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Biden's FERC nominee outlines measured stance on gas, power issues

  • Author Zack HaleMaya Weber
  • Theme Energy
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Willie Phillips was nominated to serve on the Federal Energy Regulatory Commission in September.
Source: District of Columbia Public Service Commission

District of Columbia Public Service Commission Chairman Willie Phillips, U.S. President Joe Biden's pick to serve as the Federal Energy Regulatory Commission's fifth member, emphasized a need for balance on electric power issues and natural gas infrastructure siting during an Oct. 19 confirmation hearing.

If confirmed, Phillips would give Democrats a majority at FERC, a five-member, quasi-judicial independent agency that is seen as increasingly pivotal to the Biden administration's energy and climate agenda.

With FERC evenly divided along partisan lines, Phillips' confirmation would break 2-2 deadlocks at the agency that in recent weeks have caused a major PJM Interconnection LLC capacity market overhaul and the proposed Southeast Energy Exchange Market to become effective by operation of law.

Despite the high stakes, the Oct. 19 hearing before the U.S. Senate Committee on Energy and Natural Resources was described by Sen. Lisa Murkowski, R-Alaska, as a "pretty calm" affair.

"We usually don't get such a calm proceeding," Murkowski said of FERC confirmation hearings.

Committee Chairman Joe Manchin, D-W.Va., said he was "confident," based on dialogue with senators, that Phillips would be confirmed, as would two other nominees being considered — Brad Crabtree, to be assistant secretary for the U.S. Department of Energy's Office of Fossil Energy and Carbon Management, and Charles Sams, to be director of the National Park Service.

Electric transmission, extreme weather

In opening remarks, Phillips outlined his top priorities as a utility regulator: reliability, affordability and sustainability.

Phillips also clarified early in the hearing that he believes climate change is real and that "we have a moral and ethical obligation to address it." But Phillips also argued for "balance" in addressing the problem, likening bulk power system operations to a three-legged stool.

"If you have world-class sustainability ... and sacrifice reliability, the chair will fall," Phillips said.

Democratic senators also pressed Phillips on how FERC can boost electric transmission build-out as the U.S. struggles to accommodate a surge in renewable energy development.

Phillips repeatedly declined to wade into policy details, however, citing a major ongoing rulemaking (RM21-17) launched by FERC in July to address interregional transmission constraints, cost allocation and generator interconnection policies.

Citing an "interconnection bottleneck," Sen. John Hickenlooper, D-Colo., noted that China has constructed 260 GW of interregional transmission since 2014 while the U.S. has built just 3 GW.

"You're asking the right questions, senator," Phillips said. "If we are going to meet our goals, I believe that electric transmission will play an important part in doing that."

Phillips added during later questioning that he would pay "close attention" to policy recommendations from a joint federal-state transmission task force, which is set to meet for the first time on Nov. 10.

Sen. Martin Heinrich, D-N.M., also asked Phillips whether he supports implementing Section 219(b) of the Federal Power Act, a provision that requires FERC to encourage the deployment of technologies that squeeze more capacity out of existing transmission lines.

Phillips noted that FERC also has a pending electric transmission incentives proposal (RM20-10) that would fulfill that directive.

"As a general matter, I do support exploring all of these options to increase our flow," Phillips said.

And Sen. Catherine Cortez Masto, D-Nev., asked Phillips how drought-ravaged western states can address reliability threats caused by wildfires and severe shortfalls in hydropower capacity.

Phillips, who previously worked on reliability reports at the North American Electric Reliability Corp., said he would push for more collaboration between FERC and NERC staff.

NERC, by design, has a "very narrow view of reliability," while FERC's is "very broad," Phillips said.

"I believe that there is an opportunity to get both of these excellent staffs together, and even at the senior level, to look for how we can better improve even more, our reliability," Phillips said.

Pipeline certainty

On the natural gas side, Phillips was pressed on the role he would play in ensuring gas infrastructure permitting was timely and predictable. Some of the panel's senators recently have worried FERC was extending its reviews and adding uncertainty by turning to added environmental impacts statements to help assess the significance of climate impacts associated with projects.

Phillips acknowledged the timing concerns, but echoed the stance of FERC's sitting Democrats that the commission must adhere to recent court rulings to ensure its orders on gas projects are "legally durable."

"The D.C. Circuit has been clear to FERC that they have a responsibility to consider climate [and] environmental justice, and … if confirmed I will also be focused on that," he said.

The U.S. Court of Appeals for the District of Columbia Circuit on Aug. 3 found fault with the climate and environmental justice reviews of two LNG projects in the Brownsville, Texas, area.

As a third Democrat on the five-member commission, Phillips could be an important tie-breaking vote in key pipeline policy debates including on climate and whether to look beyond precedent agreement to determine if projects are needed.

Phillips also committed to work on gas project review efficiencies.

"No one would argue that there are [not] efficiencies that can be had with regard to our pipeline certification for natural gas," Phillips said. "This is something I would commit to work on; it's also something that I have done in my career as a regulator in D.C."

Manchin pressed Phillips on his view on maintaining U.S. energy independence.

"I believe in an all-of-the-above strategy," Phillips replied, noting that FERC, as an economic regulator, does "not pick winners and losers."

"At the same time, I'm very aware that we're in the middle of an energy transition," he said, adding, "I want to do everything that I can, if I'm honored to be confirmed, to push forward innovation to achieve our goal."

Maya Weber 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.