FERC spent its last open meeting during President Trump’s tenure welcoming a new member and rejecting proposed orders by outgoing Chairman James Danly.

Normally held on the third Thursday of the month, the commission’s monthly open meeting was moved to Tuesday, the day before President-elect Joe Biden’s inauguration. It was only one of many unusual aspects of the meeting.

Republican Commissioner Neil Chatterjee and Democratic Commissioners Richard Glick and Allison Clements voted against four proposed pipeline certificate orders brought to a vote by Danly, a Republican. The three also voted against granting rehearing of Order 871 — which barred natural gas pipeline developers from beginning construction before FERC fully acts on challenges to project approvals — and a proposed Notice of Inquiry on the White House Council on Environmental Quality’s updates to the environmental review process under the National Environmental Policy Act (NEPA). (See FERC Revises Pipeline Policy on Landowner Concerns and Trump Admin Proposes Streamlining NEPA Reviews.)

Chatterjee, Glick and Clements also voted against a proposed order regarding PJM’s minimum offer price rule (MOPR). Republican Mark Christie, who joined the commission Jan. 4 after serving as chair of the Virginia State Corporation Commission, did not participate in the vote.

Christie also did not participate in orders on the Mountain Valley gas pipeline project, part of which would run through Virginia. With Chatterjee joining Danly, the commission deadlocked 2-2, meaning it did not legally act on them. Christie, however, has not recused himself from either proceeding.

One of the FERC chairman’s responsibilities is deciding what items get voted on and discussed at the commission’s open meetings. They usually include major actions, such as landmark orders, or topics of particular importance to the chair. Proposed orders are rarely rejected, as chairs usually attempt to build a consensus prior to voting on them. Prior to Danly’s chairmanship, the last time an order on the agenda was rejected came as a surprise, when former Commissioner Bernard McNamee announced he would be voting against an order approving the Jordan Cove LNG export terminal in Oregon after state regulators rejected a permit for the project’s developers. (See In Rare Surprise, FERC Declines to Act on Jordan Cove.)

After he became chair in early November, Danly began bringing to a vote notational orders, such as waiver requests, on which he dissented. And last month’s open meeting featured a presentation on a proposed order to show cause requiring CAISO to demonstrate it can meet demand during extreme heat events — a proposal that Chatterjee and Glick rejected. (See FERC Won’t Meddle in CAISO Resource Adequacy, Yet.)

This month’s meeting was also unusual in that Danly responded to each of his colleagues’ opening remarks in which they explained why they were voting against certain orders. In doing so, Danly for the first time explained his philosophy for voting on orders he knows will fail.

Chatterjee criticized two proposals to deny requests for rehearing of FERC staff’s approval of compressor stations on the Sabal Trail Transmission natural gas pipeline in the Southeast U.S. (CP15-17-005) and the Algonquin Gas Transmission pipeline in the Northeast (CP16-9-011). Chatterjee said that the orders did not “appropriately consider the comments on environmental justice and COVID” or “take into account the comments made by nearby residents on safety.”

“The reason why I brought these up for a vote, knowing full well that there would be a great likelihood that they would be voted down, is because … far from ignoring comments, what I insisted was that there be an order that specifically addressed the comments,” Danly said. The Administrative Procedure Act “requires all comments to be responded to. And it is in fact fidelity to legal regimes that required me to offer these for” voting, he said.

Danly, however, also struck items from the agenda, which had already featured an unusually high number of omitted items. These included acting on its Notice of Proposed Rulemaking on transmission incentives (RM20-10); a complaint by Cricket Valley Energy Center and Empire Generating Co. asking the commission to order NYISO to institute a MOPR (EL21-7); and a power supply agreement between Southwestern Electric Power Co. and Hope Water & Light Commission, a municipal utility in Arkansas (ER20-3040-001, et al.). (See Tx Incentive NOPR Leaves Many with Sticker Shock and NYISO, Others Rebut MOPR Complaint to FERC.)

Footnote 134

The text of the orders that FERC rejected will not be published — at least not as they were drafted as of Tuesday. That includes an order that commissioners said would have caused further confusion about whether resources procured in state-directed default service auctions are subject to PJM’s expanded MOPR. (EL16-49-006, et al.).

FERC in October clarified that such auctions would not be classified as state subsidies, so resources procured in them would thus be exempt from the MOPR. (See FERC Acts on PJM MOPR Filing.)

Chatterjee on Tuesday maintained that the order made it clear that “revenue from a state’s nondiscriminatory and competitive default service auction would not, and should not, qualify as a state subsidy, thereby triggering the MOPR.” He also noted that FERC accepted, without any protests, a compliance filing in which PJM proposed tariff language that specified that default service providers complying with state RPS programs would be exempt from the MOPR.

However, a footnote in the order caused confusion among stakeholders, leading to a rehearing request from several generating companies who said the footnote’s language conflicted with that of the order itself.

Footnote 134 reads in part, “While this order accepts the exemption that PJM has proposed, it does not constitute a ruling that any particular state-directed default service auction actually meets these requirements. For example, we note that the New Jersey Basic Generation Service auction appears to give guidance that conflicts with the proposition it is ‘nondiscriminatory’ or ‘fuel neutral.’”

It’s unclear what exactly the proposed order on the rehearing request would have done, but Chatterjee said it “neither squarely addresses nor eradicates the confusion and the conflict created by the footnote. Instead, the order doubles down on it, and I can not support such a path. I continue to believe it was the right call to exempt default service auctions from the MOPR and accept PJM’s tariff language that did exactly that.” He said he would have supported an order that vacated the footnote and further clarified the commission’s position.

Glick also said the order “doubles down on the matter by refusing to vacate Footnote 134, even though it is directly contrary to tariff language that the commission approved in October. My argument is that you can’t have it both ways. … If the tariff language is valid, we must vacate Footnote 134.”

“This footnote will continue to create unnecessary uncertainty in a proceeding that has had a great deal of that,” Clements said. “I’m hopeful that the commission will promptly resolve the pending issues in this proceeding in the near term.”

Future of FERC Under Biden

During the meeting, Danly indicated he planned to continue serving on the commission “over the next few years,” even after President-elect Biden gives the gavel to either Glick or Clements. Danly’s term ends in 2023.

While many observers have viewed Glick as the obvious choice given his three-year tenure, ClearView Energy Partners said that it is possible that Biden selects Clements as the next chair, as her nomination to the commission was strongly supported by Sen. Chuck Schumer (D-N.Y.), who will become the Senate majority leader Wednesday.

Both Clements and Christie on Tuesday expressed their eagerness to work on the interaction between state policies and RTO markets.

In concurring on a separate order in the MOPR proceeding, Clements said, “I hope to immediately engage with my colleagues to work with states, the regional transmission operators, independent system operators and the stakeholder community to re-examine the current capacity market constructs and the interplay between state public policies and commission-jurisdictional organized whole electric markets.” (See related story, FERC Partially Accepts PJM MOPR Offer Floor Filing.)

“I hope that in the months ahead that this commission will examine comprehensively the issues related to state public policies and RTO markets … in a form in which all interested entities, including the states, of course, can voice their views,” Christie said in his opening comments. “This is a complicated issue. It raises several important questions and competing interests and competing values. … I hope we will examine this issue and all its aspects in a general forum.”

Chatterjee also said he looked forward to working on the commission into Biden’s term. He expressed hope that Biden, whom he called “a person of enormous compassion,” would bring “a return to the high standards of leadership and decency expected of the office.”

“It will be steadying to have his experience and leadership in the White House,” Chatterjee said.

Glick recalled ribbing Chatterjee at last month’s meeting when Chatterjee noted he was voting against an order for the first time. Glick had joked that voting “no” would get easier over time.

With the Democratic commissioners outnumbered at least until the end of Chatterjee’s term June 30 — and possibly longer — Glick said, “I hope that changes to a bunch of ‘yeses.’”