11/09/2020 - Legal Analysis

A Clean Energy Agenda Runs Through the Federal Energy Regulatory Commission

by Ari Peskoe

The Federal Energy Regulatory Commission’s (FERC) sweeping authority over the power sector’s interstate operations and planning drives investment and shapes the industry. In this paper, I review how FERC is already influencing the clean energy transition and explain how FERC will be an indispensable player in the Biden Administration’s clean energy agenda. I consider two 2021‒2025 scenarios: 1) Congress passes a clean energy standard; and 2) Congress does not enact major changes to energy regulatory authority.

In Part I, I explain how FERC’s regulation can have substantial consequences for the competitiveness of different fuels and technologies and thus directly affect greenhouse gas emissions from the power sector. Although Congress has not specifically directed FERC to regulate these emissions, encourage deployment of low-carbon resources, or otherwise address the power sector’s contribution to climate change, FERC’s flexible legal authority provides it with opportunities to facilitate the clean energy transition. After connecting FERC’s authority to clean energy, in Part II I highlight FERC decisions since the 2017 Presidential Inauguration that directly affect clean energy deployment. Part III suggests about how FERC can wield its authority to support Biden’s clean energy agenda. I find that FERC should ensure that transmission networks support clean energy deployment and market rules are aligned with a rapid clean energy transition.