NEW YORK — Geopolitics, tackling energy bottlenecks and increasing consideration for environmental justice are novel forces that FERC is now contending with, Commissioner Willie Phillips told an Institute for Policy Integrity conference on Tuesday.
Phillips said the U.S. is “in the middle of an energy transition,” driven by a shifting global energy landscape caused by the war in Ukraine, rising inflation and supply chain issues, all while the Biden administration advances “landmark legislation.”
The past few months have been a “historic period,” and the U.S. is now at a “turning point” where the nation must decide if “we’re ready to make decisions … that help empower the clean energy transition” and address growing crises.
Growing Crises
The energy crises in Europe and the U.S. represent the first serious challenges in the “net-zero clean energy transition period.”
With Europe confronting staggering increases in energy prices, Phillips pointed to the impact on areas in the U.S., such as New England, where the natural gas-dependent electric sector confronts resource adequacy challenges and high fuel costs as LNG is increasingly exported to the European Union to cover shortfalls in Russian supplies. Phillips said that in recently visiting the region he found that stakeholders were “really hoping for a mild winter.”
FERC Commissioner Willie Phillips | Institute for Policy Integrity
Furthermore, other contemporary problems, such as cybersecurity, aging infrastructure, a global pandemic and rapidly advancing technologies, are challenging FERC to remain committed to its duties.
Phillips pointed out, however, that FERC is “addressing all of these issues.”
FERC has responded to the crises “head-on,” Phillips said, and recent legislation, such as the Inflation Reduction Act and last year’s Infrastructure Investment and Jobs Act, has given FERC the ability to help accelerate electric vehicle and renewable deployment, better respond to climate impacts and invest more in disadvantaged communities, while still prioritizing the agency’s guiding principles to provide reliable, affordable and sustainable energy.
Phillips likened those three principles to the “three legs of a stool” that are critical to FERC’s “overall operation.”
FERC’s Challenges
Phillips explained that FERC’s top challenge will be solving transmission and interconnection reform because the buildout of needed infrastructure for clean resources will be “costly and it’s going to take time.”
FERC is accelerating transmission processes and tackling generator interconnection queue backlogs by encouraging RTOs and ISOs to take a more long-term view that considers state public policy goals and looks “at the reality on the ground,” he said
Interconnection queues have been a “bottleneck” that prevents the U.S. “from unleashing the full potential all of the renewable resources” that currently wait in queue.
FERC is “uncorking” this problem and has proposed “moving away from a serial approach to a cluster approach,” where projects are reviewed not on “a first-come, first-served basis, but a first-ready, first-served basis.”
The next challenge is cybersecurity, which has become increasingly important after Russia’s invasion of Ukraine.
According to Phillips, FERC is using a “two-pronged approach” to ensure grid cybersecurity: mandatory reliability standards and constant stakeholder collaboration. This ensures critical systems are secure and the U.S. avoids another hack like that which shut down the Colonial Pipeline last year.
Environmental Justice
The last challenge is the rising importance of environmental justice (EJ) and the increasing need to consider the environmental and economic impacts that the energy transition is having on disadvantaged communities.
Phillips, who previously served as chair of the D.C. Public Service Commission and was unanimously confirmed by the Senate last November, shared how his rural Alabama background gave him insight into the looming challenges that come with providing reliable energy to disadvantaged communities.
He said is glad that EJ is getting “more and more attention” because his own firsthand experience has shown the positive impact that government regulations can have on homeowners and landowners.
Phillips said that providing clean, sustainable, affordable and reliable energy to disadvantaged communities is always “top of mind,” and he asked industry stakeholders to focus on EJ. He explained that he is paying attention to businesses’ commitments to workforce development, board diversity and entry-level representation, as these have been shown to increase profit and innovation in those communities.
Phillips emphasized that transparency, financial disclosures and targeted communications around decision-making processes will help cultivate environmental justice.
Jeremiah Baumann, DOE | Institute for Policy Integrity
Additionally, he called on people to “comment, comment, comment” and put their concerns on the record because it helps the commission “sharpen its considerations” and better understand “where pockets of public interest lie.”
EJ concerns were echoed by other speakers, such as Jeremiah Baumann, chief of staff to the undersecretary for infrastructure at the U.S. Department of Energy.
Baumann stated in his panel that the Biden administration “has made commitments that center on key communities, particularly environmental justice communities disproportionately impacted from pollution and those that are liable to be left behind in the clean energy transition, such as timber or coal communities.”