I co-authored this post with my colleague Allison Clements.
President Obama got it right today when he nominated former Colorado utility commissioner Ron Binz to fill a vacant seat on the Federal Energy Regulatory Commission (FERC) - the nation’s top agency responsible for regulating the electric grid. If confirmed by the Senate, Binz also will become the new FERC chairman, taking over from the departing Jon Wellinghoff. (Check out our recent piece on Wellinghoff’s legacy at FERC.)
Binz is an excellent choice to head FERC. He has a strong pro-consumer and clean energy background, and he knows that a resilient and reliable electric grid includes a healthy mix of cleaner energy and robust opportunities for energy efficiency and other customer-side solutions.
The Job Ahead at FERC
Binz joins a FERC with a host of ongoing and planned grid reforms on its plate, several of which are helping to remove barriers and leveling the playing field for clean energy deployment. A top priority should be making sure that grid planners effectively implement FERC’s recent reforms.
For example, FERC’s Order 1000, issued in 2011, hardwires the commonsense requirement for grid planners to consider energy and environmental laws in their grid improvement plans. After all, state clean energy standards are pretty hard to achieve if wind and other clean resources can’t connect to the power grid.
Another critical FERC rule (Order 890) requires utilities and other grid planners to evaluate energy efficiency, demand response (where customers are paid to reduce their electricity demand during really hot summer days), and other “non-transmission alternative” solutions on a level playing field with more traditional transmission solutions. Despite Order 890, utilities often continue to discriminate against these often-cleaner and less expensive solutions. Strong FERC oversight of Order 890 is necessary to assure that consumers and the environment realize its benefits.
In terms of future reforms, one of our top priorities is creating the right long-term markets to maximize the grid value of cleaner, more flexible, and less expensive resources. So-called “capacity” and related electricity markets can come in a variety of flavors. None are cheap, and most have profound consequences for the development of renewable energy, energy storage, distributed solar generation, energy efficiency, and other clean resources. FERC is starting to make progress on this issue and we hope that Binz keeps FERC on track to tackle market reforms head on.
A Fighter for Colorado
Binz knows that affordability and clean energy go hand-in-hand. For more than a decade, from 1984 to 1995, Binz ran the Colorado Office of Consumer Counsel, the state’s utility consumer advocate. He represented residents and small businesses in state electricity rate cases. Later, he served as president of the Competition Policy Institute, where he fought for consumer-friendly competition in the telecommunications and energy markets.
Soon after Bill Ritter was elected Colorado’s governor in late 2006, he appointed Binz to be chair of the Colorado Public Utilities Commission, where he served until 2011. Binz chalked up several clean energy wins during his time with the state commission. For example, under his direction, the commission spearheaded implementation of the state’s energy efficiency resource standard. He also oversaw the crafting of many other rules needed to implement parts of Colorado’s “New Energy Economy,” such as requiring utilities to invest in more wind and other clean power. In short, Binz has made a significant contribution to clean energy and the job growth that come with it.
Since leaving the Colorado Commission in 2011, he’s established a public policy consulting practice focused on creating better utility and electric grid solutions that save consumers money and create a cleaner, more diverse, and more secure national energy supply. (Here’s his current website, including details on his and fellow former Colorado Commissioner Ron Lehr’s “Utilities 2020 Initiative”).
Binz is an innovative leader who works well with diverse interests, and he will be an excellent fit for the demanding job that lies ahead at FERC. Commissioner: congratulations on your appointment, we hope the Senate confirms you with strong bipartisan support, and we look forward to working with you to establish a cleaner and more sustainable energy future for our country!