The Trump Super-Majority May be Coming to FERC

Energy Matters

One of the biggest energy stories in Washington, D.C., is with whom and (more importantly) when the president is going to fill the three vacant Republican positions at the Federal Energy Regulatory Commission (FERC). The agency is now down to just two commissioners. Members on both sides of the aisle written to the president, urging him to hurry up as the commission cannot act on critical energy transmission infrastructure under its jurisdiction without a quorum. By statute, these five-member commissions can have no more than three members from the majority party, which is intended to assure bipartisan cooperation. The narrow majority on five-member commissions requires a commission to govern closer to the center. A chair that loses just one vote from their own party loses everything. Historically, the White House has largely deferred to the Senate in naming a commission’s minority party members. The nominees are then sent to the Senate as a pair, one Republican and one Democrat, as a means of expediting their confirmation. However, that may not be true in this administration.

People seen as the most likely to be nominated to fill the Republican slots include: Kevin McIntyre, co-head of Jones Day’s global energy practice; Neil Chatterjee, an energy aide to Senate Majority Leader Mitch McConnell (R-Ky.); and Robert Powelson, a Pennsylvania utility regulator who is serving as the chairman of the National Association of Regulated Utility Commissioners (NARUC). Tony Clark, a Republican, who left the post last year, also came from the chairmanship of NARUC as did sitting commissioner, Collette Honorable, a Democrat.

FERC’s two Democratic members — Colette Honorable, whose current term runs out at the end of June, and Cheryl LaFleur, whose term ends in 2019 (and is the acting chairwoman) are subject to extension or replacement, and there is already a buzz about whether they will be replaced by an independent more closely aligned with the Trump energy agenda.

With the Trump administration’s talk about “deconstructing” the regulatory structure, having like-minded appointees can speed up that process. Although it can’t stack commissions with more Republicans, it can replace Democrats with registered Independents who are ideologically conservative. It was suggested in a recent New York Times that the president may pursue this strategy, nominating someone more aligned with the panel’s Republican members, to push for even further deregulation. In other areas, he has already pulled at least two pending nominees from various commissions, further indicating that the White House is looking to shake up the system.

With the Trump administration’s emphasis on building new energy infrastructure, the FERC will play a key role. While the FERC has traditionally operated in an independent, bipartisan manner, having been populated in the past by former state regulatory commissioners, the addition of these three new Trump Republican commissioners and the possibility of a fourth Trump Independent commissioner seems a clear indicator of a new team being built to execute the Trump agenda.






















What Cars Will We be Driving in 2050?


The Fuel Freedom Foundation released a tool that allows users to forecast the market for light-duty vehicles and electric-vehicle (EV) penetration worldwide. Its conclusion, based on the estimates from various sources, is that the internal combustion engine (ICE) will still be with us come 2050, and thus alternatives to gasoline are needed.

One of the issues raised in this analysis is what the volume of self-driving and electric vehicles will be, and if that will that erode the demand for new vehicles. This could potentially lower the cost for using Uber-like services below the cost of owning a car, so the number of cars would drop dramatically. By 2050, the model looks at about 3 billion light-duty vehicles being on the road worldwide, up from 1 billion currently in use. The model also projects at least half of the vehicles will be powered by ICEs, using petroleum-based fuels.

Take Fuel Freedom Foundation’s model for a test drive to explore what the global fleet will look like in 2050. They have three scenarios for EV sales, based on the assumptions of top experts. For more information, click here.



Michael Best Strategies’ Energy Team

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