Power to the People is a column by Donald M. Kreis, New Hampshire’s Consumer Advocate. Kreis and his staff of four represent the interests of residential utility customers before the NH Public Utilities Commission and elsewhere.
By DONALD M. KREIS, Power to the People
From the guy who (hopefully) convinced you that ratepayers should care about depreciation, that discount rates are essential to the future of energy efficiency, and that getting rid of a little thing called the minimum offer price rule was big news, here’s a pitch to give some thought to . . . herring.
It is not because of my fondness for my late grandmother’s chopped herring, though Marcel Proust would surely appreciate how vividly the memory lingers of that particular sweet and sour delight. We ratepayers have bigger fish to fry, so let me introduce you to Loper Bright Enterprises, a commercial fishing company that operates out of Cape May, New Jersey.
Like everyone who has ever participated in commercial fishing ever, the folks at Loper Bright are not fond of federal restrictions on when, how, and where they scrounge the ocean for their catch. But especially galling to Loper Bright – and three other commercial fishing outfits from southern New Jersey – is the idea that the feds could force them to pay for observers to hang out on their boats and make sure all the regulations were being followed.
So, the herring fisher-folk did exactly what you would do in the circumstances: They sued. In federal court.
We learned recently that the case, Loper Bright Enterprises v. Raimondo (former Rhode Island Governor Gina Raimondo being the U.S. Secretary of Commerce) has made it all the way to the U.S. Supreme Court. The justices have decided to hear the case in the term that begins in October.
Ordinarily I would be rooting for the herring-people; it sure seems unfair for them to have to pay for their regulatory tormentors. But if Loper Bright Enterprises wins – and the crystal ball I inherited from my late herring-eating grandfather says they will – it will be an awful day for ratepayers and anyone else who enjoys the muscular defense of ratepayer and citizen rights by regulators.
Why? Because the Supreme Court is taking up the Loper Bright Enterprises case to reconsider, and presumably overrule, a 1984 decision of the Court entitled Chevron U.S.A. Inc. v. Natural Resources Defense Council. Out will go what is known to people like me (regulatory lawyers, not necessarily eaters of chopped herring) as the Chevron doctrine.
And what, you ask, is the Chevron doctrine? It’s a rule that says the courts should be circumspect about second guessing decisions by federal regulators. I am thinking, in particular, of the Federal Energy Regulatory Commission (FERC).
FERC looms like a regulatory omnipresence over our nation’s electric and natural gas industries. Thanks to decades of deregulation at the state level, most of the decisions that govern how much Granite Staters pay for electricity fall within the authority of FERC.
Of late FERC’s decisions had grown so pro-consumer that no less a defender of big legacy energy interests than Senator Joe Manchin of West Virginia made sure that Chairman Rich Glick – an exemplary federal regulator – did not get a second term even though President Biden had renominated him. Glick left office in January.
The Chevron doctrine says that when an agency like FERC confronts ambiguous language in whatever federal statute it must enforce, courts should defer to the agency if its interpretation is reasonable. In Chevron, the issue happened to be the meaning of “source” in the Clean Air Act – did it mean an individual smokestack or a whole Chevron oil refinery?
Back when Ronald Reagan was president, his Environmental Protection Agency (EPA) sided with the oil refinery on that one.
And the Supreme Court said it would not second-guess because EPA’s interpretation of the word “source” was reasonable, even if other outcomes could also be okay.
Now that we have Joe Biden’s EPA, and Joe Biden’s FERC, consider this quintessentially ambiguous statutory phrase: “just and reasonable” – as in the requirement in the Federal Power Act that wholesale electricity rates, and transmission charges, should be “just and reasonable.”
Consider what would be likely to happen, post Chevron, if FERC interprets the “just and reasonable” requirement in a manner that favors ratepayers but trims the sails of big generation owners like Constellation and NextEra, or big utilities like Eversource and National Grid. The loser will appeal to the federal courts and the judges there will be free to substitute their policy views for those of FERC.
You may have noticed that the U.S. Supreme Court tends to favor the interests of big business these days. The Court sided with FERC (which sided with ratepayers) the last time the Federal Power Act came up, but that was seven years ago. Much has changed about the Supreme Court since then.
Overruling Chevron will also make it much harder to legislate for a Congress that is already the very picture of gridlock.
Would it surprise you to learn that lawmakers sometimes punt difficult questions to administrative decisionmakers like FERC, by deliberately adopting ambiguous laws?
Sometimes intentional vagueness of that sort is a good idea. As a legislative body, anything goes; decisions can be made for any reason, cynical political reasons, or no reason. But when an agency like FERC makes a decision, it must analyze all the views presented to it and avoid decisions that are (to quote another famously ambiguous statutory phrase) “arbitrary and capricious.”
On occasion my friends in the world of energy journalism refer to topics like this one as “eat your broccoli” stories. One of America’s best energy journalists, David Roberts, once punctuated a story about discount rates with cute pictures of sea otters, because the subject was “a boring thing you should know about.”
The impending death of the Chevron doctrine is not boring; this kind of thing is precisely how the interests of ratepayers and the interests of citizens die their quiet deaths.
So . . . eat your herring? Try this recipe: https://flavorsofdiaspora.com/2016/07/10/chopped-herring-forshmak/