FERC in Focus will dive into the challenges facing the Federal Energy Regulatory Commission and how those challenges affect the power sector, the clean energy transition and the electric grid.
The Federal Energy Regulatory Commission works best when it has its full complement of five commissioners — that’s the conventional wisdom, at least. The agency has been down a member since the start of this year, and Commissioner James Danly’s seat may also be empty by the time January rolls around. To launch Utility Dive’s FERC in Focus column, we’re taking a look at how the vacant seat has affected FERC, who might fill it and when.
The commission has generally been operating well under acting Chairman Willie Phillips, FERC observers say. Phillips, a Democrat, was elevated to his position in January after Sen. Joe Manchin, D-W.Va., declined to act on former Chairman Richard Glick’s nomination for a second term.
“The vacancy hasn't been an issue, and the commission’s been functioning pretty well,” said Neil Chatterjee, a former FERC chairman who is now a senior advisor with Hogan Lovells. Phillips has developed a clear working relationship with Commissioner Mark Christie, a Republican, and works well in some areas with commissioners Allison Clements, a Democrat, and Danly, a Republican, he said.
On at least one contentious issue — gas pipelines — FERC appears to be making progress under Phillips.
In the first eight months of 2023, FERC approved 31 gas pipeline projects that can deliver 8,844 million cubic feet a day, up from 23 projects that can deliver 3,214 MMcf/d in the same period last year, according to the agency’s monthly infrastructure reports.
Despite that progress, having five commissioners is always better, in part because four can lead to tied votes, according to Glick, now a principal with GQ New Energy Strategies, a consulting firm.
The agency is deadlocked on elements of FERC’s pending transmission planning and cost allocation proposal, according to Devin Hartman, director of energy and environmental policy at the R Street Institute.
Also, having only four commissioners has likely slowed some gas decisions, in part because FERC seems to be struggling to reach consensus on how to assess greenhouse gas emissions from gas projects, according to Emily Mallen, a partner at Akin Gump Strauss Hauer & Feld.
FERC analyst in line for empty seat
After sitting empty for nine months, progress on filling Glick’s seat could be close. Manchin, chairman of the Senate Energy and Natural Resources Committee, is backing David Rosner, a FERC energy industry analyst on loan to the committee, for the seat, according to several sources. The White House didn’t respond to a request for comment.
Rosner “did great work for me,” Chatterjee said, noting that the analyst led a FERC technical conference on offshore wind in 2021.
Rosner, who didn’t respond to a request for comment, joined FERC’s Office of Energy Policy and Innovation in 2017, according to his LinkedIn page. He has been on detail to the Senate committee since May 2022 handling issues related to FERC, electricity and electric transmission.
Before starting at FERC, Rosner worked in the U.S. Department of Energy’s Office of Climate and Environmental Analysis and at the Bipartisan Policy Center.
“Rosner has really great experience and would come in knowing a lot,” Mallen said.
However, Congress is running out of time to review and confirm any FERC nominees this year. The nomination process requires significant paperwork and a background check. Although Congress barely avoided a government shutdown Sept. 30, the Senate must still work with the House to fund the government for the current fiscal year, which will likely consume their attention for the next month or more.
“We are not anticipating a nomination to move through particularly soon,” Hartman said. “We're probably looking at months, and potentially into next year.”
In another wrinkle, Danly’s term ended June 30, and he will have to vacate his seat if he isn’t renominated and approved by the Senate by the end of the Congressional session, which traditionally has been Jan. 3. Danly declined to comment on whether he was seeking a second FERC term.
Further, Republicans may see no benefit in changing the status quo by voting on a nominee for Danly’s seat, Chatterjee said.
“I don't think Republicans are in a hurry to put someone up — whether Danly or someone else — for the Republican seat because they're content with a two-two commission with Phillips in charge and don't want to be seen as facilitating giving Democrats a majority on the commission,” he said.
But if a Democrat is nominated to Glick’s seat, Republicans will likely call for a pairing with a Republican nominee to fill Danly’s seat so the nominees can be approved together, Chatterjee said.
Potential Republican candidates include Jason Stanek, chair of the Maryland Public Service Commission until June 30 and a former senior FERC staffer, and David Hill, a former general counsel at DOE and NRG Energy, a source said.
Would 3 commissioners be so bad?
With an election year approaching, making bipartisan cooperation even more elusive, FERC could easily start 2024 with only three commissioners.
Republicans in the Senate will ask themselves, “Why should we add a Democrat to the commission when we may control the Senate next year?” according to William Scherman, a Vinson & Elkins partner and former FERC general counsel.
“The conventional wisdom is that there's going to be three people on the commission going into 2024,” he said. “But I think the predictions about gridlock and doom and gloom are way overstated.”
Phillips, Christie and Clements are “people of goodwill and who try to get along,” Scherman said. “I don't expect there to be major roadblocks.”
Chatterjee said he often found it easier to make progress with three commissioners.
“Some of the biggest things I did at FERC, I did [with votes that were] two-one,” he said, pointing to updating rules for the Public Utility Regulatory Policies Act, requiring grid operators to open their doors to distributed energy resources and issuing a carbon pricing policy statement. “Two-one is just fine.”
Glick agreed. “Is it such a bad thing to go with three [commissioners] for early next year?” he asked. “I don't think it's a problem at all.”
That said, without a third commissioner, FERC would lose its quorum, preventing votes on significant issues, Glick warned. And Clements’ term ends June 30, although she could stay in her seat until the end of next year’s legislative session.
Glick said he doubts FERC will have four commissioners next year. “It seems that it will be easier either for the Senate to confirm two nominees, in which case FERC will have five commissioners, or for Commissioner Danly to leave at the end of the year without the Senate acting on any nominees, which would leave FERC with three commissioners,” he said.
