Biden’s FERC nominee could pave the way for the administration’s massive clean energy agenda

UPDATE: Willie Phillips was confirmed as a FERC commissioner on November 16, 2021. Read Canary’s article about the confirmation.

The Federal Energy Regulatory Commission has a lot of decisions to weigh over the coming years that could make an enormous difference in U.S. efforts to fight climate change, with impacts ranging from the development of policy around electricity transmission and natural gas to how renewable and distributed energy resources are integrated into the country’s energy markets.

If President Biden’s proposed nominee for the agency is approved by the U.S. Senate, those decisions will be made by a majority Democratic commission, the first since the early days of the Trump administration.

Willie Phillips Jr., a long-time energy industry attorney and chair of the Washington, D.C. Public Service Commission, was announced on Thursday as Biden’s nominee to fill the seat vacated by Neil Chatterjee, a Republican.

News of Phillips’ nomination drew mixed responses from parties engaged in the wide-ranging set of interstate energy policies under FERC’s authority.

Some environmental groups singled out Phillips’ actions as a utility regulator, including his early support of a merger of Washington, D.C.–area utility Potomac Electric Power (Pepco) and utility holding company Exelon, as warning signs for those seeking more community and consumer protections from the agency. Drew Hudson, senior national organizer at advocacy group Friends of the Earth, called Phillips ​“a gift to corporate utilities and the fossil fuel industry” in a Friday statement.

Hudson did say that nominating Phillips, who is Black, to serve on FERC would bring important diversity to the agency. But he cited a letter from more than 460 environmental and community groups proposing alternative nominees of color who would better ​“champion environmental and energy justice.”

Rob Rains, an analyst at the research firm Washington Analysis, wrote in a Thursday email that Phillips is ​“unlikely to ruffle too many utility…feathers,” given his moderate stances as a utility regulator and his long professional experience in the utility industry, including his work for the North American Electric Reliability Corporation.

On the other hand, Phillips has ​“a long history of actively supporting emerging technologies for the electric grid and will likely be a voice of support for incremental expansion of distributed energy systems as part of the regional wholesale power markets,” Rains wrote.

Phillips worked on implementing Washington, D.C.’s mandate to reach 100 percent carbon-free energy by 2050. During a FERC technical conference in April, he highlighted the role that distributed energy resources such as electric school buses could play on the grid, while also emphasizing the importance of managing their impact on utility distribution grids.

Clean energy industry groups were broadly supportive of Phillips’ nomination, citing his role as a key vote for the range of decisions before FERC.

“Chairman Phillips’ deep legal understanding of the issues at stake and clear recognition of the benefits that renewable energy provides our nation’s communities are encouraging,” Gregory Wetstone, CEO of the American Council on Renewable Energy trade group, said in a Friday statement.

“FERC is a key part of our clean energy transformation, and we will need a full commission and a strong leader like Chairman Phillips to realize President Biden’s Build Back Better vision,” Abigail Ross Hopper, CEO of the Solar Energy Industries Association, said in a Thursday statement.

What’s ahead for FERC

Chatterjee, who chaired FERC under President Trump, helped architect a slew of policies that have received some praise from clean energy advocates — but more criticism.

A number of the most critiqued policies were passed over the objection of Richard Glick, who was appointed FERC chair by Biden in February. Glick served as the agency’s sole Democrat from early 2019 until late last year, when Democrat Allison Clements and Republican Mark Christie were confirmed to join Glick, Chatterjee and Republican James Danly at FERC.

Among the decisions Glick opposed was a series of orders restricting the ability of state-supported clean energy resources to participate in wholesale capacity markets in New York state and the broader Eastern U.S. The best-known of these is the minimum offer price rule decision that has since been challenged by mid-Atlantic grid operator PJM, which critics say could prevent much of the clean energy called for in policies in states ranging from Illinois to New Jersey from competing in PJM’s capacity market.

FERC’s Republican majority also approved several natural gas projects over Glick’s objections that they failed to take environmental and climate change impacts into account. Several of these decisions have been successfully challenged in federal courts.

A June ruling from the D.C. Circuit Court of Appeals, regarding a project accused by opponents of being a case of self-dealing on the part of the natural gas companies involved, orders FERC to review its policies to determine whether new pipelines are needed. Glick and fellow Democrat Clements have refocused FERC’s efforts to take climate change and environmental justice into account in its decisions, including those involving pipelines and natural gas infrastructure.

At the same time, Glick has launched an effort to consider reforms to how FERC regulates interstate transmission permitting and cost allocation, with an eye to speeding the buildout of power lines to enable the massive growth in wind and solar deployments needed to meet the Biden administration’s goal of eliminating carbon emissions from the electricity sector by 2035.

Clean energy advocacy groups have for years called on FERC to take action to allow transmission lines to be built more quickly to meet these needs, including some calls to use federal authority to overcome local public and private stakeholder objections to siting these projects. Other proposals on the table could provide financial incentives to transmission projects deemed important to expand clean energy growth or deploy technologies to make existing power lines more efficient.

FERC will also be making decisions on policies championed by Chatterjee that have won praise from clean energy groups but face an uncertain prospect under the agency’s current 2–2 party split. Those include a decision last year opening the door for the country’s interstate grid operators to integrate carbon pricing into their energy markets. That decision may have played a role in Trump demoting Chatterjee from his role as FERC chair late last year.

Chatterjee also pushed last year’s passage of FERC Order 2222, which orders grid operators to open their markets to distributed energy resources including rooftop solar, behind-the-meter batteries, electric vehicle chargers and grid-responsive loads. New York’s and California’s grid operators have submitted plans to comply with Order 2222 that have drawn some criticism from clean energy groups; other grid operators are expected to propose their own plans over the coming 12 months.