New York — Despite having a strongly divided US Congress often at odds with the White House, power market experts said Wednesday they see bipartisan movement on energy and climate related initiatives that could significantly impact power markets in the near term.
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"We see the Republican Party coming out of its shell on climate issues ... even in the last 18 months you can go to the Hill and have a meeting with very Conservative Republicans and talk about climate change," Sasha Mackler, director of the Energy Project at the Bipartisan Policy Center, said during a panel discussion at S&P Global's Annual Power & Gas M&A Symposium in New York.
Mackler said he does not see major energy or climate legislation coming out of Washington in 2020, but the "ice is breaking on the issue" and 2021 could be a very significant year regardless of who wins the US presidential election in November.
Adam Benshoff, executive director of regulatory affairs at investor-owned utility trade group Edison Electric Institute, said if we are going to tackle the climate change problem the solution has to reach across the economy, and that is where Republicans are getting interested on issues like innovation and technology.
Mackler agreed, saying the ideas Republicans are bringing are different, but they are at the table. He said the leadership in the Republican Party through Representative Kevin McCarthy in California has indicated they will be coming out with a climate platform this year.
"So this is a live issue," Mackler said, adding that a framework like a federal Clean Energy Standard is gaining the most traction. "My message is something is happening on energy and climate at the federal level, and I think you need to be paying attention because we could see things move forward in the next 12 to 36 months," he said.
CHALLENGES AT FERC
The Federal Energy Regulatory Commission has been in the spotlight over the past few years as its leadership has churned, and some of its decisions on issues such as LNG, natural gas pipelines and power capacity markets have been controversial.
One current problem is having only three members -- Chairman Neil Chatterjee, Commissioner Richard Glick and Commissioner Bernard McNamee -- which means they lose quorum if one of them has to recuse themselves from an issue, said Branko Terzic, managing director at Berkeley Research Group and a former FERC commissioner.
McNamee also has announced he will not serve another term and his successor remained unclear until late Wednesday when it was announced that the White House has re-nominated James Danly, FERC's general counsel, to become a member of the commission.
Danly's nomination was returned in January after the Senate failed to confirm or reject him during its 2019 session.
"They are all lawyers and we have no engineers and no state public utility commissioners," Terzic said. "It is unusual that the [Trump] administration has not reached into the pool of Republican and Democrat state commissioners who can hit the ground running," he said.
EEI's Benshoff said the administration's biggest impact on FERC has been not fully staffing it, which has been "to the detriment of the power industry."
Additional challenges to moving ahead with federal energy policies include the degree to which regional power markets have grown in complexity since their inception about 20 years ago.
Terzic said we are talking about adding electric vehicles, distributed energy resources and energy storage all on the customer side of meter and the questions are who dispatches it? Who gets the economic benefits?
The blurring of wholesale power markets and the customer side of meter will be a "huge problem," Terzic predicted.
We now have dynamic power markets with multiple ISOs and that structure is not reflected in many current laws and rules, Terzic said.
"This all makes for a complex, unwieldy system that needs strong FERC leadership," he said.