FERC received hundreds of public comments before last Wednesday’s deadline over a proposal to possibly revise policies for reviewing and authorizing new interstate natural gas transportation facilities, while House lawmakers are considering a bipartisan bill to give the Commission flexibility to hire engineers to address the permitting backlog.
The Federal Energy Regulatory Commission issued a notice of inquiry (NOI) in April to examine its policies under Section 7 of the Natural Gas Act (NGA). The Commission issued the NOI after taking into consideration changes in the natural gas industry and increased stakeholder interest in its decision-making since September 1999, when FERC adopted its current policy statement on pipeline certification. The Commission then extended the deadline until last Wednesday [PL18-1].
At the heart of the NOI is the Commission's interest in gaining input on whether, and if so how, it should change methods for determining whether a proposed gas project would meet the criteria for public convenience and necessity. FERC also asked whether, or how, it should consider other factors in its need determination, which include precedent agreements, contracts for service, the potential use of eminent domain and an evaluation into a project's environmental impacts.
Commissioners also sought input on whether there were any specific changes to consider for improving the certification processes, including those for pre-filing, post-filing and post-order issuance.
FERC's policy review comes as it approaches losing Commissioner Robert Powelson, a Republican nominated by President Trump last year and sworn in last August, who is set to resign in August. His departure could potentially leave the Commission in a 2-2 deadlock, with Democrats Richard Glick and Cheryl LaFleur on one side and Chairman Kevin McIntyre and Commissioner Neil Chatterjee, both Republicans, on the other.
The Interstate Natural Gas Association of America (INGAA), through more than 100 pages of comments, urged FERC to reaffirm the existing policy statement, arguing that it "provided a durable framework to review certificate applications in a reasoned, consistent, and predictable manner.
"The certificate policy statement has achieved the Commission's stated goals, including benefitting U.S. consumers and the economy, fostering competitive markets, protecting captive customers, and avoiding unnecessary environmental and community impacts," INGAA said. "The fundamental architecture of the certificate policy statement is consistent with the NGA and remains sound, and the Commission should reaffirm its enduring principles.
"The Commission should avoid making wholesale policy changes that may result in problematic consequences to the detriment of natural gas consumers."
The Natural Gas Council (NGC), which includes INGAA, the American Gas Association, the American Petroleum Institute, the Independent Petroleum Association of America and the Natural Gas Supply Association, also supported the existing policy statement.
"While modernizing and streamlining certain elements of the Commission's review process may be appropriate, wholesale changes to the certificate policy statement are unnecessary and likely would be counterproductive," the NGC wrote. "We trust the Commission's review will recognize and preserve the benefits that have resulted from the certificate policy statement."
Some environmental groups urged FERC to overhaul its policies. "Reform is essential, but not to streamline the process and make it easier for industry -- reform is needed to make the process more robust, impartial, fair, equitable and accessible to the public," the Delaware Riverkeeper Network said in its comments.
"Unfortunately, FERC’s approach to the public process and decision making when it comes to pipeline infrastructure has demonstrated an actual bias, or at least created the appearance of bias, so strong and inequitable that the public has little, if any trust, in FERC when it comes to pipeline, compressor, storage and liquefied natural gas infrastructure."
Giving FERC Hiring Flexibility
In a show of bipartisanship, Reps. Pete Olson (R-TX) and Gene Green (D-TX) introduced House Resolution (HR) 6552 on Thursday. The bill would give FERC the flexibility to consult with the Office of Personnel Management (OPM), an agency under the White House's Office of Management and Budget, to determine appropriate salaries for new hires.
Specifically, under HR 6552 the Commission would be required to consult with OPM on salaries, and would only be allowed to offer higher salaries for positions where the Commission can confirm a critical need. FERC would also be required to review their decisions on salaries every five years, and would have to report on hiring and staffing moving forward.
"Our energy can't be properly utilized sitting in storage instead of being shipped to markets that need it," Olson said. "We must address this fundamental backlog in a smart way. Giving FERC needed pay flexibility in specific jobs will reduce that backlog and address a critical need."
Green added that FERC needs "qualified engineers and lawyers to do this job effectively, but often can't recruit talented individuals into these roles due to the severe limits of the government pay scale when compared to the private sector."
Chatterjee and McIntyre have lamented FERC's ability to attract qualified engineers to address the Commission's permitting backlog. HR 6552 was immediately referred to the House Committee on Energy and Commerce.