The Senate Energy & Natural Resources Committee on July 22 held an oversight hearing with the five commissioners of the Federal Energy Regulatory Commission.
At the hearing, Committee Chair Mike Lee (R-UT) expressed support for FERC’s recent Large Load Order, noting that it wasn’t a one-size-fits-all solution. He agreed with the growing consensus that existing ratepayers should not subsidize the cost of data centers.
Committee Ranking Member Martin Heinrich (D-NM) highlighted the recent introduction of his generator interconnection reform bill, saying that other bills, including one related to protecting existing customers from the costs of data centers, will be coming in the next few weeks and months.
FERC’s June Large Load Order received bipartisan praise, with FERC Chairman Laura Swett emphasizing FERC’s intention to introduce innovation into electricity markets, specifically around transmission interconnection and related studies, ATTs, and siting load closer to generation.
Commissioner David LaCerte reaffirmed the commission’s commitment to the beneficiary pays principle for hyperscalers and data centers, with Swett noting that hyperscalers are, at a minimum, willing to pay for costs associated with their interconnection, but that many are going beyond to provide additional infrastructure or bill subsidies.
Commissioner David Rosner added that hyperscalers want to go fast and are willing to pay for it.
Swett, Commissioner Lindsay See, and Commissioner Judy Chang all expressed support for Advanced transmission technologies (ATTs) and grid-enhancing technologies (GETs), while noting FERC is limited to encouraging or incentivizing their deployment under the FPA.
See noted that ATTs and GETs are not always the best solution, but if Congress were to give FERC more clarity and authority to support their deployment, it could be helpful for reliability and affordability.
Swett and Chang also highlighted the requirement to analyze ATTs and GETs in the June Large Load Order, with Chang noting that FERC can ask transmission owners who come before FERC why they are not adopting the best technology available.
Swett also shared that she has created a task force at FERC to think about how to better encourage GETs, including through incentives, but that she wants those to show that they’ll result in cost savings to ratepayers.
Hydropower
Sen. Catherine Cortez Masto (D-NV) asked about non-federal hydropower relicensing, with See saying the amount of work in coming years is sobering but needed to keep critical hydropower resources online.
She expressed support for transparent, efficient, and durable permitting processes, noting that the commission is currently discussing how to incorporate lessons learned from natural gas permitting, including potentially a blanket permitting program for routine projects or amendments that don’t require a full review.
All five commissioners agreed that the hydropower licensing process needs to be streamlined.
Senator Steve Daines (R-MT) touted the introduction of his bill, the Hydropower Licensing Affordability Act, which would require that “mandatory conditions” imposed on hydropower projects by resource agencies be directly related to the project.
Daines also asked about the implementation of S. 1020, the Build More Hydro Act, which was signed into law in May (with APPA’s strong support). Swett said the bill was very helpful, and the Commission is processing requests, but hasn’t granted any yet, though she expects some will be forthcoming.
Permitting
Lee praised the Supreme Court’s Seven Counties decision, saying that it correctly confirmed that the National Environmental Policy Act (NEPA) is a procedural statute that only requires a review of the project under consideration, not the cumulative effects of all other projects.
See said ambiguity in environmental statutes like NEPA and the litigation that comes from it is the biggest source of delay. She said the Seven Counties decision confirmed that NEPA requires FERC to look at the project in front of them, not adding additional categories. She said additional clarity in NEPA and other environmental laws that Congress provides would let FERC do its job in a predictable and streamlined fashion.
Swett highlighted two specific reforms she supported, “ending states’ ability to effectively veto federal projects that cross state lines through Clean Water Act denials,” which she said holds up both gas pipelines and transmission projects. Second, she advocated for limits on judicial review timelines.
LaCerte highlighted several “roadblocks” to building infrastructure, advocating for clarity that that Section 401 of the Clean Water Act is limited to the pollutant stemming from the discharge, not the activity as a whole and that Section 106 of the National Historic Preservation Act is intended to be a process-related statute directing agencies to consider the effects on historic properties.
He also expressed support for clarifying that a hydropower facility should only have to answer for the direct effects on the federal reservation or fisheries and for reforming how critical habitat is defined under Section 7 of the Endangered Species Act.
