Life after FERC: Honorable plans to stay engaged with new energy law role
Former Commissioner Collette Honorable outlines her top priorities as she enters her new role at law firm Reed Smith
Colette Honorable may be gone from the Federal Energy Regulatory Commission, but don’t expect her to be gone from the energy space any time soon.
The former Arkansas utility commissioner and federal regulator followed a familiar path in taking a job at law firm Reed Smith after stepping down from FERC this summer. And, like many FERC alumni, she doesn’t plan to disappear from the energy policy scene.
“I'm hoping to continue to stay engaged in the development and shaping of energy policy, and so I will continue to keep a very busy public schedule, and I especially hope to continue to engage with top leaders and experts in the field, because we have a lot of work to do,” Honorable told Utility Dive.
An avid social media user, Honorable’s Twitter feed is already filled with appearances at energy events. Just as she stepped into her new position, she took some time to talk with Utility Dive about the biggest issues in the energy space.
Cybersecurity, natural gas and infrastructure
Honorable sees grid security and reliability as the top issues facing the power sector — particularly cybersecurity.
“Cybersecurity really should be the single greatest priority,” Honorable said.
Indeed, a series of cyberattack threats and scares have set the industry on edge, and utility executives surveyed earlier this year named security as their most pressing issue. As a result, utility regulators and industry experts are taking steps to address security as the grid evolves from centralized generation to a more distributed system.
Infrastructure development is another priority, one that utility regulators and officials have touted as key to reliable service, particularly for natural gas supply. At the annual winter meeting for the National Association of Regulatory Utility Commissioners (NARUC), President Robert Powelson, a Pennsylvania regulator, expressed the need for more infrastructure development, honing on natural gas pipelines.
Honorable noted the explosion of natural gas following the fracking revolution “has really positioned the U.S. quite nicely, and our ability to participate in global gas markets while ensuring that we have terrific resources and reserves here at home.”
In particular, Honorable pointed to the “increasingly strong intersection between flat load growth and low gas prices and how that will impact the sector.”
“We've seen lots of folks turning to gas, not only because of its quick ramp-up capability, but also because it compliments the integration of renewables quite nicely,” Honorable said. “We need to also pay attention to low load growth and how that's impacting our decisions as it relates to the generation mix.”
Natural gas edged out coal and nuclear as the primary source of generation power last year, but its hold on that position is tenuous in the short term. The U.S. Environmental Information Administration (EIA) says coal will overtake gas this year, though gas will likely emerge as the dominant resource in decades to come.
More utilities are also investing in solar and wind projects, as well as announcing battery storage projects to offset the intermittency of renewable energy. With these transitions underway, Department of Energy Secretary Rick Perry signed off on a grid study in March to ascertain whether the changing fuel mix is threatening reliability.
Announcement of the study sparked outcry, particularly after Perry said the federal government could use its results to overrule state energy policies. Renewable energy advocates worry the outcome is pre-ordained to benefit coal and nuclear generators, and gas interests worry any support for older baseload plants could exlude them.
Honorable points to fuel diversity as essential to maintaining reliable service, but avoided comment on the study.
“We should always be mindful that fuel diversity...will need to be a continued focus on all of the minds of planners and leaders in the energy sector to make sure, not only that we enjoy the success in terms of reliability that we currently do, but also affordability and safety and resilience of the grid,” Honorable said.
On wholesale markets
FERC held a technical conference in May on wholesale power markets to address concerns over incorporating state policies into the organized market structure. The conference stemmed from concerns that state policies subsidizing nuclear and renewable energy could fray the organized markets.
Grid operators, utilities and generators all expressed anxiety that an influx of subsidized resources could lower power market prices, forcing generators offline. A single solution proved elusive, but many stakeholders endorsed carbon pricing as a potential alternative to state resource policies that would be friendlier to market operations.
In a June speech, Honorable noted the need for FERC to work with states in how these policies affect the market schemes. She reiterated the same point to Utility Dive.
“The intersection of the development of state energy policy and the operation of wholesale and energy markets has certainly been a concern at FERC and it needs to be a priority going forward,” Honorable said.
But she avoided saying outright whether any market reform was necessary, pointing to the comments during the technical conference as evidence that such efforts were underway.
“I think the record made very clear by the experts and the participants would suggest the same," she said. "Wholesale markets are very complex, but ... they have operated as intended by providing the lowest cost resources for consumers in ways that also support reliability.”
Even so, Honorable does see the market structure facing challenges as more renewable energy comes online and fights erupt in key states over whether or not to keep nuclear plants online.
“The issues associated with making sure that we keep nuclear as part of the mix need to be a priority as we examine the work that needs to be carried out in markets,” Honorable said.
The potential of storage
Honorable made no effort to hide her excitement about energy storage. She called it the biggest game-changer in a decade, and plans to continue advocating for how to value the technology in the markets.
“We have a significant opportunity and really a tremendous potential in harnessing the power of storage,” Honorable said. “I'm going to look forward to continuing to work on how we can continue to analyze all of the benefits and attributes that storage brings, and also how that can be valued in the marketplace in a way that doesn't harm other sources and resources.”
Honorable was part of the FERC team that opened a rulemaking over the valuation of energy storage and other distributed energy resources.
“If we're able to harness the power of storage, we can more greatly integrate renewables in ways that we probably can't yet imagine," she said.
The future U.S. power mix
What the future power mix will look like in another decade is up in the air, especially as the Trump administration continues its quest to roll back Obama-era environmental and climate regulations. But utilities and states, for the most part, have agreed the power mix is moving toward cleaner fuel sources.
Honorable plans to keep a seat at the table of those discussions as she meets with stakeholders from all levels.
“Generally we've all be around the table in discussions with [former DOE] Secretary Moniz, and, in fact, at the White House as well, and we need to continue to be focused on how we can have not only a diverse fuel supply, but one that is increasingly cleaner and more sustainable going forward."
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