The four sitting Commissioners of the Federal Energy Regulatory Commission appeared before the House Committee on Energy and Commerce, Subcommittee on Energy and Power yesterday to discuss FERC’s response to rapid shifts in the electric and natural gas industries. Commissioner LaFleur, who fielded the majority of questions over nearly two hours, was joined by Commissioners Philip Moeller, John Norris, and Tony Clark. The hearing marked the first appearance before Congress of Cheryl LaFleur in her new role as FERC’s Acting Chairwoman.
Republican members of the panel, led by Subcommittee Chairman Ed Whitfield (R-KY), asked a range of questions largely focused on the speed of permitting for gas pipeline and LNG export infrastructure and the potential impacts of new EPA regulations and the Obama Administration’s climate policy on reliable electric supplies. Republican members also questioned whether FERC Order 1000’s transmission planning and cost allocation reforms are saddling customers with costs associated with transmission projects for which they will see little, if any, benefit.
Democrats on the Subcommittee, led by Jerry McNerney (D-CA), focused on growing physical and cyber risks to the electric grid, noting, in particular, Congress’s failure to enact mandatory cybersecurity legislation for the electric industry. House Energy and Commerce Committee Chair Henry Waxman (D-CA) also described a recent attack on electric grid assets in California involving the use of highly-sophisticated, military-style weapons.
FERC’s Commissioners listed various ways in which the agency is responding to industry change. For example, Chairwoman LaFleur described the agency’s recent approval of mandatory cybersecurity standards, which are scheduled to roll out over the next two years, to combat physical and cyber risks to grid security. Commissioner Moeller stated that FERC’s ongoing implementation of Order 1000 is providing the industry with much-needed certainty and encouraging new transmission projects. Commissioner Moeller also noted the significance of FERC’s recent final rule on gas-electric coordination, which is intended to encourage information sharing between the gas and electric sectors to prevent the types of miscommunications that have led to service outages in recent years.
The Commissioners also candidly described the challenges that remain. Commissioners Moeller and Clark warned that recent projections show coal retirements in the Midwest related to the EPA’s implementation of new mercury and air toxics standards could lead to dangerously low reserve margins—and the potential for rolling blackouts—as soon as 2016. The Commissioners also explained that, while FERC has dedicated substantial resources to processing applications for new gas pipeline and LNG infrastructure, delays often occur when required state and local reviews are not given the same high priority.
The House of Representatives has moved recently on several bills that would affect FERC’s review of infrastructure projects. Earlier this month, the House approved legislation that would require faster processing of natural gas pipeline applications at FERC, and Republican Subcommittee members at yesterday’s hearing appeared eager to explore other legislation to facilitate FERC’s approval of new gas pipeline and LNG export projects.
The prepared opening statements of Energy and Power Subcommittee Chairman Ed Whitfield and Energy and Commerce Committee Chairman Fred Upton, as well as the prepared testimony of Commissioners LaFleur, Moeller, Norris, and Clark, are available for download on the Committee’s website.