The Federal Energy Regulatory Commission needs to work to speed up its U.S. LNG export terminal project approvals, FERC Chairman Neil Chatterjee said recently, rejecting the idea that a commissioner seat vacancy might first have to be filled to break any partisan logjams.
The comments during a March 14 briefing with reporters at CERAWeek by IHS Markit in Houston reflect the pressure the commission faces from both the White House and the energy industry to give the U.S. a shot at achieving its market growth goals and meeting the global demand expected next decade.
An agreement on greenhouse gas considerations reached in February allowed the commission to approve by a 3-1 vote Venture Global LNG's Calcasieu Pass project, the first such permit approval in two years. The decision gave developers of other second wave projects hope they might soon be next. With the slot for a fifth member on the commission still to be filled, some sector observers have questioned whether that optimism is warranted.
"I'm confident the current complement of us, the four of us, can get things done," Chatterjee said. He added that he considers the notion "that we are split and divided" to be unfair.
Differences at the commission over greenhouse gas considerations have tended to fall along party lines, although Democratic Commissioner Cheryl LaFleur has more often voted with Republicans to back projects — despite climate-related objections — than her Democratic colleague, Commissioner Richard Glick. Most orders at the commission are approved unanimously.
On the power front, Chatterjee said he could not comment about PG&E Corp. and its utility subsidiary Pacific Gas and Electric Co.'s bankruptcy case or the adversary proceedings in which PG&E Corp. has asked the bankruptcy court to issue an injunction to keep FERC out of the case. In court documents, FERC has described the broad scope of its statutory jurisdiction over "rates, terms and conditions of wholesale electricity sales" and said it has exclusive authority to determine the reasonableness of those rates.
Chatterjee said he felt that it was important that FERC asserted its jurisdiction over long-term power supply contracts that PG&E Corp. may decide to terminate.
The adverse proceeding is ongoing in San Francisco, with a decision expected April 10. A report March 14 by S&P Global Ratings suggested that suppliers are becoming concerned that Pacific Gas and Electric will soon seek to reject supply contracts.
Chatterjee also addressed questions about the resilience of the U.S. grid, noting that resilience and stability are now the subject of an ongoing FERC analysis on the short-term and long-term threats to the grid.
"This is a really complex undertaking," Chatterjee said, "and there is urgency around it."
Chatterjee declined to comment on whether there is a timetable for the analysis completion. He also declined to comment on when the commission will rule on capacity market reforms proposed by PJM Interconnection, or on whether the largest U.S. grid operator's upcoming August auction should be delayed further.
Chatterjee did address head-on the perceived dysfunction in Washington and the commission's effort to be an exception, especially when it comes to LNG project approvals.
"We at the commission have to do our part to make sure we are evaluating the applications before us in an expeditious and efficient manner," he said to the conference attendees. But balancing interests is a "really vexing challenge," especially with the Houston oil and gas hub lobbying hard, he said.
"It's a tough one for me personally. I'm a conservative," Chatterjee said. "Ever since I got off the plane, I keep hearing people tell me, 'Don't mess with Texas.' I get it."
Harry Weber and Jeffrey Ryser are reporters at S&P Global Platts. S&P Global Market Intelligence and S&P Global Platts are owned by S&P Global Inc.