By Rory D. Sweeney

ARLINGTON, Va. — Newly appointed FERC Commissioner Robert Powelson, a former Pennsylvania Public Utility Commissioner, seemed at ease last week as he addressed the annual meeting of the Organization of PJM States Inc. He cracked jokes and shared memories with fellow regulators, RTO officials and stakeholders.

But when the subject turned to the Department of Energy’s recent proposal that FERC promulgate rules to support generators that can stockpile 90 days of fuel in deregulated states, he became emphatic.

“I will not support anything that undoes the value of the market,” he said Wednesday. “I remind everybody in this room, we are an independent agency. … FERC does not do politics.

“I give Energy Secretary [Rick] Perry credit. He’s trying to be thoughtful in the approach, but there’s many different approaches to how we can tackle this issue. I did not sign up for blowing up the markets,” he said to a round of applause. “We will not destroy the marketplace.”

The comments were in response to concerns that DOE’s Notice of Proposed Rulemaking would drive large subsidies to nuclear and coal units that would make competition untenable. (See Consumer Advocates Slam Perry NOPR, RTOs, FERC.)

Commissioner Cheryl LaFleur seconded Powelson’s vow “not to destroy” the markets, tweeting, “Great message!”

Perry Defends NOPR

On Friday, Perry defended the NOPR, saying it was not an order to the independent commission, but an effort to begin a “conversation” on the loss of baseload generation.

“I think it’s really important for people to understand, in general terms, there is no free market in the energy industry,” he told a meeting of the group Veterans for Energy, according to an account in The Hill. “And anybody that gets up and says that is lying — is not, with all due respect, educated as to what the reality of the market is.”

Perry said he was attempting to reverse the policies of the Obama administration, which he said, “had their thumb on the scale” to help out renewables to the “detriment … of reliable, baseload industries that are really important for the future security of this country.”

The commission last week issued a notice inviting comments on the NOPR (RM18-1). Comments are due by Oct. 23, with reply comments due Nov. 7.

Other Controversies

In his speech to OPSI, Powelson also referenced several other controversial issues before the commission, without explicitly identifying them.

“Dallas Winslow, do you have a question for me?” he asked the chairman of the Delaware Public Service Commission.

Delaware has been fighting use of the solution-based distribution factor (DFAX) cost-allocation method for Artificial Island upgrades, PJM’s first competitively bid project under FERC Order 1000. The original allocation left the Delmarva Peninsula on the hook for much of the project’s $280 million cost, but PJM has proposed alternative allocations that would shift much of the bill to New Jersey and Pennsylvania. (See PJM: AI Costs Would Shift to NJ, PA Under New Allocations.)

Winslow laughed but did not ask a question.

Powelson also hinted at action on natural gas pipelines, saying, “We love infrastructure, so we’re going to work on infrastructure — New Jersey included.”

The proposed 120-mile PennEast Pipeline — which would transport Marcellus Shale gas from northeast Pennsylvania to central New Jersey — is facing opposition from landowners in both states. In April, FERC staff filed their environmental impact statement on the project, concluding that it would have “less than significant” environmental effects (CP15-558).