Next-generation regulation: Powering our country without turning up the heat

Wouldn’t it be great if there were one governmental body responsible for keeping our lights on, our homes heated and industry humming along in a way that doesn’t preclude our kids from having a habitable planet? Or making sure that the fossil fuel industry is only building essential infrastructure that serves the public interest, considering severe climate events’ catastrophic costs and impacts to national security, public health and equity? 

If we were creating this governmental body, we’d make sure that even when corporations tried to game the system in new ways, our charge would remain the same: Protect the public because “free” markets cannot.  

It might look a lot like the Federal Energy Regulatory Commission (FERC). And its mandate might look a lot like this: approve only that fossil fuel infrastructure required by the public convenience and necessity and deny infrastructure failing this fulsome legal test. But FERC has not lived up to this charge, in part because private fossil fuel companies participating in commission proceedings are well-funded and staffed, the public often lacks requisite tools, money and expertise to engage.

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Enter stage left, self-dealing fossil gas projects epitomizing how far the commission strayed from conducting a robust public need analysis. Entering stage right, extreme climate events causing loss of life, financial tolls and consensus that they seriously threaten national security. These forces placed the commission at center stage, with a weighty task at hand: how to re-engage with its mission of authorizing only truly needed infrastructure serving the public interest. 

Two recent projects, PennEast and Spire, share many similarities. Both had no identifiable new load growth or documented capacity constraints. Both were predicated on pipelines selling capacity to affiliated shippers, to the ratepayers’ detriment. Both required massive land condemnations and cataloged myriad environmental harms from their construction and operation. 

But one commonality sets them apart from dozens of other fossil gas projects: public advocates that managed to garner enough funding and resources to identify, highlight and elevate facts running counter to the corporate narratives. Where they used smoke, we cleared the air with data. Where they used mirrors, we cut windows through which adjudicators could peer in to see the harm. 

At the time, the commission was largely unpersuaded. But courts, elected officials and other bodies charged with protecting the public interest — like ratepayer advocates and state public land stewards — took notice. Courts were concerned with the commission’s lackluster evaluations of market demand, greenhouse gas emissions and resulting climate impacts, as well as landowner harms. They were troubled by a lack of basic fairness in commission proceedings, where the public had been barred from timely judicial access and meaningful remedy.

Thankfully, now, the commission is signaling that it hears those concerns. And it is grappling actively with how to better implement its mandate to protect the public interest while ensuring that projects that the public needs get built: It revived a languishing docket to reconsider how it engages in robust public convenience and necessity analyses.

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While the commission is not responsible for weighing the merit of gas shipper’s business decisions, nor for regulating upstream and downstream emissions from proposed projects, it is unequivocally responsible for determining whether or not there is public need for those projects and if building them serves the public interest. It passes reason to suggest that the commission should not solicit data and conduct analyses enabling it to consider all of the above-listed factors in making a fulsome determination of whether project benefits outweigh harms. 

Despite industry’s pleas to “leave it to the market,” and claims that “these things are too complicated for the commission,” the truth is that these questions cannot be left to the market and that doing hard things is the commission’s raison d’etre.

The Natural Gas Act exists because we learned a long time ago (and Congress proclaimed) that regulating these operations was in the public interest. If the commission commits to asking the right questions, it can absolutely verify whether there is true demand for a project. And the commission can and routinely does answer complicated questions like how to quantify and monetize harms from proposed project’s greenhouse gas emissions, so that it can balance those against economic benefits.

By learning from projects like PennEast and Spire, the commission can prevent wasted resources, both private and public, from being spent on projects that will not come to the table once the commission has stated clearly what kinds of data and analyses it will require applicants to produce in support of their project proposals. Doing so will ease the burden on both industry and public interest advocates alike, and help our country become a model for responsible energy development.

Jennifer Danis is a senior fellow at the Sabin Center for Climate Change Law and of counsel to Morningside Heights Legal Services at Columbia Law School and represented New Jersey Conservation Foundation as lead attorney in the PennEast litigation. The views expressed here are her own.