Chu’s grid guru came in ‘like gangbusters,’ left quietly

Source: Hannah Northey, E&E reporter • Posted: Friday, December 20, 2013

In 2011, then-Energy Secretary Steven Chu brought in an ambitious Wisconsin state utility commissioner to advance the Obama administration effort to site and build critical power lines and transmission technologies.

Lauren Azar was seen as the person who could help Chu’s Department of Energy navigate a maze of local opposition, permitting delays and lengthy reviews to get transmission projects going.

But it’s unclear whether Azar’s two-year run that ended in September will bring about clear game-changing transmission breakthroughs.

That’s not to say she didn’t try. Saying she came in “like gangbusters,” Azar focused on overhauling government-owned chunks of the power grid that outraged lawmakers, utility groups and four politically wired entities known as power marketing administrations, or PMAs.

Azar’s time at DOE was marked by a big blowup over a memo that Chu sent last year to the PMAs, ordering them to leverage partnerships, rate-making power and financing to spur upgrades to their collective 33,700 miles of transmission and boost reliability and access for renewable energy sources.

While little known to the public at large, PMAs are a big deal. Their transmission overlaps power lines across almost half the country.

PMA customers that enjoy the country’s cheapest electricity said they were blind-sided. Republicans flagging the cost of energy as a campaign issue attacked the memo as a “top-down” approach that favored renewables and threatened to disrupt the PMAs’ statutory authority. Eventually, 166 House and Senate members from both parties expressed concern, and the House Natural Resources Committee, which oversees the PMAs, launched an investigation.

Fingers pointed to Azar. The American Public Power Association blamed the Chu adviser for failing to collaborate with industry in her pursuit of a pro-renewable energy agenda.

“The perception was that had she collaborated and consulted with folks more at the outset in developing the agenda she wanted to pursue, and then worked with customers to prioritize and implement those things, that would have been much more effective,” said Joe Nipper, the trade group’s senior vice president of government affairs.

The memo hit a nerve with members of Congress protecting regional PMA customers. Azar, one source said, was the latest in a line of DOE senior officials who have tried and failed to make similar reforms.

Azar, 52, who has moved back to her hometown of Madison, Wis., and launched a law firm, Azar Law LLC, maintains that her DOE stint was a success.

Given the short amount of time to make big changes at DOE — Azar was, after all, picked by Chu, who himself resigned last February — she said she mapped a timeline for tapping into existing transmission siting authorities and helping critical projects get started.

“I’m much more about where the rubber meets the road than high-level policy debates,” Azar said.

She rejected the notion the controversial memo was all her doing or representative of a top-down approach. Both DOE and PMA officials, she said, helped implement the order. Chu asked the PMAs to take a leadership role, she added.

“Folks who were critical of the memo were pulling up very specific sentences or words … which I understand if you didn’t like the memo, that’s exactly what you do to attack it,” Azar said. “But if you do look at the overall thrust of the memo, it was quite simply, ‘Let’s ensure we have a robust, resilient, modern grid.’”

Others who fought strayed too close to the PMAs and faced similar problems.

Jimmy Glotfelty, founder of Clean Line Energy Partners and a former senior electricity adviser for President George W. Bush, said Azar should be remembered for trying to build infrastructure and integrate renewables in a thoughtful and cooperative manner.

“The customers of PMAs are pretty protective, and if you ask a lot of people who have been in her shoes — including myself — it’s not uncommon to get into debates with customers of PMAs,” he said. “They’re tough negotiators.”

‘Visible transmission advocate’

Chu’s selection of Azar was largely seen as a sign of the Obama administration’s intense interest in expanding the grid to support renewables and tackle climate change, sources said.

“The DOE should always have a visible transmission advocate, and she served that role,” said Rob Gramlich, the American Wind Energy Association’s senior vice president of public policy.

Whether the department will take the same approach under Chu’s successor, MIT nuclear physicist Ernest Moniz, remains unclear. Following Azar’s departure, Skila Harris, who served as the Tennessee Valley Authority’s first female director and as a special assistant to former Vice President Al Gore, began serving as senior adviser for the PMAs (E&E Daily, Sept. 11).

Expanding transmission is seen as a difficult task considering the projects can intersect environmentally sensitive areas, require years of review and often face stiff opposition from landowners who don’t want hulking infrastructure in their backyards or sightlines.

Transmission siting is also where federal and state interests often clash.

Azar was picked in no small part because of her extensive state-level experience.

Before joining DOE, she was a member of the Public Service Commission of Wisconsin, which is responsible for overseeing electricity, natural gas, telecommunications and water industries. Former Gov. Jim Doyle (D) appointed Azar to serve on the commission in March 2007 for a six-year term.

A law school graduate of the University of Wisconsin, Madison, Azar specialized in electric and water utility issues before joining the state agency. She also helped create the country’s first stand-alone transmission company

Azar also served as president of the Organization of Midwest Independent Transmission System Operator States, a nonprofit organization of 13 states and a Canadian province overseen by the Midwest grid operator.

She was also the first president and co-founder of the Eastern Interconnection States’ Planning Council, where she co-led efforts to organize states east of the Rockies in interconnectionwide planning.

Azar brought that same spirit to DOE. She helped bring together the “federal family” in 2011 — nine agencies key to streamlining federal permitting of major new power lines that could have taken up to 15 years to garner approval (Greenwire, Oct. 5, 2011). DOE already had existing authority to do so under 216(h) of the Energy Policy Act of 2005, language that allows the agency to coordinate federal and environmental reviews.

“DOE, until I got there, implemented [the rule] in somewhat of a tepid manner,” she said. “I came in like gangbusters as I always do and not only helped to lead the rapid respond team for transmission but helped DOE draft some rules for 216(h), negotiate with the nine agencies.”

PMA memo

As for the memo, Azar characterized her work as a “huge success” that complemented Chu’s recognition of the PMAs’ importance.

“As the Energy secretary, you’re the CEO of the largest transmission utility in the United States,” Azar said. “Secretary Chu, one of his primary priorities was to make sure we had a safe, reliable, resilient transmission grid. He took that quite seriously, and he asked the PMAs to take a leadership role in doing that.”

She rejects assertions from lawmakers and industry groups that the memo was a Washington directive.

“I know part of the controversy was that this was a ‘top-down approach,’” Azar said. “On the contrary, if you ask the [WAPA] staff, they’ll tell you the recommendations came from them.”

The endeavor started with the 15-state Western Area Power Administration, or WAPA.

Chu set out his goals in the memo and asked the PMAs to work with customers to lay out a plan. A joint team of WAPA and DOE officials — after numerous meetings, workshops, webinars, telephone conferences and written comments — crafted recommendations that Chu later adopted, she said.

“Indeed, I was told that the opportunity for feedback here far exceeded what WAPA normally uses for its normal initiatives,” she said.

Azar noted the effort led to proposed changes to streamline WAPA’s authority to borrow up to $3.25 million from the U.S. Treasury to build critical transmission. As laid out in the memo, she also championed Texas-based Clean Line Energy’s application to partner with DOE through its never-before-used authority under Section 1222 of the Energy Policy Act, which would allow a PMA with federal authority to site the line and overcome state opposition.

But sources said it’s unclear whether other provisions in the memo will be implemented outside WAPA — or even inside WAPA.

WAPA spokesman Randy Wilkerson said not all initiatives laid out in the original memo made it to the drawing board.

In the original memo, for example, Chu said WAPA had decided to take part in an “energy imbalance market,” a tool that allows grid operators to balance load over a larger footprint while integrating wind and solar in real time.

But Wilkerson noted that the memo may have been misleading and WAPA is still considering such a move, one that’s drawn concerns about cost from customers receiving historically cheap power. “I think that some people got the impression that … we were doing more than we were at the time,” he said

WAPA also isn’t implementing the memo’s call for new rates to support the deployment of electric vehicles because such retail issues aren’t handled by WAPA, Wilkerson noted.

Other sources said the kerfuffle fizzled as quickly as it began.

“[WAPA] is looking at it as an issue that we’re moving on from,” Wilkerson said.