About FERC Commission Members Chairman Joseph T. Kelliher

Chairman Joseph T. Kelliher

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Message from the Chairman

	December 10, 2008 - “We mourn the loss of former Chairman Martin Allday, but we also celebrate him for his tireless public service and his vision in setting the Federal Energy Regulatory Commission on the right course to establishing competition in both the natural gas and electric power industries. The country is indebted to Chairman Allday for his public service. Read more Chairman Allday was one of the Founding Fathers of FERC competition policy. Under Chairman Allday’s direction, FERC embarked on the restructuring of the interstate natural gas pipeline industry, culminating in 1992 with the landmark Order No. 636. That rulemaking, which required separation of sales and transportation services on interstate natural gas pipelines, is widely praised for helping usher in the energy market competition whose efficiency and lower prices benefit consumers to this day. Chairman Allday was a gentleman and a leader, and earned the respect of FERC staff. He leaves behind many friends at FERC." x Close October 16, 2008 - “The Federal Energy Regulatory Commission has taken an important step in our longstanding efforts to promote more effective competition by issuing a final rule to strengthen wholesale competition in organized regional power markets. Competition is national policy with respect to wholesale power markets, and has been for almost 30 years. Significantly, competition policy has always been bipartisan. Competition became national policy through enactment of three significant federal laws. Two laws were crafted by a Democratic Congress, one by a Republican Congress. Two were signed into law by Republican Presidents, one by a Democratic President. Every President since Jimmy Carter has either embraced or accepted competition as national policy with respect to wholesale electricity markets. Read more In an election where ‘change’ is the watchword, and where there has been extensive discussion of energy policy, there has been no discussion of change in federal electricity policy by the two presidential candidates. I believe that silence is significant, suggesting that both candidates understand that competition policy is the foundation of national electricity policy, that it is the best approach to assure security of electricity supply at a reasonable cost, and that continued commitment to competition policy is essential if our country is going to have any chance of achieving significant reductions in carbon emissions. Since competition is settled national policy, FERC’s duty is clear – to promote effective wholesale competition and seek steady improvement in wholesale competition. Our final rule makes a number of significant reforms to organized wholesale markets. One weakness of U.S. electricity markets compared to perfect competition is the lack of effective demand response, which results in greater price volatility and higher average costs. To that end, our final rule makes important reforms to improve demand response. The rule also includes reforms to encourage entry of generation resources during periods of shortage, promote long term contracts, strengthen market monitoring, and improve the accountability and responsiveness of regional transmission organizations.” x Close September 11, 2008 - “Protecting the Electric Grid from Cyber Security Threats” The Energy Policy Act of 2005 (EPAct 2005) authorized the Federal Energy Regulatory Commission to approve and enforce mandatory reliability standards, including cyber security standards, to protect and improve the reliability of the bulk power system. These reliability standards are proposed to the Commission by the Electric Reliability Organization (ERO) (the North American Electric Reliability Corporation or NERC), after an open and inclusive stakeholder process. The Commission cannot author the standards or make any modifications, and instead must either approve the proposed standards or remand them to NERC. FERC is well underway in implementing the new law, including now having in place an initial set of cyber security standards, for which full compliance is not required until 2010. Read more Section 215 is an adequate statutory foundation to protect the bulk power system against most reliability threats. However, the threat of cyber attacks or other intentional malicious acts against the electric grid is different. These are national security threats that may be posed by foreign nations or others intent on attacking the U.S. through its electric grid. The nature of the threat stands in stark contrast to other major reliability vulnerabilities that have caused regional blackouts and reliability failures in the past, such as vegetation management and relay maintenance. Damage from cyber attacks could be enormous. A coordinated attack could affect the electrical grid to a greater extent than the August 2003 blackout and cause much more extensive damage. Cyber attacks can physically damage the generating facilities and other equipment such that restoration of power takes weeks or longer, instead of a few hours or days. Widespread disruption of electric service can quickly undermine our government, military readiness and economy, and endanger the health and safety of millions of citizens. Thus, there may be a need to act quickly to protect the grid, to act in a manner where action is mandatory rather than voluntary, and to protect security-sensitive information from public disclosure. The Commission’s legal authority is inadequate for such action. This is true of both cyber and non-cyber threats that pose national security concerns. In the case of such threats to the electric system, the Commission does not have sufficient authority to timely protect the reliability of the system. Legislation should be enacted allowing the Commission to act promptly to protect against current cyber threats as well as future cyber or other national security threats. Full Testimony x Close September 9, 2008 - "Five years ago the United States experienced the largest blackout in our history. More than 50 million Americans were affected, and our economy suffered a blow. Five years later, we are in a much better position to protect grid reliability. We have made steady progress to reduce the prospect of another regional blackout, and to limit the extent of any such blackout. Read more Since the August 2003 blackout, Congress enacted a law to authorize FERC to protect the grid with mandatory reliability standards (Energy Policy Act of 2005), and FERC quickly issued rules implementing its new authority. FERC certified an Electric Reliability Organization (ERO) to develop and propose mandatory reliability standards, and authorized delegation of enforcement powers to regional entities that are the first line of enforcement. Last year, we approved mandatory reliability standards, which went into effect on June 18, 2007, a faster schedule than envisioned by Congress when it enacted the Energy Policy Act. For the first time, reliability of the U.S. bulk power grid was protected by mandatory reliability standards. Importantly, we have taken action to strengthen reliability standards, directing the ERO to submit revisions that would improve standards previously approved by FERC. In this manner, we will steadily raise the bar for reliability standards over time. There are four necessary elements of a reliability regime: (1) mandatory reliability standards, (2) effective enforcement of those standards, (3) a commitment to operational excellence by grid operators, and (4) a more robust transmission grid. We have made a lot of progress in all four areas. Threats to reliability remain, and future regional blackouts are still possible. But the threat has been reduced, and the prospects are greater the scope of a blackout will be smaller." x Close July 17, 2008 - “There is a need to improve regional transmission planning in all regions of the country, regardless of wholesale market structure. It is not enough to have nondiscriminatory access to the power grid. The grid itself must be robust enough to operate reliably and support competitive markets. We have taken a number of steps to strengthen the grid, by encouraging greater investment, making regional cost allocation determinations, and issuing rules governing limited federal transmission sitting authority. Improved regional planning will play an increasingly important role in strengthening the power grid.” Chairman Kelliher's Statement June 9, 2008 - “[M]y concern is we can’t use gas for everything. And right now, because of uncertainty in climate change policy, we, through decision or indecision, we have committed, subconsciously perhaps, to using natural gas to supply most of our additional electricity supply for the next 10 years or longer. And I think if we use gas for everything, there already is very strong upward pressure on natural gas prices and we use it for transportation as well as agriculture, industry, electricity, we’re going to assure high gas prices continue for a long time.” More on the Chairman’s interview by CNBC March 3, 2008 - Chairman Kelliher on strategies for achieving wholesale power market competition Details January 22, 2008 - Chairman Kelliher dispels the Five Myths of FERC’s Transmission Siting Authority Myth 1: Eminent domain will be the primary method used to acquire rights of way Myth 2: FERC will not hold local community meetings Myth 3: FERC will not consider alternatives to proposed routes Myth 4: Landowners will be denied a role and not be protected Myth 5: FERC will not consider the State record Details