Projects hang in the balance as Bay heads for exit

By Hannah Northey | 02/02/2017 01:10 PM EST

The energy world is laser-focused on the Federal Energy Regulatory Commission as former Chairman Norman Bay prepares to leave the agency tomorrow, erasing a quorum and commissioners’ ability to approve natural gas pipelines or settle proposed mergers.

Hanging in the balance are at least four major East Coast natural gas pipelines — the Atlantic Sunrise expansion, Northern Access, Rover and Nexus pipelines — as well as the $12.2 billion merger of Great Plains Energy Inc. and Westar Energy Inc.

While a number of industry groups and some Republican lawmakers eager to see infrastructure expand have tried to ratchet up the pressure on President Trump to quickly fill three Republican vacancies on the commission, some say it could be months before a nominee is chosen, vetted and Senate-confirmed.


Trump "needs cooperation from the Senate at a time when nominations to his Cabinet have become highly politicized," said Rob Rains, an energy analyst at Washington Analysis LLC. "From our perspective, a reasonable time frame to think about FERC re-establishing a quorum is two to three months."

Trump has tapped Democrat Cheryl LaFleur to serve as acting chairwoman. Another Democrat, Colette Honorable, is the other FERC commissioner.

Part of the puzzle is determining whether FERC is on Trump’s radar. Dena Wiggins, president and CEO of the Natural Gas Supply Association, said at an energy conference earlier this week that filling a seat on the commission wouldn’t normally be in the top two-thirds of the positions the administration needs to fill, adding that there are thousands of slots that need filling.

Wiggins said the industry has been working to raise awareness. "There are some very important things … that can’t be done without a quorum," she said.

FERC’s predicament is rare but not unprecedented. When President George H.W. Bush’s administration was winding down and commissioners were leaving the agency, there was a short period when there was a single commissioner — Betsy Moler, the chairwoman — said James Hoecker, a former FERC chairman and counsel to WIRES.

"I think they did a great job of hanging on to ensure that the agency was capable of acting," Hoecker said. But during that short period, "she was required to convene meetings and then adjourn them because there was no quorum."

The FERC secretary and other staff are authorized to take certain actions and approve certain things, Hoecker said. "That has been the case for a long time. One could argue — and I don’t think the issue has ever been squarely presented or litigated — that if the commission itself is unable to act, it lacks the legal authority to delegate" in that way, Hoecker added.

The vacancies have prompted some Republicans on Capitol Hill to call on Trump to quickly fill the gaps. Others are demanding that FERC rescind recent decisions to ensure the agency can process public protests and complaints.

Democratic Sens. Ed Markey and Elizabeth Warren of Massachusetts called on the commission in a letter yesterday to rescind its approval of Spectra Energy’s Atlantic Bridge natural gas pipeline until a third member is established. FERC last week approved the $450 million project, which is slated to boost gas shipments from New England into Canada. The project consists of new pipelines and some upgrades, as well as the construction of a new compressor station.

"Based on recent history, these FERC vacancies could persist for an extended period of time," the senators wrote. "The American people deserve to be assured that FERC will not be hamstrung from hearing appeals of this pipeline approval for an extended period of time."

Hoecker pointed to additional lack-of-quorum concerns about rate filings and what authority FERC staff will have.

"There are rate filings that go into effect if the commission can’t vote to extend them, and then the burden shifts to FERC to show that the rates are not just and reasonable," Hoecker said. "The more interesting question is, how does the absence of a quorum affect the ability of the commission staff to use authority delegated to the staff by the commission? That is not clear."

LaFleur earlier this week in a podcast indicated that was an area ripe for action (E&E News PM, Jan. 30).

In the absence of a quorum, she said, hydropower inspections, safety reviews of natural gas export facilities, audits and other staff activities will continue. LaFleur said she is also considering whether to give aides more power pending the selection of new commissioners.

Reporters Peter Behr and Jenny Mandel contributed.