FERC Filings
EPSA's Protest On the OMS Offer of Proof
Allocation of Federal-State Regulatory Functions
The Offer misperceives and understates the nature of FERC’s jurisdiction over the MISO wholesale market. To create the appearance of an equivalent need for wholesale market data, the OMS asserts that “state commissions and FERC are truly co-regulators, each affecting wholesale markets from their separate industry roles.” In fact, the FERC and the states are not “co-regulators.” While there certainly is a connection between certain wholesale market events and retail electricity prices, this fact alone does not justify the broad access to wholesale generation data that the OMS seeks. Nor does it justify the refusal to provide for due process protections such as those that exist in PJM’s FERC-approved confidentiality rules.
Furthermore, the OMS’ rationale begs serious practical questions: Does the extraordinary time, expertise and resources necessary for individual states to effectively evaluate all wholesale market data justify the expense, especially when the day-in and day-out market clearing prices during the past seven years in the other eastern RTO markets have been proved to be just and reasonable? With multiple parties responsible for market monitoring, how will inefficiencies and duplication of effort be avoided? How will different conclusions (both state-to-state and state-to-IMM or Commission) regarding wholesale market activity be resolved? Clearly, the concern of OMS regarding the ability of the organized Midwest ISO spot markets to produce competitive outcomes is understandable. Nonetheless, EPSA believes that the IMM is sufficiently empowered and technically equipped to confirm the legitimacy of market outcomes.
Substantial case law confirms that there is a distinct line between FERC’s responsibilities over electricity markets and the states’ responsibilities vis-à-vis retail costs. See People of the State of California, ex rel. Bill Lockyer, Attorney General v. Dynegy Inc., 375 F.3d 831 (9th Cir. 2004). FERC regulates wholesale electricity sales; states retail sales. Duke Energy Trading & Mktg, L.L.C. v. Davis, 267 F.3d 1042 (9th Cir. 2001). FERC’s jurisdiction over wholesale sales is not concurrent with state jurisdiction. Public Utilities Commission of the State of California v. Federal Energy Regulatory Commission, 900 F.2d 269 (D.C. Cir. 1990) (rejecting state’s assumption that FERC and state jurisdiction are concurrent and that state may regulate interstate transportation as long as state regulations accommodate federal concerns.) FERC’s jurisdiction is exclusive. People of the State of California, ex rel. Bill Lockyer, Attorney General v. Dynegy Inc., 375 F.3d 831 (9th Cir. 2004) citing therein Federal Power Commission v. Southern California Edison Co., et. al, 376 U.S. 205 (1965) (finding FERC regulates all sales of electricity at wholesale, not just those sales that a state is constitutionally forbidden to regulate by the Commerce Clause).
Thus, clear legal precedent exists supporting the Commission’s exclusive jurisdiction over transactions in the wholesale electricity market. Contrary to the view expressed in the Offer, although states retain jurisdiction over retail sales within their borders, they are constitutionally prohibited from being a “co-regulator” of wholesale markets. As such, state commissions have no direct regulatory need or legal right to obtain broad access to wholesale generator data. Rather, any need they have to review such data is indirect and solely related to their jurisdiction over retail sales within their states. Any data confidentiality policy that gives states access to wholesale data should recognize this fundamental limitation on the states’ jurisdiction and tailor any access to such data accordingly.