The Federal Energy Regulatory Commission rejected two "untimely" requests for rehearing after a proposed energy exchange market in the U.S. Southeast went into effect by operation of law.

More than a dozen entities filed the requests after an evenly divided FERC failed to act on the market proposal, allowing the agreement to go into effect Oct. 12 (ER21-1111). The market will establish a new trading platform that algorithmically matches excess electricity buyers and sellers but falls far short of a fully organized wholesale power market construct called for by clean energy advocates.

Advanced Energy Economy, Advanced Energy Buyers Group, Renewable Energy Buyers Alliance and the Solar Energy Industries Association filed one rehearing request, while the Sierra Club and a dozen other interest groups filed the other. Both requests claimed that FERC's lack of action on the proposal was arbitrary and capricious, given the commission's failure to address the groups' concerns.

Under the Federal Power Act, parties have 30 days to file rehearing requests when Section 205 rate filings go into effect.

Jeff Dennis, managing director and general counsel for Advanced Energy Economy, said on Twitter that the parties requesting rehearing had calculated Nov. 12 as the correct rehearing deadline "under longstanding FERC rules" because FERC was closed Oct. 11 and Nov. 11, both federal holidays.

In a Dec. 10 order, FERC acknowledged that the agency has not previously explained how it calculates deadlines for rehearing requests when Section 205 rate filings become automatically effective due to deadlocks or lack of a voting quorum.

FERC said the 30-day time period for seeking rehearing "starts running on the day after the last day that the commission could have taken action by 'issuing an order accepting or denying the change.'" The commission noted that its general practice is to issue orders by the preceding business day when a Section 205 deadline falls on a weekend or holiday. However, FERC also said, "There is no prohibition on the commission acting on a day that it is typically closed."

Therefore, opponents had 30 days to file rehearing requests from the date FERC failed to issue an order, which the commission determined to be Oct. 11. Rehearing requests on the Southeast Energy Exchange Market, or SEEM, proposal were thus due by Nov. 10, making the two Nov. 12 requests untimely, FERC said.

FERC also said it could not grant a request for a paper hearing with a technical conference because the commission had rejected those organizations' rehearing requests.

"Issues to be raised in subsequent requests for rehearing of the November 2021 ... order are outside the scope of this proceeding, which is limited to the [SEEM] agreement and concurrences thereto," FERC said.

Dennis noted that FERC's denial of the rehearing requests as untimely may prevent parties from seeking judicial review. "Denying a path to judicial review of a FERC non-action would be a serious consequence of a novel new reading of how calculating time in these circumstances must be done," Dennis tweeted.

FERC Chairman Richard Glick and Commissioner Allison Clements, both Democrats, opposed the SEEM proposal, while Republican Commissioners James Danly and Mark Christie supported it. FERC's newest commissioner, Willie Phillips, was sworn in Dec. 3 and did not take part in the proceedings.

Ellie Potter is a reporter with S&P Global Platts. S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.