With rumors swirling about when the White House could name new commissioners to the Federal Energy Regulatory Commission and who they could be, what could the future of FERC look like, and how is the agency managing the current absence of a quorum of commissioners? During today's OnPoint, FERC Commissioner Colette Honorable discusses the political dynamics at play and previews an upcoming technical conference focused on wholesale energy and capacity markets.
Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. With me today is Colette Honorable, commissioner at the Federal Energy Regulatory Commission. Commissioner, it's nice to see you again. Thanks for coming back on the show.
Colette Honorable: Thank you for having me back.
Monica Trauzzi: So a very dynamic time. What is the latest you could tell us on where the now two-person commission stands and when a full slate of commissioners could be in place?
Colette Honorable: Great question. I'm hoping you can tell me, Monica. Yes, we are at two commissioners, two women, and it's an unprecedented time, but I can assure the people that work with us in the energy sector that we are working diligently and working hard, even as we await our new colleagues, and we're hopeful that any day, any week, we will hear who the nominees will be.
Monica Trauzzi: Do you have any insight on when that could be?
Colette Honorable: No, I don't. None at all. But we've been reading, as I'm sure you have been, that the nominations could be imminent, but I've heard nothing officially, but I am hopeful.
Monica Trauzzi: Is that frustrating to the day-to-day work that's happening at the commission?
Colette Honorable: I imagine for our colleagues at FERC and for stakeholders that are awaiting important decisions. We have to really think about projects that are attempting to move, about investment decisions that need to be made and how the stalled deadlines are really impacting credit metrics and ratings and the like. It could be frustrating for many. I do appreciate that. It's the administration's prerogative, and they certainly have a lot on their plate. And I know that so many people have expressed how important our work is at FERC and how important it is that we get colleagues to join us so that we can restore the quorum and get on with the business of the agency.
Monica Trauzzi: How has your work and your outlook changed because of the lack, the absence of quorum that currently exists?
Colette Honorable: That's a great question, Monica. It's an interesting time, but it's a very, very busy time. I'm sure you'll want to talk about our upcoming May 1 and 2 tech conference focused on wholesale markets and state policy development, but we are still focused every day not only on markets but transmission issues, reliability, cybersecurity and resilience. For instance, our work in enforcement is continuing. But for me day to day, I do have a little bit more time to take up extra meetings with stakeholders, and I'm delighted to continue meeting with them and to get out among our friends and colleagues in the sector to keep up speaking appearances and the like and having meetings with members on the Hill to abreast them of our work as well.
Monica Trauzzi: President Trump's recent executive order on climate is thought to have potentially wide-ranging impacts on energy and environment regulations. Do you believe that FERC's jurisdiction over market rules could come into question as stakeholders begin to work through that executive order and potentially challenge rulemakings that have an impact on energy development?
Colette Honorable: Well, I certainly will be observing and watching how the administration is moving with regard to any changes that may impact our day-to-day work at FERC. Our work at FERC is really driven by the mandate we receive from Congress to oversee wholesale markets, to ensure reliability of the bulk power system, and so, so much of our day-to-day work evolves from there. Certainly I look forward to discussions with our sister agencies to help them appreciate not only the work that we undertake, the challenges that are ahead and how we can resolve them, and certainly the tech conference will be one way in which we will take up that discussion. But I am certain that, as the months and years progress, we certainly will have continuing conversations about the U.S.'s role in helping to reduce — continuing to reduce greenhouse gas emissions. I'm very proud of our standing worldwide and how industry in the U.S. is continuing to lead in that area, and I'm proud of their work as well.
Monica Trauzzi: But do you believe that the commission's current market rules are in line with the president's goal to promote energy production and economic growth?
Colette Honorable: Well, clearly markets are developed to provide the lowest-cost resources for end users, and we have certainly attempted to promote reliability within that and to make room for the development of state policy. I think as the administration's policies are evolving, the answer to that question remains to be seen. I'm proud of our work with regard to oversight of markets, but I too recognize that there are certainly improvements that can be made.
Monica Trauzzi: There's decidedly less of a focus on reducing greenhouse gas emissions as an overall goal coming from this administration. Will that continue to be a goal at the commission?
Colette Honorable: Well, I've been very proud of our work for making room for all sources and resources. Clearly in the past few years, that has certainly included clean energy integration, making room for energy storage. I'm especially proud of our work in that area, and also ensures that reliability is maintained. We need it all, absolutely. There is a proper role for gas and nuclear as part of that, and so it's not our job to come and pick winners and losers and to say nuclear is bad and wind and solar are good, but to make room for all of it, and that's our role at FERC, and I'm very hopeful and confident that that work will continue.
Monica Trauzzi: So this brings us to the technical conference that you mentioned that's happening at the beginning of May. The focus is on wholesale energy and capacity markets. It's a thorny issue that digs into the tension that exists over state and federal jurisdiction, and you'll be hearing from states and stakeholders at the conference. What are you hoping the meeting will accomplish?
Colette Honorable: I'm hoping that we will hear from a number of experts in the New York ISO, ISO New England and PJM markets who can tell us the state of play with regard to how markets are operating, and more importantly, getting to the heart of the tensions that do exist, and we acknowledge that with regard to the operation of wholesale markets and the interface with the development of state policy. I often say when I speak to groups that this is a new day, and we aren't turning back from a time when states weren't so involved. We must make room for appropriate development of state policy and to make room for it in a way that supports the ongoing operation of markets as we provide not only fuel diversity, lowest-cost resources and reliability for the people that we serve.
Monica Trauzzi: So are state programs the issue, or is it the lack of flexibility that exists in the regional markets?
Colette Honorable: I believe that this technical conference will shed light on how markets have traditionally operated heretofore and what are the policies that are cropping up in different places throughout the country, quite honestly, but clearly more visible in states that have capacity — or in the regions that have capacity markets operating. What are the efforts underway in those states in the Northeastern part of the U.S., whether it's an RPS or whether it's the work happening with regard to the RGGI states or the REV proceeding in New York or how states may be moving to integrate hydropower or protect nuclear. There are a number of tensions that I think will be highlighted in the tech conference, and I'm hopeful that in addition to hearing about the challenges, more importantly, we will begin to have conversations about potential solutions.
Monica Trauzzi: And you think solutions exist.
Colette Honorable: They must exist because while we know that the markets are working well to provide lowest-cost resources, the economics are really driving other sorts of problems. How we can keep important baseload generation is part of the mix. Nuclear and gas are among them. How we can make room for integration of renewables storage, and particularly in the Northeast, hydro, for instance. I am confident that solutions exist. And they may be different in different regions, but I am so excited to tee up the conversation, and I'm really proud of our FERC staff which will be leading it, and I'm hopeful about the fruits that this effort will bear.
Monica Trauzzi: Want to get a question in on infrastructure because that is a huge focus of the Trump administration and obviously something that FERC has a big hand in. What do you think the next steps are going to be on infrastructure coming out of the commission?
Colette Honorable: Thank you for the question about it. As you know, at FERC, infrastructure, I guess the hearing of applications for certificates is really a major part of our work, although it's stalled at the moment while we don't have a quorum. And so the first next step needs to be hearing the names of our three future colleagues who will join us. As you might imagine, we have quite a backlog developing, and I want to acknowledge our acting chair, Cheryl LaFleur, who is leading an effort to work on how we can expedite our colleagues' transition to FERC in a way that will help alleviate this backlog so that the stakeholders that have been eagerly awaiting hearing from us can do so. I'm really proud of our work on competitive transmission development and looking at ways to improve our processes to allow for more timely development of projects, improvements to competitive bidding processes and ways to improve transmission cost allocation and planning, particularly inter-regionally in places where we can get better cost efficiency and the alleviation of seams issues at the inter-regional seams of RTOs or ISOs. We're also, as you know, continuing our work, though at times controversial, on hearing applications for interstate gas pipelines. That is a mandate that we received from Congress and, yes, that work will continue as well. So we have a lot on our plate with regard to infrastructure, and I must also mention, Monica, our very important work focused on energy infrastructure security, focused not only on resilience, protecting the grid from physical attacks, severe weather events, but also cybersecurity, which is something that I think keeps a lot of us up at night. We really can't pay too much attention there.
Monica Trauzzi: All right. A lot going on at the commission these days, and we're waiting to hear those three names for sure. We're going to end it right there. Thank you for coming on the show.
Colette Honorable: Thank you.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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