In grid debate, ‘tension is not always a bad thing,’ says FERC’s Honorable 

Source: Rod Kuckro and Hannah Northey, E&E reporters • Posted: Wednesday, June 24, 2015

Colette Honorable, the newest member of the Federal Energy Regulatory Commission, is taking to heart some recent advice offered by a state utility commissioner — always remember where you come from.

“The point of that is to remember that state regulation is important, the ways in which state regulators carry out their work is important,” Honorable said in a recent interview.

Before being sworn in as a commissioner on Jan. 5, Honorable, a Democrat, was the chairman of the Arkansas Public Service Commission and also president of the National Association of Regulatory Utility Commissioners. What she brings to FERC is her recent experience on “Main Street — what’s happening in the real world and how energy regulation at the retail and distribution level affects ratepayers of all types,” Honorable said.

That experience may play a role in how FERC wrestles with often contentious issues of state/federal jurisdiction and prerogatives, the menu of which is growing over the siting of generation and interstate power lines, demand response, the role of regional transmission organizations and ensuring reliability under U.S. EPA’s proposed Clean Power Plan.

In exercising “cooperative federalism,” conflicts may be inevitable, Honorable said, but they are not necessarily unwelcome.

“Tension is not always a bad thing,” she said reflecting on seven years as a regulator. “Sometimes tension brings about progress, and sometimes tension requires us to come to the table and work together constructively, not in litigation and not in ways that are adversarial or antagonistic, but in ways that are productive and fruitful,” she said.

Honorable honed her skills in the tension game when as a state regulator she also served on the Southwest Power Pool Regional State Committee and on the executive committee of the Organization of MISO States, which convenes regulators from the Midwest grid operator.

“I want to be respectful of the different ways in which regions work,” she said.

In many ways, Honorable continues to embody what some Senate Republicans had hoped for as she moved through the confirmation process on Capitol Hill last year: a Democratic ally and strong advocate for grid operators and energy companies — and yes, states — concerned about their regional issues amid the implementation of new federal environmental rules.

For one, the commissioner isn’t shying away from concerns she and other Arkansas officials raised about the Clean Power Plan before arriving at FERC. But she also doesn’t believe those comments should be interpreted as criticism of the agency’s entire proposal.

“I do stand by the concerns raised in those comments regarding how the Arkansas coal was computed,” Honorable said. “But this is a new day of the intersection of the worlds of environment regulation and energy regulation that we haven’t experienced heretofore.”

Defending state roles

As chairwoman of the Arkansas PSC, Honorable told EPA last year that the proposed rule would assign her state “one of the most stringent goals in the country for reducing the rate of carbon emissions from its generating units” — a heavy burden for a small state that burns coal for half its electricity (Greenwire, Dec. 5, 2014).

The ex-NARUC president also signaled a subtle pushback when asked about the congressional effort led by Sen. Martin Heinrich (D-N.M.) to grant FERC backstop authority to approve high-priority transmission projects that face excessive delay from state or local regulators.

While the commissioner has not taken a position on Heinrich’s bill, S. 1017 — and said she would enforce the language should it become law — Honorable is quick to point out the critical role state regulators play when determining complex, emotional cases involving eminent domain and property rights.

“The states have a role to play; there are certain lines that they site. Why is it that the state commissions have this work to do?” Honorable asked. “For transmission lines that are within their borders, it’s important because they are closest to the people, they know their communities, they know the stakeholders, and it’s more efficient. There is no way in the world that FERC could hear all of those cases.”

For power line proponents who fail in gaining state approval, Honorable has one word of advice: appeal.

“That’s their job, and they owe that to their shareholders and to ratepayers, if they don’t think that a decision was correct, to take it up, and then we let the chips fall where they may,” she said.

Her comments are critical in light of the fact that Arkansas has emerged as a major battleground for the backstop authority fight.

FERC’s place in the carbon debate

Arkansas Republican Sens. John Boozman and Tom Cotton unveiled a bill in February that would require the Energy Department to obtain approval from a state’s governor and public service commission before exercising the federal power of eminent domain for certain transmission projects. DOE would have to obtain approval from a tribal government should a project traverse tribal lands.

The senators’ bill is tied to Clean Line Energy Partners’ efforts to tap into DOE’s eminent domain authority to build a power line — the Plains & Eastern Clean Line — through Arkansas. The company is seeking the federal route after the Arkansas Public Service Commission in 2011 denied its application. The Clean Line is a $2 billion, 720-mile project that would transmit electric power from Oklahoma wind farms across Arkansas to Tennessee. The company says it would make available 500 megawatts of power to Arkansas power companies and 3,500 MW to the Tennessee Valley Authority.

“The ability to own your own piece of heaven and to protect it and to pass it generation to generation is very important,” Honorable said.

“It’s very important where I’m from in Arkansas, particularly where we are a state that has truly embraced the natural beauty of our state,” she added. “So even if it’s not privately owned land, yes, we’ve had residents and consumers that have been very vocal about what happens with it, not only with regard to what’s within their view but also preserving the land for generations to come.”

That same focus can be seen in Honorable’s approach to the Clean Power Plan.

Instead of sounding the alarm that the EPA rule could usurp states’ powers as some of her fellow Republican commissioners have done, Honorable said the commission’s role is one of supporting state environmental directors and regulators as they move toward compliance. “It’s a respect of the role of the states but also a way for us to say while we don’t have the ability to trump the state here, we definitely can support the state here,” she said.

But Honorable is quick to point out that none of the FERC members are “shrinking violets” or hands-off when it comes to the EPA rule. She pointed to a letter all five commissioners — three Democrats and two Republicans — sent to EPA acting air chief Janet McCabe, in which the commission outlined the parameters of a “reliability safety valve” to resolve conflicts between the final rule to curb carbon emissions and FERC-approved reliability standards (Greenwire, May 16).

“It’s not as pointed as maybe some would like, but I think there appears to be, from my perspective, a general consensus that this is something that the EPA should consider,” Honorable said.

“FERC will be needed now more than ever to support the vast work that will have to be undertaken in states, in regions and in multistate groups that aren’t parts of regions,” she said, suggesting one or more technical conferences or FERC-directed assessments or studies.