A New Year, (Waiting on) a New FERC

The end of 2022 was a tumultuous time at the Federal Energy Regulatory Commission (FERC), as onlookers watched whether then-Chairman Richard Glick would be reconfirmed for another term. FERC is the federal agency responsible for many facets of energy and gas policy, which are key to the climate and clean energy transition.

FERC is a five-member commission whose members serve staggered terms. Each commissioner is nominated by the president and must be confirmed by the Senate. The president selects a chair from among the commissioners. Once a member’s term is up in June, the commissioner may stay on until the end of the congressional session, unless a successor is confirmed – or the commissioner might be renominated and confirmed.

In Glick’s case, his term was up in June 2022. Although President Biden did renominate Glick for another term, Senator Joe Manchin ultimately did not hold a confirmation hearing to move the nomination forward.

Glick began as a commissioner at FERC on November 29, 2017. In January 2021, President Biden named him as chair. He served in that role until January 3, 2023. Upon Glick’s departure, President Biden named Willie Phillips, who joined FERC as a commissioner in December 2021, Acting Chairman.

So what does this mean for FERC and the clean energy transition? FERC’s jurisdiction includes the rates for wholesale sales of electricity in interstate commerce, interstate electric transmission, and interstate natural gas pipelines. With Glick’s departure, FERC has four commissioners – two Democrats and two Republicans, meaning 2-2 splits are much more likely and could hold things up.

• Pipelines: A 2-2 split on gas pipelines would mean projects cannot move forward, although past voting patterns on projects do not indicate that a deadlock is a sure bet here – rather, projects will likely move forward over a dissent.

• Electric market changes: For changes to electric rates filed under Section 205 of the Federal Power Act, a 2-2 split would mean FERC is not able to act, and the changes take effect 60 days after filing “by operation of law.” Under 2018 amendments to the Federal Power Act, in this scenario, each commissioner must put a statement in the record explaining their views of the change (see Section 205(g) of the Federal Power Act). Further, the failure to issue an order accepting or denying a rate change is subject to judicial review. There are currently two pending cases that will explore how judicial review proceeds in these circumstances. The first is the Third Circuit’s review of the narrowed minimum offer price rule in the PJM Interconnection (PJM Power Providers v. FERC, Case No. 21-03068, which was recently argued). The second is the D.C. Circuit’s review of the Southeast Energy Exchange Market (Advanced Energy Economy v. FERC, Case No. 22-01018). Both of the challenged rules went into effect by operation of law.

• Rulemakings: FERC has many pending rulemakings that are currently in the proposal stage. This includes policy changes to how FERC approaches its natural gas project reviews, as well as transmission proposals covering interconnection, transmission planning and cost allocation, and more. Whether these will be stymied due to a 2-2 split remains to be seen.

It is also worth noting that an acting chair is somewhat limited by staffing. An acting chair typically does not receive the additional staff that the chair has – which is another potential roadblock to tackling the important issues that have been teed up for action in 2023. There have also been questions raised about the legal durability of FERC orders issued by fewer commissioners, which is data the Center is collecting.

FERC-watchers are anxious to see a short list for the open commissioner spot – likely to be someone who will become the chair once confirmed. A new FERC vacancy will also open up in June 2023, and that one will be a Republican spot, currently held by Commissioner James Danly. It is possible that the administration will pair Danly’s renomination (or the nomination of a new Republican commissioner) with the new Democratic chair nominee. In the meantime, Acting Chairman Phillips will preside over the Commission. His first open meeting as chair is January 19, and his remarks there may give a hint as to his priorities for the Commission.