[Senate Hearing 111-527]
[From the U.S. Government Publishing Office]
S. Hrg. 111-527
MOELLER AND LAFLEUR NOMINATIONS
=======================================================================
HEARING
before the
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED ELEVENTH CONGRESS
SECOND SESSION
TO
CONSIDER THE NOMINATIONS OF PHILIP D. MOELLER AND CHERYL A. LAFLEUR, TO
BE MEMBERS OF THE FEDERAL ENERGY REGULATORY COMMISSION
__________
APRIL 27, 2010
Printed for the use of the
Committee on Energy and Natural Resources
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57-124 PDF WASHINGTON : 2010
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COMMITTEE ON ENERGY AND NATURAL RESOURCES
JEFF BINGAMAN, New Mexico, Chairman
BYRON L. DORGAN, North Dakota LISA MURKOWSKI, Alaska
RON WYDEN, Oregon RICHARD BURR, North Carolina
TIM JOHNSON, South Dakota JOHN BARRASSO, Wyoming
MARY L. LANDRIEU, Louisiana SAM BROWNBACK, Kansas
MARIA CANTWELL, Washington JAMES E. RISCH, Idaho
ROBERT MENENDEZ, New Jersey JOHN McCAIN, Arizona
BLANCHE L. LINCOLN, Arkansas ROBERT F. BENNETT, Utah
BERNARD SANDERS, Vermont JIM BUNNING, Kentucky
EVAN BAYH, Indiana JEFF SESSIONS, Alabama
DEBBIE STABENOW, Michigan BOB CORKER, Tennessee
MARK UDALL, Colorado
JEANNE SHAHEEN, New Hampshire
Robert M. Simon, Staff Director
Sam E. Fowler, Chief Counsel
McKie Campbell, Republican Staff Director
Karen K. Billups, Republican Chief Counsel
C O N T E N T S
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STATEMENTS
Page
Bingaman, Hon. Jeff, U.S. Senator From New Mexico................ 1
Brown, Hon. Scott, U.S. Senator From Massachusetts............... 4
LaFleur, Cheryl A., Nominee to be a Member of the Federal Energy
Regulatory Commission.......................................... 10
Moeller, Philip D., Nominee to be a Member of the Federal Energy
Regulatory Commission.......................................... 6
Murkowski, Hon. Lisa, U.S. Senator From Alaska................... 1
Murray, Hon. Patty, U.S. Senator From Washington................. 2
Shaheen, Hon. Jeanne, U.S. Senator From New Hampshire............ 3
APPENDIX
Responses to additional questions................................ 19
MOELLER AND LAFLEUR NOMINATIONS
----------
TUESDAY, APRIL 27, 2010
U.S. Senate,
Committee on Energy and Natural Resources,
Washington, DC.
The committee met, pursuant to notice, at 10:03 a.m. in
room SD-366, Dirksen Senate Office Building, Hon. Jeff
Bingaman, chairman, presiding.
OPENING STATEMENT OF HON. JEFF BINGAMAN, U.S. SENATOR FROM NEW
MEXICO
The Chairman. OK. Why don't we get started?
The committee meets this morning to consider 2 nominations
to the Federal Energy Regulatory Commission. Phil Moeller was
previously nominated and confirmed to a seat on the commission
in 2006. That term expires June 30 of this year. The President
has nominated Mr. Moeller for a second term, which will expire
June 30, 2015.
Cheryl LaFleur has been nominated to the seat previously
held by Suedeen Kelly, whose term expired last year. If
confirmed, her term would expire in 2014.
Mr. Moeller is well known to the committee for the years
that he spent working for our former colleague Senator Slade
Gorton and from his service on the commission over the past 4
years.
Ms. LaFleur has spent more than 20 years in the electric
utility industry as an attorney and senior official at the New
England Electric System and its successor, National Grid USA,
from which she retired in 2007 as executive vice president and
acting chief executive officer.
Both nominees are extremely well qualified. I am pleased to
welcome them to the committee today. Before calling on some of
our colleagues to make introductions, let me defer to Senator
Murkowski for her statement.
STATEMENT OF HON. LISA MURKOWSKI, U.S. SENATOR
FROM ALASKA
Senator Murkowski. Thank you, Mr. Chairman.
Very briefly, I, too, would like to welcome both nominees
for the Federal Energy Regulatory Commission. I would like to
welcome Commissioner Moeller back to the committee. He has been
a real leader on hydropower, and I certainly appreciate that.
I also appreciate your annual visits up to the State. They
are greatly appreciated. I don't think a lot of people realize
this, but Commissioner Moeller was actually a machinist up in
the State of Alaska, working for a salmon plant at one point
during his younger days in college.
I would also like to welcome Ms. LaFleur to the committee.
Ms. LaFleur is a native New Englander with over 20 years of
electric industry experience so I am interested in the
perspective and the geographic diversity that she will bring to
the commission.
I thank both of you for your willingness to serve, and I am
hopeful, Mr. Chairman, that we can report out your nomination
shortly so that the FERC can once again enjoy a full complement
of commissioners.
Thank you.
The Chairman. Thank you very much.
We have a couple of our colleagues here, wishing to make
statements and endorse candidates.
Senator Murray, why don't you go right ahead?
STATEMENT OF HON. PATTY MURRAY, U.S. SENATOR
FROM WASHINGTON
Senator Murray. Thank you very much, Mr. Chairman, Senator
Murkowski.
It is my pleasure to be here today to introduce Phil
Moeller, who has been nominated to serve a second term on the
Federal Energy Regulatory Commission.
Commissioner Moeller has spent his career in public service
building a reputation as an energy expert who will work across
party lines to solve problems. I am pleased to report that Phil
has built on those skills during his tenure as a FERC
commissioner.
I first got to know Phil during his time working for my
colleague Senator Slade Gorton, where he really stood out as an
example of what an effective congressional staffer should be.
He wanted to hear all sides of an issue. He would work with
anyone, and he operated in a bipartisan manner while protecting
the interests of his boss and Washington State.
While Phil has traveled a long ways from his days growing
up on a ranch outside of Spokane, Washington, he maintains a
unique perspective on issues important to our Northwest. I can
tell you, I am personally excited that Phil brings to the
commission a working knowing of hydropower systems and the
intricacies of the Pacific Northwest.
Mr. Chairman, Phil has dedicated his life to public
service. The knowledge, the perspective, and the expertise he
has gained throughout his career have been a great benefit to
the commission throughout his first term, which is why I am so
proud to support his nomination to the Federal Energy
Regulatory Commission for a second term.
So I want to say I am very proud to be here today to
request the committee again pass him on as FERC commissioner,
and I especially want to thank his beautiful family, who is
sitting behind me. His kids are so well behaved. I am just way
impressed. His wife and, I believe, his sister.
So thank you very much, Mr. Chairman. Phil, thank you for
your willingness to be a public servant. We appreciate it.
The Chairman. Thank you very much for that strong
endorsement.
We have 2 of our colleagues, Senator Shaheen, who is, of
course, a member of our committee, and Senator Brown. I believe
each of them wanted to make a statement on behalf of the
nominee Cheryl LaFleur. So whatever order you would like. Go
right ahead, Senator Shaheen.
STATEMENT OF HON. JEANNE SHAHEEN, U.S. SENATOR FROM NEW
HAMPSHIRE
Senator Shaheen. Thank you very much, Mr. Chairman.
I am delighted to be here to introduce Cheryl LaFleur. I
want to welcome her family--Bill Kuncik and their children,
Daniel and Allison. It is great that you can be here for your
mom today and your wife.
I know that Cheryl is technically from Massachusetts, but I
had the good fortune of working with her when I was in the
State senate and then Governor when she was president of
Granite State Electric and then at New England Electric
Systems. I am really excited about her nomination for 2
reasons.
First of all, I think it is very important to have someone
on the FERC who understands the challenges facing our energy
regulatory environment today. But I think it is particularly
important for those of us in the Northeast to have someone who
understands that the challenges we face in the Northeast are
not exactly the same as those in the Midwest and the far West.
So, I am particularly pleased to have someone who so clearly
understands what some of those special challenges are.
Second, and probably most important, is that I know how
exceptionally qualified Cheryl is to be a commissioner on the
Federal Energy Regulatory Commission. You know, she retired in
2007 as executive vice president and acting CEO of National
Grid. In her role there, she was responsible for the delivery
of electricity to 3.4 million customers in the Northeast.
As I said, I got to appreciate Cheryl's work when she was
the president of Granite State Electric in New Hampshire. When
she was at New England Electric Systems in the 1990s, she led
energy efficiency programs in New Hampshire and across the
region that became an award-winning national model because of
their focus on residential efficiency. I think this is one of
the real benefits that she is going to bring to the FERC.
She understands how regulators' decisions affect real
customers, and she has been committed to providing reliable
energy to people in the Northeast and to Americans for a very
long time. I think that special appreciation for the impact on
consumers is something that she brings that is going to be very
important going forward.
So I am really delighted to be here to introduce Cheryl, to
commend her to the committee. Certainly, I will be voting for
her as a member of the committee. There is no doubt about that,
and I am sorry that because I have to go preside, I am not
going to be able to be here to give her some softballs that can
point out just how very qualified and what an excellent job she
is going to do on the committee.
So thank you very much, Mr. Chairman.
The Chairman. Thank you for your strong endorsement.
Senator Brown, we welcome you to the committee. Go right
ahead.
STATEMENT OF HON. SCOTT BROWN, U.S. SENATOR
FROM MASSACHUSETTS
Senator Brown. Thank you, Mr. Chairman, and I am honored to
be here with Senator Shaheen. I know she has duties to attend
to. So I wanted to let her go first, certainly, and she
deserves that opportunity.
As you know, I am new here, relatively, compared to
everybody else. This is the first opportunity I have had to
speak on behalf of somebody that I felt and feel is most
qualified to be in this position.
Obviously, from Massachusetts, and Cheryl has been working
very hard for our State and for, obviously, the region as per
Senator Shaheen's statements. As you know, it is an
independent--FERC is an independent commission charged with
regulating our Nation's energy markets and preventing
manipulation, maintaining a strong competitive marketplace, and
improving and supporting the infrastructure. That is something
that we have great concerns with in Massachusetts and in the
New England area.
Obviously, dealing with electricity, oil, and gas, natural
gas's role as providing reliable energy services to our
constituents in Massachusetts and the Northeast, and her 20
years of experience in the electric and gas industry, executive
VP and CEO of National Grid, she oversaw, as you know, 3.4
million customers and the service and challenges associated
with dealing with Boston and the surrounding areas and the
politics involved there.
I think that she will be a real leader and a great asset to
FERC, and it takes a lot for me to come and testify for folks.
I take my testimony and my endorsement very, very seriously.
Through my independent research and review of her
qualifications, I can think of no one better to be in this
position, to represent the interests of Massachusetts, but more
importantly, the Northeast, and obviously, the rest of the
country. To have that balance and that knowledge that she can
bring in her personal experiences, I think, is very, very
important.
So she has my overwhelming endorsement. I wanted to thank
you for allowing me to come and speak on her behalf, and I am
hopeful that you will also move her out favorably and give us
an opportunity to vote on it.
Thank you.
The Chairman. Thank you for your strong endorsement as
well. We appreciate it very much, and thank you for coming to
our hearing.
Senator Brown. Thank you, Mr. Chairman.
The Chairman. The rules of the committee that apply to all
nominees require that they be sworn in connection with their
testimony.
I would ask the 2 of you to each stand and raise your right
hand. Do you solemnly swear that the testimony you are about to
give to the Senate Committee on Energy and Natural Resources
shall be the truth, the whole truth, and nothing but the truth?
Mr. Moeller. I do.
Ms. LaFleur. I do.
The Chairman. Please be seated.
Before you begin your statement, I will ask 3 questions
addressed to each nominee before the committee. First question,
will you be available to appear before this committee and other
congressional committees to represent departmental positions
and respond to issues of concern to the Congress?
Mr. Moeller.
Mr. Moeller. I will.
The Chairman. Ms. LaFleur.
Ms. LaFleur. I will.
The Chairman. Second question, are you aware of any
personal holdings, investments, or interests that could
constitute a conflict of interest or create the appearance of
such a conflict should you be confirmed and assume the office
to which you have been nominated by the President?
Mr. Moeller.
Mr. Moeller. My investments, personal holdings, and other
interests have been reviewed both by myself and the appropriate
ethics counselors within the Federal Government. I have taken
appropriate action to avoid any conflicts of interest. There
are no conflicts of interest or appearances thereof to my
knowledge.
The Chairman. Ms. LaFleur.
Ms. LaFleur. My investments, personal holdings, and other
interests have been reviewed both by myself and by the
appropriate ethics counselors within the Federal Government. I
have taken appropriate action to avoid any conflicts of
interest, and there are no conflicts of interest or appearances
thereof to my knowledge.
The Chairman. The final question, are you involved or do
you have any assets that are held in a blind trust?
Mr. Moeller.
Mr. Moeller. No.
The Chairman. Ms. LaFleur.
Ms. LaFleur. No.
The Chairman. All right. At this point, our tradition is to
allow and invite nominees to introduce any family members that
they brought with them today. Mr. Moeller, why don't you go
right ahead?
Mr. Moeller. Thank you, Mr. Chairman.
It is my pleasure to introduce my wife, Elizabeth, and our
children, Philip and Caroline, who just turned 3 a couple of
weeks ago. Also is my sister Ann Marie and my team, Jennifer
Quinlan, Jennifer Shipley, Robert Ivanauskas, Michelle Brown.
Jason Stanek on our team, his appendix decided to go out last
week. So we are missing him today.
The Chairman. We welcome all of you to the hearing, and
thank you for coming.
Ms. LaFleur, if you have family members or visitors you
want to introduce?
Ms. LaFleur. Thank you, Senator.
I do have my family behind me. I would like to introduce my
husband, Bill Kuncik, and our children, Dan LaFleur Kuncik and
Allison LaFleur Kuncik, who have--the kids both came in
overnight to be here, and I really appreciate it.
The Chairman. All right. We welcome them to the hearing as
well.
At this point, let me call on the 2 nominees to make any
opening statement they would like.
Mr. Moeller, why don't you start?
STATEMENT OF PHILIP D. MOELLER, NOMINEE TO BE A MEMBER OF THE
FEDERAL ENERGY REGULATORY COMMISSION
Mr. Moeller. Thank you, Mr. Chairman, Senator Murkowski. It
is a pleasure to be here.
It is an honor to have served on the FERC, and I appreciate
the heart-felt comments that Senator Murray made in my
introduction. She introduced me nearly 4 years ago, and I am
honored to continue to receive her support.
I also thank President Obama for nominating me, and I also
appreciate the support of Senator McConnell for nominating me
to another term.
I also extend special thanks to my wife, who supports my
career in public service.
In the nearly 4 years that I have spent on FERC, I have
voted on over 4,500 orders. As with my first day of my service,
I remain motivated to make decisions that benefit and protect
consumers through the safe and efficient provision of the
energy products and services we regulate.
I have extensive written comments, but I thought I would
summarize kind of eight areas that we have focused on and that
I think, if I am confirmed, I would still continue to work on,
and certainly, it will be in the commission's areas--areas
where the commission will be spending a lot of time.
As noted, I come from the Pacific Northwest, and as such, I
have tried to be an advocate for hydropower. All energy sources
have tradeoffs, but hydropower is kind of the quiet workhorse
that provides about 10 percent of the Nation's electricity
needs, and it is renewable energy. We regulate over 2,600 dams
in this country. So it is a big part of what FERC does.
The new hydrokinetic technologies, whether it be wave
power, tidal power, ocean current, or in-stream current, all
have enormous potential. But in order for them to develop and
for the environment to be protected, the commission is going to
have foster and nurture and watch these technologies, and we
have tried to do our part to encourage them along the way.
On electric reliability, during my term, we passed the
first set of mandatory and enforceable reliability standards
that came out of 2005 EPACT. This has been largely a successful
framework that we have put together, and yet a lot of work
still needs to be done.
We need to make sure that these standards are enforceable,
that they are effective and they are cost effective. I think we
also need to look at the fact that taking a longer-term look at
reliability, perhaps with a cybersecurity component, is
something that at this point would serve consumers well.
In terms of energy infrastructure in this country, it seems
clear to me that we are going to be using more natural gas to
generate electricity in this country, even though the most
efficient use of it is direct usage. As such, it is our job, I
believe, at the commission to develop the kind of policies that
allow the adequate natural gas infrastructure to be deployed.
We have deployed or at least we have approved significant
natural gas pipelines in the last few years, significant new
natural gas storage. We have approved some LNG terminals, and
we have given significant support to 2 entities that are
looking at building a pipe from Alaska to deliver domestic
natural gas.
Wholesale electric markets is something that we probably
spend most of our time on at the commission, and they have
evolved in different ways and at different paces throughout the
country. Often, the policies related to electricity are really
more based on regional differences than anything else.
Yet there has been enormous progress in the wholesale
markets, both in their expansion and the new services that they
have delivered in just the last couple of years. Yet we need to
work at the commission to make sure that we protect consumers,
that they feel that the RTOs are responsive, and that we have
adequate metrics that measure the success of these markets. In
the next year, we will also be dealing a lot with demand
response and the compensation for that product.
Enforcement is an area that we have also spent a lot of
time on in the last few years. You gave us major league
enforcement powers in EPACT 2005, and we appreciate it. Yet we
need to be cautious when we wield the Government sword of
enforcement. I have worked to make sure that our process is
transparent and that we are firm and fair. We have more work to
do here, but we have made a lot of progress.
A big part of the next year at the commission will be
working on the integration of variable generation. The good
news is that wind and solar power has been a significant part
of our electric mix in the last few years, but there are
challenges that are being delivered through that because the
system wasn't designed for variable generation.
These are not insurmountable problems, but they are
difficult, and they will take an increasing amount of time in
the next year and perhaps more than that. At the commission, we
have a major notice of inquiry, where we have asked people to
comment on, and the comments are voluminous.
The smart grid is something that you have tasked us with
dealing with through the 2007 legislation. Specifically, you
asked us to adopt interoperability standards for the smart
grid. We expect that NIST will be delivering us a package of
those in the near future. Yet it is going to be something we
have to make sure that consumers do not feel that they have
been overpromised the benefits of the smart grid because
although I believe that they are transformative and they will
be widespread and benefit consumers, it will take longer than
probably most people realize to fully utilize the smart grid
and implement it throughout the country.
Finally, you, as committee members, are well aware that we
have a CFTC-FERC jurisdictional battle going on in terms of
regulating certain components of the energy market. Regardless
of what you direct us to do, where that bright line or not-so-
bright line goes jurisdictionally, I have worked to try and
make sure the 2 agencies are working together better, both at
the commissioner level and the staff level. So that, in
essence, our main motivation is to protect consumers.
With that, again, it is an honor to be here, and I look
forward to answering any of your questions.
[The prepared statement of Mr. Moeller follows:]
Prepared Statement of Philip D. Moeller, Nominee to be a Member of the
Federal Energy Regulatory Commission
Chairman Bingaman, Ranking Republican Murkowski, and
members of the committee, thank you for considering my
nomination today for another term on the Federal Energy
Regulatory Commission (FERC). I send heartfelt thanks to
Senator Murray from my home state of Washington for her kind
words. She introduced me nearly four years ago and I am honored
to continue to receive her support. I thank President Obama for
nominating me, and I greatly appreciate both Senator McConnell
and Senator Murkowski for supporting my nomination to another
term. And I extend special thanks to my wife Elizabeth for
supporting my career in public service.
In the nearly four years that I have served on the FERC I
have voted on over 4500 orders. As with my first day on the
commission, I remain motivated to make decisions that benefit
and protect consumers through the safe and efficient provision
of the energy products and services we regulate.
Working with my colleagues, current Chairman Wellinghoff,
Commissioners Spitzer and Norris, former commissioner Kelly,
former Chairman Kelliher along with the talented staff at FERC,
I have been deeply involved in efforts to better protect
consumers through economic and safety regulation, improve
energy markets, encourage needed energy infrastructure, and
ensure bulk-power system reliability. Much has been done, but
more needs to be done. If confirmed for another term, I look
forward to the opportunity to continue to serve. In my efforts
to keep improving the areas in which we regulate, I have
focused on several issues and I expect all of these areas to
receive necessary and extensive attention in the next several
years.
hydropower
I hail from the Pacific Northwest, the region that most
relies on hydropower to deliver needed energy to consumers.
With that background, I have worked to assure that my
colleagues have a thorough appreciation of hydropower and the
benefits that this resource delivers. All energy sources--
including hydropower--exhibit inherent tradeoffs, but
traditional hydropower is a mature renewable resource that
provides enormous benefits through the over 1600 projects--
which includes approximately 2600 dams--that the Commission
regulates. The new hydrokinetic technologies that make use of
wave, tidal, ocean current, and in-stream current resources
hold the promise of a new generation of benefits. The
Commission has worked to enable these technologies to be
deployed, but the hydrokinetic industry is still a nascent one
that needs attention to develop in an orderly manner while
assuring that citizens and the environment are protected.
reliability
During my term FERC approved the first set of mandatory and
enforceable standards intended to enhance the reliability of
the nation's bulk-power system. Subsequently we have approved
and proposed additional standards. This authority and
responsibility emanates from the 2005 Energy Policy Act that
this committee developed. Overseeing the implementation of this
system of mandatory and enforceable reliability standards by
the designated Electric Reliability Organization (NERC) has
been a major undertaking. As with any new and comprehensive
regulatory regime, there have been plenty of challenges
highlighted by the complex nature of these standards. Our
efforts have been largely successful in setting the framework
for this new and transformative approach toward ensuring
consumers have the reliable power they need delivered through
the bulk power system. However, the Commission still has a lot
to do in the realm of reliability policy--especially in regards
to assuring that we focus on short term and long term
reliability challenges and implementing cost effective
standards that truly improve the reliability of the bulk power
system. Cyber security is a major area of our attention, and we
are likely to spend additional efforts to clarify the standards
in this area, perhaps with more direction from Congress to FERC
this session.
infrastructure
Over the last several years, the nation has dramatically
increased its use of natural gas to generate electricity.
Because I see this trend continuing in the foreseeable future,
a big part of FERC's responsibilities is to ensure that we
promote policies that allow safe and sufficient natural gas
infrastructure to meet this demand. Consumers have benefitted
especially from the new sources of shale gas that have been
developed in just the last few years. Domestic production of
natural gas increased dramatically in 2007 (by some estimates
an 8 percent increase) and again in 2008. The Commission has
approved significant new capacity in new pipelines, new gas
storage and liquefied natural gas terminals while also
providing extensive guidance to entities interested in
developing a natural gas pipeline from Alaska. In fact, two
proposals to develop an Alaska pipeline are currently in the
pre-filing process at the Commission.
Expansion of the nation's electric transmission
infrastructure has not been as robust as in the natural gas
arena. Some of this is attributable to issues of uncertainty
over transmission planning, transmission siting authority and
transmission cost allocation. We need to assure that consumers
who pay for transmission investments receive benefits from such
investments. Our Order 890 (discussed below) is an effort to
provide guidance so that additional cost-effective transmission
investments can be made. I have made it a priority to promote
policies that allow for additional qualified entrants in the
transmission field (independent developers, merchant
developers, and joint projects) along with more creative
approaches such as the ``anchor shipper'' model often used in
the natural gas industry.
wholesale electric markets
Wholesale electricity markets are evolving in different
ways and at different paces in various regions throughout the
nation. In the last two years alone, most of the organized
wholesale markets have expanded in either their membership and/
or the scope of products provided. Several examples include:
the California market (through the California Independent
System Operator) saw the implementation of the long-planned
Market Redesign and Technology Update (MRTU) launched in March
of last year; the Midwest market (through the Midwest
Independent System Operator) saw significant new membership
additions and the launch of its ancillary services market; and
the Southwest market (through the Southwest Power Pool)
expanded with new members from Nebraska, new product launches
and SPP has recently proposed a major transmission expansion
plan.
During my term FERC implemented Order 890, a comprehensive
review and reform of the nation's wholesale transmission
markets. One of the major components of Order 890 included
regional transmission planning requirements based on specific
principles. As with the other issues, significant progress has
been made but that progress needs to continue to assure that
adequate infrastructure is developed to serve the nation's
consumers.
Although in the last year we have witnessed dramatic drops
in the price of power--in many areas approximately a fifty
percent decrease in price--the Commission still needs to be
vigilant in assuring that the benefits of competitive markets
flow through to consumers and that these regional market
structures are responsive to customer concerns. We are
currently undertaking efforts to improve the responsiveness of
regional transmission organizations and developing the metrics
necessary to evaluate wholesale markets. Another issue we will
address in the next year is the best way to compensate demand-
side resources in the organized wholesale markets.
enforcement
Early in my term the Commission first exercised its penalty
authority that was authorized by the Energy Policy Act of 2005.
To date we have approved 41 settlements, of which 40 involved
civil penalties. FERC's enforcement process continues to
mature, as our most recent annual enforcement report
highlighted the agency's enforcement priorities and relevant
case studies. Recently proposed penalty guidelines are an
additional effort to provide context and clarity to the
entities we regulate. However, FERC needs to continue these
recent improvements in our enforcement process to assure that
we are firm but fair in providing a transparent process that
emphasizes compliance while maintaining the threat of
substantial penalties for non-compliance and violations of our
rules.
integration of variable generation
Over the last several years the Commission has undertaken
efforts to facilitate the integration of variable generation--
namely wind power and solar power---onto the electric
transmission grid. We have done this by requiring
jurisdictional transmission providers to better utilize
existing transmission capacity to meet customer needs through
``conditional firm'' access to the grid; expending considerable
time and effort in reforming ``queue'' policies to hasten
clearing the backlog of interconnection requests; and approving
transmission cost allocation proposals designed by regions to
address particular needs. And as the development of these
resources has been quite significant and successful, it has led
to new challenges precisely because of the amount of these
resources now on the grid.
The Commission will be spending a great deal of time and
effort in the near term focusing on these challenges that are
present in nearly every region of the nation (with the general
exception of the Southeast.) Even in my home region of the
Pacific Northwest, the Bonneville Power Administration is
struggling with integrating these resources into a system that
was not designed or developed with variable generation in mind.
In response to this situation, in January we issued a Notice of
Inquiry (NOI) on this issue, requesting comments on how the
FERC should address a wide range of policy questions. Within
the last month, the first round of comments has been submitted
in response to our NOI. I am convinced that these challenges
are not insurmountable but are extensive and growing in their
complexity.
smart grid
Congress tasked the Commission with implementing ``smart
grid'' interoperability standards through the Energy
Independence and Security Act of 2007. Last year FERC adopted a
policy statement with core principles intended to provide
guidance for jurisdictional entities pursuing smart grid
investments and for those developing the standards through the
process coordinated by the National Institute of Standards and
Technology (NIST). We expect NIST to deliver a set of
interoperability standards to FERC in the near future and to
commence a rulemaking on the adoption of standards. When
considering such a rulemaking, cyber security of the grid will
be my paramount concern.
Although the concept of the ``smart grid'' can be defined
many different ways, its potential to allow two-way
communication with consumers has revolutionary and
transformative potential in ways that can bring greater
efficiencies to our nation's electric system. However, the
transformation will not be immediate and will occur at varying
paces throughout the nation. And although many of the policies
related to the actual implementation of the smart gird will
occur at the state and local levels, we at FERC also need to be
aware not to overpromise the benefits of the smart grid to
consumers lest there be a backlash that slows the pace of its
implementation.
cftc/ferc jurisdictional issues
As this committee is well aware, there is an ongoing debate
pertaining to the jurisdictional lines of regulation between
the FERC and the Commodity Futures Trading Commission (CFTC)
over certain energy-related trading products. As the committee
works with the Senate Agriculture Committee to clarify our
respective roles, it is my firm belief that consumers will
benefit if the two agencies can forge a closer and more
productive working relationship. I have worked to bring the
staffs and the commissioners of the two agencies together for
briefings and meetings to better appreciate the different sets
of expertise that each agency can bring to this effort to
better protect consumers.
Thank you again for the opportunity to appear before the
committee today and I look forward to answering your questions.
The Chairman. Thank you very much.
Ms. LaFleur, why don't you go ahead with your statement?
STATEMENT OF CHERYL A. LAFLEUR NOMINEE TO BE A MEMBER OF THE
FEDERAL ENERGY REGULATORY COMMISSION
Ms. LaFleur. Thank you, Chairman Bingaman, Senator
Murkowski, members of the committee.
I am deeply honored to be here today as a nominee for the
Federal Energy Regulatory Commission. I would like to thank
President Obama for nominating me, and thank the committee for
your consideration and for scheduling this hearing so quickly.
I would like to thank Senator Shaheen for her very generous
introduction and everything she has done for the citizens of
New Hampshire and New England, both as Governor and Senator.
Also Senator Brown for being here today, for his very kind
endorsement, and for his service, both as my State senator and
now this year as the U.S. Senator for our entire State.
Finally, thank you to my family for being here for me today
and every day.
I know that FERC is faced with substantial
responsibilities, and Congress is considering adding even more
as it takes up energy bills, including the one this committee
reported out last year. Issues before FERC in the coming years
will be critical to strengthening electric and gas
infrastructure for greater reliability, security, and economic
growth; facilitating environmental improvement through greater
reliance on new sources of energy; and promoting fair and
efficient markets to reduce costs to consumers. I would welcome
the opportunity to apply myself diligently to these efforts.
I believe my background is well suited to many of the
challenges FERC will be facing should I be confirmed. I was
fortunate to have a wonderful education through the sacrifices
of my parents and the availability of public and private
financial aid. I was trained as a lawyer and practiced law for
several years, but have spent the last 20-plus years of my
career in the electric and gas industry.
I have leadership experience both in a vertically
integrated electric company with a diverse fossil, hydro, and
nuclear portfolio, and in a restructured electric and gas
company that provided transmission and distribution services
and bought power in a competitive wholesale market.
Much of my career has been spent at the distribution
customer level, and I understand that everything FERC does
affects real customers. I was closely involved in the
restructuring of the electric markets in the New England States
and in helping customers to understand and benefit from the new
marketplace. I also led a major effort to improve reliability
and safety through infrastructure investment.
Earlier in my career, as Senator Shaheen alluded to, I
spent 4 years directly leading energy efficiency and demand
response programs for business and residential customers in
Massachusetts, New Hampshire, and Rhode Island. I know that
demand-side efforts can save money for homes and businesses;
help markets meet energy needs, especially peaks; and
contribute to environmental improvement.
I come from a part of the country that has been an early
leader in the development of robust competitive markets, in
sustainable demand-side programs, and in efforts to boost
renewable energy, and I am proud to have been a part of those
efforts. At the same time, the Northeast has struggled with a
lack of indigenous energy resources and historically high
energy prices.
If confirmed as a FERC commissioner, I would work to
understand and be sensitive to the unique situations and needs
of different geographic regions and markets across the country
and to approach all issues with an open mind. I would look
forward to working closely with State utility commissions,
whose work complements FERC's in many areas. I would also be
honored to work with the members and staff of this committee.
Thank you again for the opportunity to testify, and I would
be happy to answer your questions.
[The prepared statement of Ms. LaFleur follows:]
Prepared Statement of Cheryl A. Lafleur, Nominee to be a Member of the
Federal Energy Regulatory Commission
1Thank you, Chairman Bingaman, Ranking Member Murkowski, and
members of the Committee. I am deeply honored to be here today as a
nominee for the Federal Energy Regulatory Commission. I would like to
thank President Obama for nominating me, and thank the Committee for
their consideration and for scheduling this hearing so quickly. I would
like to thank Senator Shaheen for her very generous introduction, and
for all that she has done for the citizens of New Hampshire and New
England as both Governor and Senator. Finally, thank you to my home
state Senators, Senator Kerry and Senator Brown, for all that they do
for the people of Massachusetts.
I know that FERC is faced with substantial responsibilities, and
Congress is considering adding even more as it takes up energy bills
including the one this Committee reported out last year. Issues before
FERC in the coming years will be critical to strengthening electric and
gas infrastructure for greater reliability, security, and economic
growth; facilitating environmental improvement through greater reliance
on new sources of energy; and promoting fair and efficient markets to
reduce costs to consumers. I would welcome the opportunity to apply
myself diligently to these efforts.
I believe my background is well-suited to meet many of the
challenges FERC will be facing should I be confirmed. I was fortunate
to have a wonderful education through the sacrifices of my parents and
the availability of public and private financial aid. I was trained as
a lawyer and practiced law for several years, but have spent the last
twenty plus years of my career in the electric and gas industry. I have
leadership experience both in a vertically integrated electric company
with a diverse fossil, hydro and nuclear portfolio, and in a
restructured electric and gas company that provided transmission and
distribution services and bought power in a competitive wholesale
market.
Much of my career has been spent at the distribution customer
level, and I understand that everything FERC and other regulators do
affects real customers. I was closely involved in the restructuring of
the electric markets by statute and regulation in the New England
states, and in helping customers to understand and benefit from the
competitive marketplace. I also led a major effort to improve
distribution reliability and safety through infrastructure investment.
Earlier in my career, I spent four years leading energy efficiency
and demand response programs for business and residential customers in
Massachusetts, New Hampshire and Rhode Island. I know that demand-side
efforts can save money for homes and businesses, help markets meet
energy needs, and contribute to environmental improvement.
I come from a part of the country that has been an early leader in
the development of robust competitive markets, in sustainable demand-
side programs, and in efforts to boost renewable energy, and I am proud
to have been a part of those efforts. At the same time, the Northeast
has struggled with a lack of indigenous energy resources and
historically high energy prices. If confirmed as a FERC Commissioner, I
would work to understand and be sensitive to the unique situations and
needs of different geographic regions and markets across the country
and to approach all issues with an open mind. I would look forward to
working closely with state utility commissions, whose work complements
FERC's in many areas. I would also be honored to work with the members
and staff of this Committee.
Thank you again for the opportunity to testify this morning, and I
would be happy to answer any questions you have.
The Chairman. Thank you both for your statements.
As I indicated before, I think the President has chosen
wisely in nominating both of you and re-nominating Phil Moeller
for this position and in nominating Ms. LaFleur for the
commission as well.
So I will have no questions. Let me defer to Senator
Murkowski.
Senator Murkowski. Thank you, Mr. Chairman.
I just have a couple of questions here this morning.
Commissioner Moeller, I appreciate your comment about the role
of natural gas, and hydro.
But you mentioned natural gas, and of course, we are
seeking to advance a project--actually, there are a couple that
you are reviewing now, currently, to get Alaska's gas from the
North Slope and to the consumer here in the lower 48. I want to
thank you for your very open-door policy, the conversations
that you have had, as members of the State administration and
the legislature come and visit.
I know they have a steady stream of them that come in
February and March, and I hear very, very positive reports
about the level of meetings that they have had with those of
you at the FERC. I just want to thank you for that and just
urge you, as a commissioner, and Ms. LaFleur, as I am assuming
you will be an incoming commissioner, to just commit to working
with the State of Alaska as we try to advance these very
important projects for the country when it comes to our natural
gas resources.
Mr. Moeller. Senator, thank you for those comments.
Of course, you have my commitment toward that, and I have
spent considerable time with Alaskans and in the State. I think
that it is not only critical, but it is something that I feel a
little bit of a connection to because they have kind of adopted
me as an honorary Alaskan, given that I have lived in the
State. So you have my commitment.
Senator Murkowski. I appreciate that.
Ms. LaFleur, I am sure you will be spending plenty of time
coming up to speed on it, but I appreciate your interest in it
as well.
Ms. LaFleur. Thank you.
I certainly pledge my support, first of all, to learn
quickly as much as I can about the project. I know it is
something FERC has been working very hard to permit the
pipelines, and I think they are critically important to bring a
huge domestic resource to market.
Senator Murkowski. Thank you.
Let me ask a question to both of you about transmission
cost allocation. The issue of who pays for the new
transmission, I think we all agree, is a very difficult one.
This committee has spent some significant time on it.
Chairman Wellinghoff has recently told reporters that he
believes that FERC already has the authority to broadly
allocate the cost to pay for transmission lines, but he did
acknowledge that this power could be derived only implicitly
from FERC's existing Federal Power Act authority and stated his
preference for congressional legislation that would make the
authority more explicit.
Now, in this committee, we have declined to socialize the
transmission costs. Instead, we have adopted an amendment to
ensure that the costs are more appropriately allocated to the
beneficiaries of the new transmission. But it does appear that
FERC is reviewing stakeholder comments on the issue. They have
directed FERC staff to begin drafting a proposed transmission
cost allocation rule.
So the question that I have to you this morning is whether
or not you think it is appropriate for FERC to basically get
out in front of Congress on this issue? Then also whether you
believe that the Federal Power Act does provide the explicit
authority to FERC to broadly allocate these costs?
If you can just speak to this as an issue because it is so
important, as you recognize.
Mr. Moeller. Thank you, Senator Murkowski.
It is a critical issue, and I will associate my comments
with those of the chairman, or Chairman Wellinghoff, that we
believe we have authority, but it would be helpful if we had
further direction from Congress. We are walking a little bit of
a fine line because we have, for instance, States that are
developing renewable portfolio standards, and they need the
infrastructure to support those. We are dealing with proposals
that come to us with regional differences, and I think that is
appropriate, and we will continue to do so.
I am very sympathetic to the home region of Ms. LaFleur,
New England, who they will claim, rightfully so, that they have
made significant investments in transmission, and they feel
like their customers are paying for that, and they don't want
to have something added on to that.
We have allowed regional approaches to occur and have
adopted them as they have come to us, largely supported through
a stakeholder process. But something that could change the game
is if you decide in Congress to perhaps have a national
renewable portfolio standard or something along that line that
will clearly require the additional transmission construction.
If that is the case, perhaps our authority needs to be
clarified as well.
Senator Murkowski. Ms. LaFleur, do you have any comments?
Ms. LaFleur. Thank you.
I don't pretend to understand the Federal Power Act as well
as Chairman Wellinghoff, but I do think it has a rather general
standard of just reasonable and nondiscriminatory rates. So it
gives FERC, by its terms, quite a bit of discretion. However, I
think a more current and pointed statement of congressional
intent would be extremely helpful, especially as FERC considers
going into new areas.
I think that transmission cost allocation, whether it is
within a State, within a region, and certainly beyond regions,
is inherently a very tricky business. Should Congress choose to
give FERC more authority, it would have to be used very
judiciously because new transmission infrastructure could cross
between regions of the country that have very different
internal mechanisms to allocate costs that affect customers
differently and also have, as Commissioner Moeller alluded to,
a lot of ongoing efforts to improve their own generation
portfolio and improve their transmission planning within
regions that the idea isn't to disrupt or set back things that
are already going on.
So I do think it would be useful, as you asked, to have
Congress give FERC some guidance on this issue.
Senator Murkowski. Thank you. I appreciate those comments.
Then one final question here. FERC had contracted with the
Lawrence Berkeley Laboratory to do this comprehensive study of
the reliability of our grid system as we add in these
intermittent renewable resources. It is my understanding that
we anticipated that the results of this study would be out in
December 2009, but to date, it has not yet been released.
Can you give me an update, Commissioner Moeller? Do we know
whether the study has been completed? Do we know where we are
with the findings and when that study might be made available
to the committee?
Mr. Moeller. Senator Murkowski, I will get back to you with
more of an update, but I checked on it last week. The word I
received is that they are still working on it at Lawrence
Berkeley. We did initially anticipate it within 6 months, but
it is my understanding that perhaps the issues are a little
more extensive and complicated than they realized so that they
are still working on it.
Senator Murkowski. Couldn't we have said we could tell you
that they were going to be more complicated than that? We knew
that. But it is still underway then?
Mr. Moeller. Still underway. But it is a critical study,
and I greatly anticipate it, and I think it is something that
we will do our best to let the members and staff of this
committee know what the results are because it is a very
important issue.
Senator Murkowski. I appreciate that.
Mr. Chairman, those are all my questions, but I just did
want to note for the record we talk about this committee being
a very bipartisan committee. We get along pretty well. But it
was interesting to note today that the Republican nominee was
introduced by a Democrat Senator, and our Democrat nominee was
introduced by a Republican Senator as well as a Democrat
Senator. So it just continues that fine tradition of
bipartisanship.
The Chairman. All right. Senator Risch.
Senator Risch. Thank you, Mr. Chairman.
The President certainly has appointed a diverse pair, one
from the Northeast and one from the Northwest. Mr. Moeller
hails from part of the country we call ``the Palouse,'' which
is an area that straddles the State line between Washington and
Idaho. Although he was on the wrong side of that line, he had
substantial experience in Washington, which speaks highly of
him.
I have advised Ms. LaFleur she is going to learn a lot more
about anadromous fish than she wants to hear about on FERC. But
certainly, 2 good appointees that we are going to be relying on
as we head into the nuclear renaissance in this country,
something we are going to be looking for support from FERC on
that, as we move forward and hopefully move forward
aggressively.
So thank you, Mr. Chairman.
The Chairman. Thank you.
Senator Wyden.
Senator Wyden. Thank you very much, and good to have a
chance to spend a few minutes with both of these individuals.
I want to walk through a situation--Ms. LaFleur, you and I
have talked about it--that will help us address the question of
how to get the States a bigger role in key parts of this
debate, particularly involving liquefied natural gas.
Now, on April 5, FERC approved construction of the Ruby
pipeline. This was a project that will bring 1.5 billion cubic
feet of natural gas to Oregon from the Rocky Mountains. This
comes after FERC approved the Bradwood LNG project, which would
bring another 1.3 billion cubic feet of gas to Oregon.
It approved the Jordan Cove LNG project, bringing in
another billion cubic feet of natural gas to Oregon, and FERC
is working its way through the permitting process for the
Oregon LNG project in Warrenton, Oregon, to bring another 1.5
billion cubic feet of natural gas to the State.
So, on top of these capacity issues, the agency is also
about to issue a draft Environmental Impact Statement for the
Palomar pipeline that would run throughout Mount Hood National
Forest, with the capacity to bring another 1.3 billion cubic
feet of gas a day to western Oregon.
Now for all of these projects, FERC has or will issue the
certificate of public convenience and necessity justifying
their construction. So you say to yourself, how do we get in
this situation where one project after another is just getting
a green light to proceed apace without really thinking through
what this is going to mean for a State where, traditionally, we
have brought everybody together. We brought together economic
development interests, environmental interests, and fishing
families and land owners, and we were able to strike a balance.
It seems, as a result of the change in policy, which I
vehemently opposed that, in effect, cut the State's role,
handed everything back to FERC, that States, and I am sure mine
is the not the only one, feel that they are getting trampled in
this debate. So I have introduced legislation in the past to
return control to the States.
A gentleman I am fond of now living at 1600 Pennsylvania,
President Obama, when he was here, was a co-sponsor of this
legislation. So the administration knows of my longstanding
interest in this issue. I would like to get on the record from
both of you, your view with respect to how the States can have
an expanded voice in these decisions because I think if we are
going to get balanced approaches to LNG and natural resources,
running roughshod over the States is not the way to do it.
Senator Risch, for example, has done great work as a State
official trying to bring people together. That is what I am
trying to make the hallmark of my approach to natural resources
in my home State.
Ms. LaFleur, I will start with you, since we have talked
about it in the office. No. 1, what is your assessment of the
description of events, and do you think that this is a
legitimate concern?
No. 2, if you do, if you think that this is a legitimate
concern, what would be your thoughts from a policy standpoint
about how, if confirmed, you could ensure that the States would
have a bigger voice in these matters?
Ms. LaFleur. Thank you, Senator for that question. Thank
you for the time you spent educating me on the situation in
Oregon.
I am no stranger to LNG because I come from a part of the
country that is heavily dependent on LNG to meet winter peaks,
and I also know that LNG siting can cause great controversy. I
have family in Fall River, Massachusetts, very close to a
proposed LNG facility. If Tip O'Neill said all politics is
local, all siting is very, very local.
Obviously, I don't want to comment on the specific all the
dockets you enumerated that are pending with respect to LNG
certification and pipelines in Oregon because they could still
be pending should I be confirmed as a commissioner. But I do
understand that the process you describe has been really
difficult for your constituents, and I would make it a high
priority to learn more about that process.
I think FERC and all agencies at the State or Federal level
should always be committed to improving their processes and
doing better, and I would be open to exploring whether there
could be an expanded role for State regulators in cases where
there are--particularly in cases where there are multiple
projects within a State, multiple options being considered,
whether the State regulators could help sort through that in a
way that would improve the process.
Senator Wyden. So, from a policy standpoint, I guess this
is a yes or a no, I want to know from a nominee whether they
think the States should have more of a say in this process?
Ms. LaFleur. I think that----
Senator Wyden. You got pretty close to saying yes. Don't
unravel it.
Ms. LaFleur. I mean, I do think that the States could
usefully play a bigger role, and I think, should I be confirmed
to FERC, cases will come before me. I know FERC has a lot of
precedent in this area, and it is up to the commissioners to
adapt that precedent, apply it, evolve it, based on the record
before. I would have an open mind on that.
Senator Wyden. Mr. Moeller, should States have more of a
say in this process?
Mr. Moeller. Senator, I think they should. I am not quite
sure how we formalize that. I have a very good relationship
with the Oregon commission, former Chairman Beyer, Commissioner
Savage. You have a new commissioner there as well, and Ray Baum
has been out here a lot.
So I think I have reached out to the Oregon commission, but
I think we can do a better job with the other State agencies
because, as you outlined, you have constituents that feel that
at times that their voice hasn't been heard, and we never like
that. We want to make sure Government should be responsive to
constituent concerns.
I won't go into specifics as well, but I recognize that
things can be improved.
Senator Wyden. I think this has certainly been a step in
the right direction. I just want to make clear. I think that
multiple proceedings allow for multiple disruptions of people's
lives, and that is what is going on in my home State.
There are a whole host of issues that you all have
correctly said today go to the question of how you deal with
this. For example, it seems to me that there ought to be
discussion about a threshold for combining proceedings, and
that is something that would be a legitimate topic of debate.
But when FERC insists that no 2 projects can ever be considered
together, I just think that is a prescription for trouble, and
I need you all to take a look at it.
Mr. Chairman and Senator Murkowski, thank you for this
extra time and look forward to working with both of you.
The Chairman. Thank you.
Senator Murkowski, did you have any other points we need to
raise?
Senator Murkowski. I do not, Mr. Chairman.
The Chairman. We thank both nominees for being here. We
will advise members and staff that they will have until 5 p.m.
tomorrow to submit any written questions, if there are
questions that someone would like to have a response to.
With that, the committee will stand in adjournment.
[Whereupon, at 10:44 a.m., the hearing was adjourned.]
APPENDIX
Responses to Additional Questions
----------
Responses of Philip D. Moeller to Questions From Senator Murkowski
Question 1. Do you agree that one of the important aspects of the
Commission's mission is to set clear policy and to provide clear
guidance to the energy industry regarding the enforcement of your
policies? Do you agree that market participants must be able to clearly
understand what behavior is prohibited in order to avoid engaging in
that conduct? For example, I understand that a number of trade
associations have requested greater clarity with respect to affiliate
bids in the same open season for interstate transportation or storage
capacity.
Answer. I fully agree that clear guidance on policies and
enforcement is essential. My votes, including separate concurrences and
dissents, have reflected my strong feelings on this subject.
Question 2. Do you believe that transmission should be an asset for
all generation resources? How do you view efforts to limit federal
benefits like cost allocation and back-stop siting to new transmission
for only renewable or low-carbon emitting resources?
Answer. I believe that transmission policies should not be limited
to any specific types of resources.
Question 3. Do you believe federal siting authority in the area of
transmission should be uniform in the Eastern and Western
interconnection?
Answer. Yes. While its authority should be the same, FERC can and
should consider the specific circumstances in a region when it makes
infrastructure decisions.
Question 4. In your opinion, what is the appropriate standard or
principle that governs who should be assessed the costs for new
transmission lines?
Answer. I favor policies that lead to additional cost-effective
transmission getting constructed over policies that lead to lengthy
litigation over cost allocation. With this as my guiding principle, I
support the statement below that customers should not pay for
transmission unless they benefit from transmission.
Question 5. As a general matter, do you believe that the
beneficiaries of a transmission project should bear the costs of that
project?
Answer. As noted above, yes.
Question 6. Do you believe it is ever appropriate to allocate the
costs of transmission infrastructure over an entire interconnection
area?
Answer. In the case of ERCOT, yes. Absent new federal legislation
(such as mandatory renewable energy production levels) I do not
envision a cost-allocation proposal that would apply to either the
entire Eastern interconnection or the entire Western interconnection.
Question 7. Last year, the Commission conducted a series of
regional transmission planning conferences. What is your assessment of
the existing transmission processes? Does FERC require additional
statutory legislation in this area?
Answer. I believe our Order 890 advanced the policy of better
regional planning, but the progress needs to continue. I will be very
interested in the results of the ongoing interconnection-wide planning
efforts. I do not believe we need additional statutory direction to
require more regional planning.
Question 8. Do you believe that FERC's authority to provide
incentive-based rate treatment to promote construction of new or
upgraded transmission facilities to address reliability and
accommodated the integration of renewable resources has had a positive
impact in transmission investment?
Answer. Yes.
Question 9. In your opinion, has the Commission given appropriate
incentives to promote investments in transmission? Additionally, what
types of projects do you see as meriting incentive-based rate
treatment?
Answer. I believe FERC has awarded appropriate incentives for
transmission incentives. In some orders I wrote separately urging
greater use of incentives for newer technologies that provided
significant reliability or environmental benefits in an effort to
encourage greater deployment of these technologies.
Question 10. FERC recently initiated an inquiry on the integration
of variable energy resources. What actions will FERC take in this area?
Will FERC recognize the regional differences that will impact such
integration and support market-based innovation to facilitate
integration?
Answer. Examining the issues within this Notice of Inquiry will
consume much of the next year, as the initial round of comments are
extensive and voluminous. I am not certain which actions we will even
consider at this point, but regional differences and market-based
innovation will be extremely important to me as I consider our policy
options.
Question 11. The focus on interconnecting renewable resources to
the transmission grid has created significant backlogs in some
interconnection queues, resulting in additional congestion and
reliability concerns. Does FERC's current interconnection policies
adequately address these issues? How should FERC update its current
interconnection policies to ensure that viable projects addressing the
needs of all generating resources, including renewable resources, are
not stuck in the interconnection queue?
Answer. FERC is working to address queue backlog issues that are
affecting most areas in the nation. Some matters pertaining to this
issue are pending, but progress has been made in addressing ``phantom''
projects and new policies such as the ``cluster'' approach pioneered by
BPA. This is an ongoing issue that requires continued oversight by
FERC.
Question 12. S. 1462, as reported by this Committee last year,
provides DOE with the authority to deal with cybersecurity threats and
FERC with the authority to deal with cybersecurity vulnerabilities. Do
you support this shared responsibility?
Answer. In general I support policies that give FERC more
responsibility but I recognize that Congress may decide that the
identification of national security threats should be done by the
President or an agency such as DOE.
Question 13. I understand that FERC is working with NERC on cyber
security protection through the standards development process set forth
in Section 215 of the Federal Power Act. Is this Section 215 process
adequate to address cyber security threats and vulnerabilities? Absent
Congressional legislation in this area, what actions can FERC take
administratively to secure critical electrical infrastructure?
Answer. I do not believe that the section 215 process is adequate
to address cyber security threats and vulnerabilities on the grid. I
support Congressional proposals to give FERC more authority in this
area, in order to ensure that the grid will be protected while the
section 215 standards development process proceeds. Absent additional
authority, FERC will continue to make improving the cybersecurity of
the electric grid a very high priority in its current work under
section 215 by enforcing existing cyber security standards and ensuring
that they are updated to reflect current conditions and risks.
Question 14. On March 18, 2010, FERC issued a Notice of Proposed
Rulemaking which directs the North American Electric Reliability
Corporation to include electric transmission facilities of 100
kilovolts (kV) or more in its ``bulk electric system'' definition.
a. What is the status of this NOPR and how soon does FERC
intend to move forward on implementation?
Answer. The Commission has sought comments on its proposal to
direct NERC to include electric transmission facilities of 100kV or
more in its ``bulk electric system'' definition. Those comments will be
submitted by May 10, 2010. I expect that we will treat this matter with
some urgency as the definition of ``bulk electric system'' determines
which facilities are subject to the standards and therefore covered by
their requirements.
b. If the NOPR requires a case by case review by FERC for
each facility exemption, does the Commission have the capacity
to manage this workload?
Answer. Only one of the eight Regional Entities currently uses a
definition that sets a voltage baseline in excess of NERC's 100 kV
threshold. Therefore, I believe we have the resources to manage this
process.
Question 15. There is growing concern that ``smart'' meters are
vulnerable to hacking. At a recent House oversight hearing, Chairman
Wellinghoff noted that because smart grid technology will introduce
many potential access points, security must be addressed. Are these
concerns being addressed at the federal level? Please respond.
Answer. This issue is being considered by FERC, NIST, DOE, DHS and
others. These concerns may be addressed specifically in our rulemaking
on interoperability standards. The issue of cyber security as it is
impacted through these standards will be my top priority as I consider
a proposed rulemaking.
Question 16. The 2007 Energy Independence and Security Act (EISA)
directs the National Institute of Standards and Technology (NIST) to
coordinate the development of standards to ensure the interoperability
and functionality of Smart Grid. When sufficient consensus of NIST's
work is reached, EISA directs FERC to initiate a rulemaking to adopt
such standards and protocols. The FERC Policy Statement issued last
July adopts key priorities for the interoperability and cyber security
of standards. With respect to cyber security, how does FERC plan to
determine whether the standards are cyber secure? Is there a
coordination process between FERC and NIST or is FERC planning to wait
for NIST to submit standards before making any determinations?
Answer. FERC staff and NIST are coordinating closely regarding the
smart grid standards development process, holding weekly meetings and
sharing information about issues and new developments as they arise. In
particular, NIST has organized a Smart Grid Interoperability Panel
Cyber Security Working Group to analyze cyber security issues and
assess individual smart grid standards to ensure that cyber security is
properly addressed. The Commission's staff participates with this
group. The Cyber Security Working Group is expected to issue a final
NIST Interagency Report on Smart Grid Cyber Security Strategy and
Requirements later this year. NIST has not yet completed work on its
initial set of smart grid standards; I do not expect that FERC will
take action on any standards until that process is completed.
Question 17. Last year, the Commission conducted a technical
conference on improving the licensing process for small hydropower
development. The comment period closed last month and I understand FERC
has already identified several common issues to address. Has the
Commission identified any legislative actions Congress can take to help
facilitate small hydropower?
Answer. At the last Commission meeting, the Commission discussed an
action plan, under its existing authority, for assisting developers of
small hydropower projects in the licensing process. I have not
identified any legislative actions that are needed to facilitate small
hydropower, though I stand ready to assist if Congress determines that
additional legislative action is appropriate in this area.
Question 18. What are your thoughts on the issue of reliably
integrating intermittent renewable resources onto the grid? What role
can both conventional hydropower and pumped storage have to play in
addressing these problems?
Answer. Conventional hydropower and pumped storage are--where
available--the ideal complementing technologies for firming or shaping
intermittent renewable resources.
Question 19. FERC recently released a policy statement on penalties
for violation of reliability rules. There has been some concern by
stakeholders regarding the substantial penalties for shedding load.
What about a situation where there is a failure of critical facilities
due to natural or manmade disasters and utilities must intentionally
shed the load in order to preserve the reliability of the larger
system? Is it FERC's intention to impose some of its highest penalty
fees--which will ultimately be passed through to consumers--onto
utilities when it might be more desirable for the overall grid to shed
a portion of the load?
Answer. The concerns raised in this question are legitimate, as the
overall reliability of the grid can be enhanced in rare circumstances
by shedding load. I believe the penalty guidelines--when better
explained and understood, and perhaps modified--will help address this
concern.
Question 20. Are you concerned that substantial penalties could
have a chilling effect on self-reporting?
Answer. I believe our penalty guidelines, when finalized and
implemented, will be better understood as the regulated community has
the time to fully digest the policy statement. Self-reporting is
actually rewarded--significantly--in our penalty guidelines. These
guidelines provide transparency to a process that has been too
mysterious until now.
Question 21. How important is FERC action to recognize demand-side
and efficiency measures in its efforts to support the grid integration
of renewable and other energy resources?
Answer. Demand-side and energy efficiency are important and growing
resources in our electricity mix and will play a very important role in
the effort to better integrate renewable resources.
Question 22. FERC has issued a Notice of Proposed Rulemaking to
require all RTOs to pay wholesale demand response providers in RTO
markets the locational marginal price in all hours. There are some
concerns that such pricing policies could result in perverse economic
incentives that might overcompensate demand response providers. What
are your thoughts on how best to compensate demand response measures?
Answer. I am undecided on how to best compensate demand response.
My partial concurrence and dissent in our proposed rule on this subject
extensively outlined my concerns: although I strongly support cost-
effective demand response programs I also feel strongly that we do not
know enough yet to decide on the best way to provide this compensation.
I would have preferred a Notice of Inquiry instead of a proposed rule.
Question 23. What is the appropriate path forward with respect to
organized and bilateral wholesale markets? Can and should they co-exist
or should all utilities ultimately be in organized markets?
Answer. These markets can co-exist. Organized markets have
generally been growing and offering more products in the last several
years.
Question 24. Is FERC's oversight of electricity markets sufficient
to ensure that the wholesale electric rates meet the ``just and
reasonable'' standard of the Federal Power Act?
Answer. Yes. I believe we are satisfying our responsibilities under
the Federal Power Act in this area. FERC devotes significant resources
to reviewing market rules and proposed changes to them, as well as
overseeing activities in the markets and investigating and litigating
enforcement actions.
Question 25. Do you believe that the wholesale electricity markets
operated by regional transmission organizations are achieving net
benefits for consumers as compared to those regions without RTOs?
Answer. I believe that consumers are enjoying net benefits from
RTOs but I recognize that conflicting studies can be cited by advocates
on both sides of this argument. Prices in RTO markets fell nearly fifty
percent last year and some consumers are already receiving the benefits
of these price reductions. Several regions are not yet comfortable
moving forward with organized markets.
Question 26. Do you think that there is a sufficient level of
transparency in the pricing and other relevant data from the
electricity markets, particularly those operated by RTOs?
Answer. I believe there is sufficient pricing transparency in RTOs
that in many cases exceeds that available in non-RTO markets. FERC must
continue its vigilance on this front, however. Also, FERC has proposed
rules to elicit price data from non-public utilities.
Question 27. What is your assessment of the success of pricing
incentives in the RTO markets, such as Locational Marginal Pricing, to
spur infrastructure development and address transmission congestion?
Answer. Locational marginal pricing helps provide appropriate price
signals in RTO markets for generators and load-serving utilities. While
the market rules may need to be changed from time to time to ensure
they operate effectively, I believe locational marginal pricing is a
reasonable tool in these markets for eliciting appropriate investment.
Question 28. Do you believe RTO-run locational capacity markets are
providing adequate revenue and certain for new generation while
avoiding excess payments to existing generation?
Answer. I support existing capacity markets but recognize that they
continue to evolve as conditions change; matters pertaining to specific
markets are pending but our ongoing challenge is to best assure that
the needed capacity is there for consumers balanced by the concern that
payments are reasonable.
Question 29. As the Senate works on Wall Street reform legislation,
we can all agree that Congress must guard against systemic risk by
improving the oversight, transparency, and stability of financial
markets. The CFTC will certainly be provided with additional regulatory
authority aimed at addressing systemic risk in the Over-the-Counter
market. But we need to carefully tailor Congressional action to avoid
sweeping in the physical energy markets that are regulated by FERC.
How would CFTC jurisdiction over electricity market mechanisms like
Financial Transmission Rights (FTRs) affect FERC's overall mission of
ensuring just and reasonable rates?
Answer. CFTC jurisdiction over FTRs could significantly impair
FERC's ability to ensure just and reasonable rates. FTRs are an
important tool for protecting customers against the risk of price
increases for transmission services in RTOs/ISOs. Congress recognized
the importance of FTRs when it enacted FPA section 217 as part of the
Energy Policy Act of 2005, requiring FERC to use its authority in a way
that enables load-serving entities to secure FTRs on a long-term basis
for long-term power supply arrangements made to meet their customer
needs. CFTC jurisdiction over FTRs could lead to, e.g., limits on the
availability of FTRs for load-serving entities and thus less protection
for their customers against increases in transmission costs.
Question 30. How would CFTC jurisdiction over FTRs impair FERC's
ability to protect against manipulation in the RTO markets?
Answer. Under the Commodity Exchange Act, the CFTC asserts
exclusive jurisdiction in the markets they regulate. Were the CFTC to
acquire exclusive jurisdiction over the FTRs currently traded in RTO/
ISO markets subject to FERC regulation, FERC's authority to prevent and
penalize market manipulation in the RTO markets could be restricted.
Question 31. Are you concerned about potential CFTC jurisdiction
over products that are available outside of RTO and ISO markets?
Answer. Yes. For example, the definition of ``swaps'' in financial
reform legislation passed by the House of Representatives last year
(H.R. 4173) could be construed to include a number of contractual
products outside of RTO and ISO markets, including bilateral capacity
contracts.
Question 32. The Tres Amigas project currently under development
seeks to transmit renewable power out of the Southwest and into Texas.
This project, then, raises a tough jurisdictional issue since it would
create a historic linkage among the three separate power grids--ERCOT
and the Eastern and Western grid interconnections. Because this is an
ongoing case at the Commission, I won't ask you to comments on the
specifics of the proposal. However, I am interested in your thoughts on
the relationship between FERC and ERCOT and whether the jurisdictional
bright lines will be able to be maintained in the future.
Answer. ERCOT generally has guarded its jurisdictional boundaries.
As markets evolve and (in general) become more interconnected and
sophisticated, both FERC and ERCOT will be dealing with ongoing issues
of balancing consumer benefits of interconnectedness with legitimate
ERCOT concerns over being subject to FERC jurisdiction.
Responses of Philip D. Moeller to Questions From Senator Shaheen
Question 1. Traditionally, the planning, siting and cost allocation
of new transmission has been left up to the states. However, given the
importance of investing in our transmission system--especially for the
connection of renewables, some have talked about the need for an
increased federal role and sharing of costs.
How do we balance the concerns expressed by the New England
Governors, PUC Commissioners and others about protecting the
competitive New England markets from potentially market-distorting
subsidies for new transmission as a result of a broad cost allocation
scheme with the need to overcome the barriers of connecting renewable
resources that are often location constrained and distant from load?
Answer. FERC needs to consider regional implications of its
decisions. I am very sympathetic to the concerns of New England as it
is clear to me that the region has already made significant and
worthwhile investments in its transmission grid. To some extent we
await direction from Congress on national renewable energy standards.
Question 2. In New England, we share costs of new transmission
projects needed for reliability rather broadly. In your view, could a
similar structure work for the construction of transmission needed to
connect renewable energy? Could such a policy be workable for new
transmission, or upgrades to existing transmission infrastructure,
solely to connect renewable resources?
Answer. I believe a similar structure could work for transmission
needed to connect renewable energy and it could work for both new
transmission and upgrades. As noted above, if Congress mandates a
national renewable energy standard then FERC would need to be open to
all types of proposals that would result in the actual deployment of
new transmission facilities.
Question 3. How can we connect our renewable resources to the grid
and allocate costs in a fair way that helps pay for transmission
projects or upgrades?
What role should the FERC play in helping to get renewable
resources connected to the grid? What problems would be addressed with
this new authority?
Answer. We should allocate costs in a manner in which those that
benefit from the transmission bear the costs of the transmission. FERC
has undertaken a number of policies that encourage the gird
interconnection of renewable resources, including our ``conditional
firm'' requirement in Order 890 and our focus on clearing the ``queue''
backlog in many markets. Going forward, our Notice of Inquiry on
Intermittent Generation is addressing a range of challenges that
pertain to allowing more renewable generation to be interconnected to
the grid; this NOI is extensive and the process of addressing these
challenges will probably consume us for the next year.
Question 4. Municipal and cooperative utilities in New England have
told me that they would like the opportunity to jointly plan, finance
and own new transmission facilities. They believe their participation
will bring additional capital and political support to needed projects
and will make cost allocation decisions easier. Do you support joint
ownership by these utilities?
Answer. I support joint transmission projects and have encouraged
these types of projects throughout the nation.
Question 5. One issue that has come up in the context of
transmission incentives is whether their availability should be
conditioned on the applicant taking steps to allow financial
participation and investment by other entities, including public power
and cooperative utilities. The FERC has stated that it seeks to
encourage diversity of ownership of the nation's transmission grid,
which is an essential set of facilities. My understanding is that,
encouragement aside, little is happening in terms of ownership
diversity.
Why has the Commission refused to link incentive compensation to
affording public power and cooperative entities an opportunity to
participate in new investment?
Answer. I consider strictly linking incentives to joint projects as
too stringent an approach to incentive policy. However, I have
explicitly encouraged entities to reconsider the benefits of joint
projects and my sense is that there is growing momentum to do so.
Generally speaking there are many more joint projects in the Western
United States and I hope to see more of these projects in the East as
well.
Question 6. There is great concern about the substantial increase
in transmission charges, including in New England. The transmission
investment base is growing by leaps and bounds. The transmission
investment base (the basis for rates) was roughly $3.5 billion in mid-
2009. By 2013, it is forecast to be $8.5 billion. I am concerned that
ladling incentive return on equity adders on top of the existing rate
of return will exacerbate the cost impact on consumers.
In your view, what are the risks that would justify additional
incentives for owners of new transmission facilities?
Answer. In my view transmission projects inherently entail great
risk due to the challenges of siting and in some cases cost allocation.
Transmission is a relatively small part of a consumer's final bill
(usually less than fifteen percent) yet the lack of transmission can
result in much more expensive generation charges. The risks that
justify additional incentives include siting challenges (including
physical challenges and public perception challenges) and technological
challenges.
Responses of Philip D. Moeller to Questions From Senator Menendez
Question 1. The Energy Bill as currently drafted would allow FERC
to approve lines anywhere and for almost any reason. Some are concerned
that this means the federal government will be siting transmission
lines thorough protected open spaces and through people's back yards.
Do you believe that FERC should have the authority to site transmission
lines and use eminent domain power to site those lines over local
opposition?
Answer. Electric transmission is essential for consumers and
interstate commerce, and I believe consumers would benefit from FERC
having its siting authority clarified when it is presented with
transmission proposals. However I envision this as ``backstop''
authority that is exercised rarely, partly because the very existence
of such backstop authority would result in it rarely needing to be
used, as it would encourage states and local entities to find the
optimum regional solution that meets the needs of customers. Though
there are energy infrastructure projects where eminent domain authority
is exercised as a result of a FERC certificate order, there are many
where it is not exercised at all.
Question 2. Some claim that enhanced federal power to site
transmission lines will only result in getting more wind power on the
grid, but for New Jersey more transmission will likely lead to more
dirty, coal power being transported into our state, a concern that 10
governors of the Northeastern states have also voiced. When exercising
your current back stop authority to site transmission lines or future
powers Congress might bestow on you, do you believe it is appropriate
to consider the fuel mix that transmission project will likely bring
onto the grid? In other words if you know a transmission line will
result in more coal being burned and in turn increase pollution and
public health impacts, would it be appropriate to reject that line
because of those environmental and public health impacts? Should those
impacts even be a factor in your decisions?
Answer. In general, I believe the future of coal-generated
electricity is going to hinge much more on environmental laws and
regulation rather than on transmission policy. My decisions are
motivated by assuring the reliability of the bulk power system due to
the inability to ``color'' the electrons on the grid. However,
environmental impacts are factors that I presently consider in siting
decisions and will continue to do so.
Question 3. FERC is currently reviewing an application to have a
high pressure natural gas pipeline located in a dense urban environment
of high-rise residences in New Jersey. There are concerns that this
pipeline could have a significant detriment to economic development.
What is your position on placing these types of high pressure natural
gas pipelines in dense urban environments? Is that appropriate? Should
FERC consider the economic impacts of such pipelines before providing
approval?
Answer. The Commission has a long history and a great deal of
experience in siting natural gas infrastructure, including lines in
dense urban environments. Cities represent large and growing markets
for natural gas. Thus, there may well be a need to site additional
infrastructure in such areas. All interstate natural gas pipelines are
required to comply with the Department of Transportation's safety
regulations, and it is my understanding that these regulations take
population density into account. In addition, in our review pursuant to
the National Environmental Policy Act, the Commission analyzes the
potential environmental impact a proposed project would have on
residents and communities in the vicinity of the projects. Also,
pursuant to our Certificate Policy Statement, the Commission
specifically considers potential economic effects of proposed pipelines
on affected communities.
Responses of Philip D. Moeller to Questions From Senator Barrasso
Question 1. The Energy and Natural Resources Committee approved
legislation that expands FERC's eminent domain authority. It allows
FERC to override State rejections of proposed transmission lines. Do
you believe FERC should have the authority to override a State's
rejection of a transmission proposal?
Answer. I believe that it would be helpful for Congress to clarify
and strengthen FERC's backstop siting jurisdiction. However, I believe
it is important for states and local jurisdictions to have the primary
responsibility for siting transmission lines. If Commission involvement
becomes necessary, the Commission will give appropriate consideration
to the effects of proposed projects on the interests of landowners and
communities, as it currently does in its other infrastructure siting
work.
Question 2. What is your view on the future role of baseload power
sources like coal and nuclear in America's energy portfolio?
Answer. Baseload power sources including coal and nuclear will be
essential in our fuel mix for the foreseeable future, at least many
decades in my view.
Question 3. Last year, Chairman Wellinghoff said that the nation's
future power needs can be fully met by renewable energy sources and
efficiency improvements. Do you agree?
Answer. Although I support renewable energy and energy efficiency,
I do not believe these sources will be sufficient to meet the nation's
future electricity needs. New methods of energy storage will help to
greatly increase our use of renewable energy, but these methods of
storage need to be proven cost effective and technologically feasible
before they can be applied on a wide scale.
Question 4. Do you support requirements that new transmission favor
or be limited to renewable or low-carbon emitting resources?
Answer. I do not support limiting new transmission to only certain
types of resources. And in this situation the laws of physics would
rule: electricity flows on the path of least resistance.
Responses of Philip D. Moeller to Questions From Senator Sessions
Question 1. Do you believe FERC needs new cease and desist
authority, or is FERC's current authority sufficient to deal with
energy market manipulation?
Answer. I believe consumers would enjoy a greater level of
protection if FERC is given additional cease and desist authority.
Question 2. Once the economy recovers, it is expected our nation's
demand for electricity will increase significantly over the next 20
years. I subscribe to the belief we will need a variety of both supply
and demand side resources to meet our energy needs, including new
nuclear, renewables, clean coal, demand response, and energy
efficiency. In your opinion can we afford to take any of these
resources off the table and still deliver the reliable, low cost, and
clean energy our homes and businesses need?
Answer. I agree that all sources of supply and demand need to be in
the mix to assure that consumers have the electricity they need.
Question 3. Considering your extensive knowledge of the energy
industry, I'm sure you are familiar with ``standard market design,'' a
Commission proposed restructuring of the electric industry that would
have required all utilities to join Regional Transmission Organizations
and adopt centralized operating control of the grid. As a result of
concerns from many states and members of Congress, that proposal was
dropped, and as a result today's industry structure has a mix of
vertically-integrated utilities operating under state rate regulation
and restructured utilities operating in organized markets. In your
opinion do you believe that these two market structures can continue to
co-exist?
Answer. I believe these two market structures can continue to co-
exist.
Question 4. Section 215 of the Federal Power Act requires the
Commission to provide ``due weight to the technical expertise'' of NERC
with regard to reliability standards. It also requires FERC to
``provide for reasonable notice and opportunity for public comment, due
process, openness, and balance of interests in developing reliability
standards and otherwise exercising its duties''. How do you reconcile
these statutory requirements with a series of recent FERC orders that
are very prescriptive in directing NERC to make certain modifications
to its standards and to do so by specified deadlines?
Answer. The recent FERC orders to which you refer are pending on
rehearing, and thus it would be inappropriate for me to comment. I
would note, however, that we have approved most of the proposed
standards presented by NERC and the regional entities for approval.
Where appropriate, I believe that deadlines are an important tool.
Question 5. Regarding the NIST lead effort to develop Smart Grid
interoperability standards under the 2007 Energy Independence and
Security Act (EISA),
a. How will FERC determine and confirm that sufficient
consensus has been reached before moving forward with a
rulemaking proceeding to adopt such standards?
b. How will FERC determine which of the many standards
proposed by NIST are appropriate for a rulemaking proceeding?
Answer. I anticipate that NIST will finish a package of standards
in the near future and that we will need to examine any supporting
evidence to determine if sufficient consensus was reached. I will want
to evaluate the package before determining which of the standards are
appropriate for an initial rulemaking, but I fully expect that we will
have more than one rulemaking proceeding as more standards are proposed
and as consumers and the industry gain experience.
Responses of Philip D. Moeller to Questions From Senator Wyden
Question 1. In response to questions for the record during the
Committee's 2005 hearing on LNG permitting, Mark Robinson, then
Director of the Office of Energy Projects responded that,
The Commission is supportive of competition within the energy
industry and of the idea that the market drives infrastructure
development. Past experience, particularly since the
restructuring on the gas industry following Order No. 636, has
demonstrated that market forces can serve the same end as a
competitive or ``Ashbacker'' hearing. Where the Commission
approves multiple projects to serve a similar market, only an
economically viable project will actually be built, i.e., only
where customer commitments ensure new service will fulfill a
genuine need.
The Commission continues to follow this policy.
a. How is this policy consistent with the obligation of the
Commission to make an affirmative finding of public convenience
and necessity under the Natural Gas Act?
Answer. Ashbacker Radio Corp. v. FCC requires comparative hearings
for mutually exclusive applications, i.e., where granting approval to
one would preclude the grant of approval to the other. Most of the LNG
applications that come before the Commission are not mutually
exclusive--they propose to serve different customers, may have proposed
different sources of supply, and may be on different timelines. The
Commission thus examines each project on its own merits, including a
rigorous review of all potential environmental and safety impacts, and
will grant approval only if it affirmatively finds that construction
and operation of the project would be consistent with the public
interest. If a project is approved, the Commission then lets market
forces determine whether a project will be built.
b. Do you agree with this policy that competitive or
``Ashbacker'' hearings need never be conducted where multiple
projects are proposed for a given market or to serve a specific
demand, such as send-out capacity for an LNG terminal?
Answer. I think that the Commission should avail itself of whatever
regulatory tool best suits the circumstances at hand. I will keep an
open mind as to best manner of processing specific cases.
c. Are there any circumstances where you believe that it is
ever appropriate for the Commission to conduct competitive or
``Ashbacker'' hearings where multiple projects are being
proposed to serve a single market or even a specific facility,
such as an LNG terminal? If so, when?
Answer. Although, as noted in Mr. Robinson's statement, it has been
the Commission's policy that market forces may serve the same end as a
competitive hearing, where projects appear to be mutually exclusive,
the Commission could decide that it was appropriate to hold an
``Ashbacker'' hearing. I cannot prejudge what process I would consider
to be the most appropriate in the absence of case-specific facts.
d. In Oregon there are multiple projects including three LNG
terminals all proposed to serve the Northwest market with far
more capacity than the region uses. Under what circumstances,
if any, should LNG projects such as these be the subject of
combined proceeding?
Answer. Unfortunately, it would not be appropriate for me to
speculate on the outcome of a pending case. However, as I stated above,
I will consider arguments for comparative hearings with an open mind.
e. In the circumstance of the Palomar Pipeline pending before
FERC now, and the Northern Star pipeline approved by FERC as
part of the Bradwood LNG projects, the projects are intended to
transport exactly the same Bradwood-originated gas shipments.
Under what circumstances, if any, should pipeline projects be
the subject of a combined proceeding?
Answer. Unfortunately, it would not be appropriate for me to
speculate on the outcome of a pending case. However, as I stated above,
I will consider arguments for comparative hearings with an open mind.
f. If the Commission has already approved a pipeline, for
example the Northern Star pipeline, to serve a specific demand,
what basis does it or should it have to make the public
convenience and necessity finding required under the Natural
Gas Act for a second pipeline for exactly the same shipments?
Answer. The Commission could not authorize construction of the
second pipeline unless the Commission found that the pipeline was
required by the public convenience and necessity.
Question 2. The Federal Power Act currently includes authority to
establish an Office of Public Participation which has never been
created. FERC is now being given more and more authority over the
siting energy facilities. In addition to natural gas pipelines, in 2005
Congress gave FERC authority over siting LNG, and back-stop authority
to site electric transmission. Congress is currently considering
legislation to give FERC even broader authority over the siting of
electric transmission lines. Our experience in Oregon with LNG and
natural gas pipelines has been abysmal. Most recently, land owners were
denied the ability to submit written testimony in a FERC proceeding to
investigate possible abuses by the applicant on their own property. Why
shouldn't FERC have an Office of Public Participation to ensure that
citizens have a voice in FERC decisions that so directly affect their
lives and their communities? Would you support establishing and funding
this office to ensure that the public is heard?
Answer. If Congress chooses to fund an Office of Public
Participation, I believe it might play a useful role in the
Commission's proceedings. Even without such an Office, however, I
assure you that I take very seriously the interests of consumers in
making decisions at the Commission.
Question 3. The Federal Power Act and the Natural Gas Act require
FERC to ensure that rates are just and reasonable--a requirement FERC
has decided it can ignore in favor of letting the market set the
price--even when that market is dysfunctional or being manipulated as
we saw with Enron. Utility consumer advocates exist in many states.
Wouldn't you agree that consumer advocates can provide important
consumer protections for rate payers? Would you support the creation of
an office of consumer advocate within FERC?
Answer. Consumer advocates play a valuable role at many state
commissions. If Congress chooses to create such an office, it could be
helpful in identifying and presenting the interests of consumers.
However, it would be preferable for any such office to be external to,
and thus independent from, FERC.
______
Responses of Cheryl A. LaFleur to Questions From Senator Murkowski
regional perspective
Question 1. Coming from New England, you're viewed as a candidate
who will bring some geographical diversity to the Commission. Too often
it seems Congress attempts to impose a ``one-size-fits-all'' solution
for the nation. However, this Committee can tell you that energy issues
often fall along regional lines. How important is it at FERC to
recognize and appreciate these regional differences?
Answer. I believe that it is very important for FERC to understand
and consider regional differences in shaping energy policy. The regions
vary considerably not just in obvious characteristics such as geography
and population density but also in their market structures (organized
or bilateral markets), resource mix, and ongoing regional energy and
environmental efforts. At the same time, FERC is by its very nature a
federal agency, and needs to consider energy needs and projects that
span regions, as it has done for example in the area of natural gas
pipeline construction.
hydropower
Question 2. Do you consider hydropower to be a renewable resource?
Please state your views on the hydropower resource and its contribution
and value to the nation's energy mix.
Answer. Yes. Hydropower is the original renewable resource and the
predominant renewable resource in the nation's generation mix today. I
believe that both existing and new hydropower facilities will play an
important role in meeting future energy needs and contributing to
environmental improvement. In my own region of New England, the hydro
generation facilities along the Connecticut and Deerfield Rivers are an
important component of our energy mix, and of course I know the large
hydro facilities in the Western United States are critical to the
energy and economic needs of those regions. I also believe there is
considerable potential for new small (low-head) hydro facilities, as
well as new technologies such as hydrokinetics.
general
Question 3. Do you agree that one of the important aspects of the
Commission's mission is to set clear policy and to provide clear
guidance to the energy industry regarding the enforcement of your
policies? Do you agree that market participants must be able to clearly
understand what behavior is prohibited in order to avoid engaging in
that conduct? For example, I understand that a number of trade
associations have requested greater clarity with respect to affiliate
bids in the same open season for interstate transportation or storage
capacity.
Answer. Yes. I believe that clarity and transparency are very
important in the enforcement area. While I cannot comment on a matter
pending before the Commission, the purpose of enforcement is to
encourage compliance, and only if the policies are understood can that
purpose be met.
transmission (siting)
Question 4. Do you believe that transmission should be an asset for
all generation resources? How do you view efforts to limit federal
benefits like cost allocation and back-stop siting to new transmission
for only renewable or low-carbon emitting resources?
Answer. By definition, transmission is the link between generation
and load. Currently, transmission facilities connect to and support all
types of generation resources. Transmission capacity cannot be limited
to electrons generated only by specific resources, nor can electrons be
targeted only to specific transmission facilities, as electricity by
its nature follows the path of least resistance. It is true that
transmission is a particularly critical issue for geographically-
constrained renewable resources that are remote from load, and that
transmission would need to be constructed in order for such potential
resources to serve energy markets. At the same time, I believe that the
generation mix will largely be influenced by environmental policies,
such as the renewable portfolio standard that this Committee passed
last year, and not driven by transmission policy.
Question 5. Do you believe federal siting authority in the area of
transmission should be uniform in the Eastern and Western
interconnection?
Answer. FERC's existing siting authority does not vary between the
Eastern and Western Interconnections, and I note that the bill passed
by this Committee similarly does not distinguish between the Eastern
and the Western Interconnections. I believe that is appropriate.
However, I do believe FERC should exercise its authority with respect
for and consideration of regional and geographic differences.
transmission (cost allocation)
Question 6. In your opinion, what is the appropriate standard or
principle that governs who should be assessed the costs for new
transmission lines?
Answer. In general, those who benefit from transmission should pay
for it. I believe that there are several well-functioning models of
cost allocation that have been negotiated and agreed to within existing
RTOs, which in general terms allocate the cost of high-voltage
transmission more broadly because it provides reliability and economic
benefits across a region, and assign the costs of lowervoltage
transmission to more limited geographic areas that directly receive
such benefits.
Question 7. As a general matter, do you believe that the
beneficiaries of a transmission project should bear the costs of that
project?
Answer. Yes, as a general matter. I have an open mind about how
benefits and beneficiaries are defined, but believe the principle is
important.
Question 8. Do you believe it is ever appropriate to allocate the
costs of transmission infrastructure over an entire interconnection
area?
Answer. Because I know that proposals for transmission cost
allocation will come before me if I am confirmed as a commissioner, I
have an open mind about specific proposals. I believe, however, that
the larger an area across which costs are proposed to be allocated, the
more care should be exercised in assessing whether customers within the
area are receiving a benefit. In general, I believe the Commission
should seek to encourage cost allocation proposals that gamer support
from market participants and state and local regulators.
transmission (planning)
Question 9. Last year, the Commission conducted a series of
regional transmission planning conferences. What is your assessment of
the existing transmission processes? Does FERC require additional
statutory legislation in this area?
Answer. In general, I think that much progress has been made on
transmission planning within regions. But I do believe that the U.S.
needs more high-voltage transmission infrastructure to support
reliability and energy security, help connect new domestic energy
resources, and make markets work well for customers. I believe it was
prudent for FERC to issue Order No. 890, requiring open and transparent
transmission planning processes. It was also prudent for FERC to
request comments late last year on how existing transmission planning
processes can be improved, and I understand FERC has received a large
number of comments from a very broad group of stakeholders. Were I to
be confirmed, I would look forward to considering those stakeholder
comments on this issue. I have not studied the issue of whether FERC
needs additional statutory authority in this area.
transmission (incentives)
Question 10. Do you believe that FERC's authority to provide
incentive-based rate treatment to promote construction of new or
upgraded transmission facilities to address reliability and
accommodated the integration of renewable resources has had a positive
impact in transmission investment?
Answer. Yes, I believe that FERC's authority to provide incentive-
based rate treatment for transmission, including the authority that
Congress provided in the Energy Policy Act of 2005, has had a positive
impact on transmission investment.
Question 11. In your opinion, has the Commission given appropriate
incentives to promote investments in transmission? Additionally, what
types of projects do you see as meriting incentive-based rate
treatment?
Answer. I think incentives can be in the best interests of
customers where they help promote transmission construction that
strengthens reliability and makes markets work better. I agree with
FERC's statement in its rulemaking implementing the incentives
provision of the Energy Policy Act of 2005 that routine investments
made in the ordinary course of expanding the system are less compelling
cases for incentives. It is also important that incentives be
proportional to the benefits they are intended to promote, and I would
support them in appropriate cases where supported by customer benefits.
transmission (integrating variable energy resources)
Question 12. FERC recently initiated an inquiry on the integration
of variable energy resources. What actions will FERC take in this area?
Will FERC recognize the regional differences that will impact such
integration and support market-based innovation to facilitate
integration?
Answer. I believe that FERC's ongoing inquiry is important to
address the unique characteristics of variable energy resources,
particularly wind and solar generation, and the implications of
integrating those resources into grid operations. I do believe that
FERC should consider regional differences and support marketbased
innovation when considering any changes to market rules that may be
necessary to enable the efficient and reliable integration of variable
generation.
transmission (congestion on interconnection queue)
Question 13. The focus on interconnecting renewable resources to
the transmission grid has created significant backlogs in some
interconnection queues, resulting in additional congestion and
reliability concerns. Do FERC's current interconnection policies
adequately address these issues? How should FERC update its current
interconnection policies to ensure that viable projects addressing the
needs of all generating resources, including renewable resources, are
not stuck in the interconnection queue?
Answer. I understand that in December 2007, the Commission held a
technical conference on interconnection queuing practices, which
focused on the significant increases in the queue backlogs of ISOs and
RTOs due to greater interest of new generation entrants, particularly
renewable resources. The Commission directed each ISO and RTO to file a
report describing the status of stakeholder discussions on queue reform
and the schedule for selecting and implementing any necessary reforms.
As a result of these efforts, the Commission has received and
approved proposals from several RTOs to improve the interconnection
process and shorten the time required for the parties to execute a
generator interconnection agreement. In accepting these proposals, the
Commission has evolved its policy toward generator interconnection from
a rigid ``first-in, first-served'' approach to a more flexible policy
that allows transmission providers to adopt a ``first-ready,
firstserved'' approach, and has allowed other adjustments to the RTOs'
queueing methodology.
I understand that the Commission is waiting to see how these
changes have impacted interconnection queue backlogs and to determine
if further action is required. If confirmed, I would consider this
issue carefully.
cybersecurity
Question 14. S. 1462, as reported by this Committee last year,
provides DOE with the authority to deal with cybersecurity threats and
FERC with the authority to deal with cybersecurity vulnerabilities. Do
you support this shared responsibility?
Answer. Yes, I support the proposed division of authority between
DOE and FERC in S. 1462 to respond to cybersecurity threats and
vulnerabilities.
Question 15. I understand that FERC is working with NERC on cyber
security protection through the standards development process set forth
in Section 215 of the Federal Power Act. Is this Section 215 process
adequate to address cyber security threats and vulnerabilities? Absent
Congressional legislation in this area, what actions can FERC take
administratively to secure critical electrical infrastructure?
Answer. I believe that nothing in the area of energy is more
important than the security and reliability of the nation's electric
grid. I support Congressional proposals to give FERC more authority in
this area, particularly the authority to address imminent threats, as
well as vulnerabilities, promptly and effectively. Absent increased
authority, FERC should continue to make improving the cybersecurity of
the electric grid a very high priority in its current work under
section 215.
Question 16. On March 18,2010, FERC issued a Notice of Proposed
Rulemaking which directs the North American Electric Reliability
Corporation to include electric transmission facilities of 100
kilovolts (kV) or more in its ``bulk electric system'' definition.
a. What is the status of this NOPR and how soon does FERC
intend to move forward on implementation?
Answer. I understand that the Commission has sought comments on its
proposal to direct NERC to include electric transmission facilities of
100kV or more in its ``bulk electric system'' definition, and that
those comments will be submitted by May 10,2010. The next step would be
for FERC to consider the comments and then determine whether to proceed
to a final rule. I do not know how soon FERC intends to make that
determination or to move forward on implementation of its proposal.
b. If the NOPR requires a case by case review by FERC for
each facility exemption, does the Commission have the capacity
to manage this workload?
Answer. My understanding is that only one of the eight Regional
Entities currently uses a definition that sets a voltage baseline-in
excess of NERC's 100 kV threshold. Considering that every region except
that one uses the 100 kV threshold, and that any exemption must first
be approved by the applicable Regional Entity and then by the ERO
before it is submitted to the Commission, I understand that the
Commission expects that it will receive a small volume of exemption
requests based on particular circumstances and therefore that it has
the capacity to manage the exemption process.
smart grid
Question 17. There is growing concern that ``smart'' meters are
vulnerable to hacking. At a recent House oversight hearing, Chairman
Wellinghoff noted that because smart grid technology will introduce
many potential access points, security must be addressed. Are these
concerns being addressed at the federal level? Please respond.
Answer. I am informed that the Commission and other federal
agencies are working to identify and address potential vulnerabilities
that may be introduced by the deployment of smart grid technology. Most
notably, the National Institute of Standards and Technology (NIST) has
organized a Smart Grid Interoperability Panel Cyber Security Working
Group to analyze cyber security issues and assess individual smart grid
standards to ensure that cybersecurity is properly addressed. The
Commission participates with this group. The Cyber Security Working
Group is expected to issue a final NIST Interagency Report on Smart
Grid Cyber Security Strategy and Requirements later this year.
Other agencies involved with smart grid initiatives include the
Department of Energy and the Department of Homeland Security. The Smart
Grid Task Force meets regularly to ensure awareness, coordination and
integration of the diverse activities among DOE and other agencies in
the Federal Government related to Smart Grid, including identifying and
addressing potential vulnerabilities. If confirmed, I would look
forward to learning more about these issues and working to address
them.
Question 18. The 2007 Energy Independence and Security Act (EISA)
directs the National Institute of Standards and Technology (NIST) to
coordinate the development of standards to ensure the interoperability
and functionality of Smart Grid. When sufficient consensus of NIST's
work is reached, EISA directs FERC to initiate a rulemaking to adopt
such standards and protocols. The FERC Policy Statement issued last
July adopts key priorities for the interoperability and cyber security
of standards. With respect to cyber security, how does FERC plan to
determine whether the standards are cyber secure? Is there a
coordination process between FERC and NIST or is PERC planning to wait
for NIST to submit standards before making any determinations?
Answer. I have been informed that FERC and NIST are coordinating
closely regarding the smart grid standards development process, holding
weekly meetings and sharing information about issues and new
developments as they arise. Beyond these efforts, and the efforts
described in the preceding answer, I do not know the Commission's
specific plans on this point.
hydropower
Question 19. Last year, the Commission conducted a technical
conference on improving the licensing process for small hydropower
development. The comment period closed last month and I understand FERC
has already identified several common issues to address. Has the
Commission identified any legislative actions Congress can take to help
facilitate small hydropower?
Answer. I understand that at the last Commission meeting, the
Commission discussed an action plan, under its existing authority, for
assisting developers of small hydropower projects in the licensing
process. I am not aware of any statement by the Commission that
additional legislative authority is needed in this area.
Question 20. What are your thoughts on the issue of reliably
integrating intermittent renewable resources onto the grid? What role
can both conventional hydropower and pumped storage have to play in
addressing these problems?
Answer. I believe that peaking resources such as pumped storage as
well as demand response can playa valuable role in helping to balance
certain energy resources, especially wind and solar generation. Those
conventional hydropower projects that can operate in a peaking mode may
also be able to assist in this area.
reliability
Question 21. FERC recently released a policy statement on penalties
for violation of reliability rules. There has been some concern by
stakeholders regarding the substantial penalties for shedding load.
What about a situation where there is a failure of critical facilities
due to natural or manmade disasters and utilities must intentionally
shed the load in order to preserve the reliability of the larger
system? Is it FERC's intention to impose some of its highest penalty
fees - which will ultimately be passed through to consumers - onto
utilities when it might be more desirable for the overall grid to shed
a portion of the load?
Answer. While I cannot speak to FERC's intention in releasing its
Policy Statement on Penalty Guidelines, I believe that utilities should
not be penalized for acting in the best interests of customers. I
cannot comment on specific cases that might come before the Commission
should I be confirmed, but in general I believe it would be important
to consider the overall circumstances that led to the need for the
load-shedding. If none of NERC's reliability standards were violated by
the circumstances that led to the load-shedding, and if load-shedding
was conducted pursuant to the requirements of the reliability
standards, no penalty would be appropriate. I also note that FERC
settlement agreements typically require entities that pay civil
penalties to agree not to pass through the penalty to current or future
ratepayers.
Question 22. Are you concerned that substantial penalties could
have a chilling effect on self-reporting?
Answer. I believe that self-reporting plays a critical role in an
overall compliance structure. In general, self-reporting requires that
the reporters have trust in the entity to whom they are reporting,
including the likely proportionality of penalties to violations.
demand response
Question 23. How important is FERC action to recognize demand-side
and efficiency measures in its efforts to support the grid integration
of renewable and other energy resources?
Answer. I believe it is important to recognize demand-side measures
in considering overall capacity needs, particularly for peak periods,
and in supporting grid integration of variable renewable resources. I
have experience in delivering demand response programs for customers
(such as radio control of water heaters and other appliances to shift
load off peak), and know that they can work well to reduce the need for
new resources and save money for customers. Newer technologies such as
smart meters and internet-enabled communication to control energy needs
have tremendous potential to reduce peak energy needs. They can also
playa very important role in complementing the load characteristics of
variable energy resources such as wind and solar.
I do believe that harnessing demand response resources will require
not just FERC action but close collaboration between FERC and state
regulators, since state regulators are close to end-use customers and
can help influence customers to manage their energy and shift loads off
peak through time-of-use-rates and other mechanisms.
Question 24. FERC has issued a Notice of Proposed Rulemaking to
require all RTOs to pay wholesale demand response providers in RTO
markets the locational marginal price in all hours. There are some
concerns that such pricing policies could result in perverse economic
incentives that might overcompensate demand response providers. What
are your thoughts on how best to compensate demand response measures?
Answer. I am reluctant to comment on the specific proposal since it
could still be under consideration if I were confirmed. In general I
believe locational pricing for demand response makes good economic
sense, since capacity needs can be very geographically specific.
Ensuring that demand response resources bidding into RTO markets are
compensated appropriately is an important element of setting the just
and reasonable wholesale rate, and if confirmed I would consider
carefully any proposed rules in this regard.
organized markets
Question 25. What is the appropriate path forward with respect to
organized and bilateral wholesale markets? Can and should they co-exist
or should all utilities ultimately be in organized markets?
Answer. I believe that organized and bilateral markets are likely
to co-exist for the foreseeable future, and that FERC can accommodate
and work effectively with this dual market structure.
Question 26. Is PERC's oversight of electricity markets sufficient
to ensure that the wholesale electric rates meet the ``just and
reasonable'' standard of the Federal Power Act?
Answer. I believe that, with respect to organized markets, FERC
carries out its responsibility to ensure just and reasonable rates by:
ensuring that markets are structured effectively,
recognizing the interests of customers
monitoring markets carefully and investigating any market
aberrations or possible manipulation or exercise of market
power
seeking penalties and other appropriate remedies for any
market manipulation, and implementing corrective action to
prevent recurrence.
While FERC and all agencies can and should always strive to improve
their operations, I believe FERC is satisfying its responsibilities
under the Federal Power Act in this area.
Question 27. Do you believe that the wholesale electricity markets
operated by regional transmission organizations are achieving net
benefits for consumers as compared to those regions without RTOs?
Answer. I believe it is difficult to compare benefits to customers
between organized markets run by RTOs and bilateral markets in regions
without RTOs. In general, and not coincidentally, market restructuring
and the introduction of competitive markets occurred in regions of the
country that had high energy costs. Northeastern states such as my own
have historically had much higher rates than many other regions of the
country, and still largely do. I would look to whether the regions with
RTOs are better off than had they not been restructured, and I believe
in general they are. Certainly in New England we have seen much more
generation come online and more transmission be constructed than was
occurring in the period prior to the competitive market, reducing
wholesale costs to customers and improving grid reliability. RTOs have
also played a very useful role in organizing large-scale demand
response efforts and other regional projects on a scale very difficult
to achieve company-by-company.
Question 28. Do you think that there is a sufficient level of
transparency in the pricing and other relevant data from the
electricity markets, particularly those operated by RTOs?
Answer. Market transparency is desirable and, if I am confirmed, I
would be interested in exploring whether additional transparency is
needed, particularly in RTO and ISO markets. RTO and ISO markets
provide pricing data, transmission characteristics, and forecasted and
actual demand. In addition, all FERC jurisdictional sellers, including
those in RTO and ISO markets, are required to file quarterly reports
providing prices on all jurisdictional power transactions. I also
understand that the Commission has recently issued a Notice of Inquiry
seeking comment on whether it should require pricing information from
market participants that are excluded from the Commission's
jurisdiction under section 205 of the Federal Power Act.
Question 29. What is your assessment of the success of pricing
incentives in the RTO markets, such as Locational Marginal Pricing, to
spur infrastructure development and address transmission congestion?
Answer. I believe locational marginal pricing is a useful tool to
spur the construction of needed generation and transmission and help
reduce long-run costs for customers in transmission-constrained
geographic pockets. Of course, experience in the Northeast and other
organized markets shows the difficulty of crafting market rules that
always ensure strong competition, and the rules may need adjusting over
time. I believe FERC must continue to monitor the markets carefully,
and allow or require changes to market rules when appropriate.
Question 30. Do you believe RTO-run locational capacity markets are
providing adequate revenue and certain for new generation while
avoiding excess payments to existing generation?
Answer. I believe the locational capacity markets help provide a
reasonable price signal for construction of capacity or development of
other resources when and where needed. The rules for these markets must
ensure that rates are neither excessive for customers nor inadequate to
elicit the necessary supply of resources. I believe it is important,
however, to continually examine the market structure and rules to
ensure that they are achieving these goals.
cftc/ferc
Question 31. As the Senate works on Wall Street reform legislation,
we can all agree that Congress must guard against systemic risk by
improving the oversight, transparency, and stability of financial
markets. The CFTC will certainly be provided with additional regulatory
authority aimed at addressing systemic risk in the Over-the-Counter
market. But we need to carefully tailor Congressional action to avoid
sweeping in the physical energy markets that are regulated by FERC.
a. How would CFTC jurisdiction over electricity market
mechanisms like Financial Transmission Rights (FTRs) affect
FERC's overall mission of ensuring just and reasonable rates?
Answer. I am not yet familiar with the scope of CFTC jurisdiction,
but do consider FTRs an important tool for FERC in protecting customers
against the risk of price increases for transmission services in RTOs/
ISOs. Congress recognized the importance of FIRs when it enacted the
Energy Policy Act of 2005, requiring FERC to use its authority in a way
that enables load-serving entities to secure FTRs on a long-term basis
for long-term power supply arrangements made to meet their customer
needs.
b. How would CFTC jurisdiction over FTRs impair FERC's
ability to protect against manipulation in the RTO markets?
Answer. I am not yet familiar with the scope of CFTC jurisdiction,
but would be concerned if its jurisdiction were deemed to limit or
impair FERC's authority to prevent and penalize market manipulation in
the RTO markets.
c. Are you concerned about potential CFTC jurisdiction over
products that are available outside of RTO and ISO markets?
Answer. I am not yet familiar with the scope of CFTC jurisdiction,
but would be concerned if its jurisdiction were deemed to limit or
impair FERC's ability to ensure just and reasonable rates, or to
prevent and penalize market manipulation outside of RTO and ISO
markets. For example, capacity contracts allow a loadserving entity to
assure its ability to meet its customers' needs by buying the right to
use certain resources (e.g., a power plant's output or a right to
demand response). In an RTO/ISO market, capacity obligations help
ensure that there will be enough resources to meet the aggregate needs
of the market's customers. In bilateral markets, capacity contracts can
serve the same purpose for an indi vidual utility. In both organized
markets and bilateral markets, capacity contracts can be critical in
ensuring that a proposed resource has a projected revenue stream
sufficient to allow development of the resource.
ferc/ercot jurisdiction
Question 32. The Tres Amigas project currently under development
seeks to transmit renewable power out of the Southwest and into Texas.
This project, then, raises a tough jurisdictional issue since it would
create a historic linkage among the three separate power grids - ERCOT
and the Eastern and Western grid interconnections. Because this is an
ongoing case at the Commission, I won't ask you to comments on the
specifics of the proposal. However, I am interested in your thoughts on
the relationship between FERC and ERCOT and whether the jurisdictional
bright lines will be able to be maintained in the future.
Answer. This is a subject about which I look forward to learning
more. I am of course aware of ERCOT's unique jurisdictional
circumstances as a single-state transmission grid. I think it is
important to respect ERCOT's jurisdiction when considering cross-
interconnection projects. I also note by comparison that a number of
highly beneficial projects have been undertaken between the U.S. and
Canada without compromising the energy jurisdiction of either nation.
Thus, I expect that projects can be structured to maintain the
jurisdictional lines between ERCOT and the Western and Eastern
Interconnections.
Responses of Cheryl A. LaFleur to Questions From Senator Shaheen
Question 1. Traditionally, the planning, siting and cost allocation
of new transmission has been left up to the states. However, given the
importance of investing in our transmission system - especially for the
connection of renewables, some have talked about the need for an
increased federal role and sharing of costs.
How do we balance the concerns expressed by the New England
Governors, PUC Commissioners and others about protecting the
competitive New England markets from potentially market-distorting
subsidies for new transmission as a result of a broad cost allocation
scheme with the need to overcome the barriers of connecting renewable
resources that are often location constrained and distant from load?
Answer. I believe that the cost-sharing mechanisms within ISO-New
England have functioned particularly well because they have been
negotiated among the participants and have built on a long tradition of
close cooperation in regional planning dating back to NEPOOL. A cost-
sharing mechanism to bring Midwestern renewable resources to Eastern
markets, such as the New England Governors and others have expressed
concerns about, would obviously involve a much larger geographic area
and span regions with greatly different market structures and existing
resources plans. I think cost allocation between regions should be
approached with great care, but I would approach the issues with an
open mind, considering the concerns of the New England region but of
course the needs of other regions as well. In general, I believe the
Commission should seek to encourage cost allocation proposals that
garner support from market participants and state and local regulators.
Question 2. In New England, we share costs of new transmission
projects needed for reliability rather broadly. In your view, could a
similar structure work for the construction of transmission needed to
connect renewable energy? Could such a policy be workable for new
transmission, or upgrades to existing transmission infrastructure,
solely to connect renewable resources?
Answer. I believe if Congress gives FERC more express authority to
allocate costs of high-voltage transmission, it would need to be
executed with great care and in close collaboration with the states and
regions affected. I believe that more transmission is needed to connect
new sources of energy as well as for reliability and to make markets
work for customers. I would have an open mind about cost allocation
proposals for transmission intended to connect renewable resources to
the grid and bring them to market. As far as special policies solely to
connect renewable resources, it would be difficult to isolate
transmission for a particular purpose, since transmission by its nature
would connect the existing generation mix as well as new resources. I
believe that the generation mix will largely be influenced by
environmental policies, such as the renewable portfolio standard that
this Committee passed last year, and not driven by transmission policy.
Question 3. How can we connect our renewable resources to the grid
and allocate costs in a fair way that helps pay for transmission
projects or upgrades?
What role should the FERC play in helping to get renewable
resources connected to the grid? What problems would be addressed with
this new authority?
Answer. As noted above, I believe that if Congress gives FERC more
explicit authority to allocate the costs of high-voltage transmission,
it will need to be used carefully and in collaboration with states and
regions. The backstop siting authority that Congress gave FERC in the
Energy Policy Act of 2005 provides a useful example of how giving FERC
more authority can help in bring states to the table to agree on
transmission projects that cross state lines and affect different
regions differently. I believe that passage of new legislation giving
FERC more explicit authority to allocate costs of high-voltage
transmission could similarly playa very valuable role in bringing
states and regions to the table to work together with FERC on high-
voltage transmission improvements that serve the interests of more than
one region, including the interest in connecting new renewable power
sources.
Question 4. Municipal and cooperative utilities in New England have
told me that they would like the opportunity to jointly plan, finance
and own new transmission facilities. They believe their participation
will bring additional capital and political support to needed projects
and will make cost allocation decisions easier. Do you support joint
ownership by these utilities?
Answer. I believe participation by municipal and cooperative
utilities can play an important part in expansion of the transmission
system. While joint ownership can increase the complexity of planning
and developing a transmission project, the benefits ofjoint ownership
include increasing opportunities for investment in the transmission
grid.
Question 5. One issue that has come up in the context of
transmission incentives is whether their availability should be
conditioned on the applicant taking steps to allow financial
participation and investment by other entities, including public power
and cooperative utilities. The FERC has stated that it seeks to
encourage diversity of ownership of the nation's transmission grid,
which is an essential set of facilities. My understanding is that,
encouragement aside, little is happening in terms of ownership
diversity.
Why has the Commission refused to link incentive compensation to
affording public power and cooperative entities an opportunity to
participate in new investment?
Answer. As stated above, participation by municipal and cooperative
utilities can play an important part in expansion of the transmission
system. I agree with FERC's statements that it is appropriate to
encourage such utilities' participation in new transmission projects.
For example, FERC has stated that it will look favorably on a request
for transmission incentives that includes joint ownership with such
utilities. Making a joint ownership structure a precondition for
transmission incentives, however, could inadvertently chill some needed
transmission investment. Participation by a diverse group of investors
may be the best ownership structure for a particular transmission
project, but may not be appropriate in all circumstances.
Question 6. There is great concern about the substantial increase
in transmission charges, including in New England. The transmission
investment base is growing by leaps and bounds. The transmission
investment base (the basis for rates) was roughly $3.5 billion in mid-
2009. By 2013, it is forecast to be $8.5 billion. I am concerned that
ladling incentive return on equity adders on top of the existing rate
of return will exacerbate the cost impact on consumers.
In your view, what are the risks that would justify additional
incentives for owners of new transmission facilities?
Answer. Incentive-based ratemaking encompasses many techniques,
such as incentive return on equity (ROE) adders and recovery of costs
associated with projects that are abandoned for reasons beyond the
developer's control. I think such incentives can be in the best
interests of customers where they help promote transmission
construction that strengthens reliability and makes markets work
better. However, routine investments made in the ordinary course of
expanding the system are less compelling cases for incentives,
particularly incentive ROE adders. It is also important that incentives
be proportional to the benefits they are intended to promote.
Responses of Cheryl A. LaFleur to Questions From Senator Menendez
Question 1. The Energy Bill as currently drafted would allow FERC
to approve lines anywhere and for almost any reason. Some are concerned
that this means the federal government will be siting transmission
lines thorough protected open spaces and through people's back yards.
Do you believe that FERC should have the authority to site transmission
lines and use eminent domain power to site those lines over local
opposition?
Answer. I believe that it would be helpful for Congress to clarify
and strengthen FERC's backstop siting jurisdiction. However, I believe
that jurisdiction would have to be applied very judiciously, because
siting is first and foremost a state and local responsibility. I know
from my own experience that siting projects across state lines can be
very difficult, particularly when the projects impact different
customers differently. I think a major benefit of FERC's backstop
siting authority is to encourage states to work out issues
collaboratively and resolve them without FERC doing so. In addition,
the Commission's current transmission siting authority is constrained
by specific limitations, particularly a ``public interest'' standard. I
believe a similar standard in any additional authority would help
ensure that the Commission gives appropriate consideration to the
effects of proposed projects on the interests of landowners and
communities.
Question 2. Some claim that enhanced federal power to site
transmission lines will only result in getting more wind power on the
grid, but for New Jersey more transmission will likely lead to more
dirty, coal power being transported into our state, a concern that 10
governors of the Northeastern states have also voiced. When exercising
your current back stop authority to site transmission lines or future
powers Congress might bestow on you, do you believe it is appropriate
to consider the fuel mix that transmission project will likely bring
onto the grid? In other words if you know a transmission line will
result in more coal being burned and in turn increase pollution and
public health impacts, would it be appropriate to reject that line
because of those environmental and public health impacts? Should those
impacts even be a factor in your decisions?
Answer. Transmission capacity cannot be limited to electrons
generated only by specific resources, nor can electrons be targeted
only to specific transmission facilities, as electricity by its nature
follows the path of least resistance. As a result, transmission lines
built to connect different regions of the country would likely carry
electricity reflecting the overall generation mix, not just new
sources. Also, I believe that changes in the generation mix are likely
to be determined largely by environmental policy, such as the renewable
portfolio standard that the Committee passed last year, and not driven
by transmission policy.
Having said that, FERC is required under section 216 of the Federal
Power Act to consider whether proposed interstate electric transmission
facilities within FERC's limited backstop siting jurisdiction are
consistent with the public interest and with sound national energy
policy. Moreover, the National Environmental Policy Act requires
federal agencies to take a hard look at the environmental impacts of
proposed actions. Thus, I would expect FERC, in examining a proposed
transmission project, to consider all public interest factors,
including environmental impacts, and to impose conditions reducing such
impacts to an acceptable level or to deny approval if it finds that the
impacts cannot be so reduced. I cannot predict what issues would be
within the scope of FERC's review in a given case, but if confirmed I
would carefully consider and apply the law in this area.
Question 3. FERC is currently reviewing an application to have a
high pressure natural gas pipeline located in a dense urban environment
of high-rise residences in New Jersey. There are concerns that this
pipeline could have a significant detriment to economic development.
What is your position on placing these types of high pressure natural
gas pipelines in dense urban environments? Is that appropriate? Should
FERC consider the economic impacts of such pipelines before providing
approval?
Answer. I cannot comment on any specific proposal that might come
before me should I be confirmed. I do know that interstate natural gas
pipelines are required to comply with the Department of
Transportation's safety regulations, which take population density into
account. In addition, in reviewing proposed projects, FERC analyzes the
potential environmental impact they would have on residents and
communities, and the potential economic effects of proposed pipelines
on affected communities. Ifconfirmed, I would certainly strive to
consider all relevant impacts on communities in reviewing any siting
proposals.
consumer protection--wholesale electricity markets
Question 4. Ms. LaFleur, many of the nominees we have for FERC come
from State Boards of Public Utilities. I think this helpful because in
this position they need to weigh the interests of utilities against
those of consumers. On your resume, however, I only see that you have
experience on the utility side of things. In fact, as far as we can
tell you might be the first nominee to FERC or the FPC (became an
independent body in 1935) by Democratic President for a Democratic seat
that is coming from the industry. What in your background can assure me
that you will protect consumers and make sure they are charged just and
reasonable rates for electricity?
Answer. First of all, in terms of my experience in the electric and
gas industry, most of my experience has been at the distribution
customer level, directly serving residential and business customers. I
have had considerable face-to-face experience meeting with customers to
discuss their questions about their electric bills, reliability
problems and storm response, siting new distribution projects such as
new lines and substations, and providing energy services such as
conservation and load management. I believe I understand well the
impact that all regulatory decisions have on people and communities,
and would reflect those considerations as I weigh issues before the
Commission. In addition, beyond my utility background, I have
considerable experience as a community and non-profit board member, a
lawyer, and a private citizen. I have been closely involved in
hospitals, colleges, community service agencies, and economic
development organizations, and I know how much the cost and
availability of energy affects jobs and customers' pocketbooks.
Although I have not served as a state regulator, I have worked
closely and productively with state commissioners in Massachusetts, New
Hampshire and Rhode Island, and to a more limited extent in New York. I
would look forward to working with state utility commissioners from
across the country through NARUC and other collaborative efforts.
Finally, if confirmed it would be my sworn duty to decide all
matters based on my independent judgment and in the public interest,
and that is what I would do.
Responses of Cheryl A. LaFleur to Questions From Senator Barrasso
Question 1. The Energy and Natural Resources Committee approved
legislation that expands FERC's eminent domain authority. It allows
FERC to override State rejections of proposed transmission lines. Do
you believe FERC should have the authority to override a State's
rejection of a transmission proposal?
Answer. I believe that it would be helpful for Congress to clarify
and strengthen FERC's backstop siting jurisdiction. However, I believe
that jurisdiction would have to be applied very judiciously, because
siting is first and foremost a state and local responsibility. I know
from my own experience that siting projects across state lines can be
very difficult, particularly when the projects impact different
customers differently. I think a major benefit of FERC's backstop
siting authority is to encourage states to work out issues
collaboratively and resolve them without FERC doing so. In addition,
the Commission's current transmission siting authority is constrained
by specific limitations, particularly a ``public interest'' standard. I
believe a similar standard in any additional authority would help
ensure that the Commission gives appropriate consideration to the
effects of proposed projects on the interests of landowners and
communities.
Question 2. What is your view on the future role of baseload power
sources like coal and nuclear in America's energy portfolio?
Answer. I believe that existing generation resources, including
both coal and nuclear, are likely to continue to be a part of America's
energy portfolio. As far as new resources to be added to the portfolio,
I support efforts to add nuclear generation where supported by local
communities and states. I think that the future of new coal generation
units will likely depend on the success of ongoing research on clean
coal and carbon sequestration technology. I support research in these
areas.
Question 3. Last year, Chairman Wellinghoff said that the nation's
future power needs can be fully met by renewable energy sources and
efficiency improvements. Do you agree?
Answer. I certainly agree with Chairman Wellinghoff that renewable
energy and demand-side resources, both energy efficiency and demand
response, can play a very substantial role in meeting new power needs.
Because of the characteristics of those resources, I do not believe
that they will supplant the need for new baseload resources in the
short to medium term.
Question 4. Do you support requirements that new transmission favor
or be limited to renewable or low-carbon emitting resources?
Answer. By definition, transmission is the link between generation
and load. Currently, transmission facilities connect to and support all
types of generation resources. Transmission capacity cannot be limited
to electrons generated only by specific resources, nor can electrons be
targeted only to specific transmission facilities, as electricity by
its nature follows the path of least resistance. It is true that
transmission is a particularly critical issue for geographically-
constrained renewable resources that are remote from load, and that
transmission would need to be constructed in order for such potential
resources to serve energy markets. At the same time, I believe that the
generation mix will largely be influenced by environmental policies,
such as the renewable portfolio standard that this Committee passed
last year, and not driven by transmission policy.
Responses of Cheryl A. LaFleur to Questions From Senator Sessions
Question 1. Do you believe FERC needs new cease and desist
authority, or is FERC's current authority sufficient to deal with
energy market manipulation?
Answer. I believe that it would be useful for FERC to have cease
and desist authority to deal promptly and effectively with instances of
market manipulation, which would bring FERC's authority in line with
that of the SEC and the CFTC. I would also support FERC having
authority, with appropriate judicial review, to freeze assets to ensure
that FERC can prevent the significant dissipation or conversion of
assets and thus ensure that it can effectuate a remedy.
Question 2. Once the economy recovers, it is expected our nation's
demand for electricity will increase significantly over the next 20
years. I subscribe to the belief we will need a variety of both supply
and demand side resources to meet our energy needs, including new
nuclear, renewab1es, clean coal, demand response, and energy
efficiency. In your opinion can we afford to take any of these
resources off the table and still deliver the reliable, low cost, and
clean energy our homes and businesses need?
Answer. I believe that there is considerable potential for demand-
side resources such as energy efficiency and demand response to slow
the growth of energy demands, especially peak demands, and believe we
should work hard at the state and federal level to harness that
resource. However, I agree that we will also continue to need a diverse
mix of supply-side resources to meet energy needs. I would not take any
of the resources you list off the table.
Question 3. Considering your extensive knowledge of the energy
industry, I'm sure you are familiar with ``standard market design,'' a
Commission proposed restructuring of the electric industry that would
have required all utilities to join Regional Transmission Organizations
and adopt centralized operating control of the grid. As a result of
concerns from many states and members of Congress, that proposal was
dropped, and as a result today's industry structure has a mix of
vertically-integrated utilities operating under state rate regulation
and restructured utilities operating in organized markets. In your
opinion do you believe that these two market structures can continue to
co-exist?
Answer. I believe we will continue to see a dual structure of
organized markets in some regions and bilateral markets in other
regions for the foreseeable future. I believe that FERC can work
effectively with this dual structure in its development of energy
policy.
Question 4. Section 215 of the Federal Power Act requires the
Commission to provide ``due weight to the technical expertise'' of NERC
with regard to reliability standards. It also requires FERC to
``provide for reasonable notice and opportunity for public comment, due
process, openness, and balance of interests in developing reliability
standards and otherwise exercising its duties''. How do you reconcile
these statutory requirements with a series of recent FERC orders that
are very prescriptive in directing NERC to make certain modifications
to its standards and to do so by specified deadlines?
Answer. The recent FERC orders to which you refer are pending on
rehearing, and thus it would be inappropriate to comment on them as
they might come before me should I be confirmed as a Commissioner.
However, I respect the expertise of those who have developed the
standards, and understand the Congressional intent that FERC should
give ``due weight'' to NERC. In any event, I believe that deadlines are
important to keep the process of standard setting moving.
Question 5. Regarding the NIST lead effort to develop Smart Grid
interoperability standards under the 2007 Energy Independence and
Security Act (EISA),
a. How will FERC determine and confirm that sufficient
consensus has been reached before moving forward with a
rulemaking proceeding to adopt such standards?
Answer. EISA section 1305 directs FERC to institute a rulemaking
after the work by NIST ``has led to sufficient consensus in the
Commission's judgment,'' but does not specify criteria for finding
``sufficient consensus.'' I think it might be informative to consider
the process for developing consensus in other standards development
processes accredited by the American National Standards Institute.
Ifconfirmed, I would look forward to learning more about this and
helping to move this important process to completion.
b. How will FERC determine which of the many standards
proposed by NIST are appropriate for a rulemaking proceeding?
Answer. EISA section 1305 requires FERC, upon finding sufficient
consensus, to adopt ``such standards and protocols as may be necessary
to insure smart-grid functionality and interoperability in interstate
transmission of electric power, and regional and wholesale electricity
markets.'' Consistent with these criteria, FERC issued a Policy
Statement in July 2009 to provide guidance to NIST and industry as to
FERC's priorities in the development of smart grid standards. However,
NIST has not yet completed work on its initial set of smart grid
standards and it is therefore too early to tell which may be
appropriate for a rulemaking by FERC.
Responses of Cheryl A. LaFleur to Questions From Senator Wyden
Question 1. In response to questions for the record during the
Committee's 2005 hearing on LNG permitting, Mark Robinson, then
Director of the Office of Energy Projects responded that,
The Commission is supportive of competition within the energy
industry and of the idea that the market drives infrastructure
development. Past experience, particularly since the
restructuring on the gas industry following Order No. 636, has
demonstrated that market forces can serve the same end as a
competitive or ``Ashbacker'' hearing. Where the Commission
approves multiple projects to serve a similar market, only an
economically viable project will actually be built, i.e., only
where customer commitments ensure new service will fulfill a
genuine need.
The Commission continues to follow this policy.
a. How is this policy consistent with the obligation of the
Commission to make an affirmative finding of public convenience
and necessity under the Natural Gas Act?
Answer. I want to be very careful in my answer as I have not
studied FERC policy and past decisions in this area. If confirmed as a
Commissioner, I would certainly work hard to study these matters with
care.
Having said that, as I understand FERC decisions in this area, LNG
proposals have been approved without comparative hearings where such
proposals were deemed to be not mutually exclusive within the meaning
of Ashbacker. FERC has examined each project on its own merits,
including all potential environmental and safety impacts, and granted
approval if it affirmatively found the project to be consistent with
the public interest.
b. Do you agree with this policy that competitive or
``Ashbacker'' hearings need never be conducted where multiple
projects are proposed for a given market or to serve a specific
demand, such as send-out capacity for an LNG terminal?
Answer. If confirmed, I would work hard to study this area and to
understand the background of existing FERC policy. As with all matters,
I would give due deference to existing precedent but would seek to
apply the law in my independent judgment based on the facts of the case
before me.
c. Are there any circumstances where you believe that it is
ever appropriate for the Commission to conduct competitive or
``Ashbacker'' hearings where multiple projects are being
proposed to serve a single market or even a specific facility,
such as an LNG terminal? If so, when?
Answer. As stated above, I have an open mind and, if confirmed,
would consider this in view of the specific circumstances of the case
before me.
d. In Oregon there are multiple projects including three LNG
terminals all proposed to serve the Northwest market with far
more capacity than the region uses. Under what circumstances,
if any, should LNG projects such as these be the subject of
combined proceeding?
Answer. I cannot comment on the specifics of cases that are still
pending or could be brought before the Commission should I be
confirmed. Were I presented with such an issue if confirmed as a member
of the Commission, I would approach it with an open mind based on the
facts and law of the case before me.
e. In the circumstance of the Palomar Pipeline pending before
FERC now, and the Northern Star pipeline approved by FERC as
part of the Bradwood LNG projects, the projects are intended to
transport exactly the same Bradwood-originated gas shipments.
Under what circumstances, if any, should pipeline projects be
the subject of a combined proceeding?
Answer. Since these cases are pending before the Commission, I
cannot comment on the specific proceedings or how I might approach them
should I be confirmed. On the general question of when proceedings
should be combined, I would consider arguments with an open mind and
seek to make the best decision on the facts and the law in cases that
came before me.
f. If the Commission has already approved a pipeline, for
example the Northern Star pipeline, to serve a specific demand,
what basis does it or should it have to make the public
convenience and necessity finding required under the Natural
Gas Act for a second pipeline for exactly the same shipments?
Answer. As I understand the law, the Commission could not authorize
construction of the second pipeline unless it affirmatively found that
the pipeline was required by the public convenience and necessity. This
finding would have to be made based on the facts of the specific case
before it.
Question 2. The Federal Power Act currently includes authority to
establish an Office of Public Participation which has never been
created. FERC is now being given more and more authority over the
siting energy facilities. In addition to natural gas pipelines, in 2005
Congress gave FERC authority over siting LNG, and back-stop authority
to site electric transmission. Congress is currently considering
legislation to give FERC even broader authority over the siting of
electric transmission lines. Our experience in Oregon with LNG and
natural gas pipelines has been abysmal. Most recently, land owners were
denied the ability to submit written testimony in a FERC proceeding to
investigate possible abuses by the applicant on their own property. Why
shouldn't FERC have an Office of Public Participation to ensure that
citizens have a voice in FERC decisions that so directly affect their
lives and their communities? Would you support establishing and funding
this office to ensure that the public is heard?
Answer. FERC has an existing obligation to consider the interests
of citizens, and allow them to be heard in FERC proceedings, regardless
of whether an Office of Public Participation is created and funded.
Ifconfirmed as a Commissioner, I would strive to uphold this duty.
However, if Congress chooses to fund an Office of Public Participation,
I believe it might playa useful role in helping consumers and other
stakeholders participate in FERC proceedings and making sure that FERC
processes support such participation. An alternative approach might be
the creation of an Office of Consumer Advocacy, as mentioned in your
next question.
Question 3. The Federal Power Act and the Natural Gas Act require
FERC to ensure that rates are just and reasonable - a requirement FERC
has decided it can ignore in favor of letting the market set the price
- even when that market is dysfunctional or being manipulated as we saw
with Enron. Utility consumer advocates exist in many states. Wouldn't
you agree that consumer advocates can provide important consumer
protections for rate payers? Would you support the creation of an
office of consumer advocate within FERC?
Answer. The Commissioners of FERC, and all offices within FERC,
have an existing obligation to consider the interests of consumers when
applying the enabling acts and making decisions about energy projects
and other matters. If confirmed as a Commissioner, I would work very
hard to meet that obligation. I do not think a consumer advocate could
relieve FERC of that obligation, or be responsible for representing
consumers in all matters before the Commission. However, I know that
consumer advocates playa valuable role at many state commissions. If
Congress chooses to appropriate funds to create such an office, it
might play a useful role, for example in helping consumers participate
in FERC proceedings and strengthening relationships between FERC and
consumer groups that seek to be heard on energy policy.