FERC, Interior Nominees Breeze Through Senate Hearing

Two White House nominees for FERC and two nominees for the Department of Interior (DOI) faced limited resistance and not too many serious questions from lawmakers during a September 7 hearing before the Senate Energy and Natural Resources Committee.

The chairman of the committee, Lisa Murkowski (R-Alaska), advised senators to submit any questions for the record by the close of business September 7, and to be prepared to vote on the nominees soon. “It is my hope that we’ll be able to advance your names out of committee shortly,” Murkowski said to the nominees at the end of the hearing.

Appearing before the committee were Kevin McIntyre and Richard Glick to serve as commissioners at FERC, with McIntyre tapped by President Donald Trump to become chairman upon Senate confirmation, and Ryan Nelson and Joseph Balash to serve at DOI. Nelson is nominated to be solicitor at DOI while Balash is nominated to be assistant secretary of Interior for land and minerals management.

Murkowski questioned the FERC nominees on issues related to Alaska’s energy resource potential, and efforts to market natural gas stranded in the state without access to markets, including the massive application (CP17-178) by Alaska Gasline Development Corp. to develop a natural gas treatment facility, 800-mile pipeline, and LNG export facility.

Kevin McIntyre

McIntyre, a Republican attorney and co-leader of the global energy practice at Jones Day, declined to comment specifically on the state’s effort to build the pipeline and LNG facility because the matter is pending at FERC. In general terms, however, he said he supports the role of states to advance their own resources.

Several senators asked about the Department of Energy (DOE) staff report on power grid reliability and resilience in light of baseload generation changes and retirement of coal and nuclear power plants. Included in those questions were concerns that FERC would interfere with the resource decisions of states supporting renewable resources, but both Glick and McIntyre said FERC has no authority on generation choices or resource decisions that are under the authority of state regulators.Both McIntyre and Glick, a Democrat and Senate staffer serving as general counsel for Sen. Maria Cantwell (D-Wash.), ranking member on the committee, made similar comments supporting the role of states regarding power generation and renewable energy resources.

The DOE staff report touches on FERC’s oversight of energy markets in general and its role in assuring just and reasonable rates, along with the authority overseeing the reliability of the power grid, McIntyre noted. He vowed to give the report and the policy suggestions within it careful consideration, adding that some of the issues overlap with work the Commission has underway following a two-day technical conference on state generation policies and their impact on wholesale power markets.

Sen. Martin Heinrich (D-N.M.) commented that he is concerned about seeing the term “baseload power” become a political term and less of a scientific term, and questioned the nominees about suggestions from some that FERC should financially reward, or prop up, certain types of generation facilities.

“The Commission does not have the authority to, nor should it, prop up failing technologies or technologies that are not economically competitive,” Glick said in addressing Heinrich’s question.

Other than comments about the limitations of FERC’s authority on generation choices, Glick and McIntyre avoided specific comments due to the pending nature of the technical conference proceeding at the Commission. They both noted that state laws adding renewable resources to the nation’s power generation mix at increasing levels are being carried out with no reliability impact on the grid.

Addressing comments and questions from Sen. Angus King (I-Maine), both nominees addressed the challenge of regulating energy markets under decades-old statutes when markets and technologies are rapidly changing. FERC proposals to allow energy storage and distributed resources participate in wholesale energy markets are some of the ways FERC can adapt its regulations to embrace new technologies, they said.

In his prepared testimony, McIntyre told lawmakers that “any consideration of potential action by FERC, or by any governmental body, must begin with a firm understanding of the applicable legal requirements – and that any action taken must satisfy those requirements in full.  Because many situations permit a range of equally lawful decisions, including some with profound policy implications, it is also critical to ensure a full airing of all views on the matter, with input by stakeholders, including the public.” He vowed to be guided by those principles, rooted in the rule of law, with processes that are fair, transparent, and even-handed.

The DOI nominees were questioned about federal lands issues, permits for mining taking too long, and oil and gas drilling on federal land. Cantwell asked about royalty rates that producers pay for production on federal land, with Balash indicating that royalty rates should be set based on the market price environment for resources and geological challenges that vary in different parts of the country. Sometimes royalty rates should be increased or decreased, depending on the circumstances.

Cantwell indicated she would issue follow-up questions to both Balash and Nelson.

The hearing was briefly interrupted a few times when protestors yelled that FERC is a “rubber stamp” agency for the fossil fuel industry and that it is harming the environment by approving pipeline infrastructure. Three individuals were forcibly removed by security, with one shouting “no imminent domain for private gain,” in reference to pipeline siting authority that is provided to companies receiving a certificate from FERC under the Natural Gas Act.

By Tom Tiernan TTiernan@fosterreport.com


This article appears as published in The Foster Report No. 3164, issued September 8, 2017

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Copyright © 2017 by Concentric Energy Publications, Inc.  All rights reserved.

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