FERC is not in the business of picking generation fuels, nominee tells lawmakers

Kevin McIntyre, President Trump’s pick to become chairman of the Federal Energy Regulatory Commission, on Sept. 7 underscored the point that FERC’s role does not include choosing fuels for the generation of electricity.

He made his comments at a Senate Energy and Natural Resources Committee hearing convened to consider McIntyre’s nomination to serve as a FERC commissioner.

Also in attendance at the hearing was Richard Glick, a FERC commissioner nominee, as well as Joseph Balash, nominee to be Assistant Secretary of the Interior for Land and Minerals Management, and Ryan Nelson, nominee to be Solicitor of the Department of the Interior.

McIntyre is currently a partner in the Jones Day law firm in Washington, D.C., heading its global energy practice and Glick noted in his testimony that he has had the opportunity to work on a number of major energy issues over is career. Most recently, Glick has served as general counsel for the Democratic staff of the Energy and Natural Resources Committee. 

“I’m confident that Mr. McIntyre will be a capable chairman upon his confirmation,” said Sen. Lisa Murkowski, R-Alaska, and chairman of the committee. She also thanked Glick for his service to the committee “including your role in shaping our bipartisan energy bill.”

Committee members at the hearing raised no objections to the nominees and Murkowski has said she would like the committee to vote on the nominations as quickly as possible.

In his opening remarks, McIntyre said he believes that any consideration of potential action by FERC, “or by any governmental body, must begin with a firm understanding of the applicable legal requirements – and that any action taken must satisfy those requirements in full.”

He said that because “many situations permit a range of equally lawful decisions, including some with profound policy implications, it is also critical to ensure a full airing of all views on the matter, with input by stakeholders, including the public. If confirmed, I would be guided by these principles, rooted in the rule of law and in a commitment to processes that are open, transparent and fair, with an insistence on excellence in the workings of government. I would strive to bring an even-handed and judicious approach to each matter, with a focus on listening, which is indispensable to fairness and sound decisionmaking.”

In his opening statement, Glick said FERC’s decisions “can have a significant impact on the lives of everyday Americans.”

Glick said that, if confirmed, he looks forward “to working with my fellow commissioners to help facilitate the ongoing dramatic transformation to the ways Americans produce and consume energy. This revolution has the potential to substantially improve our energy efficiency, reduce emissions, grow the economy and create millions of new jobs. FERC, working with state regulators, can help eliminate barriers to the adoption of these new technologies and processes.”

Baseload power focus of questions

Several senators who attended the hearing focused their questions on issues tied to baseload power, as well as a recently released Department of Energy staff report on the state of the U.S. electric grid.

Responding to a question from Sen. John Barrasso, R-Wyoming, about the role of coal-fired generation as a baseload resource, McIntyre said that coal “historically has played an enormously important role in our nation’s generation of electricity.”

McIntyre noted that nuclear power is also mentioned in the context of baseload generation resources. “The importance of such resources cannot be denied,” McIntyre said.

“However, FERC is not an entity whose role includes choosing fuels for the generation of electricity,” he said. “FERC’s role, rather, is to ensure that the markets for the electricity generated by those facilities proceed in accordance with law.”

McIntyre said he thinks that overall “FERC’s role should be to take a hard look at these very important questions and determine where FERC’s jurisdiction actually gives it a role” related to making decisions “that could ensure that there is a proper attention to the reliability and resilience impacts of what have traditionally been thought of as baseload generation.”

At a later point, Sen. Angus King, I-Maine, said that he is worried that the term “baseload is becoming a political term and not necessarily a scientific term.”

FERC should “not get tangled up in – advertently or inadvertently – favoring one technology over another and getting involved in the politics of generation,” the senator said.

Echoing his comments in response to Barrasso’s question, McIntyre said that FERC “does not pick fuels among different generating resources and so it’s important that it be open to – as you say, the science – which I would expand somewhat to include also the characteristics of reliability and the characteristics of economics and the other features that are very important to satisfying the energy needs of our nation, but, yes, I absolutely commit to making decisions on those bases.”

Distributed resources and FERC

King asked Glick whether he believes FERC has a continuing role in making sure that all resources can compete evenly “and that full value should be provided for things like” energy storage and distributed energy.

“Much of distributed energy resources is regulated at the state level, it’s behind the meter technology in many cases,” Glick noted, mentioning rooftop solar and energy storage, for example.

On the other hand, those technologies can provide benefits at the wholesale market level, he went on to say. “For instance, energy storage has potential to provide significant reliability benefits” for wholesale electricity markets, he said.

Glick noted a FERC proposed rulemaking that would allow energy storage facilities and distributed energy resources in aggregate to participate in wholesale energy markets.

In November, the commission issued a notice of proposed rulemaking that would require regional transmission organizations and independent system operators to revise their wholesale power tariffs to better remove barriers to RTO-run wholesale market participation by energy storage resources such as large battery systems. The NOPR would also require RTOs and ISOs to allow aggregators of distributed energy resources to participate directly in the organized wholesale electric markets, and similarly remove barriers to DER aggregator participation.

King said that for Glick and McIntyre, “you’re entering into these positions – assuming you’re confirmed – at a time of tremendous dynamism in an industry that essentially was unchanged for a hundred years, and now suddenly there are so many different options. And that’s going to be a real challenge, to be sure that a regulatory system that was established seventy or eighty years ago, can meet the needs and respond to the technologies of the coming decades.”

The senator added, “this isn’t your grandfather’s FERC.”

“It is not,” McIntyre said. “FERC operates under statutory standards that were set in law decades ago,” McIntyre pointed out.

“Justness and reasonableness, avoidance of undue discrimination, and yet our energy industry has, of course, modernized itself significantly since then and so the challenge at the FERC is to determine how to apply these statutory standards to today’s energy industry,” McIntyre said.

Sen. Al Franken, D-Minn., asked McIntyre to describe what role he sees energy storage playing in the future in electricity markets and transmission systems “and how can FERC help ensure that energy storage is receiving proper compensation for the benefits that it provides to the grid?” Franken noted FERC’s issuance of the storage and DER NOPR late last year.

Energy storage’s role “in satisfying our nation’s energy needs is growing year after year, irrespective of any action by the FERC,” McIntyre said. “Your question recognizes that there is a pending matter before the FERC looking at storage’s role in energy markets overseen by the FERC and so it wouldn’t be appropriate for me to indicate a specific position on that,” he went on to say.

However, “as general, philosophical matter, I’m very much an all-of-the-above person when it comes to the resources that we need to satisfy our energy needs and energy storage should validly be recognized as a growing part of that,” McIntyre said.

Transmission infrastructure

Sen. Tammy Duckworth, D-Ill., asked the FERC nominees to comment on how they would work as commissioners to promote greater investment that would both modernize and expand the country’s energy transmission infrastructure.

McIntyre said that “FERC’s role in energy infrastructure is what I think of as its original jurisdiction going back to hydroelectric power in 1920” and then expanding to natural gas facilities.

He noted the role of states when it comes to infrastructure matters. “Generally speaking, electric transmission infrastructure is sited at the state level, so that of course is something that the FERC must continue to respect.”

Glick said that “we clearly need additional electric transmission, both to access remotely located renewable resources, but also to reduce congestion and allow consumers to have greater access to less expensive power.”

He said that while the commission’s authority in terms of electric transmission siting is very limited, FERC does have other authority when it comes to transmission.

Glick mentioned FERC’s Order 1000, a final rule that reformed the commission’s electric transmission planning and cost allocation requirements for utility transmission providers. “I think that’s worked pretty well,” he said.

FERC also has “various incentive rate authorities” aimed at encouraging investment in transmission, Glick noted.

FERC and manipulation

Meanwhile, Sen. Maria Cantwell, D-Wash., and ranking member on the Energy and Natural Resources Committee, asked McIntyre whether he is “committed to policing the energy markets” and keeping them free from manipulation.

“Yes, I absolutely am,” McIntyre responded. “FERC’s role in enforcement is a very important one and I believe in a robust program of enforcement, and if confirmed, I would bring that view to my work at the FERC,” he added.

“So you don’t believe that it’s just calling balls and strikes, but protecting the public interest standard as it relates to just and reasonable rates for electricity and natural gas?” asked Cantwell in a follow up question.

“I think it goes beyond just and reasonable rates,” McIntyre responded. He noted that Congress in the Energy Policy Act of 2005 gave “express authority to the FERC to police market manipulation in energy markets regulated by the FERC and so that’s something that comes up in a number of different contexts. I think it’s essential that the FERC get that right.”

Senate recently voted to confirm two FERC nominees

The Senate recently voted to confirm the nominations of Neil Chatterjee and Robert F. Powelson for seats on the Federal Energy Regulatory Commission. Chatterjee is currently serving as acting chairman of the commission.

The Aug. 3 vote to confirm Chatterjee and Powelson means that FERC once again has a quorum and assuming the nominations of McIntyre and Glick clear the Senate Energy and Natural Resources Committee and the full Senate, the commission would have all five of its commissioners’ seats filled.