Building for the Future Through Electric Regional Transmission Planning and Cost Allocation

Federal RegisterApr 28, 2025

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DEPARTMENT OF ENERGY

Federal Energy Regulatory Commission

18 CFR Part 35

[Docket No. RM21-17-003; Order No.1920-B]

Building for the Future Through Electric Regional Transmission Planning and Cost Allocation

AGENCY:

Federal Energy Regulatory Commission.

ACTION:

Order on rehearing and clarification.

SUMMARY:

In this order, the Federal Energy Regulatory Commission addresses arguments raised on rehearing, grants clarification, in part, and denies clarification, in part, of Order No. 1920-A, which addressed arguments raised on rehearing of, set aside, in part, and clarified Order No. 1920. Order No. 1920 required transmission providers,

inter alia,

to conduct Long-Term Regional Transmission Planning to ensure the identification, evaluation, and selection, as well as the allocation of the costs, of more efficient or cost-effective regional transmission solutions to address Long-Term Transmission Needs.

DATES:

The effective date of the document published on December 6, 2024 (89 FR 97174), is confirmed: January 6, 2025.

FOR FURTHER INFORMATION CONTACT:

Patrick T. Metz (Legal Information), Office of the General Counsel, 888 First Street NE, Washington, DC 20426, (202) 502-8197,

patrick.metz@ferc.gov

Michael Kellermann (Legal Information), Office of the General Counsel, 888 First Street NE, Washington, DC 20426, (202) 502-8491,

michael.kellermann@ferc.gov

David Borden (Technical Information), Office of Energy Policy and Innovation, 888 First Street NE, Washington, DC 20426, (202) 502-8734,

david.borden@ferc.gov

Noah Lichtenstein (Technical Information), Office of Energy Market Regulation, 888 First Street NE, Washington, DC 20426, (202) 502-8696,

noah.lichtenstein@ferc.gov

SUPPLEMENTARY INFORMATION:

Table of Contents

Paragraph

Nos.

I. Introduction

II. Long-Term Regional Transmission Planning

A. Planning for the Long-Term Transmission Needs of Unenrolled Non-Jurisdictional Transmission Providers

1. Order Nos. 1920 and 1920-A

2. Rehearing Requests

3. Commission Determination

21.

III. Regional Transmission Cost Allocation

23.

A. Requirements Concerning Relevant State Entities' Agreed-Upon Cost Allocation Methods

23.

1. Order Nos. 1920 and 1920-A

23.

2. Challenges to Order No. 1920-A

30.

B. Consultation With Relevant State Entities After the Engagement Period

105.

1. Order Nos. 1920 and 1920-A

105.

2. Challenges to Order No. 1920-A

108.

C. Definition of Relevant State Entities

131.

1. Order Nos. 1920 and 1920-A

131.

2. Rehearing Requests

134.

3. Commission Determination

138.

D. Other Cost Allocation Issues

143.

1. Order Nos. 1920 and 1920-A

143.

2. Rehearing Requests

148.

3. Commission Determination

152.

IV. Document Availability

155.

V. Effective Date

158.

I. Introduction

1. In Order No. 1920,

the Federal Energy Regulatory Commission (Commission) revised the

pro forma

Open Access Transmission Tariff (OATT) to adopt reforms to its existing electric transmission planning and cost allocation requirements pursuant to section 206 of the Federal Power Act (FPA).

The Commission found that existing regional transmission planning and cost allocation processes are unjust, unreasonable, and unduly discriminatory or preferential because,

inter alia,

the Commission's existing transmission planning and cost allocation requirements do not require transmission providers

to: (1) perform a sufficiently long-term assessment of transmission needs that identifies Long-Term Transmission Needs;

(2) adequately account on a forward-looking basis for known determinants of

Long-Term Transmission Needs; and (3) consider the broader set of benefits of regional transmission facilities planned to meet those Long-Term Transmission Needs.

Building on Order Nos. 890

and 1000,

Order No. 1920 addresses these deficiencies by establishing requirements to ensure that Commission-jurisdictional rates remain just and reasonable and not unduly discriminatory or preferential, including,

inter alia,

a requirement that transmission providers in each transmission planning region participate in a regional transmission planning process that includes Long-Term Regional Transmission Planning,

which will ensure the identification, evaluation, and selection of more efficient or cost-effective regional transmission facilities to address Long-Term Transmission Needs, as well as the just and reasonable allocation of the costs of those facilities.

Bldg. for the Future Through Elec. Reg'l Transmission Plan. & Cost Allocation,

Order No. 1920, 89 FR 49280 (June 11, 2024), 187 FERC ¶ 61,068,

order on reh'g & clarification,

Order No. 1920-A, 89 FR 97174 (Dec. 6, 2024), 189 FERC ¶ 61,126 (2024).

16 U.S.C. 824e.

FPA Section 201(e), 16 U.S.C. 824(e), defines “public utility” to mean “any person who owns or operates facilities subject to the jurisdiction of the Commission under this subchapter.” As stated in the Order No. 888

pro forma

OATT, “transmission provider” is a “public utility (or its Designated Agent) that owns, controls, or operates facilities used for the transmission of electric energy in interstate commerce and provides transmission service under the Tariff.”

Promoting Wholesale Competition Through Open Access Non-Discriminatory Transmission Servs. by Pub. Utils.; Recovery of Stranded Costs by Pub. Utils. & Transmitting Utils.,

Order No. 888, 61 FR 21540 (May 10, 1996), FERC Stats. & Regs. ¶ 31,036 (1996) (cross-referenced at 75 FERC ¶ 61,080),

order on reh'g,

Order No. 888-A, 62 FR 12274 (Mar. 14, 1997), FERC Stats. & Regs. ¶ 31,048 (cross-referenced at 78 FERC ¶ 61,220),

order on reh'g,

Order No. 888-B, 81 FERC ¶ 61,248 (1997),

order on reh'g,

Order No. 888-C, 82 FERC ¶ 61,046 (1998),

aff'd in relevant part sub nom. Transmission Access Pol'y Study Grp.

FERC,

225 F.3d 667 (D.C. Cir. 2000),

aff'd sub nom. N. Y.

FERC,

535 U.S. 1 (2002);

pro forma

OATT section I.1 (Definitions). The term “transmission provider” includes a public utility transmission owner when the transmission owner is separate from the transmission provider, as is the case in regional transmission organizations (RTO) and independent system operators (ISO).

For purposes of Order No. 1920, Long-Term Transmission Needs are transmission needs identified through Long-Term Regional Transmission Planning by, among other things and as discussed in Order Nos. 1920 and 1920-A, running scenarios and considering the enumerated categories of factors. Order No. 1920, 187 FERC ¶ 61,068 at P 299; Order No. 1920-A, 189 FERC ¶ 61,126 at P 20 n.16.

Order No. 1920, 187 FERC ¶ 61,068 at P 1.

Preventing Undue Discrimination & Preference in Transmission Serv.,

Order No. 890, 72 FR 12266 (Mar. 15, 2007), 118 FERC ¶ 61,119 (2007),

order on reh'g,

Order No. 890-A, 73 FR 2984 (Jan. 16, 2008), FERC Stats. & Regs. ¶ 31,261 (2007) (cross-referenced at 118 FERC ¶ 61,119),

order on reh'g and clarification,

Order No. 890-B, 73 FR 39092 (July 8, 2008), 123 FERC ¶ 61,299 (2008),

order on reh'g,

Order No. 890-C, 74 FR 12540 (Mar. 25, 2009), 126 FERC ¶ 61,228 (2009),

order on clarification,

Order No. 890-D, 74 FR 61511 (Nov. 25, 2009), 129 FERC ¶ 61,126 (2009).

Transmission Plan. & Cost Allocation by Transmission Owning & Operating Pub. Utils.,

Order No. 1000, 76 FR 49842 (Aug. 11, 2011), 136 FERC ¶ 61,051 (2011), Order No. 1000-A, 77 FR 32184 (May 31, 2012), 139 FERC ¶ 61,132 (2012),

order on reh'g & clarification,

Order No. 1000-B, 141 FERC ¶ 61,044 (2012),

aff'd sub nom. S.C. Pub. Serv. Auth.

FERC,

762 F.3d 41 (D.C. Cir. 2014) (

South Carolina

For purposes of Order No. 1920, Long-Term Regional Transmission Planning means regional transmission planning on a sufficiently long-term, forward-looking, and comprehensive basis to identify Long-Term Transmission Needs, identify transmission facilities that meet such needs, measure the benefits of those transmission facilities, and evaluate those transmission facilities for potential selection in the regional transmission plan for purposes of cost allocation as the more efficient or cost-effective regional transmission facilities to meet Long-Term Transmission Needs. Order No. 1920, 187 FERC ¶ 61,068 at PP 38, 250-252; Order No. 1920-A, 189 FERC ¶ 61,126 at P 21 n.17.

Order No. 1920, 187 FERC ¶ 61,068 at PP 1-2.

2. In Order No. 1920-A, the Commission largely sustained the reforms adopted in Order No. 1920 while refining and improving those reforms to address concerns raised in response to Order No. 1920 and to ensure that states have a robust role in Long-Term Regional Transmission Planning and in the cost allocation processes established in the final rule. Specifically, and as relevant here, the Commission set aside, in part, and clarified, in part, Order No. 1920 to provide that: (1) transmission providers may not plan for the needs of a non-jurisdictional transmission provider if that non-jurisdictional transmission provider has not enrolled in the transmission planning region and thereby has not agreed to any cost allocation method applicable to selected Long-Term Regional Transmission Facilities;

(2) when Relevant State Entities

agree on a Long-Term Regional Transmission Cost Allocation Method(s)

and/or State Agreement Process

resulting from the Engagement Period,

transmission providers must include that method(s) and/or process in the transmittal or as an attachment to their Order No. 1920 regional transmission planning and cost allocation compliance filings, along with any information that Relevant State Entities provide to transmission providers regarding the state negotiations during the Engagement Period, even if transmission providers propose a different Long-Term Regional Transmission Cost Allocation Method or do not propose to adopt a State Agreement Process;

(3) the Commission will consider the entire record—including the Relevant State Entities' agreed-upon Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process and the transmission provider's proposal—when setting the replacement rate in Order No. 1920 regional transmission planning and cost allocation compliance proceedings;

and (4) transmission providers must consult with Relevant State Entities prior to amending the Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process or, if Relevant State Entities seek, consistent with their chosen method to reach agreement, for the transmission providers to amend that method or process.

As further relevant here, the Commission disagreed with certain arguments raised on rehearing of Order No. 1920 and continued to: (1) find that the Commission made adequate findings and marshalled sufficient evidence under the first prong of FPA section 206 to establish that existing Commission-jurisdictional regional transmission planning and cost allocation processes are unjust and unreasonable;

and (2) define Relevant State Entities as any state entity responsible for electric utility regulation or siting electric transmission facilities within the state or portion of a state located in the transmission planning region, including any state entity as may be designated for that purpose by the law of such state.

Order No. 1920-A, 189 FERC ¶ 61,126 at P 323. For purposes of Order No. 1920, a Long-Term Regional Transmission Facility is a regional transmission facility, as defined in Order No. 1000, that is identified as part of Long-Term Regional Transmission Planning to address Long-Term Transmission Needs. Order No. 1920, 187 FERC ¶ 61,068 at PP 41, 250; Order No. 1920-A, 189 FERC ¶ 61,126 at P 21 n.18.

For purposes of Order No. 1920, a Relevant State Entity is any state entity responsible for electric utility regulation or siting electric transmission facilities within the state or portion of a state located in the transmission planning region, including any state entity as may be designated for that purpose by the law of such state. Order No. 1920, 187 FERC ¶ 61,068 at PP 44, 1355; Order No. 1920-A, 189 FERC ¶ 61,126 at P 23 & n.23.

For purposes of Order No. 1920, a Long-Term Regional Transmission Cost Allocation Method is an

ex ante

regional cost allocation method for one or more Long-Term Regional Transmission Facilities (or a portfolio of such Facilities) that are selected in the regional transmission plan for purposes of cost allocation. Order No. 1920, 187 FERC ¶ 61,068 at P 1291; Order No. 1920-A, 189 FERC ¶ 61,126 at P 612 n.1539.

For purposes of Order No. 1920, a State Agreement Process is a process by which one or more Relevant State Entities may voluntarily agree to a cost allocation method for Long-Term Regional Transmission Facilities (or a portfolio of such Facilities) before or no later than six months after they are selected in the regional transmission plan for purposes of cost allocation. Order No. 1920, 187 FERC ¶ 61,068 at P 45; Order No. 1920-A, 189 FERC ¶ 61,126 at P 24 n.28.

For purposes of Order No. 1920, an Engagement Period is a six-month time period during which transmission providers must: (1) provide notice of the starting and end dates for the six-month time period; (2) post contact information that Relevant State Entities may use to communicate with transmission providers about any agreement among Relevant State Entities on a Long-Term Regional Transmission Cost Allocation Method(s) and/or a State Agreement Process, as well as a deadline for communicating such agreement; and (3) provide a forum for negotiation of a Long-Term Regional Transmission Cost Allocation Method(s) and/or a State Agreement Process that enables robust participation by Relevant State Entities. Order No. 1920, 187 FERC ¶ 61,068 at PP 5, 1354; Order No. 1920-A, 189 FERC ¶ 61,126 at P 24.

Order No. 1920-A, 189 FERC ¶ 61,126 at P 651.

Id.

P 659.

Id.

P 691.

See id.

PP 72-86.

See id.

P 685.

3. Seven petitioners have sought further rehearing and clarification of the Commission's determinations in Order No. 1920-A,

and the Commission received two additional filings.

Pursuant to

Allegheny Defense Project

FERC,

the rehearing requests filed in this proceeding may be deemed denied by operation of law. However, as permitted by FPA section 313(a),

we are modifying the discussion in Order No. 1920-A and continue to reach the same result in this proceeding, as discussed below.

That is, in this order, we do not change the outcome of Order No. 1920-A.

This order also does not amend the Commission's regulations or the provisions of Attachment K to the

pro forma

OATT.

Appendix A includes a list of petitioners submitting requests for rehearing and/or clarification of Order No. 1920-A.

On February 5, 2025, NRECA sent a letter to Chairman Mark Christie addressing Order No. 1920-A. On February 12, 2025, Developers Advocating Transmission Advancements submitted a late-filed pleading and white paper in response to the 2021 Advanced Notice of Proposed Rulemaking. To the extent that they intend to seek rehearing, these pleadings are untimely and we therefore reject them. 16 U.S.C. 825

(a); 18 CFR 385.713(b) (2024). They also do not include a separate section entitled “Statement of Issues” listing each issue presented to the Commission in a separately enumerated paragraph, as required by Rule 713(c)(2) of the Commission's Rules of Practice and Procedure. 18 CFR 385.713(c)(2). Below, we address NRECA's

rehearing request, which raised similar issues to those NRECA raised in its letter.

See infra

Definition of Relevant State Entities section.

964 F.3d 1 (D.C. Cir. 2020) (en banc).

16 U.S.C. 825

(a) (“Until the record in a proceeding shall have been filed in a court of appeals, as provided in subsection (b), the Commission may at any time, upon reasonable notice and in such manner as it shall deem proper, modify or set aside, in whole or in part, any finding or order made or issued by it under the provisions of this chapter.”).

Allegheny Def. Project,

964 F.3d at 16-17.

See Smith Lake Improvement & Stakeholders Ass'n

FERC,

809 F.3d 55, 56-57 (D.C. Cir. 2015).

4. We also grant, in part, and deny, in part, the requests for clarification. Specifically, we clarify one aspect of the Commission's discussion in Order No. 1920-A to explain that, consistent with Order No. 1000, transmission providers are not required to plan for the Long-Term Transmission Needs of unenrolled non-jurisdictional transmission providers, but voluntary arrangements for regional transmission planning and cost allocation that comply with the FPA and the Commission's cost causation precedent are not prohibited.

In addition, we sustain the requirement in Order No. 1920-A that transmission providers include Relevant State Entities' agreed-upon Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process resulting from the Engagement Period, and associated information provided to transmission providers regarding the state negotiations during the Engagement Period, in transmission providers' transmittal or as an attachment to their Order No. 1920 regional transmission planning and cost allocation compliance filings.

We further sustain the requirement that transmission providers consult with Relevant State Entities: (1) prior to amending the Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process; or (2) if Relevant State Entities seek, consistent with their chosen method to reach agreement, for the transmission provider to amend that method or process.

We are not persuaded, however, by NRECA's request to expand the definition of Relevant State Entity to include any entity that establishes or regulates electric rates under state law.

Finally, we reject as procedurally barred Indicated PJM TOs' and SPP TOs' arguments that the Commission's findings under the first prong of FPA section 206 were insufficient to support its exercise of authority in Order No. 1920.

See

Order No. 1920-A, 189 FERC ¶ 61,068 at P 323;

infra

Planning for the Long-Term Transmission Needs of Unenrolled Non-Jurisdictional Transmission Providers section.

Order No. 1920-A, 189 FERC ¶ 61,126 at PP 651, 655;

infra

Requirements Concerning Relevant State Entities' Agreed-upon Cost Allocation Methods section.

Order No. 1920-A, 189 FERC ¶ 61,126 at P 691;

infra

Consultation with Relevant State Entities After the Engagement Period section.

Order No. 1920-A, 189 FERC ¶ 61,126 at P 701;

infra

Definition of Relevant State Entities section.

Order No. 1920-A, 189 FERC ¶ 61,126 at PP 72-86;

infra

Other Cost Allocation Issues section.

5. We continue to find that these reforms, as refined and improved in Order No. 1920-A, ensure that transmission providers will conduct sufficiently long-term, forward looking, and comprehensive transmission planning and cost allocation processes to meet the demands of the modern transmission grid, while facilitating meaningful participation by the states, consistent with the jurisdictional boundaries delineated in the FPA.

II. Long-Term Regional Transmission Planning

A. Planning for the Long-Term Transmission Needs of Unenrolled Non-Jurisdictional Transmission Providers

1. Order Nos. 1920 and 1920-A

6. In Order No. 1920, the Commission required transmission providers in each transmission planning region to participate in a regional transmission planning process that includes Long-Term Regional Transmission Planning, meaning regional transmission planning on a sufficiently long-term, forward-looking, and comprehensive basis to identify Long-Term Transmission Needs, identify transmission facilities that meet such needs, measure the benefits of those transmission facilities, and evaluate those transmission facilities for potential selection in the regional transmission plan for purposes of cost allocation as the more efficient or cost-effective transmission facilities to meet Long-Term Transmission Needs.

To identify Long-Term Transmission Needs and to identify and evaluate transmission facilities that meet such needs, transmission providers must develop a set of at least three plausible and diverse Long-Term Scenarios,

each of which must: (1) incorporate seven specific categories of factors that represent known determinants of Long-Term Transmission Needs; and (2) account for factors within each such category that the transmission provider determines are likely to affect Long-Term Transmission Needs.

Factor Category Three comprises state-approved integrated resource plans and expected supply obligations for load-serving entities.

Order No. 1920, 187 FERC ¶ 61,068 at P 224;

see also

Order No. 1920-A, 189 FERC ¶ 61,126 at P 138.

Order No. 1920 defines Long-Term Scenarios as scenarios that incorporate various assumptions using best available data inputs about the future electric power system over a sufficiently long-term, forward-looking transmission planning horizon to identify Long-Term Transmission Needs and enable the identification and evaluation of transmission facilities to meet such transmission needs. Order No. 1920, 187 FERC ¶ 61,068 at PP 40, 302.

Id.

PP 298, 409, 415.

Id.

P 447;

see also

Order No. 1920-A, 189 FERC ¶ 61,126 at PP 139, 263, 279.

7. In Order No. 1920-A, the Commission clarified that, for purposes of complying with the requirements of Order No. 1920, transmission providers must plan for the needs of non-jurisdictional entities that are among the transmission providers' transmission customers as they would plan for the needs of any other transmission customer. For example, each Long-Term Scenario must account for and be consistent with factors within Factor Category Three once transmission providers in a transmission planning region have determined that such factors are likely to affect Long-Term Transmission Needs. This includes any non-jurisdictional transmission customer's resource planning and procurement processes that have been approved by that entity's respective governing authority.

Order No. 1920-A, 189 FERC ¶ 61,126 at P 323 (citing Order No. 1920, 187 FERC ¶ 61,068 at PP 507, 510). The Commission issued this clarification in response to a request to clarify that the resource planning and procurement processes of non-jurisdictional transmission providers that have been approved by their respective governing authorities should be included in Factor Category Three.

Id.

P 315 (citing SERTP Sponsors June 12, 2024 Rehearing Request at 5).

8. The Commission further clarified in Order No. 1920-A that “transmission providers may

not

plan for the needs of a non-jurisdictional utility transmission provider if that non-jurisdictional transmission provider has not enrolled in the transmission planning region and thereby has not agreed to any cost allocation method applicable to selected Long-Term Regional Transmission Facilities.”

The Commission stated

that, if transmission providers were to plan for and consider non-jurisdictional transmission providers' Long-Term Transmission Needs without a way to ensure the non-jurisdictional transmission provider contributes to the costs of the resulting Long-Term Regional Transmission Facilities, the resulting cost allocation could violate the cost causation principle and result in free-ridership.

Id.

P 323 (citing Order No. 1000-A, 139 FERC ¶ 61,132 at P 276).

Id.

(citing

El Paso Elec. Co.

FERC,

76 F.4th 352, 363-66 (5th Cir. 2023) (

El Paso

)).

2. Rehearing Requests

9. NRECA and WestConnect CTOs request rehearing and/or clarification of the statement in Order No. 1920-A that “transmission providers may

not

In particular, NRECA and WestConnect CTOs assert that this statement could be read to prohibit transmission providers from voluntarily agreeing to plan for the needs of unenrolled non-jurisdictional transmission providers.

NRECA Rehearing Request at 3 (quoting Order No. 1920-A, 189 FERC ¶ 61,126 at P 323); WestConnect CTOs Rehearing Request at 1 (same).

NRECA Rehearing Request at 3, 17; WestConnect CTOs Rehearing Request at 1-5 (asserting that Order No. 1920-A, misinterpreting

El Paso,

establishes a prohibition on voluntary planning with unenrolled non-jurisdictional transmission providers).

10. NRECA asks the Commission to clarify that Order No. 1920-A does not change the Commission's existing regulations and policy, and thus transmission providers in a transmission planning region continue to have the discretion to plan for the needs of a non-jurisdictional transmission provider that has not enrolled in the regional transmission planning process.

NRECA asserts that its requested interpretation of Order No. 1920-A is supported by the Commission's own citation to the language in Order No. 1000-A, stating that the regional transmission planning process is not required to plan for the transmission needs of a non-jurisdictional, unenrolled transmission provider.

NRECA states that the Commission has interpreted Order No. 1000-A as neither prohibiting nor compelling regional transmission planning processes from planning for the transmission needs of unenrolled non-jurisdictional transmission providers,

i.e.,

non-jurisdictional transmission providers that have not agreed to accept any applicable cost allocation method for selected regional transmission facilities.

NRECA Rehearing Request at 3;

see also id.

at 16 (“NRECA requests that the Commission clarify that `may

not

plan' means `is not

required

to plan' rather than `is not

permitted

to plan.' ” (emphasis in original)).

Id.

at 16 (citing Order No. 1920-A, 189 FERC ¶ 61,126 at P 323 n.914 (citing Order No. 1000-A, 139 FERC ¶ 61,132 at P 276)).

Id.

at 16, 17 (citing

Pub. Serv. Co. of Colo.,

148 FERC ¶ 61,213 (2014),

order on reh'g,

151 FERC ¶ 61,128 (2015),

vacated & remanded, El Paso Elec. Co.

FERC,

832 F.3d 495 (5th Cir. 2016)).

11. NRECA also argues that its requested interpretation of Order No. 1920-A is consistent with the next sentence of Order No. 1920-A, which states that, “[i]f the transmission provider were to plan for and consider non-jurisdictional transmission providers' Long-Term Transmission Needs without a way to ensure the non-jurisdictional transmission provider contributes to the costs of the resulting Long-Term Regional Transmission Facilities, the resulting cost allocation could violate the cost causation principle and result in free-ridership.”

NRECA asserts that this rationale supports Order No. 1000-A's statement that the public utility transmission providers in a transmission planning region are not compelled to plan for the transmission needs of an unenrolled non-jurisdictional transmission provider that has not agreed to accept any applicable cost allocation method for selected regional transmission facilities, but does not justify prohibiting voluntary planning for such needs if transmission providers in a transmission planning region can ensure that they will not be required to subsidize transmission projects that benefit the unenrolled non-jurisdictional transmission providers.

Id.

at 16 (citing Order No. 1920-A, 189 FERC ¶ 61,126 at P 323).

Id.

at 16-17.

12. NRECA and WestConnect CTOs each argue that the court in

El Paso

did not hold that the FPA requires the Commission to prohibit transmission providers in a transmission planning region from voluntarily planning for unenrolled non-jurisdictional transmission providers' needs.

NRECA states that the

El Paso

court had no reason for such a holding in reviewing an Order No. 1000 regional compliance filing but simply quoted with approval the Commission's “ `clear' statement” in Order No. 1000-A.

Thus, NRECA contends, Order No. 1000-A and

El Paso

allow transmission providers in a transmission planning region to agree to plan for the transmission needs of unenrolled non-jurisdictional transmission providers if they have assurance that the enrolled transmission providers will not be required to subsidize transmission projects that benefit the unenrolled non-jurisdictional transmission providers.

Id.

at 17 (citing

El Paso,

76 F.4th at 363); WestConnect CTOs Rehearing Request at 4 (asserting that

El Paso

holds only that public utilities may not be required to plan for the transmission needs of unenrolled non-jurisdictional utilities that do not accept the allocation of costs related to regional transmission projects from which they benefit (citing

El Paso,

76 F.4th at 362-63)).

NRECA Rehearing Request at 17 (quoting

El Paso,

76 F.4th at 363).

Id.

13. WestConnect CTOs assert that the issue on which the transmission providers prevailed in

El Paso

was their objection to being forced to subsidize transmission projects from which unenrolled non-jurisdictional transmission providers who did not commit to the allocation of costs might nonetheless benefit. WestConnect CTOs assert that members of WestConnect believed that the risk of subsidization could be sufficiently minimized to allow their long history of beneficial coordinated transmission planning to continue without enrollment of the WestConnect unenrolled non-jurisdictional transmission providers.

WestConnect CTOs argue that, contrary to the Commission's statement in Order No. 1920-A, it is untrue that transmission providers cannot ensure that an unenrolled non-jurisdictional transmission provider contributes to the cost of a regional transmission project from which it benefits without enrolling in the transmission planning region.

WestConnect CTOs assert that prohibiting joint regional transmission planning is based on a false binary choice—that non-jurisdictional transmission providers are not required to enroll in a transmission planning region and can only participate if they enroll.

WestConnect CTOs represent that the WestConnect transmission planning region's transmission providers remain open to considering a modified coordinating transmission owner framework that provides them reasonable assurance that they will not have to subsidize their non-

jurisdictional counterparts without requiring their enrollment.

WestConnect CTOs Rehearing Request at 6 (citing

Ariz. Pub. Serv. Co.,

181 FERC ¶ 61,223, at P 14 (2022)).

Id.

at 5 (citing Order No. 1920-A, 189 FERC ¶ 61,126 at P 323).

Id.

at 6;

see also id.

at 9 n.17 (citing

Pub. Serv. Co. of Colo.,

WestConnect CTOs Request for Clarification, Docket No. ER13-75-014, et al., at n.2 (filed Nov. 18, 2024)).

Id.

at 5 (citing

Pub. Serv. Co. of Colo.,

WestConnect CTOs Request for Clarification, Docket No. ER13-75-014, et al. (filed Nov. 18, 2024)).

14. WestConnect CTOs further state that banning the possibility of voluntary arrangements for joint regional transmission planning with unenrolled non-jurisdictional transmission providers violates FPA section 202(a), under which the Commission is “affirmatively not only `empowered,' but `

directed

to divide the country into regional districts for the voluntary interconnection and coordination of facilities for the generation, transmission, and sale of electric energy.' ”

Id.

(quoting 16 U.S.C. 824a(a) (emphasis added)).

15. WestConnect CTOs and NRECA argue that a ban on regional transmission planning by public utilities and unenrolled non-jurisdictional transmission providers would be an unacknowledged, unexplained, and hence arbitrary departure from Order No. 1000 precedent.

WestConnect CTOs argue that the Commission's misinterpretation of

El Paso

is counterproductive to the Commission's professed goal of Order Nos. 1000 and 1920—to encourage and enhance regional transmission planning.

Id.

at 2-3, 6; NRECA Rehearing Request at 4-5, 18 (citing 5 U.S.C. 706(2)(A) (other citations omitted)).

WestConnect CTOs Rehearing Request at 6;

see also id.

at 6-7 (asserting that, in Order No. 1000 compliance proceedings, WestConnect transmission providers explained that non-jurisdictional transmission providers' enrollment was not a prerequisite to their participation in regional transmission planning and would run contrary to the goals of Order No. 1000) (“It was precisely because of the presence of a large number of both public utility and non-jurisdictional utility transmission owners in the WestConnect region that the [j]urisdictional [u]tilities strove to create a compliance structure that would be superior to one in which non-jurisdictional utilities unwilling to subject themselves to Order No. 1000 cost allocation would be excluded from the region's planning process entirely.” (quoting

Pub. Serv. Co. of Colo.,

Motion for Leave to Answer and Answer of the WestConnect Jurisdictional Utilities, Docket No. ER13-75-003 et al., at 13-14 (filed Nov. 8, 2013))).

16. WestConnect CTOs state that the Commission has noted that it “accepted the WestConnect public utility transmission providers' proposed participation framework [(

i.e.,

the coordinating transmission owner framework)] under which non-public utility transmission providers could participate in WestConnect as either enrolled transmission owners or coordinating transmission owners.”

WestConnect CTOs also state that the Commission expressly held that Order No. 1000 “does not preclude the enrolled public utility transmission providers in a transmission planning region from conducting transmission planning for unenrolled non-public utility transmission providers if the enrolled public utility transmission providers elect to do so.”

WestConnect CTOs argue that this holding underpinned the development of WestConnect's existing coordinating transmission owner framework and was not challenged or addressed in

El Paso.

On the contrary, WestConnect CTOs argue,

El Paso

does not alter—and could not have altered—Order No. 1000's holdings, which were affirmed by the U.S. Court of Appeals for the D.C. Circuit (D.C. Circuit).

Id.

at 7 (quoting

Pub. Serv. Co. of Colo.,

189 FERC ¶ 61,028, at P 6 (2024) (WestConnect Remand Order),

order on reh'g,

190 FERC ¶ 61,128 (2025) (Remand Rehearing Order)).

Id.

at 7-8 (quoting

Pub. Serv. Co. of Colo.,

148 FERC ¶ 61,213 at P 55).

Id.

at 8 (citing

South Carolina,

762 F.3d 41).

17. WestConnect CTOs argue that the Commission's prohibition on transmission providers planning for the needs of unenrolled non-jurisdictional transmission providers fails to acknowledge, explain, or consider WestConnect CTOs' substantial reliance interest in the Commission's prior approval of the coordinating transmission owner framework.

Id.

(citing

FCC

Fox Television Stations, Inc.,

556 U.S. 502, 515 (2009);

Dep't of Homeland Sec.

Regents of the Univ. of Cal.,

591 U.S. 1, 30 (2020)).

18. WestConnect CTOs further note that, in Order No. 1000, the Commission required that the scope of a transmission planning region “be governed by the integrated nature of the regional power grid.”

WestConnect CTOs allege that the Commission stated that without the participation of non-jurisdictional transmission providers interspersed throughout the WestConnect transmission planning region that make up half of its membership, WestConnect would be like “swiss cheese.”

WestConnect CTOs state that one of the reasons coordinating transmission owners supported WestConnect's coordinating transmission owner framework was the institutional difficulties non-jurisdictional transmission providers face in agreeing to enrollment rather than case-by-case acceptance of cost allocation for regional transmission projects.

WestConnect CTOs argue that Order No. 1920-A does not acknowledge or explain how transmission providers barred from joint regional transmission planning with unenrolled non-jurisdictional transmission providers can meet Order No. 1000's integration requirement in a transmission planning region like WestConnect.

Id.

(citing WestConnect Remand Order, 189 FERC ¶ 61,028 at P 23 & n.49).

Id.

at 8-9 (citing

Pub. Serv. Co. of Colo.,

142 FERC ¶ 61,206, at P 349 (2013),

order on reh'g,

148 FERC ¶ 61,213,

order on reh'g,

151 FERC ¶ 61,128,

vacated & remanded, El Paso Elec. Co.

FERC,

832 F.3d 495). The order that WestConnect CTOs cite does not contain this statement.

Id.

at 9.

Id.

19. WestConnect CTOs state that while the Commission found in its order on remand from

El Paso

that WestConnect remains an integrated transmission planning region even without participation of coordinating transmission owners, the Commission does not incorporate or reference that finding in Order No. 1920-A.

Nevertheless, WestConnect CTOs object to the Commission's determination in its order on remand from

El Paso

regarding the continued integration of the WestConnect transmission planning region.

Id.

at 9 n.17 (citing WestConnect Remand Order, 189 FERC ¶ 61,028 at P 23).

Id.

(quoting

Pub. Serv. Co. of Colo.,

WestConnect CTOs Request for Clarification, Docket No. ER13-75-013, et al. (filed Nov. 18, 2024) (internal quotations omitted)).

20. WestConnect CTOs assert that the ban on use of a coordinating transmission owner framework would all but ensure the failure of regional transmission planning in WestConnect, contrary to the objectives of Order Nos. 1000 and 1920. WestConnect CTOs contend that the Commission's failure to acknowledge its departure from existing policy or explain how a mandatory enrollment requirement would be consistent with Order No. 1000's integration requirement was arbitrary.

Id.

at 9 (citing

FCC

Fox Television Stations, Inc.,

556 U.S. at 515).

3. Commission Determination

21. We agree with rehearing petitioners that Order No. 1920-A does not modify the requirements of Order No. 1000 with respect to planning for the needs of unenrolled non-jurisdictional transmission providers.

Although Order No. 1000 does not require a coordinating transmission owner framework, Order No. 1000 and

El Paso

do not explicitly foreclose the possibility that a voluntary arrangement for regional transmission planning

and

cost allocation that includes unenrolled non-jurisdictional transmission providers could comply with the FPA's mandate for just and reasonable rates and the Commission's cost causation

precedent.

Accordingly, we clarify the Commission's statement in Order No. 1920-A that transmission providers may

not

plan for the needs of a non-jurisdictional transmission provider if that non-jurisdictional transmission provider has not enrolled in the transmission planning region and thereby has not agreed to any cost allocation method applicable to selected Long-Term Regional Transmission Facilities.

Specifically, we agree with NRECA that transmission providers are not

required

to plan for the Long-Term Transmission Needs of unenrolled non-jurisdictional transmission providers.

El Paso,

the U.S. Court of Appeals for the Fifth Circuit held that the Commission's orders accepting WestConnect's coordinating transmission owner framework were incompatible with the FPA and with the application of the cost causation principle in Order No. 1000 because they permitted non-public utility transmission providers to cause transmission costs to be incurred through the WestConnect regional transmission planning process without bearing cost responsibility.

The Commission will evaluate any voluntary arrangement for regional transmission planning and cost allocation that includes unenrolled non-jurisdictional transmission providers if and when it comes before the Commission, and that is unaffected by Order No. 1920-A. We emphasize that any transmission provider proposing to include unenrolled non-jurisdictional transmission providers in regional transmission planning and cost allocation, including Long-Term Regional Transmission Planning, must demonstrate that its proposed arrangement will not result in free ridership in violation of the cost causation principle and otherwise complies with the requirements of Order No. 1000, Order No. 1920,

El Paso,

and the FPA.

See

NRECA Rehearing Request at 3, 17; WestConnect CTOs Rehearing Request at 8.

See

Remand Rehearing Order, 190 FERC ¶ 61,128 at P 28.

Order No. 1920-A, 189 FERC ¶ 61,068 at P 323. We find moot WestConnect CTOs' arguments that the relevant language in Order No. 1920-A violates the Commission's obligations under FPA section 202(a) and the objectives of Order No. 1000 as well as NRECA's argument that this language conflicts with other statements in Order No. 1920-A.

See

WestConnect CTOs Rehearing Request at 4-5, 9; NRECA Rehearing Request at 16-17. Our clarification of Order No. 1920-A in relevant part resolves these claims.

See

Order No. 1000-A, 139 FERC ¶ 61,132 at P 276 (“[T]he regional transmission planning process is not required to plan for the transmission needs of such a non-public utility transmission provider that has not made the choice to join a transmission planning region.”);

see also id.

at 5-6 (arguing that circumstances in which public utilities voluntarily cede statutory filing rights to others are distinct from those in which the Commission attempts to encroach on those rights).

102

Indicated PJM TOs Rehearing Request at 2;

id.

at 10-11.

see also

SPP TOs Rehearing Request at 3.

104

See, e.g.,

Indicated PJM TOs Rehearing Request at 2-3, 10, 16; MISO TOs Rehearing Request at 5, 8, 12-15; SPP TOs Rehearing Request at 5; EEI Rehearing Request at 6-8, 12-13; WIRES Rehearing Request at 6.

105

See, e.g.,

WIRES Rehearing Request at 6, 8; EEI Rehearing Request at 10-11, 11 n.34; SPP TOs Rehearing Request at 9, 16 n.43, 19, 21; Indicated PJM TOs Rehearing Request at 7.

33. In addition, petitioners cite precedent that, they contend, reflects the fact that the Commission cannot diminish public utilities' FPA section 205 filing rights and, therefore, Order No. 1920-A's requirement for transmission providers to submit Relevant State Entities' agreed-upon Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process with their compliance filings is unlawful. Many of the rehearing requests argue that the requirement to include Relevant State Entities' agreed-upon Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process in transmission providers' compliance filings is contrary to

Atlantic City Electric. Co.

FERC.

106

They assert that

Atlantic City I

holds that public utilities—and only public utilities—have FPA section 205 filing rights to propose rate changes and that public utilities cannot be involuntarily divested of those rights as a result of an FPA section 206 compliance directive.

107

Several rehearing

petitioners point to other decisions that, they contend, rejected attempts by the Commission to limit or compromise public utilities' (or, in the parallel context of the Natural Gas Act (NGA),

108

natural-gas companies') statutory authority to file rates.

109

A number of the rehearing requests also rely on

Massachusetts Department of Public Utilities,

110

asserting that “states may not force public utilities to make section 205 filings” or require utilities to submit “`regulator-compelled' utility-proposed changes.”

111

106

295 F.3d 1 (D.C. Cir. 2002) (

Atlantic City I

);

see also

MISO TOs Rehearing Request at 9, 18, 25.

34. MISO TOs assert that Order No. 1920-A contravenes restrictions on the Commission's FPA section 206 authority because, by requiring attachment of Relevant State Entities' agreed-upon Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process to transmission providers' compliance filings, it requires transmission providers to relinquish their right to file rate changes under FPA section 205 to Relevant State Entities.

112

MISO TOs argue that the Commission in Order No. 1920 acknowledged that it could not encumber these filing rights by initially allowing transmission providers to determine which Long-Term Regional Transmission Cost Allocation Method(s) to file as part of their compliance filings.

113

Indicated PJM TOs assert that FPA section 206 “does not authorize the Commission to provide [Relevant State Entities] with the statutory authority reserved solely to public utilities, nor does it authorize the Commission to require public utilities to cede those rights to [Relevant State Entities] by forcing them to submit proposals and materials prepared by those [Relevant State Entities] that the public utilities do not support.”

114

EEI argues that, “[b]y requiring the public utilities to file the Relevant State Entities' proposals, the Commission is requiring those public utilities to cede their statutory rights to make filings under the FPA to the Relevant State Entities and to provide those entities with statutory rights that Congress did not intend them to have.”

115

SPP TOs argue that Order No. 1920-A gives “preferential filing privileges to states that the FPA does not authorize the Commission to grant,” and thereby diminishes the FPA section 205 filing rights of public utilities.

116

WIRES states that the Commission does not have statutory authority to require a public utility to file another entity's rate proposal, and that Order No. 1920-A does not reflect a “mere change in the filing process” but rather a substantive change that the Commission is not authorized to make.

117

WIRES further argues that Order No. 1920-A effectively elevates states to the equivalent of public utilities in requiring that their proposals be included in the compliance filing, which will be assessed under the same just and reasonable standard articulated in FPA section 205.

118

112

MISO TOs Rehearing Request at 16-19 (arguing that this effectively forces transmission providers to make FPA section 205 filings that are not their own; also characterizing this as involuntarily transferring to Relevant State Entities the right to make FPA section 205 filings to make rate changes (citing

Atlantic City I,

295 F.3d at 9-11;

Atlantic City II,

329 F.3d at 858-59;

NRG Power Mktg.,

862 F.3d at 114;

PJM Power Providers Grp.,

88 F.4th at 270 n.122;

Emera Maine,

854 F.3d at 24)).

113

See id.

at 16-17 (noting that, under Order No. 1920, filing a Relevant State Entity's proposed Long-Term Regional Transmission Cost Allocation Method was voluntary).

114

Indicated PJM TOs Rehearing Request at 11-12 (citing 16 U.S.C. 824d;

Atlantic City I,

295 F.2d at 9-11;

Massachusetts Department of Public Utilities,

729 F.2d at 888).

115

EEI Rehearing Request at 8 (citing

Atlantic City II,

329 F.3d at 858-59) (arguing that the Commission “acknowledges this when it concedes that it generally does not consider alternate compliance proposals other than those filed by the relevant public utility” (quotation marks omitted));

see id.

at 9-12 (arguing that under the FPA the Commission may not, in setting a replacement rate, divest public utilities of their filing rights and give them to Relevant State Entities).

116

SPP TOs Rehearing Request at 13;

see id.

at 14 (“The FPA does not contemplate any party, including states, being allowed to make compliance filings on a regulated public utility's behalf. Nor does it authorize third parties to somehow join or commandeer a public utility's compliance filing.”);

id.

at 17 (“The fact that states are unable to file cost allocation methods themselves and must instead either comment on transmission providers' proposals or file section 206 complaints is exactly what the FPA requires.” (quotation marks omitted)).

117

WIRES Rehearing Request at 11-12;

id.

at 13 (“[B]y requiring a transmission provider to include in its compliance filing a state-agreed upon method or process, the transmission provider is forced to share its statutory filing rights with another entity under a just and reasonable standard.”).

118

See id.

at 13-14 (arguing that the Commission has not previously taken the approach set forth in Order No. 1920-A and that, as the Commission recognizes, transmission planning is the tariff obligation of transmission providers);

see also id.

at 10-11 (“Procedurally, the public utility's obligation under compliance is the same as that under FPA section 205,

i.e.,

the public utility must submit a just and reasonable rate.”);

id.

at 15-16 (“Whether a filing is submitted under FPA section 205 or 206, the public utility's filing is equally subject to a just and reasonable standard, as both statutory provisions ultimately rely on the same standard.”);

cf.

SPP TOs Rehearing Request at 30 (claiming that “[t]he Commission failed to acknowledge that it was changing policy when it decided to afford public utility and state proposals equal status when the Commission's previous approach was to favor compliance proposals by the regulated entities that were the actual subject of compliance mandates”).

35. Many rehearing petitioners also contest the Commission's explanation for why this compliance filing requirement was statutorily permissible. MISO TOs assert that the Commission's explanation that a Relevant State Entity's proposed method or process does not constitute a “proposal” is an “empty formalism with no grounding in the statutory text” that does not change the impact of the requirement on transmission providers' FPA section 205 filing rights.

119

WIRES similarly argues that, despite this clarification and the fact that transmission providers are not required to characterize or justify the Relevant State Entities' agreed-upon Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process,

120

the compliance requirement remains unlawful because neither states nor Relevant State Entities are public utilities entitled to make FPA section 205 filings.

121

119

MISO TOs Rehearing Request at 19 (quoting Order No. 1920-A, 189 FERC ¶ 61,126 at P 654 n.1651).

120

WIRES Rehearing Request at 13 (quoting Order No. 1920-A, 189 FERC ¶ 61,126 at PP 654 n.1651, 655).

121

See id.

36. MISO TOs argue that the Commission's distinction between FPA section 205 filings and compliance filings under FPA section 206 is a “hollow explanation” that does not allow the Commission to give filing rights to Relevant State Entities in violation of the FPA or require public utilities to cede their filing rights under FPA section 205.

122

SPP TOs acknowledge that Commission precedent distinguishes between FPA section 205 filings and compliance filings under FPA section 206,

123

but

still contend that Order No. 1920-A's mandates are unlawful because they are forced encroachments on public utility filing rights under the FPA, which may only be relinquished voluntarily.

124

EEI also recognizes that a compliance filing under FPA section 206 is not a change initiated by a public utility but rather one directed by the Commission,

125

but asserts that, even if the Commission were to act pursuant to FPA section 206 or via rulemaking, whatever rate or regulation the Commission establishes may not usurp the rights of public utilities to file proposed rates.

126

122

MISO TOs Rehearing Request at 19-20.

123

SPP TOs Rehearing Request at 3-4 (citing

N.Y. Indep. Sys. Operator, Inc.,

131 FERC ¶ 61,242, at P 32 (2010);

PJM Interconnection, L.L.C.,

85 FERC ¶ 61,111, at 61,413 (1998);

PJM Interconnection, L.L.C.,

142 FERC ¶ 61,214, at PP 5-7, 21 (2013)).

124

See id.

at 4-5 (“Courts have firmly rebuffed various attempts to alter the FPA framework, especially when the purpose was to weaken public utilities' ability to independently exercise their statutory filing rights.”);

at 6.

125

EEI Rehearing Request at 8-9 (citing

S. Co. Servs, Inc.,

61 FERC ¶ 61,339, at 62,328-29 (1992),

order on reh'g,

63 FERC ¶ 61,217 (1993)).

126

Id.

at 9 (citing

Atlantic City I,

295 F.3d at 10-11).

37. SPP TOs argue that the Commission has rejected attempts to use compliance filings to bypass the FPA's filing requirements and circumvent FPA notice requirements, and that the Commission has recognized that it could not circumvent these requirements even by invoking FPA section 309.

127

They contend that the Commission's approach could lead it to improperly “bypass” FPA sections 205 and 206 in future cases,

e.g.,

in complaint proceedings, by authorizing “favored parties to include their preferred alternative remedies in other parties' compliance filings without first having to make the first step showings under FPA section 206 that are normally required of complainants or protestors.”

128

SPP TOs claim that Order No. 1920-A's attempt to weaken FPA sections 205 and 206's statutory constraints wrongly attempts to resolve a “major question” under the statute in ways that Congress did not authorize and could not have foreseen.

129

127

SPP TOs Rehearing Request at 15 (citing 16 U.S.C. 825h;

PJM Interconnection, L.L.C.,

178 FERC ¶ 61,083, at P 29 (2022)).

128

Id.

at 15 & n.39 (“The states or third parties would not have to show that the existing rates were unjust and unreasonable as they would under section 206.”).

129

SPP TOs Rehearing Request at 17-18 (citing

Biden

Neb.,

143 S. Ct. 2355, 2374 (2023);

W. Va.

EPA,

597 U.S. 697, 724 (2022)).

38. Indicated PJM TOs argue that Order No. 1920-A's requirement to include Relevant State Entities' agreed-upon Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process in transmission providers' compliance filings intrudes into the decision making processes of public utilities as to whether to submit a filing under FPA section 205.

130

Indicated PJM TOs state that these are “internal decisions by the public utility determined by its governing authority” that are beyond the Commission's authority to regulate and contrary to the “passive role” assigned to the Commission under FPA section 205.

131

They assert that this requirement is a “direct intervention into a public utility's decision regarding what to file even before the filing is made” and not a “practice affecting a rate” subject to Commission regulation.

132

Indicated PJM TOs further assert that Commission precedent addressing RTO/ISO governance is not relevant, as the two cases addressing participation in the bodies that vote on rate proposals were decided prior to the Supreme Court's decision in

Loper Bright Enterprises

Raimondo,

did not “advance[ ] to judicial review,” and did not “address[ ] the D.C. Circuit's decision in

CAISO.

”

133

130

Indicated PJM TOs Rehearing Request at 2-3, 6-7, 12-15.

131

Id.

at 12-15 (also arguing that under

EPSA,

577 U.S. 260 and

Cal. Indep. Sys. Operator Corp.

FERC,

372 F.3d 395, 403 (D.C. Cir. 2004) (

CAISO

), the Commission's authority is limited to regulating practices directly affecting jurisdictional rates and does not extend to regulating how a public utility makes decisions).

132

Id.

at 14 (citing

Atlantic City I,

295 F.3d at 10).

133

Id.

at 15 (citing

PJM Interconnection, L.L.C.,

154 FERC ¶ 61,147,

order on reh'g,

157 FERC ¶ 61,229 (2016);

New England Power Pool Participants Comm.,

166 FERC ¶ 61,062 (2019)).

39. EEI, SPP TOs, and WIRES assert that there are other avenues for parties to be heard with respect to cost allocation, such that infringing on transmission providers' FPA section 205 rights is not necessary or justified. EEI argues that parties may file protests to a transmission provider's compliance filing if they wish to advocate for an alternative approach.

134

SPP TOs argue that, because states are not authorized to file cost allocation proposals, they are limited to commenting on or protesting transmission providers' proposals or filing FPA section 206 complaints.

135

WIRES argues that there are ways of evaluating whether transmission providers have provided state regulators with a formal opportunity to develop a Long-Term Regional Transmission Cost Allocation Method other than compelling transmission providers to include Relevant State Entities' agreed-upon Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process in their compliance filing, but that Order No. 1920-A adopts an adversarial approach of dueling compliance proposals.

136

134

EEI Rehearing Request at 9-10 (arguing that “[t]he Commission fails to explain what procedural infirmity would be created by requiring Relevant State Entities and other stakeholders to provide comments and feedback on these filings throughout the traditional regulatory process” and that the approach adopted in Order No. 1920-A could lead to confusion as to which proposal to provide feedback on);

see also id.

at 12.

135

SPP TOs Rehearing Request at 17-18;

see also id.

at 15-16, 18-19.

136

WIRES Rehearing Request at 14.

40. MISO TOs assert that, under Order No. 1920-A, the Commission is particularly likely to accept Relevant State Entities' Long-Term Regional Transmission Cost Allocation Methods rather than transmission providers proposals because they assert that Order No. 1920-A provides that Relevant State Entities' proposals “will be afforded heightened preference over transmission providers' own proposals.”

137

MISO TOs argue that accepting Relevant State Entities' cost allocation method over the transmission provider's proposed cost allocation method would “subvert[ ] future FPA section 205 filings related to that rate scheme in a manner that disfavors the transmission provider's FPA section 205 proposals.”

138

137

MISO TOs Rehearing Request at 7;

see id.

at 24-25 (citing Order No. 1920-A, 189 FERC ¶ 61,126 at P 659);

id.

at 9, 33-37.

138

Id.

at 24-25.

41. Indicated PJM TOs and SPP TOs argue that, in claiming that the Commission need not accept a transmission provider's proposal on compliance even if the proposal complies with the final rule's requirements, the Commission's reliance on

Entergy Arkansas, LLC

FERC

is misplaced.

139

They contend that

Entergy

is inapposite because the Commission there rejected MISO's compliance filing before selecting a different replacement rate.

140

SPP TOs argue that the Commission can accept a proposed replacement rate from a third party (including Relevant State Entities) only after finding that the transmission provider's compliance filing does not comport with the Commission's directives.

141

139

Indicated PJM TOs Rehearing Request at 22-23 (citing

Entergy,

40 F.4th 701-02); SPP TOs Rehearing Request at 18-19 n.49 (same);

see

Order No. 1920-A, 189 FERC ¶ 61,126 at P 658 & n.1656.

140

Indicated PJM TOs Rehearing Request at 22-23; SPP TOs Rehearing Request at 18-19 & n.49 (“[S]tates, like every other third party, should have to show that a public utility's proposed replacement rate does not satisfy compliance directives before their preferred alternatives are considered.”).

141

SPP TOs Rehearing Request at 14-15.

42. Indicated PJM TOs assert that the preference the Commission has articulated in its precedent for accepting public utilities' compliant, just and reasonable proposals rather than

competing proposals

142

is, in fact, mandated by the FPA.

143

Indicated PJM TOs state that FPA sections 205 and 206 are part of a single statutory structure under which rates are initially established by the utility, such that the Commission must give preference to compliance proposals by public utilities over those by other entities.

144

142

See infra

P 74 (summarizing arguments that the Commission departed from this precedent without adequate explanation).

143

Indicated PJM TOs Rehearing Request at 17-18 (arguing that “[t]he statutory structure of the FPA requires the Commission give preference to the proposal submitted on compliance by public utilities” and the Commission “cannot simply choose the one it likes best” (citing

United Gas Pipe Line Co.

Mobile Gas Serv. Corp.,

350 U.S. 332, 340-41 (1956)));

see id.

at 20 (“This preference for the public utility's proposal is the only interpretation that conforms with the statutory text of the FPA.”).

144

See id.

at 17.

43. Indicated PJM TOs also assert that Order No. 1920-A “did not prescribe a specific replacement rate,” instead maintaining a “light touch” and providing flexibility to transmission providers as to their compliance filings on cost allocation, and therefore “forwent its opportunity to establish a specific replacement rate pursuant to section 206.”

145

Indicated PJM TOs further maintain that the Commission's approach in Order Nos. 1920 and 1920-A is inconsistent with FPA section 206, which Indicated PJM TOs state requires that the replacement be “fixed by rule or by a later order on compliance, but not by both.”

146

As a result, Indicated PJM TOs claim that “any later filing made by the public utility to ensure that the public utility is compliant with the Commission's rules is made pursuant to section 205”

147

such that the Commission's “only recourse is to consider whether the rate submitted by the public utility on compliance is just and reasonable.”

148

WIRES similarly argues that the Commission did not “take the initiative in setting the replacement rates” but instead directed transmission providers on compliance to submit just and reasonable cost allocation methods consistent with the requirements of Order No. 1920, such that “the public utility need only propose a just and reasonable replacement rate in compliance with the Commission order.”

149

145

Id.

at 27-28.

146

Id.

at 27 n.102 (citing 16 U.S.C. 824e(a);

Indep. Energy Producers Ass'n

Cal. Indep. Sys. Operator Corp.,

128 FERC ¶ 61,165, at PP 21-26 (2009)).

147

Id.

at 27-28 n.102.

148

Id.

at 28;

see also id.

at 859 (“[W]e reaffirm and clarify our prior decision that [the Commission] has no jurisdiction to enter limitations requiring utilities to surrender their rights under [section] 205 of the FPA to make filings to initiate rate changes.”).

56. Other cases that the rehearing requests rely on are similarly inapposite because they rejected attempts by the Commission or its predecessor, the Federal Power Commission (FPC), to modify public utilities' FPA section 205 filings or natural gas companies' NGA section 4 filings, without first exercising its authority and carrying its burden under FPA section 206 or NGA section 5, as appropriate.

189

Also distinguishable are cases involving Commission attempts—in NGA section 4 proceedings—to require that natural gas companies refile their rates at regular intervals, rather than the Commission employing its NGA section 5

190

authority to review existing rates.

191

Again, none of these cases address the circumstances presented here, where the Commission has invoked its FPA section 206 authority, made findings that existing practices do not meet the statutory standard, and then further exercised its authority to determine and fix the replacement rate.

189

See NRG Power Mktg.,

862 F.3d at 110, 114-17 & n.2 (explaining that, in FPA section 205 proceedings, the Commission may not unilaterally impose a new rate scheme of its own making without the consent of the utility, but that it “may unilaterally impose a new rate scheme on a utility or [RTO] only under a different provision of the Act[,][FPA section 206,]” which was not “the basis for [the Commission's] decision in this case”);

Western Resources,

9 F.3d at 1577-79 (“After careful consideration of the statutory framework, we cannot accept the Commission's argument that [NGA section] 4 permits it to approve any rate, no matter how materially different from that proposed by the pipeline, so long as it can be viewed as a `part' of the original request.”);

Louisiana

FPC,

503 F.2d at 861-62 (“The difficulty is this: FPC approved the interim four-level plan as `just and reasonable,' and in the next breath it ordered a new, three-level plan to take its place.”).

190

15 U.S.C. 717d.

191

See, e.g., Consumers Energy Co.

FERC,

226 F.3d 777, 780-81 (6th Cir. 2000);

NYPSC,

866 F.2d 487, 488-92 (D.C. Cir. 1989).

57.

Massachusetts Department of Public Utilities

also does not support rehearing petitioners' arguments. In that case, the D.C. Circuit held that the Commission correctly concluded that Massachusetts could not compel a public utility to exercise its FPA section 205 rights to change its Commission-jurisdictional rates.

192

The court there described the “procedural dichotomy” reflected in FPA sections 205 and 206.

193

It explained that Massachusetts's argument that it could compel a public utility to make FPA section 205 rate changes “would prevent the utility from choosing among reasonable rate-practice alternatives.”

194

By contrast, the Commission's view was “more consistent with the purposes of the entire procedural scheme” in that it allows the utility's filed rate to remain in effect absent a finding that the rate is unjust, unreasonable, or unduly discriminatory or preferential and allows the utility to change its rate so long as the utility can prove the proposed change is reasonable.

195

This same “procedural dichotomy” supports the lawfulness of Order No. 1920-A; public utilities are not exercising (or being compelled to exercise) their FPA section 205 filing rights. Rather, the Commission has made the requisite findings to support the exercise of its own authority under FPA section 206—a posture that the court in

Massachusetts Department of Public Utilities

differentiated

196

—and the compliance filings that Order Nos. 1920 and 1920-A require and the subsequent fixing of the replacement rate by order occurs under that authority, not FPA section 205.

192

Massachusetts Department of Public Utilities,

729 F.2d at 886-87.

193

Id.

at 886-88.

194

Id.

at 888.

195

Id.; see id.

(explaining further that “the net effect of accepting Massachusetts' argument is to allow a state to do what FERC itself cannot, namely, to change an

inter

state rate practice that FERC has not found unreasonable” and also identifying pragmatic considerations relating to the availability of refunds under FPA section 205 and concerns of “confusion, possibly chaos” that could result if states attempted to require conflicting changes); 16 U.S.C. 824e(a).

196

Massachusetts Department of Public Utilities,

729 F.2d at 866-88 (contrasting the two procedural “tracks” under which rates are regulated in FPA sections 205 and 206).

(b) Inclusion of Relevant State Entities' Agreed-Upon Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process in Transmission Providers' Compliance Filings

58. As explained above, Order No. 1920-A's compliance process with respect to cost allocation does not infringe on or encumber transmission providers' FPA section 205 filing rights, as a matter of statutory text, structure, and applicable precedent. Specifically, the compliance process requirement that transmission providers include in their transmittals or attach to their Order No. 1920 regional transmission planning and cost allocation compliance filings Relevant State Entities' agreed-upon Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process does not infringe or encumber transmission providers' FPA section 205 filing rights. We address in additional detail here certain of the arguments raised on rehearing challenging this requirement.

59. We disagree with rehearing petitioners' claims that requiring transmission providers to include or attach these materials in transmission providers' FPA section 206 compliance filings in response to Order Nos. 1920 and 1920-A constitutes a “filing” requirement under FPA section 205, requires transmission providers to “cede” FPA section 205 filing rights or encumbers those rights, or grants such filing rights to Relevant State Entities. The Commission required only that transmission providers include this material in their FPA section 206 compliance filings, either in the

transmittal or an attachment thereto.

197

The Commission did not require transmission providers to independently characterize this material.

198

The Commission was further clear that “the transmission providers decide what to submit as their actual Order No. 1920 compliance proposal, including relevant tariff language and supporting evidence or arguments.”

199

Put in practical terms, in Order No. 1920-A, the Commission requires nothing more from transmission providers than attaching one or more additional documents, produced by parties other than transmission providers, to a compliance filing made under FPA section 206, to assist in building the record for the Commission's exercise of its own authority to determine and fix the just and reasonable rate under that statutory provision, as well as monitoring compliance with the requirements related to the Engagement Period and efficiently considering the views of both Relevant State Entities and transmission providers.

200

Furthermore, this is a one-time filing requirement associated with this FPA section 206 proceeding—not an ongoing obligation affecting any future filings by transmission providers under section 205 or any other section of the FPA.

201

And where transmission providers' FPA section 205 rights are at stake, Order No. 1920-A does not include these same requirements.

202

197

Order No. 1920-A, 189 FERC ¶ 61,126 at P 651.

198

Id.

P 655.

199

Id.

P 654 n.1651 (“The requirement to include Relevant State Entities' Long-Term Regional Transmission Cost Allocation Method and/or State Agreement Process as an addition to the compliance filing does not constitute a `proposal' from the transmission provider.”).

200

FPA section 206 does not mandate a specific process through which the Commission chooses to build the record to determine and fix the replacement rate; rather, FPA section 206 merely requires a hearing prior to finding the existing rate unjust and reasonable, and then empowers the Commission to determine and fix the replacement rate by order.

See

16 U.S.C. 824e;

see also

WIRES Rehearing Request at 13; SPP TOs Rehearing Request at 4-5; EEI Rehearing Request at 8-9.

204

Order No. 1920-A, 189 FERC ¶ 61,126 at P 652.

205

Id.

P 654 n.1651.

61. SPP TOs' argument that “[t]he Commission previously rejected attempts to use compliance filings to bypass the FPA's filing requirements” and cannot “ `circumvent the notice and filing requirements of FPA sections 205 and 206' ”

206

is immaterial because Order No. 1920-A does not have these effects—no notice and filing requirements are “bypassed,” and no filings under FPA section 205 are required at all. Rather, Order No. 1920-A's approach to cost allocation in the required compliance filings is a proper exercise of the Commission's authority under FPA section 206. For the same reason, we disagree with SPP TOs' assertion that Order No. 1920-A raises a “major question” because it attempts to weaken FPA sections 205 and 206's statutory constraints:

207

Order No. 1920-A is a clear and unequivocal application of the Commission's authority under FPA section 206.

206

SPP TOs Rehearing Request at 15 & nn.37-38 (quoting

PJM Interconnection, L.L.C.,

178 FERC ¶ 61,083 at P 29).

207

Id.

at 17-18.

62. We similarly disagree with SPP TOs' claim that Order No. 1920-A sets a precedent in which, “in a future section 206 complaint proceeding, the Commission could authorize states or other favored parties to include their preferred alternative remedies in other parties' compliance filings without first having to make the first step showings under FPA section 206 that are normally required.”

208

The Commission considers compliance filings in FPA section 206 rulemaking proceedings only after it makes a first-step determination that existing rates are unjust, unreasonable, or unduly discriminatory or preferential,

209

as it did in Order No. 1920. Once such a finding is made, the Commission determines and fixes the replacement rate, including through the use of compliance filings.

210

208

Id.

at 15.

209

16 U.S.C. 824e(a);

see, e.g., Emera Maine,

854 F.3d at 24 (holding that “unlike section 205, section 206 mandates a two-step procedure that requires FERC to make an explicit finding that the existing rate is unlawful before setting a new rate”).

210

In a complaint proceeding under FPA section 206, the burden of proof to make this first prong showing is on the complainant,

see id.

824e(b), but once that showing is made, the replacement rate is determined and fixed by the Commission,

see id.

824e(a);

see also id.

at 2-3;

id.

at 14 (citing

Atlantic City I,

which addressed FPA section 205 rights, and referring to the “passive” role of the Commission, which pertains under FPA section 205).

65. EEI, SPP TOs, and WIRES each argue that there are other avenues (

e.g.,

protests) for parties to be heard with respect to cost allocation, such that allegedly infringing on transmission providers' FPA section 205 rights by requiring inclusion of Relevant State Entities' materials in transmission provider's compliance filings is not necessary or justified.

215

For the most part, these arguments appear to be claims that the Commission's decision on this point was arbitrary and capricious or that the Commission should have adopted a different approach.

216

At times, however, rehearing petitioners link these arguments to their claims that the Commission has afforded Relevant State Entities rights not found in the FPA.

217

We reject these arguments as inconsistent with the statutory text and structure, as well as applicable precedent. Although protests are one way that other entities can be heard, the FPA does not limit the Commission's ability to determine how to build the record when determining and fixing an appropriate replacement rate under FPA section 206.

218

215

See

EEI Rehearing Request at 9-10, 12; SPP TOs Rehearing Request at 15-18; WIRES Rehearing Request at 14.

216

See infra

PP 78-80 (addressing these arguments).

217

See, e.g.,

EEI Rehearing Request at 9 (arguing that the Commission “goes beyond its authority under the FPA” and that the proper method for submitting an alternative to a replacement rate proposed by a public utility on compliance is to file a protest); SPP TOs Rehearing Request at 17-18 (“The fact that states `are unable to file cost allocation methods themselves' and must instead either comment on transmission providers' proposals or file section 206 complaints is exactly what the FPA requires.” (quoting Order No. 1920-A, 189 FERC ¶ 61,126 at P 645)); WIRES Rehearing Request at 11, 14 (advancing this argument in contending the Commission does not have statutory authority to require a public utility to file another entity's rate proposal).

218

See supra

PP 51-52, 59.

(c) Commission Consideration of Relevant State Entities' Agreed-Upon Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process

66. The above discussion of the statutory text, structure, and precedent rebuts the core of the challenges to the Commission's determination that it will “consider the entire record—including the Relevant State Entities' agreed-upon Long-Term Regional Transmission Cost Allocation Method and/or State Agreement Process and the transmission providers' proposal—when setting the replacement rate.”

219

We address in additional detail certain of the specific arguments raised on rehearing challenging Order No. 1920-A in this respect.

219

Order No. 1920-A, 189 FERC ¶ 61,126 at P 659.

67. We continue to conclude that “the Commission need only select a replacement rate that complies with the final rule and that is adequately supported in the record, and then intelligibly explain the reasons for its choice.”

220

Claims that Order No. 1920-A distorts the statutory scheme by “elevating” Relevant State Entities to the equivalent of public utilities by requiring that their agreed-upon Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process be included in the compliance filing, which will be assessed under the same just and reasonable standard as articulated in FPA section 205,

221

are unpersuasive. As discussed above, FPA section 206 does not specify that the Commission may only consider public utilities' proposals for a replacement rate; rather, FPA section 206 merely requires a hearing prior to finding the existing rate unjust and reasonable, and then empowers the Commission to determine and fix the replacement rate by order.

222

In fact, the D.C. Circuit has explained that the Commission is not required to await public utilities' proposals on compliance at all but may instead determine and fix the replacement rate coincident with the finding under the first prong of FPA section 206 that the existing rate is unjust and unreasonable.

223

And while the Commission has typically adopted public utilities' compliant just and reasonable proposals for the replacement rate without considering alternate proposals by other entities, FPA section 206 does not prevent the Commission from taking a different approach in a specific rulemaking proceeding. Rather, and as discussed further below,

224

where the Commission has adopted transmission providers' proposals on compliance where it finds them compliant with the requirements of the final rule, it has done so based on pragmatic considerations and pursuant to its authority and discretion to determine and fix a just and reasonable rate.

225

220

Id.

P 658 (citing

Entergy,

40 F.4th at 701-02).

221

See, e.g.,

SPP TOs Rehearing Request at 13-14.

222

See supra

P 51.

223

See Electrical District,

774 F.2d at 494;

Kern River Gas Transmission Co.,

133 FERC ¶ 61,162 at PP 21-22 (“[A]s an alternative to waiting for the pipeline to calculate the rates in a compliance filing, the Commission may calculate and fix the rate itself in the initial order.”).

224

See infra

PP 71, 86-87.

225

See, e.g., Entergy,

40 F.4th at 701-02 (“[A]t bottom, Petitioners simply argue that, in its view,

a better method exists. But [the Commission] is not required to choose the best solution, only a reasonable one.” (quotation marks and citation omitted));

Duke Energy Trading & Mktg., L.L.C.

FERC,

315 F.3d 377, 382 (D.C. Cir. 2003) (“[T]here may be a number of different potential rates all of which are just and reasonable.”);

Kern River,

142 FERC ¶ 61,132 at P 37 (“Here, the Commission is acting under NGA section 5, not section 4. However, just as there may be several just and reasonable rates, terms, or conditions which a pipeline may propose in a section 4 proceeding, there may be several just and reasonable rates, terms or conditions which the Commission may adopt as a just and reasonable remedy in a section 5 proceeding.”).

68. Relatedly, MISO TOs misunderstand Order No. 1920-A in contending that the Commission has ascribed “heightened importance” to state-developed cost allocation methods in the context of planning to meet Long-Term Transmission Needs, such that the Commission will be particularly likely to accept Relevant State Entities' agreed-upon Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process rather than those of transmission providers.

226

Relevant State Entities' agreed-upon Long-Term Regional Transmission Cost Allocation Methods and State Agreement Processes take on heightened importance in relation to other commenters' views, not in relation to transmission providers' proposals for a replacement rate in transmission providers' compliance filings. Further, MISO TOs' argument disregards the Commission's explanation that “the Commission will consider the entire record—including the Relevant State Entities' agreed-upon Long-Term Regional Transmission Cost Allocation Method and/or State Agreement Process and the transmission provider's proposal—when setting the replacement rate.”

227

The Commission did not state that it was adopting any generic or

per se

preference for Relevant State Entities' agreed-upon Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process. Rather, the Commission provided that it will make determinations as to the appropriate replacement rate on a case-by-case basis, based on the entire record and consistent with the Commission's statutory authority and discretion to determine and fix the replacement rate.

228

And, consistent with the discussion herein, nothing prevents the Commission from determining and fixing the replacement rate of its choosing, including choosing the Relevant State Entities' agreed-upon Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process, pursuant to FPA section 206, so long as it is consistent with the final rule, adequately supported in the record, and the Commission adequately explains the reason for its choice.

226

See, e.g.,

MISO TOs Rehearing Request at 24-25, 33-37 (citing Order No. 1920-A, 189 FERC ¶ 61,126 at P 659).

227

Order No. 1920-A, 189 FERC ¶ 61,126 at P 659;

see also id.

(explaining that the Commission was “not required to accept a cost allocation proposal from a transmission provider simply because it may comply with Order No. 1920” but could, instead, “adopt any cost allocation method proposed by Relevant State Entities and submitted on compliance so long as it complies with Order No. 1920”).

228

See id.

P 658 (explaining how the Commission will consider replacement rate proposals) (citing 16 U.S.C. 824e, 825

(b)).

69. MISO TOs claim that “[i]f the Commission accepts the Relevant State Entities' Cost Allocation Method over the transmission provider's method . . . the Commission has subverted future FPA section 205 filings related to that rate scheme in a manner that disfavors the transmission provider's FPA section 205 proposals.”

229

Although MISO TOs do not sufficiently explain this specific argument,

230

namely by indicating how they believe the Commission is “subverting” future FPA section 205 filings, this argument again appears to ascribe effects to Order No. 1920-A that it does not have, which we have already addressed. Irrespective of the replacement rate that the Commission sets under FPA section 206, the Commission will assess transmission providers' future FPA section 205 filings according to the statutory standard prescribed by the FPA for such filings. Nothing in Order No. 1920-A “disfavors” or “subvert[s]” those hypothetical future filings.

231

Moreover, any challenges related to the Commission's treatment of such future FPA section 205 filings can be raised when those filings are made.

229

MISO TOs Rehearing Request at 24-25.

230

A rehearing request must set forth with specificity the grounds on which the request is based. 16 U.S.C. 825

(a); 18 CFR 385.713(c)(2) (2024);

see ZEP Grand Prairie Wind, LLC,

183 FERC ¶ 61,150, at P 10 (2023);

Ind. Util. Regul. Comm'n

FERC,

668 F.3d 735, 738-40 (D.C. Cir. 2012).

231

Challenges to the Commission's treatment of those potential filings are not before us at this time.

70. We find unpersuasive Indicated PJM TOs' and SPP TOs' arguments that

Entergy

is inapposite to Order No. 1920-A because the Commission in that case first rejected MISO's compliance filing before selecting a different replacement rate.

232

First, the Commission's determination that it may, in compliance proceedings, consider and set as the replacement rate Relevant State Entities' agreed-upon Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process is consistent with both the text and structure of the FPA, for the reasons already discussed.

233

Second,

Entergy

supports this conclusion because it reflects that the Commission, when addressing compliance filings in FPA section 206 proceedings, is not required to adopt a replacement rate proposed by public utilities,

234

but instead may determine and fix any just and reasonable replacement rate of its choosing.

235

Third, Indicated PJM TOs and SPP TOs misconstrue

Entergy

as reflecting a requirement that the Commission must first reject a public utility's proposal on compliance before adopting a different replacement rate. That the Commission in that case elected to first consider and reject MISO's proposal

236

before selecting a different replacement rate does not demonstrate that it was legally required to do so—and nothing in

Entergy

holds to the contrary.

237

232

See

Indicated PJM TOs Rehearing Request at 22-23; SPP TOs Rehearing Request at 18-19 n.49.

233

See supra

PP 48-53.

234

In other words, if compliance filings were subject to the requirements of FPA section 205, under which the Commission plays a passive role, once the Commission rejected MISO's proposal in

Entergy

it would not have been empowered to itself fashion a different rate.

Entergy

reflects that this is not the case, as the Commission itself fashioned the replacement rate and the court upheld this result.

See Entergy,

40 F.4th at 701-02.

235

See id.

(noting that the Commission “is not required to choose the best solution, only a reasonable one” (citations omitted)).

236

The approach in

Entergy

was consistent with the Commission's general practice with respect to compliance filings under FPA section 206 by public utilities, but, as we have explained above, this practice is not a statutory or legal requirement under FPA section 206.

237

Contrary to SPP TOs' contention that the Commission erroneously relied on certain cases that do not support its approach,

see

SPP TOs Rehearing Request at 16-17, the Commission cited these cases in “recogni[tion]” of the Commission's typical practice that it “generally does not consider alternate compliance proposals other than those filed by the relevant public utility (here, the transmission provider),” before then explaining why it was not adopting that practice in Order No. 1920-A with respect to these cost allocation proposals. Order No. 1920-A, 189 FERC ¶ 61,126 at P 659;

see F.C.C.

Fox Television Stations, Inc.,

556 U.S. at 515 (“To be sure, the requirement that an agency provide reasoned explanation for its action would ordinarily demand that it display awareness that it

changing position.” (emphasis in original)).

71. We are also not convinced by Indicated PJM TOs' contention that the statutory structure of FPA sections 205 and 206 mandates a preference for the public utility's proposal on compliance.

238

Although the Commission has historically identified prudential and policy reasons for adopting public utilities' proposals in compliance filings if they are compliant with the requirements of a final rule

issued pursuant to FPA section 206,

239

these prudential and policy reasons are not statutory commands.

240

Interpreting the FPA as Indicated PJM TOs urge renders meaningless this aspect of the statutory divide of FPA sections 205 and section 206 and would impermissibly convert the Commission's statutory authority to determine the replacement rate into a substantive statutory right for the public utilities.

238

See

Indicated PJM TOs Rehearing Request at 17-18, 20.

239

See, e.g., Kern River,

142 FERC ¶ 61,132 at P 37 (noting that “[i]f the pipeline supports one such just and reasonable remedy, the Commission finds that adopting the pipeline's remedy, in preference to other possible remedies, properly recognizes the NGA's policy of giving pipelines the primary initiative to establish their rates, terms, and conditions of service” but also recognizing that “there may be several just and reasonable rates, terms or conditions which the Commission may adopt as a just and reasonable remedy in [an NGA] section 5 proceeding”);

PJM Interconnection, L.L.C.,

173 FERC ¶ 61,134 at P 117 n.175 (“Because PJM may make a section 205 filing to revise these [OATT] provisions, we find it reasonable to accept PJM's proposal over alternatives if PJM's proposal is just and reasonable.”).

240

See

16 U.S.C. 824e(a);

Electrical District,

774 F.2d at 492. Reinforcing this conclusion, the D.C. Circuit has explained that the Commission is not required to await public utilities' proposals on compliance at all but may instead set the replacement rate.

See Electrical District,

774 F.2d at 494;

Kern River Gas Transmission Co.,

72. Indicated PJM TOs and WIRES are similarly incorrect in arguing that the Commission is limited to considering whether the rate submitted by the public utility on compliance is just and reasonable because the Commission failed to prescribe a specific replacement rate in Order No. 1920-A.

241

Consistent with the D.C. Circuit's holding in

Electrical District,

the Commission is not “obligat[ed] to end an unlawful rate from the moment it finds unlawfulness” but rather may “tak[e] time for further deliberations necessary to determine what the precise terms of [the replacement rate] should be.”

242

The “not at all ambiguous” procedures set forth in FPA section 206 establish that after finding existing rates are unjust, unreasonable, or unduly discriminatory or preferential “ `the Commission shall determine the just and reasonable rate . . .

to be thereafter observed and in force, and shall fix the same by order.

' ”

243

Claims that the Commission somehow in Order No. 1920 or 1920-A forfeited to transmission providers the responsibility—assigned to the Commission by the statute's plain text—to fix the replacement rate, consistent with the requirements of those orders, are not grounded in the statutory text or structure, and are contrary to precedent.

244

241

Indicated PJM TOs Rehearing Request at 28;