The Federal Energy Regulatory Commission (FERC) held its February open meeting earlier this month at Howard University School of Law—of which Chairman Willie Phillips is an alum.[1] The Commission addressed a number of items at the open meeting, including cold weather reliability standards, hydropower permitting, and natural gas exports.[2]

Cold Weather Reliability Standards

FERC approved two extreme cold weather reliability standards,[3] proposed by the North American Reliability Corporation following Winter Storm Uri in 2021.[4] One of the standards requires grid balancing authorities to prepare plans to avoid natural gas infrastructure outages during planned load shedding; and the other more clearly specifies balancing authorities’ responsibilities in extreme cold weather.[5] Some of the requirements imposed under these standards have a delayed effective date of three years, although Chairman Phillips and Commissioner Clements have urged affected entities to adopt these standards as soon as possible, noting the “urgency these issues demand.”[6]

Hydropower and Deference to Tribal Governments

Additionally, FERC rejected preliminary permit applications for several potential hydro storage projects.[7] The projects were opposed by the Navajo Nation and would have been sited on Navajo land in Arizona and New Mexico, and their denial came alongside the announcement of a new policy by FERC to deny any preliminary permits for new hydroelectric facilities that a tribal government has opposed on the project proceeding’s record.[8]

The new policy “treats tribes with the same deference that the Commission gives to federal land managers and similarly affected federal agencies that oppose a preliminary permit,” said Chairman Phillips.[9]

Liquefied Natural Gas Reviews

The Commission moved forward with its liquified natural gas (LNG) reviews and approved two natural gas projects seeking to boost exports, finding that FERC’s LNG exports reviews are not affected by the Department of Energy’s (DOE) pause.[10]

DOE announced a temporary pause on pending approvals of LNG exports to review the economic, environmental, and shipping impacts of proposed projects in January.[11] The pause has drawn the ire of many congressional Republicans and some moderate Democrats who argue that it weakens the position of the U.S. and its allies against adversaries such as Russia, China, or Iran.[12] Others, however, argue the opposite – that repealing the pause would increase sales to foreign adversaries.[13]

FERC’s decision coincides with the House passing the “Unlocking our Domestic LNG Potential Act” on February 15 by a vote of 224-200, with nine Democrats crossing party lines to vote for the bill.[14] The bill would repeal DOE’s pause on new LNG export approvals and remove requirements for the DOE to conduct public interest reviews of new facilities, instead providing exclusive permitting and approval authority to FERC.[15] Senators Bill Cassidy (R-LA), Tim Scott (R-SC), and 15 other Republicans have also introduced a companion bill—however neither measure is expected to gain traction in the Senate.[16]

Currently, FERC is responsible for the siting of LNG infrastructure, and DOE is responsible for LNG export and import.[17] Chairman Phillips has emphasized FERC’s status as an independent agency focused on performing its role outside the fold of political controversy, and noted that FERC does “not coordinate with the Department of Energy on [LNG] determinations.”[18]

Transmission Planning

Notably, FERC did not take up its pending regional transmission planning and cost allocation rule.[19]

FERC issued a Notice of Proposed Rulemaking (NOPR) in April 2022 that would require long-term transmission planning processes and for transmission providers to seek agreement on a cost allocation method for transmission costs and has since held multiple technical conferences on the subject; more than 18 months later, FERC is facing pressure from members of Congress to complete the rule, which they say is urgently needed for grid reliability and affordability.[20] Chairman Phillips has reassured lawmakers that finalizing the rule is a top priority for FERC, and indicated that the Commission will address how to ensure transmission planners both prioritize transmission facilities that most improve grid reliability and allocate costs in a manner consistent with the cost causation principle.[21] Still, the Commission has yet to finalize the rule.

At the February 15 open meeting, Chairman Phillips stated that FERC intends to move forward on the rule in the “very near future.”[22]

Looking Forward: The Challenge of Clements’ Departure

Looking forward, FERC might face additional challenges in preparing the grid for a buildout of clean energy as Commissioner Allison Clements, a climate advocate and major backer of transmission reform, announced Feb. 9 that she will not be seeking a second term on the Commission.[23] Clements’ departure could leave FERC with three vacancies—and short of the three-person quorum that the five-member Commission needs for regulatory actions.[24] Clements did not specify whether she would leave the Commission June 30, when her term ends, or serve through the end of the year; however, she did note that she is looking forward to working with Chairman Phillips and Commissioner Christie to “finaliz[e] the transmission planning rule.”[25]

FERC’s next open meeting is scheduled for March 21, 2024, at FERC Headquarters.[26]

 

 

[1]February Commission Meeting at Historic Howard University School of Law, https://www.ferc.gov/news-events/news/february-commission-meeting-historic-howard-university-school-law (last visited Feb. 22, 2024).

[2]February 15, 2024 Open Meeting, https://www.ferc.gov/news-events/events/february-15-2024-open-meeting-02152024 (last visited Feb. 22, 2024).

[3]Order Approving Extreme Cold Weather Reliability Standards Eop-011-4and Top-002-5, 186 FERC ¶ 61,115 (Feb. 15, 2024).

[4]Ethan Howland, FERC OKs cold weather reliability standards, and 5 other takeaways from Thursday’s open meeting, UtilityDive (Feb. 16, 2024), https://www.utilitydive.com/news/ferc-cold-weather-reliability-standards-lng-tribe-hydro-permit-policy/707746/.

[5] Id.

[6] Id.

[7] Id.

[8] Catherine Morehouse, FERC denies four hydropower projects under new policy deferring to tribal governments, PoliticoPro (Feb. 15, 2024), https://subscriber.politicopro.com/article/2024/02/ferc-denies-four-hydroelectric-projects-under-new-policy-deferring-to-tribal-governments-00141714.

[9] Id.

[10] Ethan Howland, supra note 4; Zach Bright, FERC greenlights projects that could unleash gas exports, PoliticoPro (Feb. 16, 2024), https://subscriber.politicopro.com/article/eenews/2024/02/16/ferc-green-lights-projects-that-could-unleash-gas-exports-00141713.

[11] Brian Dabbs, Biden administration freezes gas export approvals, E&E News (Jan. 26, 2024), https://www.eenews.net/articles/biden-administration-freezes-gas-export-approvals/.

[12] Josh Siegel, House rebukes Biden on LNG pause, PoliticoPro (Feb. 15, 2024), https://subscriber.politicopro.com/article/2024/02/house-rebukes-biden-on-lng-pause-00141648.

[13] Id.

[14] Id.

[15]Id.

[16]Id.

[17]Zach Bright, FERC greenlights projects that could unleash gas exports, supra note 9.

[18]Id.

[19]Ethan Howland, supra note 4.

[20]Zach Bright, FERC chair echoes Democrats’ plea for electric grid action, PoliticoPro (Jan. 31, 2024), https://subscriber.politicopro.com/article/eenews/2024/01/31/ferc-chair-echoes-democrats-plea-for-electric-grid-action-00138628; Heinrich, Markey, Tonko Lead Bicameral Letter Urging Ferc To Strengthen And Finalize Transmission Planning Rule, https://www.heinrich.senate.gov/newsroom/press-releases/heinrich-markey-tonko-lead-bicameral-letter-urging-ferc-to-strengthen-and-finalize-transmission-planning-rule (last visited Feb. 22, 2024).

[21]Zach Bright, FERC chair echoes Democrats’ plea for electric grid action, supra note 19.

[22]Ethan Howland, supra note 4.

[23]Catherine Morehouse, Departure at critical energy regulator threatens to stymie clean power, PoliticoPro (Feb. 11, 2024), https://subscriber.politicopro.com/article/2024/02/11/energy-regulator-biden-00140774.

[24]Id.

[25]Id.

[26]March 21, 2024 Open Meeting, https://www.ferc.gov/news-events/events/march-21-2024-open-meeting-03212024 (last visited Feb. 23, 2024).