Waiver of Tariff Requirements and Petitions or Complaints for Remedial Relief

UNITED STATES OF AMERICA

FEDERAL ENERGY REGULATORY COMMISSION

Before Commissioners: Neil Chatterjee, Chairman;

Richard Glick, Bernard L. McNamee,

and James P. Danly.

Waiver of Tariff Requirements

Docket No. PL20-7-000

PROPOSED POLICY STATEMENT ON WAIVER OF TARIFF REQUIREMENTS

AND PETITIONS OR COMPLAINTS FOR REMEDIAL RELIEF

(Issued May 21, 2020)

In this Proposed Policy Statement, the Commission proposes to clarify its policy

regarding requests for waiver of tariff provisions.1 Reviewing courts have instructed that

“[t]he filed rate doctrine and the rule against retroactive ratemaking leave the

Commission no discretion to waive the operation of a filed rate or to retroactively change

or adjust a rate for good cause or for any other equitable considerations.”2 The

Commission’s waiver orders have sometimes drifted beyond the limits imposed by the

filed rate doctrine and the rule against retroactive making.3 This Proposed Policy

1 We will use the shorthand term “tariff” in this Proposed Policy Statement to refer

to the full range of documents that the relevant statutes and our regulations require be

filed with the Commission, including rates, non-rate terms and conditions, market rules,

and procedural deadlines set forth in tariffs, rate schedules, service agreements, and

contracts. See infra P 6.

2 Old Dominion Elec. Coop., Inc. v. FERC, 892 F.3d 1223, 1230 (D.C. Cir. 2018)

(ODEC) (citing Columbia Gas Transmission Corp. v. FERC, 895 F.2d 791, 794-97 (D.C.

Cir. 1990)). ODEC did not make new law, but rather reiterated existing law. See, e.g.,

Ark. La. Gas Co. v. Hall, 453 U.S. 571, 578 (1981) (Arkla) (finding that “the

Commission itself has no power to alter a rate retroactively”).

3 See infra notes 36-37.

Inc. v. FERC, 892 F.3d 1223, 1230 (D.C. Cir. 2018)

(ODEC) (citing Columbia Gas Transmission Corp. v. FERC, 895 F.2d 791, 794-97 (D.C.

Cir. 1990)). ODEC did not make new law, but rather reiterated existing law. See, e.g.,

Ark. La. Gas Co. v. Hall, 453 U.S. 571, 578 (1981) (Arkla) (finding that “the

Commission itself has no power to alter a rate retroactively”).

3 See infra notes 36-37.

Docket No. PL20-7-000

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Statement sets forth the approach the Commission would propose to take going forward

to ensure compliance with these doctrines.4 We seek comments on this proposal.

I.

Background

The Commission’s authority to grant remedial relief for actions or omissions that

occur prior to a filing with the Commission differs markedly from its authority to grant

prospective waivers of tariffs. We start with the Commission’s statutory authority to

review and approve public utility rates, as set forth in Federal Power Act (FPA) sections

205 and 206,5 and the parallel provisions in Natural Gas Act (NGA) sections 4 and 5.6

FPA section 205 and NGA section 4 require that public utilities and pipelines file

all rates with the Commission and also file any changes to their existing rates before a

proposed change may go into effect.7 The FPA prior notice period is 60 days,8 while the

NGA prior notice period is 30 days.9 Both statutes permit the Commission to waive the

prior notice requirement for good cause, but the courts have held that this does not

authorize the Commission to permit a rate change to go into effect prior to the date it was

filed unless (i) there was notice that the previously-charged rate was tentative and subject

to retroactive adjustment or (ii) the parties to a contract agreed in advance that the

contractual rate could go into effect prior to the filing date.10

4 We propose that waiver requests pending as of the date of issuance of a final

Policy Statement in this proceeding be handled in accordance with the Policy Statement

re was notice that the previously-charged rate was tentative and subject

to retroactive adjustment or (ii) the parties to a contract agreed in advance that the

contractual rate could go into effect prior to the filing date.10

4 We propose that waiver requests pending as of the date of issuance of a final

Policy Statement in this proceeding be handled in accordance with the Policy Statement.

Applicants could refile pending waiver requests as appropriate.

5 16 U.S.C. §§ 824d, 824e (2018).

6 15 U.S.C. §§ 717c, 717d (2018).

7 See 16 U.S.C. § 824d(c)-(d); 15 U.S.C. § 717c(c)-(d).

8 16 U.S.C. § 824d(d).

9 15 U.S.C. §§ 717c(d).

10 See Consolidated Edison Co. of N.Y. v. FERC, 347 F.3d 964, 969 (D.C .Cir. 2003);

Columbia Gas Transmission Corp. v. FERC, 895 F.2d 791, 795-97 (D.C. Cir. 1990). This

exception was adopted by the courts in City of Piqua v. FERC, 610 F.2d 950, 954-55 (D.C.

Cir. 1979), and it is reflected in several long-standing waiver practices this Proposed Policy

Statement would not change. See infra note 50.

Docket No. PL20-7-000

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Likewise, the Commission’s authority to change rates under FPA section 206 and

NGA section 5 does not permit retroactive changes to filed rates; on the contrary, those

statutes permit the Commission, after conducting a hearing, to establish the rate “to be

thereafter observed.”11 Neither statute permits the Commission to order refunds for any

period prior to the date a complaint is filed or, if a proceeding is initiated by the

Commission on its own motion pursuant to FPA section 206, the date that the

Commission’s determination to initiate such proceeding is published in the Federal

Register

r conducting a hearing, to establish the rate “to be

thereafter observed.”11 Neither statute permits the Commission to order refunds for any

period prior to the date a complaint is filed or, if a proceeding is initiated by the

Commission on its own motion pursuant to FPA section 206, the date that the

Commission’s determination to initiate such proceeding is published in the Federal

Register.

Two related doctrines have been developed through judicial precedent interpreting

these ratemaking provisions in the FPA and NGA, as well as other statutory regimes

governing rate-setting for regulated entities.12 The first is the filed rate doctrine, which

holds that a public utility may not charge any rate other than what has been filed by the

Commission and allowed to go into effect.13 The second is the rule against retroactive

ratemaking: “Not only do the courts lack authority to impose a different rate than the one

approved by the Commission, but the Commission itself has no power to alter a rate

retroactively.”14 As the D.C. Circuit made clear in ODEC, “[t]he filed rate doctrine and

the rule against retroactive ratemaking leave the Commission no discretion to waive the

operation of a filed rate or to retroactively change or adjust a rate for good cause or for

any other equitable considerations.”15

The filed rate doctrine and rule against retroactive ratemaking precedents were

developed in the context of rates. However, the statutory provisions on which those

rules were based apply equally to non-rate terms and conditions. For example, FPA

11 16 U.S.C. § 824e(a); 15 U.S.C. § 717d(a).

12 See, e.g., Am. Tel. & Tel. Co. v. Cent. Office Tel., Inc., 524 U.S. 214, 223 (1998)

(AT&T) (telephone rates); Maislin Indus., U.S., Inc. v. Primary Steel, Inc., 497 U.S. 116,

128, 131-32 (1990) (transportation rates).

13 See Arkla, 453 U.S. at 577; Mont.-Dakota Utils. Co. v. Nw. Pub. Serv. Co., 341

U.S. 246, 251-52 (1951).

14 Arkla, 453 U.S. at 578

6 U.S.C. § 824e(a); 15 U.S.C. § 717d(a).

12 See, e.g., Am. Tel. & Tel. Co. v. Cent. Office Tel., Inc., 524 U.S. 214, 223 (1998)

(AT&T) (telephone rates); Maislin Indus., U.S., Inc. v. Primary Steel, Inc., 497 U.S. 116,

128, 131-32 (1990) (transportation rates).

13 See Arkla, 453 U.S. at 577; Mont.-Dakota Utils. Co. v. Nw. Pub. Serv. Co., 341

U.S. 246, 251-52 (1951).

14 Arkla, 453 U.S. at 578.

15 ODEC, 892 F.3d at 1230 (citing Columbia Gas Transmission Corp., 895 F.2d at

794-97). In describing the rule against retroactive ratemaking, the court in ODEC also

noted that this “otherwise categorical prohibition” yields in the limited circumstance of

formula rates, noting that such rates are “not really an exception at all.” Id. at 1227 & n.1;

accord, e.g., Pub. Utils. Comm’n of Cal. v. FERC, 254 F.3d 250, 254 & n.3 (D.C. Cir.

2001).

Docket No. PL20-7-000

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section 205(d) requires prior notice not only of changes in rates, but also to changes to

“any . . . classification, or service, or . . . any rule, regulation, or contract relating

thereto.”16 The Commission’s regulations implementing FPA section 205 thus require

the filing not only of “rates” but of “rate schedules” and “tariffs,”17 both of which are

defined as including “all classifications, practices, rules, or regulations which in any

manner affect or relate to the aforementioned service, rates, and charges.”18 The

Commission’s regulations also codify the filed rate doctrine and make it applicable to

non-rate terms and conditions.19 In addition, the Commission has consistently held that

non-rate terms and conditions must be filed.20 Thus, there is no basis for the Commission

to conclude that those doctrines apply any differently to non-rate terms and conditions

than to rates.21

16 16 U.S.C. § 824d(d); accord 16 U.S.C. § 824e(a) (giving the Commission the

authority to require prospective changes to “any rule, regulation, practice, or contract

affecting such rate, charge, or classification”).

17 18 C.F.R

st be filed.20 Thus, there is no basis for the Commission

to conclude that those doctrines apply any differently to non-rate terms and conditions

than to rates.21

16 16 U.S.C. § 824d(d); accord 16 U.S.C. § 824e(a) (giving the Commission the

authority to require prospective changes to “any rule, regulation, practice, or contract

affecting such rate, charge, or classification”).

17 18 C.F.R. § 35.1(a) (2019).

18 18 C.F.R. § 35.2(b) and (c)(1) (2019).

19 See 18 C.F.R. § 35.1(e) (“No public utility shall, directly or indirectly, demand,

charge, collect or receive any rate, charge or compensation for or in connection with

electric service subject to the jurisdiction of the Commission, or impose any

classification, practice, rule, regulation or contract with respect thereto, which is different

from that provided in a rate schedule required to be on file with this Commission unless

otherwise specifically provided by order of the Commission for good cause shown.”).

20 See, e.g., Chehalis Power Generating, L.P., 152 FERC ¶ 61,050, at P 16 & n.40

(2015) (citing Prior Notice, 64 FERC ¶ 61,139; Promoting Wholesale Competition Through

Open Access Non-Discriminatory Transmission Services by Public Utils.; Recovery of

Stranded Costs by Pub. Utils. and Transmitting Utils., Order No. 888, FERC Stats. & Regs.

¶ 31,036, at 31,768 (1996) (cross-referenced at 75 FERC ¶ 61,080) (holding that non-rate

terms and conditions of a transmission provider’s open access transmission tariff be must

filed with the Commission), order on reh’g, Order No. 888-A, 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 Policy Study Group v. FERC, 225 F.3d 667

(D.C. Cir. 2000), aff’d sub nom. New York v. FERC, 535 U.S. 1 (2002)).

21 See, e.g., Seminole Elec. Power Coop., Inc. v. Fla

ats. & 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 Policy Study Group v. FERC, 225 F.3d 667

(D.C. Cir. 2000), aff’d sub nom. New York v. FERC, 535 U.S. 1 (2002)).

21 See, e.g., Seminole Elec. Power Coop., Inc. v. Fla. Power & Light Co.,

139 FERC ¶ 61,254, at P 44 (2012) (finding that a time bar provision “is itself the filed

rate”), reh’g denied, 153 FERC ¶ 61,037, at P 27 (2015) (reiterating that “the Commission

Docket No. PL20-7-000

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There are two additional factors relevant to this discussion. First, “no violation of

the filed rate doctrine occurs when ‘buyers are on adequate [advance] notice that

resolution of some specific issue may cause a later adjustment to the rate being collected

at the time of service.’”22 The provision of notice of a potential change does not create

an exception to the rule against retroactive ratemaking. Rather, notice “changes what

would be purely retroactive ratemaking into a functionally prospective process by placing

the relevant audience on notice at the outset that the rates being promulgated are

provisional only and subject to later revision.”23 Therefore, if a tariff indicates that a

specific tariff provision is subject to a remedial waiver, then such waivers may be granted

without violating the filed-rate doctrine and rule against retroactive ratemaking.24

Second, the Commission has authority under FPA section 309 and NGA section 16

to “perform any and all acts, and to prescribe, issue, make, amend, and rescind such

orders, rules, and regulations as it may find necessary or appropriate to carry out the

provisions of this chapter.”25 The courts have held that this expansive language “permits

[the Commission] to advance remedies not expressly provided by the FPA,” which in

some circumstances has included authorizing changes to amounts paid or received by

e

o prescribe, issue, make, amend, and rescind such

orders, rules, and regulations as it may find necessary or appropriate to carry out the

provisions of this chapter.”25 The courts have held that this expansive language “permits

[the Commission] to advance remedies not expressly provided by the FPA,” which in

some circumstances has included authorizing changes to amounts paid or received by

entities.26 For example, courts have upheld the Commission’s use of this authority to:

(i) require surcharges to certain public utility customers where the total rate charged by the

public utility did not change, only the allocation of cost responsibility among customers

has found time limitations on the correction of bills involving violation of the filed rate

doctrine to be consistent with the filed rate doctrine”), aff’d sub nom. Seminole Elec.

Coop., Inc. v. FERC, 861 F.3d 230, 234-35 (D.C. Cir. 2017).

22 ODEC, 892 F.3d at 1231 (quoting Natural Gas Clearinghouse v. FERC, 965

F.2d 1066, 1075 (D.C. Cir. 1992)).

23 Columbia Gas Transmission Corp., 895 F.2d at 791, quoted in Natural Gas

Clearinghouse, 965 F.2d at 1075; see also Columbia Gas Transmission Corp. v. FERC,

831 F.2d 1135, 1141 (D.C. Cir. 1987).

24 See infra P 16 & note 44.

25 16 U.S.C. § 825h; 15 U.S.C. § 717o.

26 Verso Corp. v. FERC, 898 F.3d 1, 10 (D.C. Cir. 2018) (citing TNA Merch.

Projects, Inc. v. FERC, 857 F.3d 354, 359 (D.C. Cir. 2017) (citing Niagara Mohawk

Power Corp. v. FPC, 379 F.2d 153, 158 (D.C. Cir. 1967)), cert. denied sub nom. City of

Mackinac Island v. FERC, 139 S. Ct. 2044 (2019).

d 1135, 1141 (D.C. Cir. 1987).

24 See infra P 16 & note 44.

25 16 U.S.C. § 825h; 15 U.S.C. § 717o.

26 Verso Corp. v. FERC, 898 F.3d 1, 10 (D.C. Cir. 2018) (citing TNA Merch.

Projects, Inc. v. FERC, 857 F.3d 354, 359 (D.C. Cir. 2017) (citing Niagara Mohawk

Power Corp. v. FPC, 379 F.2d 153, 158 (D.C. Cir. 1967)), cert. denied sub nom. City of

Mackinac Island v. FERC, 139 S. Ct. 2044 (2019).

Docket No. PL20-7-000

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did;27 (ii) retroactively adjust rates in order to recoup erroneous refunds;28 (iii) order

refunds where the rate paid exceeded the filed rate;29 and (iv) impose refund protection

where the Commission erred in accepting a tariff revision that lacked such a

commitment.30

The Commission’s remedial authority under FPA section 309 and NGA section 16

is not unlimited, however.31 Rather, “the [Commission’s] action [must] conform[] with

the purposes and policies of Congress and [may] not contravene any terms of the Act.”32

Judicial precedent forecloses purely equitable exceptions to the filed rate doctrine and the

rule against retroactive ratemaking:

It bears repeating, however, that the Commission does not have the

authority to ignore the law to achieve an equitable result. Had we found

that its actions violated the filed rate doctrine or the rule against retroactive

ratemaking, we would not then invoke the Commission’s assessment of the

equities to overcome those violations.33

As the Supreme Court has explained in the context of transportation rates, its consistent

policy of “strict adherence to the filed rate has never been justified on the ground that a

27 Id. at 10-11.

28 See TNA Merch. Projects, 857 F.3d at 362; Canadian Ass’n of Petroleum Prods.

v. FERC, 254 F.3d 289, 299-300 (D.C. Cir. 2001).

29 See Towns of Concord v. FERC, 955 F.2d 67, 73 (D.C. Cir. 1992).

30 See Xcel Energy Servs. Inc. v. FERC, 815 F.3d 947, 954-56 (D.C. Cir. 2016).

31 See Fed. Power Comm’n v. Texaco, 417 U.S

rate has never been justified on the ground that a

27 Id. at 10-11.

28 See TNA Merch. Projects, 857 F.3d at 362; Canadian Ass’n of Petroleum Prods.

v. FERC, 254 F.3d 289, 299-300 (D.C. Cir. 2001).

29 See Towns of Concord v. FERC, 955 F.2d 67, 73 (D.C. Cir. 1992).

30 See Xcel Energy Servs. Inc. v. FERC, 815 F.3d 947, 954-56 (D.C. Cir. 2016).

31 See Fed. Power Comm’n v. Texaco, 417 U.S. 380 (1974) (holding that NGA

section 16 “does not authorize the Commission to set at naught an explicit provision of

the Act”).

32 Verso Corp., 898 F.3d at 12 (quoting Niagara Mohawk, 379 F.2d at 158).

33 Public Utils. Comm’n of Cal. v. FERC, 988 F.2d 154, 168 n.12 (D.C. Cir. 1993)

(citation omitted) (emphasis added).

Docket No. PL20-7-000

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carrier is equitably entitled to that rate, but rather that such adherence, despite its harsh

consequences in some cases, is necessary to enforcement of the Act.”34

From the above, we find that the Commission has the authority to grant

prospective waivers of deadlines or other provisions established in tariffs, e.g., a request

to waive a deadline before the deadline has passed. Such waivers are, in effect,

temporary or otherwise limited amendments to relevant tariff provisions, and the

Commission may approve such proposed prospective tariff changes under FPA section

205 or NGA section 4. The Commission may not grant retroactive relief, however,

unless the applicant makes a showing that either (1) the request for remedial relief does

not violate the filed rate doctrine or the rule against retroactive ratemaking due to

adequate prior notice or, alternatively, (2) that the requested relief is within the

Commission’s authority to grant under FPA section 309 or NGA section 16—that is,

granting the requested relief conforms with the purposes and policies of Congress and

does not contravene any terms of the FPA or NGA.35

We recognize that the Commission suggested in a 2016 decision that the filed rate

doctrine and rule against retroactive ratemaking

2) that the requested relief is within the

Commission’s authority to grant under FPA section 309 or NGA section 16—that is,

granting the requested relief conforms with the purposes and policies of Congress and

does not contravene any terms of the FPA or NGA.35

We recognize that the Commission suggested in a 2016 decision that the filed rate

doctrine and rule against retroactive ratemaking may not apply to non-rate terms and

conditions.36 Further, the Commission has previously granted retroactive waivers of non-

rate terms and conditions of public utility tariffs.37 However, upon further consideration,

we propose to no longer grant retroactive waivers of tariff provisions except as consistent

with the discussion in this Proposed Policy Statement.

34 Maislin Indus., 497 U.S. at 117; accord AT&T, 524 U.S. at 223 (explaining that the

filed rate doctrine applies regardless of any motive “to benefit or harm a particular

customer”).

35 See Verso Corp., 898 F.3d at 12; Niagara Mohawk, 379 F.2d at 158.

36 See Old Dominion Elec. Coop., 154 FERC ¶ 61,155, at P 19 n.40 (2016) (“A

retroactive waiver of a non-rate term and condition that does not subject ratepayers to an

additional surcharge may not violate the filed rate doctrine or the rule against retroactive

ratemaking.”).

37 See, e.g., Cal. Indep. Sys. Operator Corp., 164 FERC ¶ 61,065 (2018) (non-time

bar billing waivers); Consol. Edison Co. of N.Y., Inc., 168 FERC ¶ 61,047 (2019) (time

bar billing waivers); Renewable Energy Aggregators, 167 FERC ¶ 61,013 (2019) (waiver

of procedural deadlines).

an

additional surcharge may not violate the filed rate doctrine or the rule against retroactive

ratemaking.”).

37 See, e.g., Cal. Indep. Sys. Operator Corp., 164 FERC ¶ 61,065 (2018) (non-time

bar billing waivers); Consol. Edison Co. of N.Y., Inc., 168 FERC ¶ 61,047 (2019) (time

bar billing waivers); Renewable Energy Aggregators, 167 FERC ¶ 61,013 (2019) (waiver

of procedural deadlines).

Docket No. PL20-7-000

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II.

Guidance

To implement this new approach, we propose the following guidance on filing

procedures. First, we propose that when seeking remedial relief in connection with

actions or omissions that have already occurred prior to the date relief is sought from the

Commission, requesting entities should not describe the requested relief as a waiver,

which incorrectly suggests that the Commission may alter the substance of a filed tariff

retroactively from the date a filing is made. Rather, such filings should be characterized

as a request for remedial relief. In response to such a request, the Commission will focus

on what remedy, if any, is required to cure acknowledged or alleged deviations from a

filed tariff. We propose that the term waiver should be confined to: (a) requests for

prospective relief when a requested future deviation from the filed tariff has not yet

occurred at the time a request is filed; or (b) petitions for remedial relief when a tariff

expressly authorizes regulated entities to seek a remedial waiver from the Commission

for past non-compliance with the filed tariff

led tariff. We propose that the term waiver should be confined to: (a) requests for

prospective relief when a requested future deviation from the filed tariff has not yet

occurred at the time a request is filed; or (b) petitions for remedial relief when a tariff

expressly authorizes regulated entities to seek a remedial waiver from the Commission

for past non-compliance with the filed tariff.

Second, we propose that when the entity requesting remedial relief is the entity

that acted in a manner inconsistent with the tariff, or believes it may have done so, such

requests should be filed as petitions for declaratory order under Rule 207 of the

Commission’s Rule of Practice and Procedure.38 We propose that when the filing entity

alleges a different entity has acted in a manner inconsistent with the tariff, such requests

should be filed as complaints under Rule 206.39

Third, for petitions or complaints seeking remedial relief for actions or omissions

that occurred prior to the date of filing, where the petitioner acknowledges or the

38 18 C.F.R. § 385.207 (2019). In cases where a petitioner is seeking remedial

relief for its own failure to comply with a tariff, and such failure results in a violation of

the tariff, the petitioner may also submit a self-report to the Office of Enforcement,

consistent with the guidance on the Commission’s website,

http://www.ferc.gov/enforcement/self-reports.asp. Such self-reports would not appear to

be necessary when a petitioner seeks remedial relief from a tariff where the petitioner’s

action or omission caused it to be excluded from the benefits the tariff would otherwise

provide. An example is where the petitioner misses a deadline set in the tariff to

participate in a voluntary program (such as missing the deadline to provide notice as a

precondition to continue to provide service) and, as a result, is precluded from further

participating in the program established by tariff

on or omission caused it to be excluded from the benefits the tariff would otherwise

provide. An example is where the petitioner misses a deadline set in the tariff to

participate in a voluntary program (such as missing the deadline to provide notice as a

precondition to continue to provide service) and, as a result, is precluded from further

participating in the program established by tariff. In that instance, the petitioner has not

violated the tariff; instead, the petitioner seeks relief so that it can participate in the

program offered under the tariff.

39 18 C.F.R. § 385.206 (2019).

Docket No. PL20-7-000

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complainant alleges violation of a tariff filed under the FPA or the NGA, we propose that

such petitions or complaints should expressly request Commission action pursuant to

FPA section 30940 or NGA section 16.41 The federal courts have found that those

statutory provisions afford the Commission latitude to remedy past non-compliance,

“provided the agency’s action conforms with the purposes and policies of Congress and

does not contravene any terms of the Act.”42

We recognize that this proposal represents a change from the Commission’s past

approach, particularly in situations where inadvertent failures to comply with ministerial

tariff requirements have not been protested.43 To avoid what otherwise may appear to be

harsh outcomes by comparison to past practice, we also propose to offer suggestions

about ways that tariffs may be modified to avoid conflict with the filed rate doctrine and

the rule against retroactive ratemaking

approach, particularly in situations where inadvertent failures to comply with ministerial

tariff requirements have not been protested.43 To avoid what otherwise may appear to be

harsh outcomes by comparison to past practice, we also propose to offer suggestions

about ways that tariffs may be modified to avoid conflict with the filed rate doctrine and

the rule against retroactive ratemaking.

First, when deadlines are involved, a tariff may be modified to expressly state that

failure to comply with a certain deadline may be waived by order of the Commission.44

Advance notice that a specific tariff provision may be waived by a future Commission

order accomplishes the core purpose of the filed rate doctrine and provides an

opportunity to seek relief for past errors without running afoul of the rule against

retroactive ratemaking.45 When an entity seeks to revise its tariff to provide advance

40 16 U.S.C. § 825h (2018).

41 15 U.S.C. § 717o (2018).

42 Verso Corp., 898 F.3d at 10 (quoting Niagara Mohawk, 379 F.2d at 158); see

also Columbia Gas Transmission Corp. v. FERC, 750 F.2d 105, 109 (D.C. Cir.1984)

(“The principle fairly drawn from prior cases is that the Commission has broad authority

to fashion remedies so as to do equity consistent with the public interest.”).

43 See supra note 37.

44 One such example may be found in the tariff of PJM Interconnection, L.L.C.

(PJM), which describes the conditions under which a capacity market seller may seek a

remedial waiver from the Commission if the seller does not timely take actions to remove

its resource from the capacity market or exempt its resource from the must-offer

requirements. See PJM, Intra-PJM Tariffs, OATT, Attachment DD, 6 Market Power

Mitigation (22.0.0), § 6.6(g) Offer Requirement for Capacity Resources; see also, e.g.,

AEP Generation Resources Inc., 170 FERC ¶ 61,103 (2020) (granting a waiver request in

accordance with the remedial waiver provision in PJM’s tariff)

its resource from the capacity market or exempt its resource from the must-offer

requirements. See PJM, Intra-PJM Tariffs, OATT, Attachment DD, 6 Market Power

Mitigation (22.0.0), § 6.6(g) Offer Requirement for Capacity Resources; see also, e.g.,

AEP Generation Resources Inc., 170 FERC ¶ 61,103 (2020) (granting a waiver request in

accordance with the remedial waiver provision in PJM’s tariff).

45 Advance notice that failure to comply with a specific tariff provision may be

waived by order of the Commission does not guarantee a waiver will be granted; nor does

Docket No. PL20-7-000

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notice that a specific tariff provision may be waived by a future Commission order, the

Commission will evaluate the merits of such proposed revisions on a case-by-case basis,

as requests to make specific tariff provisions subject to a remedial waiver may or may not

be just and reasonable.46

Second, tariffs may be modified to allow various kinds of errors to be cured by the

relevant entities themselves within a reasonable period of time after a default has

occurred or an error has been discovered. Such two-stage deadlines—one initial deadline

that allows errors or omissions to be corrected, the other a final deadline after the

opportunity to take corrective action has passed—should reduce or avoid the need for

entities to seek remedial action from the Commission in most instances.

Under current practice, when considering requests for waiver in cases involving

wholesale power or electric transmission rates and services, the Commission has granted

waiver of tariff provisions where: (1) the underlying error was made in good faith;

(2) the waiver is of limited scope; (3) the waiver addresses a concrete problem; and

emedial action from the Commission in most instances.

Under current practice, when considering requests for waiver in cases involving

wholesale power or electric transmission rates and services, the Commission has granted

waiver of tariff provisions where: (1) the underlying error was made in good faith;

(2) the waiver is of limited scope; (3) the waiver addresses a concrete problem; and

(4) the waiver does not have undesirable consequences, such as harming third parties.47

When considering requests for waiver in cases involving natural gas pipeline rates and

services, the Commission’s analysis has been comparatively less structured. Going

forward, we propose to incorporate that four-part analysis in considering both requests

for prospective waiver and petitions for remedial relief, and further propose to do so in

circumstances involving wholesale power or electric transmission rates and services as

well as natural gas pipeline rates and services.

However, while we propose to clarify that we will apply the existing four-part

analysis to both prospective waiver requests and petitions for remedial relief, we stress

that we propose that the four-part analysis will be applied to petitions for remedial relief

only in those limited circumstances, described above, when (1) the request for remedial

relief does not violate the filed rate doctrine or the rule against retroactive ratemaking due

to adequate prior notice, or (2) the requested relief is within the Commission’s authority

to grant under FPA section 309 or NGA section 16.

it change the guidance proposed here that a petition for declaratory order seeking

remedial relief should be made under Rule 207 when the petitioner itself failed, or

believes it may have failed, to comply with the filed tariff. See supra P 13

due

to adequate prior notice, or (2) the requested relief is within the Commission’s authority

to grant under FPA section 309 or NGA section 16.

it change the guidance proposed here that a petition for declaratory order seeking

remedial relief should be made under Rule 207 when the petitioner itself failed, or

believes it may have failed, to comply with the filed tariff. See supra P 13.

46 For example, an excessively broad advance waiver provision would erode

commercial certainty in rule-based outcomes, therefore undermining the core purpose of

the filed rate doctrine and the rule against retroactive ratemaking.

47 E.g., AEP Generation Resources Inc., 170 FERC ¶ 61,103, at P 14 & n.22

(2020) (listing cases).

Docket No. PL20-7-000

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We also propose to find that it is appropriate to require a stronger showing when a

petitioner is seeking remedial relief for its own failure to comply with a tariff. For

example, we propose to find that arguments that a petition for remedial relief has been

made in good faith will be more compelling when the petition contends the error was

caused by something more than inadvertent error or administrative oversight; that

arguments that a petition for remedial relief is limited in scope will be less compelling

when the petition involves long-standing tariff provisions that affect large numbers of

similarly-situated entities; and that arguments that remedial relief addresses a concrete

problem will be more compelling when the concrete problem was not created by the

petitioner in the first place. Finally, we propose that petitioners requesting remedial relief

will generally be denied when a protestor credibly contends that the petition for remedial

relief will result in undesirable consequences, such as harm to third parties. However, we

propose to find that the absence of a protester does not necessarily mean that there is no

harm to other parties

the

petitioner in the first place. Finally, we propose that petitioners requesting remedial relief

will generally be denied when a protestor credibly contends that the petition for remedial

relief will result in undesirable consequences, such as harm to third parties. However, we

propose to find that the absence of a protester does not necessarily mean that there is no

harm to other parties. In certain circumstances, the Commission may determine that the

effects of a waiver will result in harm to third parties.48

The foregoing proposed guidance is limited to requests for remedial relief to

address tariff-related actions or omissions that have already occurred before a petition or

complaint is filed. Requests for remedial relief are distinct from prospective requests to

waive the 60-day prior notice requirement under FPA section 205(d), or the 30-day prior

notice requirement under NGA section 4(d), which the Commission has discretion to

waive “for good cause shown.”49 The Commission has long found that waiver of the

prior notice requirement will generally be granted in certain circumstances,50 and we

48 For example, the Commission could acknowledge that participation by an

additional entity in the process at issue (e.g., auction or interconnection queue) through a

waiver could harm the entities that complied with all the tariff requirements, even though

those other entities did not protest.

49 16 U.S.C. § 824d(d); 17 U.S.C. § 717c(d).

50 See Cent. Hudson Gas & Elec. Corp., 60 FERC ¶ 61,106, order on reh’g,

61 FERC ¶ 61,089 (1992) (Central Hudson). Factors that will generally support a waiver

of prior notice include: (1) uncontested filings that do not change rates; (2) filings that

reduce rates and charges; and (3) filings that increase rates as prescribed by a previously-

accepted contract or settlement on file with the Commission

t. Hudson Gas & Elec. Corp., 60 FERC ¶ 61,106, order on reh’g,

61 FERC ¶ 61,089 (1992) (Central Hudson). Factors that will generally support a waiver

of prior notice include: (1) uncontested filings that do not change rates; (2) filings that

reduce rates and charges; and (3) filings that increase rates as prescribed by a previously-

accepted contract or settlement on file with the Commission. See Central Hudson,

60 FERC at 61,338-39; Prior Notice and Filing Requirements under Part II of the Federal

Power Act, 64 FERC ¶ 61,139, at 61,974-75 (summarizing Central Hudson), order on

reh’g, 65 FERC ¶ 61,081 (1993) (Prior Notice); see also Alternatives to Traditional Cost-

of-Service Ratemaking for Natural Gas Pipelines, 74 FERC ¶ 61,076, at 61,241-42 (1996).

The Commission has also found that prior notice may be waived for service agreements

under an umbrella tariff if such service agreements are filed within 30 days after service

Docket No. PL20-7-000

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propose that this policy will remain in effect to the extent that entities seek an effective

date no earlier than the day after the date a rate change is submitted to the Commission.51

Comment Procedures

The Commission invites comments on this Proposed Policy Statement by

June 4, 2020 and reply comments by June 11, 2020. Comments must refer to Docket

No. PL20-7-000, and must include the commenter’s name, the organization they

represent, if applicable, and their address in their comments.

The Commission encourages comments to be filed electronically via the eFiling

link on the Commission’s web site at http://www.ferc.gov. The Commission accepts

most standard word processing formats. Documents created electronically using word

processing software should be filed in native applications or print-to-PDF format and not

in a scanned format. Commenters filing electronically do not need to make a paper

filing

mments to be filed electronically via the eFiling

link on the Commission’s web site at http://www.ferc.gov. The Commission accepts

most standard word processing formats. Documents created electronically using word

processing software should be filed in native applications or print-to-PDF format and not

in a scanned format. Commenters filing electronically do not need to make a paper

filing.

Commenters that are not able to file comments electronically must send an

original of their comments to: Federal Energy Regulatory Commission, Secretary of the

Commission, 888 First Street NE, Washington, DC 20426.

All comments will be placed in the Commission’s public files and may be viewed,

printed, or downloaded remotely as described in the Document Availability section

below. Commenters on this proposal are not required to serve copies of their comments

on other commenters.

commences. See Prior Notice, 64 FERC at 61,984; 18 C.F.R § 35.3(a)(2). Commission

Staff retains its existing delegated authority to accept service agreement filings under

18 C.F.R § 35.3(a)(2), to accept notices of cancellation under 18 C.F.R § 35.15, and to

accept notices of succession under 18 C.F.R § 35.16. See 18 C.F.R. § 375.307(a)(1)(iii),

307(a)(7)(iv) (2019) (delegating authority to resolve uncontested requests for waiver of the

prior notice requirement under FPA section 205(d) and NGA section 4(d)).

51 See Evergy Ks. Cent., Inc., 171 FERC ¶ 61,016, at P 17 (2020). While the

decision in Evergy permitted the filing to take effect as of the day it was filed, we propose

that our general intent going forward will be to permit new filings to go into effect no

earlier than the day after filing, rather than the day of filing, to provide some amount of

prior notice

205(d) and NGA section 4(d)).

51 See Evergy Ks. Cent., Inc., 171 FERC ¶ 61,016, at P 17 (2020). While the

decision in Evergy permitted the filing to take effect as of the day it was filed, we propose

that our general intent going forward will be to permit new filings to go into effect no

earlier than the day after filing, rather than the day of filing, to provide some amount of

prior notice. FPA section 206(b), by contrast, permits same-day notice in the case of

complaints because the statute specifically states that the refund effective date in an FPA

section 206 complaint proceeding “shall not be earlier than the date of the filing of such

complaint.” 16 U.S.C. § 824e(b).

Docket No. PL20-7-000

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Document Availability

The Commission provides all interested persons an opportunity to view and/or

print the contents of this document via the Internet through the Commission’s Home Page

(http://www.ferc.gov). At this time, the Commission has suspended access to the

Commission’s Public Reference Room, due to the proclamation declaring a National

Emergency concerning the Novel Coronavirus Disease (COVID-19), issued by the

President on March 13, 2020.

From the Commission’s Home Page on the Internet, this information is available

on eLibrary. The full text of this document is available on eLibrary in PDF and

Microsoft Word format for viewing, printing, and/or downloading. To access this

document in eLibrary, type the docket number excluding the last three digits of this

document in the docket number field.

User assistance is available for eLibrary and the Commission’s website during

normal business hours from the Commission’s Online Support at (202) 502-6652 (toll

free at 1-866-208-3676) or email at ferconlinesupport@ferc.gov, or the Public Reference

Room at (202) 502-8371, TTY (202) 502-8659. E-mail the Public Reference Room at

public.referenceroom@ferc.gov.

By the Commission.

( S E A L )

Nathaniel J. Davis, Sr.,

Deputy Secretary.