FERC Filings
REQUEST FOR REHEARING ON PJM GRANDFATHERING PROCESS
The Commission Should Review PJM's Actions Without Deference
THE COMMISSION SHOULD REVIEW PJM'S ACTIONS WITHOUT DEFERENCE
The Commission's decision was predicated on its belief that the filing reflected "the outcome of a stakeholder process," under governance procedures approved by the Commission. While this is technically true, PJM's March 31st filing fails to give a fully accurate account of that process. The Minutes of PJM's March 25th Members Committee Meeting, under the Tariff Advisory Committee (TAC) discussion, state, in part:
Mr. Spector highlighted the three areas where disagreement still existed: 1) Extent of upgrades (handling capability in excess of minimum needs; 2) Grandfathering (priority in the queue); and 3) Other issues. Mr. Spector noted that significant debate had occurred at the TAC meetings, and that the goal at the Members Committee meeting was to air all views and agree on a plan to move forward. Following discussion of each topic, straw votes were taken to determine Members' preferences. Upon completion of all discussion, the Members Committee approved the subject documents as amended during the meeting. The filing will be made next week, with an effective date of April 1, 1999. FERC will be asked to rule within 90 days, and the cover letter will indicate that this was a consensus filing, proposed to FERC without prejudice.
(Bold and italics added.)
When PJM made its March 31st filing, this concept of "without prejudice" was presented in a strangely cryptic and misleading way. Footnote 2 of the transmittal letter states, in part, "Not every member agreed with every proposed revision, but the entire membership favored proceeding with the package of amendments. Some members may file comments on limited aspects of this filing."
Those that objected to the grandfathering proposals made by PJM voted to proceed with the filing. That is, they wanted to put the issue before the Commission for resolution. As the Members Committee minutes clearly state, this filing was to be made "without prejudice." Accordingly, PJM was not asking FERC to defer to its proposal because of the consensus process that led to the filing; rather, PJM Members agreed to bring the issue before the Commission without prejudice so that the Commission could hear from all interested parties on the issues in dispute and render an objective, independent decision on the issue.
Under the circumstances, then, the Commission's deferral to a "consensus process" within PJM was inappropriate. The Commission should take this opportunity to do what PJM members intended: consider the pros and cons of the PJM proposal, without any deference to the fact that the proposal was filed pursuant to a reformulated governance process, and render a decision on the merits of the proposal.
Based on the equities presented, the Commission should reject PJM's grandfathering procedures. In the alternative, given the stakeholders' express acknowledgement that they could not come to agreement on this issue, the Commission should review PJM's actions - as the stakeholders' requested -- without any deference to the vote taken to approve filing of the procedures. FERC must also ensure that the grandfathering procedures were applied fairly and consistently. The Commission should impose a high burden on those seeking grandfathered treatment to show why they had not notified PJM earlier, when numerous other developers saw fit to do so, particularly when the consequence of failing to do so has prejudiced the projects that notified PJM and are now being bumped. Thus, the Commission should take on this task itself and not defer to PJM's dispute resolution procedures unless all projects are included in a single dispute resolution proceeding.