Canada has been experiencing country-wide wildfires earlier in the season and more severe than ever before. In DC, like up and down the East Coast, we all experienced it. There was smoke creating orange dystopian skylines. Communities were forced inside, and vulnerable people were exposed to bad air quality and risk. Of course, this is a story that is all too familiar for those in the West. It is quite a striking backdrop in which to issue orders E-1 and E-2 today, and we’ll talk more about those.
E-3
In E-3, we issue a Final Rule that permits RTOs and ISOs to share credit-related information of their market participants with each other. As the order notes, the inability of an RTO to access credit-related information of participants hinders its ability to mitigate risk to prevent default in its markets. Today’s order is certainly a good step toward lowering barriers to sharing.
However, as I expressed last July when we issued this NOPR, I’m afraid that this rule involved a lot of work but falls short of fixing the problem that it’s aiming at. The rule does not require RTOs to actually share information, it merely permits RTOs to share whatever information they want to share, whenever they want to share it. I appreciate the need for flexibility, but the Commission could have balanced that need with a requirement that RTOs provide information upon reasonable request.
Nevertheless, I hope this rule facilitates progress on this front, and I will continue to look for opportunities to strengthen its provisions.
C-1 and Commonwealth
I want to talk about a couple of gas orders. First, I have a partial dissent in C-1. I agree with granting a certificate for Equitrans’s project, but I again object to the gratuitous language in the order saying that there is no appropriate tool for assessing the significance of greenhouse gas emissions. As I’ve said before, I do not know whether an appropriate tool exists. That is because the Commission has never seriously considered the voluminous record we have in open generic proceedings in our draft policy statements addressing this and related issues.
I made the same point in a notational order from last week in the Commonwealth LNG matter. But in that case, it was a full dissent, and there was a second reason motivating my dissent in the Commonwealth docket. There the Commission violated the core Administrative Procedures Act requirement for reasoned decision-making.
Look, I have signaled a willingness to work towards incremental improvements on our 1999 policy statement. And I have joined my colleagues in approving many gas and LNG projects. And I have been open to different ways of expressing the Commission’s reasoning. But this majority opinion appears to back away from settled law that we consider environmental factors in our decision-making, a point that has been clearly affirmed by the DC Circuit in recent years with regard specifically to greenhouse gas emissions and environmental justice considerations. Perhaps because of this, the language in the Commonwealth order is written in some sort of code in an attempt to evade the law that we are bound to apply. As a result, the language has become, to me, incomprehensible. And I had to draw the line and vote to dissent.
I could not tell from the majority’s language in paragraph 37 of that Commonwealth order whether the Commission considered the project’s greenhouse gas emissions at all. The Commission is legally bound and required to do so under both the Natural Gas Act and NEPA. That is the current law. And as I have said before, should the Commission decide how to address climate impacts in a generic proceeding, we should do so after a thorough and transparent generic review of the record.
A-3
Thank you all very much for the work on this and the presentation.
It’s so striking looking at that slide with the checkmarks that the number one issue (or among the number one issues) has been a lack of generator weatherization, or unplanned outages. It’s just more evidence that the failure to weatherize and to address the issues with the natural gas system is very troubling in the face of increasing extreme weather. And I know some of these things run up against our jurisdictional boundaries. There’s more to do that we can hopefully be helpful with and there are things that we can do within our own jurisdiction.
And those reliability standards the Chairman was speaking about – we said in the order we put out that they must be strengthened from where the proposal had been. This is further affirmation of that need for strengthening. Every winter we go through is putting people’s lives at risk. And we’ve known this for at least 12 years.
Predicting these electric system vulnerabilities is becoming increasingly difficult as climate change worsens these extreme weather events, and we don’t have the data to adequately predict what might happen. To me, it shows that reserve margins are an increasingly inadequate tool to predict winter sufficiency. In this storm, two of the regions that suffered rolling outages during Winter Storm Elliott—TVA and Duke—were not even identified in NERC’s 2022-23 winter assessment as anything more than a low risk of load shed.
PJM too, which the NERC study forecasted as being especially low risk, didn’t shed load, but it did trigger emergency actions due to the loss of 46 GW of capacity, far more than the 18 GW that NERC’s analysis anticipated. So, the challenge is real relative to how we’re doing these predictions on a going-forward basis. It’s really important not just to look at reserve margins as the way we’re getting at these problems.
PJM did note that its ability to import power from its northern neighbors and MISO helped to avoid load shedding, again underscoring the importance of interregional transfer capability.
Presentation: E-1 and E-2
Thank you all very much for the great work on these two orders. I’m happy to see them.
In E-1, the transmission planning standards we are directing NERC to develop are one step to making the system more reliable and resilient. We speak to this in the order. The standards address one aspect of the bigger challenge. They can be an effective part of the reform needed if paired with important updates to resource adequacy constructs across the country, as well as long-term, holistic transmission planning. That’s a really good step.
With regard to E-2, I want to highlight my joint concurrence with Chairman Phillips. It encourages transmission providers to describe their efforts with regard to disadvantaged communities. Gathering this information is an important step, and it may help transmission providers to address any unique challenges they identify based on this initial engagement.