Joseph Kelliher, a former chair of the Federal Energy Regulatory Commission (FERC) and current head of Joseph Kelliher Consulting, recently discussed the recommendations from the Organization of PJM States (OPSI) regarding PJM Interconnection’s governance. OPSI suggests that both PJM and its transmission owners should make specific filings at the request of OPSI under the Federal Power Act. Their reasoning is that PJM’s governance is outdated, but Kelliher argues that the fundamental legal framework remains unchanged.
Kelliher believes these recommendations do not align with the Federal Power Act. Historically, under Section 205, only public utilities like PJM can propose changes to their tariffs, subject to FERC’s approval. Section 206 allows the Commission to modify existing tariffs under certain conditions, requiring either a complaint or the commission’s initiative to demonstrate that current practices are unreasonable.
He cites a prior case, Massachusetts Dept. of Public Utilities v. FERC, where a state commission ordered a public utility to make a Section 205 filing. FERC rejected this, affirming that only the utility itself can propose such changes. If states have issues with a rate, they should file a complaint under Section 206 instead, maintaining the integrity of the Federal Power Act.
Kelliher points out that OPSI repeatedly claims they lack formal ways to present state-developed proposals to FERC. However, he believes that the existing mechanism under Section 206 is adequate. He expresses concern that OPSI’s recommendations attempt to bypass the established legal process, a practice that has been rejected in the past.
Furthermore, he emphasizes that allowing states to dictate filing requirements would undermine the ability of public utilities to manage their rates independently. This notion of states having unilateral filing rights not only contradicts the original intent of the Act but also risks opening the door to broader challenges against FERC and its jurisdiction.
Kelliher concludes by urging FERC to reject the OPSI recommendations, warning that adopting them would lead to significant legal and operational complications for the regulatory framework governing public utilities. He reflects on the implications of past decisions, urging caution for the future of energy governance.