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Allison Clements’s Blog

FERC Chairman's Resignation Leaves Big Clean Energy Shoes to Fill

Allison Clements

Posted May 29, 2013 in Curbing Pollution, Solving Global Warming

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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.bio_wellinghoff_md.jpg

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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Comments

John JimisonMay 29 2013 05:42 PM

I have paid close attention to the leadership at FERC since John Nassikas was the Chairman of the predecessor Federal Power Commission during the Nixon Administration. Allison is absolutely correct: no prior FERC Chair has used his powers of agenda-setting, dispute resolution, and initiative regarding interstate and wholesale electricity transmission and sales more effectively to reorient the grid toward clean energy and demand-side opportunities than Jon Wellinghoff. He not only sees clearly how the future grid will be dramatically different and better than the current one after it is fully integrated, opened to competitive efficiencies, and computerized, he sees the steps that can be taken in that direction given limited federal jurisdiction and has been doing what was possible to take those steps. In addition to offering our thanks for his sterling contributions, we should merely hope that we can continue to benefit from his vision and leadership in whatever role he elects to play going forward.

Nathan MatthewsMay 29 2013 10:12 PM

In addition to the work discussed above, Commissioner Wellinghoff provided the lone dissenting vote in FERC's approvals of the Jordan Cove and Bradwood LNG import terminals, respectively sited near Coos Bay and Astoria Oregon. Wellinghoff recognized the inadequacy of the environmental review and called for a more sober evaluation of the economic case for and impacts of the proposed LNG imports--issues that are even more important now that FERC faces proposals for numerous LNG export terminals.

Mike HenryMay 29 2013 10:25 PM

Having experienced the Chairman's tenure from the inside of FERC, first in the Office of the General Counsel and later as a member of his advisory staff, I have utmost respect for Jon's wisdom, vision, determination, and leadership.

I agree with Allison's and John's comments, but I write here to emphasize two points. First, from the moment he took the oath as a Commissioner, Jon single handedly ensured that demand response became a priority at FERC. His leadership and vision helped make demand response a crucial resource in regional markets. Later, he established the Office of Energy Policy Innovations within FERC to ensure this small but influential agency was maximizing its legal authority to encourage the energy industry and markets to break old habits and foster non-traditional resources.

As I said when I left his advisory staff, Jon taught me that just because you operate in an obscure corner of the regulatory universe doesn't mean that you get a pass on doing what is right for the planet.

I wish Jon all the best, and I look forward to hearing more from him in his next adventure.

Seth KaplanMay 30 2013 10:41 AM

Chairman Wellinghoff has been able to make a shockingly large amount of progress at a time when the obstacles to doing so have never been greater - but the need to do so has also never been greater.

I would highlight, since the material above does such a good job of laying out many of his other accomplishments at FERC, the skillful use of precedent and inter-regional competition in orders to make progress.

Again and again one region has been told by the Wellinghoff led FERC to learn from a best practice from another region. This has created a "race to the top" where leadership moves from region to region and truly creates laboratories for great policy development across the nation.

Carl ZichellaMay 30 2013 12:16 PM

Chairman Wellinghoff made FERC a true entity of the people, opening the door for stakeholders -- including people concerned about the environment and a rapidly changing climate -- to have a meaningful voice in the unprecedented advances occurring to our nation's electrical system. Without these changes a clean energy vision would remain forever a dream and would never become a reality. The grid of the future, he undrrstands, will not be the grid we have today. It had to change to enable the rise of clean renewable power to replace older dirty sources of electricity. Renewable energy never had a better friend in government. His contributions have been incredibly important for all Americans. Thanks to Chairman Wellinghoff for seeing the need for change and helping FERC be an avenue on which positive changes could be made.

Julia ProchnikJun 3 2013 02:26 PM

I have had the joy of working with Chairman Wellinghoff during his tenure at FERC, and was always impressed by his leadership. He stood for energy efficiency and demand side management before it was trendy, and made his points clear without wavering to special interests. His strong integrity makes him an unusual powerhouse in Washington DC and he will be missed. It was refreshing to work with someone who really cares about our future and choose to make a difference. Thank you! -Julia Prochnik, JASenergies

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