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With lots on their plate, new FERC members will have to quickly get up to speed


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With lots on their plate, new FERC members will have to quickly get up to speed

After six months of lacking the three-member quorum needed to vote on major matters, the Federal Energy Regulatory Commission will soon regain that authority given that the U.S. Senate late on Aug. 3 voted to allow Neil Chatterjee and Robert Powelson to join Acting Chair Cheryl LaFleur on the five-member commission.

The agency has plenty of items on its to-do list given the backlog of cases that have piled up since former Chairman Norman Bay left the agency in early February. But the newest members will need some time to hire assistants and get up to speed on the many pressing issues before the agency and FERC's operational procedures before they can begin to help address that backlog.

Jim Hoecker, a former FERC chairman, stressed during a February discussion on Capitol Hill that while most incoming commissioners are relatively familiar with the major issues before FERC, being a commissioner requires "an awful lot of detail work" and takes a "boatload of reading" to prepare. He acknowledged that it took him a good six months before he felt comfortable with dealing with the wide range of issues that come before the agency.

But former commissioner Philip Moeller noted that new commissioners get plenty of help from the FERC staff of engineers, economists, biologists, lawyers and other experts, many of them "lifers," as they try to educate themselves on a wide variety of subjects with which they may not be familiar.

FERC's responsibilities are wide-ranging, including the regulation of wholesale transmission and sales of power and natural gas and oil pipeline rates. It also must sign off on major mergers and acquisitions by power companies, the siting and abandonment of interstate natural gas pipelines and storage facilities, and hydropower licenses.

FERC also has a reliability role. It is charged with ensuring the safe operation and reliability of proposed and operating LNG terminals and the wholesale power grid. It oversees energy markets and punishes improper behavior by imposing civil penalties and through other means. And while FERC does not regulate utility emissions or impose clean air requirements, it does have to ensure that natural gas and hydroelectricity projects meet environmental requirements.

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Chatterjee's and Powelson's extensive energy industry experience should ease their transition to their new jobs. Chatterjee was Senate Majority Leader Mitch McConnell’s energy advisor, and Powelson was a commissioner on the Pennsylvania Public Utility Commission and is president of the National Association of Regulatory Utility Commissioners.

If all goes as planned, Chatterjee and Powelson will be joined by Kevin McIntyre, an energy attorney at international law firm Jones Day, and Richard Glick, the Democratic General Counsel for the Senate Energy and Natural Resources Committee, after Congress returns from its August break. McIntyre and Glick have been nominated by President Donald Trump to fill the two remaining open seats as the commission, with McIntyre to be the new chairman.

The Senate Energy and Natural Resources Committee has scheduled a confirmation hearing for the last two nominees for Sept. 7. Even if confirmed by the committee, the full Senate might not vote on their confirmations for some time. The Senate took nearly two months to vote on Chatterjee and Powelson after they were approved by the energy committee June 6.

One of the most pressing issues the new commission will have to address is whether and how to facilitate state clean energy policies in FERC-regulated electricity markets. FERC held a two-day technical conference on the issue in early May, during which staff outlined a handful of options for FERC action.

In addition, FERC has proposed to remove barriers that keep energy storage resources, such as batteries and flywheels, and distributed resource aggregations from more fully participating in markets run by the nation's regional transmission operators and independent system operators. (FERC dockets RM16-23; AD16-20)

But before attacking big policy issues such as those, the agency's time in the near term will be taken up addressing oil pipeline rates, gas pipeline certificates, contested rate filings and tariff revisions that have statutory deadlines because they were postponed by a tolling order from staff while FERC lacked a quorum.

In addition, the Interstate Natural Gas Association of America has estimated that about $14 billion in private capital for energy infrastructure projects, including new natural gas pipelines and LNG terminals, were being held up by the lack of a FERC quorum.

Eventually, the agency will also have to address a number of other pending power related rulemakings, include one that would require all new generators to have the ability to provide frequency response (RM16-6), and another that would direct RTOs and ISOs to adopt market rules that meet certain requirements when pricing fast-start resources (RM17-3).

The agency also has a pending inquiry into whether to modify how it evaluates market power when considering requests for merger approvals or for the authority to sell power, capacity and ancillary services at market-based rates (RM16-21).

FERC also has proposed a series of interconnection reforms for large generators (RM17-8), to allocate real-time uplift costs to those that cause them (RM17-2) and modify the length of hydropower licenses (RM17-4).