What a big and impactful year at FERC we’ve had. We’ve done a lot of consequential work. We put out important proposals on regional transmission planning and cost allocation, and on interconnection reform. We held technical conferences on transmission cost management and interregional transfer capability. We’ve held an important forum on winter reliability in New England, and two recent, timely technical conferences focused on system reliability broadly and supply chain management risk more specifically. That’s a lot of work.
I’m honored to be working with Chairman Glick and his team, who have shepherded all of this through, and especially to our dedicated Staff. We cannot overstate the work of Staff on these issues. Your work is hard, and important, and we thank you for what you do.
E-3
First, on order E-3. In that order, the Commission approves Arizona Public Service Company’s (APS) proposal to transition from rated path to flowgate methodology for determining available transmission system capacity. That is a mouthful of words to describe an improvement APS is making. It’s a more granular and accurate way to figure out how much capacity is available on each portion of its transmission system, as often as on an hourly basis. The change is a potentially vast improvement over the status quo, which involves making only system-wide seasonal determinations of available capacity.
The new, more dynamic approach would squeeze out more value from the existing system before we think about building new infrastructure, an effect not unlike that of the grid enhancing technologies I like to talk about. The change is especially important in these “all hands on deck” moments of system stress like Western heat waves, when a more dynamic understanding of the capacity of a line in a given moment can allow for increased flow, which in turn contributes to keeping the lights on. And, if that wasn’t enough, the APS filing also notes that the change is important to complement its potential participation in a day-ahead market.
I hear other Western utilities are considering a similar option for similar reasons. While each proposal must satisfy our statutory standards, as a general matter, I am encouraged by these evolving, organic efforts by Western utilities towards market participation that is good for their business, good for cost savings, and good for reliability.
G-6
Next, I’d like to say a few words about G-6. The last two times the Commission issued full opinions on natural gas rates cases like this one were in 2012 and 2013. I commend our Advisory Staff’s support in helping us understand a voluminous record, our Office of Administrative Law Judges for their hard work in holding a full hearing in this matter, and all of the participants in the case—Panhandle, state commissions, cities and townships, our Trial Staff, and dozens of other parties—for their involvement.
Rate-making is the bread and butter of our agency’s regulatory responsibility, and I am pleased to support this order. I expect it will provide important guidance on the Commission’s approach to natural gas rate cases in the coming years.
C-1
Finally, I want to speak to today’s order reissuing a certificate of public convenience and necessity to the already operational Spire STL Pipeline. Chairman Glick laid out the troubled history and I won’t repeat it here, except to say that my concurring statement reflects on the lessons to be learned. First, as the D.C. Circuit instructed, we must follow our own existing Certificate Policy Statement. That policy calls on us to consider evidence of need beyond the affiliate precedent agreement, including market studies. Second, we cannot ignore record evidence contradicting the need and benefits claimed by the certificate applicant.
It may be simple and expedient to rely solely on an affiliate precedent agreement while ignoring contrary evidence. But that shortcut here exacted a very high cost on all parties, including Spire.
And it’s still not over. As Chairman Glick noted, the Commission must be vigilant that Spire fully restores the pipeline right-of-way, minimizing the remaining impacts on affected landowners. Second, the Commission must be vigilant in assuring that Spire’s rates remain just and reasonable.
Presentation Items
A-3
Thanks to David and Kiel for your presentation. I will also pick up on the state jurisdictional issue, but from a different perspective. Several of our orders today have dealt with the interrelation between states and FERC jurisdiction. If we’re going to meet this reliability challenge, we cannot do it unless the states and the federal government are cooperating together.
No state or region is an island unto itself, and it simply doesn’t work if we’re in our own silos. On a related issue, the NARUC-FERC task force is a really good example of putting down the angst of whether one hair of jurisdiction falls on the right or wrong side of the line, and sitting down together and realizing we’re all in this reliability challenge together. I’m particularly interested in the work we’re doing with the NARUC Subcommittee on Electric Reliability and Resilience. I encourage you to continue doing that. That’s the only way we’re going to get at these problems.
E-1
Thanks to Abby, Kim, Ena and the Team. I talk a lot about these reliability and cost benefits to customers. But sometimes I think the term “benefits” is a misnomer. Transmission isn’t like a nice new sweater from the Gap that would be a nice thing to have. The record continues to demonstrate that significant investment in new transmission across the country is nothing less than essential to system reliability and customer affordability, now and in the future. That is especially true for that subset of projects envisioned by IIJA revisions, these higher voltage, larger scale corridor transmission projects that Congress intends.
It’s rare for agencies to create a platform or a new approach—this is a new authority. For the vast majority of transmission projects that are sited, they are continuing to be sited by state commissions. We have to acknowledge that and respect that and recognize that Congress has told us to do that. I’m supportive of the voluntary applicant code of conduct as well as the environmental justice public engagement plan.
Let’s do this well. To have fidelity to the IIJA, the purpose is to get transmission built. And to the Chairman’s point, its hard to build infrastructure because that impacts people. So let’s find ways to bring people into the conversation early on and get satisfactory outcomes relative to transmission siting and pathways. I think that’s pretty exciting and has a lot of opportunity, and makes these projects less litigated on the backend. I hope people will embrace the idea of this applicant code of conduct, and let us know where we didn’t get it right. Thanks for the good work.
E-27
Thanks to Mark and the team for the presentation and work on this item. I’m glad to vote for today’s order. The news in recent weeks doesn’t represent a new thread, but it highlights the need to take a refreshed look at whether our current reliability standards adequately deter risk and protect FERC jurisdictional infrastructure. The speed at which Staff turned this around—it’s a great example of how FERC can respond swiftly as we should in improving reliability baselines. Thanks for the work on this one.
Chairman Rich Glick is a true public servant. His career, his beliefs, the way he operates each day is because he is trying to do the right thing by the people he is serving, and it has been an honor to work with him.
Chairman Glick, I think your legacy will be a lot of things. I hope we get some rules done for you that are in process, your rules, but you have taken important steps to set this agency up for the future. None of these agencies, state regulatory commissions, or energy offices were set up for the challenges that are now being thrown at us, at these institutions. Decisions like personnel announcements, like creating a senior advisor for environmental justice and equity, by establishing an Office of Public Participation, by elevating really amazing women across the Commission—you started us down a path where we are trying to meet those challenges.