FERC suggests Congress make resource agencies meet hydro licensing deadlines

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The four members of the Federal Energy Regulatory Commission testified before a House subcommittee, telling lawmakers that hydropower licensing might be accelerated if Congress could compel state and federal resource agencies to meet deadlines in the licensing process.

Newly named Acting Chairman Cheryl LaFleur and the other three sitting FERC members testified Dec. 5 to the House Energy and Power Subcommittee on a broad range of FERC's responsibilities and activities. The commission is down one member since the term of former Chairman Jon Wellinghoff expired. 

Titled "Evaluating the Role of FERC in a Changing Energy Landscape," the hearing spent little time on FERC's hydropower regulatory function, dealing instead with energy system reliability, transmission and pipeline siting, energy market regulation, and uncertainty caused by expected carbon regulations from the Environmental Protection Agency that would restrict the use of coal. 

However, Commissioner Philip Moeller was designated to address hydropower in his prepared remarks, focusing on the part played by state and federal resources agencies in the hydro licensing process. 

"To the extent that some entities believe our decisions on certificating natural gas pipelines or the licensing and relicensing of hydropower projects take too long, my impression is that the commission carries out its responsibilities efficiently and that any delays are often driven by the role that state and federal resource agencies are given by federal law in this process," Moeller said.

"Simply put, the commission is dependent on state and federal agencies to submit timely determinations/conditions as part of the regulatory review of projects," he said. "It is especially difficult when these agencies issue their determinations or impose conditions late in the process."

The commissioner added that agency determinations and proposed license conditions might be based on an agency's specific focus, rather than the balanced review of all public interest considerations that the commission is required by statute to undertake.

"If Congress chooses to address this situation, changes in various statutes could require that resource agencies meet certain deadlines in their statutory role in reviewing such projects," Moeller said. "Another approach would be to provide the commission with the authority to rule on whether the conditions that resource agencies submit appropriately balance the benefits and costs that these projects provide. Again, this would require a significant change in the various environmental laws for relevant resource agencies."

Commissioner John Norris echoed the concern regarding hydroelectric projects and other energy infrastructure.

"I believe it is important to understand that building new infrastructure is much more difficult today than in years past," Norris said. "You can count on significant resistance from multiple parties to the construction of any new infrastructure. ... I believe our role is to reach a just and reasonable decision, respectful of due process in a fair and reasonable manner as expeditiously as practical and required under law." 

Cyber security, transmission siting, new natural gas discussed 

The remainder of the hearing covered a broad range of FERC responsibilities, many not directly related to hydropower.

Rep. Fred Upton, R-Mich., chairman of the full House Energy and Commerce Committee, summed up the hearing, saying America's energy picture is changing and its regulators must keep pace. 

"Long-held beliefs in American energy scarcity have given way to a new era of energy abundance, especially in regard to oil and natural gas," Upton said. "But many policies and attitudes are still rooted in the outdated assumptions of shortages and rising imports, with the potential to obstruct the opportunities before us. And FERC is in the middle of many of these debates." 

LaFleur testified that FERC acted in November to issue final rules updating Critical Infrastructure Protection Reliability Standards by expanding cyber security standards for the bulk electricity system, including hydroelectric projects. The rules are the result of a rulemaking proceeding (RM13-5) incorporating a proposal submitted to the commission in January by the North American Electric Reliability Corp., constituting Version 5 of the CIP Reliability Standards

The CIP Version 5 standards address cyber security of the bulk electric system, adopting new cyber security controls. The standards identify and categorize cyber systems based on whether they have low, medium, or high impact on reliable operation of the bulk electric system. The new rules may be obtained from FERC's Internet site under http://www.ferc.gov/whats-new/comm-meet/2013/112113/E-2.pdf.

LaFleur also told the committee of FERC action directing NERC to take steps to protect the grid from geomagnetic disturbances. GMDs caused by solar events distort, with varying intensities, the earth's magnetic field. They can have potentially severe, widespread effects on reliable grid operation, including blackouts and damage to critical or vulnerable equipment.

Moeller also talked about the commission's continuing implementation of its Order No. 1000, amending requirements for interstate electric transmission companies to allocate the costs of transmission planning and development to their customers. Moeller said FERC has not yet considered complex inter-regional filings under the order that have raised difficult policy questions. 

Commissioner Tony Clark talked about a flood of new domestic natural gas due to new recovery technologies that has "upended" utility planning models and market fundamentals. He said gas will play a much bigger role in the nation's energy than anyone thought only 10 years ago.

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