Outgoing chairman fields calls on C-SPAN, reflects on his legacy
“I’ve been there seven years, which is a long time for a FERC commissioner,” Chairman Jon Wellinghoff said during an interview with C-SPAN’s “Washington Journal.” “I think it’s time to move on, look for other opportunities and sort of turn it over to the next group.”
Wellinghoff came to FERC to fill a vacant seat in 2006 and was reconfirmed in 2008 for a full five-year term as a commissioner. President Obama tapped him in March 2009 to become chairman; his current term expires at the end of next month.
During his tenure, the former Nevada consumer advocate ushered in far-reaching rules to revamp how new power lines are planned and paid for, and eased the path for renewable generators to connect to the grid. He also oversaw the agency’s implementation of new policies to strengthen demand response and spark innovative transmission and “smart grid” technologies.
“I’ve done a lot there, and I think it’s time to turn it over to a new class,” he said.
Wellinghoff will continue leading the commission and its 1,500 employees until Obama picks a replacement and secures Senate confirmation.
There is a lot of talk in Washington about whom the president might choose. Sources have pointed to FERC’s two sitting Democratic commissioners, Cheryl LaFleur and John Norris (Greenwire, May 29).
Wellinghoff said little about what’s next for him, but he vowed to recuse himself from any votes involving firms he’ll be speaking with in coming months. Federal rules will prohibit him from doing business before the commission for one year after his departure.
He touched on the agency’s stepped-up oversight of manipulation in the wholesale power and gas markets, and said FERC has already collected enough in fees from users and fines from manipulation cases to cover its annual budget of more than $300 million.
“We already almost paid for ourselves,” he said.
FERC has recently stepped up its oversight of market manipulation and collected millions in fines from Wall Street banks accused of gaming power markets, including Constellation Energy Commodities Group. Wellinghoff said scrutiny has ramped up since the 2001 Enron scandal and since FERC obtained more authority under federal law to oversee the markets and impose fines of up to $1 million daily.
“I think we’re actually doing it very effectively in the sense that I think we’re corralling in the good portion of what fraud there is out there,” he said. “We’re seeing a lot less now, certainly, than we did see back in the Enron days, so I think we can have confidence in these markets going forward.”
The chairman did not provide a timeline for when FERC would conclude its investigation of JPMorgan Chase & Co. FERC has accused the bank of overcharging grid operators and customers in Michigan and California up to $83 million, drawing the ire of lawmakers from those states (Greenwire, May 30). The timeline could depend on whether FERC settles the case or issues an order, he said.
The outgoing chairman also took questions from C-SPAN callers, some angry over the agency’s approval of new gas pipelines to ship around a newfound glut of shale gas.
“I got breast cancer because of you, buddy,” said one caller who said she got sick from methane leaking into a nearby well.
Wellinghoff said that such issues are not under FERC’s jurisdiction and instead are handled by the federal or state environmental agencies, and that he does believe gas can be developed responsibly.
“We have to recognize there are trade-offs we have to make to ensure we can have the quality of life” we desire, he said. “That doesn’t mean it can’t be done in an environmentally sensitive way to minimize damage” to consumers and the environment.
Wellinghoff also said he believes that potential exports of domestic natural gas will not cause prices to spike, noting that export terminals — that FERC must approve — are expensive and time-consuming to build. Instead, the United States is likely to see production continue to increase and new shale plays will be found, and prices will remain relatively stable, he said.
“We’re seeing new availabilities of gas that we never even knew were in existence,” he said. “The price is going to stay very stable for a long time, between the $3 and $6 range.”