FERC on Thursday once again rejected attempts by environmental, clean energy and community groups to overturn both its approval of the Southeast Energy Exchange Market (SEEM) and its subsequent orders implementing the market (ER21-1111, et al.).
The petitioners — two separate collections of activist organizations calling themselves the Clean Energy Coalition and the Public Interest Organizations (PIOs) — have been active in their opposition to SEEM since before the market came into effect by force of law last October because of the inability of commissioners to form a majority either for or against approval. (See SEEM to Move Ahead, Minus FERC Approval.)
The groups challenged this and were denied by the commission. Their request for rehearing Nov. 12 (30 days after the Oct. 13 announcement that the agreement had taken effect) was rejected on the grounds that it was filed out of time; FERC reasoned that the request should have been filed by Nov. 10 (30 days after the deadline for FERC to issue an order expired on Oct. 11, Columbus Day).
After the SEEM agreement became effective, FERC in November approved revisions to four of the participating utilities’ open access transmission tariffs (OATT) implementing the non-firm energy exchange transmission service (NFEETS) used to deliver the market’s energy transactions. (See FERC Accepts Key Tariff Revisions to SEEM.) The petitioners also filed for rehearing of this request, which FERC likewise denied.
Thursday’s orders affirmed FERC’s decisions in both of these cases. Regarding the rehearing request for the original SEEM approval, the commission argued that “the statutory deadline under Section 205(d) [of the Federal Power Act] is a strict requirement.” While petitioners had pointed out that FERC has previously allowed more time for filing rehearing requests because the deadline for commission action fell on a public holiday or a weekend, the commission replied that court decisions have not allowed such extensions for decisions relating to electric rates.
FERC was likewise “unpersuaded” by the petitioners’ description of the OATT amendments as discriminatory. For one thing, the commission said, the PIOs and Clean Energy Coalition had merely repeated their claims that the SEEM agreement constitutes a loose power pool, claims that “were thoroughly addressed in the November 2021 order.”
Additionally, the petitioners had argued that SEEM members have “absolute discretion” about whether NFEETS is used. FERC said that this is not true, because NFEETS is so fundamental to the system that there is no discretion available to members on this point; NFEETS must be used for SEEM to function at all. The commission also disagreed with the claim that requiring “good financial standing” to access NFEETS, as required in the OATT amendments, is unreasonable, as the original OATT also included requirements related to creditworthiness.
Commissioners’ Statements Point to Pending Appeal
Some of the members of the two petitioner groups have also separately filed an appeal in the D.C. Circuit Court of Appeals, asking the court to set aside SEEM’s implementation and FERC’s approval of the tariff amendments. (See Environmental Groups Appeal SEEM in DC Circuit.) Thursday’s order did not directly discuss those challenges, though Commissioners James Danly and Mark Christie issued concurring statements intended to clarify statements of theirs, cited by the petitioners in their arguments, for the benefit of “any reviewing court.”
Danly’s and Christie’s clarifications pertain to their statements of Oct. 20 explaining their support for the SEEM agreement. (Chairman Richard Glick and Commissioner Allison Clements both voted against approval.) Both statements included language that the petitioners interpreted to support their contention that the SEEM agreement took effect later than Oct. 11; Christie and Danly emphasized in their concurrences that this was not their intent, and they both agreed with the commission’s timeline.
Clements also concurred with FERC’s decision to deny rehearing of the SEEM agreement, though she called it a “close case” that is “lamentable insofar as it deprives the rehearing parties a chance to be heard on the merits of their claims” and also leaves unaddressed the question of whether FERC’s deadline for action continues to run during a federal holiday or emergency. Unlike her colleagues, Clements did mention the pending case before the D.C. Circuit, which she hoped would provide “clarity in this difficult matter.”
Clements had dissented on the amendments approval, writing that she agreed with petitioners that “NFEETS is provided through a loose power pool, [and] the majority’s determination to the contrary is arbitrary and capricious.”
“I am an ardent supporter of electric markets when they are used to meaningfully harness competition and ensure better outcomes for customers, including through reduced costs and reliability benefits,” Clements wrote. She warned that the decision “puts a camel’s nose of discrimination under FERC’s tent, threatening to despoil the principles this commission has long held dear. Whatever the potential market benefits of SEEM, the means by which utilities transition towards such a market cannot be permitted to undermine the bedrock principle of ensuring open access to non-discriminatory rates and service.”
