By SETH MASIA
Jon Wellinghoff was named to the Federal Energy Regulatory Commission (FERC) in 2006, became its acting chairman in January 2009, and was confirmed in the job on March 19, 2009. The agency has jurisdiction over the wholesale electricity market, including interstate electric and natural gas transportation and large hydroelectric projects.
Wellinghoff, a member of the American Solar Energy Society since 1978, has brought some important new ideas to the job. By law, FERC is supposed to function in a “nondiscriminatory” manner regarding energy sources. But discrimination can be defined according to a political viewpoint. Wellinghoff found, on arriving at FERC, that all energy sources were treated under the same rules — rules developed for large, central coal-burning power plants. It was a top-down view of the market. At the time of his appointment, the Washington Post noted that FERC had “long been dominated by oil and gas or utility lawyers….”
Wellinghoff, who had served as Nevada’s energy consumer advocate and had written Nevada’s renewable portfolio standard (RPS) legislation, looked at the market from the other end.
“My perspective is to ensure that consumers have access to all economically reasonable, competitive resources, including solar and wind,” he said. “We need to ensure that [wind and solar] are not discriminated against in grid integration. You can’t treat a coal plant like a photovoltaic system. They have different financing and different technical characteristics, and you have to accommodate both so they can both compete. We have a view that everything must integrate and compete.”
Wellinghoff grew up in Reno, Nev. While attending Reno High School, he got hooked on physics. He spent each summer in a program at the University of Nevada that put him into the physics lab. It had the wrong effect. On arriving on campus full time, as an undergraduate, he said, “I got sick of dark labs and wanted to see sun.” So he switched majors and graduated with a Bachelor of Science in math in 1971. The next step was to become a math teacher, so he took a Master of Art in Teaching degree in math at Howard University in Washington, D.C., in 1972.
Teaching was tough, and while he welcomed the challenge, Wellinghoff worried that he wasn’t creating real change in the world. “I had this technology bent,” he said. “I wanted to make things better and more efficient. Ultimately, to be more effective and do things on a broader scale, you needed a law degree.” And so he attended the Antioch School of Law in Washington. On graduating in 1975, he went straight into energy law.
Specifically, Wellinghoff went back to Nevada and set up a private practice, specializing in renewable energy issues. Clients included solar power developers near Las Vegas, large power consumers, manufacturers of energy-efficiency products, clean energy advocacy organizations and some government agencies. He was the primary author of the 1997 Nevada Renewable Portfolio Standard Act, effective in 2001 and requiring 25 percent renewable sourcing by 2025. He then consulted on RPS developments in six more states.
Wellinghoff then served two terms as Nevada’s consumer advocate for customers of public utilities, in effect a public-advocacy attorney practicing before the Nevada Public Utilities Commission, Nevada Supreme Court and FERC. He created the first comprehensive statewide utility integrated planning statute, a critical piece of the puzzle in a state that had developed two widely separated grid systems in its rural north and fast-growing urban south. The statute was widely imitated.
As his expertise grew in grid-integration issues, Wellinghoff recognized the importance of demand-response and grid-enabled storage mechanisms. He co-authored a paper, for the Energy Law Journal, on paying electric vehicle owners for access to their batteries for load balancing in a smart grid, and another on hydrokinetic (ocean and open-river) power. One of the first issues resolved after he became FERC chairman was a jurisdictional dispute with the Department of Interior over off- shore renewable sources: The logjam over permitting would break as the Interior took responsibility for wind projects and FERC for ocean-power projects.
Wellinghoff views the energy market as a dynamic, ever-shifting entity. “We’re seeing changes over time as resources and loads change,” he said. “Historically, we’ve delivered services through local utilities, with central power plants located close to consumer loads, with short transmission lines. Those plants have been fueled by coal, natural gas and nuclear power. Now we’re reaching out to resources in remote locations, including wind, solar and geothermal. They provide cleaner power at low cost but are not located near the loads, so they require a very different type of infrastructure. And then we have distributed power, which is something not available in the past. We have very local photovoltaic, wind and water systems at the house or business site. This is more cost-effective for the consumer. But it means we have to figure out how to simultaneously integrate both very long lines and very close sources.”
Even without distributed power, Wellinghoff pointed out that the energy mix has changed dramatically. “In the 1930s, 40 percent of our power was from large hydro sources,” he noted. “And 10 to 20 percent was small wind. So we had 40 to 50 percent renewable power then. Then it changed to 12 to 14 percent, including large hydro. And now it’s changing again.”
The rise of distributed sources blurs the line between retail and wholesale distribution. “To the extent that [distributed sources] offset local power, they’re considered retail transactions,” Wellinghoff said. “Under PURPA [Public Utility Regulatory Policies Act, amended in 2005], to the extent they add power they can be wholesale systems. There is a possibility all the time for conflicts between state law and PURPA. State regulatory regimes are not used to seeing consumers be generators. For instance, Hawaii is concerned about the level of photovoltaics (PV) on local distribution feeders. This is the kind of conflict we can help to work out so that local consumers can have competitive choices.”
In fact, Wellinghoff reports, FERC spends up to half its time and resources dealing with local integration issues. “In California, we needed to ensure that their feed-in tariff could go forward in a way that was not inconsistent with PURPA,” he noted. “The small generator inter- connection standard encourages states to adopt [policies friendly to distributed generation]. We are paying attention to local distribution and demand-side requirements. We’ve issued a number of rules on both the supply and demand side, meant to enable [distributed sources] to participate in a competitive market.”
At the utility scale, a major barrier remains long-distance transmission. New transmission lines often run into not-in-my-backyard local opposition, and FERC has been exploring ways to resolve those disputes. Thus, the commission’s Order 1000, announced in July, requiring (among other things) that utilities coordinate regionally in planning new transmission lines, and allocate costs of new transmission to the beneficiaries of the lines.
“FERC doesn’t have a direct role to play in siting transmission,” Wellinghoff cautions. “We’d like to see our 2005 policy directive repurposed in that direction, but it hasn’t happened yet. Order 1000 focuses on areas where we do have authority: planning and cost allocation. We can affect planning, pricing and permitting. We’re now looking to see how we might better help the states in permitting.
“The renewable energy community’s best path forward is to encourage competitive markets down to retail distribution and up to wholesale distribution levels,” Wellinghoff said. “All studies have shown that when consumers are given choices they’re very, very interested in purchasing renewable energy. That’s especially so now that we’re starting to see PV systems price-competitive with retail electricity.”
Seth Masia is the deputy editor of SOLAR TODAY. Contact him at firstname.lastname@example.org.