On May 25, 2017, Federal Energy Regulatory Commission nominees Neil Chatterjee and Robert Powelson testified before the Senate Energy and Natural Resources Committee, marking their first joint appearance before the Committee since their nomination by President Trump (see May 9, 2017 edition of the WER).
Nominee Powelson was introduced to the Committee by Senator Pat Toomey (R-PA), and Nominee Chatterjee was introduced to the Committee by Senate Majority leader Mitch McConnell (R-KY). Both Nominees emphasized their appreciation for the historically bipartisan and independent nature of the Commission, and their willingness to listen to and work with stakeholders.
The hearing featured several notable exchanges. In response to a question from Senator Joe Manchin (D-WV) requesting that the Nominees identify the "critical challenges" that they would face as FERC Commissioners, Nominee Powelson identified "first and foremost" the backlog of cases at FERC that have built up since the elimination of a quorum (see February 21, 2017 edition of the WER), as well as cyber security, physical security, infrastructure investment, and market issues. Nominee Chatterjee identified reliability, noting that it is "at the core of the Commission's mission," along with just and reasonable rates.
When Senator Mike Lee (R-UT) asked if the Nominees would consider supporting review deadlines for projects that require FERC approval, Nominee Powelson stated that he would do some "root cause analysis" to identify where such approvals may be slowing in FERC's Office of Energy Projects, and Nominee Chatterjee offered his assurance that he would work to "better coordinate and streamline" the approval process in a responsible manner.
Both Senators Corey Gardner (R-CO) and Tammy Duckworth (D-IL) asked the Nominees questions relating to when they would use federal authority to preempt state initiatives. In response, Nominee Powelson described himself as a "states' rights individual" and pledged to keep an open mind. He noted that while FERC Commissioners have a responsibility to uphold the Federal Power Act and the Natural Gas Act, he subscribed to the general philosophy of "do no harm to the states." With respect to subsidies of nuclear generation facilities, Nominee Powelson stated that "we don't want people losing jobs, and we want these units to run because we want the clean energy resource—the base load resource." Nominee Chatterjee stated that he also believed in states' rights, and that fuel diversity was necessary in order to ensure "safe, affordable, and deliverable electricity." Nominee Chatterjee identified this as one of the "critical matters" that will come before FERC. Both Nominees noted FERC's recent technical conference on the subject and expressed their intent to closely follow and engage in those proceedings.
Senator Catherine Cortez Masto (D-NV) asked the Nominees if they would support FERC's proposed rule regarding the participation of electric storage resources in FERC-regulated wholesale markets. Nominee Powelson pledged to read through the record and comments in the proceeding, and stated that he would keep an open mind. He noted that, while FERC does not pick the winners and losers in a market, it nonetheless has a responsibility to provide rules and proper incentives for new technologies to compete in the market. He pledged to continue to work constructively "so we are not getting into situations where we are displacing resources that are providing good benefits to customers." Nominee Chatterjee stated that he could not speak to the particular matter before the Commission or prejudge it, but was supportive of technological innovation. He stated that he was supportive of competition and access to markets, "particularly when it is in the consumer's interest." Nominee Chatterjee stated that he would "judiciously" study the issue, if confirmed.
Senator Martin Heinrich (D-NM) asked if the Nominees thought FERC has a role to help facilitate investment in new interstate transmission facilities, and if the Nominees thought FERC had sufficient authority from Congress to ensure such investment. Nominee Powelson noted the efforts of former FERC Chairman Jon Wellinghoff in promulgating Order No. 1000, and expressed his intention to work with Regional Transmission Organizations and Independent System Operators to identify which aspects of their transmission planning processes are working and which are not. Nominee Chatterjee agreed that continued investment in interstate transmission was important, and stated that "we need to make sure that the Return on Equity is sufficient to achieve that goal."
Senator Tammy Duckworth (D-IL) asked the Nominees if climate change was real. Nominee Powelson stated that he was "not a climate denier," and that Pennsylvania was proud of the efforts it had made to reduce carbon dioxide emissions. Nominee Chatterjee stated that with respect to any policy put forward by Congress that would seek to mitigate carbon emissions, "we would have to ensure that it did not have a negative impact on reliability."
Senator John Barrasso (R-WY) asked what changes the Nominees would make to FERC's regulations implementing the Public Utility Regulatory Policies Act ("PURPA"). Nominee Powelson stated that his state (Pennsylvania) believed in "least-cost procurement," which benefited customers. He also noted that FERC had held a technical conference on PURPA implementation issues, and that he would examine the record in that proceeding to better understand what is working and what is not. Nominee Chatterjee stated that he would also review the record in the technical conference proceedings, but that any major changes to PURPA would need to come from Congress, and not from FERC.
A webcast of the March 25, 2017 hearing may be found here.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
