Chairman Jon Wellinghoff Statement August 30, 2012

Executive Order - Accelerating Investment in Industrial Energy Efficiency

"Today President Obama issued an Executive Order on Accelerating Investment in Industrial Energy Efficiency to improve coordination between the federal government and states, utilities, and manufacturers with the aim of unlocking investment in industrial energy efficiency. I support this goal.  Through the use of combined heat power (CHP) and other technologies, producers and users of electricity can improve efficiency, help lower costs for consumers, and strengthen our economy. 

"The Federal Energy Regulatory Commission is using its existing statutory authorities to increase efficiency and facilitate evaluation of innovative solutions to the Nation's energy needs by investors, state legislatures, and state utility regulators. For example, some states have asked FERC for guidance on how to establish, consistent with Federal law, a feed-in tariff program for efficient CHP facilities.  A feed-in tariff is typically designed to encourage development of certain types of electric generation resources by offering a guaranteed purchase price for electricity generated from those resources under a long-term contract.  In response to these inquiries, FERC highlighted that a state’s determination of avoided costs pursuant to Federal law may differ by technology to account for a state’s requirement that a utility purchase electricity generated by resources with specified characteristics, such as satisfying a CHP efficiency standard.  By emphasizing states’ existing flexibility, this action can serve as a blueprint for other states considering similar programs to encourage development of CHP facilities.

"In addition, building on work initiated by the Interstate Natural Gas Association of America, FERC has increased transparency regarding potential opportunities for waste heat recovery on natural gas pipelines.  In particular, FERC has encouraged consideration of whether use of waste heat recovery technology is feasible at natural gas pipeline compressor stations.

"As FERC Chairman, I will continue to look for opportunities for FERC to use its existing authorities to improve operational efficiencies for the benefit of consumers.”