When considering a federal agency’s jurisdiction, we tend to think that jurisdiction is a legal issue, not a policy issue. Certainly, a federal agency can expand or narrow its jurisdiction through a new interpretation of a Congressional mandate, but FERC of late has taken actions that indicate that it views jurisdiction, as a matter of policy untethered to FPA. As already discussed in a blog article on Order No. 2222-A, FERC waved away thirty years of legal precedent on interconnection jurisdiction over distributed QFs selling power at wholesale, to third parties providing no legal basis for its decision to decline interconnection jurisdiction as to distributed QFs selling wholesale power to DER aggregators. FERC indicated that “state and local authorities, which have traditionally regulated distributed energy resource interconnections, have the requisite experience, interest, and capacity to oversee these distribution-level interconnections.” This decision was all the more profound because an aggregation of one was permitted.
In Order No. 2222, FERC already had decided to “decline” jurisdiction over second-use DER interconnections, without any discussion of its legal authority to decline jurisdiction given to it by Congress, particularly while reserving its right to reassert jurisdiction. Remarkably, FERC even stated that jurisdiction was matter of policy, not law, noting that “the Commission may revisit this policy decision in the future.” In the same decision, FERC implicitly declined to assert jurisdiction over sales of wholesale power in interstate commerce by DERs to aggregators, once again refusing to provide the basis for its authority to decline jurisdiction or, at the very least, deregulate such sales.
The August 26, 2022 ISO New England Inc. order, however, is perhaps even more stunning in its approach to jurisdiction. FERC ruled there that an RTO and its transmission owners could determine the bounds of FERC jurisdiction under the “independent entity variation” standard.
Continue Reading FERC Jurisdiction – A Matter of Policy?