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FERC Chair Asks For 'Candid' Input From NARUC on Grid Resiliency

FERC Chairman Kevin McIntyre said the Commission has begun analyzing President Trump's proposal for comprehensive infrastructure legislation, but he strongly disagreed with the characterization, often leveled by pipeline opponents, that it serves as a "rubber stamp" to the oil and gas industry.

Speaking at the winter summit of the National Association of Regulatory Utility Commissioners (NARUC) on Tuesday, McIntyre also urged attendees to "candidly and in detail" assist the Federal Energy Regulatory Commission with its order to examine the resiliency of the nation's power grid -- an order it issued in the wake of its unanimous rejection last month of the Department of Energy's (DOE) controversial notice of proposed rulemaking (NOPR).

McIntyre, just two months into his role as FERC chairman, took the podium one day after Trump proposed that Congress pass an infrastructure bill that would generate at least $1.5 trillion in new investment over the next decade, and shorten the permitting process for infrastructure projects to two years or less.

"Here we are today with a recognized need for more infrastructure," McIntyre said. "We can talk about where it’s needed, how it’s needed, what sorts of resources it should be facilitating -- but there's really no argument about whether we need additional energy infrastructure at some level and in some areas."

On the Trump infrastructure plan, McIntyre said the Commission is "not even close to making our way yet through the analysis of that, although that work is commencing as we speak. There is a lot there: a lot of emphasis on regulatory streamlining and attempts to minimize delays in permitting, certifications, etc., all of which is completely valid and as it should be policywise."

The administration’s plan has called for modifying the Federal Power Act and other laws to require federal agencies, upon request, to participate as a cooperating agency to a FERC review under the National Environmental Policy Act.

"We, of course, will be looking at it both from the standpoint of the framework of law -- what is required of us, what is committed by us -- and within that framework, working toward an understanding of what opportunities this infrastructure plan presents to us to improve the nation's overall potential infrastructure picture," the FERC chairman said.

Dusting Off Gas Infrastructure Review

McIntyre also touched on the Commission's plans, announced last December, to review its 1999 Policy Statement on Certification of New Interstate Natural Gas Pipeline Facilities.

"It's time for us to dust that off and have a fresh look at it and see what changes, if any, are appropriate," he said. There may be opportunities “to better or more efficiently identify where and what type of gas pipeline infrastructure projects should be going forward. We need to make that happen in a way that avoids undue delay and enhances transparency, with appropriate stakeholder input at every turn."

McIntyre admitted that he was "bothered" when the term "rubber stamp" is used to describe the Commission’s work.

"It bothers me because, first of all, it's factually wrong," he told the audience, adding that the remark "fails to recognize the excellent work done by the Commision and, importantly, the staff over many, many years…”
The commissioners are “working hard and doing exactly what is required of them under the law and under our existing policies to ensure adequate and careful review of all of the facts that are presented with regard toward justifying a project.

"One can quarrel whether there should be tweaks to what is required, or what the specific standards should be for demonstrating that particular project satisfies a need. But that should not be in any way misconstrued as something to where FERC just says 'OK, here comes another one, let's rush it out the door with an approval on it.' That's simply not the way it's worked at the Commission. I'm committed, and I know my fellow Commissioners are committed, to getting this right."

NOPR Raises 'Valid' Concerns

While the DOE NOPR stirred passions in the energy sector, pitting natural gas groups against some coal and electricity organizations, McIntyre said the actual proposal "has been misunderstood by many in the industry."

"There is no question that it was validly propounded by the secretary of the DOE," he said. "It was motivated by, and expressly described itself as being motivated by, the long-term resilience of our energy grid. Well, who can argue with that? It's a valid concern, a completely valid concern.

"People quarreled with the way resilience was described or measured. Should it really be connected to certain types of on-site fuel requirements? Should that be read as some sort of bailout of specific fuel sectors? Reasonable people can debate these issues, but I want to emphasize that we truly embraced the challenge presented by that unusual DOE NOPR situation."

FERC ultimately voted to reject the NOPR on legal grounds. The Commission's order to analyze grid resiliency "acknowledges the importance of grid resilience, [while] taking no position on whether the notion of resilience is one that should be measured by on-site fuel or something completely unrelated to that,” he said.

"The questions are big, they're weighty and they're complicated. This country has benefited enormously from robust, competitive markets. One has to be very careful taking any steps that could have the result of, or even be perceived as, casting aside recognition of those important market benefits that make their way to consumers. There will be no step we take lightly here.

"Tell us what needs to happen and why, with an eye toward shoring up the resilience of our grid. Let's try not to get hung up in notions of bailouts, of particular fuels or anything like that. I really don't think that advances the ball at all. But let's do think carefully about the policies that are implicated by these questions."

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