The Fed's "Mr. Green"

If you're looking for proof positive of President Obama's commitment to a clean energy future, that is proof beyond his appointment of Dr. Steven Chu as Secretary of Energy and Ken Salazar as Secretary of the Department of Interior, look no further than the Federal Energy Regulatory Commission (FERC). As the following article points out, most citizens are probably not aware of what FERC does or that it even exists. But this federal agency plays has a very pivotal role in determining the shape and direction of the nation's power industry. It appears to be in the hands of an extremely capable and pragmatic visionary. (GW)

Jon Wellinghoff, Obama’s energy futurist

The chairman of the Federal Energy Regulatory Commission is committed to renewable energy.

By Mark Clayton
The Christian Science Monitor
June 8, 2009

Washington

When giving his slide presentation on America’s new energy direction, Jon Wellinghoff sometimes sneaks in a picture of himself seated in a midnight blue, all-electric Tesla sports car.

It often wins a laugh, but makes a key point: The United States is accelerating in a new energy direction under President Obama’s newly appointed chairman of the Federal Energy Regulatory Commission (FERC). At the same time, FERC’s key role in the nation’s energy future is becoming more apparent.

Energy and climate legislation now pending in Congress would put in FERC’s hands a sweeping market-based cap-and-trade system intended to lower industrial greenhouse-gas emissions.

Besides its role granting permits for new offshore wind power, the agency is also overseeing planning for transmission lines that could one day link Dakota wind farms to East Coast cities, and solar power in the Southwest to the West Coast.

“FERC has always been important to power development,” says Ralph Cavanagh, energy program codirector for the Natural Resources Defense Council, a New York-based environmental group. “It’s just that people haven’t known about it. They will pretty soon.”

That’s because Mr. Wellinghoff and three fellow commissioners share an affinity for efficiency and renewable energy that’s not just skin-deep, Mr. Cavanagh and others say.

Wellinghoff started his energy career as a consumer advocate for utility customers in Nevada before being appointed by President Bush in 2005 as a FERC commissioner. He was a key author of “renewable portfolio standards” that require Nevada’s utilities to incorporate more renewable power in their energy mix. Now he’s the nation’s top energy regulator.

It’s clear that FERC has a mandate to speed change to the nation’s power infrastructure, Wellinghoff says.

When it comes to the extra work and complexity FERC will encounter if Congress appoints FERC to administer a mammoth carbon-emissions cap-and-trade program, Wellinghoff is eager, yet circumspect.

“We believe we are fully capable of fulfilling that role with respect to physical trading [of carbon allowances],” he says during an interview in Washington. “We’ve demonstrated our ability to respond efficiently and effectively to undertake those duties Congress has given to us. Unfortunately, the result of that is they give you more to do.”

While the US Department of Energy controls long-term energy investment decisions, FERC’s four commissioners (a fifth seat is vacant) appear determined to ensure that wind, solar, geothermal, and ocean power get equal access to the grid.

The commissioners are also biased against coal and nuclear power on at least one key factor: cost.

Many in the power industry believe that renewable energy still costs too much. Not Wellinghoff, who says: “I see these distributed resources [solar, wind, natural-gas microturbines, and others] coming on right now as being generally less expensive.”

That might sound surprising. Yet, with coal and nuclear power plants costing billions of dollars – and raising environmental issues such as climate change and radioactive waste – others also see renewable power as the low-cost option.

Wellinghoff’s outspoken views have irritated some since his March selection as chairman.

Last month, for instance, he drew fire from nuclear-energy boosters in Congress after he characterized as “an anachronism” the idea of meeting future US power demand by building large new coal-fired and nuclear power plants.

“You don’t need fossil fuel or nuclear [plants] that run all the time,” Wellinghoff told reporters at a US Energy Association Forum last month. Then he added: “We may not need any, ever.”

That set off a salvo from Sen. Lind­sey Graham (R) of South Carolina, a staunch nuclear-power advocate. “The public is ill-served when someone in such a prominent position suggests alternative-energy programs are developed and in such a state that we should abandon our plans to build more plants,” he said in a statement.

But to others, Wellinghoff is the epitome of what the US needs: a public servant zeroed in on energy security, the environment, efficiency, and keeping energy costs down.

“Wellinghoff has been a longtime supporter of efficiency and consumer interests,” says Steven Nadel, executive director of the American Council for an Energy Efficient Economy, an energy advocacy group. “I would call him a visionary. He’s not just content with the status quo.”

In Wellinghoff’s vision of the future, where the cost of carbon dioxide emissions is added to the price of coal-fired power plants and natural-gas turbines, it may be less expensive for consumers to set their appliances to avoid buying power at peak times. Or they may choose to buy power from a collection of microturbines, fuel cell, wind, solar, biomass, and ocean power systems.

“We’re going to see more distributed generation – and we’re already starting to see that happen,” Wellinghoff says. “Not only renewable generation like photovoltaic [panels] that people put on their homes and businesses, but also fossil-fuel systems like combined heat and power,” called cogeneration units.

To coordinate and harmonize this fluctuating phalanx of power sources, customers will need to know and be able to respond to the price of power, Wellinghoff says. They will also need a new generation of appliances that switch off automatically to balance power supply and demand peaks.

But there are huge challenges with a power grid that provides energy from a mix of wind, solar, and other renewable power.

“You’re going to have to upgrade this whole grid [along the East Coast], he says. “You can’t just move [wind and wave power] from offshore to load centers onshore without looking at the effect on reliability – Florida
to Maine.”

As the percentage of renewable power rises toward 20 to 25 percent of grid power from around 3 percent today, there must be a backup to fill gaps when intermittent winds stop blowing or the sun doesn’t shine.

In a decade or more from now, Wellinghoff, says millions of all-electric or plug-in electric-gas hybrid vehicles could plug into the grid and supply spurts of power to fill in for dipping wind and solar output.

“There are new technologies,” he says, “that in the next three to five years will advance the grid to a new level.”

Gesturing to a drawing board on the wall, he hops up from his chair, his hands flicking across a sketch of the eastern half of the US with power lines fanning out from the Plains states to the East Coast.

“This is another grid option that would take a lot of power that’s now constrained in the Midwest, that can be developed - wind energy there - and move it to all the load centers [cities] on the East Coast,” he says.

Similarly, lines could be built across the Rockies to connect wind power in Montana and Wyoming to the West Coast. Instead of building power lines from the Midwest to the East Coast, “a lot of people would say, ‘No, no, let’s look first look at the wind offshore,’ ” he says.

Whether it’s wind from the Plains or the ocean, the resulting variability will have an impact on grid reliability if action isn’t taken, Wellinghoff says.

“You’re going to have to upgrade this whole grid here,” he says, gesturing to the East Coast. “You can’t just move [power] from offshore to load centers onshore without looking at the effect on reliability.”

Reliability of the grid remains paramount – Job No. 1 for the Federal Energy Regulatory Commission. But if boosting renewable power to 25 percent by 2025 – the Obama administration’s goal – means spreading Internet-connected controllers across substations and transmission networks, then cybersecurity to protect them from increasing Internet-based threats is critical.

Yet a recent review by the North American Electric Reliability Corporation overseen by FERC found more than two-thirds of power generating companies denied they had any “critical assets” potentially vulnerable to cyberattack. Those denials concern Wellinghoff.

“We are asking the responding utilities to go back and reveal what are the number of critical assets and redetermine that for us,” he says. “We want to be sure that we have fully identify all the critical assets that need to be protected.”

It would be especially troubling if, as was recently reported by The Wall Street Journal, Russian and Chinese entities have hacked into the US power grid and left behind malware that could be activated at a later time to disable the grid.

But Wellinghoff says he has checked on the type of intrusion referred to in the article and denies successful grid hacks by foreign nations that have left dangerous malware behind.

While acknowledging that individuals overseas have tried to hack the grid frequently, he says, “I’m not aware of any successful hacks that have implanted into the grid any kinds of malware or other code that could later be activated.”

But others say there is a problem. In remarks at the University of Texas at Austin in April, Joel Brenner, the national counterintelligence executive, the nation’s most senior counterintelligence coordinator, indicated there are threats to the grid.

“We have seen Chinese network operations inside certain of our electricity grids,” he said in prepared remarks. “Do I worry about those grids, and about air traffic control systems, water supply systems, and so on? You bet I do.”

In an e-mailed statement, Wellinghoff’s press secretary, Mary O’Driscoll, says the chairman defers to senior intelligence officials on some questions concerning grid vulnerability to cyberattack: “The Commission isn’t in the intelligence gathering business and therefore can’t comment on that type of information.”