The Federal Energy Regulatory Commission enters the second half of 2024 with its landmark transmission planning and cost allocation rule in the books — but subject to possible changes — and three new commissioners in their seats.
After a years-long effort on the transmission planning rule, what are FERC’s top priorities for the rest of the year and how quickly will its new commissioners be able fully engage at the agency?
New commissioners gear up
It will take time for FERC’s newly seated commissioners to get up to speed on issues at the agency and put together their staff, according to agency observers.
The new commissioners are Judy Chang, who was a managing principal at the Boston-based Analysis Group and former undersecretary of energy and climate solutions for Massachusetts; David Rosner, most recently a FERC energy industry analyst on loan to the Democratic staff of the U.S. Senate Energy and Natural Resources Committee; and Lindsay See, formerly the West Virginia solicitor general. See is a Republican; Chang and Rosner are Democrats.
“Whenever there's new commissioners coming or going, the rhythm changes, and it takes a while for everyone to get up to speed and get used to everyone else's rhythm,” said Rich Glick, GQ New Energy Strategies principal and former FERC chairman.
Also, it takes time to adjust to life at the agency, according to former FERC Chairman Neil Chatterjee, who spent about 15 years working in the Senate on energy policy before joining the commission in 2017.
“I thought I really knew energy policy, and then I got into the building and was like, ‘Oh, my God, there's so much that I don't know,’ and they're speaking a different language … and I need to develop brand new relationships even with stakeholders that I've known for years because it's totally different work. So it just takes time,” he said.
However, FERC has been operating with a quorum, getting decisions out the door, which will give the new commissioners time to get acclimated, said Chatterjee, a senior advisor at Hogan Lovells.
Rosner, who had worked at FERC, is in a good position to hit the ground running — and Chang and See will likely adapt quickly, according to Chatterjee.
There will likely be a light agenda for FERC’s monthly meeting on July 25, and then, with no meeting in August, the agency’s next open meeting will be in late September. “I expect by September, the three new commissioners will be well positioned and ready to start voting and really thoroughly engaging on the matters before the commission,” Chatterjee said.
It’s unclear how the new commissioners view issues at the agency. “I don't know of anyone that's got a clear idea how things are going to proceed,” said Tyson Slocum, director of Public Citizen’s Energy Program. “We've got some new commissioners that it's sort of unclear where they may be on key issues.”
At a minimum, having a full complement of five commissioners at FERC ensures that the agency will continue with its business, according to Slocum. “Chairman Phillips is going to be meeting with these new commissioners and finding out where common ground is on some unresolved, still pending issues,” he said.
Transmission planning 2.0?
One of the first issues the new commissioners face is roughly 50 requests for rehearing and clarification on the transmission planning rule issued in May.
“They will have a role in determining what is actually the final word on Order 1920,” Caitlin Marquis, managing director at Advanced Energy United, said, noting it is unclear how long it will take the agency to issue an order on rehearing.
With only two commissioners remaining at FERC who voted on Order 1920 — Chairman Willie Phillips who voted for it and Mark Christie who dissented — it will be a different commission that takes it up on rehearing, Chatterjee said.
“That's fascinating to me, because it's a 1,360 page order,” he said. “There's so much complexity to it, and each of these three new commissioners are going to have an opportunity to kind of shape it and put their fingerprints on it.”
The first early indication of the posture of the new commission is with the rehearing requests, according to Tony Clark, a senior advisor at the law firm of Wilkinson Barker Knauer and former FERC commissioner. “After that, you'll have more of a sense of timing as they deal with some of the inevitable requests for extension of time on certain filings, and then finally, after that, and I'm sure after some litigation, we'll have a sense of what the compliance filings and expectations themselves are,” he said.
‘Compliance mode’
“With any of these big rulemakings, the compliance filings and how FERC approaches compliance is almost as big as, sometimes it's bigger than, the rule itself,” Clark said.
What FERC accepts and rejects in compliance plans from grid operators and transmission owners will be a big part of the work of this commission over the next few years, he said.
On the electric side, FERC is in “compliance mode,” especially on Order 2023, its new interconnection reform requirements, as well as with upcoming filings for the transmission planning rule, according to Glick.
“It’s obviously up to [Chairman Phillips] and what he wants to do, and obviously what the other commissioners would agree to do, but I don't expect a lot of new activity in the next six months,” Glick said.
In late June, Phillips said FERC had more transmission-related work to do this year.
“We're not resting on our laurels there,” Phillips said in a media briefing. “We continue on our transmission reform journey. We know that we need to turn to interregional transfer capability.”
FERC staff is working on the issue while the North American Electric Reliability Corp. drafts an interregional transfer study set to be released in early December, according to Phillips. “Our staff continues to work in parallel,” he said. “We want to be ready when NERC issues their study.”
FERC is working on other issues as well, he said. “Reliability is always top of mind, cybersecurity, physical security,” Phillips said.
Other issues FERC could tackle this year include dynamic line ratings, interconnection reforms and transmission cost containment, AEU’s Marquis said.
The agency may also weigh in on the role of energy efficiency in capacity markets, an issue especially prominent in the PJM Interconnection, Mike Haugh, AEU director, said, pointing to pending complaints and potential enforcement actions.
Natural gas pipeline and LNG reviews
Observers expect FERC will continue processing applications for natural gas pipeline and liquefied natural gas projects as they come in, but there could be changes in the agency’s approach to how it considers the projects’ greenhouse gas emissions and their effect on the climate.
“Everybody will be looking at pipeline certifications to see how this new commission looks at those,” Clark said. “The compromise language that Commissioner Christie and Chairman Phillips have struck [on reviewing carbon emissions] has seemed to hold together, but things could change a little.”
However, the agency will have to respond to a July 16 decision by the U.S. Court of Appeals for the District of Columbia Circuit that found the agency failed to adequately explain its failure to determine the environmental significance of the Commonwealth LNG project’s carbon emissions when it approved the project. FERC also failed to adequately assess the cumulative effects of the project’s nitrogen dioxide emissions, the court said.
