Utility Dive

The legislation would not give FERC “nearly as broad” authorities as it currently has with pipeline siting, said Ari Peskoe, director of the Electricity Law Initiative at the Harvard Law School’s Environmental and Energy Law Program, in an email. “FERC has exclusive authority to site all interstate natural gas pipelines … This bill would give FERC only backstop siting authority for electric transmission and only in regions designated by DOE,” he said.

No less an advocate than Ari Peskoe, director of Harvard Law School’s Electricity Law Initiative was clear with respect to the PJM auction (although he made the comment prior to the results being announced) when he told Bloomberg: “The market has been trending toward renewables, but this is pulling it back. It’s fighting the future.” PJM’s recent capacity auction — in which 3,414 additional megawatts of natural gas cleared (compared to 312 additional megawatts of wind and 942 additional megawatts of solar) — will do nothing to slow PJM’s tilt towards traditional fuels.

“Of course, any mandate would be a legally and politically controversial. … is this a fight FERC wants to take on now?” said Ari Peskoe, director of Harvard’s Electricity Law Initiative, in an email.

Calling the history of transmission expansion anti-competitive is an understatement. In a forthcoming paper in the Energy Law Journal, Ari Peskoe, director of the Harvard Electricity Law Initiative, describes how local transmission monopolists maintain the status quo by capitalizing on FERC rules that insulate their projects from competitive pressures on the backs of captive ratepayers. Concluding that the “FERC regulated planning process is a protection racket,” he argues that FERC should reclaim its transmission agenda by expanding the role for third parties in transmission planning.

Interstate transmission development is fragmented by local utility service territories. Parochial interests are impeding large-scale transmission projects, which in turn is slowing wind and solar deployment. The combination of discriminatory state laws and Federal Energy Regulatory Commission transmission planning rules shields utilities from competition within their local service territories and induces them to focus on developing small-scale local projects. These protectionist policies reinforce an anachronistic utility-by-utility approach to transmission planning that is failing to develop the regional transmission necessary to effectively decarbonize the power sector and mitigate the impacts of extreme weather.

Part of FERC’s priorities under a Democrat-run government will depend on what passes Congress. If a clean energy standard is implemented, for example, that will require FERC to ensure transmission providers are developing infrastructure in line with those policies, as well as modify market structures accordingly, Ari Peskoe, director of the Electricity Law Initiative at Harvard Law School wrote in a November paper.

The use of tort law, which covers harm related to civil claims, could provide “another legal mechanism for reforming local electricity distribution,” according to Ari Peskoe, director of Harvard University’s Electricity Law Initiative. But he said “the best approach” remains using the utility regulatory commissions to ensure utilities are prepared for climate change.

“FERC’s role could really hinge on whether Congress does enact any clean energy legislation, even if that energy legislation doesn’t specifically task FERC with anything,” said Ari Peskoe, director of the Electricity Law Initiative at the Harvard Law School’s Environmental and Energy Law Program. For example, if Congress were to pass any sort of clean energy standard, FERC would be beholden to that law, regardless of who was in charge of the commission.