FERC Juggles Proxy Group In Kern River; Wellinghoff Named Acting FERC Chairman; FERC Punishes Open Season Rule Breakers

There is precedent. President Clinton appointed Betsy Moeller as acting chairman of FERC in 1992 and then made her permanent chairman. Odds are good Wellinghoff will become permanent FERC chairman for two reasons. First, he is a Nevadan and was sworn in as a FERC commissioner by Senate Majority Leader Harry Reid (D-NV). That gives him a tremendous leg up over any other contender for the permanent chairmanship. He is well known as an advocate of a Renewable Portfolio Standard (RPS), where electric utilities must generate increasing amounts of electricity from wind, solar and other alternative sources. That dovetails with Obama’s drive to quickly inject a heavy dose of “green-power” into the U.S. economy.

Wellinghoff is best known for promoting renewable energy generation. He has a much narrower profile on natural gas issues, except for LNG, where he has carved a role as FERC’s Dr. No. Wellinghoff was the only commissioner to vote in September against the Bradwood Landing LNG facility in Oregon. Back then, he jangled the nerves of the natural gas industry by suggesting that wind and solar might be more environmentally preferred to natural gas.

He again showed his antipathy for LNG on Jan. 15 when he cast a lonely “no” against the AES Sparrows Point LNG Terminal & Mid-Atlantic Express Pipeline. That project would consist of an LNG import terminal on the Chesapeake Bay in Baltimore County, MD and 88 miles of pipeline that would interconnect the terminal with three existing interstate pipelines.

An industry source suggests Wellinghoff used his Sparrows Point dissent as a way to reassure the natural gas industry it was mistaken if it thought Bradwood made him an enemy of natural gas. In Sparrows Point, Wellinghoff said it made more sense to get additional gas to the South and mid-Atlantic by tapping gas from the Marcellus shale which extends through much of the Appalachian basin. The effective delivery of Marcellus shale gas could be accomplished with expansion of pipeline and storage infrastructure in the region. For example, Columbia Gas proposes to expand its storage in Ohio, in part to facilitate access to increased production in the Appalachian basin.

“He was doing a savvy thing in Sparrows Point,” says the industry source. “He was saying ‘Let me be clear about what I meant in Bradwood Landing.’”

FERC Penalizes Marketers for Violation Of Open Season Bidding Rules
FERC forced some major natural gas marketing companies to pay big penalties for violating the commission’s apparent rules on open season bidding. But the settlements were clouded a bit by the dissent of the two Republican commissioners, who argued FERC’s rules on the matter are unclear. The penalties were in conjunction with bidding for natural gas transportation capacity on the Cheyenne Plains Natural Gas Company pipeline owned by El Paso. Bidding for capacity on the Colorado Interstate Gas Co. and Northern Natural pipelines were somewhat of a side issue.

Commissioner Marc Spitzer, in his dissent, argued that FERC, in previous cases such as Pacific Gas Transmission Co and Trailblazer Pipeline Co., allowed multiple-affiliate bidding. “The mixed messages sent to the regulated community by the commission raise subjective uncertainty in reasonable minds on the propriety of those practices,” wrote Spitzer.