`
`UNITED STATES OF AMERICA
`BEFORE THE
`FEDERAL ENERGY REGULATORY COMMISSION
`
`
`)
`)
`)
`
`
`
`Docket No. RM22-14-001
`
`
`
`Improvements to Generator
`Interconnection Procedures
`and Agreements
`
`
`
`REQUEST FOR REHEARING AND CLARIFICATION
`OF DOMINION ENERGY SERVICES, INC.
`
`Pursuant to Section 313(a) of the Federal Power Act (“FPA”),1 and Rule 713 of the Federal
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`Energy Regulatory Commission’s (“Commission” or “FERC”) Rules of Practice and Procedure,2
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`Dominion Energy Services, Inc., on behalf of Virginia Electric and Power Company d/b/a
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`Dominion Energy Virginia (“DEV”) and Dominion Energy South Carolina, Inc. (“DESC,”
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`together with DEV, “Dominion Energy” or the “Company”),3 hereby requests rehearing, and seeks
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`one clarification of the final rule issued in this proceeding on July 28, 2023.4
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`As discussed in its Initial Comments5 and Reply Comments6 in this proceeding, Dominion
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`Energy supports common sense reforms to pro forma interconnection processes. Indeed, DESC
`
`
`16 U.S.C. § 825l(a) (2018).
`1
`18 C.F.R. § 385.713 (2023).
`2
`As described herein, both DEV and DESC are operating subsidiaries of Dominion Energy, Inc. For
`3
`the purposes of this request for rehearing, references to “Dominion Energy” shall include Dominion Energy,
`Inc., DEV, and DESC, as well as Dominion Energy Services, Inc., a subsidiary of Dominion Energy, Inc.
`4
`Improvements to Generator Interconnection Procedures & Agreements, Order No. 2023, 184
`FERC ¶ 61,054 (2023) (“Order No. 2023”).
`5
`Improvements to Generator Interconnection Procedures & Agreements, Initial Comments of
`Dominion Energy Services, Inc., Docket No. RM22-14-000 (filed Oct. 13, 2022) (“Dominion Initial
`Comments”).
`6
`Improvements to Generator Interconnection Procedures & Agreements, Reply Comments of
`Dominion Energy Services, Inc., Docket No. RM22-14-000 (filed Dec. 14, 2022) (“Dominion Reply
`Comments”).
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`

`

`
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`and DEV (through PJM Interconnection, L.L.C. (“PJM”)) were early adopters of a “first ready,
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`first served” cluster process. Dominion Energy thus supports the Commission’s efforts to remedy
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`generator interconnection backlogs and make the process more efficient for future interconnection
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`customers, while maintaining system reliability. However, the Commission erred by issuing a
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`generic rulemaking determining all interconnection processes, even those that the Commission
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`recently accepted, are unjust and unreasonable. Disturbing these processes before they have time
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`to work would upset the carefully crafted and negotiated reforms and would likely lead to further
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`delays.
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`Dominion Energy seeks rehearing on four issues: 1) the Commission did not engage in
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`reasoned decision making under the Administrative Procedure Act (“APA”) by relying on out-of-
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`date data and did not consider recent interconnection reforms by PJM and DESC that are similar
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`to the replacement rate adopted in Order No. 2023 and therefore the Commission’s actions in Order
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`No. 2023 were arbitrary and capricious; 2) the Commission exceeded its FPA Section 206
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`authority by declaring all existing interconnection tariffs, including recently accepted reforms by
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`PJM and DESC that are similar to the replacement rate adopted in Order No. 2023, as unjust,
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`unreasonable, and unduly discriminatory or preferential without substantial evidence; 3) the
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`Commission’s decision to eliminate the reasonable efforts standard and impose study delay
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`penalties on transmission providers and owners is not supported by substantial evidence and is
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`arbitrary and capricious under the APA; and 4) the Commission’s imposition of a 90-day
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`compliance deadline for the final rule is contrary to substantial evidence and fails to consider the
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`alternative timelines presented by commenters. Accordingly, Dominion Energy respectfully
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`requests rehearing of Order No. 2023. Additionally, Dominion Energy requests clarification about
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`the timing of effective dates for compliance measures.
`
`2
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`I. BACKGROUND ON DEV AND DESC
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`DEV is a public service corporation engaged in the generation, transmission, distribution,
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`and sale of electricity to retail and wholesale customers, and is a subsidiary of Dominion Energy,
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`Inc., a holding company under the Public Utility Holding Company Act of 2005. DEV furnishes
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`electric service to approximately 2.5 million retail customers in its approximately 30,000 square
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`miles of certificated service territory covering parts of Virginia and North Carolina. It does so by
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`operating a diverse fleet of natural gas, renewable, nuclear, oil, pumped storage, and coal fired
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`power stations, which collectively provide over 23,000 MW of generation capacity. It also owns
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`over 6,700 miles of electric transmission facilities.
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`DEV is organized under the laws of the Commonwealth of Virginia and is a public utility
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`subject to regulation by the Virginia State Corporation Commission (“VSCC”) and by the North
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`Carolina Utilities Commission (“NCUC”), whose regulations establish DEV’s retail customer
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`rates. DEV provides electric service by buying and selling wholesale power in PJM’s energy,
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`ancillary service, and capacity markets. PJM is a regional transmission organization and
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`independent system operator (“RTO/ISO”) that DEV joined effective May 1, 2005, after obtaining
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`prior approval from FERC, the VSCC, and the NCUC. PJM has operational control over DEV’s
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`transmission assets.
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`DESC is a public utility engaged in the generation, transmission, distribution, and sale of
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`electricity to retail and wholesale customers, and is a subsidiary of Dominion Energy, Inc. DESC
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`is not a member of an RTO. DESC owns and operates facilities for the transmission of electric
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`energy in interstate commerce and provides transmission service over those facilities pursuant to
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`the terms of its Commission-approved Open Access Transmission Tariff (“OATT”). DESC owns
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`or controls approximately 5,650 MW of generation, sells electric energy and capacity at cost-based
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`3
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`rates within its Balancing Authority Area (“BAA”), and is authorized to sell electric energy and
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`capacity at market-based rates outside its BAA. DESC’s electric service territory extends into 24
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`counties covering nearly 17,000 square miles in the central, southern, and southwestern portions
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`of South Carolina. It also owns approximately 3,250 miles of electric transmission facilities.
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`DESC supplies natural gas to retail customers in all or part of 35 counties in South Carolina
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`covering more than 25,000 square miles and it purchases and distributes natural gas in support of
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`its retail natural gas sales. DESC’s retail electricity and retail natural gas activities are subject to
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`the jurisdiction of the Public Service Commission of South Carolina (“SCPSC”).
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`Dominion Energy filed comments on the Notice of Proposed Rulemaking7 seeking
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`flexibility on a number of the proposals contained therein, and recommending that the Commission
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`refrain from adopting certain proposals at all, including the IX NOPR’s proposal to eliminate the
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`reasonable efforts standard.8 Dominion Energy also urged the Commission not to interfere with
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`transmission providers’ recently adopted interconnection reforms that were already in the middle
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`of transitioning to a first ready, first served cluster process.
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`II.
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`STATEMENT OF ISSUES AND SPECIFICATIONS OF ERROR
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`Pursuant to Rule 713(c) of the Commission’s Rules of Practice and Procedure,9 Dominion
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`Energy submits the following statement of issues and specifications of error:
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`1. Order No. 2023 is arbitrary and capricious under the APA because the Commission’s
`determination that all interconnection tariffs were unjust and unreasonable was not
`supported by substantial evidence and does not constitute reasoned decision making. The
`Commission relied on stale data, did not critically evaluate the statistics it relied upon, and
`ignored more recent information about interconnection reforms that it accepted recently.
`
`Improvements to Generator Interconnection Procedures & Agreements, Notice of Proposed
`7
`Rulemaking, 179 FERC ¶ 61,194 (2022) (“IX NOPR”).
`8
`See generally Dominion Initial Comments; Dominion Reply Comments.
`9
`18 C.F.R. § 385.713.
`
`4
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`

`
`
`5 U.S.C. §§ 706(2)(A), (E); see Motor Vehicle Mfrs. Ass’n of U.S., Inc. v. State Farm Mut.
`Auto. Ins. Co., 463 U.S. 29, 43 (1983) (“State Farm”); S.C. Pub. Serv. Auth. v. FERC, 762
`F.3d 41, 54-55 (D.C. Cir. 2014) (“S.C. Pub. Serv. Auth.”); Emera Me. v. FERC, 854 F.3d
`28-29 (D.C. Cir. 2017) (“Emera Maine”); Fla. Gas Transmission Co. v. FERC, 604 F.3d
`636, 641 (D.C. Cir. 2010) (“Fla. Gas”). Specifically, the Commission did not consider
`that the Commission itself had recently accepted PJM’s and DESC’s interconnection
`reforms (approved by the stakeholders) as just and reasonable, and the reforms are so recent
`that they have not had time to be fully implemented. See PJM Interconnection, L.L.C., 181
`FERC ¶ 61,162 (2022), reh’g denied by operation of law, 182 FERC ¶ 62,055 (2023), order
`on reh’g, 184 FERC ¶ 61,006 (2023) (modifying the discussion and reaching the same
`result); Dominion Energy S.C., Inc., Docket No. ER22-301-000 at 1 (issued Dec. 28, 2021)
`(delegated order). The Commission’s requirement that all transmission providers submit
`compliance filings and re-justify their recently accepted revisions is not proportionate to
`the problem identified. Interstate Natural Gas Ass’n of America v. FERC, 285 F.3d 18, 37
`(2002) (“INGAA”); Assoc. Gas Distributors v. FERC, 824 F.2d 981, 1020 (D.C. Cir. 1987)
`(“AGD”). The Commission’s generic determination is distinguishable from generic
`rulemakings that were upheld in Transmission Access Policy Study Group V. FERC, 225
`F.3d 667, 668 (D.C. Cir. 2000) (“TAPS”), aff’d sub nom. New York v. FERC, 535 U.S. 1
`(2002); INGAA, 285 F.3d at 37 and S.C. Pub. Serv. Auth. 762 F.3d 41.
`2. The Commission exceeded its statutory authority under Section 206 of the FPA by failing
`to make the sufficient factual determination that each of the existing interconnection
`processes are unjust and unreasonable. See Emera Maine, 854 F.3d at 25 (citation omitted)
`(“[A] finding that an existing rate is unjust and unreasonable is the ‘condition precedent’
`to FERC’s exercise of its section 206 authority to change that rate. Section 206, therefore,
`imposes a ‘dual burden’ on FERC. Without a showing that the existing rate is unlawful,
`FERC has no authority to impose a new rate.”). This burden equally applies in a
`rulemaking context. S.C. Pub. Serv. Auth., 762 F.3d 64-65.
`3. Order No. 2023 is arbitrary and capricious under the APA because the Commission’s
`elimination of the reasonable efforts standard and imposition of penalties to transmission
`providers was not supported by substantial evidence. Fla. Gas, 604 F.3d at 641. The
`Commission did not provide sufficient evidence that imposition of penalties on
`transmission providers would remedy the problem or that transmission providers can
`control the timing of interconnection studies. Instead, the Commission made “purely
`conclusory” statements not based on any record evidence. Tarpon Transmission Co. v.
`FERC, 860 F.2d 439, 444 (D.C. Cir. 1998) (“Tarpon”). Thus, the Commission cannot
`demonstrate that it made a “principled and reasoned decision supported by the evidentiary
`record.” Emera Maine, 854 F.3d at 32. Further, it did not adequately address record
`evidence to the contrary of its findings. PPL Wallingford Energy LLC v. FERC, 419 F.3d
`1194, 1199 (D.C. Cir. 2005) (citing Canadian Ass’n of Petroleum Producers v. FERC, 254
`F.3d 289, 299 (D.C. Cir. 2001)).
`
`
`
`
`5
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`4. The Commission did not engage in reasoned decisionmaking supported by substantial
`evidence when it shortened its proposed 180-day compliance period to 90 days. No
`commenter requested a shorter compliance deadline, and several commenters sought a
`longer deadline than the 180-day compliance deadline proposed in the IX NOPR. See
`Greater Bos. Television Corp. v. FCC, 444 F.2d 841, 851 (D.C. Cir. 1970) (an agency must
`give “reasoned consideration to all the material facts and issues” and “engage[] in reasoned
`decision making”); Am. Gas Assn. v. FERC, 389 U.S. App. D.C. 162, 167, 593 F.3d 14, 20
`(D.C. Cir. 2010) (“[R]easoned decisionmaking requires considering [reasonable]
`alternatives.”); Laclede Gas Co. v. FERC, 873 F.2d 1494, 1498, (D.C. Cir. 1989) (“[W]here
`a party raises facially reasonable alternatives to FERC’s decision . . . the agency must either
`consider those alternatives or give some reason, within its broad discretion . . . for declining
`to do so.” (internal citation omitted)); Tarpon, 860 F.2d at 442; Apache Corp. v. FERC,
`627 F.3d 1220, 1222-23 (D.C. Cir. 2010).
`
`III. ARGUMENT
`
`A. The Commission did not meet its APA obligation to provide substantial
`evidence to justify effectuating a generic rulemaking and compliance filing
`requirement in Order No. 2023.
`
`
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`DEV (through PJM) and DESC are both currently transitioning their interconnection
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`processes from a “first come, first served” serial process to a “first ready, first served” process
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`utilizing cluster studies, following Commission acceptance of those significant tariff reforms.
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`DESC and PJM undertook these reforms to address interconnection queue backlogs and to speed
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`up interconnection processes. Both sets of reforms sought to address the same problems that the
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`Commission later identified as its justification for adopting Order No. 2023, and indeed FERC
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`noted DESC’s process as a basis for several proposals in the IX NOPR and the final rule.10
`
`
`See IX NOPR, 179 FERC ¶ 61,194 at P 21 (acknowledging DESC as transitioning to from the serial
`10
`first-come, first-served study process to a first-ready, first-served cluster study process in outlining the need
`for reform); id. at PP 80, 82 (proposing the allocation of study costs on a split pro rata/per capita basis, the
`same as DESC); Order No. 2023, 184 FERC ¶ 61,054 at P 177 (adopting proposal to make cluster studies
`the required interconnection study method); id. at P 418 (adopting proposal to allocate study costs on a split
`pro rata/per capita basis); id. at P 465 (noting DESC had adopted study timelines similar to those adopted
`in the final rule); see also id. at P 59 (noting that “final rule uses some of these individual and incremental
`improvements [already implemented by early adopters] as a basis for a broad suite of reforms that, in their
`entirety, have not yet been adopted by any region and we believe will ensure that interconnection customers
`are able to interconnect to the transmission system in a reliable, efficient, transparent, and timely manner”).
`
`6
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`
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`Moreover, DESC’s and PJM’s reforms were thoroughly vetted by stakeholders to ensure the
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`interconnection reforms worked for their particular regions.
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`PJM filed its interconnection reforms with the Commission on June 14, 2022,11 they were
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`approved subject to condition on November 29, 2022,12 and the transition component of the rules
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`became effective January 3, 2023.13 PJM’s transition process only just began on July 10, 2023,
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`mere days before the Commission issued Order No. 2023.14
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`The PJM proposal was the result of an approximately 18-month stakeholder process.15 In
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`the course of the Commission proceeding, PJM was required to provide supplemental information
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`including information about “how the proposed removal of sections related to reporting and
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`penalties is consistent with or superior to similar sections of Order No. 890; the specifics of the
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`revised site control requirements; a project’s eligibility to be processed through the proposed
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`Expedited Process; and why it is just and reasonable for PJM’s generator interconnection
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`procedures to exclude a 10 kW Inverter Process and a Fast Track Process.”16 In its order accepting
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`PJM’s interconnection reforms only 10 months ago, the Commission evaluated PJM’s initial filing,
`
`
`PJM Interconnection, L.L.C., Tariff Revisions for Interconnection Process Reform, Request for
`11
`Commission Action by October 3, 2022, and Request for 30-Day Comment Period, Docket No. ER22-
`2110-000 (filed June 14, 2022) (“PJM Interconnection Reform Filing”).
`12
`PJM Interconnection, L.L.C., 181 FERC ¶ 61,162 (2022), reh’g denied by operation of law, 182
`FERC ¶ 62,055 (2023), order on reh’g, 184 FERC ¶ 61,006 (2023) (modifying the discussion and reaching
`the same result).
`13
`PJM Interconnection, L.L.C., 181 FERC ¶ 61,162 at P 9 (providing for varying effective dates for
`later components of the rules).
`14
`See PJM Interconnection, L.L.C., Notification of Occurrence of Transition Date, Docket No. ER22-
`2110-000 (filed July 11, 2023); see also Transition to New Interconnection Process Begins July 10, PJM
`Inside the Lines (July 6, 2023), https://insidelines.pjm.com/transition-to-new-interconnection-process-
`begins-july-10/.
`15
`Order No. 2023, 184 FERC ¶ 61,054 at P 1749.
`16
`PJM Interconnection, L.L.C., 181 FERC ¶ 61,162 at P 22.
`
`7
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`its supplemental response, and comments and protests from approximately 80 different parties and
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`then specifically found PJM’s proposed revisions to its interconnection procedures to be “just and
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`reasonable.”17 At the time of this request for rehearing, PJM has only just begun the transition
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`process.
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`Now, through a generic FPA Section 206 factual determination and rulemaking, the
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`Commission’s order has the effect of declaring that PJM’s interconnection reforms are unjust and
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`unreasonable. While the Commission speaks in terms of the pro forma LGIP, LGIA, SGIP, and
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`SGIA when making its determination,18 its compliance obligation extends to all existing processes
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`and essentially requires them to re-prove the justness and reasonableness of their processes,
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`creating a remedy that is “disproportionate” to the identified problem.19 The Commission cites no
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`specific evidence to demonstrate that PJM’s tariff that is currently in effect is unjust and
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`unreasonable. Indeed—it would be difficult to do so, as PJM has not yet completed its transition
`
`and so there is no data available to determine whether its reformed process is successful. Instead,
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`the PJM queue delays cited in Order No. 2023 coincide with the previous interconnection tariff,
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`which used a serial queue process.20 These cited backlogs are the exact reason that PJM
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`collaborated diligently with stakeholders to develop a solution. PJM expects to clear 62,000 MW
`
`
`PJM Interconnection, L.L.C., 181 FERC ¶ 61,162 at P 34.
`17
`Order No. 2023 184 FERC ¶ 61,054 at P 37 (finding “existing pro forma generator interconnection
`18
`procedures and agreements [to be] unjust, unreasonable, and unduly discriminatory or preferential”).
`19
`Id. at PP 1762-64 (requiring all “transmission providers” to submit compliance filings, noting the
`standard for proposed deviations from the final rule in the compliance filing”); INGAA, 285 F.3d at 37-39.
`20
`Order No. 2023, 184 FERC ¶ 61,054 at P 39 (relying on PJM interconnection wait time data as of
`February 2022); id. at Appendix B Tables 2-5 (all relying on data from the end of calendar year 2022 and
`earlier).
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`8
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`for connection under the new process by the end of 2024, compared to just 2,000 MW in 2022
`
`under the serial process that the Commission assessed.21
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`Similarly, DESC filed its package of interconnection reforms in November of 2021, and
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`they were accepted on December 28, 2021.22 DESC’s transitional process began on June 13, 2022
`
`and is ongoing.23 No protests or adverse comments were filed.24 In its filing DESC pointed to
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`delays in both its Feasibility Study timelines and on its System Impact Study timelines as driving
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`the need for its proposed reforms.25 DESC’s filing was based on approximately 12 months of
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`stakeholder engagement26 and included many—but not all—of the components adopted in Order
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`No. 2023. DESC’s reforms are working. Since the transitional cluster process began, DESC
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`timely completed its Phase 1 transitional study for the 26 projects remaining in the transitional
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`cluster in January of 2023 and completed its Transitional Cluster Phase 2 Study in August 2023.27
`
`
`See Transition to New Interconnection Process Begins July 10, PJM Inside the Lines, (July 6,
`21
`2023), https://insidelines.pjm.com/transition-to-new-interconnection-process-begins-july-10/.
`22
`See Dominion Energy S.C., Inc., Modifications to DESC’s Large Generator Interconnection
`Procedures to Implement Clustering Approach, Docket No. ER22-301-000 (filed Nov. 1, 2021) (“DESC
`Interconnection Reform Filing”); Dominion Energy S.C., Inc., Docket No. ER22-301-000 at 1 (issued Dec.
`28, 2021) (delegated order).
`23
`See Notice of Transition to the Definitive Interconnection Study Process, Notice_of_Transition_to
`_Definitive_Interconnection_Study_Process.pdf (oati.com) (posted to OASIS June 13, 2022); see also
`Dominion Energy S.C., Inc., Informational Report in Compliance with Section 4.5.7 of DESC’s Large
`Generator Interconnection Procedures (“LGIP”) at 3-4, Docket No. ER19-1946-000 (filed May 15, 2023)
`(“DESC initiated a Transitional Cluster Study process on June 13, 2022.”).
`24
`See generally Dominion Energy S.C., Inc., Docket No. ER22-301-000.
`25
`DESC Interconnection Reform Filing, Transmittal Letter at 6-7 (showing that 100% of DESC’s
`Feasibility Studies has exceeded its 45-calendar day deadline, while 100% of DESC’s System Impact
`Studies exceeded its 90-calendar day timeline).
`26
`DESC Interconnection Reform Filing, Transmittal Letter at 9. Following the FERC filing, DESC
`took an additional six months to implement a corresponding process for state-jurisdictional interconnection
`requests.
`27
`See Dominion Energy S.C., Inc., Informational Report in Compliance with Section 4.5.7 of DESC’s
`Large Generator Interconnection Procedures (“LGIP”), Docket No. ER19-1946-000 (filed May 15, 2023).
`
`9
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`Since June 17, 2022, eight requests remain in the transitional cluster at this time.28 DESC began
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`its 2023 annual cluster process on April 1, 2023.29
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`APA Section 706(2)(E)30 and FPA Section 313(b)31 require the Commission to base its
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`decisions on substantial evidence. The Court of Appeals for the District of Columbia Circuit has
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`also stated that in order for the Commission to regulate rates under FPA Section 206, a
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`determination that a rate is unjust, unreasonable and unduly discriminatory or preferential must be
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`supported by substantial evidence.32
`
`Though the Commission is not required to rely on “empirical evidence”,33 the Commission
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`must rely on substantial, not old, evidence and cannot ignore new circumstances as justification to
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`determine that existing rates are unjust and unreasonable.34 Similarly, though the Commission
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`“may rely on ‘generic’ or ‘general’ findings of a systemic problem to support imposition of an
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`industry wide solution”,35 any finding by the Commission must still be rooted in facts or reasonable
`
`
`See Dominion Energy South Carolina OASIS, Transitional Cluster Interconnection Queue – TC1
`28
`Statue: Phase 2 Study (July 21, 2023), https://www.oasis.oati.com/woa/docs/SCEG/SCEGdocs/
`Transitional_Cluster_Queue_20230731_-_OASIS.pdf (last checked August 22, 2023).
`29
`See Dominion Energy South Carolina OASIS, DESC News Archive at 8 (July 31, 2023),
`https://www.oasis.oati.com/woa/docs/SCEG/SCEGdocs/News_Archive_07.31.2023.pdf.
`30
`5 U.S.C. § 706(2)(E).
`31
`16 U.S.C. § 825l.
`32
`S.C. Pub. Serv. Auth., 762 F.3d at 64-65 (citations omitted) (“To regulate a practice affecting rates
`pursuant to Section 206 [of the FPA], the Commission must find that the existing practice is ‘unjust,
`unreasonable, unduly discriminatory or preferential,’ and that the remedial practice it impasse is ‘just and
`reasonable.’ These findings must be supported by ‘substantial evidence,’ which the court has long held does
`not mean empirical evidence.”).
`33
`Id. at 65.
`34
`See, e.g., Consol. Oil & Gas, Inc. v. FERC, 806 F.2d 275, 279 (D.C. Cir. 1986) (internal quotations
`omitted) (“Under the substantial evidence test, we can uphold the Commission’s decision only if it relies
`on such relevant evidence as a reasonable mind might accept as adequate to support [the] conclusion.”).
`35
`S.C. Pub. Serv. Auth., 762 F.3d at 67.
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`economic propositions.36 Moreover, the Commission cannot ignore actual facts if it is to be
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`considered reasoned decision making. Order No. 2023’s generic findings and replacement rate is
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`not reasoned decision making as it relates to PJM and DESC because 1) it relies on queue delays
`
`and backlogs that predate PJM’s and DESC’s revised interconnection reforms; and 2) it does not
`
`consider those currently effective interconnection reforms when making the determination that all
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`interconnection tariffs are unjust and unreasonable.37
`
`To support its determination that rates are unjust, unreasonable, and unduly discriminatory
`
`or preferential,38 the Commission states there is an increase in interconnection requests and
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`backlogs throughout the country and across all regions of the United States.39 The Commission
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`specifically cites the 2,274 projects in PJM’s queue as of February 2022 40 and observes that 2,544
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`studies were delayed at the end of 2022 with 2,211 being in PJM.41 But this evidence represents
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`the interconnection process prior to PJM’s reforms that were approved on November 29, 2022
`
`and began to be implemented in July of 2023. Similarly, DESC’s interconnection reforms were
`
`approved by letter order on December 28, 2021 and became effective January 1, 2022. DESC has
`
`
`See City of Holyoke Gas & Elec. Dep’t v. FERC, 954 F.2d 740, 743 (D.C. Cir. 1992) (“The
`36
`Commission must support its decision with enough data to enable an adversely affected party and by
`extension a reviewing court, to understand its calculation of the comparison rate upon which it would rely,
`as well as the underlying assumptions.”); S.C. Pub. Serv. Auth., 762 F.3d at 67 at 64-65 (Commission’s
`Section 206 findings in rulemaking context must be supported by substantial evidence, which may be
`empirical evidence or reasonable economic propositions).
`37
`As discussed below, the Court of Appeals for the District of Columbia Circuit has upheld generic
`rulemakings without consideration of specific rates, but such that the analysis is inapposite to the
`Commission’s action in Order No. 2023.
`38
`Order No. 2023, 184 FERC ¶ 61,054 at P 37.
`39
`Id. at PP 38, 39.
`40
`Id. at P 39.
`41
`Id. at P 40 & n.116 (citing interconnection study metrics transmission providers posted in
`compliance with Reform of Generator Interconnection Procedures & Agreements, Order No. 845, 163
`FERC ¶ 61,043 (2018) (“Order No. 845”)).
`
`11
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`gone from seventy projects in its queue under the serial process to eight projects remaining in the
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`transitional cluster process, and did not receive a single dispute or complaint from interconnection
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`customers during that process. The Commission does not need to support its decisions with
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`empirical evidence if it does not exist and can instead rely on reasonable economic propositions;
`
`it cannot ignore, however, the empirical evidence before it. To do so is not reasoned decision
`
`making. “The question of sufficiency of the evidence necessarily turns on sufficiency in relation
`
`to the issue and the findings on which the agency action was based,” and here, relying on stale
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`processing time data to declare a generic problem was in error.42
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`In addition to relying on stale evidence, the Commission ignored contrary evidence, to
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`whit, that PJM and DESC had recently adopted interconnection reforms to address the same
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`problem Order No. 2023 targets to fix. 43
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`Although the Commission is able to rely on generic rulemakings to support an industry-
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`wide solution,44 this authority is not without its limits. Order No. 2023’s mandate is unlike the
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`wholesale reform of the transmission system through Order No. 888 that was considered in TAPS45
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`and relied upon by the Commission,46 the expansion and creation of new planning obligations
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`upheld in S.C. Pub. Serv. Auth.,47 or the requirement FERC issued in INGAA to require gas
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`pipelines to implement a new requirement “only where operationally feasible[,]” and where FERC
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`Pillai v. Civil Aeronautics Bd., 485 F.2d 1018, 1023, 1024 (D.C. Cir. 1973).
`42
`See PPL Wallingford Energy LLC v. FERC, 419 F.3d 1194, 1199 (D.C. Cir. 2005) (citing Canadian
`43
`Ass’n of Petroleum Producers v. FERC, 254 F.3d 289, 299 (D.C. Cir. 2001) (FERC “failed to respond
`meaningfully” to objections).
`44
`See S.C. Pub. Serv. Auth., 762 F.3d at 67.
`45
`TAPS, 225 F.3d 667.
`46
`Order No. 2023, 184 FERC ¶ 61,054 at P 1766.
`47
`See S.C. Pub. Serv. Auth., 762 F.3d at 67.
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`would “shoulder the burden under [Section 5 of the NGA, the corollary of FPA Section 206] to
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`show the required operational feasibility.”48 Order No. 2023 declares as unjust and unreasonable,
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`through a generic rulemaking, specific reformed tariffs that substantively address the same issue
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`and with similar or identical reforms. Such a generic finding is disproportionate to the findings
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`FERC relies on and to the replacement rate it adopts. The courts have emphasized that where a
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`problem only exists in isolated pockets, “proportionality between the identified problem and the
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`remedy is the key.”49 Where an industry-wide solution is imposed for a problem that only exists
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`in isolated pockets, “the disproportion of remedy to ailment would, at least at some point, become
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`arbitrary and capricious.”50
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`The Commission did not specifically consider whether PJM’s, DESC’s, and other similarly
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`situated transmission providers’ reforms are working or even had a chance to be fully
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`implemented. Reasoned decision making should at least require the Commission to consider all
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`relevant information – including information about the efficacy of reforms in existing tariffs that
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`are attempting to address the same problem the Commission is relying upon to make its FPA
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`Section 206 determination.51
`
`
`INGAA, 285 F.3d at 37-39.
`48
`See id. (emphasis in original); see also S.C. Pub. Serv. Auth., 762 F.3d at 67 (“Absent such an
`49
`extreme ‘disproportion of remedy to ailment,’ the Commission could reasonably proceed to address a
`systemic problem with an industry-wide solution.”).
`50
`AGD, 824 F.2d at 1019.
`51
`See Greater Bos. Television Corp., 444 F.2d at 851 (an agency must give “reasoned consideration
`to all the material facts and issues” and “engage[] in reasoned decision making”); Tarpon, 860 F.2d at 442
`(“We cannot accept an agency determination unless it is the result of reasoned and principled
`decisionmaking that can be ascertained from the record.”); ANR Pipeline Co., 71 F.3d at 901(“[W]here an
`agency departs from established precedent without a reasoned explanation, its decision will be vacated as
`arbitrary and capricious.”); Tenneco Gas v. FERC, 969 F.2d 1187, 1214 (D.C. Cir. 1992) (“Subsumed in
`the substantial evidence requirement is the expectation that agencies will treat fully ‘each of the pertinent
`factors” and issues before them.’” (quoting Public Serv. Comm'n of New York v. FPC, 511 F.2d 338, 345
`D.C.Cir.1975)).
`
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`Though the courts have held the Commission can address case-by-case discrepancies
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`between the generic determination and specific tariffs during compliance filings,52 this cannot be
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`considered an unlimited way for the Commission to avoid its obligations under the APA to rely
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`on substantial evidence when making its FPA Section 206 decisions. Here, the Commission
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`recently accepted revisions to PJM’s and DESC’s tariffs to address the same issue that Order No.
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`2023 attempts to address. The Commission should have to consider those tariffs individually and
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`not sweep them up in a generic determination based on evidence of queue backlogs made under
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`previous tariffs and regions.
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`Relying on stale evidence and ignoring the evidence regarding interconnection reforms that
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`were recently adopted in PJM and by DESC does not constitute substantial evidence necessary to
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`support the Commission’s generic FPA Section 206 declaration that all existing rates are unjust,
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`unreasonable, or unduly discriminatory and preferential. The Commission’s remedy—to require
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`all transmission providers to either modify their tariffs or