While rising demand in both the electric and natural gas markets needs to be addressed by options that aren’t “mutually exclusive,” FERC’s newest commissioner, Suedeen Kelly, told an industry conference Friday in Santa Fe, NM, her home state, that voluntary, varying regional solutions, including more renewables, are the ultimate answer to the nation’s currently converging energy challenges.

In the renewable sector, Kelly said that at her suggestion, FERC is currently reviewing all of its rules/regulations to determine changes that need to be made to better facilitate renewable development.

“It is my personal goal to make sure that FERC does its part to make wind power and other renewables a viable part of the future energy mix.”

While touching on problems of natural gas price and supply volatility/uncertainty, and quoting the National Petroleum Council study that projects liquefied natural gas (LNG) imports being essential if current demand and production trends continue, Kelly said that LNG imports carry major issues covering engineering, health, safety, environmental and economic questions.

On safety, Kelly said the LNG receiving terminals were not the major source of concern, but rather the tanker ships when they are unloading their cargoes. What happens if a tank is breached and LNG is unleashed? she asked rhetorically.

Her understanding is that the spill initially would remain a liquid and without an ignition source (flame), the supplies would not burn. However, with an ignition source, an intense fire (not an explosion) could be created that could potentially burn people as far away as a mile.

Kelly said that with four commissioners now onboard the five-member Federal Energy Regulatory Commission, the federal electric transmission policy is being re-examined, and she favors more study of why there is inadequate investment in transmission currently. She made the remarks at the Law Seminars International conference, “Energy in the Southwest.”

When asked about FERC’s standard market design (SMD) rulemaking, Kelly said she opposes it, preferring that each region “look at the design that fits it best.” SMD is a “non-starter in the West because so much of the transmission is controlled by non-jurisdictional (public sector) entities,” such as Bonneville Power Administration (BPA) and the Western Area Power Administration (WAPA).

She said she favored a voluntary regional approach, and in the West, with which she is most familiar, that is a “huge challenge.” The Pacific Northwest regional transmission operator (RTO) — now re-named “Grid West” — is a “pretty coherent group that has made some significant progress,” despite lingering disagreements among some members.

©Copyright 2004 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.