In the April 27, 2019 edition of the Energy Bar Association’s Energy Law Journal, FERC Commissioner Richard Glick and legal advisor Matthew Christiansen published an article titled “FERC and Climate Change,” describing that the actions of the Commission, as well as the family of federal and state agencies, have “substantial consequences” for climate change. The authors argue that the threat of climate change does not necessitate “a wholesale reinterpretation of the Commission’s jurisdiction or a novel regulatory paradigm,” but rather a consistent application of FERC’s existing mandate. In addition to discussing the Commission’s role in wholesale electric markets in enabling competition for zero-and-low carbon-emitting technologies (such as solar, wind, batteries and even distributed energy resources), the authors place emphasis on hydroelectric generation as an effective resource for grid decarbonization and that such benefits should be considered in FERC’s existing “public interest” analysis.
Notably and as pointed out by the authors, FERC is not a “climate regulator” of greenhouse gas emissions, which falls within the purview of the Environmental Protection Agency; however, the authors state that FERC is an important venue for the ongoing climate debate as the lead permitting agency for types of energy infrastructure projects. For example, the article argues that natural gas pipeline permitting has become increasingly contentious before FERC and that courts have directed the Commission to review the downstream greenhouse gas impact of its approvals (which in the authors’ opinion includes indirect and cumulative additive emissions as well as the likelihood of natural gas offsetting higher-emitting coal or oil generation). As an additional example, the authors cite hydropower as among the infrastructure projects approved by FERC, which, as according to the authors, should also be evaluated by the Commission in light of this resource’s climate impacts.
Hydropower has existed for more than a century, and today hydroelectric generation remains the largest sources of renewable electricity in the United States, in terms of electric generation. The authors point out that “not only do [hydro-electric projects] produce zero-emissions electricity, they are generally fully dispatchable meaning that they can help integrate variable energy resources, such as wind and solar.” The authors argue that the review of such climate benefits is within FERC’s mandate under the Federal Power Act (“FPA”) to issue hydro-licenses in the “public interest.” Under section 10(a) of the FPA, FERC’s public interest determination reviews whether a project is “best adapted to a comprehensive plan for improving or developing a waterway.” As explained by the authors, this “multifaceted obligation” includes consideration under section 10(a) of “power development, energy conservation, fish and wildlife, recreation, other aspects of environmental quality, and other beneficial uses (irrigation, flood control, water supply).” Although not specifically mentioned in the FPA, the authors argue that the climate and baseload benefits of hydro, although they may not offset other environmental impacts of this generation source, should factor into FERC’s decision-making process. Further, the authors argue that promoting the modernization of existing facilities, retrofitting existing non-power dams for generation, as well as utilizing pumped storage for grid variability smoothing, “can be deemed to be in the public interest overall.”
The authors provide no additional guidance on how hydro’s decarbonization benefits may factor into a FERC public interest analysis, and how weighty this consideration should be on the environmental scale. As decarbonization continues to emerge as a national priority, however, the Commission could well capitalize on the broad public interest standard under FPA section 10(a) as a means of evaluating a hydro project’s climate benefits as part of the licensing or relicensing of a project.
A copy of the article can be found here.