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In This List

FERC looks to new commissioners for new life

Essential Energy Insights - September, 2020

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FERC looks to new commissioners for new life

While a Senate committee reviews nominees who could give the Federal Energy Regulatory Commission a voting quorum again, FERC's chairman and staff prepare for the new commissioners and the large workload they will all have to tackle when the agency restarts.

Testifying at a confirmation hearing, the nominees stayed true to the commission's philosophy, telling senators that they support natural gas infrastructure as an important part of the U.S. energy market but they still think it is critical to listen to input from all parties. Neil Chatterjee, energy adviser to Senate Majority Leader Mitch McConnell, told the Senate Energy and Natural Resources Committee on May 25 that he would bring the same "equitable, level-headed approach to the commission" that he brought to his work in the Senate.

Fellow Republican Robert Powelson, a Pennsylvania Public Utility Commission member and president of the National Association of Regulatory Utility Commissioners, said he was proud of the state commission's bipartisan culture and looked forward to the same at the federal commission.

The hearing was generally friendly toward the nominees, as observers had expected. Most senators want to restore a FERC quorum of at least three members so the independent commission can move major items of business. The body has lacked the ability to vote on rules, contested cases and permits for energy infrastructure since Feb. 3, when former Chairman Norman Bay departed. The White House announced that it planned to nominate Chatterjee and Powelson as commissioners on May 8.

Committee Chairman Lisa Murkowski, R-Alaska, posed the first question on gas infrastructure. She asked whether the FERC nominees would support her state's effort to develop the Alaska LNG project and commit to making sure applications for gas infrastructure permits proceed "in a timely, predictable way." Chatterjee said he supports such projects, which he said help the economy and develop domestic energy resources, but he stressed that it is important to hear "stakeholders on all sides."

Powelson observed that FERC considers for approval about $400 billion worth of "critical infrastructure" each year. At the same time, he said, pipeline safety, environmental impacts and other issues are important. Powelson promised to "look at the record and the business case" for projects.

"I would give you my steadfast commitment to be fair, balanced and do my work homework in approving, if I have to give an approval to these projects," he said.

LNG export terminals came up under questioning from Sen. Cory Gardner, R-Colo., who supports the proposed Jordan Cove Energy Project LP facility in Oregon as an outlet for gas production in his state.

Chatterjee pointed out that as a candidate for commissioner, he could not speak on individual cases. "I would certainly look to get these projects sited," he said. "I would also be certain to hear feedback from folks on all sides of the issues and make the most responsible decision I could."

Powelson indicated that he generally supports LNG projects. "Exporting, in my view, creates geopolitical upside for the U.S.," he said.

When the subject of climate change came up, Powelson said, "I am not a climate denier," while Chatterjee talked about FERC's role in ensuring the reliability of the nation's energy grid.

Preparations for the expected commissioners are underway. In an interview, FERC acting Chairman Cheryl LaFleur said she was excited to work with Chatterjee and Powelson once they are confirmed by the Senate. "The sooner, the better," she said.

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FERC has never had to operate without a quorum before this year, and the commission will likely remain shorthanded for months more before it regains the minimum number of commissioners to vote. FERC staff began preparations even before the Trump administration picked Chatterjee and Powelson. The commission will need to bring them up to speed as soon as possible to deal with the backlog of work.

At some point, it will have to do the same for a new chairman. FERC has not heard who the new chairman might be, although Kevin McIntyre, energy practice co-head with the law firm Jones Day, is reported to be in the running for the position.

LaFleur, a Democrat, keeps a red file on her desk with notes that she plans to pass on to her Republican replacement when she steps down as chairman. The notes are reminders of what is in front of the commission. The "first order of business is the backlog of orders," LaFleur said.

Some of these orders will grant certificates to build energy infrastructure. "Our pipeline work is very important, very controversial, very high-profile," LaFleur said. "We have to help the nation have pipelines where they are needed to serve customers and the public interest, but make sure we satisfy our environmental responsibilities."

The new chairman and commissioners will be aware of many of the major policy issues the agency is working on, LaFleur said, which will include everything from "master limited partnership taxation, to the length of hydro licenses, to all kinds of electric market issues."

"I think in terms of pending policy issues, the big issue of how the wholesale competitive markets can adapt to state policy initiatives is front and center: It's my top priority," LaFleur said. The chairman called a two-day technical conference at the start of May to look at the impact of state generation preferences and policies on competitive power markets, and the conference was well attended.

"Finally," LaFleur said, "the last thing I would mention is the general area of grid security — cybersecurity and other emerging grid issues — is something I would want someone to be attuned to quite quickly."

The natural gas pipeline industry hoped decisions on new lines and expansions would be among the first orders of business for the new commission. "It is reasonable to anticipate that acting on pending applications for pipeline certificates will be a high priority," said Donald Santa Jr., president and CEO of the Interstate Natural Gas Association of America.

At another event in Washington, D.C., a panel with former Commissioner Tony Clark said energy market subsidies should be a priority for the restored commission.