On August 26, 2022, Commissioner James Danly issued a statement in the FERC docket addressing PJM Interconnection, L.L.C.’s (“PJM”) replacement, focused Minimum Offer Price Rule (“Focused MOPR”). Commissioner Danly argued that the FERC Solicitor’s Office should not have filed its brief defending the Focused MOPR in the United States Court of Appeals for the Third Circuit (“Third Circuit”), and that doing so violated the Department of Energy Organization Act (“DOE Organization Act”) and the Administrative Procedure Act (“APA”). Following the statement, on September 7, 2022, certain Petitioners in the Third Circuit appeal proceedings filed a motion to strike FERC’s brief. Their motion argues that FERC’s brief should not have been filed because the Commission never voted to accept the Focused MOPR, and that filing the brief violates both the DOE Organization Act and constitutional limitations on the authority of executive officials. The Third Circuit has not yet acted on the motion.
PJM’s Focused MOPR took effect by operation of law on September 29, 2021 after FERC, at the time divided two to two on the proposal, failed to act on PJM’s tariff filing within the Federal Power Act’s (“FPA”) 60-day statutory deadline (see October 29, 2021 edition of the WER). Although FERC never issued an order accepting the Focused MOPR, Chairman Glick and Commissioner Clements filed a joint statement, and Commissioner Christie and Commissioner Danly each filed separate statements explaining his or her position on the proposal. The Focused MOPR had the practical effect of, in most situations, removing the application of a price floor to the capacity market bids of generation resources that are subsidized by states for policy reasons.
The Focused MOPR is currently being reviewed in the Third Circuit, where briefing is ongoing (see PJM Power Providers Group, et al. v. FERC, 21-3068 et al.). FERC’s brief, filed on July 22, 2022, argued that the Petitioners challenging the Focused MOPR lack standing, that the Focused MOPR is not unduly discriminatory, and that although the Focused MOPR is a change in FERC policy, Chairman Glick’s and Clements’ joint statement provided good reasons for the change, thus satisfying the APA’s requirements.
Commissioner Danly’s August 26 statement argues that FERC’s brief should not have been filed, and does not represent the view of the Commission as a whole. Commissioner Danly further argued that advancing positions in litigation that the Commission considered but did not adopt is inconsistent with the DOE Organization Act and the APA. According to Commissioner Danly, FERC should have instead filed a brief that explained the FPA’s operation and appended the Commissioners’ individual statements, declining to either advance a merits argument or to advocate for particular relief.
Following Commissioner Danly’s statement, on August 29, 2022, Petitioners representing certain competitive power suppliers in PJM and appealing the Focused MOPR, filed a copy of Commissioner Danly’s statement in the Third Circuit docket, stating that it “raises serious questions concerning the Chairman’s legal authority to unilaterally direct FERC staff to submit a Respondent brief that does not represent the view of the Commission as a body.” FERC filed a response on September 1, 2022, pointing back to the sections of its brief that it stated respond to Commissioner Danly’s assertions in the August 26 statement.
Then, on September 7, 2022, certain Petitioners filed a motion to strike FERC’s brief on the grounds that the brief should not have been filed:
Because the Commissioners deadlocked below, FERC produced no majority. The Commission as an entity, therefore, has taken no legal or policy positions with respect to the substantive rate-making issues presented here. There is thus no position fairly attributable to the agency. The Chairman’s direction of the filing of a substantive brief anyway—putatively on behalf of the Commission as an entity—violates both the [DOE] Organization Act and constitutional limitations on the authority of executive officials.
The motion goes on to argue that:
The Chairman’s abuse of his authority in this case has imperiled the constitutionality of his office. The Chairman’s attempt to arrogate powers properly belonging only to a majority of the Commission has resulted in the filing of a brief purporting to represent the Commission, but which does no such thing. The action taken here is thus inconsistent with FERC’s organic statute and the Constitution.
The Court has not yet acted on the September 7 motion. On September 19, 2022, both FERC and intervenors in support of FERC filed responses arguing that the Court should deny the September 7 motion.
Commissioner Danly’s August 26 statement is available here.