Revamped Energy Regulator to Navigate Trump’s Power Priorities

Now that the Federal Energy Regulatory Commission is once again returned to full strength, the panel will navigate how it approaches climbing electricity demand under a Trump administration with an aggressive—and sometimes conflicting—energy agenda.

Regulators and utilities are trying to fortify the grid to handle the growing power needs of data centers, artificial intelligence, and cryptocurrency miners while also making sure consumers get adequate energy at a low cost.

The commission’s “immediate priorities” are to “make sure that we have enough generation and transmission to meet the surging demand and keep the grid reliable and affordable for consumers,” said Willie Phillips, former Democratic FERC Chair under President Joe Biden.

Though FERC is an independent agency, it still has to contend with how the White House seeks to address rising energy demand while carrying out its duty to regulate the interstate transmission of natural gas and electricity.

The Trump administration’s approach has been to bolster old energy sources like coal while throttling newer renewable sources of energy like offshore wind and solar, but FERC has traditionally taken an approach that is neutral on the source of generation.

President Donald Trump also adds to the concerns over maintaining the commission’s independence since he already removed members of other independent entities such as the Federal Trade Commission and Nuclear Regulatory Commission when he disagreed with their policies.

“This is obviously a pretty turbulent time in the energy world,” said Gregory Wannier, senior attorney at the Sierra Club, an environmental advocacy group. “There’s a lot of concern about the influx of large load and what it might do to the existing system.”

New Commissioners

Laura Swett from Vinson & Elkins LLP and David LaCerte from the Office of Personnel Management—both Republican nominees—were confirmed by the Senate Oct. 7, returning the commission to its full five member body. They join current commissioners Chairman David Rosner (D), Lindsay S. See (R), and Judy W. Chang (D). Recent reporting, however, indicates Trump plans to eventually elevate Swett to chair.

The new arrangement creates a Republican majority on the commission, which is typical under a GOP president. The Sierra Club has already expressed concern over Swett previously representing fossil fuel interests and LaCerte’s “minimal experience working on energy-related issues.”

However, the group intends to meet and work with the new commissioners as it has done in the past, Wannier said.

“We just hope that they help FERC maintain its independence from political and industry influence and do what’s best for the energy system and the American consumer,” Wannier said.

The Sierra Club has received funding from Bloomberg Philanthropies, the charitable organization founded by Michael Bloomberg. Bloomberg Law is operated by entities controlled by Michael Bloomberg.

Wannier said the group hopes the upcoming full commission will “make space for generation growth from all of the abundant resources that are available and not to block access for certain resource types while laying out the red carpet for others.”

“I think everyone has the combined sense, regardless of party, that there’s an urgency to what we’re doing and we can’t afford to let politics get in the way of putting good policies in place,” said Todd Snitchler, president and CEO of the Electric Power Supply Association. He pointed to the fact that EPSA is “an all of the above trade association.”

“I believe, and I think most FERC stakeholders believe, that we need an all of the above approach,” Phillips said. “We can’t afford to leave any tools on the table.”

What’s Next

In addition to the White House’s moves, the commission has to adapt to recent court developments.

FERC has been complying with court reasoning and orders stemming from the Supreme Court’s May decision in Seven Counties Infrastructure Coalition v. Eagle County, Colo., said Matt Agen, chief regulatory counsel at the American Gas Association.

The high court narrowed the environmental review of projects under the National Environmental Policy Act to the strict confines of the statute—which also applies to FERC. Seven Counties is one of the “most impactful” permitting cases, said Robin Rorick, vice president of midstream policy at the American Petroleum Institute.

The Supreme Court decision is “going to allow more deference to FERC,” Phillips said. That will help “streamline deeper reviews, but it’s not going to completely eliminate the need for them.”

There are also the technical issues that need to be addressed such as confronting the rising power needs of data centers, which the Trump administration has continuously promoted.

One such question revolves around co-location—bypassing the grid to get energy directly from a plant—and its resulting cost allocation.

An element of that is working “behind-the-meter,” which means instead of a generator normally sending electricity to the grid for general distribution, it’s routed exclusively to a nearby source of electric demand.

It makes sense to go behind the meter in the short term, but “more cost effectively and more reliably long term, you want to embed that new load onto the grid that’s shared by all customers,” said Christina Hayes, executive director of Americans for a Clean Energy Grid.

FERC is currently looking at co-location parameters for PJM Interconnection LLC’s region, which operates the Mid-Atlantic electric transmission grid. Data centers have continued to proliferate throughout the region, and PJM is grappling with the effect on power-supply costs.

“This will be a test case for other regions around the country on how FERC views the jurisdictional line for co-location in front of the meter, behind the meter—the impacts that it has on grid reliability,” Phillips said.

FERC’s next meeting is Thursday.