Pipelines Among Priorities as Energy Regulator Gets Quorum

Turn to the nation's most objective and informative daily environmental news resource to learn how the United States and key players around the world are responding to the environmental...

By Rebecca Kern

The Federal Energy Regulatory Commission can proceed to vote on a backlog of key natural gas pipeline projects, contested rate filings, and enforcement actions now that its long-waited quorum has been restored.

Robert Powelson (R) was sworn in as a third commissioner on Aug. 10, bringing the independent agency back to a voting quorum, which it lost in February. Powelson joins Chairman Neil Chatterjee (R), who was sworn into FERC on Aug. 8 and named acting chairman Aug. 10, and Commissioner Cheryl LaFleur (D), formerly acting chairman.

Orders and rate filings that are time sensitive will likely be voted on first, said Colette Honorable, a former FERC commissioner who left the agency June 30 and is now a partner in the Energy and Natural Resources Group of Reed Smith LLC.

“Matters with urgent deadlines, matters with regard to infrastructure projects, matters concerning ratemaking as it may relate to rates that may go into effect, may be higher in the queue,” she told Bloomberg BNA.

At least three commissioners are required for the agency to vote on key infrastructure filings and orders, including natural gas pipelines and liquefied natural gas pipelines, contested rate filings, enforcement actions, and mergers and acquisitions. FERC unexpectedly lost its quorum in February when former Chairman Norman Bay (D) prematurely left.

At least $14 billion worth of natural gas pipeline projects have been awaiting the FERC quorum in order to get votes on their certificate approvals, including the $5.5 billion Atlantic Coast Pipeline, owned by Dominion Energy and other partners, and the $2.1 billion Nexus pipeline, a joint project from DTE Energy Co. and an Enbridge subsidiary.

Chatterjee, a former energy staffer for Senate Majority Leader Mitch McConnell (R-Ky.), and Powelson, the former president of the National Association of Regulatory Utility Commissioners and a commissioner on the Pennsylvania Utility Commission, were confirmed by the Senate Aug. 3.

Chatterjee will serve as chairman until Kevin McIntyre, an attorney with Jones Day, whom President Donald Trump named as chairman, is confirmed by the Senate. Trump also has nominated Richard Glick, Democratic general counsel for the Senate Energy and Natural Resources Committee, to be a FERC commissioner. The Senate will hold a confirmation hearing Sept. 7 for McIntyre and Glick, who, if confirmed, will bring FERC back to its full five commissioners.

Prioritizing Hundreds of Orders

Despite delegating certain orders to staff, hundreds of orders have piled up over the past six months, Tony Clark, a former FERC commissioner and a senior adviser at Wilkinson Barker KnauerLLP, told Bloomberg BNA.

Before FERC lost its quorum, it delegated certain responsibilities to staff, including allowing the director of the Office of Energy Market Regulation to accept and suspend rate filings and make them effective subject to refund and further commission action. But contested rate filings require a voting quorum, so these are among top issues for the commission.

Also, settlement cases from the Office of Enforcement, which require a FERC vote and have a statute of limitation, will also rise to the top of the list. “All of those things are non-public, so we wouldn’t know about them, but it would only make sense that the work of staff over the past six months may need to be acted on in fairly short notice,” Clark told Bloomberg BNA.

Marc Spitzer, a former FERC commissioner and a partner at Steptoe and Johnson LLP, said when it comes to prioritizing orders, “They’ll probably do the easiest ones first, and give them time to spend on the contested ones and complicated ones to do later.”

LaFleur, who served as acting chairman from Jan. 23 through Aug. 10, triaged orders for staff to prepare for when the quorum is restored, Honorable said.

Clark said that more policy-focused agenda items for the commission, including court decisions that have been remanded back to the agency and ongoing rulemakings, will likely take the back seat.

“Things that are plowing new ground potentially in terms of precedent—it would not surprise me if they waited on those until they have all five commissioners,” Clark said. “When you have bigger decisions, the commission speaks best when it speaks to a full complement of commissioners. So I would guess some of those might be put on the back burner.”

Staffing Up First

Former commissioners said that Powelson and Chatterjee won’t be able to start voting until they hire their staff.

Clark said he was able to hire his staff, mainly internally from FERC, within his first week on the job, while Honorable said it took her a few weeks.

Clark advised, “You’re trying to put together a team that you think has a diverse background of expertise so that you can cover as many types of filings and you can cover a broad swath of the country.”

Then, Clark said he was voting within two weeks, and Honorable was voting after a month. But, ultimately, Honorable said, “It took several months to get up to speed.”

However, they both noted that they were joining the commission when there was already a quorum, so Powelson and Chatterjee may not have as much time, with the unprecedented backlog of orders to review.

The next public meeting is Sept. 20. Staffers will continue work that was delegated to them as a result of the loss of quorum for two more weeks.

To contact the reporter on this story: Rebecca Kern in Washington at rkern@bna.com

To contact the editor responsible for this story: Rachael Daigle at rdaigle@bna.com

Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.

Request Environment & Energy Report