Monday, February 18, 2019

UPDATED: McIntyre Takes FERC Chair; Wins Delay on NOPR

By Rich Heidorn Jr., Amanda Durish Cook and Michael Kuser

Kevin McIntyre, sworn in as FERC chairman Thursday, will have a month to build support for his response to the Department of Energy’s controversial proposal for coal and nuclear price supports.

On Friday, Energy Secretary Rick Perry granted a 30-day delay from the Dec. 11 deadline set in Perry’s Notice of Proposed Rulemaking. Saying they were needed for grid resiliency, Perry called for compensating coal and nuclear plants in regions with competitive capacity markets that maintain 90 days of fuel on site.


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FERC Chief Administrative Law Judge Carmen A. Citron swears in Kevin McIntyre as his wife, Jennifer Brosnahan McIntyre, holds a Bible. | FERC

In a letter to Perry, McIntyre said the delay was “critical to afford adequate time” for him and Democrat Richard Glick, who was sworn in Nov. 29, to review the more than 1,500 comments filed in the docket (RM18-1) “and engage fully in deliberations.”

Perry agreed to the request Friday, setting a new deadline of Jan. 10. “The commission is nevertheless authorized to act at any time prior to this deadline and I urge the commission to act expeditiously,” Perry wrote. “… I continue to believe that urgent action must be taken to ensure the resilience and security of the electric grid, which is so vitally important to the economic and national security of the United States.”

New commissioners often choose not to vote on issues subject to deliberations before their arrival. Glick, for example, did not participate in a Dec. 1 order on a state-federal jurisdictional dispute over energy efficiency. (See FERC Claims Jurisdiction on EE, OKs Ky. Opt-Out.)

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Glick (left) and McIntyre | FERC

Although McIntyre and Glick have had access to the comments in the docket, McIntyre has not had time to build a consensus around his own response.

What McIntyre may have in mind is not apparent. His only prior public comments on the NOPR came at his confirmation hearing in September. (See McIntyre to Senate: ‘FERC does not Pick Fuels’.)

A Republican, McIntyre joins FERC after 22 years at Jones Day, where he was coleader of the law firm’s global energy practice. His former Jones Day colleague Don McGahn is President Trump’s White House counsel.

Perry acted within his legal authority in ordering FERC to consider his NOPR. But he has no power to make FERC provide the relief he is seeking, legal experts say. (See FERC’s Independence to be Tested by DOE NOPR.)

McIntyre did not appear to have signaled his plans to fellow commissioners Cheryl LaFleur or Rob Powelson, who indicated in public appearances Wednesday and Thursday that they expected to rule on Monday, as promised by interim Chairman Neil Chatterjee. DOE Under Secretary Mark Menezes said Wednesday that the ruling was likely to be pushed back one day to Dec. 12. (See DOE: German Energy Struggles Sparked NOPR.)

FERC’s website was briefly overwhelmed by traffic after the agency tweeted out a link to McIntyre’s letter at 6:35 p.m. Thursday.

Analysts at ClearView Energy Partners had said before news of the letter that the commission appeared to lack a consensus for responding to the NOPR. “Over the course of this week, Commissioner Neil Chatterjee conceded that he has not successful in persuading his other colleagues to support the interim solution he prefers,” the analysts wrote in an email to the firm’s clients Friday morning. “Last night’s action indicates to us that the new chairman may not be persuaded that closing the docket and issuing a Notice of Inquiry to the FERC-jurisdictional regional transmission organizations — the option purportedly preferred by Commissioners Cheryl LaFleur and Rob Powelson — is necessarily a course of action he prefers.”

LaFleur told MISO’s Board of Directors meeting in Carmel, Ind., on Thursday that the commissioners were “busily scurrying to get something out on Monday.”

“I’m actually to the point where I’m relieved [the deadline] is Monday because if it was March 11, we’d talk about it until March 11,” she said.

Republicans Chatterjee and Powelson have indicated support for Perry’s proposal. On Wednesday, Powelson told the PJM General Session that the commission would craft a “defensible” response to the NOPR that does not upend competitive markets.

LaFleur Previews Ruling

LaFleur, a Democrat, has been noncommittal in her public statements. (See DOE, Pugliese Press ‘Baseload’ Rescue at NARUC.) She told MISO’s board meeting Thursday that if customers are made to pay for generation attributes, it should be done based on data through a transparent market process.

She also said considerations of resilience should include severe weather, cyber threats and transmission. “It probably shouldn’t be confined to the areas with mandatory capacity auctions because their resilience isn’t more important,” she added.

LaFleur said the commission has reached a saturation point on dissecting the resiliency rule. “Finally, last week, even I had too much, and I said, ‘That’s it; pencils down.’”

She said the NOPR interrupted commission work on the backlog of filings that built up during the six months the commission was without a quorum after the resignation of former Chairman Norman Bay. “It’s as if we had all of our jets lined up for takeoff and someone took the airspace,” she said.

Chatterjee, speaking to a meeting of ISO-NE’s Consumer Liaison Group in Boston on Thursday, reiterated his call for providing “interim” relief to at-risk generators while FERC considers the NOPR. (See Chatterjee: ‘We’ve Moved Past’ DOE NOPR.) Chatterjee also sought to calm those who fear the new commission, now dominated 3-2 by Republicans, will be more partisan and less independent than in the past.

Advice for McIntyre

Among those offering McIntyre congratulations was interim NERC CEO Charles Berardesco. “We have a long and productive relationship with FERC,” he said in a statement. “NERC looks forward to continuing work on the key priorities impacting grid reliability, including the changing resource mix, essential reliability services and security challenges.”

Some of those issuing statements welcoming McIntyre also gave advice on how he should rule on the NOPR and other issues.

The Affordable Energy Coalition, an ad hoc group that includes industrial customers and the American Wind Energy Association, urged McIntyre to reject the NOPR. “Chairman McIntyre joins the commission at a critical moment in the agency’s history,” the group said, adding that the ruling on the DOE proposal “will determine the affordability of electricity for tens of millions of American consumers.”

John Moore, director of the Natural Resource Defense Council’s Sustainable FERC Project said the commission “is at a crossroads.”

“As an independent commission, FERC has largely avoided pressure from the White House and Congress in recent years, and hewed mostly to a nonpartisan (if not always harmonious) path,” Moore wrote in a blog post. “In the last several months, however, FERC has faced unprecedented pressure from the Trump administration to subsidize coal plants and nuclear for their claimed ‘resilience’ attributes. McIntyre’s leadership will be a test of the extent to which he can withstand pressure from the White House to bend to its political ends.”

Clients, Contributions

FERC NOPR Kevin McIntyre

McIntyre | © RTO Insider

McIntyre replaces Chatterjee, a former aide to Senate Majority Leader Mitch McConnell (R-Ky.), whose nearly four months as interim chair have been marked by his advocacy for the coal industry and sparring on social media with actor James Cromwell.

It is the first time FERC has had a full complement of five members since October 2015, when Republican Philip Moeller left the commission. The panel faces decisions on ways to harmonize RTO markets with state subsidies for nuclear plants, rulemakings on energy efficiency and distributed energy resources, and pipeline licensing.

During his two decades at Jones Day, McIntyre represented clients in administrative and appellate litigation, compliance and enforcement matters, and corporate transactions. According to his Jones Day biography, McIntyre’s clients have included American Electric Power (negotiations to settle claims in connection with the California energy crisis); SCANA (settlement of Calpine bankruptcy claims); South Carolina Electric & Gas (FERC-jurisdictional rates for electric transmission service); Public Service Company of North Carolina (litigation before FERC concerning the Atlantic Coast Pipeline); and E.ON AG ($1.9 billion acquisition of the North American operations of Irish wind farm operator Airtricity).

McIntyre has been a regular contributor to Republican candidates. In the 2016 presidential primaries, he initially backed both Wisconsin Gov. Scott Walker and Sen. Marco Rubio (R-Fla.), giving each $1,000 in July 2015. He gave Rubio another $1,700 in February 2016. He also has contributed to the Republican National Committee, Sens. Tom Cotton (R-Ark.), Pat Toomey (R-Pa.) and Rob Portman (R-Ohio), and Republican presidential nominees Mitt Romney and John McCain.

McIntyre is a graduate of San Diego State University (A.B., political science) and Georgetown Law. His wife, Jennifer Brosnahan McIntyre, a former deputy general counsel for the U.S. Department of Transportation and associate counsel to President George W. Bush, became chief counsel of Boeing’s Washington Operations in 2010. Married in 2008, the couple have three children.

Cook reported from Carmel, Ind. Kuser reported from Boston.