Dive Brief:
The Federal Energy Regulatory Commission opened investigations into the rates charged by three interstate natural gas pipelines on Wednesday to determine if they are “substantially over-recovering their costs of service.”
FERC opened the inquiries after asking pipelines in July 2018 to detail their rates of return following the passage of federal tax cuts in 2017 and changes to FERC’s tax allowance policies. FERC also found nine gas companies had complied with the agency’s request and terminated those inquiries without investigation.
FERC on Thursday canceled a planned vote at its monthly open meeting on a political spending complaint lodged against grid operator PJM, and also declined to vote on a liquefied natural gas facility it tabled last month. The delays likely indicate a deadlock among sitting regulators on the issues, but Chairman Neil Chatterjee declined to comment on internal deliberations.
Dive Insight:
For the second month running, FERC declined to act on the highest-profile item on its monthly open meeting agenda — whether PJM acted improperly in providing nearly $500,000 to two governor groups.
In December, Chatterjee removed a scheduled vote on Venture Global’s Calcasieu Pass LNG export facility shortly before the meeting, calling out opposition to the facility from Democrats, notably Commissioner Cheryl LaFleur. The chairman’s office controls the agenda for open meetings.
“I appreciate my colleague’s concerns but also, when she was chairman, she had a reputation of being a strong supporter of LNG exports,” Chatterjee said.
In that case, support from at least one Democrat on the commission was necessary for approval due to the prolonged absence of Commissioner Kevin McIntyre, who died on Jan. 4 after a battle with brain cancer.
With a vacancy on the five-member commission, the two Democrats can continue to deadlock agency votes in 2-2 ties until a replacement is nominated by the president and confirmed by the Senate. Chatterjee declined to say if that is what happened in the PJM political spending case.
“I will only say that these are complicated questions and my colleagues and I want to make sure that before [we decide], we understand everything that we’re looking at and what the implications of our decision may be going forward,” he said. “So we just need a little more time on that.”
Given that Chatterjee’s office put the PJM item on the agenda before removing it, some parties to the case say its omission from the meeting likely shows disagreement among the regulators.
“Perhaps the debate is on remedies,” said Tyson Slocum, head of the energy program at Public Citizen, a liberal watchdog group that filed the complaint against PJM. “But if the debate is whether PJM has the authority to make those expenditures, then that’s awful for the public interest.”
In its complaint, Public Citizen argued that the nearly $500,000 that PJM gave to the Democratic Governors Association and Republican Governors Association since 2007 violates the Federal Power Act because the funds come from its member companies.
PJM says it contributed the funds to gain entrance to policy summits hosted by each of the organizations where energy issues are discussed, and they were “not intended to support any political campaign.”
Slocum, however, said in February that his organization has also recorded “millions of dollars in PJM lobbying expenditures,” using at least five lobbying firms “that also have not been disclosed to FERC or stakeholders.”
“We provided overwhelming evidence PJM used ratepayer money for political activity,” he reiterated Thursday.
When FERC may take up the LNG issues or the Public Citizen complaint remains unclear. Speaking to reporters after the meeting, Chatterjee said he is “hopeful” the commission is “close to being able to move forward on more submitted [LNG] applications.”
The chairman also addressed a recent ethics letter released by Utility Dive that recommended Commissioner Bernard McNamee recuse himself from the agency’s grid resilience docket if it comes to “closely resemble” the debate over a rejected Department of Energy coal and nuclear bailout he helped design.
“The decision lies with Commissioner McNamee,” Chatterjee said. “The ethics office will make an assessment and then it’s incumbent upon him to use his discretion and judgment to decide whether he can participate [in the proceeding] or not.”
The resilience docket already contains comments from some coal and nuclear owners that resemble their arguments over the bailout plan, but Chatterjee declined to say whether he believes the two dockets “closely resemble” each other.
“I think a lot of work still needs to continue to be done and it would be premature to make any sort of assessment like that,” he said.
With the Public Citizen matter off the table and pipeline order issued the day before, FERC regulators spent most of the somber meeting offering remembrances for McIntyre. Chatterjee announced that FERC will rename the commission meeting room after the former chairman.
“His leadership was and remains an inspiration not only to me, but to the entire FERC family,” Chatterjee said in a release, “and we believe this is the most appropriate way to honor his memory.”
