Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Climate

FERC Is Already Split Over the End of Chevron

America’s energy regulators are hashing it out in the comments.

Tangled power lines.
Heatmap Illustration/Getty Images

As decades of administrative law were being rendered irrelevant last week by a landmark Supreme Court decision denying regulators deference in their interpretations of ambiguous legal statues, one such regulator, Mark Christie, already had some ideas about what do with this new development.

Christie, the Federal Energy Regulatory Commission’s sole Republican member, had taken issue with FERC Order No. 1920, which was unveiled in May and established a new set of rules requiring transmission planners to be more proactive in assessing their future needs and how to pay for them. The order was decided in a 2-1 vote along partisan lines and was largely hailed by environmental and climate groups, who saw it as a way to encourage building out the transmission necessary to bring more wind and solar onto the grid.

To some conservatives, however, the order would remove states from their rightful role in the transmission planning process and stick ratepayers with the cost of infrastructure they never asked for. The rule is already being challenged by state utility commissions, Republican state attorneys general, and the country’s largest regional transmission organization in a FERC process known as request for rehearing. Lawsuits will almost certainly follow.

Those lawsuits will play out on the new terrain laid out by Loper Bright Enterprises v. Raimondo, the Supreme Court decision rendered last week, which overturned a decades-old legal principle known as Chevron deference. Named for the 1984 case Chevron v. Natural Resources Defense Council, which established the notion that courts should defer to agencies’ interpretation of ambiguous statutory language to justify their rulemaking activity, Chevron deference formed the legal foundation for much of the U.S. regulatory apparatus.

In Christie’s lengthy and impassioned dissent to the order, however, he signaled that he thought that foundation might be crumbling.

“The final rule does not deserve a shred of deference under Chevron,” Christie wrote. Unlike past transmission planning rules that had survived legal challenge, this new order was “pretextual” and “heavy handed.” An earlier transmission case case that reached the Washington, D.C. Court of Appeals in 2014, South Carolina Public Service Authority v. FERC, upholding FERC’s ability to mandate transmission planning was, Christie wrote, decided in favor of FERC because it “upheld precisely because it was only mandating processes, not outcomes,” whereas the new rule “nakedly intends to produce very specific outcomes.” Christie was basically painting a red flag on the order for the bull of the judicial process to run through.

Once Chevron deference was no longer in force, Christie issued an update to that dissent, writing in a statement on Friday that the “most important legal lifeline that Order No. 1920 needed was pulled away today, and the final rule’s chances of surviving court challenges just shrank to slim to none.” He referred to outstanding petitions for rehearing the order as “devastating takedowns.” Without Chevron to lean on, he prognosticated, “the Commission can wait for a court to strike down” 1920, or it can answer “those many petitions asking for rehearing or amendments with a new opportunity for amendments.”

In other words, the order should not have had Chevron’s protection, but now that it doesn’t, it’s toast.

On Monday, the Commission’s Democratic Chairman Willie Phillips released a statement (because there was nothing else going on in the legal world that day) arguing that the Commission’s ability to regulate both planning and the distribution of costs “has long been recognized by bipartisan majorities of the Commission and U.S. Court of Appeals for the District of Columbia Circuit,” adding that “nothing in the Supreme Court’s Loper Bright decision overturning the Chevron doctrine calls that conclusion into question.”

He also gave a preview of how the Commission will likely defend the rule in federal court. Order No. 1920 “fits easily within the South Carolina precedent,” he wrote. “It does not promote particular public policies, does not dictate specific outcomes, does not include any selection mandate whatsoever, and employs only the lightest touch possible on cost allocation by simply restating the well-established cost causation principle.”

In conclusion, according to Phillips, Christie’s statement “does not provide a logical or reasonable basis for calling into question whether we have that authority in the first place.”

“It’s not every day that two FERC commissioners just decide to release their thoughts on the latest Supreme Court case,” Ari Peskoe, the director of the Electricity Law Initiative at Harvard Law School, told me.

FERC’s likely argument rests on two legal pillars. The first is that FERC gets its authority from the Federal Power Act, which calls for utility rates to be “just and reasonable” and not “unduly discriminatory or preferential.” FERC has argued that this gives it power over practices that directly affect rates, including transmission planning, which the D.C. Circuit affirmed in South Carolina.

In a separate 2016 case, the Supreme Court ruled that FERC could make rules on practices that directly affect wholesale electricity rates but not retail sales. This case did not depend on Chevron, with Justice Elena Kagan writing in her opinion that the justices “think FERC’s authority clear.” The combined D.C. and Supreme Court precedent, Peskoe said, adds up to FERC having “authority when something directly affects rates."

But in this new legal environment, these precedents may not be enough for a fresh case against FERC's transmission planning authority.

“What does happen now? Who knows,” University of Richmond law professor Joel Eisen told me. “What you would expect now is for litigants to say that any major FERC order, including this one, is inconsistent with the statutory authority that the agency has. They would cite Loper Bright to say that the court has to make an independent judgment that FERC has interpreted law to grant authority to do sweeping change to transmission planning, and that is simply no longer the case,” Eisen said.

Much of FERC’s more than 1,300-page order is devoted to detailed analysis of the electricity market as it stands now and how it will evolve over time, justifying the new transmission planning rules. It’s this record, Eisen said, that might let the order survive in a post-Chevron world, even when FERC asserting that the Federal Power Act gives it the right to set rules may be insufficient on its own.

“That may not have been done as an explicit nod to whether a court might uphold it under Chevron going forward. “It seems to me at least that in this new landscape, what will matter is the robustness of the agency grounded in its expertise,” Eisen told me. “The voluminous record supporting 1920 may be persuasive to a federal court.”

But, as Eisen and Peskoe both warned, which federal court may be as important — if not more so — than any argument FERC makes.

Will FERC's arguments about the nature of the electricity market and precedents relating to interpretation of the Federal Power Act fly in, say, a Texas federal court in the Fifth Circuit, where state utility commissions or Republican attorneys general may file suit? District and appeals court judges in the Fifth Circuit have shown great eagerness to throw out Biden-era rules, with a federal judge in Louisiana only this week blocking the Biden administration’s pause on approving new natural gas export terminals.

“If it goes to the Fifth Circuit,” Peskoe said, “that will be bad news.”

Green
Matthew Zeitlin profile image

Matthew Zeitlin

Matthew is a correspondent at Heatmap. Previously he was an economics reporter at Grid, where he covered macroeconomics and energy, and a business reporter at BuzzFeed News, where he covered finance. He has written for The New York Times, the Guardian, Barron's, and New York Magazine.

Politics

AM Briefing: A Quick RNC Energy Recap

On Doug Burgum’s speech, green steel, and electric jets

What Republicans Have Been Saying About Energy at the RNC
Heatmap Illustration/Getty Images

Current conditions: The Acropolis in Greece was closed yesterday due to excessive heat • The Persian Gulf International Airport recorded a heat index of 149 degrees Fahrenheit • Recent flooding in Brazil exposed a 233-million-year-old dinosaur fossil.

THE TOP FIVE

1. Republicans slam Biden energy policy at RNC

Energy hasn’t dominated the conversation at the Republican National Convention this week, but it’s certainly been a talking point. Last night North Dakota Gov. Doug Burgum gave a speech focusing on the topic. “Teddy Roosevelt encouraged America to speak softly and carry a big stick,” Burgum said. “Energy dominance will be the big stick that President Trump will carry.” He accused President Biden of making Russia and Iran “filthy rich” with his energy policies, blamed him for higher electric bills and grid problems, and said “four more years of Joe will usher in an era of Biden brownouts and blackouts.” Oh, and he promised that Trump would “let all of you keep driving your gas-powered cars.” CNN called the speech “Burgum’s audition to be energy secretary.”

Keep reading...Show less
Yellow
Technology

Florida’s Climate Tech Hub Has a Florida Problem

One of the most vulnerable states in the U.S. wants nothing to do with “climate change.”

A Florida postcard.
Heatmap Illustration/Getty Images

The Biden administration loves a hub. There are the hydrogen hubs, the direct air capture hubs, and now there are the tech hubs. Established as a part of the CHIPS and Science Act of 2022, the $10 billion program has so far seeded 12 such hubs across the country. Four of these are focused on clean energy and sustainability, and one is located in the great state of Florida, which recently passed legislation essentially deleting the words “climate change” from state law.

The South Florida ClimateReady Tech Hub did not, in the end, eliminate climate from its name. But while Governor Ron DeSantis might not approve, the federal government didn’t seem to mind, as the Department of Commerce’s Economic Development Administration awarded the hub $19.5 million to “advance its global leadership in sustainable and resilient infrastructure.”

Keep reading...Show less
Yellow
Climate

America Wasn’t Built for This

Why extreme heat messes with infrastructure.

Teton Pass.
Heatmap Illustration/Getty Images

America is melting. Roads are buckling everywhere from Houston to Aurora, Colorado, and in June caused traffic jams in Oshkosh, Wisconsin. Last week, a New York City bridge that had opened to let a ship pass got stuck after expanding in the heat, forcing thousands of commuters to detour. The mid-June heat wave led to thousands of flight delays; more recently, even Toronto’s Pearson International Airport warned travelers to brace for heat-related complications. Commuters along Amtrak’s Northeast Corridor have been harried by heat-induced delays for weeks.

The train delays have affected an especially large population. The Northeast Corridor is the most trafficked commuter rail system in the country, with over 750,000 daily commuters. In late June, Amtrak notified customers that trains in the corridor could face delays of up to an hour in the coming weeks as heat interfered with tracks and overhead power lines. Since it issued that warning, tens of thousands of people have experienced heat-related delays.

Keep reading...Show less
Green