Industry looks to FERC to do Trump’s heavy lifting

Source: By John Siciliano and Josh Siegel, Washington Examiner • Posted: Friday, March 8, 2019

The Federal Energy Regulatory Commission, the nation’s lead grid regulator, is quickly becoming to go-to agency for addressing a whole range of major energy policy hurdles for the nation, while hanging President Trump’s energy dominance agenda in the balance.

Let’s start with something simple, like cybersecurity: FERC is at the center of a major debate in the backrooms of Washington over how to guard the nation’s natural gas pipelines from being attacked by a range of state actors and terrorist groups looking to do the nation harm.

The debate is centered on whether FERC should enforce mandatory cybersecurity standards on natural gas pipelines, similar to what the power utilities already abide by under the congressionally-created North American Electric Reliability Corp.’s rules.

NERC enforces the rules with hefty $1 million-per-violation fines, which — as one could guess — the natural gas industry would like to avoid.

The pipeline industry says it wants to stick to a process being run by the Transportation Security Administration on a voluntary cyber program. But big energy users, like Dow and Dupont, would rather see enforceable NERC-style standards.

Paul Cicio, the president and CEO of the Industrial Energy Consumers of America, is the lead lobbyist in pushing for enforceable standards on the Hill and at FERC.

Cicio tells John that he has only received general feedback on a letter he sent on Feb. 12 to lawmakers on passing legislation.

Cicio expects lawmakers would probably wait on legislation addressing enforceable standards until a “big pow-wow” between FERC, the Department of Energy, and TSA is over, to decide relevant actions.

FERC says that it is holding a conference on March 28 to discuss current cyber and physical security practices and to explore potential incentives for investments in security for the electric and natural gas sectors.

Coal industry and the administration still have some major asks: The coal industry wants FERC to speed up the process of evaluating whether coal and nuclear plants should be given market-based incentives for what they argue is nothing short of keeping the grid afloat when hurricanes threaten and temperatures plummet.

Although FERC rejected Energy Secretary Rick Perry’s proposal to add incentives for coal, it is currently in the middle of an intense, protracted debate on whether or not to incentivize the grid attribute of “resilience.”

Michelle Bloodworth, president and CEO of the pro-coal group American Coalition for Clean Coal Electricity, wants FERC to provide a timeline and roadmap for its process, which would in turn provide some direction to regional grid operators wrestling with how to weigh the attributes of coal and nuclear assets in the market, which are set to retire and close.

Overall, Bloodworth’s group thinks FERC is moving too slow.

Not enough members: A big hurdle for FERC, right now, has to do with the lack of members on the commission. They are currently one commissioner shy of a full complement, which makes things tight when voting on regulations and measures to address items like cyber security and grid resilience.

That means the White House and Congress has the responsibility of adding a new member, but it’s hard to say when that will be.

The administration has placed enormous pressure on the agency as a critical chokepoint for moving ahead with its energy dominance agenda. The administration lauded the agency last month for issuing the first of a dozen backlogged natural gas export terminal permits, especially given the lack of members. Gas exports are key to Trump’s energy push.