FERC deals setbacks to gas projects, grid orders

Source: By Arianna Skibell, E&E News reporter • Posted: Wednesday, January 20, 2021

The Federal Energy Regulatory Commission delivered blows yesterday to a number of natural gas projects that had been Trump administration priorities, including the controversial Jordan Cove liquefied natural gas export facility off the Oregon coast.

During a monthly meeting, FERC commissioners unanimously rejected a bid to overturn Oregon officials’ denial of a key permit to developers of the $10 billion LNG export terminal, marking a significant victory for the project’s opponents. Outgoing Energy Secretary Dan Brouillette tried to streamline authorization for the Coos Bay, Ore., project last summer (E&E News PM, July 6, 2020).

And in an unexpected setback to Republican FERC Chairman James Danly’s final agenda as chairman, Republican Commissioner Neil Chatterjee joined his Democratic colleagues in rejecting an array of natural gas items related to the Mountain Valley and Sabal Trail Transmission pipelines, LNG company New Fortress Energy Inc., and Enbridge Inc.’s Weymouth compressor station in Massachusetts.

Many of the denials applied to draft orders, meaning the commission could take further action on the proposals under the Biden administration.

FERC also quashed a bid to begin voluntary compliance with President Trump’s overhaul of the bedrock National Environmental Policy Act. Newly seated Republican Commissioner Mark Christie joined Chatterjee, along with Democratic Commissioners Richard Glick and Allison Clements, in rejecting the proposal, citing its timing. The commission likewise declined to act on a highly anticipated electric transmission incentives proposal.

Chatterjee pushed back against two other agenda items related to FERC’s oversight of power markets, including one that would have extended a contested capacity market rule to New York state. Opponents of that rule change say it would harm renewable resources, and the item was pulled from yesterday’s agenda due to a lack of consensus.

Chatterjee also took issue with a follow-up item tied to FERC’s 2019 decision to add a so-called minimum offer price rule, or MOPR, to PJM Interconnection’s capacity market for future electricity needs. PJM is the nation’s largest regional grid operator, with a footprint spanning 13 Midwestern and mid-Atlantic states and the District of Columbia. Broadly, the MOPR blocks sources of generation that receive government subsidies — like many wind and solar farms — from competing in key electricity markets.

Chatterjee said he would reject an item yesterday relating to the MOPR because it failed to address “confusion and conflict” created by a footnote in a recent FERC order on the rule. The footnote has spurred questions about which electricity resources would be covered by the MOPR as PJM moves to comply with it.

“Instead, the order doubles down” on the confusion, Chatterjee said during the meeting. “I cannot support such a path.”

Chatterjee told E&E News that his flurry of “no” votes was not due to a “macro-level” rejection of Danly’s agenda.

“There were specific elements to each of the individual cases that caused me to vote no,” he said in an interview. “In many instances, I feel that edits could get me to a place where I could support those orders.”

Glick and Clements attributed their opposition to environmental justice and landowner rights concerns with gas projects, particularly in light of research showing that COVID-19 is having a disproportionate impact on marginalized communities.

“I have seen little in the way of orders that do more than give lip service to environmental justice,” Glick said, referring to the way FERC calculates impacts.

There is no checklist the commission is required to follow when weighing impacts to low-income and Black communities, which often disproportionately bear the brunt of environmental pollution (Energywire, July 31, 2020).

FERC’s current process “amounts to saying there are no concerns about environmental justice or discrimination because rich white people don’t live there,” Glick said.

During his opening remarks, Chatterjee also voiced concern that environmental justice and landowner rights were not being duly considered.

While it is rare for a FERC chairman to place items on the agency’s agenda without first securing affirmative votes, Danly defended his decision, citing his commitment to legal procedure.

“I brought these up for a vote knowing full well there would be a great likelihood that they would be voted down,” he said. “NEPA requires us to look into the information and comments that are submitted, and the [Administrative Procedure Act] requires all comments to be responded to, and so it is in fact the fidelity to legal regimes that required me to offer these for a vote.”

Danly also said he took “umbrage” with the claim that FERC does not take environmental justice seriously. Still, the commission has never rejected a project on environmental justice grounds even after finding significant impacts to marginalized communities.

Environmentalists and clean energy advocates praised the commission’s actions, or inaction, while also registering their surprise at the way yesterday’s meeting played out.

“Didn’t expect to be so excited by news from @FERC today but truly thrilled that #JordanCove is now all but dead,” tweeted David Turnbull, strategic communications director for Oil Change International, a group that documents the cost of fossil fuels.

The Sustainable FERC Project also praised the commission for pulling the New York market proposal from the agenda, calling it “an important surprise (but still unofficial) win for New York’s clean energy agenda.”

Road ahead under Biden

During the meeting, Clements and Christie welcomed their new staff and offered insights into their priorities. The two were confirmed by the Senate late last year, restoring the agency to its full complement of five voting members. The panel has not had five sitting commissioners since 2018.

Clements noted that she was eager to help establish the agency’s Office of Public Participation, which Congress directed FERC to design, fund and operate in the recently passed COVID-19 relief package.

“There is no better week to emphasize a need for the establishment of this office,” Clements said.

The office is intended to ease public participation at FERC, whose technical work can be difficult to follow and often plays out behind closed doors. Clements said she hopes the office will be an access point for not only landowners in the path of energy projects, but also others living in frontline communities within FERC’s jurisdiction.

Christie said he hopes the commission will examine how it can harmonize states’ public policy priorities with market rules administered by regional grid operators. Under the Trump administration, states have threatened to exit regional markets, claiming that federal rules effectively block them from following through with their low-carbon energy goals (Energywire, June 8, 2020).

“Each state is unique, and each state has different needs,” Christie said. “I have always agreed with [former Supreme Court] Justice [Louis] Brandeis that states are the laboratories of democracy and should be respected as such.”

Chatterjee noted his willingness to work with the Biden administration.

“Biden is a person of enormous compassion,” he said. “It will be steadying to have his experience and leadership in the White House.”

Chatterjee said he anticipates working with the commission’s new chair on revisiting the panel’s approach to evaluating greenhouse gas emissions. The issue is likely to be a top priority for the incoming administration, given Biden’s pledge to zero out electricity-sector carbon emissions by 2035.

While some observers have wondered whether Danly will resign after Biden appoints a successor — likely Glick or Clements — as chairman, Danly said he looks forward to the coming years at FERC, signaling his intent to stay.