25 Jul 2024 | 20:13 UTC

Transmission, reliability draw focus as new US FERC members come on board

Highlights

Upcoming cases test GHG stance, data center issues

Collegial tone, light agenda in first meeting for new members

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The US Federal Energy Regulatory Commission kicked off its first meeting with a new slate of commissioners amid a markedly collegial tone as grid reliability and infrastructure enhancement appeared as dominant themes among the newcomers.

The first meeting with the full complement of five members since the end of 2022 featured a light agenda but some comments from new commissioners about their priorities.

Commissioners Judy Chang and Lindsay See said they will focus on grid reliability and affordability. Commissioner David Rosner made similar comments when he joined FERC in June.

Chang asserted that she aims to focus on work already underway "to adapt the transmission planning and the interconnection rules in the organized wholesale electricity markets and the reliability standards that [the North American Electric Reliability Corp.] oversees to responsibly manage the ongoing energy transition that we find ourselves facing."

The former Massachusetts undersecretary of energy and climate solutions added that she will apply her experience to ensure "a robust and reliable transmission system, including the use of advanced technologies to deliver affordable energy for all consumers."

Lindsay See, previously solicitor general of West Virginia, recalled a judge she clerked with who modeled "what it means to disagree well." The new commissioner expressed hope for collegiality and the presumption of good will even when FERC members disagree.

If that mood persists, it could mark contrast from periods in recent years when sharp policy differences between the poles on the commission spilled over into tense sparring at open meetings.

See's stance on case law will be closely watched, given her track record as an appeals court litigator. During a hearing a day earlier before a House Energy and Commerce subcommittee, See addressed the recent Supreme Court ruling turning back Chevron deference for agencies.

"I believe accountability matters as my colleagues and I do the public's work," she said. "So, for instance, in response to the Supreme Court's recent decision eliminating agency discretion and reducing the margin of error for agency orders, I welcome the important check judicial review offers in our separation of powers system," she said. On the front end at FERC, that means reviewing cases on the law and the facts, she said, and "not going beyond the authority Congress has entrusted to FERC."

Rosner, a former FERC staff member, told lawmakers at the July 24 hearing that US economic and policy priorities cannot be achieved without energy reliability.

"Consumers expect it, they deserve it, and it's FERC's most sacred duty to ensure it," he said. He emphasized FERC's longstanding policy of resource and fuel neutrality as it faces the task of allowing the next generation of technologies to join the system.

The July 25 meeting was relatively light on power items. With Chang and See not yet voting, FERC approved a series of a regional grid operator plans to share credit-related information on market participants among each other. The compliance filings were made in response to Order 895 (RM22-13), a rule intended to address a massive default by a trader participating in the PJM Interconnection's financial transmission rights market.

Upcoming policy questions

Looking forward, the panel of five will face some contentious policy matters to resolve.

In wholesale power markets, a fresh look at financial incentives for transmission developers has been a priority for Commissioner Mark Christie, who dissented on a July 25 order (EL24-107) granting incentives to Pacific Gas & Electric for transmission line and substation additions.

The soaring demand stemming from data center additions and potential co-location of data centers near nuclear power plants came up several times during the House subcommittee hearing. FERC will need to address a pending case on this topic involving Talen Energy, amid opposition from electric utilities regarding use of power from the Susquehanna nuclear reactor.

On the natural gas side of its work, a court remand of FERC's Commonwealth LNG project approval offers new commissioners a chance to weigh in on prior debates on greenhouse gas considerations.

The court in that case found FERC failed to respond to environmentalists' arguments that FERC should have made a determination about the significance of the project's GHG emissions.

Tom Sharp, director of permitting intelligence for Arbo, suggested that ruling could present an opportunity for FERC to differentiate the Commonwealth case from a March 2021 precedent involving a Northern Natural Gas project. In that case, FERC found a small increase in GHG emissions would not be significant.

Separately, with a new lineup at FERC, the Industrial Energy Consumers of America and allies have stepped up calls for the commission to police what they view as excessive rates from interstate natural gas pipelines.

IECA wrote FERC July 25 to urge the commission to annually initiate Natural Gas Act Section 5 rate cases.

"In past years, FERC would initiate at least three rate cases or more," said the group's president and CEO, Paul Cicio, in a letter to Phillips. "In 2023 and so far in 2024, FERC did not initiate a single rate case."


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