To build back better, make FERC boring again
President Joe Biden has announced his intention to nominate Commissioner Willie L. Phillips, Jr. of the DC Public Service Commission to FERC. Should the Senate consent to his well-deserved nomination as the fifth commissioner of the agency, Commissioner Phillips should have one overarching goal: Make FERC boring again.
Over the past few years, FERC has gone from an agency that sought to engage in thoughtful decisions about power markets and infrastructure siting to one whose very actions have been as big of a disruptor as any to the nation’s energy system.
In the mid-Atlantic region, PJM’s electricity markets have been repeatedly delayed and distorted as FERC has tried, in very short order, to impose vastly different visions on how to account for state policies in the capacity markets. This has had the unintended consequence of delaying distribution utilities’ ability to procure power for default service to non-shopping customers. It has also thrown a massive wrench into competitive generators’ and retail power providers’ ability to engage in long-term planning.
Reliability ought to come first above all considerations. Instead, the grid operator and its host of stakeholders — power producers, utilities, ratepayers, and public service commissions alike — have had their focus continually diverted to rearranging the operations of the country’s largest organized grid to meet the ever-changing whims of FERC.
Commissioner Phillips ought to strive to moderate the vision of the agency, away from being a source of exogenous risk to the affordable and efficient dispatch of natural gas and electricity in this country, and towards a source of stability, by working towards a reliable energy system within the statutes and policies written by Congress.
Climate activists might want a fifth commissioner to “transform” the agency; ratepayers would be better suited by a commissioner who takes to heart the memorable phrasing of FERC Chairman Rob Powelson, who noted he didn’t “sign up for this job to blow up competitive markets.” As someone with a background serving on a public commission, Commissioner Phillips surely recognizes the worth and merit in making decisions within operative frameworks as instituted by legislative bodies.
