Certificate Orders
I am dissenting in part from the orders in C-1, C-2, and C-5, which authorize new natural gas facilities under section 7 of the Natural Gas Act. I disagree with the Commission’s claim in those orders that it has no tool to assess the impacts of greenhouse gas emissions from those projects. This kind of assessment is required by law.
The Commission does have a suitable tool and that is the Social Cost of GHG Protocol. Over the last decade, this Protocol has become well-accepted as a method to contextualize and monetize climate harms. The Commission should acknowledge and apply the increasingly robust science supporting its use in NGA decision-making.
I explained in depth why the Commission should use the SC-GHG Protocol in my dissent from the Transco certificate rehearing. I also dissented from the order on rehearing in the GTN Xpress certificate case. There, the Commission's myopic focus on precedent agreements caused it to miss critical evidence demonstrating the project is likely not needed and therefore not in the public interest.
While GTN put forward precedent agreements as its evidence of need, its own witnesses, arguing for a rate case increase in a different docket, projected that state decarbonization laws will likely reduce future demand for GTN’s pipeline capacity. The States agree with this assessment in the certificate docket. Evidence showing that state laws will reduce demand for GTN’s pipeline capacity deserved serious consideration but did not receive it.
There is a common theme underlying my dissents today and last week. Simply put, the Commission must update its Natural Gas Act certification framework to reflect today’s realities and consider the actual costs and benefits of proposed new gas infrastructure. Industry should be anxious for certainty on a modern, legitimate, and defensible policy to guide it forward.
We cannot serve the public interest by ignoring the effect of state decarbonization and renewable energy initiatives, which are growing in number and importance. Nor do we serve the public interest by ignoring scientific developments that enable us to incorporate climate change impacts into our substantive decision-making. The majority order’s rationale no longer holds water.
I have urged that we modernize our certification approach since I first joined the Commission. I do so again today.
A-3 (Winter Storms Review)
Thanks to all of you for the work on this. I think it was a smart idea to have a qualitative report. It’s not quantitatively determined, but we can get the information out fast so that people can pay attention and learn from it.
This is a story of significant progress: thanks to you all, thanks to the grid operators, thanks to the utilities, and others. We are following through on these recommendations from Uri and Elliott.
I have three takeaways. First, extreme cold weather is testing our systems around the country. These storms are in new geographical areas. All regions of the country need to prepare for this cold weather, even ones that aren’t historically accustomed to these events.
My second takeaway is about the gas system. Whether it’s 15% or 20% or 23% cut production, FERC doesn’t have jurisdiction to control upstream reliability. That’s not going away until Congress acts on that front. We need to think about what that means for the part of the system we do have jurisdiction over.
To that point, anecdotally, there were fewer derates and outages. That’s a very good thing. The reason the ones that are still happening are happening — whether it be generators, black start units — are the same reasons as before: mechanical failures, freezing, fuel supply issues. It’s not rocket science; we have the information to solve the challenges in front of us. That’s encouraging, and goes to some of the recommendations we need to continue to work on. The gas-electric coordination piece is so important, for example, when we couldn’t get bilateral sales quickly enough. It’s great to keep our feet to the fire on these recommendations from those reports.
Finally, at the risk of sounding like a broken record on this issue, interregional transfers between regions are so important and critical during moments of extreme weather. We have to find a way to account for the benefits of what those interregional connections are providing in shorter periods of time. The Commission should continue to facilitate these outcomes so neighbors can continue to rely upon each other.
I have no doubt that the Commission will continue to make the combined recommendations a centerpiece of its reliability work going forward.