The following is a transcript of the March 24, 2025, episode of Public Power Now. Learn more about subscribing to Public Power Now at Publicpower.org/Podcasts. Some quotes may have been edited for clarity.
Paul Ciampoli
Welcome to the latest episode of Public Power Now.
I'm Paul Ciampoli, APPA’s News Director.
Our guest on this episode is Mark Christie, Chairman of the Federal Energy Regulatory Commission. Christie began his term as a FERC Commissioner on January 4, 2021, and President Trump named him Chairman of FERC in January 2025. Chairman Christie previously joined the podcast as a guest in March 2021 and more recently in early 2023. Chairman Christie, thank you for returning as a guest on the podcast.
FERC Chairman Mark Christie
Glad to be here and thank you for inviting me. I have tremendous respect for public power. The public is what you're about and that's serving the public, so I have a tremendous respect for those of you in public power.
Paul Ciampoli
Well, thank you very much, Chairman. We appreciate that.
When you were named FERC Chairman by President Trump, you said you will continue to emphasize three priorities that you have had since joining FERC four years ago. Can you detail for our listeners what those three priorities are?
FERC Chairman Mark Christie
As a utility regulator for 20 years, I've always believed that the central purpose of public utility regulation -- and I'm talking about electricity specifically -- is to provide reliable power to consumers at the least cost. That's the purpose of utility regulation because most consumers are taking their electric service from a monopoly. Retail choice -- you know, it exists some places, but by and large in America and around the world, frankly, for that matter, because of the economics of the electric grid it tends to be a natural monopoly, certainly for the wires part, so most people are taking service from a monopoly.
So the purpose of utility regulation is to deliver reliable power at the least cost under law. Obviously, you have to comply with the laws.
So the first two priorities are built into that core principle that I've had for 20 years and I think is embedded at the core of utility regulation -- that's reliable power, OK, that's number one -- reliable power. Number two, least cost to consumers under the existing law. That's the number two priority.
And then the third priority for me -- and this will not be any surprise as someone who was many years a state regulator -- I am very, very committed to respecting and deferring to state regulators and respecting their authority and their challenges because we have 50 states in America and everyone has a little bit different challenges.
Everybody wants reliable power, of course, but everybody has a little bit different challenges and so a long way of saying my three priorities are reliable power, concern for consumer costs -- making sure those costs are as low as we can get them within the legal framework -- and then respect for the prerogatives of state regulators and respecting their knowledge, because they're on the front lines -- certainly retail regulation.
Paul Ciampoli
If I could ask a quick follow question with respect to the third priority and state regulators and respect for their prerogatives, could you perhaps discuss a little further how you've worked with NARUC on that front?
FERC Chairman Mark Christie
Yeah, and by the way, I understand that a lot of public power providers are not under state regulation. Munis – a lot of munis are not under state regulation. I understand that.
We had munis and we had co-ops which are not part of your organization -- they have their own...in some states they're not regulated.
So I look at them in the same way as I do state regulators. When they're not under a state regulatory regime, I look at them as they're the frontline providers, they're the frontline consumer providers, they provide the retail service to consumers.
And I have the equal respect for the munis and the public power providers and the co-ops, as I do for the state regulators, because you're on the frontline and so I sort of equalize those in terms of my respect and deference.
Paul Ciampoli
Just switching gears here a little bit.
You have voiced concerns over the way in which FERC grants transmission project incentives.
In terms of preparing for this interview, one of the things that caught my eye is the fact that in a late January 2025 concurrence to a FERC order, you said that it is “long past time for the Commission to revisit its ‘check-the-box’ practice of granting transmission incentives.”
Can you detail for our listeners what you view as the shortcomings of FERC’s current approach to transmission incentives? Also, do you expect FERC to take action this year on revising its policy related to transmission incentives?
FERC Chairman Mark Christie
So let's go back to 2005 when Congress passed the Energy Policy Act of 2005 and it added a Section 219 that called for transmission incentives. So that's there. I understand that, recognize that and FERC obviously has to respect and follow the law. I think though what's happened over 20 years is FERC has created two things. First of all, an entire array of incentives that go way beyond what the statute necessarily requires.
And secondly, I think when I say check the box – FERC’s process, I think historically -- instead of looking at evaluating requests for incentives it has become almost automatic if you look at the track record over the last several years and I'm not saying the four years I've been here, I mean I think it goes back for several years. So I think it shouldn't be a check the box exercise.
I think that before we give an incentive, at a minimum, there ought to be the transmission developer -- If it's a state regulated TO -- needs to go to the State Commission and get a certificate of public convenience and necessity, a CPCN.
And I don't think we ought to be talking about giving FERC incentives until after that process has been completed. [As a] state regulator, I sat on over 100 CPCN proceedings, so I know that they're valuable and I know that they serve a very important purpose in terms of vetting the projects and not just rubber stamping what comes out of the regional transmission planner, which are not adversary proceedings, they're not.
Whereas state proceedings, certainly in Virginia, where adversary in the sense that witnesses had to submit testimony, get on the stand, be cross examined if necessary. It's really about more vetting for projects before hundreds of millions of dollars get spent.
And, of course, [at] FERC -- I think one of the biggest incentives, it's not even under the Section 219...we give formula rate treatment to transmission developers and they come in with a presumption of prudence, which means when they file for their rate recovery, FERC has given them a presumption that it's prudent. When I got here, I was astounded, because I sat on literally scores of rate cases in Virginia and in every rate case in Virginia and certainly in most states the utility or the transmission developer, if they come in for rate recovery, they have the burden of proof.
FERC says -- no, we'll give a presumption of prudence to the developer filing for rate recovery. So anyone who wants to challenge it which is already next to impossible because who's going to come from Minnesota or Idaho or New Mexico to challenge a filing for transmission rate recovery? Who's going to come out to Washington and camp out here for several weeks and try to fight a process at FERC?
Particularly, it's already next to impossible from a realistic standpoint. Consumer advocates don't have those resources.
And then on top of that, FERC says we’ll give you a presumption of prudence. I think that's all part of the array of what I've occasionally referred to as FERC candy and I think I think it needs to be addressed.
Now you say when -- I can't tell you when because we can't talk about what we're going to do when, but I think it's an issue that as I’ve said -- I think it's already past time to act, and that's what I've said in several concurrences -- it is past time for FERC to act so I'll just leave it at that.
Paul Ciampoli
So Chairman Christie, just a quick follow-up question, if I could.
You mentioned the idea of utilities going to state regulators with respect to transmission projects, so is that a new idea?
I don't recall hearing you say that in the past. And also could you perhaps further elaborate on that?
FERC Chairman Mark Christie
I’ve been actually saying that for...over a year in separate statements in incentive cases, putting out the idea as a potential compromise on this incentives issue -- that we consider incentives obviously and we grant incentives, but we don't create a presumption that the incentive is going to be granted unless the transmission developer has received an appropriate permit from a state utility regulator.
So that is something I've been talking about well over a year or maybe longer.
Paul Ciampoli
OK, great. Thanks, Chairman Christie. Just switching topics, I wanted to give you the opportunity to provide for our listeners what your current thoughts are on the state of cyber and physical security in the U.S. energy sector?
FERC Chairman Mark Christie
Well, my current thoughts are we need to be very, very cognizant of the threats both to cybersecurity and to physical security.
Of course, we're speaking today [March 21, 2025] and I was just reading about the fire at Heathrow in London, which I've happened to fly into many times, and the fire at Heathrow -- which was a physical act, not cyber or it might have been cyber -- caused the disruption to the entire world's air traffic.
It's not a power grid -- although it was a transformer apparently from what I’ve read -- but it just shows the vulnerability of key infrastructure that we have to attacks or sabotage if it is that.
As we speak today -- this just happened within the last few hours so we don't have the investigation yet -- but it illustrates that we have certain infrastructure that if it is attacked or sabotaged or vandalized even it can cause tremendous ramifications and damage.
We've had attacks in America on substations -- you all are aware of that -- and we had the attack on the substation in California several years ago. We had the attack on the substation in North Carolina since I've been on FERC and that caused power for about 40,000 people to go out for days.
And so we have to be very cognizant and take all steps necessary to protect the physical security of the grid. And of course, cybersecurity is an increasing threat because bad actors can sit anywhere. They can sit in Russia.
They can sit in Iran, they can sit in a basement in Fairfax, Virginia, for that matter, and launch attacks on the electric grid using cyber means.
We have actually two divisions at FERC -- our Office of Energy Regulation and then we have a specific one on energy infrastructure, which deal with cyber security issues and they coordinate with other appropriate federal and state agencies.
So it is a huge issue and I hate to say it, but it's only going to get worse because the threat environment and the number of actors around the world that have a motive to attack American infrastructure, unfortunately, is increasing.
Paul Ciampoli
FERC in February voted unanimously to launch a review of issues associated with the co-location of large loads such as artificial intelligence-enabled data centers at generating facilities in PJM, including whether the PJM tariff needs to establish rules to create clarity while ensuring grid reliability and fair costs to consumers.
Without pre-judging the outcome of this proceeding, could you discuss what prompted FERC to take this action?
FERC Chairman Mark Christie
You're right. I'm not going to talk about the merits of that proceeding, but I can talk about what obviously led up to it.
The issue has been coming on -- the whole issue of how do you deal with the increasing loads demand of hyper scale users -- I'm talking of course data centers, particularly those that are running AI apps. Because AI apps increase the power demands by factors of 10 to 15X over just say a conventional data center.
So this issue has been coming on like freight train and as a Virginia regulator, I saw this coming years ago because Virginia as you know is Ground Zero for data center development.
We have the largest concentration of data centers not just in America but in the world in Virginia.
So I saw this coming as a state regulator and the co-location issue sort of came along with it just in the last year with proposals to take generating plants and dedicate them to one user.
It prompted several filings here at FERC, so the immediate proximate cause was we had several filings here at FERC related to that issue and so in response to those we had a technical conference last November 1 here at FERC on the broad issue.
We had a large number of speakers. The issues were very well laid out and described and in response to that, when I became chairman, I wanted to act on that and my colleagues agreed and so that's why we issued the proceeding, the 206 proceeding when we did, which is basically the need to act on this issue -- this issue has come on us quickly and we need to act on it quickly.
And I'm not prejudging and I'm not going to give a schedule because I can't, but I said publicly when we issued the order and I've reiterated we are going to act as quickly as we can.
Paul Ciampoli
It strikes me that this topic in particular is another great example of the fluidity and the ongoing challenges of utility resource integrated planning, right? It's not 20 or 30 years ago.
FERC Chairman Mark Christie
No, it comes fast. It comes fast. And again 10 years ago we started to see in Virginia these things called data centers starting to pop up and they were using substantial amount of load compared to what we consider before that a large user.
But it really didn't become a huge issue in terms of load impacts until really just before I left the Virginia Commission, it was starting to bloom into a really big issue and then AI came on the scene and with AI on the scene, it really took the issue and just blew it up again because the AI apps are using 10 to 15 to 20X the power that a data center that's not running AI has been using so the AI has really made this issue come to the fore very, very quickly and we have to deal with it and that's the whole point of that 206.
Paul Ciampoli
Chairman Christie, on behalf of APPA, I wanted to thank you again so much for taking the time out of your day to speak with us.
It's been a really interesting and informative conversation and you have an open invitation to return as a guest perhaps around this time next year if that would be of interest to you.
FERC Chairman Mark Christie
Yeah, absolutely. Just let me know. I'm always happy to converse and engage in dialogue with public power. I think you guys do a great job. And I really respect the whole role of public power because you serve the public and that's so admirable.
Paul Ciampoli
Well, thank you, Mr. Chairman.
Thanks for listening to this episode of Public Power Now, which is produced by Julio Guerrero, Graphic and Digital Designer at APPA. I'm Paul Ciampoli and we'll be back next week with more from the world of public power.
