The Federal Energy Regulatory Commission is expected to finalize a major rule on electric transmission expansion before three new nominees potentially join the agency.
If confirmed, Judy Chang, David Rosner and Lindsay See would give the commission a new look engineered by US Sen. Joe Manchin (D-W. Va.). The senator is retiring from Congress at the end of the year after looming over FERC as chairman of the Senate Committee on Energy and Natural Resources, which is responsible for vetting FERC nominees for confirmation.
In a series of interviews, industry experts were reluctant to speculate on exactly how the confirmation process might play out in an election year. But they predicted that FERC's current three members will lock in a sweeping rule on long-range transmission planning and cost allocation before Democratic Commissioner Allison Clements, whose term expires at the end of June, leaves the agency.
The regulation, first proposed in April 2022, is the most significant rule on electric transmission expansion in over a decade, and it is seen as pivotal to US President Joe Biden's clean energy agenda. Multiple academic studies have estimated that the nation's power grid will need to double or even triple in size by 2050 to accommodate a massive number of proposed clean energy projects.
FERC Chair Willie Phillips, a Democrat, has repeatedly stated in recent months that the agency is close to finalizing the regulation, which would require transmission planners to account for the expected location of future projects. The rule would also elevate the role of state regulators on cost allocation, one of the thorniest issues associated with building interstate transmission lines.
Phillips, Clements and Mark Christie, FERC's lone Republican, are already steeped in the issues at play with the transmission rule, experts noted.
"They've got three and a half months to finish it with the current set of commissioners, and if I were the chairman, that's what I would want to do," Jeffrey Jakubiak, a partner in Vinson & Elkins LLP's energy practice, said in an interview.
FERC's current three-member makeup will also likely address rehearing requests for a sweeping rule on generator interconnection reforms, said Anand Viswanathan, special counsel at Jenner and Block LLP and a former legal adviser at FERC.
"There's too much at stake to risk essentially having to start from scratch with new votes," Viswanathan said.
3 nominees with diverse experience
If confirmed, the nominees will help FERC chart a new course on crucial US power and natural gas policies. Chang and Rosner are Democrats, and See is a Republican.
ClearView Energy Partners LLC noted that the nominees would give FERC an "East Coast alignment," with all five members representing eastern states and the District of Columbia. But the firm does not expect to see substantial opposition to the nominees from Western lawmakers for this reason.
"Given the length of time it has taken to identify three nominees to the commission, we think that experiential diversity and moderate politics may have been more of a focus than geographic diversity or party ideology," the research firm said in a note to clients. "We think the slate of nominees — as a package — may prove less controversial than other Biden administration selections."
Chang, a former undersecretary of energy and climate solutions for Massachusetts, is regarded as the most liberal of the three nominees. But her résumé is more centrist than that of Clements, who worked as a clean energy lawyer before joining FERC. With a background in electrical engineering, Chang previously co-led the energy practice at the Brattle Group, a mainstream economic consulting and policy firm.
Rosner is an industry analyst at FERC and is currently on detail at the Senate Energy and Natural Resources Committee. Rosner has previously written to support US natural gas production, a top priority for Manchin.
See is the only lawyer of the three. A Harvard Law graduate and Solicitor General in the West Virginia Attorney General's Office, See notched a major legal win at the US Supreme Court in June 2022 by successfully challenging the Obama-era Clean Power Plan in West Virginia v. EPA. The decision gave rise to what is known as the major questions doctrine, a conservative legal theory that holds agencies must point to explicit authorization from Congress when issuing regulations of "vast economic or political significance."
"This is Joe Manchin's FERC," Tyson Slocum, director of the energy program for consumer watchdog group Public Citizen, said of the West Virginia senator.
"This is what he brokered with the White House," Slocum said, predicting an easy Senate confirmation process.
With agency rulemaking under close scrutiny from the Supreme Court, FERC and the regional grid operators it oversees will continue to lead on the clean energy policy front, predicted John Moore, a senior attorney with the Natural Resource Defense Council's Sustainable FERC Project.
"I think it's really important to emphasize that most of these reforms are going to be coming from the grid regions," Moore said.
The US Environmental Protection Agency's climate authority was restricted in the Supreme Court's West Virginia v. EPA decision, but Moore noted that FERC has broad authority under the Federal Power Act and Natural Gas Act.
Gas project scrutiny
Several industry observers anticipated that gas infrastructure projects will keep moving at a commission chaired by Phillips, with the potential addition of the new trio and given that two of the nominees arrive with backing from Senate Minority Leader Mitch McConnell (R-Ky.), a proponent of gas expansion.
The nominees will likely face extra scrutiny during Senate hearings about their stance on gas and LNG, amid blowback from industry against the Biden administration's LNG export review pause.
While prospects for blocking the nominations may be limited, Collin Rees of Oil Change International said it will be important to get nominees on the record and clarify their views.
"I think there's also potential to sort of stop further 'Manchin-ification' of the candidates during this process if there's a counterweight and if we're pushing back," said Rees, whose group opposes fossil fuel development.
A reconstituted FERC is likely to continue wrestling with its approach to climate in its gas project decisions, a topic of years of litigation before the US Court of Appeals for the DC Circuit.
Viswanathan expected that See, with her appellate court experience, would be particularly well-attuned to how courts will examine the agency's decision-making.
If the DC Circuit issues an adverse decision on FERC's approach to greenhouse gas emissions, "that's necessarily going to come with some change in how FERC phrases the language in those orders," Viswanathan said.
"I think if See is confirmed, she will be a real powerhouse, with her legal background and appellate work, and would work well with Commissioner Christie," said Bernard McNamee, a partner at McGuireWoods and former Republican FERC commissioner.
