Industry experts anticipate FERC being fully staffed
With the death in January of former Federal Energy Regulatory Commission (FERC) Chairman Kevin McIntyre, a Republican, and the departure later this year of FERC Commissioner Cheryl LaFleur, the five-member board could be left with just three sitting regulators if replacements aren’t nominated and confirmed soon.
“The president needs to nominate qualified, independent candidates,” said John N. Moore, a senior attorney and FERC expert at the Natural Resources Defense Council (NRDC). “The public interest certainly is not served with nominees who lack independence from political and regulated industry influence.”
U.S. Energy Secretary Rick Perry also recently urged President Donald Trump to quickly nominate regulators to FERC who could help approve new export facilities for liquefied natural gas (LNG), just one of the agency’s tasked duties, which also include regulating the interstate transmission of electricity, natural gas and oil; reviewing proposals to also build interstate natural gas pipelines; and licensing hydropower projects.
Right now, FERC is split 2-2 between political parties, which can’t hold more than three seats on the agency. Currently serving alongside LaFleur, a Democrat, are Commissioner Richard Glick, also a Democrat, and Republicans Neil Chatterjee, the chairman, and Commissioner Bernard McNamee.
Once LaFleur leaves FERC, Trump would need to nominate a Democrat and Republican to fill the vacancies.
Regardless of whether the commission is fully staffed, it’s supposed to act independently and in the public interest to best serve customers, industry and the environment, said Moore.
“That said, vacancies inevitably affect its decision-making,” Moore told Daily Energy Insider in an email. “They can slow action, especially where commissioners disagree on important topics.”
“Conversely, consensus decisions can be easier with a full commission,” he added.
And there are plenty of such decisions that must be made by FERC commissioners, including fair compensation for grid energy sources and updates to its pipeline review process, among others.
On March 21, for example, FERC opened an examination of whether and how to revise its policies on determining the return on equity (ROE) used in setting rates charged by jurisdictional public utilities. The Notice of Inquiry also seeks comment on whether to change ROE policies for interstate natural gas and oil pipelines.
“The American Gas Association would like to see all of the seats at the Federal Energy Regulatory Commission filled and continued progress in the development of natural gas infrastructure to meet a growing customer base,” Jake Rubin, senior director of public relations and executive communications at the AGA, told Daily Energy Insider.
In fact, the recently released 2019 AGA Playbook points out that America’s natural gas utilities add one new customer every minute in the United States.
And while AGA members, their customers and the entire industry rely on projects before FERC, Rubin said such projects, in any category, are not under FERC’s purview.
“Natural gas utilities are regulated primarily at the local level by public utility commissions and at the federal level by the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA),” he said.
Regarding FERC’s backlog of proposals to build LNG export terminals, Secretary Perry said in February that having all five regulators on the commission could hasten the approval of the 12 LNG applications now pending at FERC.
However, according to a spokesperson at the Natural Gas Supply Association (NGSA), “the current commission has proven its willingness to roll up its sleeves to keep projects moving forward.”
For instance, the NGSA spokesperson cited FERC’s February order certificating Venture Global’s Calcasieu Pass LNG export project in Cameron Parish, La., which FERC’s Chatterjee thinks could put the agency in a position to move forward efficiently with the other dozen pending LNG projects.
The NGSA, though, also looks forward to “a full complement at FERC” with all five commissioners serving, the spokesperson told Daily Energy Insider.
Additionally, NGSA is actively engaged in several forums supporting competitive solutions and fuel-neutral outcomes as RTOs undergo a review of their region’s fuel security, the spokesperson said.
“We hope FERC will allow industry time to work through these important issues so that reasonable assumptions are made about what types of risks are most plausible,” he said. “We further hope that the RTOs will value the reliability attributes that all fuel sources bring to the table.”
NRDC’s Moore pointed out that “context also matters.”
For example, there are some pending issues before FERC that may only need “a little more push from the chairman to generate a final order,” Moore said, like final action on aggregating rooftop solar and other distributed energy resources, which he said has been pending for a year now.
