With Fears of Rising Rates, New FERC Chairman Christie Makes Consumers a Top Priority
As we reported in our last newsletter, President Trump on Jan. 20 named Mark Christie as the new chairman of the Federal Energy Regulatory Commission (FERC). Christie, who has served as a FERC commissioner since 2021, was previously chairman of the Virginia State Corporation Commission.
In a statement, Christie immediately laid out his three priorities:
- First, the need for FERC to protect consumers from excessive power costs….
- Second, America is facing a reliability crisis driven by the dangerous pace of retirements of dispatchable generation units and failure to build sufficient new generation.
- Third, I have emphasized the critically important role of the states and their utility regulators in meeting these reliability and affordability challenges. A close partnership between FERC and the states is absolutely essential.
About a week later, he addressed an issue that bears on these priorities in an interview with Utility Dive: co-locating large loads, such as those needed by data centers for Artificial Intelligence (AI), at power-plant sites.
“We have to get it so we don’t cost-shift to residential customers who are struggling right now to pay their monthly bills,” he said. “These are the people you run into in the grocery store, when you walk around…. These are your neighbors.”
Christie doesn’t oppose co-location. His worry is that energy-intensive facilities will reduce “big dispatchable resources out of the supply stack” and put the costs on the back of consumers.
FERC on Nov. 1 rejected a proposal by Talen Energy and PJM Interconnection to deploy 180 megawatts (MW) of nuclear generators in Pennsylvania to serve data centers directly. The vote was 2-1, with Christie and Commissioner Lindsay See forming the majority. Talen on Jan. 15 asked the U.S. Court of Appeals for the Fifth Circuit to overturn FERC’s decision.
That proposal involved co-location by an Amazon Web Services data center with a Susquehanna nuclear power plant in Pennsylvania that is majority-owned by Talen. Reported Utility Dive:
In a concurrence to the decision, Christie cited concerns the PJM Interconnection’s market monitor raised that the Amazon data center could remove a significant amount of electricity from the grid operator’s market. It could also increase energy and capacity prices, according to the market monitor. In the interview, Christie said he stood by the concerns he raised in his concurrence.
Christie added that FERC will address colocation using information the agency gathered at a technical conference it held in early November. He noted it is too soon to say when or how the agency will take up the issue. But, he reiterated, “We’ve got to make sure there’s no cost-shifting.”
Christie’s position on co-location reflects his strong orientation toward holding down consumer costs, an outgrowth of his experience on the Virginia commission. We have to “remember the public interest – the people who are not in the room and the people who are not represented and people who don’t have lawyers [and] lobbyists pushing various regulatory initiatives,” he said in the interview.
He wants “reliable power at the least cost,” he added. For now, that means increased use of fossil fuels, which account for 60% of U.S. electricity generation, according to the U.S. Energy Information Administration. Some 43% comes from natural gas and 16% from coal, compared with 10% from wind, 4% from solar, and 18% from nuclear. Enabling natural gas will clearly be on Christie’s agenda.
Also on the agenda is ensuring the reliability of the grid during a period of rapid retirement of power plants driven by traditional energy sources and, at the same time, increased demand for electricity – in part from those AI data centers.
In the interview, Christie noted that PJM, the largest regional transmission organization, set a winter peak load record of 145 GW during the week of Jan. 23. The generation mix serving the load was gas at 44%; nuclear at 22%; coal, 22%; wind, 2%; hydroelectric, 4%; oil, 4% and solar at 0.4%.
The load of the Midcontinent Independent System Operator (MISO) peaked during the same cold snap at 108.2 GW, with a generation mix of gas at 37%; coal, 30%; wind, 18%; nuclear, 11%; and solar at effectively zero, according to Christie.
“In both PJM and MISO, dispatchable generation kept the lights on and heat pumps running during this freezing weather,” Christie said on X, formerly Twitter. “We need to stop the premature retirements of dispatchable generation and build more, otherwise we freeze in the dark. That is reality.”
Reports from the North American Electric Reliability Corp. (NERC) and grid operators like PJM show that baseload power plants are retiring without adequate replacements, Christie said in the Utility Dive interview. Such retirements are expected to increase in 2025, challenging the reliability of the domestic energy supply in the years to come.
FERC has no direct authority over generation, but the agency regulates capacity markets run by PJM, MISO, ISO New England and the New York Independent System Operator. So through this market oversight, FERC has “a big impact on what gets built and what gets retired,” Christie said. “We’re not just a bystander saying, ‘Hey, look what’s happening.’ We are a big actor here.”
President Trump has placed emphasis on U.S. energy dominance, in part as a way to keep consumer costs down. But in the face of rising demand and decreasing supply, that’s not a goal that can be reached easily – certainly not without a recognition by FERC that reliance on natural gas and other plentiful energy resources is a necessity.
At a Time of Capital Shortages, Should Regulators Make It Harder to Invest in Public Utilities?
Back in July, we reported in this newsletter that FERC had issued a notice of inquiry (NOI), seeking to make changes to its policy of allowing investment companies, such as mutual funds and exchange-traded funds, to make investments in public utilities without first securing authorization from the commission even if the amounts are in excess of $10 million.
FERC has allowed for “blanket authorizations,” as they are called, but they are still subject to limitations. For example, an investment company cannot own more than 20% of the voting securities of any one utility, and it can’t “exercise control over day-to-day management or operations” of a utility.
The idea behind these blanket authorizations to Section 203(a)(2) of the Federal Power Act, says an explainer on the FERC website, “was that they were appropriate to encourage greater investment in utilities by mutual funds, so long as FERC could perform ongoing oversight of the business relationship between holding companies, including investment companies, and public utilities.”
But then, FERC decided that “due to significant industry changes since FERC began granting these blanket authorizations” (for example, a huge increase in index fund ownership, plus increased activity by private equity firms), it would issue an NOI seeking public comment about whether to revise the policy. FERC also sought comment on exactly what constitutes control of a public utility and how that control relates to blanket authorizations.
The main question FERC raises is whether the $10 million ceiling is too high. Many stakeholders have responded by urging the commission not to change the current policy.
For example, the Electric Power Supply Association (EPSA), which represents competitive power providers; the Electric Edison Institute (EEI), the large utilities’ association; and the American Council on Renewable Energy (ACORE) filed a joint letter warning against the proposal. It stated in part:
Unnecessarily deterring or raising the costs of investment in the electric industry works directly counter to the Commission’s statutory mission to promote plentiful supplies of electric energy at just and reasonable rates.
The current policies, said the letter “have benefited the consuming public by removing unnecessary obstacles to investment, and re-imposing these obstacles or imposing new obstacles of the sort advocated by certain commenters would be a step in exactly the wrong direction at a time when investment is desperately needed.”
Wayne Winegarden, senior business economics fellow with the Pacific Research Institute, warned in a piece in Forbes that the policy change would threaten the reliability of energy. He wrote:
Imposing more stringent requirements on blanket authorization would have adverse consequences. With fewer (or worse zero) investors qualifying for blanket approvals, investments by retail investors would be limited, including common investment vehicles such as mutual and index funds.
Making the regulatory change, wrote Winegarden, would impair “utilities’ ability to raise the necessary capital,” making it “more difficult for them to expand capacity and improve the current energy infrastructure. The result will be upward pressure on energy costs and additional stresses on the system’s reliability.”
Rick Perry, the former governor of Texas and secretary of energy, wrote an opinion piece in the Dallas Morning News on Jan. 25 arguing that the “FERC proposal would divert capital away from the grid.” He argued:
Maintaining and expanding a reliable energy grid will require unprecedented levels of investment. However, just as the U.S. faces rising demand, FERC is proposing changes to policies that could limit access to the capital utilities and private companies need to meet this demand.
Perry refers in his piece to the Trump Administration’s goals of expanding energy exploration, production and transmission. We discussed that strategy at length in Issue No. 44 of this newsletter.) But, wrote Perry, “Achieving this vision will require more than cutting through bureaucratic red tape — it will demand a commitment to unleashing private capital for energy projects across all sectors,”
The danger is that restrictions on blanket authorizations would jeopardize the new administration’s goals and, more simply, domestic energy reliability. More capital is needed, and it would appear to make little sense to deter it now.
New York Elected Officials Sound Alarm Over Climate Plan’s Effect on Commerce and the Grid
Meeting on Jan. 31 in Utica, New York State Senator Joe Griffo, a Republican, and Assembly Members Brian Miller (R) and Marianne Buttenschon (D) joined business and municipal leaders to discuss the unintended consequences of the state’s plans to move aggressively away from fossil fuels over the next 10 years.
The Climate Leadership and Community Protection Act (CLCOPA), passed in 2019, is already limiting the sale of large gas-operated school buses and trucks (like the ones sold at Utica Mack, where the meeting took place) and even home heating and gas stoves. The restrictions, said those at the meeting, are harming commerce and putting stress on the electric grid.
In a press release, Sen. Griffo noted that the CLCPA “placed the state on a path of reducing statewide greenhouse gas emissions of 40% by 2030 and 85% by 2050.” It also mandated investment in renewable energy infrastructure with the goal of making the grid 70%-powered by renewable energy by 2030 and 100% by 2040.” The release added:
While the CLCPA set highly ambitious goals and standards, it provided little guidelines for governments or actionable roadmaps for how those goals were to be achieved. Since the CLCPA has been on the books, there has been nothing to show for it except frustrated ratepayers and taxpayers, business organizations and even climate advocacy groups.
In the statement, Sen. Griffo said he worried about the “detrimental effect the policy would have on energy bills, small businesses, schools and communities.”
Speaking to the group gathered at Utica Mack, he said while New York needs to embrace clean energy, the state also needs sensible goals. “CLCPA is full of unaffordable mandates and unrealistic and unreasonable deadlines that hurt struggling taxpayers, families, business owners and communities,” he said.
He added that policies must “improve the reliability and security of the grid and a diversified energy portfolio to best meet the needs of New Yorkers.”
Industry stakeholders have pushed back against the climate rules, such as Advanced Clean Trucks, which began this year. It requires a certain proportion of new trucks sold each year to be zero-emission vehicles – by 2035, 40% of Class 7-8 tractor (heavy-duty or semi-trucks) sales and 75% of other Class 4-8 vehicles (ranging from delivery trucks up to those with a gross weight of more than 33,000 pounds).
Kendra Hems, president of the Trucking Association of New York, said last year that while her group “fully supports the adoption and the use of zero-emission vehicles, including the use of electric where it makes sense,…this policy places a mandate on our truck dealers in New York to try and sell vehicles to an industry that currently has very limited applications for their use, making it impossible to meet the goals of the regulation. It’s not that they don’t want to comply. They simply can’t comply.” Hems asked for a pause in implementation.
In calling for a delay, State Sen. Patrick Gallivan, a Republican, expressed concern “about the financial impact the regulations will have on businesses and municipalities and fears it will hurt the state’s already poor business climate.”
He noted that zero-emission truck technology is still in its infancy and said in a prepared statement: “We all care about the air we breathe and efforts to protect our environment, but once again the state is mandating changes that are unrealistic and unaffordable.”
In a fact sheet, however, the environmental group Earth Justice called the trucking rule an “essential step toward achieving New York’s CLCPA mandate” and claimed it will “bring back a greener economy and jobs and reduce air pollution that disproportionately harms communities of color.”
A New Kind of Superfund Could Threaten Grid Reliability in New York, New Jersey, Vermont and Other States
In late December, New York Governor Kathy Hochul, a Democrat, signed a law “that requires companies that are big fossil fuel polluters to help pay to repair damage caused by extreme weather,” reported the New York Times.
The legislation, called the Climate Change Superfund Act, is modeled on the original 1980 federal Superfund law, which requires companies to pay for the cleanup of toxic waste from incidents like oil and chemical spills.
Under the New York climate law, companies responsible for the bulk of carbon emissions’ buildup between 2000 and 2024 would have to pay about $3 billion annually for 25 years – even if those emissions were legal under federal or state law at the time.
The money would go toward repairing and upgrading New York infrastructure damaged or threatened by extreme weather. “Some projects could include the restoration of coastal wetlands, improvements to storm water drainage systems and the installation of energy-efficient cooling systems in buildings,” reported the Times.
“With nearly every record rainfall, heat wave, and coastal storm, New Yorkers are increasingly burdened with billions of dollars in health, safety, and environmental consequences due to polluters that have historically harmed our environment,” Gov. Hochul said.
Six weeks after the New York law was signed, 22 states filed a suit to block it. At a news conference on Feb. 6, John B. McCuskey, attorney general of West Virginia, the lead in the suit, said that the legislation overreached by seeking to hold energy companies liable in New York no matter where they are based.
“This lawsuit is to ensure that these misguided policies, being forced from one state onto the entire nation, will not lead America into the doldrums of an energy crisis, allowing China, India and Russia to overtake our energy independence,” Mr. McCuskey said in a statement.
West Virginia, the number-two state in production of coal and number-four in natural gas, was joined in the lawsuit by other states where fossil fuels are abundant, including Texas, Kentucky, Oklahoma and North Dakota.
“The suit argues that while federal courts have not held coal, oil and natural gas companies liable for climate change, New York lawmakers have decided that traditional energy producers are comparable to tobacco companies and harm consumers with their products,” reported the Times.
Vermont enacted a similar law last May (it was not included in the February suit). In the headline of a memo last year, the law firm Sidley Austin said that the state actions “First in a Wave of Likely Climate Change Cost Recovery Laws.”
The Superfund laws target energy companies that have produced more than one billion tons of greenhouse gas emissions globally over the past quarter-century, but the threat is not just corporate. The zealous pursuit of climate goals may put grid security at risk.
As we reported in our Issue No. 23, the New York Independent System Operator (NYISO) issued a 2024 Reliability Needs Assessment (RNA) late last year that identified “a very concerning decline in state resource margins such that by 2034 no surplus power would remain without further resource development.”
The RNA cited “significant uncertainties” concerning growing demand and a “changing supply mix.” It specifically pointed to New York City as having a reliability need starting in 2033, driven by “gas plant retirements.” Below is a graph from the report showing levels of deficiency.
The RNA noted the contribution to future peak demand created by electrification of the transportation and building sectors and by large, energy-intensive commercial projects, including data centers and chip fabrication.
Like many other states, New York is trying to decarbonize its energy sources at a time of rising demand and growing plant retirements. The predictable outcomes are higher electricity costs and growing threats to the grid. Con Edison, with 9 million New York customers, has proposed hiking the average electric bill by 11.4% in 2026. The state’s Department of Public Service has final approval.
New Jersey consumers this year will see utility bill increases of about one-fifth statewide. On Feb. 12, the state Board of Public Utilities (BPU) completed its yearly electricity auction for New Jersey’s top four utilities. “The board said costs are expected to rise anywhere from 17% to more than 20% for customers of the four biggest utilities in the state: PSE&G, Jersey Central Power & Light, Atlantic City Electric, and Rockland Electric,” reported NBC’s New York TV station.
In December, the Environment and Energy Committee of the New Jersey State Senate passed its own climate superfund bill. Then, on Feb. 6, a judge in Mercer County dismissed a state lawsuit, filed in 2022 against oil and gas companies for allegedly encouraging the unchecked burning of fossil fuels and worsening climate change.
State Superior Court Judge Douglas Hurd wrote in his opinion:
Only federal law can govern Plaintiffs’ interstate and international emissions claims because ‘the basic scheme of the Constitution so demands. Therefore, Plaintiffs’ complaint is hereby dismissed with prejudice for failure to state a claim.
In both New York, New Jersey and other states, the battle continues to heat up between those wanting to push ahead on climate change mandates and those wanting more measured steps to keep the grid secure and rates low.
Giving Dispatchable Power Priority
A bill introduced in the U.S. House and Senate on Feb. 13 would give priority to dispatchable power plants in interconnection queues. “Dispatchable” power can be programmed quickly on-demand by power grid operators and is especially useful in extreme weather events. Examples include natural gas, coal, nuclear, hydropower and biomass. By contrast, energy sources such as solar and wind are normally not dispatchable.
Rep. Troy Balderson, Republican of Ohio, introduced the Guaranteeing Reliability through the Interconnection of Dispatchable (GRID) Power Act, which would enable grid operators to expedite power-generation projects that improve the reliability of the electric grid. The bill had previously been introduced in September 2024, but no committee action was taken. This time around, the chances are considered better. Republican Sens. John Hoeven of North Dakota and Todd Young of Indiana introduced identical legislation in the Senate.
The bill addresses “the inefficiencies and ineffectiveness of existing procedures for processing interconnection requests to ensure that new dispatchable power projects that improve grid reliability and resource adequacy can interconnect to the electric grid quickly, cost-effectively, and reliably.”
The proposed law would allow certain projects, at the request of the grid operator, to bypass the overwhelmed interconnection queue. According to the Lawrence Berkeley National Laboratory, “Generating projects that started operating in 2023 faced a 5-year median time between entering the interconnection process and coming online,” Utility Dive reported. As a result, delays have mounted for critical projects to be built and connected to the grid.
“Our interconnection queue is buckling under its own weight,” said Balderson in a press release. He added:
Transmission providers are tasked with ensuring we have enough electricity to keep the lights on, but the growing backlog of projects is adding years to an already time-consuming process. This legislation would give grid operators the authority to identify and expedite the consideration of essential projects that will protect our grid’s reliability and provide the power needed to meet America’s growing demand.
Solar interconnection requests have been especially heavy, totaling 1.1 trillion watts (TW) of power. Wind requests were 366 GW and gas-fired requests totaled 79 GW, according to the Lawrence Berkeley National Laboratory’s report on the U.S. interconnection queue. Requests for storage interconnection totaled 1 TW.
The report noted that “interconnection wait times are…on the rise. The typical duration from connection request to commercial operation increased from <2 years for projects built in 2000-2007 to over 4 years for those built in 2018-2023 (with a median of 5 years for projects built in 2023).”
In addition, said the report, “Much of this proposed capacity will not ultimately be built. Among a subset of queues for which data are available, only 19% of the projects (and 14% of capacity) seeking connection from 2000 to 2018 have been built as of the end of 2023.” The wait times are just too long.
Under the bill, FERC would have 60 days to review proposals from regional transmission organizations (RTOs) and independent system operators (ISOs) for specific projects that would be pushed to the head of interconnection queues.
Grid operators would still be required to conduct feasibility and system impact studies on the generation projects before signing an interconnection agreement. The bill mandates a process for public comment and stakeholder engagement before proposals go to FERC and requires operators to provide regular reports on the state of grid reliability to FERC.
Projects will be accelerated, according to the bills, if they provide new dispatchable power and improve grid reliability and resource adequacy, address power shortages caused by retiring or offline dispatchable power, or support increased power demand.
Stakeholders are supporting the legislation as a step toward solving the current reliability crisis, holding down prices, and improving grid security. For example, Todd Snitchler, president and CEO of EPSA (cited above), said in a press release, “Grid operators should be given significant flexibility to address current or future reliability concerns.” He added:
While other hurdles, including permitting and siting criteria and supply chain snarls, impede development, delays in interconnection queues to connect new projects to the electric grid can slow the building of new power infrastructure. By providing the opportunity to speed the connection of dispatchable resources that meet certain reliability criteria, the Balderson/ Hoeven/ Young legislation will help resolve pain points.
Anne Bradbury, CEO of the American Exploration & Production Council (AXPC) stated, “As our nation’s power demand continues to rise, it is critical that we don’t delay consideration of power-generation projects, such as those that use natural gas, that can provide needed dispatchable power and enhance reliability.”
In addition, Ryan Augsburger, president of The Ohio Manufacturers’ Association (OMA), said that his group “supports queue reform to more quickly and efficiently interconnect generating resources to the grid….. Ohio manufacturers believe competitive markets will best respond to future load growth and demand…. Representative Balderson’s bill is a good first step toward reform.”
These supporters see the GRID Act is an opportunity to modernize grid and infrastructure permitting, particularly under an administration that has focused on unleashing American energy as a means to lowering inflation and adding jobs.
A Lawsuit Over Its Activities to Stop the Dakota Access Pipeline Could Put Greenpeace USA Out of Business
Energy Transfer on Feb. 24 took Greenpeace USA to trial in Morton County, North Dakota, asking $300 million in damages, “which would likely wipe out” the organization, according to its leadership, the Wall Street Journal reported. Earlier, the company filed RICO (Racketeer Influenced and Corrupt Organizations Act) claims against Greenpeace, which a federal court dismissed in 2019. Energy Transfer is one of the largest U.S. pipeline companies, with a market capitalization of $68 billion.
In 2016, Greenpeace, along with Native American tribal groups and other activists, gathered in a remote corner of North Dakota to block Energy Transfer’s 1,172-mile underground pipeline that would carry oil from the Bakken Formation to Illinois. The Journal reported:
Images of sometimes violent confrontations between protesters and law enforcement made international news…. The monthslong protests impeded the oil pipeline’s completion and became a flashpoint in the fight over fossil fuels. Images of sometimes violent confrontations between protesters and law enforcement made international news.
Kelcy Warren, cofounder and executive chairman of Energy Transfer, ultimately finished what’s called the Dakota Access Pipeline, but he didn’t drop the matter. “Everybody is afraid of these environmental groups and the fear that it may look wrong if you fight back with these people,” he said in a 2017 TV interview. “But what they did to us is wrong, and they’re gonna pay for it.”
Warren’s pipeline isn’t the only one that green activists have tried to disrupt. “Starting with protests of Keystone XL, which successfully derailed that project, activists have targeted pipelines across the country,” said the Journal.
The Dakota Access Pipeline carries roughly “5% of U.S. oil production and supplies large refining markets in the Midwest and Gulf Coast.” That is up to 750,000 barrels of oil a day; the pipeline thus removes the equivalent of 3,000 tanker trucks or 815 rail cars from the roads, waterways, and tracks of America.
The Energy Transfer lawsuit charges Greenpeace with causing damages during the protests. The suit claims that environmental activists spent months circulating false and misleading information about the project, and helped fund and organize protestors from out of state who attacked law enforcement and damaged property
A major issue during the protests was a campaign claiming that the pipeline would travel across sovereign tribal land, destroying sacred sites. The company says that the pipeline does not traverse Standing Rock Sioux territory. An independent review by the North Dakota State Historical Society found no cultural material in the site it inspected.
In a September 22, 2016, memo, Paul R. Picha, the chief archaeologist of the historical society, wrote: “In conclusion, the cultural resources inventory and inspection conducted and reported herein yielded no evidence of infractions to or violations of North Dakota Century Code 23.06-27 with respect to disturbance of human remains.”
Greenpeace attorneys sought last year to dismiss the Energy Transfer lawsuit, but in vain. Greenpeace has claimed that the lawsuit is an attempt to silence the group, but the company claims that free speech, which Greenpeace “has exercised without limitations,” is not in question. “We support the rights of all Americans to express their opinions and lawfully protest,” said the company in a September statement.
“However, when it is not done in accordance with our laws, we have a legal system to deal with that.”
According to the Journal, “The litigation is unlikely to affect Greenpeace’s international operations. While the Greenpeace network’s coordinating body in the Netherlands is also a defendant, Energy Transfer may struggle to enforce any award against it because it doesn’t own assets in the U.S.” (Greenpeace International has filed its own countersuit against Energy Transfer in a Dutch court.)
But, says the Journal article, “Greenpeace says losing its affiliate—and influence—in the U.S. would have a profound impact on the group’s ability to address climate change.” In addition, “environmental leaders fear the demise of Greenpeace USA would send a chilling message to their movement.” The Journal added:
Josh Galperin, an associate professor of law at Pace University, said that environmentalists have long recognized that they can choke off pipelines by challenging them on legal grounds. Now, some oil-and-gas companies are realizing they can use litigation to stop green activists.
The lawsuit is important, wrote Jeff Stier, a senior fellow at the Consumer Choice Center, because “decisions made in the North Dakota case will set the tone for whether, in the future, activist groups are permitted to fund and perpetuate crimes when their arguments fail to persuade the majority.”
Michael Toth, outside General Counsel with PNT Law, wrote “Greenpeace argues that the lawsuit is an ‘attack on free speech.’ But it’s not Greenpeace’s speech or public positioning that the lawsuit questions—it’s the organization’s conduct.”
David Blackmon, the energy expert quoted earlier, wrote in the Daily Caller that “protesters and the groups that fund them have rights, but so do the individuals and companies whom they unfairly malign and attack. The case could be an important reminder to organizations and protesters that free speech is constitutionally protected, but inciting and funding violent actions is not.”
In a 2017 letter to President Trump, then North Dakota Governor Doug Burgum expressed his fear regarding inflammatory protests at the time:
Passionate causes, millions of dollars of anonymous protest funding (over $13.5 million on GoFundMe.com alone) and sophisticated and inflammatory social media campaigns have forever changed the nature, duration, and reach of unlawful protests…. Sadly, I believe this will become the new normal in America.
Or, depending on the outcome of the lawsuit, perhaps not.