[00:00:03] Speaker 05:
Oh yeah, oh yeah, oh yeah.

[00:00:05] Speaker 05:
All persons having business before the honorable, the United States Court of Appeals for the District of Columbia Circuit are admonished to draw near and give their attention for the court is now sitting.

[00:00:16] Speaker 05:
God save the United States and its honorable court.

[00:00:19] Speaker 05:
Receive the plate.

[00:00:22] Speaker 05:
Case number 20-1449, American Municipal Power Inc.

[00:00:27] Speaker 05:
et al.

[00:00:27] Speaker 05:
petitioners versus Federal Energy Regulatory Commission.

[00:00:31] Speaker 05:
for the stakeholders, additioners.

[00:00:34] Speaker 05:
Mr. Gosat for the consummation owners, additioners.

[00:00:37] Speaker 05:
Mr. Longspread for the respondent interveners.

[00:00:43] Speaker 07:
Good morning, Ms.

[00:00:43] Speaker 07:
Murphy.

[00:00:44] Speaker 07:
Whenever you're ready.

[00:00:46] Speaker 02:
Good morning, Your Honors, and may I introduce the court.

[00:00:48] Speaker 02:
Karen Murphy on behalf of the stakeholder

[00:00:52] Speaker 02:
When transmission owners joined the PJM Regional Transmission Organization, it was agreed to delegate to the PJM responsibility to implement and expansion of the regional transmission grid to which they were committing their facilities.

[00:01:07] Speaker 02:
Yet as things currently stand, upwards of two thirds of the projects for new transmission facilities to serve the regional grid are being kept not by PJM, but by transmission owners making unilateral determinations about how to address needs that arise

[00:01:22] Speaker 02:
when they choose to retire from that grid, one of their facilities that has reached the end of life.

[00:01:27] Speaker 02:
In the series of FERC orders at issue here, FERC not only sanctioned that lopsiding planning regime, but cemented in place a regime under which literally billions of dollars of these end of life projects will have their costs allocated locally without regard to whether they have regional benefits.

[00:01:45] Speaker 02:
The ultimate result is to saddle consumers like many of the consumers that my clients here today represent

[00:01:51] Speaker 02:
with local costs for regionally beneficial projects in which the regional planning authority has had virtually no involvement.

[00:01:59] Speaker 06:
And if I could just have you step back a second just to kind of understand the regime and scheme.

[00:02:04] Speaker 06:
Are stakeholders and members interchangeable?

[00:02:08] Speaker 02:
So generally the stakeholders that I'm hearing there's there's stakeholders who are members there.

[00:02:13] Speaker 02:
There may be some among our client group.

[00:02:15] Speaker 02:
I'm not 100% certain that there aren't some who aren't members, but we have members and stakeholders and generally people who kind of put forward the proposal on behalf of the PJM membership.

[00:02:25] Speaker 06:
And is there a document that expressly identifies more than just the stakeholders who are issue in this case?

[00:02:32] Speaker 02:
I don't know offhand kind of where in the record it would tell you the universe of stakeholders.

[00:02:36] Speaker 02:
What I can tell you is the member's proposal that was put forward here was supported by a super majority of the membership.

[00:02:43] Speaker 02:
So it may not be that all of that super majority is a party to this proceeding.

[00:02:48] Speaker 06:
Because I just want to know how far reaching the implications of any of our decision-making goes.

[00:02:53] Speaker 02:
Sure.

[00:02:53] Speaker 02:
I mean, I think that your decision-making would impact basically the entirety of kind of the PJM

[00:03:00] Speaker 02:
universe without regard to precisely who the parties are that are up here, you know, challenging things as members or as parties to the owner's agreement, because ultimately what we're talking about is how to interpret the documents that govern the PJM owner's relationship, the PJM operating agreement and the PJM.

[00:03:17] Speaker 06:
And then one last question on that kind of setup.

[00:03:20] Speaker 06:
How would we use stakeholders versus transmission owners?

[00:03:24] Speaker 02:
So the transmission owners are the parties that own the facilities that kind of make up the PJM grid and they have entered into the owner's agreement with themselves and with PJM that delineates the differences between their rights and the rights that they have delegated to PJM.

[00:03:43] Speaker 02:
The stakeholders and the members

[00:03:45] Speaker 02:
are essentially the customers of the PJM transition grid by and large.

[00:03:53] Speaker 02:
And some of them, there's overlap between the two.

[00:03:55] Speaker 02:
There are some entities, some of my clients are both

[00:03:58] Speaker 02:
who are parties to the owner's agreement and they are customers within PJM who take transmission from the grid and are also members and stakeholders and parties are part of the membership that works on the operating agreement.

[00:04:15] Speaker 06:
And I'll ask the chief judge to give a little grace for you because I just needed to know that answer.

[00:04:20] Speaker 06:
Thank you.

[00:04:21] Speaker 07:
Ms.

[00:04:22] Speaker 07:
Murphy, isn't the stakeholders position that all end of life projects

[00:04:27] Speaker 07:
should be part of the regional plan or some subset of them?

[00:04:31] Speaker 07:
I mean because it seems that there is between both sides sort of like an either or.

[00:04:35] Speaker 07:
It's either all of them are left to the discretion of the transmission owners or all of them are with PJM.

[00:04:42] Speaker 02:
So it's not our position that all of these projects need to be regionally planned.

[00:04:46] Speaker 02:
We do think that they all fall within PJM's planning authority.

[00:04:51] Speaker 02:
such that basically under our proposal, the member's proposal that was the one that was rejected in the second set of third quarters here, we would have essentially had PJM decide in the first instance when a need arises because a facility has been retired, we want PJM to be involved in deciding is that a need that gives rise to a project with regional benefits, in which case it should be regionally planned?

[00:05:15] Speaker 02:
Or maybe it is a project that's local and can be locally planned.

[00:05:19] Speaker 02:
What we don't want is a world in which transmission owners get to make that decision for themselves and decide to locally plan projects even when, as here, it's clear that they actually have projects with regional benefits.

[00:05:31] Speaker 07:
And is that because end-of-life projects are part of an enhancement or expansion?

[00:05:36] Speaker 02:
We think they are.

[00:05:38] Speaker 02:
I guess the way I would put it is, you know,

[00:05:41] Speaker 02:
I think it's helpful to think about it less in terms of the project and more in terms of the need.

[00:05:46] Speaker 02:
What happens when you retire a facility that's currently serving the regional grid is you have a need for transmission on the grid.

[00:05:54] Speaker 02:
And we think the question of how you should deal with that need is a question that involves

[00:06:00] Speaker 02:
planning about the enhancement and expansion of the grid.

[00:06:02] Speaker 02:
Now, it may be that the ultimate determination about a proper project in some instances is something that's pretty minimal and doesn't really have a huge impact in terms of enhancement or expansion, and PJM can say that can be locally planned and you can do it.

[00:06:17] Speaker 02:
But the universe of things we're talking about, when you're saying we're going to take something offline that's currently serving the regional grid,

[00:06:26] Speaker 02:
To us, that fits very comfortably within that planning responsibility to deal with enhancement and expansion of grid.

[00:06:34] Speaker 07:
And I think one of the major... And do you think that's true with respect to the terms of the owner's agreement as it is written now or that the owner's agreement would require some kind of amendment to make that clear?

[00:06:49] Speaker 02:
I think it's unambiguous within the terms expansion and enhancement.

[00:06:53] Speaker 02:
And I think

[00:06:54] Speaker 02:
One of the principle problems with FERC's reasoning here is FERC all but acknowledged that the way they have read those two terms deprives enhancement of any independent force, because FERC has defined an enhancement to mean only a capacity expansion.

[00:07:11] Speaker 02:
And if the only thing that counts as an enhancement is capacity expansion, then lots of things that in common parlance would be enhancements, things that increase reliability, increase efficiency,

[00:07:22] Speaker 02:
increase cost effectiveness, are enhancements that somehow have been read right out of the agreement.

[00:07:28] Speaker 02:
So you're not only depriving enhancement of what I would think of as it's just ordinary plain meaning, you're really depriving it of any meaning at all and reading this agreement as if the only thing that was delegated is planning authority with respect to capacity expansions.

[00:07:45] Speaker 02:
I don't think that's a natural or appropriate reading of the plan.

[00:07:50] Speaker 00:
I'm sorry, will you finish with that one?

[00:07:52] Speaker 00:
Yeah.

[00:07:52] Speaker 00:
I have a procedural question.

[00:07:56] Speaker 00:
You argue that the, in your brief at least, you argue that the transmission owners surrendered their filing rights to PGM, and you rely on the tariff section 9.2, right?

[00:08:17] Speaker ?:
Yes.

[00:08:18] Speaker 00:
What is, I'm curious about it, you cite it, but you don't seem to make a big deal out of it.

[00:08:22] Speaker 00:
What is the term, what is the phrase, what is the phrase, what is the phrase, terms and conditions of the PGM tariff mean?

[00:08:37] Speaker 00:
What does that mean in the tariff?

[00:08:39] Speaker 02:
So I think the dichotomy we see between 9.1, which reserves filing rights to the owners, and 9.2, which reserves to PJM, is that 9.1 is focused on things that are very specific to rates.

[00:08:55] Speaker 02:
And so I think the universe of what we would think of as planning decisions, which is what we're talking about in the first instance here.

[00:09:02] Speaker 02:
Obviously, these are planning decisions that impact cost allocation, but that planning determinations in the tariff about who's going to decide what should be built are things that we would fit into that broader language in 9.2.

[00:09:15] Speaker 00:
And so if you're right about that, it's a consequence simply that the transmission owners just need to submit

[00:09:23] Speaker 00:
their proposed tariff revisions to PGM and follow those procedures?

[00:09:29] Speaker 00:
Is that the only difference?

[00:09:31] Speaker 02:
As a procedural matter?

[00:09:32] Speaker 02:
Yeah.

[00:09:32] Speaker 00:
So, as I understand it, PGM... I mean, suppose you're right about this.

[00:09:36] Speaker 00:
Yes.

[00:09:36] Speaker 00:
Suppose you're right that this filing right they surrendered.

[00:09:40] Speaker 00:
What are the consequences of that?

[00:09:41] Speaker 02:
So as I understand it, PJM doesn't have an obligation or even authority, I don't think, to file a unilaterally, something that's put where we're just by the owners to change the tariff.

[00:09:53] Speaker 02:
So if we're right about that, you know, the changes to the tariff have to come through PJM, through the PJM membership directing PJM as to what the filing should be, which is what happened with respect to our proposal.

[00:10:06] Speaker 00:
Yes, that's the way yours worked.

[00:10:08] Speaker 00:
Right.

[00:10:08] Speaker 00:
But does PJM have any choice about that?

[00:10:12] Speaker 02:
So I don't think, you know, I think we, as we read kind of the filing obligations of PJM, it doesn't have the ability to file something that's just put forward by the owners that isn't within the owners 9.1 rights.

[00:10:25] Speaker 02:
No, I'm talking about that.

[00:10:27] Speaker 00:
Oh, all right.

[00:10:28] Speaker 00:
Well, tell me what will happen.

[00:10:30] Speaker 00:
Suppose we agree with you that this has to go to

[00:10:34] Speaker 00:
This has to go back for that reason.

[00:10:36] Speaker 00:
What will happen?

[00:10:36] Speaker 02:
I think if you agreed with us, then the what would have to be come up through PJM is something like the members proposal that because it would have to come through for PJM to file it, it would have to be something that the owners got the members to agree to direct PJM to file.

[00:10:51] Speaker 02:
So, you know, you end up with... So you would have control over it?

[00:10:55] Speaker 02:
We would have control over what can be filed.

[00:10:57] Speaker 02:
And FERC would have the same ultimate question of looking at probably the member's proposal and determining whether it thought the member's proposal was consistent with the owners, the rights of the owners in the owner's agreement and the broader documents here.

[00:11:11] Speaker 02:
So, you know, I mean, ultimately,

[00:11:13] Speaker 02:
I don't want to suggest we actually care quite a bit about this question of who has the rights to file because it has broader implications, not just this case, but for several cases in which we've been having a debate with Burke and the owners for years about what the scope of their filing rights are.

[00:11:29] Speaker 02:
But in this case, you know,

[00:11:31] Speaker 02:
you'd probably still end up reaching the question of whether there it who has the planning authority because the members proposal was put forward properly to FERC pursuant to the members rights to have PJM make filings on their behalf and FERC did address that question in the members proposal orders separate from

[00:11:51] Speaker 02:
its discussion in the local proposal.

[00:11:54] Speaker 07:
Is the filing authority question also linked to the substantive question about whether the transmission owners have authority for end-of-life planning?

[00:12:06] Speaker 07:
Because if you assume that they do have authority over end-of-life projects, then doesn't that pertain to their transmission revenue requirements, which is a category over which they retain

[00:12:22] Speaker 07:
filing rights.

[00:12:24] Speaker 07:
So if they have the authority to plan those projects, then they need the revenue to pay for those projects and so would have filing rights.

[00:12:31] Speaker 07:
So I'm wondering if the two questions are in fact interrelated.

[00:12:34] Speaker 02:
So I think they're related.

[00:12:35] Speaker 02:
I don't think at the end of the day they stand and fall together, but I do think they're related in the sense that, you know, we would say it's not kind of terribly surprising that 9.1 is focused on rates and not planning because

[00:12:50] Speaker 02:
That is consistent with the broader dichotomy of what we think is the right understanding of the owner's agreement and the delegated rights under section 4.144 that rates and rate determinations are something that owners did reserve the rights to make their filings to FERC about.

[00:13:08] Speaker 02:
But planning determinations, that's exactly what they gave up was the right to

[00:13:13] Speaker 02:
do planning for the broader enhancement and expansion of the regional transmission grid, because that was sort of the point.

[00:13:20] Speaker 02:
We're joining the grid.

[00:13:21] Speaker 02:
We're putting our facilities in that grid.

[00:13:23] Speaker 02:
And we're entrusting a regional authority to make determinations about what the needs are and how best to address them for the broader region.

[00:13:32] Speaker 02:
So I do think there's a reason that the parties kind of both see them as aligning with their ultimate substantive positions about rights.

[00:13:42] Speaker 02:
But at the end of the day, I don't think that there is a reason that, you know, you kind of have to read them such that if you reach one conclusion about filing that necessarily follows, then you would reach the same conclusion.

[00:13:56] Speaker 06:
With respect to the 8.5 section that's dealing with the voting rights, it actually refers to an administrative committee versus PJM.

[00:14:06] Speaker 06:
So how does that play into

[00:14:08] Speaker 02:
Sure, we think that's actually like the critical distinction here, which is that the owners chose to act through the administrative committee.

[00:14:19] Speaker 02:
And as we said in our reply group, if they hadn't chosen to do that, they wouldn't have been bound by the procedural requirements that apply to action through the administrative committee.

[00:14:29] Speaker 02:
It's not obvious that they had to act through the committee.

[00:14:32] Speaker 02:
They could have put out their proposal themselves, but having chosen to act

[00:14:37] Speaker 02:
committee can only act if it takes a vote.

[00:14:40] Speaker 02:
And it did not do that here.

[00:14:41] Speaker 02:
It took a vote ultimately on the proposal, but not on that initial step of submitting the proposal to everybody, basically to the membership or employee.

[00:14:51] Speaker 02:
And I do, you know, I just want to be clear that there's a reason we care about this.

[00:14:56] Speaker 02:
It actually is sort of what helped

[00:14:59] Speaker 02:
Then the timing of it and jump us in line because we were right to vote have the membership was ready to vote on a proposal to put out notice we're going to vote on a proposal in a couple of weeks and the very next day is when the owners.

[00:15:13] Speaker 02:
jumped us in line and filed their proposal with FERC and then FERC was unwilling to consolidate our two proposals and consider them together.

[00:15:22] Speaker 02:
So the whole kind of trajectory of how all of this got teed up at FERC and the lens through which FERC was looking at it ended up being controlled by the fact that they filed this, that they put in this filing before we could complete

[00:15:36] Speaker 02:
membership vote on our filing and they wouldn't have been able to do that if they complied with the obligations to take a vote on the initial step of putting that proposal out for for membership input because there's procedural dynamics that apply to just putting something out for up for a vote for the administrative committee.

[00:15:55] Speaker 06:
So you take a different position in terms of there's not a you think that there should be essentially a vote

[00:16:03] Speaker 02:
to put the proposal out before that's right if you if you want to add to the administrative committee you know our view is you need to take the vote and for both the preliminary step and the ultimate now the consultation to take the vote to do the consultation okay and then ultimately you have the vote so so we do think that there are a couple of procedural defects here but you know i also want to

[00:16:26] Speaker 02:
very clear that we think there's fundamental substantive defects with Berks reasoning.

[00:16:30] Speaker 07:
Ms Murphy, can you say a little bit about if we were to vacate Berks orders here, what would you have us direct them to do on remit?

[00:16:41] Speaker 07:
Consider the two proposals together?

[00:16:44] Speaker 02:
I mean, I think it would be, you know, I suppose if there's a couple of different ways you could vacate them.

[00:16:53] Speaker 02:
You could vacate the first set of orders on the ground.

[00:16:56] Speaker 02:
that there was procedural defects.

[00:16:58] Speaker 02:
The procedural defects don't naturally carry over to the second set of orders.

[00:17:08] Speaker 02:
impacted the whole thing.

[00:17:09] Speaker 02:
So just please start over.

[00:17:11] Speaker 02:
But I also think given that the orders on the member's proposal independently addressed the substantive question of who has the power here, that it would be absolutely open to this court and you know we certainly urge the court to take a step of addressing in the context of the member's proposal the fundamental problems with the reasoning that FERC

[00:17:32] Speaker 02:
employed so that we don't go back to square one and just kind of show up here again a year from now in exactly the same, you know, making the exact same subject of arguments and just a little bit different.

[00:17:43] Speaker 02:
And we do think that both, you know, whether you're looking at this through the lens of the local proposal or through the lens of the members proposal, that this language in the owner's agreement about enhancement and expansion

[00:17:54] Speaker 02:
unambiguously gives this planning power.

[00:17:58] Speaker 07:
Do you think it was arbitrary and capricious for to consider the two proposals separately?

[00:18:03] Speaker 02:
You know, I mean, we haven't independently argued, you know, kind of independently challenged the failure to consolidate

[00:18:10] Speaker 02:
I don't quite understand why you wouldn't consolidate.

[00:18:14] Speaker 02:
I mean, clearly, all of this is arising in the same context.

[00:18:17] Speaker 02:
You have here, you know, the same parties aligned in the same substantive positions in the opposite way.

[00:18:23] Speaker 07:
And some of the arguments of the stakeholders go to whether

[00:18:28] Speaker 07:
whether FERC had to consider whether the proposals were just and reasonable, right?

[00:18:34] Speaker 07:
And it seems like it would be very hard to make that determination looking at the proposals separately because they're two competing proposals.

[00:18:41] Speaker 07:
And so therefore they would have to say one is just and reasonable or neither are just and reasonable or something about both of them.

[00:18:49] Speaker 02:
I think that's exactly right.

[00:18:51] Speaker 02:
And it goes to what, to me, one of the most kind of glaring problems

[00:18:56] Speaker 02:
reasoning is the failure to account for the cost causation principles which are important to both of these proposals.

[00:19:04] Speaker 02:
I mean, as we repeatedly explain below, the local proposal, sure, you know, Ferg's right that it doesn't change the formulas for how cost causation will work, but what it does is the same thing that was going on in the old Dominion case.

[00:19:17] Speaker 02:
It takes a category of project and says this category is going to be subject to local cost allocation.

[00:19:24] Speaker 02:
We put in a bunch of evidence

[00:19:26] Speaker 02:
in the administrative record that this category, just like in Old Dominion, includes significant numbers of projects that have regional benefits.

[00:19:34] Speaker 02:
I mean, we put in evidence that they were talking about, you know, in one year alone, like $750 million of these costs, half of that was misallocated if you just apply ordinary compensation principles.

[00:19:45] Speaker 02:
Now, if FERC were really looking at, you know, that proposal side by side with our proposal under our proposal where we're saying,

[00:19:52] Speaker 02:
We think there should be a threshold determination by PJM to decide, look, some of these projects, local, fine, they can be locally cost allocated.

[00:20:01] Speaker 02:
Some of these projects are regional.

[00:20:03] Speaker 02:
And as to those, we need either have regional cost allocation or at the very least acknowledge that we're not having it and explain why that's consistent with Old Dominion, with Energy Arkansas.

[00:20:15] Speaker 02:
I think the answer Ferg gave is simply say,

[00:20:18] Speaker 02:
Oh, this filing isn't about the formula itself.

[00:20:21] Speaker 02:
So we can ignore the fact that this filing is deciding what cost allocation will apply.

[00:20:27] Speaker 02:
I mean, to me, that is kind of classic arbitrary preciousness, even without this board having just put out an opinion a couple of years ago, saying in the specific context of end of life projects, that FERC has an obligation to deal with cost causation principles that FERC should

[00:20:43] Speaker 02:
presumptively when you have regional projects be doing regional cost allocation and that if you're not going to do that you need to acknowledge it and explain why.

[00:20:52] Speaker 02:
Now I will say, you know, I think there's a reason that these projects ended up going, you know, why the local proposal designates them categorically for local cost allocation.

[00:21:03] Speaker 02:
It's because if you go back, I mean this is another problem with first reasoning, if you go back to something like order 1000 that kind of sets the whole stage

[00:21:11] Speaker 02:
Irk has said that if you have regional benefits, then you not only have to have regional cost allocation, you have to have regional planning.

[00:21:19] Speaker 02:
You have to have competition.

[00:21:20] Speaker 02:
You have to go through that process that has been set up for the projects that have regional cost allocation.

[00:21:26] Speaker 02:
So, you know, there's a reason that owners want to say, we're just going to put these in the local bucket because the moment you do acknowledge that we're talking about a category that has projects that have tens, hundreds of millions, I mean, you know, over time, we could be talking about billions of dollars,

[00:21:42] Speaker 02:
costs that are being under cost position principles misallocated that not only says we need to allocate the cost differently, it really goes to show why this whole regime that the local proposal is put in place just doesn't work because we should be doing regional planning, not just regional cost allocation in instances where we have needs that arise that impact the integrity.

[00:22:06] Speaker 07:
Any further questions?

[00:22:08] Speaker 07:
Thank you.

[00:22:09] Speaker 07:
I'll give you some time on the model.

[00:22:28] Speaker 03:
May it please the court, David Gossett for the transmission owner petitioners.

[00:22:33] Speaker 03:
The legal determination that the owner's agreement is ambiguous has no basis in the controlling document.

[00:22:39] Speaker 00:
Mr. Gossett, could you start with standing?

[00:22:42] Speaker 00:
Can you, you, you repeated the commission repeatedly ruled in your favor in this case.

[00:22:51] Speaker 00:
And what you're challenging here is there, is there reasoning, correct?

[00:22:55] Speaker 00:
Can you cite any case which suggests you have standing under these circumstances?

[00:23:01] Speaker 03:
Your honor.

[00:23:03] Speaker 03:
The Commission made two separate legal determinations.

[00:23:06] Speaker 03:
They made the legal determination that the owner's agreement was ambiguous.

[00:23:11] Speaker 03:
And then they separately made the legal determination that the transmission owners would plan for the specific end-of-life projects.

[00:23:21] Speaker 03:
That first legal determination is a separate one that has separate consequences.

[00:23:26] Speaker 00:
So I go back to my question.

[00:23:27] Speaker 00:
Can you cite a case where a... Let me just finish my question.

[00:23:32] Speaker 00:
where petitioner has succeeded on the merits, but is challenging the reasoning.

[00:23:40] Speaker 03:
I mean, in sealant, the court talked about how if there was a separate proceeding as a result of the reasoning, it would be sufficient.

[00:23:49] Speaker 03:
And in metric constructors case that we discussed our reply brief similarly.

[00:23:55] Speaker 03:
But I mean, I think it's important here to focus on what the consequences of that the determination are and the fact that the commission never really engaged with that.

[00:24:04] Speaker 03:
We submitted a factual declaration in the record that the finding of ambiguity as to the owner's agreement was costing the transmission owners time and money in separate proceedings, in proceedings addressing other forms of... I read all that.

[00:24:24] Speaker 00:
My question is whether that's enough for Article 3 standard.

[00:24:29] Speaker 00:
Not all injuries are sufficient.

[00:24:31] Speaker 00:
to support Article 3 standing.

[00:24:33] Speaker 00:
Some are too amorphous or too conjectural.

[00:24:40] Speaker 03:
Of course, Your Honor, but I think we have

[00:24:45] Speaker 03:
specified concrete injuries that are not therefore amorphous or conjectural, it is costing the transmission owners time and money in the planning of other forms of supplemental projects, other forms of asset management projects that are not end of life projects.

[00:25:02] Speaker 03:
But that are today we are being challenged by the stakeholders and others saying these are under the commission's ruling projects that should be planned, must be planned by PJM rather than by the transmission owners.

[00:25:19] Speaker 03:
And that's costing us money in the real world today.

[00:25:22] Speaker 03:
It's a very concrete injury that we believe is sufficient under.

[00:25:27] Speaker 07:
Mr. Prosser, are you saying legal uncertainty is an injury because it

[00:25:32] Speaker 07:
creates legal fees?

[00:25:38] Speaker 03:
I mean, no, your honor, because it's not, I mean, the finding of ambiguity is not an uncertainty.

[00:25:46] Speaker 03:
It's not uncertain.

[00:25:47] Speaker 03:
There has been a finding here that the owner's agreement is ambiguous.

[00:25:52] Speaker 03:
So it's this weird circumstance where

[00:25:56] Speaker 03:
The actual legal finding is a finding of uncertainty.

[00:26:00] Speaker 03:
That's the legal finding here.

[00:26:03] Speaker 03:
So we're not saying that there is uncertainty about the legal finding.

[00:26:06] Speaker 03:
There is certainty that the commission has said that the owner's agreement is embedded.

[00:26:11] Speaker 07:
There's certainty about uncertainty.

[00:26:14] Speaker 03:
Yes, exactly.

[00:26:16] Speaker 07:
That creates an Article III injury in fact.

[00:26:18] Speaker 07:
I don't know if there are any cases that suggest that that's true to Judge Tatel's point.

[00:26:24] Speaker 03:
I have not found any cases in which the, um, the injury specifically is a finding of ambiguity, but here we believe that that injury is, um, precise and has a directly traceable consequences to our members.

[00:26:42] Speaker 06:
I mean, if that is reversed, what does it accomplish?

[00:26:49] Speaker 06:
What are you?

[00:26:50] Speaker 06:
You know, if that particular finding or reversing on that particular order point, what is that accomplishing?

[00:26:56] Speaker 06:
What do you need us to do in that regard?

[00:26:58] Speaker 06:
And, you know, what's the consequence of that?

[00:27:01] Speaker 03:
Well, the consequence as to this litigation, I would suggest would be that the commission, the court would grant the petitions for review and vacate for remand.

[00:27:13] Speaker 03:
We would have remand without vacator for purposes of the commission to who

[00:27:19] Speaker 03:
clarifying or to re rework its orders along the lines it has done three times already.

[00:27:25] Speaker 03:
Its consequences in other circumstances would be that it would.

[00:27:30] Speaker 06:
I guess I'm asking, are you asking just to delete that particular finding about the uncertainty?

[00:27:37] Speaker 06:
And I mean, excuse me, the ambiguity?

[00:27:40] Speaker 03:
Yes, sir.

[00:27:41] Speaker 03:
That is what we as petitioners are asking for is that the the

[00:27:46] Speaker 03:
I'm not sure if that's correct.

[00:27:58] Speaker 03:
remand for the purpose of the Commission to say the owner's agreement unambiguously gives us the rights to plan the specified end-of-life projects.

[00:28:08] Speaker 03:
Of course, it's important to note that the Commission said that the owner's agreement was ambiguous, but never actually really relied on that fact.

[00:28:16] Speaker 03:
I mean, they said that they were going to look to extrinsic evidence, but then in fact, the evidence they looked to was exactly the kinds of evidence that

[00:28:24] Speaker 03:
You would normally look to under Chevron step one or in a contract interpretation case to decide what the contract means.

[00:28:31] Speaker 03:
to decide whether the contract unambiguous in the first place.

[00:28:34] Speaker 03:
So they look to history and pattern and practice in the industry.

[00:28:38] Speaker 03:
That's exactly the material that the commission itself in paragraph 14 of the hearing order said, you'll have to look to decide ambiguity.

[00:28:46] Speaker 03:
So it really is a reach here.

[00:28:51] Speaker 03:
It's an agglomeration of power on the part of the commission.

[00:28:56] Speaker 03:
I mean, because what does the finding of ambiguity do?

[00:29:00] Speaker 03:
It transfers the decision making about what the owners agreement does, says to the commission.

[00:29:09] Speaker 03:
I mean, it's exactly what the commission did in Atlantic City.

[00:29:12] Speaker 00:
That's always the case in a situation where an agency or a court concludes language is ambiguous.

[00:29:17] Speaker 00:
I mean, that's nothing new.

[00:29:19] Speaker 00:
That happens.

[00:29:20] Speaker 00:
That's inherent in the judgment that something's ambiguous.

[00:29:25] Speaker 03:
Yes, your honor.

[00:29:27] Speaker 00:
So I'm not sure why that's relevant to your standing.

[00:29:32] Speaker 03:
I was addressing Judge Child on the merits, your honor.

[00:29:36] Speaker 03:
I thought her question was a merits question.

[00:29:40] Speaker 00:
Seeking remand.

[00:29:41] Speaker 00:
That's okay.

[00:29:41] Speaker 00:
Keep going.

[00:29:42] Speaker 00:
I'm sorry.

[00:29:43] Speaker 00:
If that's what you were doing, I apologize for interrupting you on that.

[00:29:46] Speaker 00:
Go ahead.

[00:29:47] Speaker 07:
Perhaps seeking remand without vacator as a giveaway that there's no real injury.

[00:29:54] Speaker 03:
I do think there is injury in the context we've said, though, of course, I do also think that the commission, the court in reviewing the commission's order here could review this legal reasoning, regardless of our standing to bring this case.

[00:30:08] Speaker 03:
I mean, it's a legal question for the court to address.

[00:30:13] Speaker 00:
Any other questions?

[00:30:14] Speaker 00:
I don't want to take this any further.

[00:30:18] Speaker 00:
If you don't have standing, why would we review that in this part of the case?

[00:30:23] Speaker 03:
Uh, if we don't have standing your judge tailed, uh, we think you could review it in the other part.

[00:30:30] Speaker 00:
I guess.

[00:30:30] Speaker 00:
Yes.

[00:30:31] Speaker 00:
That I agree with you on that.

[00:30:32] Speaker 03:
That was my point.

[00:30:33] Speaker 00:
So your point doesn't have any consequences for what this court has to do.

[00:30:38] Speaker 00:
Correct.

[00:30:39] Speaker 03:
The court has to decide whether the commission erred in its interpretation.

[00:30:43] Speaker 00:
Okay.

[00:30:44] Speaker 00:
That's all.

[00:30:45] Speaker 03:
Thank you.

[00:31:02] Speaker 08:
Morning is true.

[00:31:03] Speaker 08:
Good morning.

[00:31:04] Speaker 10:
May it be the court Susanna Q for the commission.

[00:31:08] Speaker 00:
I'd like to start.

[00:31:09] Speaker 00:
Do you have any views about this standing question?

[00:31:11] Speaker 00:
I'm sorry.

[00:31:12] Speaker 00:
Do you have any views about this standing issue?

[00:31:15] Speaker 10:
I think Judge Taylor, you asked exactly the question that the commission has been asking.

[00:31:22] Speaker 10:
The commission ruled in favor of the transmission owners.

[00:31:26] Speaker 10:
We don't think that uncertainty, even if it's certain uncertainty, is an actual arm sufficient for Article 3 standing.

[00:31:36] Speaker 10:
I think that transmission owners

[00:31:41] Speaker 10:
You know, we received all the substantive relief that they wanted.

[00:31:46] Speaker 00:
But do you agree, even if we agree with you about that, that we still have to address that issue in the stakeholders' part of the case, right?

[00:31:55] Speaker 10:
Right, Your Honor.

[00:31:55] Speaker 10:
I think that even if the transmission owner petitioners have no standing, of course, there is the stakeholder petitioners, and that has to be reviewed.

[00:32:05] Speaker 00:
OK.

[00:32:05] Speaker 00:
And just to clean up some discussions from previous parts of the argument, what's your view about

[00:32:10] Speaker 00:
Chair of Section 9.2.

[00:32:14] Speaker 10:
Your Honor, the commission, as we explained in our brief, we think that the transmission owners certainly retained their Section 205 filing rights with respect to the tariff.

[00:32:26] Speaker 10:
If you look at the section in its entirety, you'll see other indications.

[00:32:36] Speaker 10:
that the transmission owners did not confine themselves only filing rate and transmission revenue requirement changes.

[00:32:44] Speaker 10:
For example, at the end of section 9.2f, the transmission owners reserve their rights to assert that other provisions of the tariff should be included within their section 205 rights.

[00:32:56] Speaker 10:
And that's a JA 2265.

[00:32:58] Speaker 10:
When we think applying Atlantic City,

[00:33:03] Speaker 10:
You know, the commission did not feel that it could hold that the transmission owners lacked Section 205 filing rights here.

[00:33:13] Speaker 06:
Was there any reason that these proposals weren't considered in a consolidated way?

[00:33:18] Speaker 10:
Well, Your Honor, I think

[00:33:20] Speaker 10:
I think Judge Rao made a point about the practicality of reviewing these two proposals.

[00:33:26] Speaker 10:
I do want to emphasize that how these cases were teed up at FERC had no impact on the ultimate resolution.

[00:33:35] Speaker 10:
The commission objectively considered each of these proposals on their own merits.

[00:33:40] Speaker 10:
Each Section 205

[00:33:43] Speaker 10:
They had to be considered under the burden, you know, the proponents of the proposal had to show that it was just and reasonable.

[00:33:54] Speaker 10:
And the commission accepted a transmission owner proposal as just and reasonable because it was consistent with the lines that were drawn in the PJM governing document.

[00:34:05] Speaker 10:
It did not alter any actual division of authority.

[00:34:08] Speaker 10:
On the other hand, the stakeholder proposal was not accepted as contrary to the lines that were drawn in the PJM governing agreement.

[00:34:16] Speaker 10:
And here, I'd like to point out the decision.

[00:34:19] Speaker 07:
Ms.

[00:34:19] Speaker 07:
Chiu, separating these out, I think it makes it easier for FERC to kind of put aside the cost allocation issue.

[00:34:28] Speaker 07:
You know, it says, well, the transmission owner proposal

[00:34:31] Speaker 07:
is not to a specific allocation of costs, and so we're not going to consider that here.

[00:34:35] Speaker 07:
And then, you know, taking the proposal separately, you know, FERC seems to have avoided its responsibility to think about how these proposals affect costs, which is an important underlying principle of quarter 1000 and 2000 and, you know, the sort of the whole idea of regional transmission.

[00:34:55] Speaker 07:
Right.

[00:34:55] Speaker 10:
So your honor, you're correct that absolutely cost allocation is hugely important in regional transmission planning.

[00:35:02] Speaker 10:
But this case, let me emphasize first that this case isn't about transmission planning policy and the commission is actively engaged on issues relating to cost allocation outside of this case.

[00:35:14] Speaker 10:
For example, in the

[00:35:16] Speaker 10:
Concurring statement by Commissioner Clements.

[00:35:18] Speaker 10:
She discusses the ongoing proposed rulemaking on transmission policy issues for the commission.

[00:35:26] Speaker 10:
That's discussed at Joint Appendix 2061.

[00:35:29] Speaker 07:
I mean, what about the cost allocations here?

[00:35:33] Speaker 07:
I mean, so first position here streams to me very peculiar because first ultimate conclusion is that the agreement is ambiguous.

[00:35:42] Speaker 07:
And so therefore it doesn't actually settle

[00:35:45] Speaker 07:
who should resolve, who should plan end-of-life projects.

[00:35:51] Speaker 07:
So if that's the case, then making a decision that transmission owners plan end-of-life projects will, of course, have consequences for costs.

[00:36:01] Speaker 07:
Because FERC concluded that it was ambiguous.

[00:36:03] Speaker 07:
So by definition, if it's ambiguous, it doesn't then settle the cost allocation.

[00:36:09] Speaker 07:
And so by choosing the transmission owner proposal, you are choosing one particular allocation of cost.

[00:36:15] Speaker 07:
And then why isn't it incumbent on FERC to determine whether that cost allocation is just and reasonable?

[00:36:22] Speaker 10:
So, Your Honor, it's important to remember this was not a Section 206 complaint.

[00:36:29] Speaker 10:
So that's what makes this case different from the Old Dominion case.

[00:36:34] Speaker 10:
That case involved an identified set of transmission projects, so we knew what they were.

[00:36:40] Speaker 10:
And that set of transmission projects, the transmission owners actually made a filing to remove them from regional cost allocation.

[00:36:49] Speaker 10:
These are projects that were originally identified as Form 715 projects, which are planned by PJM and typically would have been subject to broad regional cost allocation.

[00:37:00] Speaker 10:
But in that case, the transmission owners chose to make a tariff filing to remove them from regional cost allocation, to make them local.

[00:37:08] Speaker 10:
Now, this case doesn't involve anything like that.

[00:37:12] Speaker 10:
Why not?

[00:37:14] Speaker 07:
Why not on FERCs?

[00:37:16] Speaker 07:
first conclusion that it's ambiguous.

[00:37:18] Speaker 07:
So it is making a change to the allocation.

[00:37:23] Speaker 10:
So, Your Honor, there's no change to the allocation.

[00:37:27] Speaker 10:
The ambiguity finding relates to the specific language in the owner's agreement, the expansion and enhancement language.

[00:37:38] Speaker 10:
Of course, the commission had before it two parties that were advancing very different proposals and saying that the owner's agreement was unambiguous in two opposite directions.

[00:37:51] Speaker 10:
So the commission turned to the language of that owner's agreement and specifically section 6.3.4 at JA 2367, which says that PJM shall conduct its planning for the expansion and enhancement of transmission facilities.

[00:38:09] Speaker 10:
based on a horizon of at least 10 years.

[00:38:13] Speaker 07:
It's true.

[00:38:13] Speaker 07:
I just don't feel like you're answering my question.

[00:38:15] Speaker 07:
My question is if the commission believes that that was ambiguous and then they pick the transmission owner proposal in the context of what they say is an ambiguous agreement, then doesn't that have consequences for costs?

[00:38:30] Speaker 07:
Namely that these projects are going to have costs assigned locally.

[00:38:35] Speaker 10:
Okay, I apologize, Your Honor.

[00:38:37] Speaker 10:
You're right that there are consequences for costs.

[00:38:40] Speaker 07:
Yes.

[00:38:40] Speaker 07:
And if that's true, then why does FERC not have to determine whether that allocation is just and reasonable on a cost causation type of principle?

[00:38:48] Speaker 10:
Right.

[00:38:48] Speaker 10:
And that's because there are consequences for the costs, practically speaking, on the ground.

[00:38:56] Speaker 10:
However, these are two proposals that were made under Section 205.

[00:39:01] Speaker 10:
And neither proposal actually made any change to the existing cost allocation methods that are set out in the PJM tariff.

[00:39:09] Speaker 07:
Well, I mean, the fact that it doesn't change one particular part of the tariff doesn't mean that, as you say, it does have consequences for costs.

[00:39:17] Speaker 07:
So just because it doesn't modify one particular part of the tariff, you're saying,

[00:39:22] Speaker 07:
FERC is absolved of considering cost causation, you know, against a background where FERC is supposed to be trying to promote efficient, cost-effective, regional planning of transmission upgrades for the benefit of the public.

[00:39:37] Speaker 07:
So why does FERC not believe it has to consider that in this context?

[00:39:41] Speaker 10:
Well, the commission felt it was not appropriate in the context of these Federal Power Act Section 205 filings, and it felt that it

[00:39:52] Speaker 10:
The larger competitive considerations that inform the commission's policy concerns.

[00:39:59] Speaker 10:
Those are addressed in other contexts, right?

[00:40:01] Speaker 10:
They could be addressed as they are being addressed in the generic rulemaking about transmission planning and cost allocation.

[00:40:08] Speaker 10:
They could also be addressed in a section 206 complaint filing, which would be under 16 USC section 824E.

[00:40:17] Speaker 10:
And there, that would be a challenge to the existing cost allocation as not just unreasonable.

[00:40:24] Speaker 10:
So here we don't have that.

[00:40:26] Speaker 10:
This is not a section 206

[00:40:28] Speaker 10:
proceeding where parties or any party is challenging the existing cost allocation as unjust and unreasonable.

[00:40:37] Speaker 07:
It's proved a cost allocation, I think, by approving a transmission owner proposal.

[00:40:43] Speaker 07:
Is that incorrect?

[00:40:44] Speaker 07:
I mean, in a Section 205 filing, FERC still has to determine that what it's accepting is just and reasonable.

[00:40:50] Speaker 10:
It's correct.

[00:40:51] Speaker 10:
The commission accepted it as just unreasonable, but on the basis that it didn't change the status quo.

[00:40:57] Speaker 10:
The existing cost allocation remained the same.

[00:41:00] Speaker 07:
But that's my question, right?

[00:41:02] Speaker 07:
Because actually on FERC's view, it did change the status quo because FERC believes that the agreement was ambiguous.

[00:41:09] Speaker 07:
So if FERC holds to the idea that it's ambiguous, then by accepting the 205 filing, it is making a change.

[00:41:18] Speaker 07:
It is not the status quo on first own reasoning.

[00:41:21] Speaker 07:
So at least at a minimum first internal reasoning is unreasonable, maybe or arbitrary and capricious.

[00:41:27] Speaker 07:
Like, I don't know how first reasoning kind of all lines up to reach the conclusion that it did.

[00:41:33] Speaker 10:
I think the commission, you know, what happened is that the commission is looking not just at this one provision, but it's looking at the operating agreement.

[00:41:42] Speaker 10:
It's considering PJM's position that PJM does not have this authority and cannot do this planning, and is looking at the operating agreement, which specifies that it is important to remember that PJM doesn't necessarily plan all regional projects.

[00:42:00] Speaker 10:
I mean, there is substantial overlap to some degree here.

[00:42:04] Speaker 10:
There are projects that may address a local need and also a regional need.

[00:42:15] Speaker 10:
And under the existing tariff, what happens is PJM does get this information from the transmission owners.

[00:42:25] Speaker 10:
And PJM has the opportunity to plan a regional project

[00:42:29] Speaker 10:
with the information about this local planning project.

[00:42:32] Speaker 10:
So there's significant complexity here, but the commission ultimately found that the governing documents do specify that transmission owners retain certain planning authorities.

[00:42:49] Speaker 10:
They retained planning authorities for supplemental projects, and that's basically all of the projects that are not included in the PJM regional transmission expansion plan.

[00:43:00] Speaker 10:
So what the commission was accepting was a proposal that just formalized the process for the planning of these projects.

[00:43:09] Speaker 10:
Previously, they would have been planned as supplemental projects.

[00:43:13] Speaker 10:
Or if they had been identified on a utilities form 715, they would have been planned by PJM, such as the projects that were at issue in Old Dominion.

[00:43:25] Speaker 10:
I'm sorry if that doesn't answer your question.

[00:43:27] Speaker 10:
I can try again.

[00:43:30] Speaker 10:
Oh.

[00:43:34] Speaker 10:
All right, I do just want to clarify that the orders don't cement anything in place.

[00:43:40] Speaker 10:
I'm sorry, they don't what?

[00:43:42] Speaker 10:
They don't cement anything in place.

[00:43:44] Speaker 10:
I mean, this is the current state of play in PJM.

[00:43:48] Speaker 10:
However, to the extent that parties have concerns about a specific cost allocation, they can always bring these concerns to the commission as a Section 206 complaint.

[00:44:00] Speaker 10:
And of course, these issues are being considered in the rulemaking proceeding.

[00:44:04] Speaker 07:
So isn't that what the previous orders, like Order 1000 and Order 2000, was designed to prevent by creating an overall system of regional planning to avoid this case-by-case determination about whether a particular cost allocation was unjust?

[00:44:23] Speaker 07:
I mean, that could have happened even before.

[00:44:27] Speaker 10:
You're right.

[00:44:28] Speaker 10:
That is the motivating concerns of Order 1000.

[00:44:34] Speaker 07:
You jam does do regional planning through the regional transmission expansion plan and it's not taken out of authority all end of life projects, which are substantial part of what's going to be.

[00:44:47] Speaker 07:
I mean, especially in, you know, in the northeast where expansion.

[00:44:53] Speaker 07:
of the grid is extremely difficult because of regulatory and other hurdles.

[00:44:57] Speaker 07:
I mean, the whole ballpark is enhancement and upgrading of systems.

[00:45:02] Speaker 07:
And FERC has said that all of that is now left to local transmission owners.

[00:45:08] Speaker 07:
So how is that consistent with Orders 1000 and 2000?

[00:45:12] Speaker 10:
Well, the Orders 1000 and 2000 did recognize that not all planning was regional, that there are projects that continue to be local in nature.

[00:45:23] Speaker 10:
And that's where the commission found here that a replacement of equipment continues to be local in nature.

[00:45:32] Speaker 10:
It falls on that side of the line.

[00:45:36] Speaker 10:
I mean, I understand your father's concerns that, yes, this is a significant number of projects, but it is important to remember that the PGM does span some of these end-of-life projects.

[00:45:49] Speaker 10:
And those are the so-called Form 715 projects.

[00:45:55] Speaker 00:
Any other questions?

[00:45:56] Speaker 00:
Yeah.

[00:45:57] Speaker 00:
I want to take you back to my 9.2 question.

[00:46:00] Speaker 00:
Yes, your honor.

[00:46:01] Speaker 00:
I'm just looking at the language of this.

[00:46:07] Speaker 00:
I don't see why it isn't a surrender of their filing rights here.

[00:46:12] Speaker 00:
It says that PJM shall have the exclusive and unilateral right to file LIPSYs, make changes in or relating to the terms and conditions of the PJM tariff.

[00:46:31] Speaker 00:
with the exception, with one exception.

[00:46:34] Speaker 00:
Why is that not a complete surrender of their 205 filings?

[00:46:38] Speaker 00:
I just, I don't understand that.

[00:46:40] Speaker 10:
Your Honor, my understanding of PJM as a practical matter.

[00:46:43] Speaker 10:
No, no, tell me about this language.

[00:46:45] Speaker 00:
Look at the language, 9.2.

[00:46:47] Speaker 00:
I'm sorry, you're looking at... 9.2.

[00:46:49] Speaker 00:
9.2.

[00:46:50] Speaker 00:
Yeah, look at the language.

[00:46:52] Speaker 00:
I don't mean to be a textualist here, but that's what we are.

[00:46:55] Speaker 00:
9.2, you got it?

[00:46:57] Speaker 00:
Yes, Your Honor.

[00:46:58] Speaker 00:
Okay, PJM says,

[00:46:59] Speaker 00:
to have the exclusive and unilateral right to make changes in or relating to the terms and conditions of the PJM test.

[00:47:12] Speaker 00:
That sounds like what this is all about.

[00:47:21] Speaker 10:
Right, Your Honor.

[00:47:22] Speaker 10:
As a practical matter, PJM did make filing for the transmission owners to FERC.

[00:47:29] Speaker 10:
My understanding, and I think the Council for Transmission Owners would be better able to discuss the process.

[00:47:35] Speaker 00:
I thought they didn't go through the PJM procedures to make a filing.

[00:47:39] Speaker 00:
Didn't they file it directly?

[00:47:42] Speaker 10:
The cover letter and all of that was prepared by the transmission owner.

[00:47:47] Speaker 10:
The actual filing.

[00:47:49] Speaker 10:
My understanding is the actual filing was done by PJM.

[00:47:56] Speaker 00:
Do you have something in the record that says that?

[00:47:59] Speaker 00:
What was your point to there?

[00:48:01] Speaker 10:
That I don't know if I can point to anything in the record.

[00:48:04] Speaker 10:
That might be a function of the.

[00:48:06] Speaker 00:
I mean the transmission owners, sorry to interrupt, they're arguing that it was not done that way.

[00:48:12] Speaker 00:
that it didn't go through PGA, at least as I understand it.

[00:48:18] Speaker 10:
Right.

[00:48:18] Speaker 10:
They did files.

[00:48:19] Speaker 10:
Right.

[00:48:19] Speaker 10:
So they and the stakeholders filed separately.

[00:48:23] Speaker 10:
Right.

[00:48:24] Speaker 00:
Exactly.

[00:48:24] Speaker 10:
That's correct.

[00:48:26] Speaker 10:
But my understanding is that PGM actually made filing.

[00:48:30] Speaker 10:
So yeah.

[00:48:32] Speaker 10:
And I think, Your Honor, it's the overlay of Atlantic City and the, you know, the also the provisions, for example, the owner's agreement that says that, you know, rights not specifically transferred to PGM remain with the

[00:48:48] Speaker 10:
with the transmission owners.

[00:48:49] Speaker 00:
This is exclusive and unilateral right to file.

[00:48:58] Speaker 00:
All that leaves for them is what's in the end of the sentence.

[00:49:03] Speaker 00:
We can pursue this.

[00:49:06] Speaker 00:
That's interesting that at your point I hadn't understood that this was actually submitted by PJM through their procedures.

[00:49:15] Speaker 00:
That would certainly solve the problem if that's the case.

[00:49:20] Speaker 08:
Okay, thank you very much.

[00:49:23] Speaker 08:
Thank you.

[00:49:24] Speaker 08:
Thank you.

[00:49:33] Speaker 04:
Thank you.

[00:49:33] Speaker 04:
We've been kind of been let down a path here and I think we're down the wrong path and I'd like to kind of get us on the best.

[00:49:43] Speaker 00:
Wait, who's the we?

[00:49:44] Speaker 00:
Us?

[00:49:46] Speaker 00:
It could be us.

[00:49:48] Speaker 00:
That happens in FERC cases often.

[00:49:50] Speaker 07:
Don't we get to go down any pathways?

[00:49:53] Speaker 04:
First of all, FERC decided this issue.

[00:49:56] Speaker 04:
FERC held that the agreement was ambiguous, but FERC decided this issue.

[00:50:00] Speaker 04:
FERC decided that transmission owners have the authority to plan end of life projects.

[00:50:08] Speaker 04:
Period.

[00:50:08] Speaker 04:
They decided it's done.

[00:50:09] Speaker 04:
There's no ambiguity about that decision.

[00:50:12] Speaker 04:
It is based on the finding Ferck had that we disagree with, that the agreement was ambiguous.

[00:50:19] Speaker 04:
But looking at that agreement, Ferck absolutely decided that end of life projects are planned by the transmission orders.

[00:50:26] Speaker 04:
There's no doubt about that.

[00:50:27] Speaker 04:
That's why we're defending Ferck in this case.

[00:50:30] Speaker 07:
Did they decide that under the agreement or as an amendment to M3?

[00:50:37] Speaker 04:
They decided it.

[00:50:37] Speaker 04:
They decided it.

[00:50:39] Speaker 04:
So amendments to M3 were proposed by the transmission owners.

[00:50:44] Speaker 04:
Burke decided that those amendments should be accepted.

[00:50:47] Speaker 04:
And this has nothing to do with, you know, separating out the issue.

[00:50:50] Speaker 04:
We can get to that later.

[00:50:51] Speaker 04:
Burke decided those amendments should be accepted because end of life projects had always been planned by the local TOs.

[00:50:59] Speaker 04:
PJM has never planned these end of life projects, at least as they're defined here, where they don't expand and

[00:51:05] Speaker 04:
and enhance the grid and when they don't address some other regional planning need of PJM.

[00:51:11] Speaker 04:
So there's no change in that either.

[00:51:12] Speaker 04:
So this discussion we've had that projects have been dedicated to local planning, there's some kind of change.

[00:51:18] Speaker 04:
There has been no change.

[00:51:19] Speaker 04:
PJM has never planned these projects and that's never gotten in the way of regional planning.

[00:51:25] Speaker 04:
So there's no change on that.

[00:51:27] Speaker 04:
We've always planned these projects.

[00:51:30] Speaker 07:
What does it mean for there to be no change if both parties disagree about

[00:51:34] Speaker 07:
what was required by the tariff and the agreement and they both propose amendments.

[00:51:39] Speaker 07:
Well the two part well first of all one to the one to M3 and one to the to the agreement.

[00:51:43] Speaker 04:
First of all the parties to the owner's agreement which is the fundamental basis of all this because the owner's agreement decides based on Atlantic City what powers the transmission operators have and what powers PJM has.

[00:51:56] Speaker 04:
The parties to the owner's agreement are PJM and the transmission owners those parties don't disagree

[00:52:02] Speaker 04:
The parties to the owners agreement fully agree that these end of life projects have always been planned by the transmission owners will still be planned by the transmission owners.

[00:52:12] Speaker 04:
And that's not going to affect regional plan.

[00:52:15] Speaker 04:
So the parties are in agreement on that.

[00:52:17] Speaker 04:
The parties that are not in agreement are strangers to the owners agreement.

[00:52:23] Speaker 04:
And I guess they have some.

[00:52:24] Speaker 04:
Some small some small part of their group, but basically the primary driver of all of this is somebody who's not an incumbent transmission owner who's trying to come in and get authority to plan the projects that have been reserved to us.

[00:52:37] Speaker 04:
Now, we had a long discussion about cost allocation and all of that.

[00:52:42] Speaker 04:
I think this is what you have to understand about that.

[00:52:45] Speaker 04:
The regional cost allocation in Old Dominion and all these cases, there's regional cost allocation when there's regional plan.

[00:52:54] Speaker 04:
Okay, here there's no regional planning.

[00:52:56] Speaker 04:
There has never been regional planning of these projects.

[00:52:58] Speaker 04:
It's always been local planning.

[00:53:02] Speaker 04:
The petitioner, but he talks about, you know, old dominion and cost allocation.

[00:53:07] Speaker 04:
She's putting the card before the horse because in those cases, there was regional planning because there was regional planning that was presumed to be regional benefits.

[00:53:17] Speaker 04:
And because they were resumed regional benefits, we have this fifty fifty system where in the regional planning side, half of it goes to the whole to the whole

[00:53:27] Speaker 04:
PJM, all of the load, and half of it goes to the people actually getting the flow.

[00:53:32] Speaker 04:
In this particular case, there's no presumption of regional benefits from the regional planning because there has never been regional planning of these projects.

[00:53:40] Speaker 04:
They are local projects.

[00:53:42] Speaker 04:
They do not expand and enhance the grid.

[00:53:44] Speaker 04:
They're not planned to expand and enhance the grid.

[00:53:47] Speaker 04:
So we're just on a completely wrong track here when we're putting the cart before the horse here saying, well, FERC had to consider regional cost allocation.

[00:53:56] Speaker 07:
Why is an end-of-life project not an enhancement?

[00:53:59] Speaker 04:
Because it's not planned to enhance the grant.

[00:54:02] Speaker 04:
It is planned to replace the project.

[00:54:05] Speaker 04:
There may be, and Burke explained this very well in the California Orders, those got appeals.

[00:54:11] Speaker 04:
I think LSP appeals those that got settled.

[00:54:14] Speaker 07:
Just focus on the word enhance.

[00:54:16] Speaker 04:
Right.

[00:54:16] Speaker 07:
Why is, you know,

[00:54:19] Speaker 07:
Upgrading or you know, why is it, you know, replacing, you know, firming up a transmission line, not an enhancement?

[00:54:26] Speaker 04:
Because it the question is the question is not.

[00:54:31] Speaker 04:
Does it have some enhancing effect?

[00:54:33] Speaker 04:
The question was it planned to enhance or expected?

[00:54:36] Speaker 04:
We're talking about planning here and this is an allocation of planning responsibility.

[00:54:42] Speaker 04:
So the plan, the plan to replace the.

[00:54:46] Speaker 04:
that the plan is to replace the project.

[00:54:48] Speaker 04:
It's not to upgrade it or enhance it.

[00:54:51] Speaker 04:
Now, you may have an incidental enhancement effect, but the question is, what's the planning?

[00:54:56] Speaker 04:
And I need to go back to this to talk about this allocation, because it's very central to all of this.

[00:55:01] Speaker 04:
What's left to the transmission owner planning?

[00:55:04] Speaker 04:
What's left to the PJM planning?

[00:55:07] Speaker 04:
There are specific planning authorities

[00:55:10] Speaker 04:
regional planning authorities that were given to PJM by the transmission because they have to remember this is what Atlantic City was about.

[00:55:16] Speaker 04:
We have millions, billions of dollars in assets.

[00:55:20] Speaker 04:
We were being asked to give control of those assets over to another entity.

[00:55:25] Speaker 04:
Okay, people don't do that.

[00:55:27] Speaker 04:
Just willy-nilly, we think it would be a good idea if they had this all.

[00:55:30] Speaker 04:
This is our property.

[00:55:32] Speaker 04:
We have the right to control this property.

[00:55:34] Speaker 04:
And now all of a sudden, people are coming in and saying, but we think it would be nice for regional planning purposes if you gave up control of our property.

[00:55:41] Speaker 04:
Well, we thought of that.

[00:55:42] Speaker 04:
We litigated in Atlantic City.

[00:55:44] Speaker 04:
We got a strong decision from this court that they can't force us to give up anything we haven't given up.

[00:55:50] Speaker 04:
Now what we're saying is, well, because of this language of 9.2, we somehow gave up our right to all of this planning.

[00:55:57] Speaker 04:
We let out, we sent out very, very specifically in the owner's agreement.

[00:56:03] Speaker 04:
All they get is the power to plan.

[00:56:06] Speaker 04:
for expansion.

[00:56:09] Speaker 07:
If that's correct though, why isn't it within PJM's authority to determine what should be part of the regional plan as an enhancement or expansion?

[00:56:21] Speaker 04:
It is, and this is another very important point that's been missed.

[00:56:25] Speaker 04:
When the transmission owners propose an end of life project,

[00:56:31] Speaker 04:
They have to notify.

[00:56:32] Speaker 04:
Now, we agreed to that.

[00:56:33] Speaker 04:
We notify here's what's coming down for the next 5 years.

[00:56:37] Speaker 04:
Here are the end of life projects that are coming down the pipe.

[00:56:40] Speaker 04:
Okay.

[00:56:41] Speaker 04:
Can look at that and say, look, you say, this is just a replacement, but we're looking at it.

[00:56:46] Speaker 04:
We've got a regional planning and we have specific planning authorities that you've given us Atlantic City and Atlantic City.

[00:56:53] Speaker 04:
We said, we gave them.

[00:56:54] Speaker 04:
the right to plan for reliability, the right to plan 715 projects, the right to plan economic projects.

[00:56:59] Speaker 04:
So P-GENs can say, look, we have this authority for regional planning for all of the good reasons we talked about with order 1000, order 2000, all that.

[00:57:08] Speaker 04:
We have this authority.

[00:57:10] Speaker 04:
And so what we're saying is you're proposing an end of life project, but we think actually it overlaps with our planning responsibility.

[00:57:17] Speaker 04:
We've been identified as reliability concerns in this area.

[00:57:21] Speaker 04:
So what we're gonna say is we're not gonna just let you

[00:57:23] Speaker 04:
build that project.

[00:57:25] Speaker 04:
We have exercised our planning authority, fully recognized under attachment M3, part five, the applicability section, J8-2301.

[00:57:34] Speaker 04:
When there's an overlap between the local project and the regional project, PJM gets to plan that project and it gets to assign the project and Ms.

[00:57:44] Speaker 04:
Murphy's client can build that project.

[00:57:46] Speaker 04:
That's for an overlap.

[00:57:47] Speaker 04:
We can't stop that.

[00:57:49] Speaker 04:
Transmission owners can stop it.

[00:57:50] Speaker 04:
So that protects this regional planning.

[00:57:53] Speaker 04:
Now, if that plan, if PJM decides that, yes, this plan has, this project has a regional benefit, then the cost allocation rules that Ms.

[00:58:04] Speaker 04:
Murphy is talking about come into place.

[00:58:06] Speaker 04:
You've got regional planning.

[00:58:07] Speaker 04:
Now PJM has within its authority taken this regional planning.

[00:58:12] Speaker 04:
Now you've got a regional project, now you presume the regional benefits.

[00:58:16] Speaker 04:
So now this 50-50 system that she'd like to apply to these local projects makes sense because it's regional.

[00:58:22] Speaker 04:
When PJM doesn't do that, when PJM says, no, there's no overlap here, it's solely a local project.

[00:58:29] Speaker 04:
Then it stays in the local project and it stays in the local zone and that's always been the rule.

[00:58:34] Speaker 04:
And it's not changed by us.

[00:58:36] Speaker 07:
Are you saying that PJM can

[00:58:39] Speaker 07:
override a transmission owner's decision to locally plan in every instance?

[00:58:46] Speaker 04:
In every instance within PJM's delegated authority.

[00:58:51] Speaker 04:
So when PJM says we have the authority to plan for a liability.

[00:58:55] Speaker 07:
My question is can PJM assert that we believe this is an enhancement and then make it part of the regional plan?

[00:59:01] Speaker 04:
They can.

[00:59:02] Speaker 04:
They can assert that.

[00:59:03] Speaker 04:
Now, you know,

[00:59:05] Speaker 04:
Obviously it has to be within their authority, but we assume that the PJM asserts it.

[00:59:09] Speaker 04:
And look, that's why PJM is on board with this.

[00:59:11] Speaker 04:
This is affecting PJM.

[00:59:14] Speaker 07:
Who decides whether it's within PJM's authority at that point?

[00:59:18] Speaker 04:
That's an interesting question.

[00:59:20] Speaker 04:
So here's the way it actually comes out.

[00:59:23] Speaker 04:
Wouldn't it be ultimately FERC?

[00:59:25] Speaker 04:
Let's put it this way.

[00:59:25] Speaker 04:
If we got into a disagreement with PJM and we said that PJM was asserting its authority outside of the owner's agreement, which is our contractual

[00:59:34] Speaker 04:
you know, protection for our property that we gave them, ultimately, I suppose, can wind up with this court.

[00:59:40] Speaker 04:
But basically, we really haven't had those disputes.

[00:59:42] Speaker 04:
And we certainly didn't have this dispute here.

[00:59:44] Speaker 04:
PJM fully agrees this is not affecting them, that they understand they only got some authority, they didn't get this authority, and this doesn't come in.

[00:59:53] Speaker 04:
But the answer to your question is yes, if PJM asserts that and wants to put it in the plan, we cannot stop them from putting it into the plan.

[01:00:00] Speaker 04:
I mean, I suppose we could try to argue it doesn't really create reliability, but we would never do that.

[01:00:06] Speaker 04:
It would never come up.

[01:00:07] Speaker 04:
If PJM wants to build the project, PJM can direct building the project.

[01:00:11] Speaker 04:
We can't do anything.

[01:00:13] Speaker 07:
So why does PJM care then in this context?

[01:00:17] Speaker 04:
PJM cares because PJM knows the whole history of this.

[01:00:22] Speaker 04:
We've had a whole system set up for now, 20 years, where everybody understands what

[01:00:28] Speaker 04:
What's regional and what's local?

[01:00:30] Speaker 04:
We've all been working under this system for 20 years and it's protected our property rights.

[01:00:34] Speaker 04:
Now we have a third party to all of SLSP with some state folks and some, you know,

[01:00:40] Speaker 04:
Transmission owners, I guess they got on their side.

[01:00:43] Speaker 04:
Now we've got them coming in and trying to upset the whole apple cart.

[01:00:46] Speaker 04:
Now I understand why they're trying to do that.

[01:00:47] Speaker 04:
They want to get their hands on these projects.

[01:00:50] Speaker 04:
But these have been projects that were reserved to us under Atlantic City.

[01:00:55] Speaker 04:
By the way, this isn't the first time LSB has done this.

[01:00:57] Speaker 04:
This is the third time they've been here this year trying to get their hands on this stuff.

[01:01:02] Speaker 04:
They're not entitled to it under our agreement.

[01:01:04] Speaker 04:
They're just not.

[01:01:06] Speaker 04:
PGM agrees.

[01:01:08] Speaker 04:
PGM knows the deal.

[01:01:10] Speaker 04:
When the stakeholders came with this proposal and said, hey, wouldn't it be nice if we could have some competitors come in and get their mitts on the transmission owner's property?

[01:01:20] Speaker 04:
You know, LSP says that's fine.

[01:01:23] Speaker 04:
The regulators say fine, they're always after us.

[01:01:26] Speaker 04:
Sure, why not?

[01:01:27] Speaker 04:
Let's throw it up a little bit.

[01:01:28] Speaker 04:
But that's our property.

[01:01:29] Speaker 04:
That's what Atlantic City was all about.

[01:01:31] Speaker 04:
In Atlantic City, Fert said, just like we've been saying here.

[01:01:34] Speaker 07:
Isn't the whole concern though, is that yes, it's your property, but if there's no competition and no regional planning, then consumers are at the short end of the stick when there's no competitive bidding for improvements to the transmission grid?

[01:01:47] Speaker 04:
That's the argument they made and actually that's why, yes, it all sounds good in the abstract, but that's one of the reasons we made our standing argument is when you really look at what's going on here, that's not what's happening.

[01:01:58] Speaker 04:
First of all.

[01:02:03] Speaker 04:
It's often nice if somebody has property and let somebody else compete for their property.

[01:02:08] Speaker 04:
Yeah, that might be competition.

[01:02:09] Speaker 04:
The point is, we reserve this right.

[01:02:11] Speaker 04:
It's our property.

[01:02:13] Speaker 04:
But the second point is, the idea that we can engage in all kinds of inefficient planning or inefficient process, it's just not true.

[01:02:20] Speaker 04:
First of all, if there is efficiency in regional planning, PJM can say, yes, we've identified that this is in our planning process and we're going to build that project.

[01:02:33] Speaker 04:
The jam says no, and we build the project in our local zone.

[01:02:37] Speaker 04:
We can't recover costs for that unless we go to get it put in our transmission rate base.

[01:02:43] Speaker 04:
They have the right to discovery in that process.

[01:02:46] Speaker 04:
They can look at everything.

[01:02:48] Speaker 04:
They can look at everything in connection with that project and say it should have been better.

[01:02:53] Speaker 04:
There's also prudency reviews.

[01:02:55] Speaker 04:
So the notion that somehow because LSP isn't allowed to come onto our rights of way and take over the projects that we reserve ourselves under the agreement, there's going to be a huge downside to consumers.

[01:03:09] Speaker 04:
It's just not going to be.

[01:03:10] Speaker 04:
First of all, they can't come onto our rights of way anyway.

[01:03:12] Speaker 04:
That was part of our standing argument.

[01:03:14] Speaker 04:
And they say in response to that, well, maybe state law lets us.

[01:03:17] Speaker 04:
But the but the real question is we reserve in Atlantic City firm by this very strong opinion and really just to back up again the whole point of Atlantic City was first said just kind of what the argument is here now.

[01:03:38] Speaker 04:
Regional planning is going, wouldn't it be nice if we had gave all of this regional planning authority and the transmission owners came and said, well, you know, that's our property.

[01:03:51] Speaker 04:
We reserve rights to that.

[01:03:53] Speaker 04:
You can't you, I mean, it was on their side back then and.

[01:03:58] Speaker 04:
This board said, you cannot do that.

[01:04:01] Speaker 04:
You cannot, just because you think it would be nice for regional planning purposes, take the transmission owner's property and give it over to PJM when they haven't agreed that.

[01:04:11] Speaker 04:
The transmission owners, it's a voluntary RTO.

[01:04:14] Speaker 04:
We have to voluntarily give up our authority.

[01:04:17] Speaker 04:
We did not give up our authority and we did not give up our authority on these end of length projects.

[01:04:21] Speaker 00:
So put another way, put another way

[01:04:28] Speaker 00:
From your point of view, there's nothing ambiguous about this, correct?

[01:04:31] Speaker 00:
There's nothing what?

[01:04:32] Speaker 00:
Ambiguous.

[01:04:34] Speaker 04:
Well, we don't think there's anything.

[01:04:35] Speaker 04:
That's my point.

[01:04:36] Speaker 04:
That's your argument, right?

[01:04:39] Speaker 04:
Hurt did think there was some ambiguity as to whether we gave up these rights or didn't.

[01:04:44] Speaker 04:
We strongly disagree with the reasons Mr. Gossett said.

[01:04:47] Speaker 04:
The bottom line is, Hurt ultimately decided we didn't give them up.

[01:04:51] Speaker 04:
They decided that issue.

[01:04:52] Speaker 04:
There was no ambiguity about Hurt's holding.

[01:04:54] Speaker 04:
They decided we didn't give up those rights.

[01:04:58] Speaker 00:
Yeah.

[01:04:58] Speaker 00:
Okay.

[01:04:59] Speaker 00:
All right.

[01:05:00] Speaker 00:
That is all very, very helpful to me.

[01:05:02] Speaker 00:
Could you be equally helpful on the language of tariff 9.2 for me?

[01:05:10] Speaker 04:
Yes.

[01:05:10] Speaker 00:
Yes, please.

[01:05:11] Speaker 00:
Just look at the language and tell me you've heard me ask this question at least three times.

[01:05:17] Speaker 00:
I have.

[01:05:18] Speaker 00:
Okay.

[01:05:18] Speaker 00:
So what's what from your perspective is the answer to my question?

[01:05:22] Speaker 04:
Okay.

[01:05:22] Speaker 04:
First of all, 9.2 gives rights to

[01:05:27] Speaker 04:
PJM, it doesn't give rights to stakeholders.

[01:05:30] Speaker 00:
I understand that, I get it.

[01:05:32] Speaker 04:
And as a matter of fact, it expressly distinguishes PJM from the members committee.

[01:05:36] Speaker 04:
I get it, okay.

[01:05:38] Speaker 04:
They can consult, so it says in B, PJM can consult with the TOs in the members committee.

[01:05:45] Speaker 00:
I just want you to focus on the language that says, which states that PJM has unilateral control over filings regarding the terms and conditions of the PAC tariff.

[01:05:54] Speaker 00:
That's the language I want you to.

[01:05:56] Speaker 04:
Well, except as described in 9 1A.

[01:05:58] Speaker 04:
And of course, 9 1A has very broad authority for us to reserve our rights under.

[01:06:05] Speaker 00:
And what precisely in 9 1A reserves the rights over EOL?

[01:06:13] Speaker 04:
Transmission revenue requirements, the transmission rate resigned to the PJM tariff, any provision covering the recovery of transmission related costs by the transmission owners.

[01:06:22] Speaker 04:
So, for example, by.

[01:06:25] Speaker 04:
By the stakeholders own own assertion.

[01:06:28] Speaker 04:
They're saying if we They're saying if we Succeed in obtaining local planning authority for this in our proposal that will all be locally charged will go under our rate.

[01:06:43] Speaker 04:
So it definitely affects our rates under nine point one a

[01:06:47] Speaker 04:
But look also, as Ms.

[01:06:48] Speaker 04:
Chu pointed out, look to 9-1-F, where it says the transmission owners reserve their rights to reserve that other provisions of the OAT should be included within their Section 205 rights and PJM reserves its right to contest such assertions.

[01:07:03] Speaker 04:
That's very important because that goes to the issue and that goes to 5.6 of the owners agreement.

[01:07:08] Speaker 04:
Having been through all of this discussion and litigation in Atlantic City to fight FERC's attempt as people try to piggyback on FERC's attempt

[01:07:17] Speaker 04:
to get at our transmission assets.

[01:07:20] Speaker 04:
We made very clear in the owner's agreement that PJM only has this authority for expansion enhancement and the other specific authorities given reliability, 715 and all that.

[01:07:31] Speaker 04:
And most importantly, anything we didn't expressly delegate in the owner's agreement to PJM

[01:07:40] Speaker 04:
We retain those views.

[01:07:45] Speaker 00:
Would I be wrong if I said, I'm trying to restate your position here in a way I might understand.

[01:07:52] Speaker 00:
The point is, you did not surrender.

[01:07:56] Speaker 00:
The transmission owners never surrendered their authority over EOL.

[01:08:02] Speaker 04:
That is correct.

[01:08:03] Speaker 00:
Let me just finish.

[01:08:05] Speaker 00:
Over a project, and it would have made no sense for them to surrender their 205 filing rights over those projects.

[01:08:12] Speaker 00:
Correct.

[01:08:12] Speaker 00:
Is that the point?

[01:08:13] Speaker 00:
Correct.

[01:08:14] Speaker 00:
Do I have it?

[01:08:14] Speaker 04:
Correct.

[01:08:15] Speaker 04:
That's exactly right.

[01:08:15] Speaker 04:
And that's what Ferkel Ferkel book.

[01:08:17] Speaker 04:
The issue is what tariff rights we gave up.

[01:08:20] Speaker 04:
We didn't give up these terrifying rights.

[01:08:22] Speaker 04:
Therefore, under Atlantic City, we get to reserve them.

[01:08:25] Speaker 00:
And was transmission owners filing in this case through PJM or directly to the commission?

[01:08:32] Speaker 04:
I think our first filing, I think we made it directly.

[01:08:36] Speaker 04:
That's signed by my partner.

[01:08:39] Speaker 04:
The stakeholder, but they do have authority.

[01:08:41] Speaker 04:
And this is another thing about how the filing system works.

[01:08:44] Speaker 04:
So we can delegate to PJM our authority to make filings.

[01:08:49] Speaker 04:
And that's mostly just a long tariff.

[01:08:51] Speaker 04:
It's very complicated.

[01:08:52] Speaker 04:
That's mostly just to make sure it all works together.

[01:08:55] Speaker 04:
I'm sorry, I'm wrong about that.

[01:09:09] Speaker 04:
It was on our firm's letterhead, but it does say in the note, pursuant to order 714, this filing is submitted by PJM on behalf of the PJM transmission owners as part of an XML filing package that conforms the commission's regulations.

[01:09:22] Speaker 04:
And the reason for that is because it's a long

[01:09:25] Speaker 04:
I want to make sure everything fits together, Ryan, and so that PJM dots the I's and crosses the T's, but they're doing it on our behalf.

[01:09:34] Speaker 04:
But see, that's where 9.2 comes in.

[01:09:36] Speaker 00:
So this whole argument that the transmission owners surrendered their rights, it's just a red herring because PJM submitted it anyway, right?

[01:09:45] Speaker 04:
I think, first of all, that's correct.

[01:09:48] Speaker 04:
Second, it's an absolute red herring to say the state courts can control the filing under 9.2.

[01:09:53] Speaker 04:
It's absolutely clear in 9.2b they can.

[01:09:56] Speaker 04:
As a matter of fact, they can't even, they can't veto or even delay the filing.

[01:10:01] Speaker 00:
I don't think, I didn't read their argument that way.

[01:10:03] Speaker 00:
I just read their argument as saying, not that they could control it, they were looking for a ruling from this court that only PJM could make the filing.

[01:10:12] Speaker 00:
Right.

[01:10:14] Speaker 00:
And your point is PJM did make the fine.

[01:10:17] Speaker 00:
PJM did make the fine.

[01:10:18] Speaker 00:
So who cares, right?

[01:10:19] Speaker 04:
That's right.

[01:10:20] Speaker 04:
PJM did make the fine, so who cares?

[01:10:21] Speaker 04:
But then the second issue is the whole issue is this allocation of authority between PJM and the transmission owners.

[01:10:31] Speaker 04:
So if we had made this filing and PJM had said no,

[01:10:34] Speaker 04:
That's within our planning authority.

[01:10:37] Speaker 04:
That's within that.

[01:10:39] Speaker 04:
We need this for, you know, regional planning authority to be reliable and all that.

[01:10:43] Speaker 04:
He jam would have said, no, you know, just like they do with the stakeholders, they would have disagreed with us.

[01:10:48] Speaker 04:
And as a matter of fact, there's actually a provision of their disputes regarding the filing rights.

[01:10:52] Speaker 04:
We go and do that.

[01:10:52] Speaker 04:
But none of that is really an issue here because he agreed with us.

[01:10:56] Speaker 04:
He had been through the Atlantic City case.

[01:10:58] Speaker 04:
They lost.

[01:10:59] Speaker 04:
right?

[01:11:00] Speaker 04:
We want it.

[01:11:01] Speaker 04:
Okay.

[01:11:02] Speaker 04:
They didn't want to have that fight again.

[01:11:03] Speaker 04:
They know what the rules are.

[01:11:05] Speaker 04:
We know what the rules are.

[01:11:07] Speaker 07:
Let me see if my colleagues have any further questions.

[01:11:12] Speaker 04:
Um, the only other point I want to make is they argued that somehow this whole issue on the filing, which all doesn't matter, but we stole a march on them somehow because we filed ahead of them.

[01:11:22] Speaker 04:
They didn't come in second because we stole a march on they proposed their

[01:11:27] Speaker 04:
They proposed a thing and they lost.

[01:11:29] Speaker 04:
They had a failed vote.

[01:11:31] Speaker 04:
So the idea that somehow we created this system that created a bad situation for them and how this was all set up and that FERC didn't decide.

[01:11:40] Speaker 04:
FERC didn't consolidate the cases.

[01:11:43] Speaker 04:
Our filing was about our rights.

[01:11:45] Speaker 04:
It makes perfect sense for FERC to decide our filing based on our rights.

[01:11:49] Speaker 04:
But the idea that somehow they were disadvantaged, they were last because they lost the vote, not because of anything else.

[01:11:59] Speaker 07:
Okay.

[01:12:00] Speaker 07:
Um, Mr. Gossett, I believe you're going to do the first rebuttal and give you two minutes.

[01:12:09] Speaker 01:
Unless the court has any questions for me, I'll actually wait for rebuttal.

[01:12:11] Speaker 01:
I think the issues of standing ambiguity have been addressed and nothing new came up unless the court has any.

[01:12:18] Speaker 00:
Can I ask one more question?

[01:12:20] Speaker 00:
Oh, sure.

[01:12:21] Speaker 00:
I'm sorry.

[01:12:23] Speaker 00:
Yeah.

[01:12:23] Speaker 00:
Can I just ask you one more question?

[01:12:26] Speaker 00:
You say, um,

[01:12:28] Speaker 00:
I'm looking at page 25 of your brief.

[01:12:32] Speaker 00:
I'm still focused on 9.2 here.

[01:12:35] Speaker 00:
You say that the phrase means only, quote, the terms and conditions of interconnection, point-to-point transmission services, and network transmission services under the tariff.

[01:12:47] Speaker 03:
That's what you're saying.

[01:12:50] Speaker 03:
I'm sorry, are you trying to ask Mr. Longstock a question?

[01:12:53] Speaker 03:
I'm sorry, I didn't understand that.

[01:12:54] Speaker 00:
Oh, I'm sorry.

[01:12:56] Speaker 00:
I just, yeah.

[01:12:57] Speaker 00:
Is that okay?

[01:12:58] Speaker 00:
Yeah, sure.

[01:12:59] Speaker 00:
Could you just answer that question about this sentence in your brief?

[01:13:03] Speaker 00:
Do you see where I am?

[01:13:06] Speaker 00:
I'm at page... I'm at page... I'm at page... Yeah, here, page 25.

[01:13:24] Speaker 00:
You say what this means

[01:13:27] Speaker 00:
I mean, this phrase, this 9.2 language means only quote, the terms and conditions of interconnection, point to point transmission services and network transmission services under the tariff, right?

[01:13:42] Speaker 00:
Do you have a site for that?

[01:13:45] Speaker 04:
I'm not sure that I'm not sure that I do.

[01:13:47] Speaker 04:
That is the understanding that we've had and the feelings that we've had.

[01:13:51] Speaker 00:
I mean, that's consistent with what you were saying all along.

[01:13:54] Speaker 00:
I just wondered,

[01:13:56] Speaker 00:
what you would say.

[01:13:57] Speaker 00:
That's all.

[01:13:58] Speaker 04:
Yeah.

[01:13:59] Speaker 04:
And I'll look at it and see if we have it.

[01:14:01] Speaker 04:
I think we put that in because that was the understanding people have been working for this for a long time.

[01:14:05] Speaker 04:
But the point is, thank you.

[01:14:09] Speaker 00:
If you have a site for it, I will.

[01:14:12] Speaker 00:
Yes.

[01:14:12] Speaker 07:
Thank you.

[01:14:15] Speaker 07:
I'll give you two minutes.

[01:14:20] Speaker 02:
Thank you.

[01:14:21] Speaker 02:
Just want to make a couple of points.

[01:14:22] Speaker 02:
First, while the interviewers love to talk about LSP and their fear of competition, I want to be clear.

[01:14:28] Speaker 02:
I'm standing up here on behalf of about a dozen different parties, including the People's Council for D.C., the New Jersey Rape Council.

[01:14:36] Speaker 02:
The public advocate for Delaware, these are organizations that are designed to be here on behalf of great payers who are very concerned about the out of control costs that they are facing because there's no accountability for these projects.

[01:14:50] Speaker 02:
So, sure, competition is part of this and I have clients who want to compete, but that is by no means the only reason that I am up here today or the only parties that we are up here on behalf of.

[01:15:01] Speaker 02:
I want to also clear up some confusion.

[01:15:04] Speaker 02:
I think that was generated about what PJM can do under the local proposal.

[01:15:09] Speaker 02:
Yes, if PJM is planning something else that it determines and obviates the need for an end of life project, it can say you don't get to do the end of life project because pursuant to some other planning we've already done, that project isn't necessary.

[01:15:25] Speaker 02:
But what it can't do is actually review these end of life needs on a case by case basis and say,

[01:15:32] Speaker 02:
Hey, is the place that makes sense here is that what's in the best interest of the grid?

[01:15:36] Speaker 02:
Should we maybe be thinking about a line somewhere else is what would enhance and expand the grid in the best manner.

[01:15:42] Speaker 02:
Maybe not to replace this facility at all, because we don't need lines bringing power from coal mines in West Virginia anymore.

[01:15:48] Speaker 02:
We need them bringing from wind farms on the.

[01:15:51] Speaker 02:
most of Virginia.

[01:15:52] Speaker 07:
So, Ms Murphy, you disagree with Mr. Longstreet's characterization that PJM can override a decision on an end-of-life project.

[01:16:02] Speaker 02:
I think he was being very, very careful about his word.

[01:16:05] Speaker 02:
There are circumstances

[01:16:07] Speaker 02:
in which PJM can override, but they are very narrow.

[01:16:10] Speaker 02:
They are circumstances where PJM, pursuant to other planning authority, is basically, you know, pursuant to... So not pursuant to its general... There's nothing in the local proposal that says, hey, we're going to ask PJM.

[01:16:25] Speaker 02:
If they think we should do this end of life project, and if they say no, hands off.

[01:16:30] Speaker 02:
It's just that if there's overlap between some other project that PJM is planning pursuant to some other authority that has nothing to do with the need that's arising by virtue of the retirement, PJM can say, hey, we've already got this, so in this instance, you don't get to do the project, or we need that project to be part of this project.

[01:16:49] Speaker 02:
What we wanted was exactly what I think was it.

[01:16:53] Speaker 02:
It sounded a little bit like they were saying is what exists and it's not, which is something where PJM gets to look at these projects and say, should they happen at all?

[01:17:02] Speaker 02:
Should they be regionally competitive?

[01:17:03] Speaker 02:
Should they be locally planned?

[01:17:05] Speaker 02:
The last thing I just want to talk about just a little bit is the cross-causation and old dominion and Section 205 versus Section 205.

[01:17:14] Speaker 02:
I mean, for one thing, Holden was not a Section 206 case.

[01:17:17] Speaker 02:
It was a Section 205 case that was almost exactly like this one.

[01:17:22] Speaker 02:
What had happened was there was a 205 proposal to take a category of end-of-life projects and say that category of end-of-life projects should be categorically set for local cost allocation.

[01:17:35] Speaker 02:
And it happened, you know, part of the reason those objections to that was the particular project at hand, the old Dominion project demonstrated that there were projects within that category that had regional benefits.

[01:17:47] Speaker 02:
And what this board said it was the cost causation principle focuses on project benefits, not on how the particular planning criteria were developed.

[01:17:58] Speaker 02:
So the, you know, the notion that it kind of started local or started, it doesn't really matter.

[01:18:02] Speaker 02:
What matters is to confront the problem that you have projects here that have.

[01:18:08] Speaker 02:
regional benefits.

[01:18:09] Speaker 02:
And I don't think, I mean, FERC didn't even rely on the idea below that you can fix all of this through a 206 filing.

[01:18:16] Speaker 02:
But I think there's a reason for that.

[01:18:18] Speaker 02:
It's because 205 filing says, this is the file rate.

[01:18:21] Speaker 02:
We've decided that this is right.

[01:18:23] Speaker 02:
A 206 filing, it doesn't allow us to come in and change the planning.

[01:18:28] Speaker 02:
And it only allows us to come in and say, you got the file rate wrong, which of course is arguing with one hand tied behind our back.

[01:18:34] Speaker 02:
because we're fighting against what is already even deemed to be adjusted.

[01:18:36] Speaker 07:
And do you think that type of case by case 206 filings would be inconsistent with the framework of regional planning and the other FERC orders?

[01:18:45] Speaker 02:
I think it doesn't solve the planning problem because it's really just about cost allocation.

[01:18:51] Speaker 02:
And here, it might help address the problem, the inconsistency with this court's precedent, because this court's precedent requires cost allocation without regard to planning.

[01:19:01] Speaker 02:
But FERC's precedent actually says,

[01:19:04] Speaker 02:
Hey, if regional cost allocation is required, then so too is regional planning.

[01:19:09] Speaker 02:
And I don't understand the section 206 filings to allow reopening of that question about who should have planned this?

[01:19:16] Speaker 02:
How should this have been done in the first instance?

[01:19:18] Speaker 02:
All it is is, I mean, don't get me wrong.

[01:19:19] Speaker 02:
Like we'd love to get some money back if there's going to be projects that end up producing just and unjust and unreasonable rates.

[01:19:25] Speaker 02:
But that doesn't solve the more fundamental problem.

[01:19:28] Speaker 02:
I mean, it's kind of striking for me that Ferck said this case isn't about transmission filing policy.

[01:19:33] Speaker 02:
that's all that that's that's first and foremost what this case is about is who's going to be doing the transmission planning we think that if you're talking about a category of projects that involves things that are going to have regional impacts that the regional planning authority should be involved any further questions thank you mr faith thank you to all council for their arguments the cases have been