The Power Grid in Focus

The crisis in Texas has brought new urgency and attention to the need to ensure power grid reliability in the face of climate change impacts. In the wake of last week’s events, the nation’s main energy regulator, the Federal Energy Regulatory Commission (FERC), has been closely monitoring the recovery. FERC launched a formal inquiry, and will be examining the behavior of those participating in the electric and gas markets to determine if any market manipulation or other violations occurred. FERC is also taking a leadership role on climate and the grid with a broader proceeding to examine the threat that climate change and extreme weather events pose to grid reliability.

It is a positive and necessary shift for FERC to seriously consider the climate effects of power generation. The power sector is the second largest source of greenhouse gas emissions in the United States, just behind the transportation sector. New Commissioner Allison Clements has stressed the need to take climate change into account in FERC’s decisions. And FERC’s new Chairman Richard Glick, along with its new general counsel, wrote recently that FERC both has a responsibility to consider these emissions in several different types of proceedings and will inevitably make decisions that have an enormous impact on these emissions.

FERC is on a path to confront climate realities and look at the interconnectedness of power generation and climate impacts. For example, FERC recently announced that it is taking a harder look at its certification of gas pipelines. This proceeding was opened in 2018 to examine a certification policy statement that is now over 20 years old. The Commission is seeking information about how to analyze and consider greenhouse gas emissions from proposed pipeline projects, as well as the effects of these projects on environmental justice communities (who are often disproportionately affected by climate change) and its evaluation of alternatives to a proposed project.

FERC will also likely take a hard look at how the markets it regulates can procure generation in a way that accounts for greenhouse gas emissions from the power sector, a mission that is largely consistent with the commitments of an increasing number of state laws and policies, as well as the stated interests of utilities and large energy customers. FERC previously labeled such state clean energy laws and policies as market distortions, threatening these policy goals in favor of fossil fuel-fired generation — over the dissent of Chairman Glick (a position now joined by Commissioner Clements). But FERC recently announced that it will hold a technical conference on resource adequacy as part of an exploration of market design. This proceeding will be an opportunity for FERC to gather information and take a new look at how the wholesale markets it oversees can work with — rather than oppose — state clean energy goals.

Along with these efforts, FERC also shut the door for good on the coal bailout proposed by the Energy Department in 2017, making clear that politically motivated, biased proceedings are not the place to address the important issues of grid resilience and reliability (see Docket No. RM18-1-001 and Docket No. AD18-7-000 for more information).

A transition to clean energy in this country has significant equity implications. Environmental justice communities must be involved in these decisions and the decisions need to be made with a focus on the potential disproportionate burden on those communities. Accordingly, FERC has made environmental justice an important focus of its efforts. Just before the change in administration, Commissioners Glick and Clements filed a strong dissent in a case regarding the Rio Grande liquefied natural gas facility, calling on FERC to provide a full analysis of the impact of its decisions on environmental justice communities. The Commission recently announced the creation of a new senior position with the purpose of ensuring that the Commission takes equity and environmental justice into account in its decisions. FERC also has announced a workshop to get feedback as it envisions its new Office of Public Participation, with an eye towards increasing participation by environmental justice communities.

We can now expect environmental justice and climate analysis to be taken seriously by the Commission, as FERC seeks input from the public across a variety of matters on these issues. This new focus at FERC is certain to provide significant opportunities for states, as well as historically underrepresented stakeholders, to help shape FERC’s next steps. Our highlights below start off with an AG brief on an important procedural issue in natural gas pipeline proceedings — a busy beginning with the promise of a course for sustained action on climate and energy issues.