Biden plans to nominate DCPSC chair Phillips to be fifth FERC member

President Joe Biden plans to nominate District of Columbia Public Service Commission Chairman Willie Phillips to become a member of the Federal Energy Regulatory Commission, potentially bringing the commission to a 3-2 Democratic majority at a time when key decisions about the future of electric power markets and natural gas infrastructure reviews are at stake.

Phillips has chaired the DC utility regulatory agency since 2018, after joining the commission in 2014. In announcing Biden's planned nomination, the White House Sept. 9 called Phillips a "thoughtful and innovative leader in modernizing the energy grid, implementing the District's aggressive clean energy and climate goals, and protecting the District's customers."

Phillips' prior experience includes acting as assistant general counsel for North American Electric Reliability Corp. as well as work in the private sector as a regulatory attorney. He also serves on the board of directors for National Association of Regulatory Utility Commissioners and chairs its select committee on regulatory and industry diversity.

With the departure of former Republican Commissioner Neil Chatterjee in late August, FERC is down to 2 Democrats and 2 Republican members, complicating the path for more contentious matters under consideration. The addition of a Democrat would strengthen the hand of Chairman Richard Glick.

If confirmed by the Senate, Phillips would join FERC at a time of substantial debate within the commission about the natural gas pipeline certification process, including division on how the need for gas projects should be assessed and consideration of climate impacts of projects. Pipeline companies in recent months have complained of increased uncertainty for projects based on a number of actions recently taken by FERC. Among key pending matters, FERC has an open docket on how to update its pipeline certification policy.

Transmission planning

On the power side, Phillips would join the commission as it seeks to address transmission challenges exacerbated by more variable renewable energy sources coming online. FERC plans to issue a new major electric transmission planning rule by the end of 2022 and recently announced an advanced notice of proposed rulemaking to kick off that effort. That docket seeks to adjust the commission's policies to help support the grid amid a transition to cleaner energy sources.

FERC is also considering PJM Interconnection's proposed replacement for its contentious minimum offer price rule. PJM proposed a "focused" MOPR to help states that are pursuing more aggressive climate and clean energy targets. Critics have said the proposed rule would allow one state's policy decisions to affect wholesale energy prices in other states.

If confirmed, Phillips would join the commission with a background in the years-long PJM MOPR debate. During a 2018 industry event, while serving as a DC Public Service Commission member, he said that he would not support unjustified energy cost increases.

"States need to be at the table to make sure that policy, price and people — our perspective on those three issues — are presented and that they're reflected in the outcome of any policies," the PSC member said then.

Of note, Phillips voted in 2016 to approve the Exelon-Pepco merger, which had generated debate about potential harm to DC communities. Approval came along with requirements that Exelon pay millions for pilot projects, gird modernization and energy efficiency in DC.

Early reaction

Glick welcomed the nomination, calling Phillips "highly qualified and very well regarded," and asserting that FERC's work is "essential to advancing our nation's clean energy transition and to ensuring the reliability and security of our energy infrastructure."

Senate Energy and Natural Resources Committee Chairman Joe Manchin, Democrat-West Virginia, who will play an important role in the confirmation process, also said he was pleased the president put forward a nominee. "Just as I do with each of the nominees that come before the committee, I will carefully examine his record and qualifications to serve in this important role overseeing our federal energy policy," Manchin said.

The intent to nominate Phillips drew quick support from the American Council on Renewable Energy, which said Phillips has a "clear recognition of the benefits that renewable energy provides our nation's communities."

The Interstate Natural Gas Association of America called on the Senate to act promptly, while adding that as the Senate considers his nomination, it is critical the nominee show a "commitment to a predictable and clear regulatory process and evaluating each project on its merits."

Food & Water Watch, an environmental group that has opposed further approval of fossil fuel infrastructure, criticized the plan to nominate Phillips, contending he had spent too much time "working on the side of the oil and gas industry and electric utility giants."

With Senate approval, Phillips would join fellow former state utility regulator Mark Christie on the panel, adding another voice for respecting states' rights to the commission, which has been criticized in past years for not giving proper weight to states' concerns.

ClearView Energy Partners, in a research note, characterized Phillips as more of a "technician" and a "green pragmatist," suggesting his selection may avoid political minefields and be less controversial than several other candidates offered for consideration in early August by a group of 466 environmental organizations.