US Federal Energy Regulatory Commission member Cheryl LaFleur on Monday poked at proposals to compensate generating resources, such as coal-fired plants, that struggle to compete with natural gas in wholesale power markets.
Register Now Speaking at the North American Gas Forum sponsored by Energy Dialogues, the Democratic commissioner said cheap and plentiful gas supplies, and the ability to quickly build gas-fired generation, had helped make gas the generating fuel of choice in some parts of the country. That has led some coal and nuclear generators to seek market rules to compensate them under the rubric of grid resilience, she said.
Some concerns may be "sensible," such as those over multiple power plants relying on one natural gas pipeline, she said. But she called other concerns "more commercially motivated, like criticizing... cyber security and natural security of natural gas pipelines," but offering an answer of "let`s pay some other resource that we like more," rather than making pipelines more secure, she said.
FERC earlier this year voted unanimously to reject a proposal from the Department of Energy to compensate generating resources with 90 days of fuel stored onsite. A leaked DOE memo in May later presented a national security rationale for potentially requiring grid operators to compensate struggling generators. Months later, a full-fledged proposal has yet to surface from the White House.
"In the meantime, we have to try to apply the rules as squarely as we can," and make sure that if there`s a problem the solution is tailored to the problem, LaFleur said.
With FERC down to four members, LaFleur is a key swing vote, particularly on natural gas infrastructure approvals, which have become more divisive. She continued to walk a careful line Monday, recounting the areas of her prior dissents on natural gas projects while stating FERC commissioners should seek common ground. Whether a 2-2 split vote at the commission holds up other projects may depend on how long FERC is without a fifth commissioner, she told reporters.
As the administration seeks to speed LNG permitting, LaFleur offered the industry attendees notes of caution. FERC has to be sure it doesn`t compromise its responsibility under the Natural Gas Act or the National Environmental Policy Act to carefully review applications and not short-change the stakeholder process, she said. She pointed out that after FERC approvals of gas projects, lawsuits now often ensue in which those opposed to the infrastructure are "making sure there are no holes in anything being done."
This year, amid multiple petitions filed by environmental groups, the DC Circuit Court overturned one FERC certificate over greenhouse gas considerations, and the 4th US Circuit Court of Appeals vacated several federal resource agency permits for the Atlantic Coast Pipeline and Mountain Valley Pipeline projects.
"It is incumbent upon us to make sure our processes are as strong and robust" as possible, LaFleur said.
LaFleur also warned operators about environmental and safety compliance, noting that high-profile incidents can immediately affect the whole industry and quickly surface in FERC dockets for other projects.
It is important that conditions attached to FERC certificates orders are "scrupulously observed," she said. A project may otherwise be slowed or referred to enforcement, she added. FERC last year suspended work on horizontal directional drilling for the Rover Pipeline project after a major release of drilling fluids into Ohio wetlands. The agency also held out in-service authorization for key Rover laterals for several months while staff sought further progress on restoration and stabilization in areas that had suffered slope failures.