Considering FERC at 40

Oct. 2, 2017
The US Federal Energy Regulatory Commission celebrated its 40th anniversary on Oct. 1, about a month after resuming full business following its not having a quorum since the end of January.

The US Federal Energy Regulatory Commission celebrated its 40th anniversary on Oct. 1, about a month after resuming full business following its not having a quorum since the end of January. Regular meetings have resumed, with new commissioners Neil Chatterjee and Robert F. Powelson on board with holdover Cheryl A. LaFleur. Two more-Richard Glick and Kevin McIntyre-should join them once the full US Senate votes on their nominations.

There's been recent criticism, however, that the independent commission does not adequately consider the environmental consequences of the interstate energy transportation projects it approves. "Rubber stamp" is one of the milder names critics assign FERC, despite a National Environmental Policy Act review being part of its application evaluation process.

Basically, FERC regulates the interstate transmission of electricity, natural gas, and oil. It also reviews proposals to build interstate gas pipelines and LNG terminals, as well as licensing hydropower projects.

It does not regulate retail gas and power sales to consumers, local energy distribution, construction of power plants or oil pipelines, oil facilities' abandonment of service, offshore pipeline safety and transportation, or oil and gas mergers and acquisitions.

Many of these responsibilities remain with state public utility commissions. Some PUCs have found in the past few years that their missions of ensuring reliable energy supplies for consumers at the lowest possible prices conflict with state environmental departments' goals.

FERC must deal with this when other federal agencies take their time to weigh in during its environmental impact reviews. The bill that US Sens. James M. Inhofe (R-Okla.) and Angus S. King Jr. (I-Me.) introduced on Sept. 22 is only the latest congressional measure aimed at improving coordination of interagency reviews for gas pipeline projects undergoing NEPA reviews at FERC.

There also have been periodic cries of runaway federalism when nearby communities and residents protest the agency's approval of a project. These have existed since FERC was created.

What helps it work

It's a tribute, then, that the commission has worked so well since 1977. Some of this is due to its members being both Democrats and Republicans serving staggered 5-year terms. Several have come directly from state PUCs. The remarkable support FERC's staff provides to help commissioners reach their decisions also should not be overlooked.

Finally, the US interstate gas pipeline system is probably the world's best because it grew more competitive after FERC removed the last federal price controls in 1985. There are still conflicts with state environmental regulators, particularly in the Northeast, but the system provides a good example for areas like Central and Eastern Europe, which lack decent gas transportation.

That's why FERC at 40 looks pretty darn good.