New chairman’s first day is marked by protests, weighty decisions 

Source: Hannah Northey, E&E reporter • Posted: Friday, April 17, 2015

Norman Bay’s first day on the job as chairman of the Federal Energy Regulatory Commission was repeatedly interrupted by the removal of shouting climate activists opposed to hydraulic fracturing and the agency’s approval of gas pipelines and export terminals.

“Well, I guess one wouldn’t be the chairman of FERC without having to deal with protesters,” Bay said today after Ted Glick, the national campaign coordinator for the Chesapeake Climate Action Network, was removed from the commission’s meeting room in Washington, D.C.

Protesters have increasingly targeted FERC for approving infrastructure tied to the production of natural gas, with CCAN focused on the Cove Point export terminal on the Chesapeake Bay.

“FERC is a rubber stamp for the gas industry these days,” Glick yelled as he was escorted out of the room. “Commissioner Bay, you need to lead in ways that may be new to FERC. We need you to lead in a very different way; you need to truly be about the public interest, and stop construction at Cove Point.”

Security guards ushered out at least four additional protesters calling on FERC to halt Cove Point construction and consider climate change.

Bay continued, thanking FERC Commissioner Cheryl LaFleur for leading the agency for the past 17 months, handing her a framed letter from the New England Patriots — her favorite sports team. LaFleur was the first agency head to face large protests (Greenwire, March 23). Just as Bay was about to hand LaFleur a “FERC” jersey, another interruption surfaced.

“Oh my God, we have a situation here. The situation is not going away,” a protester shouted before being led out of the room. “There is no democracy here; you just ignore what I write on my computer.”

Bay, who formerly led FERC’s enforcement division, attempted to quell the outbursts, saying the commission respects protesters’ First Amendment rights but has rules of decorum to follow, just as Congress, courts and other agencies do. Bay directed protesters to make submissions to the agency online, noting that documents outside the filing process are deemed ex parte contacts and aren’t considered.

“Interrupting these open meetings does not help your cause,” he said.

He went on to announce that Larry Gasteiger, FERC’s acting director of enforcement, would become his chief of staff.

Gasteiger previously served as the office’s deputy director and the director of the Division of Tariffs and Market Development-East in the Office of Energy Market Regulation. He also served as a legal adviser to former FERC Chairman Joseph Kelliher and was an attorney in the general counsel’s office at the Commodity Futures Trading Commission.

Bay also announced that Larry Parkinson will now head FERC’s Office of Enforcement. Parkinson currently serves as the director of the Division of Investigations and in the past worked at the Department of the Interior and as a principal legal adviser to FBI Director Robert Mueller.

After the meeting, Bay told reporters that he’s not sure the agency will handle protesters any differently in the future, while noting that FERC in March adopted a new rule declaring that disruptions at open meetings are not allowed (Greenwire, March 11). Bay said the rule is similar to those at other federal agencies, the courts and Congress.

“I can’t comment on whether we’ll be doing anything more,” Bay said. “I’m willing to talk to my colleagues about it.”

Gas, grid decisions

Bay’s first day on the job was also marked by big decisions for the wholesale gas and electric industries, including one decision that could lead to fewer leaks of the mega-greenhouse gas, methane.

After more than three years of work, Bay and his four fellow FERC commissioners approved a final rule to better align the nation’s power and gas sectors, which are increasingly dependent on one another as generators turn to newfound shale plays to generate electricity.

That coordination has grown in importance with U.S. EPA’s Clean Power Plan and with weather abnormalities like the polar vortex that saw higher prices this past winter in the Northeast (EnergyWire, Jan. 27).

The final rule shifts the timeline for when customers can submit a nomination for interstate natural gas, effectively adopting proposals floated by the North American Energy Standards Board. The rule does not, however, change the start of the gas day — as FERC concluded that there wasn’t a sufficient record for doing so — but does require grid operators to file tariff revisions to coordinate with the final rule or show why they shouldn’t be required to do so. The gas day is the time frame for which the gas must be available.

Bay told reporters after the meeting that not all entities across the country supported changing the gas day, so the commission decided not to do so as part of a national rule. “Ultimately, the record wasn’t there,” he said. “We still believe more progress will be helpful.”

Industry groups like the American Gas Association, the Interstate Natural Gas Association of America and the Natural Gas Supply Association applauded FERC’s decision not to change the gas day, as well as the agency’s initiative to assess how each regional market can best address fuel assurance. “We believe that effort will yield insights and opportunities to address improvements in gas-electric coordination that are more effective than changing the clock on gas day,” Dena Wiggins, NGSA’s president and CEO, said in a statement.

Bay and FERC commissioners also unanimously approved a new policy statement that paves the way for interstate gas pipelines to recover the cost of upgrading their infrastructure with a surcharge mechanism, or “tracker.” Doing so will also bolster reliability, safety and regulatory compliance, FERC said. Pipelines proposing to use the tracker must meet five different conditions, including justifying and reviewing the costs, and working to secure shippers’ support.

“While the protesters are no longer here in this room, this policy statement is an example as a way in which the commission can help incent the modernization of pipelines, which has important safety and environmental benefits,” Bay said.

LaFleur said the policy statement shows that FERC is adapting to emerging issues such as growing reliance on natural gas, changing pipeline safety rules and stronger emphasis on curbing greenhouse gas emissions.

FERC Commissioner Tony Clark agreed while acknowledging that shippers were concerned with allowing pipelines to add costs to their operations. But Clark pointed to EPA’s focus on fugitive methane emissions and federal pipeline rules.

“[The policy statement] allows for recovery of these investments, which I think the public and Congress expects and demands … and allows those investments to move forward and be recovered in a timely fashion,” Clark said, adding that companies must prove that the costs are just and reasonable.