On May 21, 2020, the Federal Energy Regulatory Commission issued a Proposed Policy Statement describing the parameters it intends to apply to requests for waivers of tariff provisions. Proposed Policy Statement On Waiver Of Tariff Requirements And Petitions Or Complaints For Remedial Relief, Docket No. PL20-7 (May 21, 2020). The Commission summarizes the filed rate doctrine and the corollary rule against retroactive ratemaking as preventing it from waiving, or otherwise modifying, rates or terms of service retroactively. (PP 3-7) The Commission acknowledges that the Commission’s past waiver orders may, at times, have overstepped that authority, particularly for terms of service and inadvertent errors. (PP 11, 15) The Commission notes that it has some remedial authority under Federal Power Act (FPA) Section 309 and Natural Gas Act (NGA) Section 16, which authorize the Commission to advance remedies not expressly provided by the Acts, but those remedies do not override the filed rate doctrine or the rule against retroactive ratemaking. (PP 8-9) The Commission notes it has specific authority to grant requests to waive prior notice requirements under the Acts “for good cause shown.” (P 21)
The Commission establishes that future waiver requests should be limited to: (1) requests for prospective relief, seeking authorization for a future deviation from the filed tariff; or (b) requests involving relief from application of tariff provisions when a tariff expressly authorizes regulated entities to seek a remedial waiver from the Commission for past non-compliance with the filed tariff. (P 10) The Commission also clarifies that it will apply the four factor standard it traditionally applied in waivers involving tariffs under the FPA to those governed by the NGA. (P 18) The four factors are: (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. The Commission indicates it will require stronger showings of these factors when the petitioner is seeking relief from its own failure to comply with the tariff. (P 20) The Commission indicates the request will be denied if a protestor credibly contends that the relief will result in harm to third parties. (Id.)
The Commission provides guidance as to how requests should be made if the requested relief would involve retroactive changes, addressing three circumstances.
First, for entities seeking relief from tariff provisions in connection with actions or omissions that have occurred prior to the date relief is requested, the request should not be styled as a request for waiver because the Commission cannot retroactively alter the substance of the tariff. Instead, the filing should be characterized as a request for remedial relief. The Commission will then consider what relief is appropriate to cure past deviations from a filed tariff, but will not retroactively adjust or waive the provision. (P 12)
Second, if the requesting entity itself acted in a manner inconsistent with the tariff, it should file the request as a petition for declaratory order under Rule 207. If the filing entity alleges another entity acted inconsistent with the tariff the request should be filed as a complaint under Rule 206. (P 13)
Third, if the request alleges violation of a tariff, the petition or complaint should expressly request Commission action pursuant to FPA section 309 or NGA section 16. (P 15)
The Commission also suggests changes regulated entities can make to their tariffs to allow greater remedial latitude going forward. First, tariff provisions creating deadlines can expressly provide that failure to comply with the deadline may be waived by order of the Commission. The Commission views this advance notice as providing it the ability to waive the deadline without violating the rule against retroactive ratemaking. (P 16) Second, the tariff can provide authority for the regulated entity itself to cure errors. (P 17)
Comments have been submitted, and Commission action is pending. However, the Commission indicated its intent to apply the Proposed Policy Statement to pending waiver requests.
For more information regarding this Proposed Policy Statement, please contact Peter Scanlon.
June 2, 2021