Jan 232023

FERC Opens 2023 With Leadership Transition

Karl Pielmeier III and Sarah Tucker
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Former U.S. Federal Energy Regulatory Commission (FERC or the Commission) Chairman Richard Glick has officially departed the independent Commission after failing to secure a reconfirmation hearing before the Senate in December 2022. Glick’s departure leaves the Commission with a 2–2 split between Democrats and Republicans that could stall a number of major initiatives that were ongoing under the former Chairman and the Commission’s Democratic majority.

On January 3, President Joe Biden named Commissioner Willie Phillips, who is currently serving a FERC term that expires in June 2026, as acting Chairman to temporarily succeed Glick. The White House has not confirmed when it will name a new Commissioner to the five-seat Commission or who is being vetted for Glick’s now-vacant seat. Some speculate that a successor to Glick as permanent chair will not be named until summer; the term of Commissioner James Danly is set to expire on June 30.

With a deadlocked Commission, a number of agenda items furthered may be left in limbo — at least for the near future. These include a series of natural gas policy statements that the Commission converted to draft form in March 2022 along with power transmission initiatives aiming to respond to capacity and reliability challenges.

Other recent ambitious policy items may be affected by Glick’s absence. The past few months have seen heightened FERC involvement in ratemaking cases. Last month, FERC issued an order (RP19-78) setting a return on equity of 11.25% for Energy Transfer LP subsidiary Panhandle Eastern Pipe Line Co. LP in its first fully litigated natural gas pipeline rate case in almost a decade. Commissioner Allison Clements indicated that she expects the order will “provide important guidance on [FERC’s] approach to natural gas rates in coming years.” On the power side of FERC’s docket (Docket No. ER22-233-000), Portland General Electric Co. recently submitted a proposed settlement of the company’s first rate case in more than 20 years, which if accepted would result in a reduction in the company’s requested return on equity from 10.36% to 10.0%. In another rate case, addressed on January 19 in the Commission’s first meeting of 2023, FERC conditionally accepted the filing by three Southern Co. subsidiaries in response to a 2022 show-cause order with respect to the companies’ formula rate protocols, subject to a further compliance filing.

Meanwhile, presiding over his first monthly meeting as acting chairman, Commissioner Phillips promised to prioritize grid reliability, transmission reforms, and environmental justice and announced plans to hold a roundtable on environmental justice and equity on March 29.

This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.

Karl Pielmeier III

Sarah Tucker

Washington, D.C.

stucker@sidley.com

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