3 takeaways from yesterday’s FERC hearing

Federal Energy Regulatory Commission Chairman Richard Glick yesterday defended the need for a stricter review of natural gas projects during his first appearance before the Senate Energy and Natural Resources Committee since that he took over as head of the agency in January.

Lawmakers questioned all four FERC members – two Democrats and two Republicans – in a watchdog hearing that addressed issues such as environmental reviews and the House Democrats’ clean electricity plan. He also presented political divisions to FERC, which oversees the bulk supply system and large gas pipelines, among other energy projects.

“FERC’s regulatory actions have a significant impact on the lives of millions of people,” Glick, a Democrat, told lawmakers in his opening remarks. “As a result, it is important that our decision-making processes include strong input from various points of view.”

Glick pushed to update FERC’s approach to reviewing gas pipelines, including accounting for greenhouse gas emissions proposals.

Republican Commissioner James Danly has raised concerns over several recent FERC orders that he says go against the agency’s precedent.

“I am concerned that a number of recent actions by the commission have created such deep uncertainty in the gas pipeline industry that it is becoming increasingly difficult for companies that build and operate gas pipelines to obtain financing. or rationally allocate capital, ”Danly told lawmakers. in his opening remarks.

Danly and fellow Republican Commissioner Mark Christie have also sounded the alarm bells about how the clean electricity performance program under consideration in the House could affect grid reliability and electricity bills (Energy wire, September 28). Supporters of the plan, including President Biden, say it would create clean energy jobs and reduce the country’s greenhouse gas emissions by prompting utilities to add more renewable resources.

Biden has appointed Willie Phillips, Democratic chairman of the District of Columbia Civil Service Commission, to join the agency as fifth commissioner. If confirmed by the Senate, Phillips would shift the political balance of power at FERC, which has been either under Republican control or in a partisan split for four years.

“We hope we can find you another candidate as soon as possible,” said Senator Joe Manchin (DW.Va.), chairman of the ENR committee yesterday.

Here are three takeaways from the audience:

1. Glick Eyes emission standard

Republicans on the committee questioned FERC commissioners about whether the agency was unnecessarily delaying energy projects.

In March, the majority of then-commissioners agreed to begin assessing the significance of greenhouse gas emissions from natural gas projects as part of a major policy change. And the FERC under Glick recently began preparing environmental impact statements – which can take months longer than environmental assessments – for a wide range of gas projects before allowing them to move forward.

Glick doubled the commission’s legal obligation to consider all “reasonably foreseeable” environmental impacts of proposed natural gas projects.

Responding to questions from Sen. James Lankford (R-Okla.), Glick also said the independent agency could also vote on how to use the social cost of carbon. The metric is intended to measure the damage associated with the emission of an extra ton of carbon dioxide into the atmosphere.

The White House Council on Environmental Quality has backed an interim value of $ 51 per tonne, slightly higher than the cost of carbon set by former President Obama during his tenure.

The independent agency wouldn’t necessarily adopt the price used by the Biden administration, Glick said.

“We have to make our own decision,” he said.

The commission never used the metric to reject an individual project, but the EPA and environmental groups urged the agency to use the framework. While FERC has argued in the past that it cannot measure the significance of global warming emissions from liquefied natural gas pipelines and terminals, Glick has previously proposed the social cost of carbon as an option to determine how projects can contribute to climate change.

The U.S. District of Columbia Circuit Court of Appeals also ordered the agency last month to redo its environmental scans for two LNG terminals the commission approved in 2019, Glick noted. In the ruling, the court ordered FERC to consider the social cost of carbon or explain why it couldn’t use the metric (Energy wire, August 4).

“In fact, we have to take it into account,” he said.

In addition, Glick said he hoped the commission would finalize “in a few months” its review of a comprehensive policy statement that guides how FERC generally reviews proposed pipelines. Glick reopened the closely watched investigation into the commission’s 1999 certification policy statement in February.

2. A “circuit breaker” for energy prices?

Lawmakers insisted on the commission’s response to winter storm Uri, which caused record cold weather in Texas and much of the central plains in February. The storm has been linked to more than 200 deaths in Texas, where millions of residents have faced long power outages in sub-freezing temperatures. The extreme weather event also resulted in drastic increases in energy prices and put pressure on the region’s natural gas supply.

Senator Roger Marshall (R-Kan.) Highlighted the alleged rise in natural gas prices in his home state, noting that this would lead to higher taxpayer bills over the next decade.

According to Glick, the crisis has proven the need for increased monitoring of spikes in natural gas prices.

“I think it would help if Congress gave, whether it’s FERC or some other agency, some sort of breaker authority when there are extreme prices, [to] impose some kind of limitation at times, ”Glick said.

Additionally, Glick renewed its call on Congress to establish the power of the commission to set stricter reliability standards for natural gas deliveries.

In Texas, Uri destroyed the natural gas infrastructure that powered major gas-fired power plants. The loss of these electrical resources – many of which had not been weathered to withstand extreme cold – was one of the many failures that led to blackouts.

Glick argued that the commission had not done enough to push gas and electricity suppliers to improve coordination.

“We have only approved changes that the gas industry and the power industry could agree with,” he said. “I think we need to bring the two sides together and kind of hit heads and suggest that we really need to make changes here.”

3. Debate on Transport Authorities

In June, the FERC unanimously published an advance notice of a regulatory proposal exploring potential reforms to the transportation planning process. Political obstacles to the construction of high-voltage power lines could hamper the development of renewable energy in parts of the country, according to many analysts.

Meanwhile, Congressional Democrats mulled over their own reforms, including creating a national authority to help set up new interstate transmission plans.

In response to a question from Sen. John Hickenlooper (D-Colo.) About a potential “federal site selection authority,” Glick said it “would have certain advantages, in terms of advancing transmission”.

But that wouldn’t solve other hurdles, such as the fact that the costs of new transportation projects usually fall on individual producers who want to link their projects to the grid, Glick said.

“Sometimes these upgrade costs are so high that they cause generators to drop out of the interconnect queue at the last minute,” he said.

Across the country, hundreds of gigawatts of new wind and solar projects are waiting to be connected to the wider grid in clogged interconnection queues.

One solution could be to accelerate “off the shelf” generation projects, said Christie, FERC’s most recent Republican commissioner.

“Some are ready to go, some are not,” he said. “Queue reform includes prioritizing ready projects over not-so-ready projects. “

A former Virginia state utility regulator, Christie also wondered how a national grid authority would help address transportation bottlenecks or ease potential local opposition to new power lines. A national transmission authority could stoke the community’s setback, as decisions would come from regulators far away in Washington, he said.

Commissioner Allison Clements, a Democrat who called on FERC last month to use all “tools in its toolbox” to aid in the development of transmission, agreed that the commission and other agencies will still need ” buy-in ”from communities and other parties. At the same time, it is essential that the transmission system is improved to ensure the reliability of the network, she said.

Otherwise, the country could find itself in a position “where the lack of interconnection between regions and states is going to cost consumers a lot of money,” Clements said.

This story also appears in Daily E&E.

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