E025: SMART Program In Massachusetts and How Regulators View 201 Petition Risk with Mike Judge

On the 14th of November, DOER released the RFP for the initial block of the much anticipated SMART program. The timing of the release was cause of many questions considering the shadows of the 201 petition which could affect the price of solar in Massachusetts. SolarWakeup covered many of these questions with Mike Judge, Director of Renewable Energy at DOER, during last month’s SolarWakeup Live! in Boston.

Full Transcript Below. (While we attempt to make it verbatim, it may miss a few words)

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YANN: [00:00:00] Want to thank Mike judge from DOER for coming today, I am sure if you are in the solar industry in Massachusetts you know Mike and you know Mike’s work. Your work kind of depends on him doing his job. He is a director of renewable & alternative energy at DOER, he’s been at DOER for seven years so he knows the SREC program and he knows how to administer it. Also at MASSCEC, you’ve managed the solar carve out of the RPS amongst other things but now most recently you have been the leader in developing the rules of the SMART program. You finalized those rules but because it’s a tariff as we know it, the DPU, which has released some draft language, can you talk about where the process stands and what you make of the process so far?

MIKE: [00:00:57] Absolutely so the DOER, the legislation was passed last April, requiring the DOER to create new solar programs. We started working on that last summer, we had some listening sessions, we put out the draft proposal in the fall, final proposal in the late winter or mid-winter and we issued our regulations, promulgated those in August. So now DOER’s part here is almost done with components are which I can talk about in a minute but now the model tariff has been filed by the distribution companies jointly filed at the DPU and they are kicking off that proceeding, we had a deadline to intervene, several interveners, several people intervening with their granted status today and then there was procedural conference and a public hearing last week and so right now we are waiting for them to advertise the procedural schedule for the remainder of the proceeding. Don’t know exactly what they are going to do next but we did ask at the conference where they try to aim for first order date and set up a schedule accordingly so that the transition to occur hopefully spring of next year.

YANN: [00:02:13] So speaking of the transition, what is the main goal in the transition going to SREC to SMART?

MIKE: [00:02:20] I think there is a few things, the biggest one I would say is trying to create certainty and bring cost savings to ratepayers. One of the benefits of SREC its different than other states is we did actually have a good job of mitigating some of the risks, our auction mechanisms and SREC values remain high but financiers still would take very, there’s a steep discount that you’d have to take when you are selling things over a long term contract. So in some cases we’ll have taking 50% of the SREC value and the problem with that from a rep air stand point is that you are still paying 100% and so when you have an SREC that’s worth 100 dollars and someone buys it a hundred and fifty and selling it back for three hundred dollars, the generator, the owner of the facility or the developer of the facility is only getting 150 but their financial backer is getting the 150 as you are paying that. So by moving to a tariff, we can create financial certainty and you can have transactions between the utility and owner of the facility which removes a lot of that soft costs and financial costs.

YANN: [00:03:37] So talk a little bit about the process and the involvement of the industry to get to the final rules.

MIKE: [00:03:46] Yeah so we tried to really be as inclusive as possible throughout the process and so we had these initial listening sessions at the same time we were conducting some analytical work on the necessary incentive values, that was last summer and then we put out the straw proposal, collected feedback on the industry, got over 600 pages of comments on the straw proposal, 250 sets of individual comments and lots of feedback from stakeholders and then we convened a number of working groups. So we reached out to the major associations in all sorts of different stake holder groups and ask them to appoint representatives to a working group by either there’s five working groups and so they’re established on different components of the program and they about 40 pounds over the course of the fall. All different types of people, land use advocates, small solar developers, large solar developers and low income advocates, you take utilities, the attorney general’s office and the product of that was our final proposal which we then took some additional informal comments on and then we had the formal rule making another 100 sets of comments and feedback from stake holders there and that’s when well get to the final rule. So I’d like to think its been an open and transparent process where we’ve tried to solicit as much input from the general public as possible but now there is still one final process left where we are focused more on the mechanics of the program then the policy.

[00:05:32] Some important questions of the policies as we enter into that mechanics discussion but the eligibility criteria, the process of establishing incentives, all that’s really been established by the regulators.

YANN: [00:05:43] So one of the major attributes of the SMART program verses pretty any other solar programs around the country, it looks like you are really working to encourage solar projects to include energy storage; why did you choose the two kind of matrix, two kind of Y axis of percentage of capacity to solar plus number of hours?

MIKE: [00:06:15] So earlier in the Baker administration we launched the energy storage and it’s a 10 million dollar initiative, the majority of that fund is going towards administration projects and those administration projects will actually be awarded soon but the first component of that was comprehensive study on the benefits and the used cases of energy storage in Massachusetts and we found that there is tremendous for all sorts of different used cases for energy storage and there was a series of recommendations that came out of that and one of them was averaging the solar program to include solar plus storage. As we develop more solar regs 1600 megawatts DC and this will be another 1600 megawatts AC. So collectively when SMART is done, we will have probably somewhere between 2200 and 3500 megawatts AC of solar capacity in Massachusetts, nearly 95% or more that’s going to be on the distribution system too and then so that all acts as load reducer and when you have that much solar on the system, you really starting to see it very reminiscent of California, you see it today there’s a little bit of one today in the spring of this year, it was really very dramatic.

[00:07:42] So we really need to have battery storage or some way to mitigate that and we saw this was really like a tremendous opportunity to incorporate storage from the get go because it makes more sense to have storage upfront when you are building these products rather than being retrofitting it, it’s more expensive to do it after the fact so just pair them upfront. As far as to why we structure the incentive that way with its looking at the ratio of storage capacity to solar capacity and the duration of the storage, that was done primarily because of the results of the energy storage which showed that the shorter term to medium term storage with the generally sized, approximate size to the facility is compared was going to provide the best benefits to repairs and actually if you look at that chart, as you move to longer duration or higher capacity, there is a diminishing increase in the amount of incentive that the facility has received and that reflects that same thing. It’s really a sweet spot in the 2 to 4 hour and sized to the 25-60% of the solar capacity and that’s reflected in the benefits that we identified in the storage study.

YANN: [00:09:08] So talking about the mechanics of the next step of the SMART program, how much more can you do under your guidance at this point before the DPU issues the final order things like, hosting the auction, the initial auction or participating in the DPU process kind of give some guidance on things that maybe you were silent on but have an opinion on now that’s there is language around us.

MIKE: [00:09:42] I think there’s still a fair amount that we can do. So the two big things that are left on our plate are the roll out of the program and being able to do the intake of application so we have solar program administrator, the distribution company’s choice who solicited for that summer. They’ve made their selection, they’ll be executing that contract possibly this week and so there’ll be an announcement on who that entity is and then the RFP for the initial competitive procurement, that’s drafted and we are first working on details with them so that should be going out soon and those are the two really kind of big items that DOER is doing, we also have to build the application platform, make sure it’s working, get the website up and running, do a lot of outreach and stakeholder communications and then plan for that transition but in addition to that we are full intervener and the DPU proceedings, we plan on providing comments and filing briefs, asking discovery questions we’ll be active with on that proceeding, not clear if we are going to issue sponsor testimony and put up a witness and that proceeding is resolved but we plan on being involved and there are certain things that are in the tariff that are not expressly called for in the reg.

[00:11:08] An example would be the utilities cost recovery mechanism. So I’ll state just very briefly there the proposal is a fixed charge cost recovery and there are some details and mechanics of that. DOER will likely pick a position from that, I don’t know what that position is going to be this time, I can’t really speak to that but we’ll be participating in that proceeding and taking a stand on what we think cost recovery mechanism looks like.

YANN: [00:11:41] Speaking about the auction right? because you could that’s obviously everyone wants to know what the clearing price is going to be from a development standpoint but we also have this pending federal issue with the 201 petitions happening, we’re module prices can be double what they are today.

MIKE: [00:11:54] Yeah.

YANN: [00:11:55] How do you, can you have an auction before the 201 is resolved?

MIKE: [00:12:00] So I’ve spent a fair amount of time, I’ve asked this question a lot of people and the consensus generally seems to be that yes, there’s no reason to delay, we should we should put something out there is obviously some uncertainty lingering out there and I think we’re watching it very closely. The timing of the release of the RFP is actually maybe fortunate that it’s coming out a week or two later than we originally envisioned because now people will have full visibility until at least what’s recommended by the ITC and that we will be making final announcements on the result of it potentially after the White House makes a decision on what they’re going to do and we can take that into account to some extent, I think as regulators, state regulators, we try to not design our policy around what may or may not happen at the federal level because it’s hard, it’s really hard to do that and when you have sort of optionality things that might go one way or the other that’s challenging. That being said, we do have the ability to make changes to the program if necessary. So there’s something really drastic happened, it’s our reg, we can open that reg, not saying we want to I don’t think that’s you know, that’s no one wants us to do that really you know, you we don’t open regulations without careful consideration but we can take appropriate action if necessary. So we’re watching it closely, I think we’re going to run the procurement, hopefully people will be able to understand at least what their what the potential outcomes are at the time they’re submitting bits but yeah we’re well aware.

YANN: [00:13:38] But do you see you know because this is a clearing price right? There’s there there’s both financial modeling as well as strategy.

MIKE: [00:13:49] Yeah.

YANN: [00:13:50] I mean people are going to be bidding what maybe gets them below the highest clearing price. So you know maybe they don’t want their number but they’re hoping to be under the clear, clearing price number you know, what if I assume a modest whatever you know, maybe I’ll take today’s ITC recommendation and model that into my number but someone says you know what I’m not modeling any of that and maybe there’s enough of those people that unrealistically bid into the system and then all of a sudden the White House comes out with double the ITC’s amount right? I mean do you see a scenario where maybe you’d say you know what there was too much uncertainty and we have to issue another RFP?

MIKE: [00:14:39] Well we do routine the flexibility in the Reg to do a couple things, the Reg allows us to determine whether or not there was a non-competitive result, we can issue of additional solicitations. We can also administratively set prices so I think we’re sort of in a wait-and-see, let’s see what we get, let’s see what happens, let’s see how it plays out and then we can, we have some ability and flexibility to make decisions and modifications to a certain degree but if things are that really kind of dramatic impacts, then we can take further action as well if necessary.

YANN: [00:15:16] So when do you see the RFP being issued?

MIKE: [00:15:20] I’m hesitant to give like a firm date but I’d say in the next two weeks (October 31st – November 13th) or so, like it’s very it’s well developed and we’re working, it’s high priority for us.

YANN: [00:15:32] So let’s speak about some of the dynamics you know, solar advocates are coming back and saying listen, the block one makes sense. Block one there’s a clearing price, everyone under the price gets that price and then the feedback is well after that, it moves to an average, it takes that it takes the mean of the initial bids and works down from there. Which from their standpoint can be skewed if there is a wide range of bits, what do you think about that feedback and do you think there’s a fix for a process?

MIKE: [00:16:08] Yeah, so part of the reason we went that way is that there was some concern that there would be a lack of participation in the initial procurement. If people could just wait for block one and get the same rate as they could have gotten in the procurement, then a lot of people would just opt-out and just wait and see what happens but by setting the block one rate at the clearing of the marginal clearing price, then you’re sort of guaranteeing anyone who participates in that initial procurement is going to get a higher base compensation rate than anyone who waits for block one. That being said, people in block one can also take advantage of adders and other, they can be alternative on bail credit, they can mean that metering facilities, they don’t have to be a qualifying facility. So there’s some advantages to waiting to but I think that you know, there are again opportunities for DOER to make modifications to the final procurement results. If you, I’m going to throw in an extreme example here, if we saw a bid come in at one penny kilowatt hour, obviously that’s probably not a very realistic bid and that’s not something that someone can actually achieve if that was the clearing price, DOER does have the flexibility to say this was not necessarily competitive or administrative least set the price you know, I don’t know that we would take this action, I think we want to wait and see and reserve our judgment but we could say, we’ll count, we’ll set the average but we’re not going to count that one set bit in setting the average. So I think, we are hoping then nothing like that happens, we’re hoping that people are responsible and bid in what they actually need but we’re watching it closely.

YANN: [00:17:51] How do you, how do you get you know, you’re going to have, I mean some would argue that any project in the SMART program is going to have energy storage associated with it you know, many people say that these days. Energy storage prices are dropping and this will be a way to increase the return of the project. So having energy storage is just going to make financial sense for investors to participate in, you’re going to have all of this dispatchable resource, not dispatchable but not just energy but also capacity, how do you get the distribution companies and utilities to take this energy and take this power and participate in the market? Because you know it does give them some flexibility to but they’re not required to.

MIKE: [00:18:47] Well this is this with respect to capacity rights and ownership or the energy?

YANN: [00:18:56] The value of that.

MIKE: [00:18:57] So there’s actually some long-standing precedent on the net metering side in Massachusetts for the utilities taking ownership of the energy. So any energy that’s exported back onto the grid they take title to and then they sell that back into the market. They actually install the interval meters on these systems and they register the assets in ISO England, most solar generators don’t even know that they’re doing this behind the scenes and offsetting the costs of the net metering program through that. So I’d expect that would work the same way and SMART for the energy side of things. Capacity is a bit more of an open-ended question right now and I’d be hesitant to kind of offer a position on it because I don’t think the or air has a formal position that we’ve worked out yet. What I will say is that it’s been raised as a top issue of the proceeding by a number of people with me and there are two dockets actually at the TP right now, there’s one on net metering and capacity rights and then there’s SMART, which is going to have to deal with this as well and in the net metering rules in 2009 order, where a lot of the net metering rules were established, the DP said that the utilities have, are allowed to take title to the capacity in order to avoid offsetting it.

[00:20:12] They didn’t direct them to enroll in the markets and actually do something with it, they didn’t require them to take title and I think that’s the question that’s at hand, should that be firmed up and I think the same question will apply in SMART and the DPU has aligned those proceedings, I haven’t talked to them about this or anything but it seems as though they’ve outline those proceedings so that they’re happening coincident with one another and that they can issue sort of a unified approach to how this is all going to be settled going forward.

YANN: [00:20:41] Do you see potentially this discussion including the rights to dispatch the assets?

MIKE: [00:20:48] It could, I don’t know exactly what the utilities position will be, I think this is all going to get fleshed out in in discovery, in the discovery phase of the proceeding when intervenors are asking questions of the utilities, there’s going to be a lot of questions asked about what is your intent regarding the capacity? How do you intend to participate in these markets? How do you intend to offset the costs and it’ll be interesting to see what their perspectives are because I think that will probably inform a lot of the intervenors positions when they actually file testimony and briefs later on? That’s why I’m a little hesitant to say what DRS position is because I’m not entirely sure.

YANN: [00:21:26] But it’s an interesting sort of thesis right? If one party has the rights to the capacity, especially on energy storage integrated systems but they don’t own title of the actual asset therefore can’t dispatch, they wouldn’t be able to bid the capacity and to market without knowing.

MIKE: [00:21:47] No, it’s a tough question, it’s not I’m glad I don’t have to grapple with it at the DPU you buy we can just offer an opinion and they but yeah it’s, I think it is to me from the feedback I’ve received on the tariff as filed, this seems to be the top issue for, top concern among the solar industry this and the cost recovery mechanism and there’s a lot of other smaller issues and a lot of other people in intervenors in the proceeding who have a specific thing a specific item they want to address but as far as kind of issues that affect everybody that all intervenors I expect will comment on, I think these are two of two of them.

YANN: [00:22:30] What’s the fairest criticism the solar industries offered about the rules this far?

MIKE: [00:22:36] I suppose that there’s some complexity to them, that I think you know DEOR ours never really shied away from complexity. I do think it is a big shift from where we have been historically and but I think the industries, I think it’s less complicated than people think it may be once we kind of dig into it and that what it does really does is it creates a lot more options for business models. It levels the playing field between qualifying facilities and net metering, it creates this alternative to net metering in the event that that metering caps, it gives sort of a fixed price rec contract for behind the meter facilities, it has all these different adders. So I think it at first glance there’s just a lot getting thrown at you and it takes a little while to sort it out but people seem to be finding their niche like this is what, this is the market I want to serve, this is the types of projects I want to build, this is how the business models going to work and I think once people kind of get their arms around it will start to make sense but if definite, I definitely recognize there’s a lot of moving parts and it is a lot of new things and it definitely challenges people to kind of rethink how they’ve been doing business.

YANN: [00:23:58] So another critique of the DPU rules, which I’m sure you probably because you mentioned finance ability is that some of the draft language kind of makes it seem easy to cancel a contract or cancel might be the wrong word, how important is the bank ability of a SMART project for DOER?

MIKE: [00:24:27] I think it’s very important, I mean that’s really what we’re trying to create here is certainty and price certainty, revenue certainty to the generators and cost certainty to ratepayers you know what you’re getting for a revenue stream ratepayers, know what they’re paying over the life of the project and that’s, that hasn’t been the case with net metering and extracts, both of those are volatile, uncapped well that’s right kind of the cap with the ACP rate but they’re volatile streams and prices and costs for those programs can shift dramatically from year to year. This program is pretty, when something, when a project gets locked in you know what they’re going to get paid and just to be clear, I would say that the it isn’t a DPU rule, it’s the utilities proposed tariff but the, in that tariff I know there’s some concerns about some of the language around, their ability to cancel things. I think some of that is intended to just be sort of pro forma from their part certainly I think wording matters and the details, those details will be fleshed out but there a lot of the eligibility criteria for participating in the program itself, that all sits with DEOR and those final decisions will be made by DEOR.

[00:25:43] These are I think those are more tariff enrollment terms, there’s some specific things that you’re required to do as participating the tariff that could result in a cancellation and I think all that it’s going to have to be washed out.

YANN: [00:25:55] Do you do you worry as you add you know, you mentioned you know 1,600 megawatts AC of solar in the state, naturally as you add more solar to the grid, more infrastructure will have to be built and many times solar developers will end up having to build new infrastructure substations etc. Things that cost millions of dollars, do you worry that over time the cost of having to build up the infrastructure goes counter to the fact that the revenue streams are going down over time?

MIKE: [00:26:31] Absolutely, I mean I’ve heard a lot of, that’s another concern I think of people is interconnection costs seem to be going the opposite direction in many cases and I think storage can help mitigate some of that but and you know there’s maybe work that needs to be done on the interconnection side of things at some point as well. The, but that is definitely a concern of ours and we did build into the program review, I can’t remember how many megawatts, after a certain amount of megawatts are reserved, we will conduct a review and potentially make changes if necessary. So if things are going slow, if one market segment isn’t really picking up, if one utilities service territory is lagging behind, we can step in and modify our rules to see if we can kind of adjust that accordingly and get things back on track. So we’ll definitely be watching intricate, we watch interconnection and monitor it very closely.

YANN: [00:27:31] What kind of advice can you give other states right because you know, as a lot of people have been in the weeds here and maybe they think it’s too complex. There’s no doubt that Massachusetts continues to make forward strides in growing its solar market whereas other states are not right? I mean the and it’s not like you have this supermajority from a political standpoint you know, it’s a diverse state politically and you know what kind of, what are you, are you speaking with other states about crafting language? What kind of advice are you giving them and why do you think other states that could be doing something like this, are falling short?

MIKE: [00:28:15] It’s hard for me to kind of speak as to why they might be I mean I think one thing that we’ve done is, we’ve haven’t let perfect be the enemy the good sometimes I mean, I so our programs are complex but we also just kind of really, we put something out there and the goal is to get projects in the ground, let’s get things built and then we’ll learn from our mistakes and then adjust accordingly in the future. If you spend too much time on the front end trying to craft the perfect policy and then you put something out and it doesn’t really work, I think that there’s been some states that have seen that happen, we do talk to other states and especially a lot of our neighboring states. There’s been a lot of interest in some of the land-use stuff that we’re doing among East Coast states, that is a part of our program that you know we sit under the Secretariat of Energy and Environmental Affairs. So when projects get cited on farmland or on a wetland or near a wetland, then that impacts some of our sister agencies and there were all answering to the same secretary so he hears it from those agencies and it was a very important thing for him that the, that our Paul is, our solar incentive policies were in alignment with our environmental and agricultural policies so we spent a lot of time and effort crafting that and a lot of states have taken notice, spend time on the phone with Connecticut, Maryland, Rhode Island, who similarly smaller East Coast states with not a lot of land and but the ambitious goals trying to build solar and they’re trying to grapple with how do we match our environmentally in our energy policy?

[00:29:53] So yeah, I mean, I guess advice other states, don’t let perfect be the enemy of the good, listen the stakeholders and try to be as inclusive as as many business models as possible because Solar is complicated. Every project is different and there’s all sorts of different types of solar projects and solar companies and you got to try to find a way to be as inclusive as possible.

YANN: [00:30:18] Speaking of stakeholders and advocates you know, maybe you’re not going to give criticism but give some feedback to solar advocates on how to improve the language you know, I asked us the same question to Senator bond Cory this morning you know, how do we get, why we in this net metering fight again and you know with no foresight on when that will get resolved but give some feedback to the other side of the table that are asking you for things and how can they improve their messaging, when they’re trying to get something from you?

MIKE: [00:31:00] Well I will say that I think the solar community of Massachusetts has done a great job over the last few years of getting a more cohesive message and being more on the same page. A few years back, I think a lot of fractures kind of emerged where you had different sectors of the industry sort of arguing against one another, there was a bill back in 2014.

YANN: [00:31:28] Or 41, 85 yeah.

MIKE: [00:31:29] And there was a lot of internal debates and it was, I think surprising to the administration at the time in the legislature to watch the solar industry have infighting amongst each other and I think there’s been a lot of good work done since then but it’s still not perfect, I mean you have a lot of different voices to the extent that people can speak with one voice, I think that’s very helpful. I know that’s not always know is easy to do and actually in the DPU proceedings SIA has intervened on behalf of a number of associations so there’s not different associations participating in that proceeding, there’s only one voice and I think that will be helpful for the industry to not have conflicting messages being sent to the DPU about what solar is looking for out of that. I know that could be very difficult though, I think that’s probably the biggest thing I would I would say and because I know legislators have said this to me too that, it seems like they don’t get the same message from solar stakeholders, like one group wants one thing one, wants another thing they’re all saying they want net metering cap increases but they all say something different,  they say it in a different way or say something different and it’s just, they don’t live and breathe this every day.

[00:32:47] So they spend a lot less time thinking about this than I do or the people at DOER do and so when they hear conflicting things, I think it just confuses them and they say well, we’re not going to deal with that so do the extent you can unify that message that’s really helpful.

YANN: [00:33:06] How important is it to your success that the net metering caps are increased?

MIKE: [00:33:12] Well I think that we have tried in the SMART program to ensure that net metering caps being increased are not a barrier to the success of the program. That’s why we’ve created the alternative on bill credit, that’s why we’ve allowed for a mechanism that would level the playing field a bit between net metering facilities and qualifying facilities because in today’s environment, it being qualifying facility doesn’t make a lot of sense Massachusetts. If you have SRECs in the QF rate, you’re just making a lot less money than someone who has SRECs net metering but Nitor SMART it’s not as much of a difference between those two and I think we’ve tried to ensure that continued increase of net metering caps is not critical to the program success because that was a major barrier for SRECs net metering caps weren’t raised, then S trucks weren’t going to get built whereas traditionally wouldn’t get built and all right so I don’t think it is as critical to the success of the SMART program as it was to the success of the asteroid program but certainly we remain engaged in that.

YANN: [00:34:23] Discussion, do you have a handicap of your expectation for the net metering cap increase?

MIKE: [00:34:30] That’s on well we’re just between friends.

YANN: [00:34:32] Yeah. So with that I want to thank Mike for joining us today.

MA DOER Releases 100MW RFP, Starting SMART, But Results Could Be Changed

  • MA DOER has released the initial block procurement with a 100MW RFP ahead of the resolution of the 201 petition case which could increase the cost of solar modules significantly
  • The MA distribution companies, that make up the SMART program, have selected CLEAResult as the administrator and the initial bidder conference will occur on November 17th, 2017
  • DOER has issued the final regulations and submitted them to the DPU to enact the tariff rules. DOER has requested the tariff to be created by June 1st, 2018 but the process is ongoing
  • The regulations from DOER and the RFP are meant to be final, however if the 201 case severely impacts the results of the program, DOER reserves the ability to make changes
  • Developers are looking at their own situation for bidding strategy. Some bidders are considering submitting projects meant for SREC II as NEM cap increases seem unlikely and other bidders have modules reserved without 201 impact

On the 14th of November, DOER released the RFP for the initial block of the much anticipated SMART program. The timing of the release was cause of many questions considering the shadows of the 201 petition which could affect the price of solar in Massachusetts. SolarWakeup covered many of these questions with Mike Judge, Director of Renewable Energy at DOER, during last month’s SolarWakeup Live! in Boston.

The initial 100MW RFP is managed by the newly selected administrator, CLEAResult, and will set the clearing price for the initial set of solar projects. All blocks after the RFP will be benchmarked against this RFP making the pricing important for the entire program.

As the 201 case is not fully resolved, bidders will have to predict its outcome or ignore it completely. Some developers commented to SolarWakeup that modules have already been procured which are not impacted by the outcome of the trade case. In the scenario that the case increases the cost of solar panels, future blocks of the program could result in underpriced tariffs for the solar generation as capital costs of installation increase.

Mike Judge commented about this scenario to SolarWakeup, “We [DOER] do have the ability to make changes to the program if necessary. So if something really drastic happened, it’s our reg, we can open that reg,” Mike continued, “we don’t open regulations without careful consideration but we can take appropriate action if necessary.”

DOER is hopeful that bidders understand the various outcomes of the 201 case and looks at changes to the regulations as an option of last resort. This doesn’t minimize the impact to the RFP results. Bidders with SREC II projects, some operating, could decide to bid those projects into SMART prior to electing SREC II compliance if they view the NEM cap increase as unlikely.

Make sure to check out SolarWakeup Live! in D.C. on 12/6 and NYC late January.

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You can hear the full podcast here with transcript

E024: Live From DC, Tom Matzzie, CEO of CleanChoice. Talk Power Markets, Community Solar And Policy

Live from MDV-SEIA’s Solar Focus Conference in Washington DC, I speak with Tom Matzzie, CEO of CleanChoice Energy. CleanChoice is a retail energy retailer that sells clean energy to homeowners and businesses across 9 states.

As a market participant, CleanChoice can create the products that can revolutionize solar development across markets, even outside of community solar regulations. CleanChoice is the largest developer of community solar in Maryland and working on a project in Brooklyn.

Tom is a politics veteran that once live tweeted a retired CIA director’s conversation with a reporter while on a train. This is a great conversation for anyone that works in solar because you need to know more about power markets than you do now.

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Make sure to check out SolarWakeup Live! in D.C. on 12/6 and NYC late January.

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E023: Impact of DOE’s NOPR and Next Steps At FERC with Former Chairman Jon Wellinghoff

In this episode I speak with Jon Wellinghoff, former FERC Chairman and Principal at Policy/DER consulting. We discuss the DOE NOPR and the FERC docket that is now open to review the proposal to subsidize coal and nuclear plants. Full transcript available below.

Make sure to rate and review the podcast!

Make sure to check out SolarWakeup Live! in D.C. on 12/6 and NYC late January.

If you enjoyed this episode as much as I did, make sure to subscribe on your favorite podcast platform including iTunes, SoundCloud and Stitcher radio. Please subscribe and share with your friends how much EnergyWakeup is helping you.


YANN BRANDT: [00:00:01] Today I’d like to welcome Jon Wellinghoff to the show. Jon is the principal at policy DER consulting. He spent a year as a chief policy officer SolarCity but most importantly for this conversation was, he was a commissioner at FERC from 2006-2013 and the chairman for the last four years of his tenure. Welcome to the show Jon.

JON WELLINGHOFF: [00:00:24] Thank you all. It’s great pleasure to be here.

YANN BRANDT: [00.00.27] Absolutely so we wanted to have you on because on September 28th; energy secretary Perry proposed a rule for final action to the Federal Energy Regulatory Commission, FERC, as we will refer to it. Under the proposal and I quote “FERC will impose rules on the Commission– will impose rules to the approved ISOs and RTOS to ensure that certain reliability and resilience attributed of electric generation resources are fully valued”. Can you translate this for us?

JON WELLINGHOFF: [00.01.00] Well it’s actually a mischaracterization and misinterpretation by the secretary of energy. I mean first of all he issued it in a letter as a directive to FERC. He directed FERC to issue the rule based upon the language that he submitted to them in his proposed notice of rulemaking NOPR and the thing that I guess the secretary forgot to read in the federal Power Act– you know he was acting under. I’m going to forget the sections here. I think it was 403 at the federal Power Act Subsection B if you read subsection C, he finds that the jurisdiction for the determination of whether or not this rule goes forward– what happens to this rule and whether it’s appropriate is entirely within the purview of FERC. So, what that means is he issued in essence an extra– what I would call an extra Vilas order. An extra Vilas order means that in essence he issued something that he had no authority to issue and direct it to FERC. The Secretary of Energy has no statutory authority whatsoever to issue a directive to the Federal Energy Regulatory Commission. Federal Energy Regulatory Commission is an independent body, independent regulatory body with five commissioners who are all nominated by the President and confirmed by the Senate and so as such; now the only authority that Secretary of Energy has is this extremely limited authority to propose a rule to FERC which he did do but again in language it seemed as if he was directing them to do something which he did not do which he does not have that authority. That is sort of procedural structure of it so once it goes over to FERC as a proposal then it’s like any other proposal. That’s like I could submit a proposal to FERC, you could submit proposal to FERC, anybody could and once FERC assumes jurisdiction by opening the docket, opening those proposed rulemaking which they did do; they did utilize the Secretary’s language in that proposed rulemaking as the proposal that comments would be made up to. But once that is done FERC has the complete authority to reject it, to modify it, to amplify it, to do anything that they deem to be appropriate in the context of their rulemaking authority and their rulemaking authority of course is not unlimited. It’s not without boundaries. FERC administrative a procedure act and in doing so they have to ensure that the rules that they promulgate are based upon substantial evidence of record. So, they have to take up evidence into the record which they’re doing now based upon comments that are being submitted. I submitted comments along with the seven other former commissioners including I think three or four other former chairs of FERC asking the rule be rejected, the proposed rule be rejected basically but again FERC will take these comments in and then they’ll make a decision as to what to do. So that’s the whole procedural aspect but now the substantive part of it if we want to talk about the substance of what secretary Perry was proposing substantively, that gets a little bit more difficult because on its face what the (05.03)  the secretary Perry said over says is that anything that has a 90-day fuel source and organized wholesale market and they were looking at nearly the ISOs and RTOs is not outside of those areas and there’s only six of them that are under Burke’s jurisdiction and there are large parts of the country that does not have an organized source of marketing including most of the western United States and most of the southeastern part—

YANN BRANDT: [00.05.34] We’re talking about mostly like ERCOT (05.36) and the Midwest ISO and PJM those examples—

JON WELLINGHOFF: [00.05.42] ERCOT is not under full jurisdiction so this rule couldn’t apply to ERCOT. You would hear we have no applicability to ERCOT whatsoever because ERCOT is not part of FERC’s jurisdictional Authority. They are not interconnected into the rest of United States and as such their transmission grid is not considered to be in interstate commerce and therefore they’re not in their jurisdiction. So, we’re only talking about PJM, (06.07), New England, New York, SPP in California; I think I got them all. Those are the only areas that this rule could potentially apply to if it was promulgated by FERC, if it was enacted so you have to have a 90-day supply and show the ninety days supply. Well, so number one I don’t even know what that means. I mean first of all I’m sure there are multiple gas plants and natural gas plants in this country that could show that they have 90-day contracts and a contract for supply for over 90 days and I can tell you I don’t have little weight in front of me; so, I’m not sure if there’s any qualifying language about fuel has to be on site or something not sure if that’s a requirement. But someone could argue that there may be instances where a gas plant has 90 days for the fuel or certainly could the extent that this rule was particularly economically advantageous. I’m sure there’re a lot of gas plants to build on site and they did fuel on site so that would negate whatever the whole intent of the rule is really.

YANN BRANDT: [00.07.27] One of the interesting things and we’ll get into what the intent of this (07.36) or this request order from the secretary actually means; the comments came back and as far as I could— I mean layman’s point of view a lot of negative responses including the letter that you wrote with your FERC former commissioners. This is what the Department of Energy’s press secretary said about the comments that came back and it was said, “As intended, the proposal has jump-started a long overdue conversation about grid resiliency.” How would you respond to the comments that you’ve seen and kind of characterize those and what makes up a resilient grid? I mean what—there is this new word that we’ve been studying and you know what is the resilient grid?

JON WELLINGHOFF: [00.08.34] First of all I don’t think the comments did jumpstart any conversation about clearly resiliency. I think they jump-started a conversation about whether or not it makes any sense to subsidize nuclear power plants in this country because that’s really what the entire intended rule seemed to be. It was to provide rate based constant service treatment that is out of market, subsidy payments to plants that are no longer competitive in the markets so you’re going to prop up plants that can’t make in the markets and you’re going to give them billions of dollars. I think the last estimate I saw was 10 billion dollars annually—you’re going to give these plants 10 billion dollars annually out of our pockets, out of consumers’ pockets so these plants can continue to run where there are a more cost competitive, more cost-effective ways to produce power in this country. So, it had nothing to do with resilience. You only want to talk about resilience; resilience really is all about how you deliver that last mile of power. There’s nothing to do with the Central Station power plant that may be located 50, 100, 200 miles away. That’s to do with whether or not you’re going to have a tree touch the last mile or two miles away because we have a windstorm in Santa Rosa, we have a hurricane in Puerto Rico and all the plants in Puerto Rico that were the Central Station plants there are still operable but you can’t get the power to anybody because the resilience was not there in the system in the sense that the distribution systems were too brittle to maintain the ability to deliver and distribute power to residents and businesses in the last mile. So, you have to start looking now at how you make that system more resilient and the most effective way to make them system resilient in my opinion is to start looking at micro grids, start looking at island beam systems in regional grid areas where you can pull apart systems more quickly that have substantial outage problems because of either chronological event, high-impact weather events or other events that may impact the ability of the grid at a local level to deliver power to customers.

YANN BRANDT: [00.11.01] Right, so I hear where you’re going with this and having– I mean I lost power for a week from hurricane (11.09) and it had nothing to do with generation but everything to do with my tree falling down—

JON WELLINGHOFF: [00:11:15] [chuckles] Exactly.

YANN BRANDT: [00:11:16] And a pole snapping a half but– so if the secretary were to call you and said, “Jon, what’s the biggest threat to grid resiliency? Is it not enough base load? Is it too much solar? Is it stronger weather or really has it come down to the fact that we have a bunch of wood poles across this country that are susceptible to breaking, falling etcetera and then you can’t get the power that you’re generating to the consumer.”

JON WELLINGHOFF: [00:11:46] Yeah, it’s the latter. If you do analyses of the reasons for grid outages 99%– now the outages in this country are at the distribution level and I’m not suggesting that we bulk up the distribution system so that we have steel poles, where we underground the whole thing. I mean I think there’s much cheaper ways to do it and those cheaper ways to do it are in essence provide for Island beam and separating of systems from each other and allowing for, within those islands, self-sufficiency in aggregated distributed energy resources; rooftop solar, demand response, battery storage, improved levels efficiency and control systems that can sense these outages and in sensing them virtually instantaneously separate from that area that has been out, been put out by the weather (12.48) maybe and ensure that other parts that are not affected can stay up. I mean ultimately that’s what we need to do. The military is going to figure this out. The military is not stupid. They are doing whatever they can to build micro grids with every– on continent military facility in the US and certainly foreign facilities as well to ensure that they have micro grid sustainable systems. They don’t have to rely on an out-power source from some utility company that relies on wooden poles put up 40 years ago that may or may not be maintained that could be subject to all kinds of damage and destruction based upon the kinds of weather events that were saying now; the fires the Hurricanes and the other things that we’re all experiencing throughout this country.

YANN BRANDT: [00:13:49] Would you say that the word resiliency is being overused given the fact that the US generally speaking has, as you and I would describe it, probably the most resilient grid in the world?

JON WELLINGHOFF: [00:14:08] Well, not entirely true. From an outing standpoint, the outages in Europe are much, much less than the outages in the US so in my opinion almost the order of mileages so—

YANN BRANDT: [00:14:21] But would you describe that as a– I mean yeah, I lost power for a week because of a hurricane but I hadn’t lost power in ten years for more than 30 minutes and maybe someone like me in Europe would have lost power for five minutes. We are not talking about a—

JON WELLINGHOFF: [00:14:41] Yeah now that’s true. It’s not long-duration outages. It’s a minute here, two minutes here, five minutes their kind of saying over a year period and how do we stack up against Europe? Europe does much better than we do but overall if you’re looking in the larger context of things like the level of outages of power that they have in developing countries, in Sub-Saharan African countries, in Southeast Asia etcetera you certainly have a much, much stable resilient reliable grid in this country and in Europe than you do anywhere else in the world. There’s no question about that.

YANN BRANDT: [00:15:32] So I mean at the end of the day I want to talk about this letter you wrote because you wrote– you and seven others wrote an 11-page memo so these are former FERC commissioners and many of you were chairs. I want to read a couple of things from the letter. You write, “One critical aspect of competitive wholesale markets is that the risk of generation investments has been shifted from captive customers to market participants who could better manage the risk and some who have not been successful doing so.” The some who have not been successful doing so, is that who this proposed rule is really for that they’re “Seeking some sort of market subsidy bail out”?

JON WELLINGHOFF: [00:16:22] That is what market is all about. That you’re supposed– everybody talks about we’re not supposed to pick winners and losers; that’s right. We’re not supposed to. The markets are supposed to do that. Ultimately what the markets are about; the markets are supposed to determine who can compete and who can’t compete and in our capitalist system which we utilize markets to drive down prices and drive in innovation. We should be embracing that rather than rejecting it. It seems to me that this Republican administration is rejecting markets and rejecting the ability of those markets to successfully choose those technologies and those companies who can be the most efficient, the most effective and delivering services to the end-user.

YANN BRANDT: [00:17:15] But we’ve also seen this– I mean you also write in a letter about the power plant industrial fuel use act of ‘78 which then under Reagan was repealed that talks about being fuel agnostic and refraining from favoring one fuel over another but haven’t we also seen in New York, in Illinois with the use of nuclear or Xerox the bailout of nuclear power plants. Why do you think states and now the administration– what do you think they’re afraid of If these power plants were to actually close because they just don’t make economic sense?

JON WELLINGHOFF: [00:17:51] Well that’s a good question because if the ultimate fear is the lights are going to go out because the plant closed, that’s never happened yet. We’ve never seen a situation where because of markets working correctly above market participant that could not effectively compete and therefore had to close their facility resulting in the lights going out and there is market fix for that problem. If in fact a plant that is going to shut down is essential for reliability, FERC has in the past and on a regular basis authorized the independent system operators in these markets to put in place what we call reliability (18.44) RMR units that are recognized for short term reliability purposes; they need to continue to stay in the market and they’re allowed to but that’s for identified reliability problem. There’s no blanket problem at any one of these or ISOs and RTOs with respect to reliability or resilience. It’s never been identified and there’s no evidence of any blanket problem that would justify doing this for the massive amounts of coal and nuclear power plants that would be covered under the (19.26) as proposed by secretary Perry. So again, even if– the worst-case scenario i.e. a plant going out of business would result in some of these lights going off were about to happen. There’s a mechanism to take care of that and that mechanism has worked for many, many years so we don’t need a rule. We don’t need any changes in the rules to ensure that we can maintain reliability in the system. There is a method to do that (19.58) got it covered, the markets have got it covered; we don’t need to change the rules to worry about that.

YANN BRANDT: [00:20:06] Just a few years ago Rick Perry was the governor of Texas and just last week Texas utility that’s I believe now owned by Vistra called Luminant announced that they were going to close. In the next few months we’re going to close two coal plants one in Houston and one between Dallas and Houston. Assuming if Rick Perry was governor of Texas and (20.39) comes to CNN and says, “Listen, you know I got to shut these things down because the markets tell– I’m just not getting my return on this and I’m better off closing these plants.” From a political standpoint, what kind of reaction would Governor Rick Perry have to that compared to what he’s having as a reaction as a secretary of energy today?

JON WELLINGHOFF: [00:21:04] His reaction should be that, “(21.08) if you have to close your plants I’m sorry but if in fact those plants can’t produce energy at market rates and can’t provide services to Texans within the market then that’s what the markets for me.” He should be supportive of the market that was the whole point of the 8-page letter that we sent to FERC was that FERC has a long-standing tradition; 25 plus years of developing and supporting markets in this country we shouldn’t start turning our backs on that now. So, Secretary Perry as governor in Texas should be extremely supportive of those markets as market to work very effectively (21.53) Texas as one of the robust, most robust wholesale and retail electric markets in the entire United States. They went to a restructured retail market back in the early 2000s or maybe it might even be in 1999 and that’s been very successful. We’re now in Texas. You can choose among 25 retail providers in most areas except for (22.20) like Houston and in San Antonio and in addition they’ve been extremely successful in driving innovation into their wholesale market by encouraging wind energy to site in that market because in fact Texas was a lot of the four states that had a renewed portfolio standard and as such had very high levels of wind energy. And then as those higher levels of wind energy came into the market, the ERCOT team at the operator level has been extremely competent in integrating that wind in a very smart way. They’ve done that by becoming much more sophisticated as Dallas. We will cast those very low resources forecasted in a timely fashion and ensuring that there are adequate resources to support the entire market at times when that wind energy may not be available now or seen in Texas because of prices again coming down on the overall prices of solar energy; as you’re seeing people starting to come in and build solar plants. In fact, we’ve even seen people build merchants solar plants in Texas for the first time

YANN BRANDT: [00:23:46] And that’s happening because they’re able to go to market traders and get enough of a hedge price by them that is able to pay for the construction and some of the financing for the solar plant. Is that not correct?

JON WELLINGHOFF: [00:24:04] That’s correct—

YANN BRANDT: [00:24:07] The market’s working incentivizing really the lowest cost solution available in the marketplace—

JON WELLINGHOFF: [00:24:15] Yes and I wouldn’t use the word incentivizing. I’d say compensating. They’re compensating the lowest cost provider toward the value that those providers are providing to the market for the market products that you’re able to provide. It’s adequately compensating them and enabling them to be able to develop those resources in those fully competitive markets that are working extremely well in Texas.

YANN BRANDT: [00:24:43] We’re seeing a two different Rick Perry’s these days so if– you mentioned that this would have astronomical cost to consumers because it’s shifting really bad business decisions on to consumers. Define how bad this would be for customers in picking sub-economic power plants as market winners.

JON WELLINGHOFF: [00:25:17] Well, again we know the preliminary estimates are at least ten billion dollars a year in higher market costs in those markets where these plants would be supported. What we don’t know when you talk about really bad as we don’t know what the unintended consequences would be of setting up the room with this 90-day provision and as I said, there may be at a market gas plant so all of a sudden you decide well it makes sense for me to build this diesel tank along the side my gas plant. I may never use it. The diesel may just sit there and it may never be of any real use whatsoever but what it does allows me to get all these above market rates for this clamp is really now is that connect inoperable to run in the market so I’m going to throw that one into the mix as well; and so, you don’t know how much additional flak and (26.17) could come into this whole system based upon this distortion that Perry’s trying to impose upon us and we don’t know the full consequences of that. The cost, the consumers could be much, much higher than this initial estimate that these 10 billion dollars a year.

YANN BRANDT: [00:26:36] I can think of a few ways that that money is better spent in terms of creating a more—

JON WELLINGHOFF: [00:26:44] But we all have to remember; we’ve talked about Rick Perry in Texas, you all have to remember Enron thought they were the smartest guy in the room and so if somebody develops a market distortion and embraces that market distortion, there’s going to be a whole group of other people who going to figure out how to take advantage of that market distortion. They’re going to be people. We’re going to figure out how to milk that for every single dollar the best work.

YANN BRANDT: [00:27:14] Yeah, I can imagine. I want to talk to you because just about as much as anyone about grids. Americans in Puerto Rico are without power I mean just a vast majority of them; we’re talking about a tropical climate, no air-conditioning, no– many of them without access to clean water which is tied to not having access to energy. It’s an islanded grid and a lot of sort of regulatory issues around PREPA but potentially the largest rebuilding in terms of capacity of a power market that at least in the last 30, 40 years in a developed nation. What the path forward for Puerto Rico today and how do we help them?

JON WELLINGHOFF: [00:28:08] Well certainly we have to get power up and delivered as quickly as possible and in part that is going to require sort of rebuilding the archaic systems they have there now in somewhat of a parallel manner; certainly, it is now built but hopefully we can do that in some mechanism it’s somewhat temporary so that also in parallel we go alongside of that and start putting in the grid 3.0 that they really should have because they have an opportunity to rebuild it overall again. I’m not sure that we’re going to get there. I see that there’s conflicting activities that the solar energy association is very involved doing things there; there’s Tesla’s, there’s (29.04), there’s Sunrun, there so a lot of renewable. FERC are trying to do everything they can to help with the sort of modernization process and put in place more robust and more innovative and advanced systems but at the same time I’m not sure those systems can be put in place quick enough to defer or alleviate the need to build up the old system sort of in a similar manner to its previous infrastructure being Central Station plants with though I understand one on the south side of the island, most of the population’s on the north side of the island with these transmission lines in between and all the distribution lines as well.  If there’s some way we can circumvent then do an extensive parallel process, it would be ideal but I don’t see a path forward. I’m doing that right now and hopefully we can give as much support and as much financial assistance to those entities who are trying to do the sort of a grid 3.0 part of it right now but you kind of do that like one facility at a time and it’s really slow going. I think Tesla just completed a hospital. If they get down there I saw—

YANN BRANDT: [00:30:44] We’ve seen hospitals and we’ve seen fire stations. I agree with you there’s– we’re juggling grid 3.0 with people that just want to be able to turn their air conditioning on the grid looks like and—

JON WELLINGHOFF: [00:31:04] Exactly, they just want it done today whatever it is. They don’t care what it looks like. Whether it’s the old system or the new system; they don’t care and waiting for that newest best latest thing to be put in place is not an option, is not a realistic option. So we hopefully can put in enough of the new stuff to show people what the potential and possibilities are because up to this point I’m for whatever reason I also was the management of prep up. If it was some other issues related to prep-up of the utility, Municipal utility that oversees Puerto Rico or was some other factor but less than 2% of I understand of the island was powered by renewable energy which just seems ridiculous to me given its location and level of resources available to natural resources, renewable resources that would be available to it. So we need to somehow unleash from these people the potential and possibilities of a distributed, more advanced cleaner, locally sourced grid system that can provide them with a sustainable future but now it seems like there’s no question sort of both systems. We’re going to be moving forward.

YANN BRANDT: [00:32:32] Jon there are two seats open at the FERC, you going back?

JON WELLINGHOFF: [00:32:38] Actually that’s not true. Those seats have been taken [laughter].

YANN BRANDT: [00:32:43] Have never been confirmed?

JON WELLINGHOFF: [00:32:45] They have. Well, I’m not sure the Senate is actually voted on their confirmations yet but the Senate Energy Committee has voted them out of committee. I know that I’m sure. I don’t know—

YANN BRANDT: [00:33:01] They’re not on the website in my defense.

JON WELLINGHOFF: [00:33:03] Yeah McIntyre and I can’t remember the other gentleman’s name but McIntyre’s from Jones Day he’s sort of the new chairman designee although he doesn’t become chairman until the president says he is. Right now, Neil Chatterjee is a chairman of FERC. I had a great opportunity to meet with Neil on the west coast here a couple of weeks ago in fact we gave him a tour of the Tesla factory and also gave him a full briefing on all that Tesla had done with battery storage in Australia and in Hawaii and some of the other places where we’ve done large-scale protests and done large-scale battery work. He seemed to be very interested and engaged and that was very encouraging but no; I haven’t seen the other two get confirmed yet I don’t think.

YANN BRANDT: [00:34:01] We’re going to hold out hope. When you were on the Commission so speaking in terms of next steps on this proposed rule in this FERC docket, how political is the process? Is there a lot of political influence that’s coming your way as a commissioner or are you left alone to do what’s best and then figure out the intent of regulations?

JON WELLINGHOFF: [00:34:23] When I was there at zero, there was no political influence—

YANN BRANDT: [00:34:28] I mean you were originally appointed by the Bush White House, correct?

JON WELLINGHOFF: [00:34:32] I was nominated by George W Bush twice and so I served two terms and for both of those terms I was nominated by Bush and confirmed by the Senate but I was designated by President Obama as chairman. The president designates the chairman among the exceeding commissioners and that’s not a position that needs to be confirmed. You are not confirmed as chairman, you’re only confirmed as a commissioner and I went as a commissioner then the president sites who of the commissioners gets to be the chair of the Commission. So, I served under both administrations; both the Bush administration and the Obama administration. I never got called by the White House about anything ever. I went over to the White House to talk to them about things on occasion that relate more to federal agencies helping us out with sighting of transmission lines and the natural gas lines that kind of thing but we never ever had any political influence whatsoever and it was bipartisan Commission. I served initially with three Republicans and two Democrats and then Obama came in that flipped over to three Democrats and two Republicans. That whole time with the bipartisan Commission, there was no partisanship within the Commission either within the Commission itself. There was none which is good although the existing FERC I have some concerns about, not about the commissioner. I think the commissioners are all good and decent people ones that I know and have had interactions with but it’s my understanding that the Trump administration actually designated and chose for the chairman of FERC the person who’s going to be the chief of staff at FERC and the person who is going to be the general counsel at FERC. That’s never ever happened. I don’t know why there is wider reporting on that but that has never happened in my knowledge of the last 25,30 years at FERC. The chairman at FERC always, always got to choose their chief of staff and their general counsel.

YANN BRANDT: [00:37:07] That’s definitely concerning. Let’s leave it at that and we’ll see how these progresses. We would love to have you on again; always interested in having conversations about energy markets. Maybe next time we’ll talk about the role of utility monopolies and how that looks into the future. Jon, we appreciate you coming on and sharing your experiences and your expertise with us today.

JON WELLINGHOFF: [00:37:32] My pleasure; you’re on anytime. Thank you very much.