What We're Watching: FERC Edition

Two windows, looking out on views of a transmission tower and a pipeline.

There has been a lot hap­pen­ing at the Fed­er­al Ener­gy Reg­u­la­to­ry Com­mis­sion (FERC). Here are some high­lights from across FERC’s gas, con­sumer pro­tec­tion, and elec­tric­i­ty mar­ket work. 

First, watch­ing FERC walk back the imple­men­ta­tion of its new poli­cies for eval­u­at­ing appli­ca­tions to con­struct inter­state nat­ur­al gas pipelines – and their green­house gas emis­sions – was a hur­ry up and wait moment. But there is still like­ly to be sig­nif­i­cant change in the near future. There are pro­pos­als out for com­ment, and an expan­sive record of already-filed com­ments to sup­port big improve­ments to how FERC con­sid­ers new projects. While the agency is not there yet, it is mov­ing clos­er to a more robust, sus­tain­able approach to assess­ing nat­ur­al gas infrastructure. 

Sec­ond, the reply com­ment peri­od recent­ly closed in FERC’s pro­ceed­ing to con­sid­er what trade asso­ci­a­tion expen­di­tures are prop­er­ly passed through to util­i­ty cus­tomers. Trade asso­ci­a­tions in the ener­gy indus­try include the Amer­i­can Gas Asso­ci­a­tion and the Edi­son Elec­tric Insti­tute. Their activ­i­ties may include direct lob­by­ing as well as reg­u­la­to­ry and pro­mo­tion­al work that is not with­in the def­i­n­i­tion of lob­by­ing – for exam­ple, this mar­ket­ing cam­paign tout­ing the ben­e­fits of cook­ing with gas. Util­i­ties recov­er their costs from their cus­tomers, and while the por­tion of a utility’s trade asso­ci­a­tion dues spent on lob­by­ing is pre­sump­tive­ly not recov­er­able, there is a large swath of more ambigu­ous expen­di­tures that are pre­sumed to be appro­pri­ate to pass on to customers. 

In response to a peti­tion from the Cen­ter for Bio­log­i­cal Diver­si­ty, FERC asked for com­ment on the issue of who pays for trade asso­ci­a­tion advo­ca­cy and oth­er activ­i­ties. As com­ments revealed, there is a need for more trans­paren­cy into these expens­es. Now it’s up to FERC to decide how to proceed.

Third, FERC has an inquiry open into the abil­i­ty of demand response – broad­ly speak­ing, resources that can decrease pow­er con­sump­tion as a quan­tifi­able prod­uct – to ful­ly par­tic­i­pate in whole­sale mar­kets for ener­gy, capac­i­ty, and ancil­lary ser­vices. When aggre­gat­ed demand response resources are able to par­tic­i­pate in mar­kets, it can help pre­vent the need for addi­tion­al gen­er­a­tion to meet demand. Pri­or FERC orders on the issue have left room for states to pro­hib­it demand response from par­tic­i­pat­ing in whole­sale mar­kets, and a demand response aggre­ga­tor has asked FERC to remove this opt out. Last month, the House Sus­tain­able Ener­gy and Envi­ron­ment Coali­tion Pow­er Sec­tor Task Force sent a let­ter to FERC urg­ing it to address this issue. 

At FERC, state attor­neys gen­er­al have been advo­cat­ing for poli­cies that pro­mote decar­boniza­tion, pro­tect con­sumers, and pre­serve the state author­i­ty in this sphere. FERC has a lot on its plate, and it is worth watch­ing to see what devel­ops in these areas.