Thank you again, Senator. You’ve been a strong voice on so many energy issues throughout your tenure, and we at FERC have benefited from your engagement and interest in the issues we tackle. In particular, you’ve been a champion of the work we’ve done to eliminate market barriers to storage and distributed energy resources, or DERs. I appreciate your leadership and support on these issues and am proud that we have been able to move forward with both Orders 841 and, most recently 2222.
We’re grateful to have you help us frame this significant conversation we’re having today and look forward to continuing to work with you on critical energy issues.
Thanks so much for taking the time out of your busy schedule to be with us.
Now, I want to also express my gratitude to my colleagues, Commissioners Glick and Danly, for their work and collaboration to bring us here today. As with any technical conference, this required a lot of staff work as well, and some continued ingenuity as we gather participants virtually. For that, I want to thank the team without whom we could not have organized this important and timely discussion.
And, of course, I want to thank all the panelists for your time and perspectives. The statements and comments you’ve submitted already have advanced and enriched our thinking on the topics we’ll address today, and I look forward to diving deeper into the issues with you all. Your perspectives and voices are invaluable to us.
We’re all here to address what boils down to a narrow, but critical topic: When states or regions adopt a carbon pricing framework, what considerations does that raise for FERC and the markets we oversee?
There’s no dispute that states are actively exploring and adopting policies to curb emissions, and diverse stakeholders have embraced carbon pricing as an important tool in that effort. Many view carbon pricing, when correctly designed and implemented, as having the potential to be an efficient, least-cost and transparent way to reduce emissions. That’s why groups like the Natural Gas Supply Association have actively supported carbon pricing as a critical tool for decarbonizing energy systems.
All that said, although I’ve often shared my personal belief on confronting climate change and the role clean energy resources can play in reducing emissions, I want to be clear: We’re not here today to focus on the merits of various environmental policy goals or tools. In any action we take, I think a market-based solution are preferable to heavy-handed regulations. But I think it’s important to be very clear about our starting point today: FERC is not an environmental regulator. We have neither the expertise nor the authority to weigh in on how to best curb emissions.
What we do have is the expertise – and the mandate – to ensure just and reasonable wholesale rates. In our modern construct, that requires us to ensure that the organized wholesale markets we oversee – with their layers of complexity, their diverse footprints, and their constantly emerging and evolving challenges – remain efficient and transparent. In doing so, we can continue to protect consumers by ensuring a reliable supply of affordable energy at just and reasonable rates.
The conversation we’re having today is forward-looking, no doubt. And though state carbon pricing policies were the impetus for this discussion, in my view it’s a very natural extension of the important, market-protective work we’ve been focused on during my time as Chairman.
I’ve demonstrated my commitment to ensuring that competition can continue to create value for consumers. That’s the consistent, durable thread that binds the Commission’s most significant actions under my leadership. You can see it in our work to ensure competitive capacity markets and to knock down barriers to storage and DERs. You can see it in our actions to modernize and introduce competitive pricing principles under PURPA. You can even see it in looking to the emerging issues we’re exploring like hybrid resources and barriers to offshore wind. Competitive markets are, in my view, the smartest path forward in this energy transition.
But our complex energy markets cannot be hermetically sealed from state environmental policies. That’s just an undeniable fact. And it’s evident to anyone who’s watched us over the past several years we’ve grappled with the thorny issues that arise at the intersection of state policies and our markets.
We’re at a pivotal point when it comes to these discussions—a point that I think, will ultimately lead to action in some shape or form. As states continue having these conversations, we’ve seen mounting pressure on lawmakers as well. And some of the proposals that have been floated—while presumably well-intentioned—could actually bring with them more harm than good. That’s why I think, as we face this crossroads, we have to take this issue head on. That’s why I felt it was important for FERC to convene this dialogue and explore solutions from our pragmatic, market-based lens.
So, the focus here is about the reality facing this Commission: as states and regions move forward with carbon pricing policies – sometimes conflicting policies – how do we ensure that our markets continue to deliver on their promise? What is our role and what is our responsibility in this moment?
To that end, we’ve gathered what I view as a blockbuster line-up of experts and key voices representing a range of interests. I couldn’t be more pleased to jump into today’s conversation. I’ll be especially attuned to the discussion we’re going to have at the outset about our statutory authority and mandates under the Federal Power Act. I’ll also be interested in the panelists’ insights as we drill down into topics that touch on the efficiency and transparency in our markets, ways to approach complex issues like leakage and resource shuffling and any potential implications for reliability and costs.
In preparing for today, as I read the statements and submissions of the panelists, I was struck by a common theme: When it comes to grappling with these market issues, the perfect
should not become the enemy of the good. These issues are complex, the market footprints all differ and the policies bubbling up within them differ. We may not have all the answers – indeed we almost certainly do not. But it’s time for us to roll up our sleeves and confront the questions head on.
With that, I’d like to give my fellow Commissioners an opportunity to share any opening remarks they may have.