Speaker 1 (00:52):
… that I'll turn it over to the chairman.
Mark C. Christie (00:54):
All right, welcome everybody. I think I know everybody except next to Katherine.
Alexis (00:59):
Oh, Alexis, I'm with Bloomberg Law.
Mark C. Christie (01:01):
Oh, okay.
Alexis (01:02):
Yeah.
Mark C. Christie (01:02):
Welcome. I know Noreen's here from Bloomberg also. I know everybody else. Okay. All right, well, good. I've got a sneaking suspicion somebody's going to ask about the EO, so let me just go ahead get to that. Two main points I want to make. One point is, and I'm going to elaborate on both, probably more than you want to hear, but that's what lawyers do. But I'm going to elaborate on both.
(01:26)
First point I want to make is, as I read this and I've got a quaint habit of reading stuff before I run my mouth about it. I read this very closely, read it very, very closely. A lot of this in the EO is basically putting in one place past practices that have been going on for years. Let me just give you examples. We already submit our budget to OMB. We've been doing that for years. They can approve it or not approve it. We already submit our strategic plan to OMB and we've been doing it for years and they can question it. So that's not new.
(02:05)
We already submit major regulations that have economic impacts to what's called OIRA, the Office of Information and Regulatory Affairs, OIRA. We already do that. We did it in 1920. Go back and look at 1920. There's a little thing in there about OIRA compliance. So that's been going on for quite a while.
(02:24)
We have complied with presidential EOs for decades. For decades. The CEQ regulations, we have voluntarily complied with. They're pursuant to an EO that goes back to the Clinton administration. President Obama had several executive orders. One on ethics that we comply with. I don't know if you all look. You probably should, but I'm not asking for it. But we file an ethics report every year, and we do that because of an EO, executive order that we comply with. So we've had EOs that we've complied with for decades.
(03:04)
In terms of consulting. Of course, the chairman is going to consult with the administration. That's been going on for decades. A.J wrote a good story. Where is A.J? A.J wrote a good story, really interesting about FERC's independence mentioning noting that one of the former chairs since I got here, Rich Glick, met regularly with the Biden White House with the so-called Climate Czar and on a regular basis.
(03:33)
And you know what? That was perfectly appropriate. That was perfectly appropriate. So the consultation part has been going on for years as of course, it should. It's fanciful to think that if a president can appoint a chair, the president is going to appoint a chair who's going to do something 180 degrees opposite of what the general policy of the administration is. I mean, it's ludicrous to think that. And that has never been the case. That's never been the case. Reminds you of the last four years, President Biden came out early in his administration with an executive order called Net Zero 2035. You might want to go read it. And it was by its own description, a quote, "Whole of government approach." And it applied to every agency and every agency had to adopt a strategic plan and move forward on Net Zero 2035. FERC was under the rubric of every agency.
(04:34)
So that's not new. The idea that a presidential administration is not going to expect agencies to be consistent with their overall policy. And certainly in terms of this administration, what do we want at FERC? We want a reliable power grid and we want to control consumer costs, which is exactly what this Trump administration wants, a reliable power grid, get generation bill, get energy infrastructure built, control cost to consumers. I've been talking about this for four years. Perfectly consistent with this administration. So the consultation is that's not new. All right. So that's the first point. A lot of this stuff is basically taking stuff that was somewhere else and putting it in one place and nothing new.
(05:18)
Now the second point I want to make is there's a lot of detail yet to be known about the parts that aren't obviously what we've been doing. And the question here, and again, I want to get more detail. We're going to ask the appropriate places for more detail, and we'll see how this plays out. But we have statutes that govern the many cases that we have. We do over a thousand cases a year. Our cases arrive… Yeah, they do arrive here because 99% of them come in the door. We don't start them. They come here.
(05:52)
So we have over a thousand cases. Where do they arise from? First of all, on the Federal Power Act, we have cases that come in under Section 203. Section 203 are the mergers. One utility wants to buy another utility or a big investment fund, asset manager like BlackRock wants to buy a chunk of a utility. They file here under 203. We handle those under the statute. Section 205. The bread and butter of what we do here are like 205 cases. 205 cases come in Section 205 Federal Power Act.
(06:24)
They're filed here. We don't start them. They're filed here and they're handled under that code section and we have a long history of handling those efficiently. We have to handle them efficiently because we only have 60 days to do it. And so we can't be obviously waiting on those. We have to act on those. Section 206 is another part of the Federal Power Act that we handle. Section 219, Federal Power Act. These are when transmission developers come in and they want incentives, what I've called fur candy, and they come in under Section 219 of the Federal Power Act. All these are covered by statutes that we follow and will continue to follow.
(07:09)
Another part of our bread and butter here, the pipeline cases, the LNG export cases, they come in under either Section 3 of the Natural Gas Act, that would be LNG or they come in under Section 7 of the Natural Gas Act. These are the pipeline cases. We handle those under our statutes and we will continue to handle those under our statutes. So there's a bunch of statutes that govern what we do. In addition to the Federal Power Act and Natural Gas Act, there are procedural statutes like the Administrative Procedure Act. We have to follow the APA in every case, and we will continue to do so. In cases where we're going to have to do an environmental impact statement or environmental assessment, we're going to follow the NEPA, National Environmental Policy Act.
(07:54)
So all these statutes, and we have to follow what's called the Sunshine Act. And for example, in all these proceedings under 205, 203, 219, 206, Section 3, Section 7, Natural Gas Act, these are all contested proceedings and we do not allow ex-party communications that would violate Sunshine Act. It would also violate everything I know about due process in contested proceedings going back being a state regulator. We didn't allow it in Virginia either. So we're not going to start allowing ex-party communications because that would violate the Sunshine Act.
(08:36)
So the point I'm making is a lot of the detail about how this EO may necessarily impact on the bread and butter cases that we do, we'll seek information and we'll seek clarification. And I don't think that that's the intent. I don't think that OMB wants to weigh in on the over 1000 cases that we have, that 99% of which we don't initiate. They come in the door. And every one of which the party initiating it, whether it's a utility, whether it's a transmission developer, whether it's an asset manager seeking to buy a chunk of a utility under 203. I don't think the industry wants any of those delayed, and we're going to continue to act quickly and get those out. And so I think a lot of this, I think is really about the big sweeping… I really think it's about the big sweeping regulations.
(09:32)
I'm not going to speak for OMB or the White House, but I'm going to speak about, it's about the big sweeping regulations where a commission or an agency is initiating a really big deal to use a certain acronym. And I think that's what it's about but then we don't have that clarification yet. I think that's what it's about. And it should be about, because why would any commission initiate a big sweeping regulation that's contrary to what the presidential administration wants?
(10:06)
I mean, and by the way, I can't think of an example in my history of watching administrative law where that's ever happened. I can think of a lot of examples where commissions initiated big sweeping regulations that the White House did want. One example. Go back to the Obama administration and net neutrality. That came out of the White House and the FCC did it. I remember reading all about that.
(10:34)
In the past administration. I mentioned to Biden Net Zero 2035, the GHG policy statement that was initiated on a three two vote at this commission in 2022 was perfectly consistent, came right out of that Net Zero 2035 and perfectly appropriate. I mean, I dissented on policy grounds, but there was nothing inappropriate about the majority pursuing that GHG policy statement. 1920. 1920 was all about promoting a, I said at my dissent a policy agenda, and it was a policy agenda completely consistent with Biden's Net Zero 2035. And in my dissent, I brought the receipts. Katherine, I quoted you probably five times. I'm surprised you didn't charge me for royalties about pointing out from the press coverage that that's exactly what it was. That's exactly what it was. So nothing inappropriate about and nothing inappropriate.
(11:34)
Nothing nefarious. It's just agencies are going to reflect the presidential administration. I mean, why wouldn't they when the president appoints the chair and the president gets to appoint a majority. So I think where the detail needs to come and where we're going to seek detail is in the bread and butter cases that we have that come in the door. We didn't ask for them. They come in the door. 205s, 206s, 203s. And we got to get detail because I certainly don't think that the intent is that every 205, every 206, we have to go ask somebody else what we do in those cases. And I don't think DOJ wants a thousand cases where they have to do a legal opinion in every 205, every 206. I don't think they have the resources or the inclination to want to do that. But we'll get clarification. We'll get clarification.
(12:23)
But one thing overall, I want to say we have a vital mission. The overall mission at FERC, of course, is to ensure just and reasonable rates under the Federal Power Act and that is certainly consistent with what this administration said once, which is control consumer costs, is consistent with what I said for four years. We want reliable power. That means we've got to build infrastructure. Clearly, this president wants to build infrastructure. We're the key agency to do that. We're the ones who issue the CPCNs. So everything is perfectly consistent there.
(12:55)
So that's the two points I want to make. Number one, a lot of what's in the EO, if you read it a lot, and I have read it a lot. Maya sent it to me while I was having a martini Tuesday night and thank you. Had a second martini, which I was going to do, anyway. But I've read it very closely, very, very carefully. I think a lot of what's in there is basically putting in one wrapper practices that we followed for years and it's not new to the extent there's question marks about the details, particularly with our bread and butter cases that we handle over a thousand a year. We'll get detailed guidance on that, but at the end of the day, we follow the law. At the end of the day, we follow the law.
(13:47)
Federal Power Act, Natural Gas Act, Administrative Procedure Act, Sunshine Act. All of those are applicable. All of those… And oh, by the way, one other thing, and I'll finally shut up. Everybody's probably falling asleep, but the EO has a clause in it and as a lawyer, I'm always looking for that money clause. And it has a clause in it, which says, "Nothing in here affects existing law or the authority of any agency under existing law."
(14:15)
So by its own terms, with that kind of a savings clause, it does not affect our existing authority under all those statutes I mentioned to you, Federal Power Act, Natural Gas Act. It doesn't affect our existing authority under all those statutes. The EO itself says that. I highlighted it. And so I'm going to take it at his word. But the consultation, all the other stuff is perfectly appropriate and it's been going on for years, decades. Okay. All right. With that long talk, we'll go on to questions. Oh, Katherine, go ahead.
Katherine (14:57):
Thanks, Chairman, for the… Well, first
Catherine Morehouse (15:00):
First of all, congratulations on your new position, and thank you for taking our questions today. This is Catherine Morehouse with Politico.
(15:07)
Okay, my question might be a little bit long, but I'm going to try and keep it somewhat contained. So one point is one case where there was disagreement between the administration and a chair was between former Chairman Chatterjee and the last Trump administration, over carbon pricing. I would say it's probably still not totally clear, at least to the reporters, whether his removal as chair at that point was directly related to that or related to… There was some other rumors at the time as well. But the reason I bring that up is because the DOJ has also said not long before this, about a week ago, that they will no longer consider restrictions on the President's ability to fire independent regulators constitutional.
(15:51)
So I guess my question is, are there concerns that combined, if there was say a sweeping order that maybe the administration was interested in and maybe disagreed with the Commission's process on, for instance data centers, they're very interested in if they weighed in on the co-location piece. And I don't want to get too speculative here, but combined with the DOJ's memo, this executive order, do you have any concerns at all that there might be a case where the administration improperly weighs in on a proceeding, one of those sweeping proceedings, like the data proceeding and what that might mean for the commissioners for removing them, their independence and hopefully that's a clear question. Sorry.
Mark C. Christie (16:34):
Yeah, that's a lot of questions. But I know what you're… But I can pick them out. So first of all, the thing about former Commissioner Chatterjee, I got an easy answer. I wasn't here. I was state commissioner. I read about it. And I don't know what the motivation was, but that clearly illustrates that presidents have under our statute… Now I know our organizational statute, and I didn't even mention that in listing all the FP. Our organizational statute is called the Department of Energy Organization Act, DOE Organization Act, and that's our foundational statute. And it gives the President the authority to name a chair and to remove a chair and there's no Senate confirmation or unconfirmation. And so that power obviously indicates that the President has the prerogative to have a chair that the President thinks is going to basically generally pursue the overall policies.
(17:43)
I don't think presidents wanting to get into so much detail about, again, I mentioned hundreds of hundreds of 205s we have. But I think that that example, the legal authority is there. There's no question that legal authority is there. So clearly the intent of that kind of authority of Congress… Congress did that. That wasn't from an EO. Congress gave the President the authority to name the chair and get rid of the chair, and they can do it with an email. It doesn't require much paperwork. So that authority is there. So that interaction is obviously built into the relationship. The other thing you asked about, I think it's the Humphrey's Executor… Yes, the Humphrey's Executor.
(18:28)
And that is the position taken by the acting solicitor general that they're not going to defend Humphrey's Executor. Humphrey's Executor was a case from almost a hundred years ago, which… Okay, point number one, this issue's been around for a long time where President Franklin Roosevelt fired a commissioner on the Federal Trade Commission and sent a letter saying first… It's interesting history. First he sent a letter saying, would you please step down voluntarily? And the commissioner says, "No, I won't."
(18:59)
So then Roosevelt sends a letter and says, "Well, you're fired." And the commissioner named Humphrey sued for his back pay and then died four months after he stepped down, he was fired. And so the whole case became… Its reason it's called Humphrey's Executor is because his executor brought the case to get the back pay. So the holding in the Supreme Court was a president cannot fire a member of a multi-member commission without these specified causes. So what you're asking about Catherine is the acting solicitor general says, "We're not going to defend challenges to statutes that say the President can only fire FERC commissioners, or any commissioners for cause." And that's a prerogative to take that position.
(19:46)
And I will say this, the only lawyers who are in court today as we speak, who are arguing that the President should have the power to fire FERC commissioners is a former FERC commissioner and a former solicitor general for President Clinton. They're the only lawyers I know in court today as we speak in the middle district of North Carolina, arguing that the President should have the ability to fire FERC commissioners at will. That's the only case I know of, and it'll play itself out. And yes, if you want to read the complaint, I've got the complaint right here. I've read it quite a bit. And so that issue is going to be litigated. The Humphrey's Executor issue is going to be litigated. I think there's probably a lot of other test cases where it's going to be litigated on the Supreme Court and it's up to the Supreme Court to determine whether to overturn Humphrey's Executor, it's not up to not us. I hope that was your question.
Catherine Morehouse (20:46):
Well, the data center piece.
Mark C. Christie (20:48):
Data center?
Catherine Morehouse (20:50):
Sorry. Part of the question was, I guess, do those things combined give you any concern… I mean, part of what you said was the unknown was how they essentially plan to carry out the pieces, carry out FERC's ability to comply with some of these laws and that includes-
Mark C. Christie (21:09):
Okay, I go you. I got you.
Catherine Morehouse (21:10):
Yeah. I'm wondering in terms… It sounds like there's still an opening for them to possibly weigh in on these sweeping decisions. You say that's the target.
Mark C. Christie (21:18):
That's a good point. I know what you're asking. First of all, does the President or the Secretary of Energy or anybody else in the administration have the authority to weigh in on a FERC case? And the answer is yes, of course. They can file comment in the case. In the last four years, I've seen numerous examples where the Biden administration EPA would regularly file comment in our proceedings, in the CPCN proceedings. Regularly, file comment in the proceedings. So an administration can do that. Under our own DOE Organization Act the Secretary of Energy and the Department of Energy have every authority to file a position in any of our proceedings that they want to.
(22:10)
The point I was making earlier was they can weigh in, the administration can weigh in through any… It can be the Secretary of Energy, it can be the Secretary of Interior, Secretary of Defense. It can be EPA, OMB. They can weigh in, but it has to be in the record. When you're talking about a case like a 203, let's say, or 20… Well, any of them, 203, 205, 206. The data center case we did today is going to be a 206. The one we initiated. The administration can weigh into those cases, but under our statutory rules of ex parte communications, it has to be on the record. It has to be part of the record. It can't be a phone call saying, I want you to do this, or I want you to do that. Yeah, Maya. Did that answer… Did that get you… Okay.
Maya Weber (23:07):
Hi. Thanks. Maya Weber, S&P Global Platts. Okay, more on that executive order. There's a provision in there that says employees of FERC have to align with the legal opinions of the White House or the Attorney General. And I'm just wondering how you see that fitting in to give an example of, say, the White House's position on a rule that it would like FERC to adopt. Does that mean that you or the other commissioners cannot have a different legal interpretation? And then just more broadly, are you essentially saying you're not too concerned about this executive order and the potential for the White House to try to infringe on FERC's autonomy in making decisions?
Mark C. Christie (24:00):
Well, what I'm saying is point number one, a lot of this is past practice that's been put under one wrapper. I want to get details on the part that doesn't appear to be past practice. Does this contemplate a role in proceedings outside of our ex parte rules? And that's where we'll seek clarification. You raise a good question about the part about who sets the legal opinion. In every 205 we do, every 206 we do, we obviously put a legal reasoning for what we do. I don't think this in any way, shape, form, they intend… I don't think DOJ wants a thousand new cases of telling us a legal opinion in every 205, every 206. I don't think that's at all what's intended because I don't think they want a thousand new cases, but every order we do, we give a legal opinion. I think what that's aimed at is, again, and by the way, let's get on the question of past practice.
(24:55)
I've talked to former general counsels of FERC. FERC historically, whenever we're appealed in court, whenever one of our orders is appealed, seeks and coordinates with the Department of Justice before taking a legal opinion. Most of the time, historically, what I've been told is DOJ says, "Thanks, you do it because we've got enough work of our own." But the practice of coordinating or at least consulting with DOJ on an appeal where you're going into federal court, which might raise a legal issue, is a practice that goes back a long, long time. And again, most of the time DOJ says, "We don't want any part of that. We don't have time." And so it leaves it up to us. And again, I don't think that… For example, we get appealed on certificate cases, section three, section seven cases. We get appealed all the time. Every single one is going to be appealed if we grant the certificate.
(25:47)
That's been the practice. I don't think that DOJ wants to come in and get… And we defend our opinion. So I don't think that's whats intended by this. I don't think DOJ wants to come in on every single one of our garden variety cases and say, "We'll give you the legal position." I just don't think that's intended. I think it's on big, big… If we are going to go to Supreme Court or someone wants to take us to the Supreme Court, I think DOJ definitely wants to say, if you're arguing a constitutional issue like Humphrey's Executor, that will be for a decision for a decision for DOJ, not for us to make an opinion on Humphrey's Executor. I think that's what it's intended for.
Maya Weber (26:30):
Okay.
Mark C. Christie (26:30):
And that's been past practice by the way. We don't take cases to the Supreme Court. Historically if a case is going to go to the Supreme Court, DOJ handles it, not FERC. That's never been the case.
Maya Weber (26:41):
So you don't think that would apply to the opinions or statements of the various commissioners? I mean, if say you have a rule that you're acting on and some of the commissioners may be dissenting, I mean, the way this is written, I mean, would this impinge on their ability to express their legal views?
Mark C. Christie (27:03):
Yeah. I don't see that. I descended on 1920. I don't see that as telling commissioners. If you go retroactively and say, okay, Christie descended on 1920, would he have been what? Let's say an EO like this had been in place, would he have been arrested? I mean, don't know. I don't see it applying to people's descents at all.
Maya Weber (27:33):
Okay.
Mark C. Christie (27:33):
Yeah, I want to get more detail as we go forward and we'll just keep going forward and we will apply the statutes that we typically apply. I don't see it that way. I think it's for big deal cases that are going to end up going to SCOTUS, Supreme Court where there's a big legal issue, usually a constitutional issue that's an issue. Of course, the DOJ wants to know, but they always have. They always have. We tried to get them to appeal Sabal. I'm told by a former general counsel, when Sabal Trail came down, FERC wanted DOJ to appeal to Supreme Court, and DOJ said, "No, we don't have time or money, resources." So it's always been their ultimate call when you talk about big cases like that. Does that take care of it? Okay. George.
George Weykamp (28:17):
Hi. Once again, just wanted to reiterate what everyone said. Congratulations on the new role, and thank you so much for taking our questions.
(28:23)
I wanted to shift gears a little bit. I know the US Office of Personnel Management gave voluntary guidance to agencies last week directing them, saying that they could terminate probationary employees. I was just curious if any probationary employees had been laid off or let go from FERC, and if so, how many or if there are any further plans for a reduction in force in coordination with some of the presidents earlier executive orders?
Mark C. Christie (28:53):
The number of probationary employees who've been laid off is zero.
Daniel Moore (29:04):
Daniel Moore with Axios. Given what you were saying about coordinating with the White House on policy matters, I mean, have you been coordinating with the Trump White House on data center co-location issues, and how has that been informing if so any [inaudible 00:29:21]
Mark C. Christie (29:21):
No, no. I had a very nice introductory lunch meeting with two cabinet secretaries, energy and interior, and talked about the same things I've been talking about for four years, which is reliability and getting infrastructure built. But no specific cases certainly. It's just-
Daniel Moore (29:42):
Do you plan to, or…
Mark C. Christie (29:43):
What?
Daniel Moore (29:44):
Is that something you plan to do going forward given the executive order and what you were saying about coordinating with-
Mark C. Christie (29:51):
Well, I hope so if they want to hear from me. I mean, I hope they do because there's absolutely nothing inappropriate with talking about general issues of
Mark C. Christie (30:00):
Energy. I mean, again, that's been AJ's story. Rich Click talked regularly and appropriately. I mean, really, FERC doesn't live in a parallel universe. Some people seem to imply that FERC lives in some parallel universe where there's no such thing as an administration, and FERC just goes about its life without anybody being affected. The DOE Organization Act puts us within the Department of Energy so I would hope they would want to hear from me. I would hope so. Not in an inappropriate way, not in a way that violates the ex parte rules. I'm not going to do that. I've been doing this business for a long time.
(30:49)
I've been in this business for a long time as a lawyer and as a state commissioner, and I know how important ex parte rules are. I'm not going to violate ex parte rules. You don't talk about pending, you don't talk about contesting cases. You do not. And I don't think any of my predecessors has, but talking about general issues of the need to build generation, the need to build infrastructure, transmission pipelines, totally appropriate. Totally appropriate. A lot of people don't know what we do. A lot of people don't know what we do. They don't know how these energy markets work. They don't know how the capacity markets work. I think a lot of people that run the capacity markets don't know how they work, but that's my opinion. But what we do over here is extraordinarily technical. Extraordinarily technical. Just look at the cases we've had recently on the capacity markets. It's not bedtime reading, unless you want to go to sleep. This is very technical stuff and I like to explain to people outside what we do, including people in the administration who want to know. I hope they want to know. I hope they're interested in what we do because I'm happy to tell them. Yeah, AJ.
George Weykamp (32:18):
Thank you, Chairman Christie. I think you actually owe me a couple of nickels in royalties for referencing my article twice now.
Mark C. Christie (32:23):
Okay.
George Weykamp (32:25):
Jesting aside, I want to draw your attention to Section 7 of the executive order in particular where the language is, "The President and the Attorney General shall provide authoritative interpretations-"
Mark C. Christie (32:36):
Right.
George Weykamp (32:37):
"Of law for the executive branch." I spoke to two of your predecessors, Jon Wellinghoff and Joe Kelliher, and their concern with that is, as you mentioned, this doesn't necessarily say the law will be violated, but it gives an extraordinarily broad authority by the plain meeting of this executive order to the president and the Attorney General to interpret what the law is and their concern is, as Jon Wellinghoff put it, that if we were to see a situation like in 2017 where the Energy Secretary asks FERC to adopt something, FERC might not have the option assuming that the president issued a legal opinion on it. Or if a court issued an order telling FERC to reverse a decision or go back to the drawing board on something and the White House's opinion did not change, FERC would be caught between a rock and a hard place, between violating either the executive order or the court order. And I'm curious what your interpretation of this would be and how you're going to proceed going forward.
Mark C. Christie (33:34):
Yeah, that's a good question and that's a good point, and it comes under the second point I was making, which is the devil's in the details is how does this play out in individual cases? What those two guys are referring to was the regulation which came over here from DOE, I think it was in 2017. And then FERC ultimately chose not to adopt it, which by the way… And I wasn't here, I was a state regulator, but I read about it, but it was perfectly legal and perfectly appropriate, and it still is, hasn't been changed, for DOE to propose a regulation to FERC. That's in the DOE Organization Act. Read it. It is perfectly legal and appropriate for the Secretary of Energy to propose a regulation to FERC, and it is perfectly appropriate for FERC to consult with the secretary, but once it's filed and it becomes a contested proceeding, it all has to be on the record so they can certainly file their legal opinion.
(34:39)
And if it's filed under 205, then FERC ultimately is going to take a vote under 205. The secretary's position is going to be known. I mean the DOE Organization Act contemplates that because they're going to file an opinion, so that is already built into the DOE Organization Act. They can file a regulation and FERC acts on it or not. What's built into the regulation is FERC decides, as it did in that case. So I think on the legal opinion, you pick out a good section, and I read that closely too, is again… In constitutional law we have a thing where we talk about, "Are we analyzing…?"
(35:21)
And you know, you're a law student. It's amazing, by the way. This guy's a law student and still does this. I mean, I wouldn't have a time to do that, but you analyze a constitutional issue on two levels. You either do it on its face, prima facie, or you do it as applied. And the Supreme Court has through many, many cases on law has sometimes evaluated a law on its face, sometimes evaluated law how it was applied. And I take this to be the same thing. We will see how it's going to be applied and find out whether or not… It can't violate our ex parte rules. I mean, again, we're not going to have a situation where somebody outside of the record says to do something, and that's not even on the record.
George Weykamp (36:07):
I appreciate your comments about the intent as well that you highlighted at the beginning, and I think it is clear that we could still use some additional details on that intent from the White House, but to press you on this, if there is a situation where the White House provides an official opinion or the Attorney General provides an official opinion that you believe is flagrantly contradictory to the interpretation of the Supreme Court, such as this Humphrey's executor letter, Attorney General says that that is bad law, Supreme Court says it's good law as recently as 2020 with Seila, although they modified it a bit, if you reach that situation, how are you going to proceed in the interim?
Mark C. Christie (36:53):
That is just too hypothetical and we don't have a set of facts in that case. We really don't. But you sort of jumped to Humphrey's executor. They're saying they won't defend Humphrey's executor, the Supreme Court's the ones who have to decide whether to overturn it, and it's, first, not going to be taken a position on Humphrey's executor. That's going to be way above our pay grade. That's a constitutional case. That's going to be above our pay grade. So that's not going to be a scenario that even happens. Now, if it's a Federal Power Act and we say, "Federal Power Act says this," secretary says, "Well, no, it doesn't," I want to see… If there's some opinion that comes in and says 205 means something different than what you've always said it meant and I want to see the reasoning.
(37:38)
We may say, "We don't agree," but I don't think they're going to be wading until 205s. I mean, seriously, that is such eyes glazed over stuff. I just don't think that that's what they have in mind. I think they're talking about big stuff like, "We're not going to take a position on Humphrey's executor contrary to what DOJ takes," and we don't want to. That's way above our pay grade. We're not going to weight in on Humphrey's executor. Again, the only lawyer's doing that, I named them, are in court right now saying, "Per commissioner should be fired at will." Yeah. Noreen.
Speaker 2 (38:14):
Congratulations for your answer. I don't know if it's working. Okay. Just to follow up to Jordan's question, given the mass culling that's happening in the federal government, are you worried about FERC staff being culled? Has the Department of Efficiency…? Government of DOGE, I guess, have they come around? Have they called? What's happening on that front? And how many probationary employees do you have?
Mark C. Christie (38:45):
I don't know the number of probationary off the top of my head, but I know that no one has been terminated. I'm not sure of the exact number, but no one's been terminated. What we do on probationary is we follow the way it's supposed to be, which is probationary period is where you judge… It is part of the job application and probationary employees, if they're high performers, that's what you want to determine. And if they're not cutting it, you determine that too. But that's just part of good management. But no one's been terminated. No one's been terminated. You asked about something else.
Speaker 2 (39:26):
If you'd been contacted by DOGE or if they've come by at all?
Mark C. Christie (39:29):
No, we provide information to OMB all the time. And here's the thing about FERC, which I think is important. Number one, we don't add a dollar to the deficit. We hold taxpayers harmless. Every dollar we spend, it comes from fees from regulated industries. We don't get a single dollar from taxpayers. So we are deficit neutral, number one. Number two, we don't make grants. You've been reading about all these grants that have been stopped from EPA. We don't make grants, none, zero. So what we do is… The money we spend, again, it doesn't come from taxpayers, it comes from regulated industries, and we only spend it on our direct operations to do the functions that we are statutorily required to do under the Federal Power Act, Natural Gas Act. So we're very lean and our money goes to the purpose of why we're here, which is to administer the Federal Power Act and the Natural Gas Act. That's what we do.
Speaker 2 (40:33):
And just a very quick follow up. Has the administration's stance on DEI affected anything internally or what you're making presentable in documents or on the website in any way?
Mark C. Christie (40:46):
No. We hire on merit. We hire without discrimination. We value every employee without regard to ethnic orientation, sexual orientation. We hire on merit. We value the individual. We have great individuals and we hire, we advance, we promote based on the individual's abilities, which is the way it ought to be. Yeah, Tom.
Tom Tiernan (41:16):
Thanks. Tom Tiernan with the Energy Daily. I want to drill down a little bit on your comments on the executive order. I want to make sure… So you're comfortable beforehand, before issuing a major policy statement or a major rule that you're comfortable going to the White House or the OMB or DOJ? And I'll give an example of the resource adequacy announcement today. Assuming there's some kind of policy statement or something where FERC wants to do this, you're comfortable going to the White House and those administration agencies before issuing anything and getting their input and having them give some kind of guidance?
Mark C. Christie (41:51):
Well, we certainly didn't seek permission to do a technical conference on resource adequacy, and I don't think there's anything in the resource adequacy technical conference that would be in any way, shape, or form contrary to anything that this administration is promoting. I mean resource adequacy, that's generation, it's infrastructure. So wasn't any reason to go to the White House on doing a technical conference on resource adequacy. One thing that's undefined, and I'm going to seek detailed response, is the EO talks about regulatory actions, which is a sort of nebulous term. I think we need more detail about what are actions. I mean, I think the thing is really about big deal regulations.
(42:44)
Regulations are legislative. Regulations, I've always said in teaching regulatory law is that regulations are simply laws by another name. So of course, they're going to want to know. When any agency is issuing laws and just calling it a regulation, there's going to want to be some explanation and coordination about what are you doing. But the term actions, I certainly don't think it extends to something like a technical conference and certainly not on resource adequacy, but I would like to know more detail about, "What do you mean by actions? How far does that go?"
Tom Tiernan (43:24):
Okay, and quick follow up on that resource adequacy announcement. FERC traditionally holds an annual reliability conference, grid reliability. I haven't read the details at this point, but this is something separate. I understand resource adequacy is dealing with grid reliability, but this is separate and apart from the annual grid reliability session that is held.
Mark C. Christie (43:47):
Yeah, I think that's in the fall, if I'm not mistaken. This technical conference is spurred by several factors. One, as we all know, we're looking at load forecasts that are just astronomical compared to anything I ever saw as a state regulator driven by the data center explosion. We also know that we are not building, generating capacity anywhere near at the pace we need to. So that's the big picture. And by the way, you asked about, " Did you ask the White House?" They're all for reliability and resource adequacy and building infrastructure, so I wouldn't see anything that would even be cross-ways on that. The reason this is focusing on the RTOs is, first of all, about three-quarters of the consumers in America by the load portion are served by RTOs and ISOs. So that's the first place to look. Three-fourths of the country roughly is in an RTO, and it's no secret
Mark C. Christie (45:00):
… accurate that we have had, over the last couple or three months, numerous cases come in, 206s, 205s, related to alleged problems in the capacity markets, particularly the PJM capacity market. There's a lot of controversy percolating about that capacity market. A lot of states are concerned. Pennsylvania filed its own complaint. I'm not going to talk about the merits because it was just settled, but governors are concerned. I had a conversation with the governor of Pennsylvania, an extensive conversation about the concerns that they have about consumer cost in PJM. There is a lot of concern about what's going on in PJM, what going on in MISO.
(45:58)
MISO, if you look at the NERC resource reports, long-term resource adequacy, MISO is looking at a deficit of resources very soon, so we got a big problem. We got a big problem in resource adequacy in the RTOs, particularly the two biggest in America, PJM and MISO. Those are the two biggest in America by load, by load. SPP might be geographically, but by load, it's PJM and MISO, but we're going to talk about all of them, but that's what spurs that.
(46:33)
We've had a lot of controversy, a lot of complaints. Not only complaints that come in the door as a 206, but just general controversy. A lot of letters from politicians from the PJM region, a lot of letters from state legislators, from senators, from governors. Again, Governor Shapiro of Pennsylvania has been very vocal. Other governors have been vocal now in PJM, so I want to get in front of it. I don't want to be behind it. That's my goal. I always like to be in front of an issue, not behind an issue.
(47:04)
That's why we're going to have the technical conferences … well, it's one conference, two days … in June, and yes, you're right. It's separate from the other one, because I want to drill down in detail particularly about the capacity markets. There's a lot of experimentation about alternatives now in PJM. I ought to talk about alternatives. Yeah, James? The guy who covers PJM.
James (47:32):
Yeah. Thanks for taking all this time with us. My question is back to the EO. A common concern I heard from people was that it's just another step in the ongoing politicization of FERC, and that has implications for investments and stuff. Do you share that concern? What are your thoughts there?
Mark C. Christie (47:49):
The idea about politicization, I mean, look. We live in a democratic system, and we live in a political world in the sense of politics with a small P, the Aristotelian version of politics. The danger at FERC, in any regulatory agency, is not that a … you know. Let's go back to 1920. I'm glad you mentioned that. Actually, you didn't mention it, but I brought it up.
(48:21)
In 1920, we … and I cited this in my dissent. I cited a letter from Senator Schumer, majority leader of the Senate, who wrote us a letter and in granular detail told us exactly what we should do, and 99% of that became part of 1920, and that's political interference, but you know what? It was totally appropriate. It's fine for Senator Schumer to write us a letter, ghostwritten by lobbyists, that told us what to do, and it ended up in the rule. I cited that.
(49:11)
You're going to have that, okay? Again, we don't live in a parallel universe, in some pristine vacuum, and it's totally appropriate for a senator, especially a majority leader, to write us a letter and say, "Here's what I want to see." The bigger danger at FERC and other regulatory agencies is the danger of regulatory capture, and it's the influence of special interests.
(49:42)
Politicians are going to do what politicians do. They're going to represent their constituents. Special interests affect this process here at FERC all the time, by which I mean lawyers and lobbyists for special interests who are looking for … either rent-seeking. I said in 1920. I said, "If you want to see an example of regulatory capture, this is Exhibit A," and I stand by that. It's the private interests, that we have got to make sure we're working for the public interest and not the private special interests.
James (50:17):
Would that potentially open up another avenue for that through the White House? Because I talked to Commissioner Bernal yesterday and she told me, "I'm going to try to do Standard Market Design." Southern Company called the White House and got them to kind of shut it down. Couldn't there just be a more common occurrence with this?
Mark C. Christie (50:38):
I don't know what Southern did back during Standard Market Design. I'm very glad they got it shut down, because I think it was a terrible idea. Whatever they did, I'm glad they got it shut down. Look, when I was in Virginia, no one talked to us. We had very strict rules on ex parte. We wouldn't even talk to outside interests about anything substantive, because we were under a judicial code of conduct and so we didn't talk to anybody about anything, other than the weather. At FERC, it is perfectly appropriate.
(51:12)
I was taken aback when I got here. During a rulemaking, any interest group that wants to can talk to you. Any interest group that wants to can come and lobby you. When I first heard about that, I was like, "What?" They said, "Oh, yes. That's the way it's been for decades." A rulemaking is considered a general proceeding, and any lobbyist, any lawyer that wants to, any interest group, any corporation, can come and talk to you freely, privately, and that's not considered ex parte. That's nothing different, James. That's been going on for decades. That's been going on for decades. Query whether it should.
(51:59)
Now, the FCC's had a rule where any lobbyist or lawyer that comes and talks to you has to sign a form, and it's publicly published at the end of every month. I've actually looked into that to see whether we should do something like that, but it's been the practice at FERC for decades, is that lawyers, lobbyists, get to come talk to commissioners about a rulemaking and try to lobby you on it, and they do, and they did, and it's standard practice and it's been going on for decades. The danger is always … and let's move to a contested proceeding.
(52:37)
Now, in a contested proceeding they cannot do that, because ex parte communications in a contested proceeding are totally inappropriate, and that ain't going to happen, I can promise you. That ain't going to happen on my watch, because ex parte communications are illegal, but it's in the proceedings where that rule applies. Again, 205, 206, 203, but in open general proceedings, we've had people come in and lobbying us for years, for decades, way before I got here, and it's standard practice. Nothing new.
Speaker 3 (53:20):
Mr. Chairman, can we just take a question online?
Mark C. Christie (53:23):
Oh, yeah. You still out there?
Speaker 3 (53:25):
Okay. We're going to go to a question online.
Mark C. Christie (53:27):
We could probably turn the channel.
Speaker 3 (53:30):
Zach, do you still have a question?
Zach (53:37):
Yeah. Can you hear me?
Speaker 3 (53:38):
Yes.
Zach (53:40):
Okay, great. I guess, yeah, thanks again for doing this, Chairman. Just one more quick follow-up, specifically on the ex parte considerations around the EO. Is it possible to send draft rules to OIRA for White House review and potential approval without violating FERC's ex parte rules, and preserving commissioners' ability to vote?
Mark C. Christie (54:12):
That's the kind of detail I gotta get straightened out. You talk about evaluating something on an as-applied basis. We need to get details about how that applies, and a definition of matter, okay? A definition of matter. If we do a policy statement … like again I get back to the GHG policy statement which a majority voted for, I dissented, which was totally consistent with the Biden policy … how would that have worked under this? I'd have to find that out. That's the kind of detail I want to get to.
Zach (54:51):
Thanks.
Mark C. Christie (54:52):
Uh-huh.
Speaker 3 (54:53):
Okay. One more question online, from Chris Knight with Argus Media.
Tom Tiernan (54:59):
Chairman, thanks for doing this. The order says that FERC and other agencies are so-called independent agencies. It basically says that you're under the control of the White House. Do you see FERC as an independent agency, and will you act independently from the White House?
Mark C. Christie (55:16):
I see FERC as run by the Department of Energy Organization Act and exactly what it says, and it uses the term independent, but it's independent according to the terms of the DoE Organization Act and our applicable statutes. We are independent in decision-making according to the terms of the DoE Organization Act, and that's what we're going to continue to follow, the applicable statutes, whether it's the Federal Power Act, Natural Gas Act, all those statutes. We act under all those statutes, so follow the statute.
Speaker 3 (55:48):
Great. Okay, one more, Alexis. This is the last question. Alexis in the room, go ahead.
Maya Weber (55:53):
Hi. Thank you. Yeah, Alexis Waiss with Bloomberg Law. I've been on the job for only a few months, so it's great to finally have the opportunity to introduce myself. Either way, I mean, in the case that NEPA does face legal challenges or proposed amendments for the sake of streamlining the permitting process, I'm just curious about how that would impact FERC's approach when it comes to its project approvals, especially when it comes to, as I know with your legacy, balancing the interests of the developer versus the needs of the surrounding communities as well.
Mark C. Christie (56:30):
Yeah. She asked about NEPA. I don't see the EO having any effect whatsoever on our NEPA procedures. What we do under NEPA is when we're talking about a pipeline or an LNG under the Natural Gas Act. We are required under NEPA to determine whether, first of all, there's a major environmental impact, and if there is, we have to come up with mitigation.
(57:02)
What FERC has historically done … and again, this gets back to why there's a lot not new here … FERC has historically has followed White House guidance via the Council on Environmental Quality, CEQ, in our NEPA procedures, and we've been doing that for like 20-some years. Following CEQ guidance on NEPA has been the practice around here for quite a long time. They've changed a lot of that, and we will have to take the new guidance, and again, it's voluntary. We've always followed it voluntarily.
(57:36)
What we don't have the choice to follow is NEPA. We have to follow it and we have to meet those statutory requirements, and we'll continue to do it. Part of the process when you do an environmental impact is you look at the impact on communities that are affected by an infrastructure project, and so we will certainly continue to do that and focus on all the impacted communities. I guess you're asking about the impact on people around the pipeline side?
Maya Weber (58:02):
Yes, but more just I'm concerned about just the legal applicability of NEPA if it does face legal challenges, because then I feel like you might have to wait for a decision or things of that sort.
Mark C. Christie (58:17):
No one, in my opinion, has challenged the constitutionality of NEPA. I mean, there's no pending cases that I'm aware of where somebody's saying NEPA is not constitutional. There's been efforts in Congress to change NEPA, to amend it. Thus far, they haven't changed it, so we follow it. It's just like I can't emphasize this enough. We follow the statutes that apply to individual cases. If NEPA applies in a case, we follow it.
(58:49)
We're going to follow it. No one's going to tell us not to follow the law, because NEPA applies. NEPA is very controversial. There's a lot of people that'd like to cut it back, change it, amend it, but amending NEPA is up to Congress. That's above our pay grade. We follow NEPA. We follow NEPA. That isn't affected by the EO. We follow NEPA. Of course we do.
Speaker 3 (59:21):
Great. Thank you so much. Thank you, everyone. Thank you, Chairman.
Mark C. Christie (59:24):
Is that it?
Speaker 3 (59:25):
That's it.
Mark C. Christie (59:25):
Okay. Oh, man.
Speaker 3 (59:49):
Great first meeting.
Mark C. Christie (59:51):
Fun.