FERC Chairman's Resignation Leaves Big Clean Energy Shoes to Fill
Posted May 29, 2013
This post was co-authored by my colleague John Moore.
Late yesterday the chairman of the Federal Energy Regulatory Commission (FERC), Jon Wellinghoff, announced his resignation after a 7-year tenure (4 years as chairman) that saw the agency make unprecedented advances in supporting clean energy.
Although what FERC is and what exactly it does sometimes flies under the radar in Washington’s sound-bite frenzied environment, and outside of it, anyone and everyone who cares about curbing global warming and supports the transformation toward a clean energy economy owes Chairman Wellinghoff a profound thank you.
We had heard of his intent to depart at the end of President Obama’s first term, and while he certainly deserves the break we are sorry to see him go. It is not exaggeration to say that Chairman Wellinghoff is responsible for a FERC that has done more to integrate renewable energy resources like wind and solar power, and also harness the potential of energy efficiency and demand response, than any of its predecessors in fulfilling the agency’s duty to regulate the interstate transmission of electricity.
Resources like energy efficiency (permanent reductions in electricity demand through more efficient appliances, windows, insulation, etc.) and demand response (voluntary customer reductions in electricity use during peak, or other, periods) can support the integration of wind and solar energy onto the high power transmission grid while maintaining reliability and, in many cases, lowering customer costs.
But the rules that regulate the transmission grid were designed around historic, central-station fossil fuel generators, and have been a barrier to the accelerated deployment of both renewable power and demand-side resources. Chairman Wellinghoff’s FERC has taken up the case and has made improvements in both transmission planning and market rules to remove these barriers.
On the transmission planning side, the Chairman oversaw the development and issuance of Order 1000, a landmark rule that requires transmission planners to, among other things, account for the impact of public policies on the transmission grid. Some policies, like state Renewable Portfolio Standards (RPS) requiring a certain percentage of power come from renewable sources and any potential federal RPS or carbon legislation, will require more transmission lines to move renewable power to load centers. Order 1000 also requires grid planners to account for energy reducing policies like energy efficiency standards, so that grid operators do not overbuild the system with unnecessary transmission lines. It also requires neighboring planning regions to work together to coordinate so that transmission lines that do get built are the most efficient and cost-effective options.
On the markets side, Wellinghoff and his fellow FERC commissioners have created new market opportunities for demand response, energy storage and other demand-side resources, thereby quickening the pace of the grid’s evolution towards a flexible and resilient system. For example:
-Issuing Order 745, a rule to provide a full locational marginal price for demand response in wholesale markets (the same price that generation resources get paid),
-Creating market opportunities for flexible resources that can balance differences between supply and demand on the grid quickly,
-Developing the National Demand Response Action Plan, and
-Establishing the FERC-NARUC smart grid and demand response collaborative.
As technical and “inside baseball” as many of these improvements appear to be, they are essential to help achieve a cleaner energy future. Chairman Wellinghoff should be applauded for achieving many aspects of his strategic plan, which embraced the reality that the grid must adapt to accommodate the next generation of transmission and generation resources. Critically, for our purposes, most of these next generation resources are cleaner, more flexible, and more resilient than the last generation.
The next FERC chairman and the next FERC commissioner that the president will name to replace Wellinghoff have big clean energy shoes to fill. The continuing transformation toward a clean energy future is impossible without FERC leadership. We urge the new FERC leaders to use the extent of their authority to support this critical transformation.
On behalf of the large majority of Americans that want to see the government take action to curb climate change and promote clean energy, thank you Chairman Wellinghoff!
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