Week Ending July 19, 2019

FERC Meeting Includes Orders with Controversy, Warm Sendoff for LaFleur

This Article Appears as Published in Foster Report No 3258
FERC Meeting Includes Orders with Controversy, Warm Sendoff for LaFleur

Commissioner Cheryl LaFleur was feted to a send-off at her last open meeting July 18 that included gifts, comments from former staffers, and many expressions of gratitude for her calm and dedicated demeanor spanning more than nine years and two stints as chairman.

Former Commissioner Marc Spitzer was among those who spoke at the meeting, which LaFleur indicated previously would be her last before leaving FERC in August.

LaFleur did not say where she is headed after leaving FERC, though she said at the meeting that it would probably involve part-time work on the board of companies or non-profit organizations. She thanked many for their guidance and assistance during her tenure, calling her time at FERC “the most meaningful experience of my life.”

LaFleur said she tried not to let politics or her chances for another White House nomination affect how she performed her duties. She said the relationships she forged with a wide circle of colleagues in the regulatory arena and the energy sector are what she will miss and treasure most after exiting FERC next month.

LaFleur’s departure will leave FERC with three members, Chairman Neil Chatterjee, Commissioners Richard Glick and Bernard McNamee. Chatterjee and McNamee are Republicans and Glick is a Democrat, with two vacancies and no White House nominations in sight.

At the media briefing after the meeting, Chatterjee said he is not concerned that the three commissioners will have any trouble issuing orders on natural gas infrastructure projects. The four commissioners will work through August and there is no impetus to move any items out before LaFleur leaves in case McNamee has to recuse himself from past work with clients when he was an attorney, Chatterjee said.

FERC’s goal when evaluating applications is to issue orders that are legally durable, and it is a mischaracterization to view any orders with votes on partisan lines as presenting a legal vulnerability, Chatterjee said. He is confident the commissioners will work diligently on reviewing applications and “we’ll vote out orders when they are ready.”

The well-wishes followed business as usual at the meeting, which included action on a few items that had disagreements among the commissioners. One involved complaints against the Midcontinent Independent System Operator (EL15-70 et al.) for power resource auctions that took place in 2015, which Public Citizen and others argued were not the result of a fair process to reach just and reasonable rates.

Chatterjee chose to end the investigation after a lengthy period in which FERC found no market manipulation and concluded that the auction for MISO Zone 4 produced rates that are just and reasonable. LaFleur and Glick both commented that they were not consulted about ending the investigation, while Chatterjee and McNamee noted that the matter was closed after an extensive review of evidence. LaFleur voted to deny the complaint and agreed that there was no market manipulation, while Glick dissented, unaware that the FERC chairman can end an investigation without consulting commissioners.

“Reasonable minds can differ” on contentious issues, Glick said, adding that serious allegations of market manipulation deserve more than a conclusory assurance that there is nothing to see here. People have to have confidence in FERC’s ability to oversee competitive markets and the order in the MISO case will not instill that confidence, he said.

Multiple parties produced compelling facts that the owner of many power plants in the MISO region – Dynegy – manipulated the auction process and used its influence in MISO’s internal operations to preserve the auction results that included an 800% price increase, said Tyson Slocum, energy program director at Public Citizen. “Dismissing our complaint is a blow to just and reasonable rates, and raises questions about the Commission’s commitment to enforcement,” Slocum said when reached after the meeting.

Another order approved at the meeting was approval of an expansion on Gulf South Pipeline Co. LP to send natural gas to a gas-fired power plant owned by Entergy in Texas. The project (CP18-525) is designed to provide up to 200,000 Dth/d of firm transportation service on Gulf South’s Willis Lateral to Entergy Texas Inc.

As has been the case in other gas pipeline project approvals, LaFleur concurred and Glick dissented based on their views about how the Commission assesses the greenhouse gas emissions associated with the project, as well as the downstream greenhouse gas (GHG) emissions. Both commissioners said they believe the courts will direct FERC to conduct more substantial analysis of the emissions due to climate change concerns, while McNamee said FERC is exercising the authority it has been given by Congress, which does not include a directive to consider climate change.

LaFleur has had a long tenure at FERC, exceeded by William Massey and Philip Moeller. Those who spoke of her included her commissioner colleagues, former staffers who worked with her, Spitzer and Travis Kavulla, director of energy issues at the R Street Institute and a former state regulator from Montana. Their kind words included grace, wisdom, passionate, diligent, the epitome of a regulator and the embodiment of engaging in cooperative federalism when working with state officials.

Chatterjee praised her for her institutional knowledge and dedication to the Commission, noting that when she leaves in August, she will have spent 3,336 days at FERC. He expressed great appreciation for her management of the backlog of items when FERC was without a quorum in 2017 and helping him in his transition to becoming chairman in 2017 and at the untimely passing of former Chairman Kevin McIntyre.

By Tom Tiernan ttiernan@fosterreport.com

 

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