Opinion ID: 185743
Heading Depth: 2
Heading Rank: 2

Heading: Reliability Deference

Text: 12 Petitioners' second argument is also founded on a flawed premise. Petitioners argue that FERC acted capriciously by failing, without adequate explanation, to follow its allegedly long-standing practice of deferring on matters of reliability to the North American Electric Reliability Council (NERC), an industry group formed after the massive power outage in the northeastern United States in 1965 to facilitate voluntary industry cooperation and standards on reliability issues. This argument is possibly more disingenuous than the first. As to discrimination, the flaw in petitioners' premise was in its assertion that FERC had departed from its policies when it had not had occasion to apply it. As to the argument that FERC improperly departed from its policy of deference to NERC, it had no such policy in the first instance. 13 In support of their objection that the real-data-only reservation and scheduling requirements of Attachment M were not necessary on reliability grounds, petitioners offered the opinion of an ad hoc Policy Interpretation Task Force (PITF) of NERC that had addressed a similar dispute between an affiliate of petitioner Enron and the Tennessee Valley Authority (TVA). (TVA is not subject to FERC jurisdiction.) The NERC PITF had expressed the view that the hub scheduling and net scheduling practices favored by petitioners were not inappropriate on electric-grid reliability grounds, provided that complete actual flow data was available sufficiently in advance to permit system-reliability analysis. Further, the PITF expressed the view that if the volume of last minute data changes and completions overwhelmed analytic capabilities and put system stability at risk, the closing of the timing window should be moved back for everyone on a non-discriminatory basis. It is this opinion to which petitioners assert that FERC owes deference. 14 This argument is without merit. Petitioners have failed utterly to demonstrate any practice of FERC deference to NERC. We seriously question whether there validly could be such a policy. FERC is a creature of statute and has only those authorities delegated to it by the Congress. Petitioners have offered no support for the proposition that Congress ever has or even could delegate authority to a federal agency which would then be able to essentially redelegate that authority by deferring to a private body associated with the industry which Congress had commissioned it to regulate. FERC may of course consider and accept the expert opinion of NERC on an electric-grid reliability issue in the same manner that any finder of fact or policy maker may consider and accept the views of an expert, but that does not limit its authority to reject or limit reliance upon the same expert in future cases. Moreover, even to the extent that FERC may have a practice of accepting as helpful or useful the opinions of NERC, NERC's reliability opinion does not appear to be fundamentally inconsistent with FERC's acceptance of Attachment M. NERC's reliability opinion is at base a timing issue, and Attachment M simply takes a conservative but non-discriminatory approach as to when it requires complete and real data from everyone. There is no binding practice of deference by FERC to NERC, and nothing relevant to which FERC might defer.