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The new acting chairman of the Federal Energy Regulatory Commission wants to use "creative mechanisms" within the agency's authority to promote energy efficiency and renewable energy.
As the head of FERC, Jon Wellinghoff said he will prioritize infrastructure efficiency and the integration of renewable energy into the grid, and will support the use of distributed and demand-side resources, which he described as "very underutilized in this country."
"These are very consistent with the new administration's goals," Wellinghoff told reporters at a Platts Energy Podium event yesterday. The acting FERC chief said he would meet with Energy Secretary Steven Chu and Carol Browner, the White House coordinator for energy and climate policy, next week.
Distributed and demand-side resources includes energy efficiency, residential solar panels, combined heat and power, and plug-in electric vehicles – areas over which FERC has very limited direct authority, as their use is largely left to state regulators, regional operators and the market to determine. Renewable energy generation is also relatively out of the purview of FERC.
Wellinghoff said FERC has some options, though, notably from incentives provided under the 2005 Energy Policy Act and its authority over tariffs set by the regional independent system operators and regional transmission organizations (ISOs/RTOs).
The integration of renewable energy into the grid is an important underlying issue to address if the United States is to fully utilize these sources of clean power. First, transmission lines to reach the remote sources of energy must be built – stirring up questions over siting and cost allocation. Wellinghoff said he is interested in exploring expanded federal siting authority (E&ENews PM, Feb. 12).
FERC has already exercised incentive power granted in the 2005 energy law to grant higher return rates for the construction of about 10 transmission lines that it felt were important and would likely not be built otherwise. But Wellinghoff and fellow Democratic Commissioner Suedeen Kelly have not always agreed with their Republican colleagues on what projects should receive the incentive treatment.
Wellinghoff said he expects to approve more incentive rate cases, but he will maintain strict requirements for them, including some combination of the following: an extraordinary voltage, which tends to be more expensive to build but goes longer distances; promotion of renewable energy sources; and utilization of smart-grid technologies.
"I hope we can work with fellow commissioners to come to some consensus proposal on incentives," Wellinghoff said.
Other areas where FERC can flex some muscle are in the interconnection of transmission lines to the grid. It is typically a "first come, first serve" process, but Wellinghoff said he would look at changing the order to accommodate "anchor" renewable energy suppliers – similar to natural gas "anchor shippers" – that could buy a majority of the capacity. This would bring project cash up front, addressing a barrier for companies looking to build transmission.