTO Insider, a trade publication that reports on
the electric industry, filed a complaint against New England Power Pool
(NEPOOL), challenging NEPOOL’s then-recently enacted policy prohibiting
press and public attendance at and reporting on NEPOOL meetings (Docket No.
EL18-196). NEPOOL filed a motion to dismiss, arguing that, among other
things, the commission lacked jurisdiction over NEPOOL’s meeting policies.
In April 2019, the commission
dismissed the complaint, finding that NEPOOL’s policy for meeting attendance did not fall within
the commission’s jurisdiction over “all rules and regulations affecting or
pertaining to” rates and charges by a public utility for jurisdictional
service. While the commission noted that the stakeholder process within
an RTO/ISO is a practice that affects rates, terms and conditions of
jurisdictional service, that jurisdiction is “necessarily limited to
aspects of an RTO/ISO stakeholder process that have a direct effect on
jurisdictional rates.” NEPOOL rules prohibiting press and public attendance
at NEPOOL meetings, the commission noted, do not directly affect rates
because they do not affect either who may vote on NEPOOL proposals, or the
filings that are ultimately submitted to the commission. Commissioner
Richard Glick filed a separate concurrence, noting that while he agreed
with the ruling, he “believe[s] th[e] rules are misguided.”
In a parallel docket, the commission
rejected revisions to the NEPOOL agreement that would have prevented members of the press from
becoming NEPOOL members or from being designated a representative of a
NEPOOL member (Docket No. ER18-2208). The revisions would limit the
definition of “press” to individuals working for the purposes of reporting
for a press organization, rather than the organization itself. The
commission rejected the amendments in January 2019. The commission stated
that NEPOOL’s membership rules fall within the commission’s jurisdiction
because they directly affect commission-jurisdictional rates. Membership in
NEPOOL confers voting rights, and the outcome of votes signals to the
commission stakeholder approval and has the potential to generate proposals
for commission consideration. Therefore, the commission determined, RTO/ISO
membership rules directly affect jurisdictional rates.
In its January open meeting, the commission denied rehearing in both cases.
RTO Insider complaint docket, the commission rejected contentions that attendance at the NEPOOL
meetings would directly affect rates because allowing non-members to
witness and report on NEPOOL’s deliberations would alter NEPOOL member
behavior and could even affect voting. The commission instead found that
“what Public Citizen refers to here are, at best, indirect effects on
rates.” In the
NEPOOL agreement docket, however, the commission upheld its rejection of the proposed revisions.
Further, the commission rejected assertions that NEPOOL was not an RTO and
therefore not subject to the commission’s jurisdiction, stating that the
“scope [of Federal Power Act Section 205] is broad enough to encompass”
actions by NEPOOL.
When taken together, these cases draw new lines in the sand regarding the
longstanding debate over commission jurisdiction over RTO/ISO business
practices. For one, other RTOs may follow NEPOOL’s lead, and work to impede
press attendance and reporting on stakeholder meetings, or otherwise limit
the transparency of RTO/ISO operations, while escaping commission review
under the premise of not “directly” affecting jurisdictional rates. RTO Insider has already expressed in trade press that it intends
to appeal the decision in the RTO Insider complaint docket, so it
appears the courts will decide if the lines the commission has drawn are
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