[Senate Hearing 116-379]
[From the U.S. Government Publishing Office]
S. Hrg. 116-379
CLEMENTS AND CHRISTIE NOMINATIONS
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON
ENERGY AND NATURAL RESOURCES
UNITED STATES SENATE
ONE HUNDRED SIXTEENTH CONGRESS
SECOND SESSION
to
CONSIDER THE NOMINATIONS OF ALLISON CLEMENTS TO BE A MEMBER OF THE
FEDERAL ENERGY REGULATORY COMMISSION AND MARK C. CHRISTIE TO BE A
MEMBER OF THE FEDERAL ENERGY REGULATORY COMMISSION
__________
SEPTEMBER 16, 2020
__________
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Printed for the use of the
Committee on Energy and Natural Resources
Available via the World Wide Web: http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
41-906 WASHINGTON : 2021
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COMMITTEE ON ENERGY AND NATURAL RESOURCES
LISA MURKOWSKI, Alaska, Chairman
JOHN BARRASSO, Wyoming JOE MANCHIN III, West Virginia
JAMES E. RISCH, Idaho RON WYDEN, Oregon
MIKE LEE, Utah MARIA CANTWELL, Washington
STEVE DAINES, Montana BERNARD SANDERS, Vermont
BILL CASSIDY, Louisiana DEBBIE STABENOW, Michigan
CORY GARDNER, Colorado MARTIN HEINRICH, New Mexico
CINDY HYDE-SMITH, Mississippi MAZIE K. HIRONO, Hawaii
MARTHA McSALLY, Arizona ANGUS S. KING, JR., Maine
LAMAR ALEXANDER, Tennessee CATHERINE CORTEZ MASTO, Nevada
JOHN HOEVEN, North Dakota
Brian Hughes, Staff Director
Lucy Murfitt, Chief Counsel
Patrick J. McCormick III, Special Counsel
Jake McCurdy, Professional Staff Member
Renae Black, Democratic Staff Director
Sam E. Fowler, Democratic Chief Counsel
Darla Ripchensky, Chief Clerk
C O N T E N T S
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OPENING STATEMENTS
Page
Murkowski, Hon. Lisa, Chairman and a U.S. Senator from Alaska.... 1
Manchin III, Hon. Joe, Ranking Member and a U.S. Senator from
West Virginia.................................................. 3
WITNESSES
Christie, Hon. Mark C., nominated to be a Member of the Federal
Energy Regulatory Commission................................... 5
Clements, Allison, nominated to be a Member of the Federal Energy
Regulatory Commission.......................................... 9
ALPHABETICAL LISTING AND APPENDIX MATERIAL SUBMITTED
Appalachian Trail Conservancy:
Letter for the Record........................................ 91
Christie, Hon. Mark C.:
Opening Statement............................................ 5
Written Testimony............................................ 7
Responses to Questions for the Record........................ 42
Clements, Allison:
Opening Statement............................................ 9
Written Testimony............................................ 11
Responses to Questions for the Record........................ 62
Responses to Supplemental Questions for the Record........... 90
Industrial Energy Consumers of America:
Letter for the Record regarding Mark Christie................ 98
Letter for the Record regarding Allison Clements............. 99
Kelly, Suedeen G.:
Letter for the Record........................................ 100
Manchin III, Hon. Joe:
Opening Statement............................................ 3
Mroz, Richard:
Letter for the Record........................................ 101
Murkowski, Hon. Lisa:
Opening Statement............................................ 1
National Association of Manufacturers:
Letter for the Record........................................ 102
CLEMENTS AND CHRISTIE NOMINATIONS
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WEDNESDAY, SEPTEMBER 16, 2020
U.S. Senate,
Committee on Energy and Natural Resources,
Washington, DC.
The Committee met, pursuant to notice, at 10:05 a.m. in
Room SD-366, Dirksen Senate Office Building, Hon. Lisa
Murkowski, Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. LISA MURKOWSKI,
U.S. SENATOR FROM ALASKA
The Chairman. Good morning, everyone. The Committee will
come to order. We are here today to consider the nominations of
Judge Mark Christie and Ms. Allison Clements to be members of
the Federal Energy Regulatory Commission (FERC). I want to
welcome both nominees to the Committee this morning. I
appreciate you both being here in person, and I truly
appreciate your willingness to serve our country on such a
consequential Commission.
I also want to express my appreciation that we are here at
all today with, again, a set of bipartisan nominees before us.
Back in 2016 as I was ending my first term as Chairman of this
Committee, I was not able to hold this same type of a hearing
despite having an open Republican seat and then two open
Republican seats by roughly the same point in that year. The
previous Administration chose not to send us any nominations,
and I can assure those who are listening that it was not for
lack of qualified or confirmable candidates. No time to go
further into the reasons why or shedding any light on that but,
whatever it was, we started 2017 with a three-member
Commission. We quickly lost one member to resignation and then
we had to wait months before we could restore a working quorum.
In the meantime, the FERC was in a situation where they were
simply not able to do their job--a job that is important and
critical to all Americans.
So hearings like this are a good opportunity to reiterate
that decisions that the FERC Commissioners make do matter. They
matter not only to the energy sector but to the nation as a
whole. I would point people to the Commission's website. The
Commission lists a baker's dozen of its duties, and to
highlight just six jobs that help determine energy security in
the real world, FERC: approves the siting of interstate
national gas pipelines; regulates transmission and wholesale
sales of electricity; licenses and inspects hydro projects;
regulates the transmission and sale of natural gas for resale;
monitors and investigates energy markets; and protects the
reliability of high voltage interstate transmission systems.
That is less than half of its jobs.
Several years ago, the Congressional Research Service, CRS,
estimated FERC's economic reach at roughly three percent of
GDP, but the Commission's real impact is likely greater because
energy is a fundamental input. Given FERC's many powers, every
hearing on the nomination of a FERC Commissioner is critical.
Today we are able to consider nominees for two of FERC's five
seats, so we have a pair before us--one nominee from the
President's party and one from the other party. Although pairs
are not the historical norm, I do appreciate the President's
willingness to nominate individuals to fill both open seats at
the Commission. I also appreciate that the two candidates
before us today are clearly experts in their field. I have
often said that my distinct preference is for FERC to have a
full complement of five Commissioners.
Again, the job is considerable. Look at the situation in
California with the electric reliability risks that I have
warned about for years now. Our reality is that we need our
FERC to take on the heavy tasks in front of them. We currently
have three confirmed members serving on FERC. I am hoping the
nominees before us today will show that they merit confirmation
and allow us to restore five members at the Commission before
the end of this Congress.
Our first nominee, Mark Christie, is the Chairman of the
State Corporation Commission of Virginia. Judge Christie has
been elected by the Virginia Legislature on a bipartisan basis
three separate times since 2004. He is one of the nation's
longest serving state regulators.
Our second nominee, Allison Clements, led the Sustainable
FERC Project for more than half of her eight years serving as a
lawyer for the National Resources Defense Council. More
recently, Ms. Clements founded goodgrid LLC--an energy policy
and strategy consulting firm. She spent two years as Director
of the Energy Markets Program at the Energy Foundation.
I view these as consequential nominations because FERC,
again, is at the center of the energy transition that we are
witnessing today. In addition to grappling with a large case
docket and its reliability mission, FERC is examining issues
such as incentives for cybersecurity investments and potential
mechanisms for pricing carbon and wholesale electricity
markets. If confirmed, these nominees will serve over the next
several critical years. While I am hopeful that a full slate of
Commissioners will be able to deliberate and resolve complex,
challenging issues to enable a more reliable, resilient,
affordable, and clean energy sector throughout that period, I
also want to make sure that we choose the right people for this
very important role.
As with all of our nomination hearings, we will allow
members to ask their questions of both nominees today. You will
note that we are, once again, operating in a hybrid manner. We
will have some members who will come to the Committee in
person, others virtually. I will be here as long as I can to
facilitate that. I will acknowledge that we have a series of
votes beginning at 11:30, but we can work through that.
Recognizing that we also have a subcommittee hearing this
afternoon, questions for the record will be due at the close of
business tomorrow.
Senator Manchin, I will now turn to you for your opening
remarks, then we will swear in the witnesses and allow them to
introduce any family members who may be here in person or
watching virtually.
Before I turn to you though, Senator Manchin, I want to
welcome back to the Committee Pat McCormick, who has been with
the Committee for many years. Pat took a brief detour and is
now back with us. This is his first hearing and, given his
expertise out in the private sector and what he has been
working on here in the Committee, it is very opportune that we
have this FERC confirmation hearing before us. So I welcome Pat
back.
With that, I turn to you, Senator Manchin, for your
comments.
STATEMENT OF HON. JOE MANCHIN III,
U.S. SENATOR FROM WEST VIRGINIA
Senator Manchin. Well, thank you, Madam Chairman, for
convening today's hearing on the nominations of Ms. Clements
and Judge Christie to be members of the Federal Energy
Regulatory Commission. I want to thank both of our nominees for
being here with us this morning and being willing to serve.
Given today's toxic atmosphere, it is sometimes hard to get the
best, but we did get the best in you two.
I am very pleased to have both of you, a Democrat and a
Republican, before the Committee. That is the way it really
should be to get a five-member Commission back. First, because
I think it is critical that we fill these two vacancies in the
Commission and return it to a fully seated FERC. And second,
because I think both of these nominees, and I have told you
this before, are most qualified and will do a great job. The
Federal Energy Regulatory Commission is meant to be a five-
member Commission. It has been for the last ninety years. This
is because Congress has always recognized that the important
issues of hydro-electric development, reliability of the
nation's electric grid, natural gas pipeline construction, and
wholesale gas and electric rates are best left to an
independent, non-partisan body of experts who can determine
policy through discussion and deliberation. Even in 1977 when
Congress established the Department of Energy and put most
energy functions in the hands of the Secretary of Energy, it
wisely insisted that the regulatory and ratemaking authorities
of the former Federal Power Commission remain in the hands of a
five-member Commission. Collectively, five Commissioners will
always bring to the table more wisdom, more knowledge, more
life experience and more diverse views than the wisest, most
knowledgeable, most experienced energy czar we could ever find.
FERC functions best when it has a full complement of five
members. We have seen what happens when the Commission can't
act because it doesn't have a quorum. With Commissioner
McNamee's departure two weeks ago, the Commission is now down
to a bare minimum of three members. I hope that following our
hearing today we can act quickly to get both of these nominees
confirmed quickly.
When Congress established FERC in 1977, it was very clear
on the sort of person it wanted on the Commission. It wrote
into the statute that Commissioners were to be individuals who
by demonstrated ability, background, training, or experience
are specially qualified to assess fairly the needs and concerns
of all interests affected by federal energy policy. I think the
two nominees before us clearly meet that test.
Ms. Clements has spent her entire professional career
working on energy issues, first as an associate in a law firm
representing utilities and independent power producers like
Southern Company and Dominion, then as the head of the
Sustainable FERC Projects at the Natural Resources Defense
Council. She then founded and served as President of a
consulting firm focused on energy policy before joining the
Energy Foundation as the Director of Clean Energy Markets and
most recently transitioning to a consulting role. This is not
her first time before the panel. She testified before us in
2018 in a hearing examining the performance of the electric
power system during winter weather events. Her knowledge and
commitment to pragmatic bipartisan and consensus solutions is
demonstrated by her service as a member of a National Academy
of Sciences committee that produced a report on enhancing the
resilience of the nation's electrical system. Similarly, Ms.
Clements co-chaired a broad stakeholder group to identify
policies to support a modern and reliable U.S. electric grid
published by the Bipartisan Policy Center. In sum, she has
represented utilities, independent power producers, developers,
lenders, non-profits, and philanthropies. As President Trump
noted when he announced his intent to nominate Ms. Clements,
``she will bring the Commission over two decades of experience
dealing with federal energy regulatory policy, energy markets
and electric grid issues.''
Judge Christie has been a member of the Virginia State
Corporation Commission for the past 16 years. He has been
elected to that important post, three times, by bipartisan
votes of both Houses of the Virginia General Assembly. He is
also a native West Virginian from Bluefield, West Virginia, and
served our country in the United States Marine Corps, which
makes him very qualified. Judge Christie will bring to FERC the
important perspective of the state utility regulator which it
has lacked since Robert Powelson stepped down two years ago.
I am pleased that the President has kept with longstanding
tradition and sent us a balanced, bipartisan pairing. I was
highly impressed by both of these well-qualified nominees and
our conversations ahead of this hearing, and I look forward to
our questions and answers. Thank you both, again, for being
with us here today to continue the conversation. I look forward
to meeting your families also.
Thank you, Chairman Murkowski.
The Chairman. Thank you, Senator Manchin.
At this time the rules of the Committee which apply to all
nominees require that they be sworn in in connection with their
testimony. I ask that you both rise and raise your right hand.
Do you solemnly swear that the testimony you are about to
give to the Senate Committee on Energy and Natural Resources
shall be the truth, the whole truth and nothing but the truth?
[Both witnesses answer, yes.]
You may both be seated.
Before you begin your statements, I will ask you three
questions. I have asked these to each nominee who appears
before the Committee.
First, will you be available to appear before this
Committee and other Congressional committees to represent
departmental positions and respond to issues of concern to the
Congress?
Mr. Christie. Yes.
Ms. Clements. Yes.
The Chairman. Are you aware of any personal holdings,
investments or interests that could constitute a conflict or
create an appearance of such a conflict should you be confirmed
and assume the office to which you have been nominated by the
President?
Mr. Christie. No.
Ms. Clements. Chairman, my investments, personal holdings
and other interests have been reviewed by both myself and
appropriate ethics counselors within the Federal Government,
and I received a guidance letter based on that review. I have
taken appropriate action to avoid any conflicts of interest.
Incorporating the guidance in that letter, there are no
conflicts of interest or appearances thereof, to my knowledge.
The Chairman. Are you involved or do you have any assets
held in blind trust?
Mr. Christie. No.
Ms. Clements. No.
The Chairman. Very good.
With that, Judge Christie, you may proceed with any
introductory remarks you may want to provide the Committee,
introduce any family members, but the floor is yours and then
we will proceed to Ms. Clements.
STATEMENT OF HON. MARK C. CHRISTIE, NOMINATED TO BE A MEMBER OF
THE FEDERAL ENERGY REGULATORY COMMISSION
Mr. Christie. Okay, well, good morning and thank you, Chair
Murkowski, Ranking Member Manchin, other members of the
Committee, Senator Heinrich, here today. Thank you for this
opportunity to be considered for the Federal Energy Regulatory
Commission. It is an honor to be here. I also want to thank the
President of the United States for providing me this
opportunity to continue serving the public on a national level
as I have done for many years at the state level.
Thanking the many people who have helped me reach this
point would take far too much time, but I want to thank some
very important ones. And first, I want to thank my wife, Anita,
who is here with me. Anita is my best friend and life partner
in all ways. Next, I want to thank my fellow Commissioners on
the Virginia State Corporation Commission (SCC) and all the
staff of the Virginia SCC who have served with me since I
joined in 2004. When my nomination was announced, I said to our
staff that I did not regard this nomination as a personal
recognition, but rather, a recognition of the national stature
and national respect earned by the Virginia State Corporation
Commission over its many years of defending the public
interest. Lastly, I want to thank my fellow state commissioners
around the country with whom I have interacted through
organizations such as NARUC and the organization of PJM states.
From my peer regulators I have learned that among the states
there are many commonalities, but also, that each state is
unique and has different needs and approaches. I have always
agreed with Justice Brandeis who said that, ``States are the
laboratories of democracy and should be respected as such.''
For more than 16 years I have served as a state utilities
regulator. That record is public, and I am proud of it. In
Virginia our legislature elects members of our commission, and
I've been honored to be elected three times, each time on a
bipartisan basis. The Virginia SCC is an independent, non-
partisan commission, so I know from experience how important
independence is to making good decisions in the public
interest. FERC is also independent. And if you honor me with
confirmation, I will absolutely respect and defend that
independence at the federal level as I have done at the state
level.
Finally, I would like to describe briefly what I believe
are the major roles of a regulatory agency based on my
experience, both as a practitioner and as a teacher of
regulation. An agency such as FERC has three essential roles,
as I see it. First is what I would call the statutory role and
that is to follow the law in each and every case. FERC has only
the authority that has been delegated to it by you, the
Congress. Statutes often contain language that is sometimes
very specific and at other times much broader. So where the law
does give discretion, my belief is that an agency should be
deeply sensitive to the impacts of its decisions on consumers.
As a state regulator I'm intensely aware that while FERC does
not regulate retail rates, what FERC does affects retail rates
and with millions of Americans struggling to pay their bills,
FERC should always be sensitive to cost to consumers as it
fulfills its duties. The second role of a regulatory agency is
to inform and advise. FERC has a tremendous amount of special
expertise that can inform and advise legislators and
policymakers about policy choices when asked. The third role of
a regulatory agency is a duty to inform the public of the true
costs and benefits of public policies. The public has a right
to know the realistic costs that it will be forced to pay and
the realistic benefits that it can expect of policies within
that area, that agency's area of expertise.
Again, thank you for this honor, and I look forward to your
questions.
[The prepared statement of Mr. Christie follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Judge Christie, thank you, and we welcome you
to the Committee, Anita, as well.
At this time, we will turn to Allison Clements. Welcome.
STATEMENT OF ALLISON CLEMENTS, NOMINATED TO BE A MEMBER OF THE
FEDERAL ENERGY REGULATORY COMMISSION
Ms. Clements. Thank you, Chairman.
Thank you, Chairman Murkowski, Ranking Member Manchin and
members of the Committee. I am honored to appear this morning
as a nominee to serve on the Federal Energy Regulatory
Commission.
I will start with thanks to Minority Leader Schumer and his
staff for recommending me for this nomination. Thank you also
to President Trump for giving me the nomination and this
opportunity, and thank you to Senator Manchin and his staff for
supporting me throughout the nomination process thus far.
All things are different in light of the Coronavirus
pandemic, including our ability to share these important
moments with family and friends. So I thank my husband, Ray,
who is here with me today and our daughters, Amelia and Claire,
who are watching from home. Their support in this process makes
it possible and worthwhile. I'd also like to recognize and
thank my parents, Bob and Jean Clements, who are watching from
Dayton, Ohio, and my siblings, David, Andrea and Janet and
their families. In addition to providing unwavering support,
during their 56-year marriage, my parents have demonstrated the
value of hard work and dedication: My father, by climbing the
ranks of General Motors over his 30-year career there and my
mother as a teacher, stay-at-home mom, and then Master's Degree
graduate which led to her tenured role as a Greene County
Extension Agent for Ohio State University. Finally, I'd like to
thank my mother-in-law, Peggy Henger, Ana and Jorge Vidal, and
colleagues and good friends in Washington, Salt Lake City, and
beyond, who have supported my family and me through this
journey.
Some people have asked me why in such partisan and divided
times I would want to take on this role. Thinking of my
daughters at home, getting ready for their virtual classes
today, my answer is easy, I firmly believe in public service as
a high calling and I'm honored for the opportunity to serve our
great country. I have tremendous respect for FERC and its role
as an independent bipartisan Commission. I've developed this
perspective across different roles throughout my career in the
energy sector. Each of these experiences has shaped the
approach I would take if having the honor of confirmed as a
Commissioner.
First, representing utilities at a law firm opened my eyes
to the magnitude of administrative compliance that is complying
with the U.S. regulatory energy landscape maze. The role also
provided me with my first encounter with the lesson affirmed
over and over throughout my career: precision and integrity are
critical for success in the practice of law.
Second, as an attorney representing borrowers and lenders
to infrastructure project financings, I became attuned to the
powerful impact that one policy change can have on a deal worth
hundreds of millions of dollars as well as the related high bar
for regulatory certainty that capital markets expect as a
precursor to investment. I learned to appreciate the intention,
and attention, that should support any regulatory change as the
impacts can be far-reaching.
Third, I'm better known for my time representing clean
energy interests, a time during which I learned many things,
the role deepened my expertise in electric grid operations by
providing opportunities to serve as co-chair of a Bipartisan
Policy Center committee on grid modernization and grid policy
as well as on a National Academy of Sciences committee focused
on grid resilience. There, I had the honor of working with some
of the country's most eminent grid-focused engineers on how to
ensure system resilience and reliability. This role also taught
me to appreciate the boundaries of FERC's jurisdiction as an
economic, technology neutral and reliability regulator.
Finally, this work made clear that FERC regulation does not
exist in a vacuum. Individuals and communities, and in the end
all of us as consumers, are affected by FERC's decisions. While
the issues are sometimes technical and arcane, we must not
forget that ultimately the Commission exists to serve the
public interest.
If I have the honor of being confirmed, I will also bring
the professional values I have employed and honed across all of
these experiences. These values include a commitment to keep an
open mind and to learn from and work with FERC's impressive
staff, my fellow Commissioners, and sector stakeholders on the
important issues facing the Commission today.
I thank you for this opportunity to appear before the
Committee, and I look forward to answering your questions.
[The prepared statement of Ms. Clements follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you, Ms. Clements. We appreciate that,
and we welcome you to the Committee, and your husband Ray, and
for acknowledging the family and the supports that allow both
of you to be before us today for consideration.
I am going to begin this first round of questions with
questions that will be directed to both of you. They are pretty
general, but I think that they go so much to the heart of the
FERC. And Judge Christie, you used the words very clearly, that
FERC is an independent agency. I think we all acknowledge that.
We acknowledge that FERC must function as an impartial,
economic regulator, not as an agency responsible for
implementing the administration's policy decisions. So both of
you have been involved in other matters prior to this, what
assurances can you give the Committee that you will be
independent, impartial as regulators and can you provide some
specific examples where you have shown just that? We recognize
that personal philosophy or opinions regarding energy policy
influence your actions. We understand that, but what I would
like to hear, and I think what is important for other members
of the Committee, is to note your assurances on independence
and impartiality in this important regulatory agency.
Judge Christie, we will begin with you, and then we will
turn to Ms. Clements.
Mr. Christie. Well, thank you, Chairman, for that question.
Independence is extremely important. The example I would offer
is I spent 16 years on an independent commission. The Virginia
State Corporation Commission is actually instituted by the
Constitution of Virginia, and it is both statutorily,
constitutionally, and by culture of Virginia, independent. And
so, for 16 years I've made independent decisions based on the
law and the facts and without political influence. One of the
great things about the Virginia State Corporation Commission,
it is, it's non-partisan and so the decisions are made based on
law and facts, and I've had a 16-year record of doing that.
So, I can assure you that FERC is also independent and I
believe very strongly in independence, and I think decisions
ought to be made based on the law and the facts and not
without, not with political influence.
The Chairman. Thank you.
Ms. Clements.
Ms. Clements. Thank you, Chairman, and I would suggest that
your leadership of this Committee is a great example for a way
to demonstrate bipartisanship and collaboration and so, I
appreciate that.
The role of the Commission is as an economic independent
regulator, pursuant to the Federal Power Act and the Natural
Gas Act which provides authority for the Commission to act at
all. I have had the honor of engaging with many FERC
Commissioners over the last 20 years, who have been models of
that independence and I would commit to following in their
footsteps. I think my time representing varied interests brings
a set of perspectives that allows me to understand where people
are coming from. And so, when I go to the statutes that empower
the Commission to act, I can take that law and apply it to the
facts, in each case, and they will always be different and
specific, to the best of my ability.
The Chairman. So, again, to both of you, I have mentioned
that you are both considered energy experts. You have
significant background here. This necessarily means that you or
institutions that you have represented have litigated before or
even against the FERC which brings up the matter of recusal and
we recognize that you have both executed ethics agreements,
perhaps haven't had an in-depth review with FERC's designated
agency office, ethics officer, but what I would ask is
assurance from both of you that you will recuse yourself as
necessary from cases in which you were involved in your prior
roles and then beyond that, following the guidance of FERC's
DAEO, what will your approach to recusals be? Is there any
specific matter that you have already identified that will
require your recusal?
Again, Judge Christie.
Mr. Christie. Yes, thank you, Chairman.
I've gone through the process with the Office of Government
Ethics and also with the FERC DAEO, and I can pledge yes to
your Committee policy. I know that was attached to the
questionnaire. You asked us to affirmatively sign a pledge
following the ethics policy at FERC, and I can certainly pledge
to do that. And I understand when you, if we get honored with
being confirmed, that one of the first things we do is we sit
down for a more extensive review with the FERC designated
ethics office/officer and I can pledge to you to work with that
DAEO anytime the issue of recusal might come up and to follow
the guidance that I receive.
The Chairman. Thank you, Judge.
Ms. Clements.
Ms. Clements. Thank you. I take the ethic obligation,
ethical obligations to which I would be subject as a FERC
Commissioner, if confirmed, very seriously as part of integrity
in the commitment of the role. I, too, have met with the
Designated Agency Ethics Official (DAEO) and if confirmed would
be subject to not only the guidance that's been provided by the
DAEO in coordination with the Office of Government Ethics, but
also to this Committee's ethics responsibility as well as the
President's pledge, and certainly I would also make one of my
first stops at the Commission to the Office of General Counsel
to figure out the immediate next steps on that front.
The Chairman. Thank you, both.
Senator Manchin.
Senator Manchin. Thank you, Madam Chairman. Thank you both,
again, and your families for the support they give you to do
the job for the people and I appreciate that. Let me just say a
word about these extreme weather conditions that we are having
and the challenge of ensuring the reliability of the power grid
that is demanded and people need. My youngest daughter just
moved to Houston, Texas, with her husband because of his job
relocation. I spent a little bit of time there as the last
hurricane came up through Lake Charles, Louisiana, and they
were affected. It was a beautiful day; six hours with no power.
They had no idea, no explanation. We called this and that. And
we watch what is happening in Florida and in California. So the
reliability of the grid, and I have always said, people want
reliable, dependable, and affordable energy and they have been
receiving that for quite some time, but now, it is a little bit
sparse and they are concerned.
So I would ask both of you, on the reliability of the grid
system, is that based on cost or based on the energy that we
are able to supply to make sure that the people have dependable
power--how do you all look at that from the FERC's evaluation?
Judge Christie, you might want to start.
Mr. Christie. Thank you, Senator, and that is a huge
issue--reliability. Americans expect electric power on a 24/7/
365 basis. They don't want hours or days where there's no
power. So that's what Americans expect. It's essential to
modern life. As a regulator, you're very sensitive to that and
so reliability is one of your most important duties, and
reliability in America is both, largely at the state level
because it is the states that approve generating plants. FERC's
role, of course, is to regulate the RTOs and for those states
that are in RTOs FERC has a very large role in ensuring that
those RTOs are doing their job to make sure that the
transmission planning and the generating planning is being done
properly and making sure that that reliability is a 24/7/365
deliverable and, in fact, does happen.
Senator Manchin. Allison?
Ms. Clements. Thank you, Senator Manchin, and thanks again
for the chance to be here today.
I think the reliability authority that FERC has under
Section 215 of the Federal Power Act is obviously critical and
whether or not the risk to reliability comes from the kind of
weather events that you're describing or from the risk of a
cyberattack, which I know this Committee has spent a lot of
time focusing on, that risk is real and important. I spent a
year on a National Academy of Sciences committee thinking about
how to ensure resilience of the system in those types of events
and there's always a tradeoff. There's a tradeoff, as Chairman
Christie has mentioned, between cost and reliability benefits.
And so, the question is in order to ensure that FERC is meeting
its obligations and protecting U.S. citizens going forward,
what are the right, most efficient, effective investments that
the system needs to make on a going forward basis to protect
customers to provide that reliable, affordable power?
Senator Manchin. Energy markets are changing, as you know,
and electric demand and everyone is taking a side. Is it going
to be renewables or is it going to be fossil or a mix of all-
of-the-above? Do you pick winners and losers in the energy mix?
I don't think that is FERC's responsibility. FERC's
responsibility is ensuring dependable, reliable and affordable
power. But on that, right now we are having a hard time siting
pipelines. West Virginia has an ocean of energy underneath our
feet as far as the Marcellus/Utica shale and now that
Rogersville is coming on, but we can't seem to get it out
because the Atlantic Coast pipeline has been shut down, as you
know, and the people in the South are demanding it. They need
it in South Carolina, especially.
So my question would be to both of you, FERC plays an
important permitting role. Without asking you to discuss any
project that might come before you, I would like to hear both
of your views on pipelines and permitting of pipelines, and on
the necessity and need for pipelines. Because of energy
demands, if they don't get pipelines, no alternative energy is
going to be dependable.
So whoever wants to comment on that.
Mr. Christie. I'll let you go first.
Ms. Clements. Thank you.
Mr. Christie. Likewise.
Ms. Clements. Thank you, Senator.
Absolutely, the Commission's role is not to pick winners
and losers when it comes to fuel choices. The Commission's role
is to ensure just and reasonable rates and to protect
reliability in light of the resource mix and as it evolves over
time. I think under--you raise the issue of gas infrastructure
and gas is a critical component of today's diverse electricity
system. It made up 38 percent of generation across the country
in 2019. When it comes to approving natural gas pipelines, the
Commission's responsibility comes under next, excuse me,
Section 7 of the Natural Gas Act and under that section the
Commission must consider whether or not a proposed pipeline is
necessary for the present or future public convenience and
necessity. Each time there is an application for a pipeline,
there is a complex record of facts, both from the applicant's
perspective and from the perspective of landowners who might be
implicated by that pipeline. If confirmed, I would commit to
going into each of those proceedings with an open mind and
reviewing the specific facts of that case to apply Section 7 in
each instance.
Mr. Christie. Yeah, and thank you, Senator, for that
question.
I agree with Allison, in an infrastructure case you have to
first look at the need. That's the most important thing. I've
sat on a lot of infrastructure cases in my 16 years. I've sat
on transmission line cases. I've sat on generating plant cases.
I've sat on some pipeline cases that were intrastate to
Virginia. FERC, of course, does the interstate pipelines. And
the most important thing when you approach an infrastructure
case is first and foremost you look at the record and the facts
are different in each case. So you have to pay careful
attention to the record because if eminent domain is going to
be used, that's going to take somebody's property and you have
to be very sensitive to that. So need has to be proven by the
facts.
And then, of course, you apply the law to the facts. And
just like Allison just said, once you get, if we're honored to
get to FERC, I would approach every case in the same way she
indicated which is you sit down with an application, each
application has a very detailed, factual record. Need has to be
proven. And then you, of course, want to make sure that the
cost is reasonable because, again, we have to be very sensitive
to what it's going to cost, but also being sensitive to the
fact that eminent domain is going to be used in these cases. So
I can pledge to you, based on a record of doing so for 16
years, that I approach every infrastructure case based on that
record, applying the law to that record and then coming to a
fair and unbiased decision.
Senator Manchin. Thank you, both.
Madam Chairman.
The Chairman. Senator Cassidy.
Senator Cassidy. Hello to you both. Thank you for offering
yourselves for service. Ms. Clements, I am from Louisiana. I
want to say, Clemont, but Ms. Clements, I agree with your
attitude regarding public service. So thank you both for your
public service.
My staff tells me that FERC will be convening a technical
conference later this month on carbon pricing and organized
wholesale electricity markets. Among the topics to be discussed
will be the Commission's statutory authority to implement
carbon pricing in the RTO/ISO markets. A question to you both,
what do you believe is FERC's role in implementing a carbon
tax?
Ms. Clements. Thank you, Senator Cassidy, and I'll just
take a moment to recognize the leadership that you're
demonstrating as your citizens in Louisiana are still reeling
from the last hurricane that happened there.
Several stakeholders across the energy sector have proposed
a price on carbon, or a carbon tax, as an efficient means to
address and put value on carbon-free power production. I think
the role of FERC, the question that you ask, in that case is to
provide an open forum on this emerging issue to allow
stakeholders to be heard, the economists and the legal experts,
about whether or not FERC has a role to play on that front. I
certainly commend Chairman Chatterjee for his decision to hold
a technical conference at the end of this month. And because
that technical conference is on the calendar, I don't want to
risk prejudging anything that might be said there or any
comments that might be provided in writing on the record
following that conference. So, if confirmed, I would certainly
commit to reviewing in detail the record that comes forward
there and to understand the perspectives that the various
stakeholders have on both the legal jurisdiction and the
economic efficiency.
Senator Cassidy. Mr. Christie.
Mr. Christie. Thank you, Senator Cassidy, for the question.
I'm aware that FERC is going to have a technical conference
to air out those issues. The question about whether FERC has
the legal authority to order a carbon price or a carbon tax in
RTOs is a legal question that I certainly haven't come to a
conclusion on, and I think it's an open question. That's why
they're having the technical conference. So what I can pledge
to you is, if I'm honored to get to FERC, if a question such as
that arises, I approach it with an open mind. And it's really a
question of legal analysis and coming to a conclusion on what
the law allows FERC to do. I don't have any prejudged opinion
on that as to the specific issue of the carbon price.
Senator Cassidy. Ms. Clements, thank you for your sympathy
for my fate, I appreciate it. We are still recovering, so thank
you for that.
I may just not have heard your answer correctly, but in
your answer to Senator Manchin regarding FERC favoring one
source of energy over another I think you said, particularly as
regards pipelines, so let me ask you this. In 2014, you wrote
that, and I am quoting, ``FERC can't pick winners or losers.
FERC's authority under the Federal Power Act is not allowed to
prefer any one type of power resource over another. In fact,
the law requires just the opposite. FERC's job is to level the
playing field so that all types of generating resources can
duke it out in the marketplace.'' And so, kind of, you were
positing a question that appeared--and then you were, kind of,
disagreeing with the question you posited but that also seems a
little incompatible with your answer with Senator Manchin
unless I didn't hear correctly. So I would just like to ask you
to clarify.
Ms. Clements. Sure, Senator, thank you for the question.
Absolutely, it is the Commission's job under the Federal
Power Act to ensure just and reasonable rates and avoid undue
discrimination. That means that the Commission does not have
the authority to prefer any type of resource, any type of fuel
source when it comes to the question of ensuring just and
reasonable rates.
Senator Cassidy. Okay, now that is, it seems that it is a
very specific answer as regards just and reasonable rates.
Would there be another reason for the Commission to favor one
resource over another?
Ms. Clements. Thank you, Senator.
Former Commissioner Phil Moeller once said the Commission
has to be technology neutral but it cannot be reliability
neutral. And so under the Commission's Section 215 authority
for ensuring the grid's reliability, I think the important
question for the Commission to ask and it does have an open
docket on resilience going on and so, I wouldn't want to
prejudge anything there. The important question for the
Commission to ask is does the grid have the right services to
provide reliability along with the electrons that flow across
transmission lines? And in that case, there might be individual
characteristics of different kinds of resources that bring
benefits to the system. It's FERC's job both to ensure that we
have the right set of reliability services for the grid as well
as to allow resources to compete to provide them on a non-
discriminatory basis.
Senator Cassidy. Okay, thank you both, again, for offering
yourselves for service. I yield back.
The Chairman. Thank you, Senator Cassidy.
Senator Wyden.
Senator Wyden. Thank you very much, Madam Chair, and Madam
Chair, thank you very much for that gracious text you sent me
over the weekend about our fires. I would like to make an
appeal, Madam Chair. Before I ask my questions with respect to
the nominees, could I take, perhaps, three minutes to just
touch on this forestry question and make an appeal to the
Committee? I can do it in three minutes.
The Chairman. Go ahead, Senator. We recognize that this is
a pretty extraordinary time in your state and in several of the
others.
Senator Wyden. I think it is an extraordinary time for our
country and our Committee. I saw neighborhoods that were
reduced to ash this weekend. The streets had cars that were
melted. You can only imagine how hot it gets to melt a car. I
think, Madam Chair, this is a watershed moment for our
Committee as well with respect to forest policy. We have done
some very good work, and you and I have worked together in the
past. Particularly, we ended this ridiculous practice of fire
borrowing that discriminated against prevention. There were
other good changes in the Farm bill.
But the fact is that forestry policy in the Congress has
not been quick enough. It has not been nimble enough to deal
with these incredibly fast-moving fires. I mean, they just
rampage through the West, and I would just make an appeal to my
colleagues in this special request I made to say that we have
been at these decisions for a long time. We know the facts, we
know the issues, and what we have to do is find a way, like we
did with fire borrowing, to work in a bipartisan way, make sure
that we don't let these third rails of fire policy get in the
way and make some big decisions now that are going to meet the
needs of our people. This Committee is the leading Committee
with respect to fire. I will be reaching out to all of you here
quickly. Senator Manchin and I already have a bill reflecting
some of the most important new science, but I think we have
some heavy lifting to do, colleagues. This is a watershed
moment for our Committee and our country in terms of fire
policy, and we are going to have to go with good science and go
with it quickly.
Thank you, Madam Chair. I will begin my five minutes.
The Chairman. Senator, if I can just interrupt----
Senator Wyden. Please.
The Chairman. ----on that and just thank you for your
comments. I think we do recognize that when it comes to
wildfires and the impact, particularly in the West right now,
but it is a threat throughout the country. We do have more work
to do as a Committee. We recognize that we have made some
significant progress. I look at my friend and colleague from
Washington there. We have made advancements and certainly what
we have been working on with the fire borrowing policy has made
a difference from a resource allocation perspective, but we
know we have more to do. We have a subcommittee hearing on
public lands that Senator Lee is going to be chairing this
afternoon that will have a bipartisan measure, but I think
there is plenty of room to be doing more, so we look forward to
engaging individually and as a Committee on these matters.
If you now wish to proceed with your questions to our
nominees please do so, but thank you for that.
Senator Wyden. Thank you, and I appreciated the
consideration over the weekend, Madam Chair, and you are
absolutely right, we can do this in the tradition that the
Committee has worked in the past.
Question for you, Ms. Clements. We have been dealing with
Jordan Cove and it has been before FERC for quite some time.
There is enormous opposition in my home state to eminent domain
and particularly threatening people's property without due
process. Right now, we don't allow eminent domain to export
other commodities. Now I am just asking you from a policy
standpoint, do you think the government should allow eminent
domain when you are talking about the export of natural gas?
Ms. Clements. Thank you, Senator Wyden, for the question
and I, too, think of the people in your state. It's hard to
fathom from where we sit here in Washington, DC, all that you
all and people across the West are experiencing right now.
When it comes to Jordan Cove and the export of liquified
natural gas, it's important to think about what the
Commission's role is in that process. Congress has determined
that the U.S. Department of Energy should be the agency that
determines whether or not there is a benefit to actually
exporting the gas itself, whether or not that is in the public
interest. The Commission's role under Section 3 of the Natural
Gas Act is then to approve simply the facility for the export
if the facts merit that approval because the facility is not
contrary to the public interest. On the pipeline question
itself, when the pipeline is deemed to be under Section 7 of
the Natural Gas Act then eminent domain rights attach.
Obviously, as Chairman Christie mentioned earlier, eminent
domain is a real, a really big deal with real life impacts for
property owners who are implicated. And so, if confirmed to the
Commission, I would never go into any Section 7 proceeding
lightly, but look very specifically at the facts of the case
and the potential impacts.
Senator Wyden. Let me ask you a question with respect to
climate science and your responsibilities at FERC. And you
know, part of the reason I made that comment earlier and I was
appreciative of Chair Murkowski for being able to do it, is
that clearly, we have to let science drive so many of these
major decisions. I happen to believe that good forest science
is good climate science, and I think as we look at these
issues, part of the task for all nominees in resource agencies
is to look at how they can affect climate policy in the most
constructive way.
In your view, and you and I talked about this, how can FERC
best utilize climate science when deciding whether pipelines
and natural gas plants are in the public's interest?
Ms. Clements. Thank you, Senator Wyden. I think science and
all facts should drive the Commission's application of the law
in all circumstances, and I would certainly commit to that
approach if confirmed. When it comes to how climate science
interacts with the Commission's authority, as you know, the
Commission is not a direct climate regulator, but one place
where the science will be very important is thinking about the
Commission's reliability responsibility under Section 215. It's
incumbent upon the Commission to ensure that the system has the
supply it needs to meet demand as well as the ongoing
reliability, operating reliability of the system, in light of
the best predictions and the best analysis about what the
future weather patterns, what type of extreme weather events
and natural disasters the country might be facing going
forward.
Senator Wyden. Well, I appreciate your comment about
applying sound climate science in your work at FERC. I would
also note apropos of this whole issue, FERC does have authority
to consider environmental impacts. In an April 28 decision,
FERC said that, as part of a notice of inquiry, that it had to
look at environmental issues surrounding pipelines. So I think
that you and all other nominees that come before us in FERC
have to be willing, almost, to put a prism up in front of them
and say, how can I use my work consistent with the rules and
statutes of FERC to do the best job of dealing with climate
science because good climate science is going to affect
everything that we do in our country? I happen to think good
forest science is good climate science apropos what I said
earlier, I think good climate science has got to be part of the
work of FERC.
Madam Chair, again, thank you for the extra time.
The Chairman. Thank you, Senator Wyden.
Senator Lee.
Senator Lee. Thanks to both of you for your willingness to
be considered for these important positions and for being here
today.
We will start with you, Mr. Christie. You have been, over
the last 16 years as I recall, a regulator in Virginia. I
believe you go by the title of Judge there. You don't wear a
robe, but they call you Judge from time to time. Some have
described you as a textualist, meaning that you have undertaken
your role in Virginia as being to apply the law, to read the
law based on what it says, rather than on the basis of what you
might wish it said. Is that an approach that you take and is
that something that you would bring to the table as a FERC
Commissioner, if confirmed?
Mr. Christie. Yes, Senator, and they call us Judge unless
they got a bad result and then they call us something else
but----
[Laughter.]
My approach is you have to follow the law and you start
with the plain meeting. In Virginia the rule is the plain
meeting is what the law, is what the legislative intent is, is
if the laws, if the text is plain then you follow that. I think
it's important, very important to follow it because if we don't
have the rule of law you don't really have a democratic
society. And so, I believe it's extremely important to follow
the rule of law. And in any case when I approach a case, you
start with the law and then you take the facts that are in the
record.
And Ms. Clements mentioned earlier that each case has a
different factual record, and that's important to understand.
They're not cookie cutter cases, especially infrastructure
cases. It might be a transmission line one day. It might be a
generating plant the next day. It might be a gas pipeline the
next day. And so, it might be a DSM case the next day. In all
those cases you have a different factual record. And I just
believe very strongly you have to look at the entire factual
record of a case and then apply the law. And let's remember
where the law came from. At the state level, the law came from
our elected legislators. At the federal level, it's going to
come from you, the elected Members of the Congress. So, that's
why it's important, I think, for an administrative body, such
as the FERC, to follow the law that you, the Congress, wrote.
You're the ones who are elected and that's what I've done for
16 years in Virginia is follow the law that's been enacted by
our elected legislators in the General Assembly.
Senator Lee. Thank you.
Ms. Clements, I would like to talk to you for a minute.
Let's talk about this concept of reasonable foreseeability. You
are a lawyer by training. Do you remember first-year Torts
class, what is often discussed as the Wagon Mound and Palsgraf
line of cases? How does that standard relate to the tort
standard? In other words, how does the tort standard relate to
the concept of reasonable foreseeability in the context of
FERC?
Ms. Clements. Thanks, Senator, for the question.
I certainly enjoyed the chance to speak with you about your
home state and my adopted state for the last few years. So,
appreciate that.
I would not claim to be an expert on torts law nor was it
my favorite class in my first year of law school. I certainly
can speak to the requirements under the Natural Gas Act and
NEPA when it comes to consideration of reasonably foreseeable
impacts. As Chairman Christie just said, each record is fact
specific and the requirement as a FERC Commissioner would be to
apply the law under NEPA which was recently interpreted by the
DC Circuit said that at least in some substantive
circumstances, for example, greenhouse gas (GHG) emissions
downstream are reasonably foreseeable impacts and that would be
something that would get incorporated into a NEPA analysis. But
in each case I would have to look at the record to do my best
job of applying that standard.
Senator Lee. But you are aware of no reason why it couldn't
be? Is that what you are saying? Why that could not be
incorporated into NEPA analysis?
Ms. Clements. I, without, kind of, getting into the
unknown, sir, I would suggest that there is a reasonably
foreseeable standard and there's courts interpreting it and as
a FERC Commissioner my job would be to look at those, that
precedent as well as existing FERC policy and apply it in each
certification proceeding.
Senator Lee. In one of your previous careers, one of your
previous places of employment, you worked on the Sustainable
FERC Project. The Sustainable FERC Project website contains a
statement with the following words, ``FERC reviews critical
questions like pipeline need and a project's carbon emissions
through a restrictive and incomplete lens.'' Do you agree with
that statement and, if so, what could you and would you do as a
Commissioner to change that lens while remaining fair and
unbiased to applicants?
Ms. Clements. Sure, thanks, Senator.
I left the FERC Project in 2015 and didn't work on Natural
Gas Act issues. During my time there I was more focused on the
Federal Power Act side of the ledger. Certainly, my role would
be, in an instance that a certification proceeding came before
me, would be to review the record and to look at the way that
FERC has, per the law and per its policy, reviewed need and I
would follow that as my guide.
Senator Lee. Madam Chair, I see that my time has expired. I
have one other question I would like to ask, if that is okay?
The Chairman. That is okay.
Senator Lee. Thank you.
In a couple of your previous positions both with NRDC and
with the Energy Foundation, a skeptic could argue that you have
identified particular winners and losers within the energy
industry. Tell me how your role would change if you were a
member of FERC, if you were a FERC Commissioner. Would that be
appropriate and would people be able to look to you as a FERC
Commissioner as someone who is neutral and objective and not in
this to pick winners or losers?
Ms. Clements. Thank you, Senator Lee. That's a fair
question.
I have represented a varied set of interests across my time
in the energy sector and in each instance I have upheld my own
oath, ethical oath, to protect and advocate for their interests
to the best of my ability. When I would turn to the role of the
FERC which is different, is an independent commission as
defined in the U.S. Department of Energy Organization Act that
Senator Manchin, that Senator Manchin mentioned, excuse me, the
requirements for being a Commissioner are that you can fairly
represent and hear all interests that come before you in any
given record. If I had the honor of being confirmed, that would
be my approach.
Senator Lee. Thank you.
Thank you, Madam Chair.
Ms. Clements. Thank you, sir.
The Chairman. Thank you, Senator Lee.
Senator Cantwell.
Senator Cantwell. Thank you, Madam Chair, and I would like
to echo the comments of my colleague, Senator Wyden, about fire
that this Committee, obviously, has had so much of an oversight
role and you and Senator Manchin, I hope, will continue to help
us in this very critical time for our states. We have had lots
of comments here about the impact of COVID that we asked the
fire chief and many others about what we were going to do with
the impact of COVID, and we are clearly seeing an impact. We
are seeing it affect our firefighters and our ability to fight
these fires. So I hope that in the coming days we will be able
to think creatively about getting more resources for fighting
fires, helping with FEMA, discussions we have had in the past
about helping rural communities. Also, Madam Chair, I think
this Committee could play a very key role in the future
discussions now that we have seen what this fire season looks
like this year, how much we want to accelerate the work that
was previously done in giving new tools and resources to
monitor and reduce fuel. I think we need to take this as a very
important learning lesson and move forward. So thank you for
your concerns and expressing your interest in this important
issue.
I want to thank you and the Ranking Member for having this
hearing on FERC nominees. This has been a long process and a
long battle, so thank you for trying to get a full FERC. This
is such an important oversight and the Commissioners and their
hard work and professional staffs have a lot cut out for them
in today's environment because of, obviously, hundreds of
billions of dollars that are invested in diversifying and
decarbonization. I think this discussion this morning is very
interesting about a price on carbon which I don't see the FERC
being able to do, but on the other hand, there were people who
were pushing FERC to basically say, put a tax on the American
consumer by mandating that coal be the only reliable source. I
mean, that is a very wrong-headed price by the FERC, in my
opinion.
So I think you guys, we are counting on you to make
independent, science-based decisions that favor consumers, and
I am pleased to see that we have two qualified nominees before
us. There is a very big bright line for me though and FERC
being a policeman on the beat and that is making sure that
there are not market distortions, that there are not market
manipulations or anti-competitive. Last year I sent a letter
with our colleagues, Senators Wyden and King and several other
Senators, expressing concerns that seem to indicate that the
FERC Office of Enforcement may not be acting as vigilantly as
in the past. And so in my opinion we have had deregulated
markets, but you better have a policeman on the beat that is
enforcing just and reasonable rates. And as FERC Commissioners,
I hope you will be fully committed to stopping and punishing
manipulative acts that can stifle competition and result in
unjust and unreasonable rates.
So I want to ask both of you, do you believe that energy
markets can be competitive and produce just and reasonable
rates if they are not free from market manipulation or other
forms of fraud?
Mr. Christie. Well, thank you, Senator, for that question.
That's a very important issue. And let me just also say up
front, I just, two days ago, had a long conversation with a
state regulator from your State of Washington, who told me
about the fires. He had just driven from Spokane to Seattle
where he lives and he was telling me how terrible it is. So my
sympathy goes out for what you're going through right now.
Market manipulation is an extremely big threat to the trust
that people have in these markets. And so, one thing we have to
understand about these RTO markets, these wholesale markets,
they're not true markets, they are regulatory constructs. We
want competitive results from these regulatory constructs and
getting those competitive results is the challenge. And
there's, of course, a threat of market manipulation. I can
pledge to you that, if I'm honored to go to FERC, to make sure
that FERC uses all the tools in the tool box against market
manipulation.
I know Washington and Oregon are both considering whether
maybe, someday, they might go into an RTO with California and
have capacity markets. I can tell you from my experience in
PJM; I've lived in PJM world for the last 16 years. It is
absolutely essential that you have an independent market
monitor in these RTO capacity markets and that we've had a lot
of experience in PJM with the need for an independent market
monitor. We have an outstanding Market Monitor in PJM, Dr.
Bowring, and to get competitive results, you need constant
market monitoring to ensure that you're not having
manipulation.
So I can promise you, if I'm honored to get to FERC, to be
very sensitive about ensuring that FERC is, uses all the tools
in its tool box and that these RTOs are having independent
market monitoring.
Senator Cantwell. My time is out----
Mr. Christie. I'm sorry.
Senator Cantwell. ----so including penalties and return to
consumers?
Mr. Christie. Well, I can't speak to individual remedies
for individual cases because each one of these cases has an
individual remedy and so, I don't want to speak to that. I'm
saying I pledge that FERC should use all the tools that it's
got available to it to act against market manipulation.
Senator Cantwell. Serious, no market manipulation tools,
Ms. Clements?
Ms. Clements. Yes, ma'am, very serious.
Senator Cantwell. Thank you.
The Chairman. Thank you, Senator, and know again the
commitment is to ensure that we are working together on these
matters related to your state.
Senator Gardner, you are next up in the rotation. Welcome.
Senator Gardner. Thank you, Madam Chair, and thank you to
both of the nominees today for your willingness to serve. We
greatly appreciate your commitment to public service.
Judge Christie, a quick question for you. The FERC mission
ensures that rates, terms, and conditions are just, reasonable,
and not unduly discriminatory or preferential. What does just
and reasonable mean to you?
Mr. Christie. I think just and reasonable means I use the
constitutional standard from Bluefield Water Works, a very
famous case in utility law and that is it's fair to the
producer and it's reasonable to the consumer. And I think what
we have to look at in every case is making sure that that
standard is met. I'm personally an advocate of least, trying to
achieve the least cost to consumers based on the facts and the
record. And I think that's one of the FERC's most important
jobs. I think the Federal Power Act is ensuring just and
reasonable rates is about protecting the consumer from paying
rates that are above what I would call a market price. And of
course, if you're in a cost to service regulation stance,
there's a long formula that goes into that, but I think FERC's
job is very important at making sure those rates are reasonable
to the consumer.
Senator Gardner. Ms. Clements, if you could answer the same
question. What does a just and reasonable rate mean to you and
that determination, how is it made?
Ms. Clements. Thank you, Senator Gardner.
The Federal Power Act at its core, is a consumer protection
statute. And so, when it comes to considering just and
reasonable rates, there needs to be fair rates and competition
needs to be encouraged as is possible. And that is the core
starting point for which I would approach any specific set of
facts.
Senator Gardner. In that determination, just and
reasonable, do you take into account calculations on
environmental issues, environmental justice issues or social
justice issues?
Ms. Clements. I think that, thank you, sir. I mean, not
directly. I think that the question of, there is always a
tradeoff between an investment and a cost and the system is, in
large part, the electricity system, in particular, is outdated
and needs modernization.
Senator Gardner. So, in part----
Ms. Clements. When it comes to----
Senator Gardner. So sorry, continue, I am sorry.
Ms. Clements. Under the just and reasonable standard, that
is not the place where a lot of the concerns which are real and
do get considered in records on environmental justice on impact
to communities come into play.
Senator Gardner. But so, you said, not directly, but in
your mind environmental justice could go into the consideration
of just and reasonable rates, is that correct?
Ms. Clements. I would consider that, that consideration,
sir, to the best of my knowledge right now, as a nominee who
hasn't gone into any specific record coming into play when
we're talking about specific approvals of infrastructure
whether that be an interstate pipeline, an LNG facility, or a
hydropower relicensing. That's the place where under NEPA,
environmental considerations come into play directly under the
law.
Senator Gardner. But just to get down a little bit further
on just and reasonable rates, you do not take that into
consideration on rates?
Ms. Clements. At the risk--I'd be happy to go back, sir,
and look at the record, look at the way that that has played
out under various aspects of the Federal Power Act. That is not
something that I have familiarity with. Certainly, I understand
the issues, the real issues that you raise when it comes to
impact to communities and other environmental concerns, I would
need to look more closely to see if there's a place in the just
and reasonable analysis for those issues to be considered.
Senator Gardner. From I think 2008 to 2016, you worked for
the Natural Resources Defense Council (NRDC). Can you name a
major issue that you disagreed with the NRDC on?
Ms. Clements. Sure. I think that, well, I don't actually
know where NRDC stands on the issue today, but I think that the
existing nuclear fleet plays an important role in providing
carbon-free, reliable power to the system. That's a place where
many of my very well-studied and smart colleagues might
disagree with me. That's one place.
Senator Gardner. Could you name another perhaps?
Ms. Clements. You know, the NRDC was an organization of
over 600 people when I worked there, all of whom were my
respected colleagues, many of whom are my friends, and I'm sure
we disagreed on a lot of issues. What I focused on was the
Federal Power Act and the ways that the Congress has authorized
the Commission to ensure the affordable, reliable delivery of
electricity regardless of what's happening in the world around
the Commission. And so, that's the role that I would be
committed to if confirmed to this role.
Senator Gardner. On natural gas production, the fossil fuel
production, did you disagree with the NRDC on anything?
Ms. Clements. You know, I'm sure many of our colleagues
disagreed on many issues related to natural gas and fossil
fuels. It was not an issue that I engaged in when I was at
National Resources Defense Council or spent a lot of time
engaging with colleagues on at that time.
Senator Gardner. But you can't name anything that you
disagreed with them on when it comes to their fossil fuels
agenda?
Ms. Clements. I honestly couldn't articulate the fossil
fuels agenda for the organization right now. I've represented
interests across the board as a project finance attorney and I
represented the purchasers of six gas plants, three peakers and
three non-peakers and, you know, did my best in that
transaction to make sure that they got a fair deal in all of
the contracts that they were engaging with. And so, that's the
approach that I would take if confirmed to the Commission.
Senator Gardner. All right, thank you. Thank you both for
your time today, thank you. Madam Chair, thank you.
The Chairman. Thank you, Senator Gardner.
Senator Heinrich.
Senator Heinrich. Judge Christie, you quoted Justice
Brandeis that, ``States are the laboratories of democracy and
should be respected as such.'' However, a couple weeks ago,
FERC voted to block proposed market changes by New York's grid
operator that were aimed at aligning their markets with the
state statutory policy goals. By law, New York has to receive
70 percent of its power from clean sources by 2030, 100 percent
by 2040. In a not dissimilar case, last year FERC issued an
order that completely upended how state-backed, clean energy
resources could compete in capacity markets run by the PJM
Interconnection. Does FERC have a responsibility to respect
these state statutes or should FERC feel empowered to
effectively overrule state statutes?
Mr. Christie. Well, thank you, Senator. I'm aware of both
of those cases. I want to note that in the, I think the second
case you referenced, which is commonly called the MOPR case----
Senator Heinrich. Right.
Mr. Christie. ----Virginia, my Commission filed comments in
that case and we were, we asked that the final MOPR make sure
that states that were vertically integrated in their utilities
were doing self-supply would be exempted from the MOPR. So we
took a position in that which I agree with. In the New York ISO
case, I'm aware of that result too. What I want to avoid
prejudging is on issues beyond what we took a position on in
Virginia which is we wanted vertically integrated states to be
exempt. I believe very strongly that every state has the,
should have the authority, it does have the authority, to make
its own generating decisions, resource decisions and, of
course, many states, certainly in your part of the country, the
Southwest, have not gone into RTOs. And so, it's totally up to
state regulators what they do in terms of what their resource
mix is.
The cases you referenced are when states choose to go into
an RTO and those RTOs are regulated by FERC. And the conundrum,
or the challenge I could put it, is, and I'm a big believer in
states' authorities to pick their own resource mix and not to
get in the way of that. I think the question in a lot of these
cases, and I'm not prejudging anything, is if the state is
offloading costs of some of its policies onto consumers and
other states, then what is--then FERC has a role because
certainly you're dealing with interstate commerce. And so, but
from the general principle, I think, states ought to have the--
well, they already do, and I would respect that--have the
authority to make their own resource decisions.
Senator Heinrich. Okay.
I think we all agree with another statement you made that
first and foremost we follow the law. One of you said that.
That is sort of where we start in all of these cases. But there
are cases where there is also discretion. And Judge Christie,
you mentioned that when the statutes give discretion that FERC
should be sensitive to its impacts on consumers.
Mr. Christie. Right.
Senator Heinrich. I certainly agree with that prospect.
Given the enormous impacts today that we are seeing from
climate change that are having on consumers that are occurring
on financial markets, on property values and the impacts that
climate change is actually now having on reliability as well,
directly, when the statutes give discretion, should FERC
consider the demonstrated climate impacts or the potential
climate impacts of its decisions, especially if those impacts
could be deleterious to either consumers and/or reliability?
Mr. Christie. Well, I think you take--I think Ms. Clements
mentioned earlier, every matter in front of FERC is a case.
It's an individual case. It has an individual factual record
and, of course, there's going to be a law applicable. And so, I
think one thing you might be referencing is there's been a
disagreement at FERC on a legal question about the downstream
GHG emissions, what's required in an individual pipeline case.
I don't want to prejudge that issue because that is a legal
question about what does the law require and what is the DC
Circuit opinion--commonly called the Sabal Trail Opinion--what
does that DC Circuit opinion require?
So I don't want to prejudge that because that's going to be
a legal question that's going to come, if I am honored to get
to FERC.
Senator Heinrich. Yes, I am more getting at should you be
considering the best available science within the bounds of,
obviously, what the statutes call out and, as you make these
decisions when there is discretion, should you be incorporating
up-to-date, scientific information?
Mr. Christie. I think you use the best available
information in any case. The factual record, you want a
complete factual record and I think that you go with the facts.
And FERC is a primarily economic regulator. It has
environmental duties. I would pledge to you to fulfill the
environmental duties that FERC has, but I think in any factual
record, as a regulator, I want to have the most complete
factual record I can and I want to go with the facts and go
with the realistic facts and take all those things into
consideration.
Senator Heinrich. Thank you, Chairman.
The Chairman. Thank you, Senator Heinrich.
Senator Hoeven.
Senator Hoeven. Thank you, Madam Chairman.
I would like to address my first question to Mr. Christie
and that is, do you support providing just and reasonable
compensation for baseload generation resources and making sure
that reliability and resiliency attributes are adequately
compensated?
Mr. Christie. Well, as a state regulator I spent 16 years
providing fair support to generating units. We've approved a
lot of generating units in Virginia. But we had that discussion
with you on the telephone, which I very much enjoyed and thank
you for that time. There are two--states fall into, really, two
categories in terms of the generating units that are being
built. Many states in the Southeast, Southwest, Northwest are
not in RTOs and state regulators in those states have the
authority to approve any generating, approve generating plants
and to compensate generating plants as that state wants to
compensate it. So that's a state decision.
When a state chooses to go into an RTO or chooses to take
its utilities into an RTO, then that RTO operates, most RTOs in
America are operating capacity markets and those capacity
markets are regulated by FERC, I mean, FERC would regulate the
RTOs and the Federal Power Act is very clear that FERC cannot
order an RTO to favor one generating resource over another.
That's just, that's Federal Power Act, black letter law. So in
those states that have chosen to go into those RTOs, FERC, it
certainly regulates the reliability component and its job is to
make sure that the RTOs and the ISOs are doing their planning
properly to ensure reliability. But the Federal Power Act says
to FERC, you cannot order an RTO to favor one generating
resource over another in those capacity markets.
Senator Hoeven. Ms. Clements, same question.
Ms. Clements. Thank you, Senator Hoeven. I appreciate the
question.
I think two proportions of the Commission's jurisdiction
are implicated when it comes to the compensation for baseload
power and one is under the Federal Power Act, the just and
reasonable rate responsibility that Chairman Christie just
mentioned, in which case, FERC has no authority to choose, to
compensate a particular type of fuel source or resource over
another. It does have the requirement to ensure the ability for
resources to compete on a level playing field. When it comes to
the Commission's reliability jurisdiction, it's important to
say, to look at the system from a reliability perspective and
say, does the system have the sufficient reliability services
to ensure that the demand or, excuse me, supply will be
sufficient to meet electricity demand on a going forward basis
and how do we do that at the most, in the most cost-efficient
way.
Senator Hoeven. Mr. Christie, do you believe that the lack
of fuel diversity in California has caused a big part of their
problem with the rolling blackouts and brownouts they have had?
And what is FERC's role in ensuring that RTOs don't have those
types of blackouts and brownouts. I don't think that is what
consumers want. What role should FERC play?
Mr. Christie. Senator, very good question, thank you and
you're absolutely right. American consumers want a 24/7/365
power supply. They don't want to lose power for hours or days
or weeks. And so, FERC's job as a regulator of RTOs is to make
sure that the RTOs--and California ISO is one of those--are
doing their transmission, their transmission and generating
planning and they're making sure they have adequate resources.
The thing about the incident in California in August with
the outages, one thing I've learned as a regulator is, I want
to get all the facts before coming up with an opinion. And so,
I think there's, a study is being done, an analyses being done
by the California system operator, the Cal ISO. It's been well
known in the utility area for years that California faces a
challenge with what is known as the duck curve, that's the name
for it, and that is because California has a large amount of
solar and its solar ramps up during the day and demand ramps up
during the day. What happens at night is, of course, the solar
drops off, but the demand has stayed up there very high because
of the hot weather. So the challenge that California ISO has
had is trying to fill the gap between the drop-off in solar and
the continuation of demand. They've been filling it with
imports of electricity from other states in the West and so
they've been trying to fill it, I think, with DR, demand
response. But I think it's very important to get an after-
action report on how California ISO has met that challenge. And
of course, they didn't meet it, obviously, when the blackouts
took place because that's not the standard. But I would like to
see the after-action report about how that could have been
handled better and FERC's role, to get back to FERC, and Ms.
Clements mentioned it. FERC's role as a regulator, FERC
regulates the Cal-ISO, CAISO, and so, FERC has got to be very,
very cognizant of what kind of planning is taking place and how
is California planning to meet the challenge of phasing in a
lot more solar, but what happens after the sun goes down and
you have that gap between generation and demand?
Senator Hoeven. And so, FERC's role is what?
Mr. Christie. FERC's role is to regulate. FERC's role
regulates the California ISO. So FERC's role is to make sure
that the planning that's being done. And I would note, the head
of the California ISO, Mr. Berberich, said just recently that,
he said he'd been warning for years about the lack of
generation that was available to fill the gap, the peak time.
Now Mr. Berberich also said that they'd filled it and they'd
met it with some, with demand response and doing some load
shedding.
FERC's role, specifically, is to ensure that these ISOs and
RTOs are planning that they have the appropriate generating
resources. And personally, I think that every state should have
a balanced portfolio. I think a balanced portfolio generating
resources is very important. There are other resources like
storage and demand response that are part of that mix, but as a
state regulator, I'm a big believer that each state should have
a balanced portfolio so you can make sure you fill the gaps and
you hit the peaks. That's the important thing is you've got to
hit the peak demands when they come on. And what happened in
California was they didn't hit the peak demand. They didn't
have sufficient generation. And so, they had the blackouts. And
FERC's job is to make sure that those things don't happen, but
its direct job as a regulator is to do it by regulating these
RTOs and ISOs.
Senator Hoeven. Ms. Clements, the same question.
Ms. Clements. Thank you, Senator.
You know, the people of California are facing a lot these
days. When it comes specific, when you ask specifically about
the proactive safety shutoffs that happened in August, as
Chairman Christie said, the investigation is still underway and
the issues are likely to come before the Commission and so I
wouldn't want to prejudge that.
Though the experience in California does highlight an
inflection point for the Commission related to resource
adequacy authority and that balance under the Federal Power Act
of the role of the Commission as relates to the role of the
states in ensuring reliability and just and reasonable rates.
Senator Hoeven. So FERC does have a role in making sure
that the baseload power is there and available?
Ms. Clements. FERC has a role, certainly FERC has a role in
ensuring reliability under Section 215 and that requires
whatever the resource mix is, if the grid system is not
ensuring reliability sufficiently then FERC would, it would be
incumbent upon the Commission to take a hard look at that and
see what needs to be done. Certainly, if confirmed, that would
be something that I would commit to doing.
Senator Hoeven. You acknowledge California has a problem
and that we don't want to have blackouts and brownouts in any
of the states--correct?
Ms. Clements. Absolutely, across the country it is critical
for individuals, for families, for businesses, for schools, to
have access to reliable, affordable electricity.
Senator Hoeven. Thank you. Thank you, Madam Chair.
The Chairman. Thank you, Senator Hoeven.
Senator King.
Senator King. Thank you, Madam Chair.
First I want to thank you and Senator Manchin for pushing
this process forward and thank the President for these two
exceptional nominees.
I have been listening to this discussion and we have sort
of been talking around an interesting issue and I don't know
the answer to it, but in business we have a concept called life
cycle cost where you look at the cost over a long period of
time, not just at the time you write the check. It strikes me
that that really gets at the heart of this discussion about
environmental externalities as they fit into the rate. You can
say a rate is just and reasonable but if those life cycle costs
of floods, fires, excessive storm damage, if those are factored
in, then that is part of whether the rate is just and
reasonable, I would argue. I realize that is a big question,
but I think it is worth talking about. It is, you can't just
take a snapshot in time and say this is just and reasonable if
that decision leads to greater costs later on that will be
borne by consumers.
A couple of specific questions. Ms. Clements, the role of
storage demand and demand response and distributed generation
in the, sort of, mix of capacity and how you make those kinds
of calculations--give me your thought, please.
Ms. Clements. Thank you, Senator King, and I've enjoyed and
appreciated watching your leadership on storage issues and
demand side resource issues and opportunities.
Under the Federal Power Act, it's incumbent upon FERC to
ensure that its regional markets and, well, its electricity
markets are open to competition, that there is not undue
discrimination against any type of resource. And as we've seen
over the last 10, 15 years, the storage market has really
evolved. Demand side resource opportunities have evolved, smart
energy efficiency has evolved, and all of these resources have
the ability to provide both electricity and reliability
services to the system. And so, FERC has taken some action.
There are certainly actions still before the Commission on this
question about how to ensure that the markets are open to
opportunities for the resources like the ones that you mention.
And if confirmed, that would be a priority for me to continue
going forward, looking at the markets and then trying to ensure
that discrimination is not taking place so that American
innovation has the ability to keep growing the type of
resources and others, that have resources you mention and
others.
Senator King. So those resources like storage, demand
response, should be able to compete and be allowed to compete
in the capacity market, is that your view?
Ms. Clements. Yes, it's--yes, sir. The FERC should not, if
there are, if resources have the ability to perform technically
to provide a service that the Commission has deemed worthy of
compensation, then all resources with the technical
characteristics that allowed it to compete should be able to
compete.
Senator King. One comment for both of you, and I discussed
this with both of you previously this week.
I am very concerned about the cybersecurity of the gas
pipeline system. I am concerned about the grid generally. I
don't think we are as secure as we think we are, but
particularly the gas pipeline system which you have, the FERC
has, a role of regulating pipelines, allowing pipelines,
permitting pipelines, but TSA has the responsibility of the
security, cybersecurity of pipelines. I would like both of your
thoughts on (a) whether you see that as a significant issue and
(b) whether you believe that should be a FERC responsibility
and do we need a statutory change to shift the responsibility
from TSA to FERC?
Mr. Christie. Well, Senator, thank you for that question.
Cybersecurity is a huge issue and our Commission has been
putting a lot of emphasis on it, working with our utilities and
encouraging them on cybersecurity, and they've been doing a
very good job on it. I know FERC has got an office dedicated to
cybersecurity and FERC is taking it very seriously and
elevating it to the importance that it deserves. Pipeline
safety, specifically, I would note that we, as a state
regulator, do the pipeline safety in Virginia and we do it
under a contract with the federal pipeline, it's called PHMSA,
the acronym for Pipeline and Hazardous Material Safety
Administration, and that's worked very well. We do it through
a--I guess you'd call that cooperative federalism.
As far as the role for FERC's job, FERC is to make sure
that the pipelines, that cybersecurity has been elevated to a
priority. It has done that.
And I think the issue about whether there needs to be
additional federal legislation, I don't, I haven't formed an
opinion on that, but I can promise you if I'm honored to get to
FERC, that certainly will be a priority to be cognizant of and
to continue working with the office and the great staff the
FERC already has who are working on that cybersecurity issue.
Senator King. Well, in New England the gas pipeline system
is a de facto part of the electric grid because about 60
percent of our power comes from gas, none of which comes from
the region, all of which comes via pipeline. So if there is a
failure, if there is a cyberattack on the pipeline system, the
grid will go down just as if there were an attack on a SCADA
system in an operating plant or at the ISO.
Mr. Christie. And the question?
Senator King. Well, I just commend that to both of your's
attention. I think this is a very, very serious issue that will
only increase in its significance. So not really a question,
just urging you to take this issue of pipeline security,
cybersecurity, very seriously as you move on to the Commission.
Thank you, both.
Mr. Christie. Well thank you and I can certainly make that
pledge to take it very seriously, because it is an extremely
serious issue, Senator. Thank you.
Senator King. Thank you.
Thank you, Madam Chair.
The Chairman. Thank you, Senator King.
Senator Cortez Masto.
Senator Cortez Masto. Thank you and I, too, want to thank
the Chairwoman and the Ranking Member for holding this hearing,
so important, and congratulations to both of you as nominees.
Let me follow up first on Senator King's questioning
because cybersecurity attacks and cybersecurity are also a
concern of mine. I know on July 21st of this year, FERC and the
North American Electric Reliability Corporation published a
cybersecurity guide for the power sector which covered four
non-invasive techniques that security professionals could use
to identify chips produced by foreign companies. I guess my
question to both of you, because this is such a topical and
timely issue and it is happening, we hear it all the time. I
hear it in Nevada when I am talking to so many in this
profession. Have you thought about or what could FERC be doing
to ensure that both our urban and rural grids are protected? I
would love to get your thoughts on that if you have any opinion
around that and what you would bring to FERC to address this
issue.
Let me start with Ms. Clements.
Ms. Clements. Thank you, Senator, for the important
question and the chance to speak to it.
The time I spent on the National Academy of Sciences
committee on grid resilience really opened my eyes to the
magnitude of the cyber threat that is persistent and increasing
for the United States. And I know this Committee has done a lot
of good work and proposed legislation on that front. FERC
worked with the North American Electric Reliability
Corporation, as you mentioned, to establish a critical
infrastructure protection standard for supply chain risk
mitigation which is one of the, if not the most important
aspect. I put it among the top of the obligations for the
Commission under its Section 215 reliability authority.
As a nominee, I don't have access to the confidential
information that says what should the Commission's next steps
be on this issue and how is the critical infrastructure
protection standard working, but certainly similar to Chairman
Christie, if confirmed, I would commit to making this issue and
staying vigilant going forward a priority.
Senator Cortez Masto. Thank you.
Mr. Christie.
Mr. Christie. I'll just reiterate what Ms. Clements said.
This is a huge issue, the threat of cyber threats to our grid,
to pipelines and I can commit that if I'm honored to get to
FERC to continue to put that, to give it the priority it
deserves and I know and FERC has already done quite a bit on
it. They have an office dedicated to it. FERC, of course, works
with other federal agencies and quasi-independent agencies like
NERC, the National Reliability Council. And so it's a very
important issue, and I can certainly pledge to you to continue
to elevate it to the priority it deserves.
Senator Cortez Masto. Thank you. I appreciate your comments
on that.
Let me jump back and talk about, there has been a lot of
questioning about FERC's role in incorporating environmental
impacts into its decision-making. Let me give you a specific
example. In Nevada, we have been working against the odds and
among growing threats from climate change to restore Walker
Lake. It is one of Nevada's desert terminus lakes; however,
much of the concern of the tribal community and the local
stakeholders there who have dedicated decades of times and
resources to building back the lake's delicate ecosystem. In
March of this year FERC issued a preliminary permit to a
California company to study the feasibility of a 2,000 megawatt
pumped storage project on the lake.
Now I understand that preliminary permits do not allow for
any land disturbance activities or constructions, but they do
provide the permitee a priority spot in line to file a license
application should they choose to move forward. So my question
to you is, when it comes to environmental impacts of
infrastructure projects, where do you see FERC's role?
Mr. Christie. Well, thank you, Senator, and I'm going to
assume with regard to the individual generating plant, hydro
plant, that you're mentioning, that's probably still pending.
I'm assuming that's pending at FERC and so, I don't want to,
obviously, say anything that would prejudge that individual
application.
Any application for an infrastructure project, whether it's
a generating plant, pipeline, or some other sort of
infrastructure project--we do transmission line siting in
Virginia--has to be approached with an extensive factual record
and then you apply the law to the record. And so the laws that
apply are the laws of the case and the environmental aspects of
that are written out in statute, and I can certainly pledge to
you that if I'm honored to get to FERC that the laws that apply
to a case, and they include environmental aspects like FERC's
duties under NEPA, I would certainly pledge to carry out the
fullest duties that FERC has, statutorily, which includes the
environmental impact that NEPA requires.
Senator Cortez Masto. Let me just touch on this because
this is one of two permits by the same company. They have
actually come and done something similar and filed a permit
with the Pyramid Lake Paiute Tribe and this tribe in Nevada has
filed a comment letter in Nevada opposing the project. So it is
pending, and I recognize you can't talk about it, but to the
extent that you are hearing from stakeholders, particularly
tribal communities, who have concerns about their cultural
sites and these particularly, in this case, Pyramid Lake Paiute
Tribe, that water source is within their jurisdiction and key
to this tribe. What could I tell them that you are going to
consider from their comments, particularly as it addresses the
ecosystem of their tribal concerns? I mean, are they wasting
their time by filing a comment in opposition, I guess is my
point?
Mr. Christie. Well, Senator, again, and thank you for the
question and, obviously, I'm not going to respond about a
specific case----
Senator Cortez Masto. Right. I appreciate that.
Mr. Christie. ----and what's going to happen or not happen.
I can say this, in 16 years in Virginia we've had many
infrastructure cases. A lot of them are very controversial.
Siting transmission lines is usually not a non-controversial
project because people don't want to look at them and so,
therein, very controversial. We've had cases where we had
hundreds of people come out in opposition to a transmission
line. And so, what I can pledge is I'm a big believer in giving
the public the fullest opportunity to comment in cases that
affect them. I'm not familiar because I've not been to FERC.
I'm not a member of FERC, but with the public comment
procedures that are built into FERC's procedures, I can promise
you, if I'm honored to get to FERC, that I think in any
infrastructure case which affects people, that the fullest
public comment should be made available consistent with what
the statute says and what the procedures are.
And I've got a 16-year track record of, we've had cases
where we've had literally thousands of comments. And believe
me, we take them, we give them the strongest consideration, but
of course, at the end of the day, you have to follow the law.
But it's very important to give the public that right to
comment and right to give their input, and I believe that very
strongly.
Senator Cortez Masto. Thank you.
I know I have gone over my time. Thank you, Madam Chair,
for your indulgence.
The Chairman. Thank you, Senator.
Senator Daines.
Senator Daines. Thank you, Chair Murkowski.
Ms. Clements, Mr. Christie, thank you both for being here
today. I first want to invite you both to come out to Montana
and to see firsthand the issues that we are talking about here
today. I believe it is important for you both to see this
unique balance that Montana has been able to deliver and that
is, understanding that we want to protect our way of life there
in Montana and we want to continue to be able to deliver
affordable, reliable energy every day.
Montana is all about balance. It is reflected in the way
that we live. In fact, you can see a coal miner in Eastern
Montana will also be an avid outdoorsman. During the week, they
are on the job. On the weekends, we are outside either with a
fishing pole in our hands, fly rod, or a rifle or a bow. A
refinery worker in Great Falls who also is a member of a local
wildlife conservation group. That is how we ride in Montana. We
balance high-paying energy jobs with protecting our environment
and promoting conservation. This is also reflected in our
energy portfolio. Our state electricity generation is about
half renewable and about half traditional. I was glad to see
this Committee, years ago and the leadership here with Chair
Murkowski helping us out, it actually made hydro defined as a
renewable source of energy. Of course, only Washington, DC,
would not classify hydro as being renewable and we got that
fixed which I am grateful that we did. So we are about half and
half, about half renewable with when you add hydro to that mix
and about half with coal making up the rest, in general. To
maintain this balance is critical for the high-paying jobs it
provides as well as keeping the lights on and the heat running
in Montana.
So I have a few questions and I will just, kind of, go back
and forth here. I will just start left to right with Mr.
Christie. Do you believe it is important for energy jobs and
our electricity grid to have a balanced portfolio with
renewables like hydro, wind, and solar and traditional fuels
like coal, oil, and gas?
Mr. Christie. Well, thank you, Senator, and yes, I'd love
to come to Montana. So that's the easy answer.
I do think each state should have a balanced portfolio, one
that's unique to that state and one that meets that states'
needs. Generation planning and generation approval, you know,
generating plants are approved by state regulators and I've
been one for 16 years and I think it's very important in a
state that you have a balanced portfolio and one that's going
to meet your needs, that's going to run the gamut from baseload
that runs 24/7 and, of course, we're going through a transition
in America working in wind and solar. So I think balance is
important. The important thing is reliability. In states that
are in RTOs have given the planning function, of course, the
RTO planners are largely deciding and making decisions on,
certainly on transmission planning and what transmission lines
should be built to serve the generation and serve reliability.
But yes, I do believe that states should have a balanced
portfolio.
Senator Daines. Thanks, Mr. Christie.
Ms. Clements.
Ms. Clements. Thank you, Senator Daines, for the question.
I too--my sister and brother-in-law from Anaconda would
certainly appreciate me spending more time in Montana, so I
would love to take you up on the invitation. I think spending
the last six years with my family in Utah has given me more of
an appreciation for states in the West. And so, while I can't
relate specifically to the way you describe your state, I
certainly can from a neighboring state.
I think the diversity of the resource mix is a really
important contribution to reliability, period. And I think that
it's important that each state get to pursue their own resource
mix, whatever the state policy preferences might be. And so, in
both cases I see the Commission's role as, in light of those,
the power that's reserved to the states under the Federal Power
Act, continuing to think about just and reasonable rates and
reliability in the context of each state's mix.
Senator Daines. Yes, thank you. I will tell you right now,
we can see how not to do it. California has now put all their
eggs in one basket and I will tell you what, they can't deliver
electricity now to their people here. So sometimes we can look
at how to do it and how not to do it.
I want to do follow-up questions. As a FERC Commissioner
will you make decisions based on the law and not--and you will
also be fuel and technology neutral?
Mr. Christie.
Mr. Christie. Senator, that--yes.
Senator Daines. Okay.
Ms. Clements.
Ms. Clements. Yes, sir.
Senator Daines. Thank you.
I want to talk about the Keystone pipeline next. The
Keystone XL pipeline enters Montana. In fact, it is the first
state it enters when it comes from Canada down to the United
States. It will provide hundreds of high-paying jobs, millions,
in fact, tens of millions of tax revenues to our Eastern
Montana counties which badly need it. Despite years of
scientific study, lengthy permitting processes and strong local
support, the pipeline still faces issues. The Keystone XL
pipeline, as well as a handful of other pipelines currently
being permitted in Montana, is hugely important for Eastern
Montana and our rural communities. While you may not have
jurisdiction over Keystone as a FERC Commissioner, you will
play an important role in the approval of other interstate
pipelines that have similar economic impacts on Montana.
Unfortunately, we have seen too many times that are, these
thoroughly researched, safe pipeline projects are canceled.
They are denied after going through years of litigation. This
hurts our jobs, it hurts our communities, and with that good
old Montana balance, it also harms our environment.
My question is, have you in the past or do you currently
have a bias against natural resource pipelines, including the
Keystone XL pipeline?
Mr. Christie.
Mr. Christie. No.
Senator Daines. Ms. Clements.
Ms. Clements. No.
Senator Daines. As a FERC Commissioner will you look at
pipeline approvals objectively?
Mr. Christie.
Mr. Christie. Yes.
Senator Daines. Ms. Clements.
Ms. Clements. Yes.
Senator Daines. Thank you.
My last question. FERC has spent the last couple of years
streamlining and modernizing the regulations. Many of my
colleagues and I worked with FERC on modernizing PURPA and
other regulations. My question is, do you support FERC's recent
modernization efforts, including the modernization of PURPA?
Mr. Christie.
Mr. Christie. Senator, my understanding is--thank you for
the question--my understanding is there's several petitions for
reconsideration pending. So that's still a live case and if I
get honored to get to FERC, I'll probably find myself ruling on
that, what is still a pending case. I will say that, in
general, I believe that when LSEs, Load Serving Entities, are
purchasing power it ought to be purchased at the least cost,
subject to what the law might require. But I believe in the
least cost purchasing principle.
Senator Daines. Thanks.
Ms. Clements.
Ms. Clements. Thank you. With a similar caveat on the open
case at the Commission, I do think that, to your question, it's
appropriate for the Commission in all areas of its jurisdiction
from time to time to review its policies when, in light of
changing circumstances.
Senator Daines. Thank you.
Last question, and I am over my time. Many of the
modernization efforts put more control at the local level. Do
you support having the local utility regulators have more say
in local energy issues?
I will start with you, Ms. Clements, this time.
Ms. Clements. Thank you, sir.
The state--the Federal Power Act reserves to states and
then substates a lot of authority under the Federal Power Act
to choose its own resource mix and to engage in local control,
and I'm certainly supportive of that.
Senator Daines. Thank you.
Mr. Christie.
Mr. Christie. Thank you, Senator.
As a state regulator that is so easy to answer, yes.
[Laughter.]
Senator Daines. All right. Well, thanks for your answers. I
appreciate it.
Ms. Clements, I hope you come out and see your family in
Anaconda.
Ms. Clements. Thanks.
Senator Daines. And Mr. Christie, I hope we can get you out
there as well.
Thanks for your time.
Ms. Clements. Thank you.
The Chairman. Thank you, Senator Daines.
We have a series of votes that have started, so I am going
to wrap up. But before I do I have just two more quick
questions, hopefully, but I think the range of questions that
you have heard from Committee members is indicative of the
interest and a real awareness as to the significance and the
importance of the FERC and the role that Commissioners play.
You spoke to that role as an independent commissioner operating
as an impartial economic regulator here. I think that is,
again, incredibly important to reinforce here.
We talk a lot about not picking winners and losers and you
have both indicated that the FERC's role is really to focus on
economic--what was it? Economic, technology neutral, regulatory
agency, I think was the comment that you made, Ms. Clements.
But again, the significance and the importance of recognizing
that while we seek to have that balance, that it is not the
FERC's role to prefer one type of power over another. You have
touched on the pipeline approval process which for FERC,
particularly at this time, is so key. In conversations with
both of you, you have mentioned the significance and the high,
high priority that we must place on cybersecurity and ensuring
that our nation's energy sector is as secure as we can possibly
address. Ms. Clements, you spoke to the role on carbon pricing
and where we are with that technical conference ongoing.
The question that I will ask of you, Ms. Clements, when we
spoke on the phone the other day and in your questionnaire to
the Committee, you mentioned your service on the National
Academy of Sciences (NAS) committee that produced this report,
``Enhancing the Resilience of the Nation's Electric System.''
That was a good effort. I have been, as you know, very focused
on reliability and resilience for the electricity system for
years and supported the appropriations that helped lead to that
NAS report, and I support the recommendations of that.
Recommendation 11, which is directed to FERC in particular,
urges FERC and the North American Energy Standards Board to
address what they call the growing risk of independent natural
gas and electric infrastructure. So the question to you is
whether or not you support Recommendation 11 and give me a
little bit of background on that. If not, why not, but in light
of the recommendation, does it make sense for FERC to increase
regulatory risk, costs, and delays for certification of new
interstate natural gas pipeline infrastructure? If you can
speak to Recommendation 11.
Ms. Clements. Thank you, Senator. I'll have to go back and
look to the very specifics of that recommendation and I'm not
sure if I totally understand the end piece, but in terms of the
risk and the criticality of the interstate pipeline system to
the bulk electricity systems, reliability and resilience, the
two are inextricably tied. And so, ensuring, you know,
reliability across the board is an important component of the
Commission's 215 reliability obligations and certainly, just in
general, important. And so, I'm happy to take to the record
more specific answer on the details of that recommendation, if
that makes sense.
The Chairman. Well it does make sense. I mean, knowing that
you were part of that committee and, again, I appreciate that.
I happen to think that that recommendation is important, that
we do address the risk of the interdependence of the
infrastructure. I think we are seeing some of that play out in
and, again, this is an area of jurisdiction for the FERC.
Ms. Clements. Thank you. I missed part of that question,
but absolutely. The Commission has started to do some work on
addressing interdependence issues. Commissioner LaFleur and
Commissioner Moeller were leaders on that for some time, and I
think there's still some work to do on that front. I certainly,
if confirmed, commit to following their path forward and
accessing where we are and any necessary next steps.
The Chairman. Last question for both of you. There has been
much discussion about the situation in California and the
impacts to reliability and those challenges. I guess I am
asking you to be critical of the FERC, if you will, which may
put you in a difficult position, but there are those who are
trying to understand FERC's role in ensuring that we don't have
these rolling blackouts that we saw in August, not only in
California but in any other state. The question is, is whether
you believe in this instance with what we are seeing, what we
have seen in California, whether FERC should have been more
aggressive in ensuring reliability in California given where we
are right now?
Mr. Christie. Senator, thank you for that question.
As I mentioned in my earlier answer about the first
question on the California situation, one thing I've learned
over 16 years is you want to get all the facts before you come
to a conclusion. And so, to say that FERC was not as cognizant
as it should have been, I think, is premature to say at this
point. Generating resource decisions are made at the state
level. It's state regulators that make decisions to build or
not build. And in California what's going to be interesting to
see and important to see is how decisions in California about
what to build and what not to build and what to shut down, you
know, they're shutting down San Onofre, they've shut down
other, a lot of gas resources, whether that was the cause, was
it the lack of purchase power agreements with other generating
resources across the West. They'd been importing a lot of coal-
fired electricity, quite frankly, from states like Idaho and
Wyoming to make up the gap, you know, that happens at night
when the duck curve, what's called the duck curve, takes place.
So was FERC responsible for that? I think it's very
premature to say who was responsible. Again, generating
resource decisions are largely a state level decision about
what to build and what to shut down. FERC's job, of course, is
to be paying attention to these RTOs and making sure these RTOs
and ISOs, like the California ISO, are doing their reliability
planning, but even the ISO can't force a state to approve a
generating plant. So I think that all has to be studied and I
think it's a very interesting case study and a very important
case study. And I really look forward to seeing the final
results and all the facts about what led to those blackouts
because blackouts are unacceptable. We don't accept blackouts
in America. We want power 24/7/365 and anything less than that
is not meeting the standard that we want.
The Chairman. Well, and again, that is why the FERC is so
important.
I am going to conclude our hearing. We are about 30 minutes
into the vote and I do not want to be disrespectful holding my
colleagues with a vote that we know we have several coming on.
I want to thank you both for not only your direct questions
here today, greatly appreciated. I know colleagues will be
submitting questions for the record. We would ask that you try
to be as prompt with your reply as possible. As I mentioned
before the hearing, this is the first step in your
confirmation, well, maybe the second step. You have gotten the
President's nomination, we have now held this hearing, and we
will figure out the next steps in terms of how we might be able
to proceed to move your names through this process. But I
appreciate your willingness to serve, and I appreciate your
service in the past. Thank you for your attention to these very
significant national issues as we focus on our energy security
and resilience and reliability and affordability.
With that, the Committee stands adjourned, and we thank you
very much.
[Whereupon, at 11:57 a.m. the hearing was adjourned.]
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