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

> Briefs, arguments, decisions, and more.

URL: https://www.frixlaw.com/law-library/documents/fr%3A2025-06941

## Record

- **Collection:** Federal Register
- **Document type:** Rule
- **Published:** April 28, 2025
- **Citation:** 90 FR 17692

## Text

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
1.

II. Long-Term Regional Transmission Planning
6.

A. Planning for the Long-Term Transmission Needs of Unenrolled Non-Jurisdictional Transmission Providers
6.

1. Order Nos. 1920 and 1920-A
6.

2. Rehearing Requests
9.

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,
1

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).
2

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
3

to: (1) perform a sufficiently long-term assessment of transmission needs that identifies Long-Term Transmission Needs;
4

(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.
5

Building on Order Nos. 890
6

and 1000,
7

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,
8

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.
9

1

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).

2
16 U.S.C. 824e.

3
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.
v.
FERC,
225 F.3d 667 (D.C. Cir. 2000),
aff'd sub nom. N. Y.
v.
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).

4
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.

5
Order No. 1920, 187 FERC ¶ 61,068 at P 1.

6

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).

7

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.
v.
FERC,
762 F.3d 41 (D.C. Cir. 2014) (
South Carolina
).

8
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.

9
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;
10

(2) when Relevant State Entities
11

agree on a Long-Term Regional Transmission Cost Allocation Method(s)
12

and/or State Agreement Process
13

resulting from the Engagement Period,
14

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;
15

(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;
16

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.
17

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;
18

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.
19

10
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.

11
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.

12
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.

13
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.

14
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.

15
Order No. 1920-A, 189 FERC ¶ 61,126 at P 651.

16

Id.
P 659.

17

Id.
P 691.

18

See id.
PP 72-86.

19

See id.
P 685.

3. Seven petitioners have sought further rehearing and clarification of the Commission's determinations in Order No. 1920-A,
20

and the Commission received two additional filings.

21

Pursuant to
Allegheny Defense Project
v.
FERC,
22

the rehearing requests filed in this proceeding may be deemed denied by operation of law. However, as permitted by FPA section 313(a),
23

we are modifying the discussion in Order No. 1920-A and continue to reach the same result in this proceeding, as discussed below.
24

That is, in this order, we do not change the outcome of Order No. 1920-A.
25

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

20
Appendix A includes a list of petitioners submitting requests for rehearing and/or clarification of Order No. 1920-A.

21
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
l
(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.

22
964 F.3d 1 (D.C. Cir. 2020) (en banc).

23
16 U.S.C. 825
l
(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.”).

24

Allegheny Def. Project,
964 F.3d at 16-17.

25

See Smith Lake Improvement & Stakeholders Ass'n
v.
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.
26

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.
27

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.
28

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.
29

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.
30

26

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.

27
Order No. 1920-A, 189 FERC ¶ 61,126 at PP 651, 655;
infra
Requirements Concerning Relevant State Entities' Agreed-upon Cost Allocation Methods section.

28
Order No. 1920-A, 189 FERC ¶ 61,126 at P 691;
infra
Consultation with Relevant State Entities After the Engagement Period section.

29
Order No. 1920-A, 189 FERC ¶ 61,126 at P 701;
infra
Definition of Relevant State Entities section.

30
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.
31

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,
32

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.
33

Factor Category Three comprises state-approved integrated resource plans and expected supply obligations for load-serving entities.
34

31
Order No. 1920, 187 FERC ¶ 61,068 at P 224;
see also
Order No. 1920-A, 189 FERC ¶ 61,126 at P 138.

32
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.

33

Id.
PP 298, 409, 415.

34

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.
35

35
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.”
36

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.
37

36

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

37

Id.
(citing
El Paso Elec. Co.
v.
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
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.”
38

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.
39

38
NRECA Rehearing Request at 3 (quoting Order No. 1920-A, 189 FERC ¶ 61,126 at P 323); WestConnect CTOs Rehearing Request at 1 (same).

39
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.
40

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.
41

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.
42

40
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)).

41

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)).

42

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.
v.
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.”
43

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.
44

43

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

44

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.
45

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.
46

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.
47

45

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)).

46
NRECA Rehearing Request at 17 (quoting
El Paso,
76 F.4th at 363).

47

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.
48

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.
49

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.
50

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.
51

48
WestConnect CTOs Rehearing Request at 6 (citing
Ariz. Pub. Serv. Co.,
181 FERC ¶ 61,223, at P 14 (2022)).

49

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

50

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)).

51

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.' ”
52

52

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.
53

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.
54

53

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

54
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.”
55

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.”
56

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).
57

55

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)).

56

Id.
at 7-8 (quoting
Pub. Serv. Co. of Colo.,
148 FERC ¶ 61,213 at P 55).

57

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.
58

58

Id.
(citing
FCC
v.
Fox Television Stations, Inc.,
556 U.S. 502, 515 (2009);
Dep't of Homeland Sec.
v.
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.”
59

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.”
60

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.
61

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.
62

59

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

60

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

61

Id.
at 9.

62

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.
63

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.
64

63

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

64

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.
65

65

Id.
at 9 (citing
FCC
v.
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.
66

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.
67

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.
68

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.
69

In
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.
70

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.
71

66

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

67

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

68
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.

69

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 El Paso,
76 F.4th at 362-63 (quoting the same).

70

El Paso,
76 F.4th at 365-66;
id.
at 363 (discussing cost causation concerns).

71

Id.
at 361-62; WestConnect Remand Order, 189 FERC ¶ 61,028 at PP 15-17.

22. To the extent that WestConnect CTOs request that the Commission address in this order the appropriate geographic scope of the WestConnect transmission planning region or any other transmission planning region,
72

we decline to address such a request here because it is outside the scope of this proceeding.
73

We further note that the Commission responded to these concerns in the Remand Rehearing Order and continued to find that the WestConnect transmission planning region complies with Order No. 1000's requirement that the scope of a transmission planning region should be governed by the integrated nature of the regional power grid.
74

72

See
WestConnect CTOs Rehearing Request at 9 n.17.

73
The Commission has declined to evaluate the appropriate geographic scope of any particular transmission planning region in our transmission planning rules.
See
Order No. 1000, 136 FERC ¶ 61,051 at P 160; Order No. 890, 118 FERC ¶ 61,119 at P 527. Instead, it is Commission practice to evaluate the proper scope of transmission planning regions in individual compliance or FPA section 205 proceedings.
See, e.g., Sw. Power Pool, Inc.,
144 FERC ¶ 61,059, at P 31 (2013);
Louisville Gas & Elec. Co.,
144 FERC ¶ 61,054, at PP 28, 30 (2013),
order on reh'g, Duke Energy Carolinas, LLC,
147 FERC ¶ 61,241, at PP 46, 48 (2014);
Me. Pub. Serv. Co.,
142 FERC ¶ 61,129, at P 21 (2013);
S. Co. Servs., Inc.,
124 FERC ¶ 61,265, at P 71 (2008).
See also PacifiCorp,
170 FERC ¶ 61,298, at P 29 (2020) (evaluating scope of transmission planning region proposed pursuant to FPA section 205).

74

See
Remand Rehearing Order, 190 FERC ¶ 61,128 at PP 30-32.

III. Regional Transmission Cost Allocation

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

1. Order Nos. 1920 and 1920-A

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

23. In Order No. 1920, the Commission: (1) required transmission providers in each transmission planning region to revise their OATTs to include one or more Long-Term Regional Transmission Cost Allocation Method(s) for Long-Term Regional Transmission Facilities that are selected; and (2) permitted transmission providers to additionally revise their OATTs to include a State Agreement Process, if Relevant State Entities indicate that they have agreed to such a process.
75

75
Order No. 1920, 187 FERC ¶ 61,068 at P 1291.

24. The Commission also established in Order No. 1920 a six-month Engagement Period, during which transmission providers must, among other things, provide a forum for the negotiation of a Long-Term Regional Transmission Cost Allocation Method(s) and/or a State Agreement Process that enables meaningful participation by Relevant State Entities, and the Commission required transmission providers to explain on compliance how they complied with the six-month Engagement Period requirements.
76

The Commission found that, if the Relevant State Entities participating in an Engagement Period agree on a Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process and provide that Method(s) and/or State Agreement Process to the transmission providers no later than the deadline for communicating agreement,
77

the transmission providers may file the agreed-to Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process on compliance. The Commission noted, however, that the ultimate decision as to whether to file a Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process to which Relevant State Entities have agreed will continue to lie with the transmission providers.
78

The Commission did not impose any obligation on transmission providers to file a cost allocation method for Long-Term Regional Transmission Facilities with which they disagree, even if such a method were proposed to the transmission providers pursuant to a Commission-approved State Agreement Process, unless the transmission providers have clearly indicated their assent to do so as part of a Commission-approved State Agreement Process in their OATT.
79

76

Id.
PP 1354, 1357.

77
Order No. 1920 requires that transmission providers in each transmission planning region provide notice, such as on their OASIS or other public website, of the deadline for Relevant State Entities to communicate their agreement on a Long-Term Regional Transmission Cost Allocation Method(s) and/or a State Agreement Process, and this deadline must be no earlier than the end date of the Engagement Period.
Id.
P 1356.

78

Id.
PP 1359, 1363.

79

Id.
P 1429.

25. In Order No. 1920-A, the Commission set aside Order No. 1920, in part, and required that, when Relevant State Entities notify transmission providers by the deadline for communicating agreement that they agree on a Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process

resulting from the Engagement Period, the transmission providers must include that method or process in the transmittal or as an attachment to their compliance filing, even if the transmission providers propose a different Long-Term Regional Transmission Cost Allocation Method or do not propose to adopt a State Agreement Process.
80

The Commission further directed transmission providers to include in the transmittal or as an attachment to their compliance filings any information that Relevant State Entities provide to them regarding the state negotiations during the Engagement Period.
81

As part of this requirement, the Commission clarified that transmission providers must include any and all supporting evidence and/or justification related to Relevant State Entities' agreed-upon Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process that Relevant State Entities request that transmission providers include in their compliance filing.
82

80
Order No. 1920-A, 189 FERC ¶ 61,126 at P 651. The Commission clarified that, under this approach, the transmission providers decide what to submit as their actual Order No. 1920 compliance proposal, including relevant tariff language and supporting evidence or arguments, whether they decide to propose the Relevant State Entities' agreed-upon Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process or a different Long-Term Regional Transmission Cost Allocation Method. 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.
Id.
P 654 n.1651.

81

Id.
P 651.

82

Id.
P 655. However, the Commission declined to require transmission providers to independently characterize this information. For example, the Commission did not require transmission providers to separately characterize Relevant State Entities' agreement or independently justify Relevant State Entities' agreed-upon Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process.
Id.

26. The Commission found that the additional requirements adopted in Order No. 1920-A will allow the Commission to better evaluate whether transmission providers have complied with Order No. 1920's requirement to provide a forum for negotiation that enables meaningful participation by Relevant State Entities during the Engagement Period.
83

The Commission recognized that it is critical to the success of the Long-Term Regional Transmission Planning reforms that states have an opportunity to have a significant role in the establishment of just and reasonable Long-Term Regional Transmission Cost Allocation Methods and State Agreement Processes.
84

The Commission found that Order No. 1920, as modified in Order No. 1920-A, strikes a reasonable balance between, on the one hand, recognizing the rights and responsibilities of the Commission and transmission providers over regional transmission planning and, on the other, the states' critical interests in the resulting Long-Term Regional Transmission Facilities and how the costs associated with those facilities will be allocated.
85

83

Id.
P 657 (citing Order No. 1920, 187 FERC ¶ 61,068 at P 1357).

84

Id.
P 649 (citing Order No. 1920, 187 FERC ¶ 61,068 at P 1415).

85

Id.
P 660.

27. Furthermore, noting that it was directing these facilitation and informational requirements on compliance pursuant to the Commission's authority under FPA section 206, the Commission found that these reforms do not implicate or infringe upon transmission providers' filing rights under FPA section 205.
86

The Commission reiterated its determination in Order No. 1920 that existing regional transmission planning and cost allocation requirements are unjust, unreasonable, and unduly discriminatory or preferential under FPA section 206,
87

and that the Commission therefore has both the authority and responsibility to “determine the just and reasonable . . . practice . . . to be thereafter observed and in force,” consistent with the Commission's findings in Order No. 1920.
88

The Commission explained that, pursuant to its authority under FPA section 206, the Commission required transmission providers to submit on compliance an
ex ante
cost allocation method. The Commission further explained that this compliance filing, submitted pursuant to FPA section 206, is not an FPA section 205 filing
89

and is thus distinct from any FPA section 205 filing that a transmission provider might file in the future following compliance to propose a change to its cost allocation method(s) for Long-Term Regional Transmission Facilities.
90

86

Id.
P 657.

87

See id.
at P 652 (citing Order No. 1920, 187 FERC ¶ 61,068 at PP 113-114).

88

Id.
(quoting 16 U.S.C. 824e(a)).

89

Id.
(citing
ISO New England Inc.,
165 FERC ¶ 61,202 (2018),
order on reh'g,
173 FERC ¶ 61,204, at P 8 (2020)).

90

Id.
(citing Order No. 1920, 187 FERC ¶ 61,068 at P 1430).

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

28. In Order No. 1920-A, the Commission noted that, when acting under FPA section 206, the Commission's statutory burden is to “establish
a
just and reasonable and not unduly discriminatory replacement rate that is supported by substantial evidence.”
91

The Commission further noted that the statute does not necessarily require the Commission to adopt the transmission provider's proposal on compliance, even if that proposal complies with the final rule's requirements. Rather, 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.
92

91

Id.
P 658 (emphasis in original) (citing 16 U.S.C. 824e; 16 U.S.C. 825
l
(b)).

92

Id.
(citing
Entergy Ark., LLC
v.
FERC,
40 F.4th 689, 701-02 (D.C. Cir. 2022) (
Entergy
) (noting that the Commission “is not required to choose the best solution, only a reasonable one” (first quoting
Petal Gas Storage, LLC
v.
FERC,
496 F.3d 695, 703 (D.C. Cir. 2007); and then quoting
FERC
v.
Elec. Power Supply Ass'n,
577 U.S. 260, 295 (2016) (
EPSA
)))).

29. The Commission recognized that, while it generally does not consider alternate compliance proposals other than those filed by the relevant public utility,
93

there are “good reasons” for considering such alternatives with respect to cost allocation under Order No. 1920.
94

The Commission explained that states play a unique role in Long-Term Regional Transmission Planning, as their laws, regulations, and policies drive the need for Long-Term Regional Transmission Facilities, and they typically will have responsibility to consider and approve the siting, permitting, and construction of Long-Term Regional Transmission Facilities selected in a regional transmission plan. As such, states affect whether Long-Term Regional Transmission Facilities are timely, efficiently, and cost-effectively developed such that customers actually receive the benefits associated with the selection of more efficient or cost-effective transmission solutions.
95

The Commission further found that given the inherent uncertainty involved in planning to

meet Long-Term Transmission Needs, state-developed cost allocation methods and State Agreement Processes take on heightened importance.
96

The Commission explained that this means that it 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. Specifically, the Commission found that it is not required to accept a cost allocation proposal from a transmission provider on compliance simply because it may comply with Order No. 1920 but may adopt any cost allocation method proposed by the Relevant State Entities and submitted on compliance so long as it complies with Order No. 1920.
97

93

Id.
P 659 (citing
PJM Interconnection, L.L.C.,
173 FERC ¶ 61,134, at P 117 n.175 (2020);
PJM Interconnection, L.L.C.,
119 FERC ¶ 61,318, at P 115 (2007);
ANR Pipeline Co.,
110 FERC ¶ 61,069, at P 49 (2005)).

94

Id.
(quoting
FCC
v.
Fox Television Stations, Inc.,
556 U.S. at 515).

95

Id.
(citing Order No. 1920, 187 FERC ¶ 61,068 at PP 124, 126, 268, 1293, 1362-1364, 1404, 1407, 1410-1411, 1415, 1477, 1515).

96

Id.
(citing Order No. 1920, 187 FERC ¶ 61,068 at P 227).

97

Id.

2. Challenges to Order No. 1920-A

a. Statutory Filing Rights Under the FPA

i. Rehearing Requests

30. Several of the rehearing requests argue that Order No. 1920-A unlawfully impinges on transmission providers' FPA section 205 filing rights by requiring transmission providers to include, in their transmittal or as an attachment to their compliance filings, Relevant State Entities' agreed-upon Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process.
98

Multiple rehearing petitioners assert that this requirement in Order No. 1920-A is inconsistent with the division of authority set forth in the FPA, which provides public utilities with unilateral and exclusive FPA section 205 filing rights to propose rates, terms, and conditions of service, and provides the Commission with the authority to modify existing rates under FPA section 206 after finding that the existing rate is unjust, unreasonable, or unduly discriminatory or preferential.
99

98

See, e.g.,
SPP TOs Rehearing Request at 7, 12-15 (alternately describing Order No. 1920-A as requiring transmission providers to include Relevant State Entities' preferred Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process in their compliance filings, or as granting “preferential filing privileges” to Relevant State Entities); Indicated PJM TOs Rehearing Request at 6 (describing Order No. 1920-A as “granting filing rights” to Relevant State Entities); MISO TOs Rehearing Request at 20 (describing Order No. 1920-A a “giv[ing] filing rights to Relevant State Entities”).

99

See, e.g.,
MISO TOs Rehearing Request at 5-7 (arguing that Order No. 1920-A disrupts the balance between the filing rights afforded to public utilities under FPA section 205 versus those afforded to the Commission under FPA section 206);
id.
at 7-8; SPP TOs Rehearing Request at 3;
id.
at 4-5 (“The FPA's distinction between section 205 and 206 filing rights is well-established and binding on the Commission.”); EEI Rehearing Request at 7-8; WIRES Rehearing Request at 7-8, 10-11; Indicated PJM TOs Rehearing Request at 3-4.

31. Rehearing petitioners contend that requiring transmission providers 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 unlawfully conditions or encumbers transmission providers' FPA section 205 filing rights. MISO TOs state that this requirement disrupts the balance set by FPA sections 205 and 206—allowing FPA section 206 to usurp FPA section 205—and encroaches on transmission providers' FPA section 205 filing rights.
100

MISO TOs and SPP TOs argue that states may not force public utilities to make FPA section 205 filings or require them to relinquish their filing rights to other entities.
101

Indicated PJM TOs assert that this requirement “effectively forces utilities to cede their filing rights to others, contravening the statutory directive by Congress in [FPA] section 205 that grants utilities the exclusive right to propose their rates and terms of service.”
102

100

See, e.g.,
MISO TOs Rehearing Request at 6-7;
id.
at 10-11; (“[T]he Commission uses its FPA section 206 authority to mandate a broad encroachment on transmission providers' FPA section 205 filing rights. Given this encumbrance, transmission providers will be unable to exercise the full breadth of their FPA section 205 rights.”);
id.
at 24-27 (arguing also that even if FPA sections 205 and 206 are ambiguous as to whether the Commission has this authority, a reviewing court will no longer afford the Commission's interpretation deference).

101

Id.
at 18 (citing
Mass. Dep't of Pub. Utils
v.
FERC,
729 F.2d 886, 886-87 (1st Cir. 1984) (
Massachusetts Department of Public Utilities
)); SPP TOs Rehearing Request at 4-5 (asserting that “states may not force public utilities to make section 205 filings”);
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
EEI Rehearing Request at 6-8 (arguing that this requires utilities to file cost allocation methods they are opposed to and that the Commission did not identify text in the FPA authorizing this approach); WIRES Rehearing Request at 2, 15 (same).

32. Some rehearing petitioners assert that the Commission misconstrues the structure of FPA sections 205 and 206, and particularly the rights afforded to public utilities under FPA section 205. For instance, they argue that FPA section 205 is intended for the benefit of the public utility, granting it the proactive right to initiate rate changes, in contrast to the passive role played by the Commission under that provision.
103

Rehearing petitioners also assert that the FPA section 205 rights of public utilities to initiate rate changes are exclusive and unilateral.
104

Rehearing petitioners further contend that public utilities are the entities entitled to submit filings under FPA section 205 to set their rates and initiate rate changes.
105

103

See, e.g.,
MISO TOs Rehearing Request at 5-6 (citing
Emera Me.
v.
FERC,
854 F.3d 9, 24 (D.C. Cir. 2017) (
Emera Maine
));
id.
at 8-9, 11, 20, 25; Indicated PJM TOs Rehearing Request at 3-4, 19 n.69;
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.
v.
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 Atl. City Elec. Co.
v.
FERC,
329 F.3d 856 (D.C. Cir. 2003) (
Atlantic City II
) (granting a petition for review seeking to enforce the mandate of
Atlantic City I
in response to the Commission's order on remand after
Atlantic City I
).

107

See
MISO TOs Rehearing Request at 11-15 (discussing
Atlantic City I
and
Atlantic City II,
and asserting that these cases “stand as foundational determinations about the lawful statutory framework created by Congress vesting certain rights in public utilities under FPA section 205 and other rights in the Commission under section 206, and denying the Commission authority to overextend its authority under FPA section 206 when directing public utilities on compliance”); Indicated PJM TOs Rehearing Request at 2, 6, 11-12 (arguing that the requirement to include Relevant State Entities' agreed-upon Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process in the transmittal or as an attachment to transmission providers' compliance filing forces transmission providers to

cede their exclusive rights to Relevant State Entities and grants Relevant State Entities rights not provided by the FPA); SPP TOs Rehearing Request at 4-5, 9, 11-16; EEI Rehearing Request at 8-9 (“The precedent in
Atlantic City II,
is clear—the Commission cannot condition or encumber a utility's right under FPA section 205 to initiate rate changes, even as a result of an FPA section 206 compliance directive.”); WIRES Rehearing Request at 5-6, 8, 10.

108
15 U.S.C. 717,
et seq.

109

See, e.g.,
SPP TOs Rehearing Request at 5 (citing
NRG Power Mktg., LLC
v.
FERC,
862 F.3d 108 (D.C. Cir. 2017) (
NRG Power Mktg.
);
Pub. Serv. Comm'n of N.Y.
v.
FERC,
866 F.2d 487, 488-89 (D.C. Cir. 1989) (
NYPSC
);
W. Res., Inc.
v.
FERC,
9 F.3d 1568, 1578 (D.C. Cir. 1993) (
Western Resources
);
Consumers Energy Co.
v.
FERC,
226 F.3d 777, 780 (6th Cir. 2000);
Louisiana
v.
FPC,
503 F.2d 844, 861 (5th Cir. 1974)); MISO TOs Rehearing Request at 9, 16 (citing
NRG Power Mktg.,
862 F.3d 108;
Emera Maine,
854 F.3d 9;
PJM Power Providers Grp.
v.
FERC,
88 F.4th 250, 270 n.122 (3d Cir. 2023)).

110
729 F.2d at 888.

111
SPP TOs Rehearing Request at 4-5; EEI Rehearing Request at 8 n.27; Indicated PJM TOs Rehearing Request at 6, 10;
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.”);
id
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
v.
Neb.,
143 S. Ct. 2355, 2374 (2023);
W. Va.
v.
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
v.
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.
v.
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
v.
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.
v.
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
v.
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, e.g., id.
at 3-4 (“Unless the Commission prescribes the specific replacement rate, the Commission must accept the utility's filing if it is just and reasonable, even if the Commission prefers a different rate.”);
id.
at 5, 7-8.

149
WIRES Rehearing Request at 10-11.

44. SPP TOs argue that certain Commission precedent cited in Order No. 1920-A
150

does not support—and, in fact, undermines—the requirement that transmission providers submit Relevant State Entities' agreed-upon Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process with transmission providers' compliance filings.
151

150
Order No. 1920-A, 189 FERC ¶ 61,126 at P 658 & n.1657 (citing
PJM Interconnection, L.L.C.,
173 FERC ¶ 61,134 at P 117 n.175;
PJM Interconnection, L.L.C.,
119 FERC ¶ 61,318 at P 115;
ANR Pipeline Co.,
110 FERC ¶ 61,069 at P 49) (reflecting that the Commission typically does not consider alternative proposals on compliance).

151

See
SPP TOs Rehearing Request at 16-17 & n.43 (arguing that these cases involved acceptance of and/or giving greater weight to transmission providers' compliance filings or settlement proposals).

ii. Commission Determination

45. For the reasons below and those stated in Order No. 1920-A, we sustain the Commission's determination in Order No. 1920-A requiring transmission providers to 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.
152

We further sustain the Commission's determination that, pursuant to its FPA section 206 authority, it will consider the entire record—including any agreed-upon Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process and the transmission providers' proposal—when setting the replacement rate.
153

152
Order No. 1920-A, 189 FERC ¶ 61,126 at PP 651, 654-655.

153

Id.
P 659. As discussed further below, pursuant to FPA section 205, transmission providers retain their discretion over whether to make and the contents of any future FPA section 205 filings, and Order No. 1920-A's requirements do not affect that discretion.
See infra
PP 69, 118.

(a) The Statutory Text and Structure, and Applicable Precedent, Support the Commission's Order No. 1920-A Approach

46. Order No. 1920-A requires that transmission providers include Relevant State Entities' agreed-upon Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process and associated information in the transmittal or as an attachment to their Order No. 1920 compliance filings and provides for the Commission's consideration of the entire record, which includes proposals from transmission providers and attachments to transmission providers' filings, when finalizing the replacement rate. The challenges raised on rehearing to both of these aspects of Order No. 1920-A incorrectly treat filings to comply with Order Nos. 1920 and 1920-A as arising under or implicating FPA section 205, which sets forth public utilities' filing rights and obligations. Rather, these aspects of Order No. 1920-A arise from FPA section 206, which sets forth the Commission's authority to determine and fix by order a replacement rate after appropriate findings.
154

The compliance filings required by Order Nos. 1920 and 1920-A are a tool to implement the Commission's authority under FPA section 206, and do not implicate public utilities' rights and obligations under FPA section 205. Thus, we address at the outset the statutory text and structure of the FPA, as well as relevant Commission and judicial decisions, in addressing these arguments.

154
16 U.S.C. 824d (setting forth public utility filing rights and obligations); 16 U.S.C. 824e (setting forth power of Commission to fix rates and charges).

47. Order Nos. 1920 and 1920-A were issued pursuant to Commission-initiated proceedings under FPA section 206.
155

As the Commission stated in Order No. 1920-A, having determined that the Commission's existing regional transmission planning and cost allocation requirements are unjust, unreasonable, and unduly discriminatory or preferential under FPA section 206, “[t]he Commission thus had both the authority and responsibility to `determine the just and reasonable . . . practice . . . to be thereafter observed and in force.' ”
156

The Commission required the submission of compliance filings to assist in effectuating the Commission's authority under FPA section 206, explaining in Order No. 1920-A that “[t]his compliance filing submitted pursuant to FPA section 206 is not an FPA section 205 filing.”
157

155

See Bldg. for the Future Through Elec. Reg'l Transmission Plan. & Cost Allocation & Generator Interconnection,
179 FERC ¶ 61,028, at P 1 (2022) (NOPR); Order No. 1920, 187 FERC ¶ 61,068 at P 1; Order No. 1920-A, 189 FERC ¶ 61,126 at PP 1, 652.

156
Order No. 1920-A, 189 FERC ¶ 61,126 at P 652 (quoting 16 U.S.C. 824e(a)).

157

Id.
(citing
ISO New England Inc.,
173 FERC ¶ 61,204 at P 8).

48. While FPA sections 205 and 206 embody a complementary structure for regulating the rates and practices of public utilities, they are distinct provisions which assign rights and

responsibilities to different entities under different circumstances. FPA section 205 requires that the public utility, subject to Commission oversight, “file with the Commission . . . schedules showing all rates and charges for any transmission or sale subject to the jurisdiction of the Commission, and the classifications, practices, and regulations affecting such rates and charges.”
158

FPA section 206(a), by contrast, delineates the authority of the Commission—the subject of the provision—to modify public utilities' existing rates on appropriate findings and, itself, determine and fix by order the just and reasonable rate, charge, classification, rule, regulation, practice, or contract to be observed and in force.
159

158
16 U.S.C. 824d(c);
cf. id.
824d(a) (requiring that “[a]ll rates and charges made, demanded, or received by any public utility for or in connection with the transmission or sale of electric energy subject to the jurisdiction of the Commission, and all rules and regulations affecting or pertaining to such rates or charges shall be just and reasonable, and any such rate or charge that is not just and reasonable is hereby declared to be unlawful”).

159
16 U.S.C. 824e(a) (providing that “the Commission shall determine” the replacement rate and “shall fix the same by order”).

49. The express text of FPA section 206 does not provide public utilities with statutory filing rights with respect to the just and reasonable replacement rate following a finding that existing rates are unjust, unreasonable, or unduly discriminatory or preferential. Rather, the authority to “determine the just and reasonable rate, charge, classification, rule, regulation, practice, or contract to be thereafter observed and in force” is vested in the Commission, and—in Commission-initiated proceedings under FPA section 206—the Commission must find that the replacement rate it determines and fixes meets the statutory criteria.
160

To implement this authority the Commission frequently requires public utilities to submit compliance filings, as it did in Order Nos. 1920 and 1920-A, which the Commission will review and address in further orders.
161

160

Id.; see E. Tenn. Nat. Gas Co.
v.
FERC,
863 F.2d 932, 937 (D.C. Cir. 1988) (explaining that, under the parallel provisions of the NGA, “[w]hen review of existing rates is initiated by the Commission, . . . the burden of proving that the existing rates are unjust or unreasonable, and that those it orders in replacement are just and reasonable, rests with [the Commission]”);
ISO New England Inc.,
153 FERC ¶ 61,224, at P 24 (2015) (“The Commission did not place the burden on Connecticut and Rhode Island to prove that the dynamic de-list bid threshold [proposed in a compliance filing] was unreasonable. Rather, the Commission affirmatively found the dynamic de-list bid threshold to be just and reasonable.”).

161

See, e.g., Improvements to Generator Interconnection Procs. & Agreements,
Order No. 2023, 184 FERC ¶ 61,054, at P 1762,
order on reh'g,
185 FERC ¶ 61,063 (2023),
order on reh'g,
Order No. 2023-A, 186 FERC ¶ 61,199,
errata notice,
188 FERC ¶ 61,134 (2024);
Participation of Distributed Energy Res. Aggregations in Mkts. Operated by Reg'l Transmission Orgs. & Indep. Sys. Operators,
Order No. 2222, 172 FERC ¶ 61,247, at P 360 (2020),
order on reh'g,
Order No. 2222-A, 174 FERC ¶ 61,197 (2021). This particular compliance process, however, is not prescribed by the statute and by no means required.
See Elec. Dist. No. 1
v.
FERC,
774 F.2d 490, 494 (D.C. Cir. 1985) (
Electrical District
) (explaining that the Commission may instead “complete the process itself and fix the rates in its initial order”).

50. As the D.C. Circuit held in discussing what it means to “ `fix' a rate within the meaning of [FPA section 206],” when the Commission determines that an existing rate is unjust and unreasonable, it is not “inevitable that the Commission has the obligation to end an unlawful rate from the moment it finds unlawfulness.”
162

The court therefore rejected the Commission's argument that a replacement rate necessarily must go into effect as of the date the Commission finds that an existing rate is not lawful under the FPA, rather than the effective date provided when the Commission determines and fixes the replacement rate on compliance.
163

This decision underscores that the Commission's authority and responsibility under FPA section 206 to fix the replacement rate continued, in the Order Nos. 1920 and 1920-A context, from the point at which the Commission determines that existing rates are unlawful and requires compliance filings until the Commission fixes the replacement rate by order.
164

The submission and Commission consideration of compliance filings pursuant to those orders, and the Commission's subsequent determination of the replacement rate, are thus later stages occurring as part of a continuing process under FPA section 206, not under FPA section 205.
165

Accordingly, the Commission has distinguished compliance filings that assist the Commission's exercise of its authority under FPA section 206 from other filings made by public utilities under the distinct rights afforded to them under FPA section 205.
166

162

Electrical District,
774 F.2d at 492. The D.C. Circuit later explained how this decision could be reconciled with
Pub. Serv. Co. of New Hampshire
v.
FERC,
600 F.2d 944 (D.C. Cir. 1979), which applied a seemingly lower standard with respect to the necessary notice required under the FPA as to certain types of rates.
See Transwestern Pipeline Co.
v.
FERC,
897 F.2d 570, 577-78 (D.C. Cir. 1990). The reconciliation of these cases does not affect the relevance of the analysis from the D.C. Circuit discussed herein regarding the Commission's ongoing FPA section 206 authority.

163

See Electrical District,
774 F.2d at 492 (“Or to use a more remote analogy, it is not the case that once a court has concluded that a particular action challenged before it is unlawful it must immediately issue an injunction, instead of taking time for further deliberations necessary to determine what the precise terms of that injunction should be.”);
see also Kern River Gas Transmission Co.,
133 FERC ¶ 61,162, at P 22 (2010) (
Kern River
) (“Since
Electrical District,
the Commission's general practice in determining the effective date of rate changes ordered pursuant to NGA section 5 has been to follow the approach suggested by the court in that case.”).

164

See Electrical District,
774 F.2d at 492 (citing FPA section 206(a), 16 U.S.C. 824e(a), as establishing “the procedures that the statute establishes for adjusting unlawful rates” and finding that these procedures for the Commission to follow in fixing the replacement rate by order, pursuant to the statutory text are “not at all ambiguous”).

165

See id.
Similarly,
Entergy
recognizes that the Commission may select the just and reasonable rate in an FPA section 206 proceeding and that its authority to do so remains intact throughout the compliance process. 40 F.4th at 701-02. This stands in contrast to FPA section 205 proposals where the Commission's role is passive and reactive.
See City of Winnfield, La.
v.
FERC,
744 F.2d 871, 876 (D.C. Cir. 1984) (
City of Winnfield
);
NRG Power Mktg.,
862 F.3d at 114.

166

See, e.g., ISO New England Inc.,
173 FERC ¶ 61,204 at P 8 (explaining that a filing from ISO-NE would be considered as a new FPA section 205 filing, rather than a compliance filing related to an FPA section 206 investigation, because the Commission “did not make a finding that ISO-NE's tariff was unjust and unreasonable without such revisions, a necessary precursor to the Commission considering ISO-NE's tariff revisions as a compliance filing setting forth a proposed replacement rate”);
N.Y. Indep. Sys. Operator, Inc.,
131 FERC ¶ 61,242 at P 32 (stating that “the Commission has always treated compliance filings differently than a company-initiated rate change application filed pursuant to section 205 of the FPA,” including that they are not subject to the 60-day prior notice requirement under section 205(d) of the FPA);
Ameren Servs. Co.
v.
Midwest Indep. Transmission Sys. Operator, Inc.,
132 FERC ¶ 61,186, at P 28 (2010) (finding that aspects of a filing exceeded the scope of compliance and should, instead, have been submitted under FPA section 205);
PJM Interconnection, L.L.C.,
85 FERC ¶ 61,111 at 61,413 (“Although PJM purported to file its market monitoring plan in part pursuant to Section 205 of the FPA, it was in fact a filing in compliance with Ordering Paragraph V of the November 25 Order. Such compliance filings are pursuant to a Commission directive and are not subject to the procedures of Section 205(d).”) (cleaned up).

51. FPA section 206 does not prevent the Commission, after having found an existing rate unjust and unreasonable, from choosing in a specific rulemaking proceeding to consider the approaches of entities other than the public utility to inform the Commission's determination of the replacement rate;
167

rather, it states that “the Commission shall determine the just and reasonable rate” to be thereafter observed and in force.
168

It also does not preclude the Commission from

requiring that transmission providers submit Relevant State Entities' agreed-upon Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process with transmission providers' compliance filings.
169

Neither does FPA section 205, which governs the distinct process of a public utility filing its own rates in the first instance, subject to Commission oversight,
170

rather than the determination of a replacement rate by the Commission after appropriate findings under FPA section 206. Moreover, that a public utility is the entity that submits a compliance filing does not transform that submission into an FPA section 205 filing, subject to the requirements of that provision.
171

A contrary conclusion would fail to recognize and give effect to the distinct and express statutory authority afforded to the Commission in FPA section 206, which arises pursuant to specific statutory findings and which, once triggered, is subject to different requirements than FPA section 205 filings.

167
As discussed below, Order No. 1920-A's approach to considering compliance filings on cost allocation represents a limited departure, in these particular circumstances, from the Commission's typical approach of adopting public utilities' proposals in compliance filings if they are compliant with the requirements of the final rule.
See infra
PP 86-87.

168
16 U.S.C. 824e(a).

169

See
16 U.S.C. 824e(a), (b) (setting forth certain procedural requirements relating to proceedings under FPA section 206, which do not include such restrictions);
see also Interstate Nat. Gas Ass'n of Am.
v.
FERC,
285 F.3d 18, 38-39 (D.C. Cir. 2002) (
INGAA
) (holding under parallel provisions of the NGA that “the Commission has authority under [NGA section] 5 to order hearings to determine whether a given pipeline is in compliance with FERC's rules . . . and under [NGA sections] 10 and 14 to require pipelines to submit needed information for making its [NGA section] 5 decisions”); 16 U.S.C. 825c(a), 825f(a), 825h.

170

See
16 U.S.C. 824d.

171

See supra
P 50 & note 166 (discussing cases distinguishing compliance filings made by public utilities, which the Commission and courts consistently and correctly treated as made under FPA section 206, from FPA section 205 filings).

52. We agree with rehearing petitioners that FPA section 205 expressly provides public utilities with statutory filing rights. But when considered in the correct statutory context, the arguments on rehearing that the Commission has intruded on those public utilities' FPA section 205 filing rights by: (1) requiring that public utilities attach to their compliance filings Relevant State Entities' agreed-upon Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process and associated information; or (2) considering, and potentially adopting, Relevant State Entities' agreed-upon Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process in determining the replacement rate, are not persuasive.
172

These aspects of Order No. 1920-A were adopted pursuant to 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, as well as in monitoring compliance with the requirements related to the Engagement Period and efficiently considering the views of both Relevant State Entities and transmission providers. FPA section 205 is not implicated by these aspects of Order No. 1920-A and arguments to the contrary conflate compliance filings to assist the Commission in implementing its authority under FPA section 206 with public utilities' rate filings under FPA section 205.

172

See supra
PP 30-31.

53. Efforts to connect public utilities' FPA section 205 rights to this distinct FPA section 206 process by appealing to the structure of FPA sections 205 and 206
173

are misplaced for similar reasons; these arguments incorrectly blur the line between the separate authorities assigned in FPA sections 205 and 206. As the petitioners seeking rehearing observe, public utilities have the statutory right under FPA section 205 to file proposals to set and revise their rates of their own initiative in the first instance, and under that section, the Commission plays an essentially passive role in reviewing—and then accepting or rejecting—those proposals based on their consistency with the statutory requirements.
174

And as discussed below, public utilities retain their discretion as to whether to file—or not file—those proposals using this FPA section 205 authority.
175

But as to existing, Commission-approved rates, the FPA separately assigns to the Commission under FPA section 206 the authority to review those rates of its own initiative or in response to a complaint.
176

Upon appropriate findings, the Commission—not the public utility—has the authority itself to determine and fix the replacement rate,
177

including determining such rate through the use of compliance filings.
178

Subsequently, public utilities may seek to revise that Commission-determined replacement rate through the exercise of their FPA section 205 rights.
179

FPA sections 205 and 206 are thus complementary provisions under a coherent statutory structure, but they embody a statutorily-imposed division of rights and responsibilities between public utilities under FPA section 205 and the Commission under FPA section 206.
180

173

See supra
P 32.

174

See, e.g.,
EEI Rehearing Request at 13; Indicated PJM TOs Rehearing Request at 2-4; MISO TOs Rehearing Request at 5-6; SPP TOs Rehearing Request at 3, 5-6; WIRES Rehearing Request at 8.

175

See infra
P 118.

176
16 U.S.C. 824e(a).

177

Id.; see also FirstEnergy Serv. Co.
v.
FERC,
758 F.3d 346, 353 (D.C. Cir. 2014) (stating that, under FPA section 206, “[i]t is the Commission's job—not the petitioner's—to find a just and reasonable rate.” (internal quotations omitted)).

178
Arguments on rehearing attempting to conflate compliance filings under FPA section 206 with public utilities' filings under FPA section 205 because both are evaluated based on a just and reasonable standard,
see, e.g.,
WIRES Rehearing Request at 14-15, incorrectly blur the lines between these two distinct statutory provisions.

179

See, e.g., PJM Power Providers Grp.
v.
FERC,
88 F.4th at 270 n.122 (describing the statutory structure and stating that public utilities may seek, through FPA section 205 filings, to modify rates set by the Commission under FPA section 206).

180

See, e.g., Emera Maine,
854 F.3d at 24 (describing this division, where FPA section 205 is intended for the benefit of the utility, but FPA section 206 has a “quite different” purpose of empowering the Commission to modify rates upon complaint or its own initiative, with “entirely different” and “stricter” procedures, such as the burden of proof and required two-step findings under FPA section 206 (quotation marks and citations omitted)).

54. Nor does the precedent that the rehearing requests rely on
181

to claim that Order No. 1920-A unlawfully intrudes on public utilities' FPA section 205 filing rights support this argument.
182

These cases do not address the context—applicable here—of how the Commission may exercise its authority, under FPA section 206, to determine the just and reasonable replacement rate, including how or from whom it obtains views concerning the replacement rate or which replacement rate it may determine and fix. Rather, they arise in proceedings under different statutory provisions—particularly including FPA section 205 and the parallel context of NGA section 4
183

—as discussed in greater detail below. As a result, none of these cases support the conclusion that the Commission intrudes on FPA section 205 when it exercises its authority under FPA section 206 by requiring that public utilities attach to their compliance filings Relevant State Entities' agreed-upon Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process and associated information or by potentially adopting that agreed-upon Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process in determining the replacement rate.

181

See, e.g., 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;
Western Resources,
9 F.3d at 1578;
Massachusetts Department of Public Utilities,
729 F.2d at 886-88.

182

See supra
P 33 (summarizing the arguments by rehearing petitioners asserting that Order No. 1920-A is contrary to judicial precedent relating to public utilities' FPA section 205 filing rights).

183
15 U.S.C. 717c.

55.
Atlantic City I
provides a straightforward example of this

distinction. The D.C. Circuit there rebuffed a Commission attempt, under FPA section 205,
184

to require that public utilities cede to an ISO their FPA section 205 right to make unilateral changes in rate design, terms or conditions of service such that “only the ISO could propose changes in rate design.”
185

The court held that the Commission “lacks the authority to require the petitioners to cede their right under [FPA] section 205 . . . to file changes in rate design with the Commission,”
186

explaining that the Commission was “attempting to deny the utility petitioners the very statutory rights given to them by Congress.”
187

Here, by contrast, public utilities retain all of their rights to file proposed rate changes under FPA section 205. Order No. 1920-A's approach to cost allocation in compliance filings, under which transmission providers must attach or include Relevant State Entities' agreed-upon Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process and associated material in transmission providers' compliance filings and the Commission may consider and adopt Relevant State Entities' agreed-upon Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process, is pursuant to the Commission's authority to set a replacement rate in FPA section 206 proceedings.
188

184
16 U.S.C. 824d.

185

Atlantic City I,
295 F.3d at 7;
see id.
at 9 (“FERC disapproved this sharing arrangement and directed the utility petitioners to give up all authority to make unilateral changes to rate design.”).

186

Id.
at 11.

187

Id.
at 9.

188

Atlantic City II
is inapposite for the same reason, as that decision involved a petition to enforce the mandate of
Atlantic City I
where the Commission “rather than simply vacating the offending portions of its prior order . . . commanded the utilities comprising the ISO to relitigate before it the very issues upon which they had theretofore prevailed before th[e] court.”
Atlantic City II,
329 F.3d at 858;
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
v.
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.
v.
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 Pension Ben. Guar. Corp.
v.
LTV Corp.,
496 U.S. 633, 653, 655-56 (1990) (holding that when the Due Process Clause is not implicated and an agency's governing statute contains no specific procedural mandates, the APA establishes the maximum procedural requirements a reviewing court may impose on agencies);
Vermont Yankee Nuclear Power Corp.
v.
Nat. Res. Def. Council, Inc.,
435 U.S. 519, 524 (1978) (“Even apart from the [APA,] this Court has for more than four decades emphasized that the formulation of procedures was basically to be left within the discretion of the agencies to which Congress had confided the responsibility for substantive judgments.”);
FPC
v.
Transcont'l Gas Pipe Line Corp.,
423 U.S. 326, 333 (1976);
Towns of Concord, Norwood, & Wellesley, Mass.
v.
FERC,
No. 90-1179, 1991 WL 17224, at *3 (D.C. Cir. 1991) (noting “the Commission's broad authority to establish its own rules of procedure and structure its own methods of inquiry”); 5 U.S.C. 706(2)(D) (permitting courts to hold unlawful and set aside action found to be “without observance of procedure
required by law
” (emphasis added)).

201
Order No. 1920-A, 189 FERC ¶ 61,126 at P 651.

202

See infra
P 118.

60. Arguments asserting that the Commission has offered only a “hollow” explanation for this requirement, resting on “empty formalisms,”
203

wrongly conflate the two distinct procedural postures and authorities set forth in FPA sections 205 and 206. The fact that a “compliance filing submitted pursuant to FPA section 206 [as required by Order Nos. 1920 and 1920-A] is not an FPA section 205 filing”
204

carries legal consequences. Moreover, as the Commission explained, the requirement to include materials from Relevant State Entities in the context of this FPA section 206 compliance filing “does not constitute a `proposal' from the transmission provider”
205

and transmission providers remain free to present whatever proposal they desire (and believe is compliant with the requirements of Order Nos. 1920 and 1920-A). Furthermore, transmission providers retain their full and exclusive discretion as to whether to file—or not file—proposed changes to Long-Term Regional Transmission Cost Allocation Method(s) and/or State Agreement Process under FPA section 205. Transmission providers continue to be able to fully participate in the FPA section 206 compliance process, their FPA section 205 rights are not implicated in this process, and FPA section 206 does not constrain the Commission, as it effectuates its own authority under that section, from requiring transmission providers to include information from Relevant State Entities in transmission providers' compliance filings to assist the Commission in setting the just and reasonable rate.

203
MISO TOs Rehearing Re

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/fr%3A2025-06941. Public record. Not legal advice.