Daily on Energy: Wondering what Trump’s latest nominee would mean for the electric grid

Not much is known in utility industry circles about Danly, the FERC general counsel since 2017 and a former lawyer at Skadden, Arps, Slate, Meagher & Flom, but he did hint at his view of the role of FERC members in a speech in April at Skadden’s Energy Regulation and Litigation Group’s 14th Annual Energy Conference in which he espoused a “humble regulator approach.”

“With Danly, the high level concern is ensuring that FERC can react quickly enough to the fast changing power grid,” John Moore, director of the Sustainable FERC Project at the Natural Resources Defense Council, told Josh. “Can FERC be nimble enough to act quickly when new barriers occur that need to be removed? For that reason, I question whether the humble regulator means passivity — or does it mean something else? He is a little bit of a black box because we don’t really know what he means in a lot of respects.”

Jeff Dennis of Advanced Energy Economy, a trade group supporting the clean energy industry, has similar questions about Danly.

“We’re looking forward to learning more about his reported ‘humble regulator’ approach and how that will translate to FERC’s mission, particularly with respect to improving wholesale power market competition and removing barriers to participation in those markets faced by advanced energy technologies,” said Dennis, AEE’s general counsel and managing director.

Others say Danly should have no trouble being confirmed by the Republican-controlled Senate, and say he has proven to be smart and thoughtful in his current role at FERC.

“He is very bright and articulate, although some industry sources knock the fact that his legal career has been relatively short,” Christi Tezak, managing director of consulting group ClearView Energy, told Josh. “We think that his military career is likely an asset in the confirmation process, and given nearly two full years at FERC in the general counsel job, he knows what’s before the commission, another plus.”

What to look for: Danly’s approach could manifest itself in shaping FERC evaluations of the effects of downstream greenhouse gas emissions in approving natural gas projects. Danly would likely follow FERC’s two sitting Republican commissioners, chairman Neil Chatterjee and Bernard McNamee, in favoring a less rigorous approach to greenhouse gas analysis. Richard Glick, FERC’s sole Democrat, has criticized the commission’s current method of not assessing the impact the emissions that LNG facilities would have on climate change and whether the potential harm of that pollution is more damaging than the project’s economic benefits.

Observers say Danly also might have sympathized with the views of McNamee, who questioned whether FERC overstepped its authority when it moved last year to remove long-standing barriers to energy storage in wholesale power markets.

McNamee dissented against the storage rule over concerns that it “fails to recognize the states’ interests.”

Moore said FERC will face similar decisions over how to better integrate new technologies like electric vehicles and distributed energy sources that can generate clean electricity on site and are disconnected from the centralized grid.

“I would not want FERC to be passive and slow to change rules when needed to help facilitate the electrical, economic and engineering changes that are fast occurring on the grid,” Moore said.

Observers are interested in seeing how Danly would view an item before FERC on updating market rules in grid operator PJM. FERC is reviewing a potential new role proposed by PJM that could undermine Democratic state policies designed to subsidize clean energy.

“There are several critical market-focused dockets that need to be decided and a commissioner who doesn’t view his role as to engage on issues but be a humble regulator would be challenging,” an electric utility industry source told Josh.

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SENATE DEMOCRATS SAY TRUMP IS POLITICIZING FERC: Senate Democrats accused Trump of politicizing FERC Tuesday for nominating a Republican commissioner without also putting forth a Democrat, as is customary.

“The administration should not play politics with our national energy policy and instead follow tradition by formally nominating both a Republican and a Democrat as a pair to the Federal Energy Regulatory Commission,” Senate Minority Leader Chuck Schumer said in a statement.

Joe Manchin, top Democrat of the Energy and Natural Resources Committee, said he is “disappointed” that Trump chose to nominate only a Republican commissioner.

But the Republican committee chairwoman Lisa Murkowski suggested she is going to proceed with Danly’s confirmation despite Democratic opposition to the White House’s process. She has not scheduled a confirmation vote yet.

NORTHEASTERN STATES REVEAL ‘FRAMEWORK’ OF CAP-AND-TRADE PROGRAM FOR TRANSPORTATION: A group of 12 Northeastern states and Washington, D.C., on Tuesday released a “framework” plan for a regional cap-and-trade program to limit emissions from transportation, the nation’s largest source of carbon pollution.

The partners in the Transportation & Climate Initiative agreed to create a system that caps the region’s transportation emissions and sets up a market of pollution permits so entities can trade in auctions for the right to emit carbon. The cap would decline every year after the program begins, as early as 2020, before reaching a target emissions level in 2032.

TCI is modeled after a similar cap-and-trade program established by Northeastern states in 2009 targeting carbon emissions in the power sector, called the Regional Greenhouse Gas Initiative.

The framework contains little detail, such as which types of entities would be regulated and have to trade in pollution permits, what permits would cost, and how quickly caps would decline.

The revenue from putting a price on transportation fuels would go to investments in “low-carbon and more resilient transportation infrastructure” such as mass transit, electric buses, and electric vehicle charging stations, with a focus on communities that are “currently underserved by the transportation system or disproportionately adversely affected by climate change.”

Partnering states expect to reach a final agreement with more detail next spring.

RENEWABLES TO PROVIDE NEARLY HALF OF WORLD POWER BY 2050, EIA SAYS: Renewables will provide nearly half of the world’s electricity by 2050 — 49% — the Energy Information Administration projected Wednesday.

That compares to 28% renewable electricity as of 2018, mostly from hydro. But hydro will see little growth through 2050, the EIA says.

Solar’s share of global electricity will grow the fastest, as installation costs have experienced the largest cost declines of all renewables. EIA projects China will see the most growth in solar of any country because of its growing demand for electricity and favorable government policy. India and the U.S. will also have more solar.

The Rundown

Bloomberg Trump officials agree on plan to boost ethanol, biodiesel

Politico Democrats turn eye to Rick Perry in Ukrainian probe

Washington Post Farm-state fury creates pressure for Trump as trade, energy pain collide

Reuters The roads driving Amazon deforestation

Calendar

WEDNESDAY | OCTOBER 2

9 a.m. to 5 p.m. 529 14th St. NW. The United States Energy Association holds its 12th annual Energy Supply Forum

11:45 a.m. to 1:45 p.m. Capitol Visitor Center. Room SVC-215. The Carbon Capture and Steel Delegation to UAE, Belgium and the Netherlands hosts a briefing for congressional staff