FERC Filings
Initial Post Hearing Brief of EPSA re: The New PJM Companies, American Electric Power Co. and Central and South West Co.
The Provisions Of Kentucky And Virginia Law Are Not Designed To Protect Health, Safety, Welfare Or The Environment, Or To Conserve Energy, Or Designed To Mitigate The Effects Of Emergencies Resulting From Fuel Shortages
Kentucky and Virginia argue that the Commission cannot exempt AEP from Kentucky and Virginia laws that prevent AEP from joining PJM because these laws were adopted to protect the health, safety and welfare of the people of the Commonwealths of Kentucky and Virginia. They argue that any law adopted by the legislature is designed to protect the “public health, safety, or welfare” of the citizens of their states, and would thereby fall within the “public health, safety, or welfare” exemption of Section 205(a).
That argument proves too much because, in the end, it makes the statute a nullity. Any legislative action is theoretically designed to promote the public health, safety or welfare of the citizens of a state. As Exelon makes clear, however, under Section 205(a)(2) the Commission must analyze the context in which the legislature acted to determine whether the exemption applies. Kentucky and Virginia enacted these laws in response to the Commission’s policy initiatives concerning RTO development and in particular to AEP and PJM’s voluntary decisions to coordinate their efforts and the Commission’s decision to support those efforts. The states disagree with those policy initiatives and, not surprisingly, the laws adopted under the auspices of protecting the public health, safety and welfare prevent the voluntary coordination from occurring.
Legislation adopted to second-guess FERC decisions over the bulk power market – a matter exclusively within the jurisdiction of the Commission – is not covered by the public health, safety, or welfare exemption of Section 205(a). First, the legislative history of Section 205 does not suggest that the state laws exempted under that section could pertain to matters within the Commission’s exclusive jurisdiction. Rather, the laws listed – such as state siting laws, regulations under the Clean Air Act and zoning laws – all pertain to areas outside of the Commission’s exclusive jurisdiction.
Second, the states’ reading of the public health, safety or welfare exemption of Section 205(a) results in the statute being a nullity. The states argue that the Section 205(a) exemption should apply to all state legislation – even though such laws prevent the voluntary coordination from occurring – because such legislation, by its very nature, was adopted to protect the public health, safety or welfare of its citizens. But, again, if this were the correct interpretation of Section 205, then the entire section would be rendered meaningless. As Exelon’s witness Elizabeth Anne Moler concludes:
[w]hatever else one might claim is included within the public health, safety and welfare language at issue, state efforts to veto or second-guess FERC determinations about bulk power market issues cannot be included. If FERC does not have the ability to prevent states from blocking its bulk power market policies simply because they disagree with those policies, then Section 205(a) has absolutely no meaning.
Rather than interpret the exemption in a fashion that makes the statute a nullity, the Commission should consider the underlying legislative intent of Section 205 and interpret the statute accordingly. Certainly, nothing requires the Commission to interpret a statute within the “narrowest meaning,” as long as the “words are given their fair meaning in accord with the manifest intent of the lawmakers.” Based on these principles of statutory construction, the Commission is on firm ground exempting state laws adopted to override the Commission’s policy initiatives – initiatives within the exclusive jurisdiction of the Commission.