Monday, June 25, 2018

Questions to FERC Nominees Reflect Democrats’ Wish List

By Michael Brooks

President Trump’s nominees to FERC gave nearly identical, boilerplate answers to senators’ written questions on issues ranging from hydroelectric project licensing to natural gas infrastructure following their confirmation hearing last month.

The questions, mostly from Democratic and left-leaning independent senators, provide more insight into a party grappling with being in the minority under a presidential administration hostile to environmental issues rather than the nominees themselves.

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Powelson | © RTO Insider

Robert Powelson, a Pennsylvania Public Utility Commissioner, and Neil Chatterjee, senior energy adviser to Senate Majority Leader Mitch McConnell (R-Ky.), toed the FERC line, declining to answer questions about specific cases pending before the commission. The two, who were each approved 20-3 by the Energy and Natural Resources (ENR) Committee on June 6, are awaiting a confirmation vote by the full Senate. (See FERC Nominees Easily Advance to Full Senate.) No vote has been scheduled as of last week.

They pointed to recent technical conferences when asked about state energy policies and barriers to participation in the wholesale markets to energy storage, saying they were “eager” or “looking forward” to reviewing comments the commission has received.

They also provided similar answers to questions about Order 1000, about which nearly every senator who submitted written questions asked.

Senators expressed concern that there were still problems with the interregional transmission process. Sen. Joe Manchin (D-W.Va.) in particular quoted PJM CEO Andy Ott and SPP CEO Nick Brown’s criticisms of Order 1000 at the RTO Insider/SAS ISO Summit in March. (See PJM, SPP Chiefs Share Frustration with Order 1000.)

Both nominees said they were supportive of the order and pledged to carefully consider stakeholder feedback on last year’s technical conference. “I am a strong advocate for interregional transmission planning and, in my view, the commission’s implementation Order No. 1000 is a work in progress,” Powelson said.

The nominees also asserted that changes to how the commission administers the Federal Power Act, the Natural Gas Act and the Public Utility Regulatory Policies Act should come from Congress, not FERC.

Sen. Maria Cantwell (D-Wash.), for example, noted that while the electric industry is subject to mandatory cybersecurity standards, gas pipelines are only subject to voluntary guidelines issued by the Transportation Security Administration. She asked the nominees whether they agreed that there should be mandatory standards for pipelines.

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Chatterjee | © RTO Insider

“I defer to Congress and the Transportation Security Administration (TSA) as to the adequacy of TSA’s natural gas pipeline cybersecurity program,” Chatterjee answered. “Congress has granted TSA authority to establish mandatory cybersecurity regulations for natural gas pipelines.”

“Congress and the TSA are in the best position to evaluate TSA’s current natural gas pipeline security authority to determine if natural gas pipelines should be subject to additional or mandatory cybersecurity standards,” was Powelson’s answer.

Senators also asked questions particular to their individual states. Sen. Al Franken (D-Minn.) asked about problems with coal transportation by railway in Minnesota — another TSA issue, the nominees said.

But Sen. Tammy Duckworth (D-Ill.) asked about states served by multiple RTOs — which include Illinois. “States that are split into two RTOs are encountering issues where generating resources have been separated from the loads that they were built or contracted to serve,” she said. “How should proximity to resources, actual power flows and pre-existing transmission rights be considered in RTO modeling?”

Both nominees said they could not answer, as it was a question pending before the commission.

Environment and Climate Change

Powelson and Chatterjee’s deferral to Congress extended to questions about environmental impacts, climate change and increasing the use of clean energy resources, subjects about which every Democratic and liberal senator asked.

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Powelson (R) listens as Chatterjee testifies | © RTO Insider

Sen. Bernie Sanders (I-Vt.), one of the three ENR members to vote against the nominees earlier this month, asked the nominees 52 questions — far more than any other senator — many of them related to the environment. Four questions asked in different ways whether the nominees accepted prevailing climate science.

Powelson and Chatterjee repeated their answers from their confirmation hearing that they understood climate change was real — and not a “hoax,” as Trump has claimed. (See No Fireworks for FERC Nominees at Senate Hearing.)

But they said it was not FERC’s place to regulate it or attempt to decarbonize the nation’s energy mix.

“Any policy to mitigate carbon emissions should originate in Congress; it should not be designed at FERC,” Chatterjee said. “Addressing climate change will require policy changes that the public accepts, and maintaining and enhancing affordability and reliability is vital to gaining that public acceptance. Should I be fortunate enough to be confirmed, my role as a FERC commissioner would be to ensure that any such policy not have a deleterious impact on reliability and affordability of our energy supply.”

“My understanding is that FERC’s policies are resource- and fuel-neutral,” Powelson said. “The commission relies on competitive markets to provide just and reasonable rates and reliable service for consumers, and to send appropriate investment signals for developers. … If confirmed, I will refrain from picking ‘winners and losers’ in the energy marketplace, as that is not FERC’s role.”

Questions by Sanders and others indicated their desire for FERC to slow down its approvals of gas pipelines. They asked the nominees if they agreed with former Chairman Norman Bay’s call for a review of the cumulative environmental impacts from Marcellus and Utica shale drilling. (See Bay Calls for Review of Marcellus, Utica Shale Development.)

While Chatterjee’s answer was anodyne — committing to working with his colleagues in reviewing commission policies — Powelson was more forceful in his answer.

“I respectfully disagree with that recommendation,” he said. “As a Pennsylvania state regulator … I believe that this issue would be better addressed at the state level. State environmental regulators and state public utility commissions are closer to the issues of shale gas development and are better equipped than the federal government to undertake such an assessment.”

Public Participation

Senators also expressed concerns about potential barriers to public participation in FERC’s processes.

“FERC is incredibly complicated, and the barrier to entry for someone to simply understand FERC proceedings, much less to participate, is extremely high,” Sanders said. “Stakeholders with considerable financial resources can participate, but everyone else is effectively excluded.”

Both Sanders and Franken asked about legislation that would create an Office of Public Participation and Consumer Advocacy at the commission, an issue earlier raised by public interest group Public Citizen. (See Public Interest Groups Cry Foul over Technical Conference, RTO Transparency.)

Both nominees wrote that they would “work with my colleagues to identify further steps that FERC could take to make its proceedings and processes more accessible to the public.”

But Powelson also said, “I do not believe that the creation of such an office at FERC is necessary. In my view, the public comment process at FERC provides all interested parties with the ability to participate in the process and express their positions on issues.”

Duckworth also spoke up for public interest groups, saying they believe they have “an extremely limited voice in RTO stakeholder discussions, and RTO actions taken behind closed doors seem to be condoned by FERC.”

Last week, Virginia Democratic Sens. Tim Kaine and Mark Warner introduced legislation that among other provisions would mandate public comment meetings in every locality in the path of a proposed interstate gas pipeline. The bill is in response to complaints in the state about the limited opportunity for the public to provide feedback.

Republican Rep. Morgan Griffith, also from Virginia and a member of the House Energy and Commerce Committee, introduced a similar bill in the House.