Taking Charge: Commissioner Clements on FERC’s ‘make or break’ role amid the energy transition

Source: By Catherine Morehouse, Utility Dive • Posted: Wednesday, March 17, 2021

Allison Clements, the 10th female commissioner to serve as a Federal Energy Regulatory Commissioner, began her first public meeting this December with a promise: that the “grave threat of climate change” would absolutely underlie her role, which oversees the certification of pipelines, and setting rules for a wide swath of the U.S. power sector.

Allison Clements [Photograph]. Retrieved from FERC.

Her nomination and successive confirmation comes at a critical time for FERC. The agency has generated more public interest as pressure mounts for the power sector to quickly decarbonize in order to avoid the worst impacts of climate change. FERC’s role is deemed essential to that transition, and Clements will be a key player in enabling a broader array of voices to share their input, in her newly-established position of leading the Office of Public Participation.

In a comprehensive interview with Utility Dive, Clements laid out her vision for that office, as well as her thoughts on FERC’s role in ensuring climate resilience following the mass outages in Texas, the need for transmission reform, some of FERC’s more controversial rulings under the Trump administration, and more.

This interview has been edited for clarity and brevity.

UTILITY DIVE: FERC recently announced that it would close its resilience docket, and then opened a new proceeding to examine the threat that climate change poses to electric reliability. What role can FERC play in ensuring a reliable grid in the face of unprecedented weather conditions?

COMMISSIONER ALLISON CLEMENTS: Sure. I don’t have full details yet, and I anticipate it being a pretty broad agenda. The issue of how climate change and changing weather patterns impacts the grid is a broad set of issues and — I’ve said this before — it’s not just a planning issue, and it’s not just a reliability issue, and it’s not just an operations issue. It’s all of the above. And starting to consider that broad set of issues and even understanding how to begin to categorize things that the commission might take on [is important] to help to prevent, to the extent possible, these types of events in the future.

UD: Why do you think it’s important for FERC, in particular, to tackle this?

CLEMENTS: None of these issues, as we saw in Texas, stop at the edge of a [regional transmission organization (RTO)] boundary, or the edge of a balancing authority boundary. And I think we also saw examples, although we don’t have specific details and analysis yet, of cases where power sharing was really helpful. [The PJM Interconnection] was exporting more power than usual to [the Midcontinent Independent System Operator (MISO)], and MISO was able to ask to export, in some parts of the emergency, more power than usual to [Southwest Power Pool (SPP)].

I even heard an anecdotal story and, again, we’ll see if this actually played out, but an LNG facility in Texas was able to scale back its own operation so that more gas could be available to flow over to the generators.

UD: Transmission is a big priority for you and other commissioners, including the chair. But I also understand tackling those policies is a big challenge, and something the commission tried to take on before, with Order 1000. What do you think are some of the biggest challenges facing FERC in reforming transmission?

CLEMENTS: One of the biggest challenges the commission faces today, 10 years after Order 1000, is to figure out a way to allow efforts to develop offshore wind transmission and other significant transmission projects to move forward, while at the same time considering broader transmission planning and cost allocation reform.

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We don’t want to get in the way of transmission development that has already been identified as needed to benefit customers, to protect reliability and to facilitate public policy. But we also want to make sure that transmission planning is actually facilitating all those things.

UD: Can you expand more on what you hope transmission reform might ultimately accomplish?

CLEMENTS: I hope reform accomplishes the facilitation of a transmission planning and cost allocation process that allows the hard transmission to get built.

Doing that will require engagement by FERC with the states. It will require engagement and input from other stakeholders who are interested in developing and transmission, and those who have concerns about the development of new transmission in any given case.

I hope that we’ll start to work on that outside of a formal proceeding, so that we have the ability to hear the frank perspectives of states and other stakeholders.

UD: You’ve made it clear that you did not support the commission’s orders last year expanding the minimum offer price rule (MOPR) in eastern RTOs. Could you explain your opposition to the MOPR orders?

CLEMENTS: My opposition was based on a few factors. One is that by the failure to contemplate the value provided to the grid by renewable energy resources and other resources, customers are left paying more than they need to, in order to ensure the reliable delivery of electricity. And that’s not just and reasonable.

“This policy statement guides regulation of an industry that has changed dramatically over the last 20 years. John Elway was the MVP of the NFL the year that this policy statement was written.”

And, as a precursor to that, I have a concern that these market designs are not compliant with the Federal Power Act’s approach to cooperative federalism — and that is to respect state policy choices. I think that markets should really be aligned with state policy goals, not in conflict with them.

UD: What options does FERC have in replacing the MOPR?

CLEMENTS: This is not a punt to your question, but I don’t know what durable, forward-looking market design is the right one.

I am looking forward to reports back from the stakeholder processes that PJM is holding, and from the conversations happening in New York and New England, in other ways. And I’m very much looking forward to the commission’s series of technical conferences on market design in the eastern interconnection to inform what those outcomes should be.

I hope that the stakeholders will come to a consensus around durable market design. But if that’s not the case, then I will have to come up with an actual answer to that question.

UD: You’ve supported the commission’s decision to revisit the natural gas permitting policy of 1999. Where do you think current policy falls short and how should it improve?

CLEMENTS: This policy statement guides regulation of an industry that has changed dramatically over the last 20 years. John Elway was the MVP of the NFL the year that this policy statement was written.

The Commission has acknowledged in other instances — including in the efforts to modernize [the Public Utilities Utility Regulatory Policy Act (PURPA)] that took place last year — that evolution merits reconsideration of policies that may be implicated.

“Establishment of the Office of Public Participation is long overdue, and the role that Congress might have envisioned the office playing in 1978 has certainly evolved as the grid has evolved.”

In this case, we have a 1999 policy that precedes the commercialization of hydraulic fracturing technology. I’ve said this before: That alone is enough to merit reconsideration of the way that we consider the policy by which we engage in pipelines certification proceedings.

UD: PURPA reform generated a fair share of opposition last year, including from the now-chairman, but I haven’t heard much talk of the commission revisiting those changes. Does it seem like there’s an appetite to move on PURPA at all?

CLEMENTS: PURPA’s a really important policy and it has been the bedrock not only of renewables development, but of competition in the electricity sector.

It is something that I have looked closely at, that I know staff within the commission are thinking about, and I look forward to the opportunity, if it arises, to work with my colleagues on considering where PURPA policy stands.

UD: I know that you and your team are really excited about this new Office of Public Participation — what should people know about the office?

CLEMENTS: The most important thing right now is to get the word out that the commission is seeking input about the scope and the functions of the office of participation.

We have announced the workshop that will be held on April 16. We have alluded to the idea that we’re trying to set up listening tour opportunities for people in the public to weigh in verbally without submitting written comments, and there’s more to come on that. And we’ve said that we will be putting forward a written comment period to complement the workshop as well as the other opportunities for verbal comment.

UD: Why do you think this office of public participation is important at this point in FERC’s history? What need is it filling?

CLEMENTS: Well, you know that there was a 1978 statute that directed the commission to set up the office. So establishment of the Office of Public Participation is long overdue, and the role that Congress might have envisioned the office playing in 1978 has certainly evolved as the grid has evolved.

“I’ve been trying to convince people of FERC’s importance to energy policy for a long time, often because FERC’s decisions make or break the ability for policies to be implemented.”

The commission’s jurisdiction, and decisions the commission makes as part of that jurisdiction, potentially have significant implications on the public. And ‘the public’ is a broad term. I think about members of the public who haven’t traditionally had access to the Commission’s decision making process.

I think about environmental justice communities that are disadvantaged vis-a-vis energy infrastructure development. I think about urban communities and rural communities, potentially. I think about tribes. I think about consumer interests, consumer advocates and folks who have real interest in the way that decisions get made and outcomes at the commission.

UD: How did you first find out you were being considered as a nominee to the commission? Did you have any reservations about taking on the role?

CLEMENTS: When I was asked if I was interested in being a FERC commissioner, I wasn’t sure if the person asking me was being serious. I said ‘Yes of course,’ immediately — and then had almost two years to contemplate the impact of that decision.

Being a FERC Commissioner is a huge honor. It is an exciting time in our country, and it’s an honor to serve in the government. I take it very seriously and I certainly am glad that I stuck with it throughout that process.

UD: In an interview with Commissioner Neil Chatterjee last fall, he told me “the days of FERC being an obscure agency are over.” What’s it like being a commissioner at a time when FERC is more visible, and serving under a president who has indicated he intends to be very active on clean energy policy?

CLEMENTS: I’ve been trying to convince people of FERC’s importance to energy policy for a long time, often because FERC’s decisions make or break the ability for policies to be implemented. If you pass a policy that mandates a certain type of resource deployment, the grid has to be able to facilitate those policy choices.

Now, the knowledge of FERC’s [central role] in the energy policy discussion is coming to the forefront, and it is exciting to be a commissioner as that is taking place.

UD: Finally, what are you most excited about in your new role?

CLEMENTS: I’m excited about a lot of things. I think first and foremost is the Office of Public Participation, its establishment. There’s that feeling of excitement in our virtual room about that work.

More generally, [I’m] excited about engaging with states, and really understanding their perspectives on how FERC regulates. And I’m excited to work with my colleagues to problem solve on these questions of transmission development and infrastructure more broadly.

It’s clear that we need to carve a path forward there, and that will require the buy-in of a lot of stakeholders.