Kelliher Nomination Moves to the Senate Floor; Sanders Submits Questions
On May 23, the Senate Energy and Natural Resources (ENR) Committee favorably reported to the full Senate the nomination of Joseph Kelliher as Chairman of the Federal Energy Regulatory Commission (FERC), by a voice vote. Kelliher’s nomination is expected to be packaged with other nominations and voted on by the full Senate. A date has not yet been set for the vote.
Sanders Questions Kelliher on RTO Accountability and Incentive Rates
During the re-nomination process, Sen. Bernie Sanders (I-VT), a member of the Senate ENR Committee, submitted written questions to Chairman Kelliher. Sanders asked, “Is it true that the mission of ISOs/RTOs, like ISO-NE, does not include keeping costs as low as possible for consumers, while also maintaining electric reliability?
Kelliher’s written response said he agreed “that the core mission of an RTO or ISO should be to assure that wholesale power prices are just and reasonable, and RTO and ISO market rules established by the Commission should prevent market power exercise.” He also said “guarding the consumer remains the primary duty of the Commission.”
With regard to ISO-NE, Kelliher said new market rules are intended to provide consumers with just and reasonable prices, continued entry by new generation, improved efficiency, adequate grid investment, and effective demand-side response. He also noted that it is important that RTOs and ISOs be accountable and have sound governance. He pointed to the fact that FERC recently held a technical conference on whether RTOs and ISO are responsive to the needs of their members and will be carefully considering all information and evaluate whether reforms are necessary.
In reference to a letter he and six New England Senate colleagues sent to FERC recently, Sander’s asked when FERC would decide on the pending transmission incentives case, which provides New England transmission owners with and additional 100-basis points on top of the cost of transmission service in the region. Kelliher indicated he could not comment on the case because it was pending matter, but indicated that it is important that the rate be just and reasonable but also provide sufficient incentives to facilitate transmission investment.
FERC Launches Investigation into PJM Market Monitoring Operations
On May 17, the FERC launched its own formal investigation into the allegations that Pennsylvania-New Jersey-Maryland (PJM) Interconnection management interfered with the PJM market monitor’s independence and operations.
However, after aggressive questioning by Sen. Robert Menendez (D-NJ) at FERC Chairman Kelliher’s re-nomination hearing and two outside complaints asking the agency to investigate, the Commission changed course and directed PJM management and the market monitor to file separate responses to a set of detailed questions about the charges. The order consolidated two dockets (EL07-56-000 and EL07-58-000), granted late interventions, and issued data requests to both PJM and the market monitor to determine whether there has been any interference with the market monitor operations by PJM and whether such interference is ongoing. FERC said the action was prompted because the record compiled to date includes conflicting assertions.
The responses are due by May 24th, and FERC said it intends to act promptly once it has reviewed them.
“Energy Independence” Legislation Advances in the House and Senate
The House and Senate continue to move forward with their respective “energy independence” bills. The full Senate plans to consider its version shortly after the week-long Memorial Day recess. The House Committees, on the other hand, will continue to mark-up their individual bills, which will be merged and considered by the full House early summer.
Senate Leader Announces Action Plan
On May 21, Senate Majority Leader Harry Reid (D-NV) announced his intension to move forward on several bipartisan energy-related bills in the coming weeks. Reid introduced S. 1419, a bill that combined a number bills reported by the following committees of jurisdiction:
- Energy and Natural Resources Committee (ENR), S.1321, a bill that would promote biofuel use, energy efficiency and carbon capture and storage programs;
- Commerce, Science and Transportation Committee, S. 357, a bill that would raise the corporate average fuel economy (CAFE) standards from their current level of 25 mpg to 35 mpg by 2020, and the;
- Environment and Public Works Committee (EPW) , S. 992, a bill that would establish an EPA program to provide grants to assist local governments in developing cost-saving and emission reducing practices in government buildings through the improvement of lighting efficiency.
In addition, he added a stand-alone bill (S.1263), introduced by Sen. Maria Cantwell (D-WA), that would prohibit price gouging on gasoline and petroleum distillates during natural disasters and abnormal market disruptions.
We anticipate a federal renewable portfolio standard (RPS) will be offered by ENR Chairman Jeff Bingaman (D-NM) during floor consideration. (See related story below.)
House Committees Move Forward on Energy Proposals
On May 23, the House Science and Technology Committee reported H.R. 632, a bill that would create a new Energy Department agency focused specifically on the development of technologies that curb greenhouse gas emissions and improve economy-wide energy efficiency. The committee-approved bill also advances hydrogen technology and includes a significant educational effort to improve college and postgraduate education related to “green” building design and construction.
On May 23, House Natural Resources Committee Chairman Nick Rahall (D-WV) held a hearing on his legislation, entitled the Energy Policy Reform and Revitalization Act of 2007 (H.R. 2337). At the hearing, support for the bill was limited, with members criticizing a number of provisions in the draft, particularly the effort to roll back the provision from the Energy Policy Act of 2005 (EPAct 05) relating to the designation of pipeline and transmission corridors on federal lands. The Rahall bill substitutes a study on whether such corridors are needed, and would severely limit locations where pipeline and transmission corridors could be designated. A mark-up on the Rahall bill is scheduled for Wednesday, June 6.
On May 24, the Energy and Commerce Energy and Air Quality Subcommittee held a legislative hearing on the first half of its “energy independence” bill. The hearing focused on four “discussion drafts” relating to: 1) energy efficiency; 2) smart electricity grids; 3) the loan guarantee program in the EPAct of 2005; and 4) standby loans for coal-to-liquids projects.
Several trade associations, including APPA, have raised concerned about a provision in the energy efficiency draft (Section 374 of Title I) that would, effectively, mandate distribution utilities to purchase excess electricity generated by co-generation facilities at a rate equal to a utility’s retail – not wholesale – rate.
The hearing was widely attended by subcommittee members, and the discussion draft generally received bipartisan support. There was some concern expressed by Democrats with the coal-to-liquids title, preferring the subcommittee focus on electrifying the transportation sector and research and development of carbon sequestration instead.
Subcommittee Chairman Rick Boucher (D-VA) announced that he would hold a second hearing on June 2 on additional titles, still being drafted. He then intends to combine all titles into one package for subcommittee, and full committee, mark-up.
This will be the package that the Energy and Commerce Committee will be contributing to the larger “energy independence” bill, which Speaker Nancy Pelosi (D-CA) wants on the House floor by the July 4 recess.
Bingaman RPS Receives Support from 200 Organizations and Individual Companies
On May 25, Senate ENR Committee Chairman Jeff Bingaman (D-NM) issued a press release announcing the support of nearly 200 companies, trade associations and environmental groups, among others for a federal Renewable Portfolio Standard (RPS).
The groups support was articulated in a letter sent to Senate Majority Leader Harry Reid (D-NV) and Minority Leader Mitch McConnell (R-KY). More than 50 Senators have indicated their support for an RPS, but Sen. Bingaman apparently does not have the 60 votes required to stop a filibuster. The letter shows increased public support, as Bingaman works to garner additional Senate votes in support of an RPS amendment, likely to be offered to the "Energy Independence" bill sometime during the month of June. (See related story titled ‘"Energy Independence" Legislation Advances in the House and Senate.')
Bingaman, a long-time champion of renewable energy and a federal RPS highlighted in the press release, that 22 states and D.C. have adopted an RPS, that requires utilities to supply a specific percentage of electricity from renewable sources of energy such as wind, solar, biomass and geothermal. Bingaman's RPS amendment would create a renewables standard of 15 percent by 2020. Here is a link to the press release and letter....
(http://energy.senate.gov/public/index.cfm?FuseAction=PressReleases.Detail&PressRelease_id=235300&Month=5&Year=2007&Party=0)