The Supreme Court’s decision in Loper Bright Enterprises v. Raimondo is already making waves in the rehearing process on FERC Order 1920, with commissioners releasing dueling statements about what the end of Chevron deference will mean for the transmission rule. (See related story, Supreme Court Ends Chevron Deference to Administrative Agencies.) 

Commissioner Mark Christie released a statement after the court’s ruling June 28 arguing that the commission should reform the order on rehearing given the lack of Chevron deference, while Chair Willie Phillips released a statement July 1 arguing that 1920 is on firm legal footing even with the doctrine’s end. Ultimately, the issue will come down to a different commission than the one that approved the order, as three new members will have joined. 

Phillips argued that FERC’s authority to regulate regional transmission planning and cost allocation has long been recognized by bipartisan majorities of the commission and the D.C. Circuit Court of Appeals. 

“It could hardly be otherwise,” Phillips said. “Both regional transmission planning and cost allocation are practices that have exactly the type of ‘direct effect’ on commission-jurisdictional rates that the U.S. Supreme Court has held brings a matter within this commission’s jurisdiction. Indeed, our authority to regulate regional transmission planning and cost allocation is essential to the commission’s ability to ensure that customers have access to reliable, affordable supplies of electricity — our most fundamental statutory responsibility.” 

Order 1920 builds on Order 1000, which was upheld by the D.C. Circuit in South Carolina Public Service Authority v. FERC using Chevron deference. The Supreme Court held in Loper Bright that settled precedents would not be disturbed by its decision, so Order 1000 is safe. 

“Order 1000 is the sort of the foundation for this Order 1920,” Christie told RTO Insider on July 1. “But the Chevron deference is not available, and so my point is that lifeline is now not available on court challenges to Order 1920. So … we’re going to have the opportunity to do substantial amendments to 1920 when we get to the rehearing stage, and I hope that we’ll be able to do that.” 

Phillips argued that Order 1920 fits easily into the South Carolina precedent in that it does not promote particular public policies, dictate specific outcomes or include any selection mandate, and its cost allocation proposals rest on well-established principles. 

“As such, Commissioner Christie’s assertions about Loper Bright’s implications for Order No. 1920 cannot be squared with the court’s actual holding in that case,” Phillips said. “As always, I respect Commissioner Christie’s regulatory perspective on how we should exercise the regulatory ‘discretion’ that Congress vested in this commission. But his disagreement with how the commission exercised that discretion in Order No. 1920 does not provide a logical or reasonable basis for calling into question whether we have that authority in the first place.” 

Christie argued that it was clear when Order 1920 was issued that it would not work, and that was made more clear by the many petitions to strike it down, many of which came from states and their organizations, such as the National Association of Regulatory Utility Commissioners.  

But they were also joined by PJM, the National Rural Electric Cooperative Association and more. Given Loper Bright, FERC should fix its issues before it winds up before the courts, Christie said. 

“The commission still has an opportunity to amend Order No. 1920 into a true compromise that will promote sensible long-term transmission planning while protecting consumers and respecting and elevating the important role of states throughout the process,” Christie said. 

Two major issues Christie would like to see changed are the requirement that regional plans take into account the supply preferences of large customers, which he argued would spread the costs of their choices to every customer impacted by the cost allocation, and Order 1920’s language around state input in cost allocation. 

While the order requires developers to give states six months to hash out an agreement on cost allocation, FERC did not require the relevant transmission providers to file it. That was based on yet another court case, Atlantic City v. FERC, which said transmission owners have the right to file their own rates. In their requests for rehearing, parties argued FERC could get around that. 

Christie also noted that the order stops short of requiring transmission providers, which include the ISO/RTOs, from even reporting on their efforts to get states to agree to a cost allocation method. 

“It says that even if the states in a region agree, the transmission provider does not even have to file it,” Christie said. “I absolutely object to that, because that totally goes against what was promised in the [proposed rule]: that state agreements would be recognized.”