Senators on Wednesday pressed nominees awaiting confirmation to the Federal Energy Regulatory Commission on the California blackouts, resource compensation, pipelines and climate change.
Sens. Lisa Murkowski, R-Alaska, John Hoeven, R-N.D., and Steve Daines, R-Mont., all asked nominees Mark Christie and Allison Clements where FERC's responsibility lies in preventing similar instances of rolling blackouts experienced by California in August. "I guess I'm asking you to be critical of the FERC, if you will," said Murkowski during the Senate Energy and Natural Resources Committee hearing. "There are those who are trying to understand FERC's role in ensuring that we don't have these rolling blackouts that we saw in August, not only in California, but in any other state."
"It's very premature to say who was responsible," said Christie, while emphasizing the state's role in resource procurement. "Blackouts are unacceptable. We don't accept blackouts in America," he added. He and Clements also both rejected the idea that it was FERC's responsibility to compensate "baseload" resources based on resilience or reliability attributes.
President Donald Trump announced his intent to nominate Clements and Christie in July to fill the roles of former commissioners Cheryl LaFleur and Bernard McNamee, respectively. Both nominees emphasized their belief that the commission should remain resource-neutral in its deliberations, as Republican senators questioned whether California's growing reliance on renewable resources led to last month's blackouts, and Democrats pushed the nominees on how the commission should consider climate change in its deliberations.
Hoeven also asked the nominees to weigh in on the specific resilience attributes of fossil fuel resources and whether they should be compensated, echoing the language of a Department of Energy plan to subsidize coal and nuclear resources based on their onsite fuel attributes that was rejected by FERC in 2018.
"Do you support providing just and reasonable compensation for baseload generation resources, and making sure reliability and resilience attributes are adequately compensated?" asked Hoeven. Both nominees rejected FERC's authority to provide this kind of compensation, citing the Federal Power Act.
"The Federal Power Act is very clear that FERC cannot order an RTO to favor one generating resource over another," said Christie.
"FERC has no authority to … compensate a singular type of fuel source over another," said Clements. "It does have the ability to ensure the ability for resources to compete on a level playing field."
Hoeven, Daines and Murkowski also pushed the nominees on what role FERC should play in preventing blackouts similar to California's.
"California ... put all their eggs in one basket, and I'll tell you what, they can't deliver electricity now to their people," said Daines during the hearing. Analysts say the blackouts are due to a power import shortage that the California Independent System Operator had previously warned about. Christie said FERC's role was to ensure the grid operator was planning adequately to meet peak demand.
"FERC has got to be very, very cognizant of what kind of planning is taking place and how is California planning to meet the challenge of phasing in a lot more solar" and the gap in supply for peak demand that that causes during the evenings, he said.
FERC's role is to ensure that the RTOs and ISOs are prepared for these events and have sufficient generating resources, said Christie. "Personally I think every state should have a balanced portfolio, I think a balanced portfolio of resources is very important," he said.
Democratic senators pushed the nominees on how they would consider climate and environmental impacts in decisions on pipelines and other matters.
"As we look at these issues, part of the task for all nominees in resource agencies is to look at how they can affect climate policy in the most constructive way," said Sen. Ron Wyden, D-Ore. He asked the nominees whether FERC should look at climate science when deciding whether a pipeline or gas plant is in the public's best interest. "I think that climate science has got to be a part of the work of FERC," he said.
"The commission is not a direct climate regulator," said Clements, while adding that the commission should think about climate science when it comes to maintaining the reliability of the grid.
Sen. Martin Heinrich, D-N.M., pushed the issue as well. Although regulators must first and foremost follow the law, he said, "there are cases where there is also discretion. ... Given the enormous impacts we're seeing today from climate change," including on reliability and consumer costs, "when the statutes give you discretion, should FERC consider the demonstrated climate impacts or the potential climate impacts of its decisions?" he asked.
Christie acknowledged the current commission has struggled with this issue — Commissioner Richard Glick has been pushing for FERC to consider the downstream impacts of emissions from natural gas pipelines as part of the commission's deliberations on whether to approve such projects.
"I don't want to prejudge that issue because that is a legal question," Christie said, later adding "FERC is a primarily economic regulator, [but] has environmental duties. I would pledge to you to fulfill the environmental duties that FERC has."
Christie currently serves as a commissioner on the Virginia State Corporation Commission and would fill the spot of Commissioner McNamee, who left FERC earlier this month.
Clements has worked as a consultant across the power sector and was also previously an attorney with the Natural Resources Defense Council's Sustainable FERC project, focused largely on the Federal Power Act. She defended her record at NRDC against the concern that her time with the environmental organization could make her biased against fossil fuels.
"A skeptic could argue that you have identified particular winners and losers within the energy industry," said Sen. Mike Lee, R-Utah.
"I have represented a varied set of interests across my time in the energy sector. And in each instance, I have upheld my own ethical oath to ... advocate for their interests to the best of my ability," Clements said.
Murkowski said the committee will work on the next steps to get the two nominees through the confirmation process. She and Ranking Member Joe Manchin, D-W. Va., have previously expressed frustration that the nominees were not forwarded earlier, and after the appointment of Republican-nominated Commissioner James Danly, Manchin said that he would be unwilling to hold a vote without a Democratic pairing.
"Although pairs are not always the historical norm, I do appreciate the President's willingness to nominate individuals to build both open seats at the commission," Murkowski said during the hearing. "I've often said that my distinct preference is for the FERC to have a full complement of five commissioners."