Jon Wellinghoff

Jon Wellinghoff
Acting Chairman of the Federal Energy Regulatory Commission
In office
January 20, 2009 – March 19, 2009
President Barack H. Obama II
Preceded by Joseph Kelliher
Succeeded by Cheryl A. LaFleur
Chairman of the Federal Energy Regulatory Commission
In office
March 19, 2009 – November 25, 2013
President Barack H. Obama II
Personal details
Born (1949-05-30) May 30, 1949
Santa Monica, California, U.S.
Nationality American
Spouse(s) Karen Galatz
Relations 4 children, 3 grandchildren
Alma mater University of Nevada, Reno
Howard University
Antioch School of Law

Jon Wellinghoff (born May 30, 1949) is an American attorney who served as the chairman of the Federal Energy Regulatory Commission (FERC) from 2009 to 2013. The FERC is a U.S. government agency that regulates the interstate transmission of electricity, natural gas, and oil. The FERC also reviews proposals to build liquefied natural gas (LNG) terminals and interstate natural gas pipelines and licenses hydropower projects.

Wellinghoff's work in energy-related fields has included renewable integration, plug-in electric vehicles, and the modernization of the American electric grid. In November 2013, Wellinghoff stepped down from his post as the 13th FERC chairman.[1]

Early life and education

Wellinghoff was born in Santa Monica, California on May 30, 1949, and moved to Reno, Nevada, at the age of four. He attended the University of Nevada-Reno, earning a B.S. in mathematics in 1971. The following year he earned a Master's degree in teaching mathematics from Howard University and stayed in Washington, D.C., to attend Antioch School of Law where he earned his J.D. in 1975.

Wellinghoff returned to Nevada where he would specialize in energy law for more than 30 years. In private practice, he focused exclusively on cases pertaining to renewable energy and energy efficiency, causes he continued to promote as FERC Chairman. He was the primary author of Nevada’s Renewable Portfolio Standard (RPS), one of two state RPS programs to receive an “A” rating from the Union of Concerned Scientists.

Wellinghoff has also held a variety of positions in the public sector, providing legal counsel on energy issues to, among others, the U.S. Senate Commerce Committee, the Federal Trade Commission and the Nevada Public Utility Commission.

Consumer protection was another hallmark of Wellinghoff’s career prior to joining FERC. In his hometown of Reno, he held the position of Deputy District Attorney in the Washoe County District Attorney’s Consumer Fraud division. His work on behalf of consumers helped make him Nevada’s first Consumer Advocate for customers of public utilities. In that role, he argued for the public in cases before FERC, the Nevada Supreme Court and what is now the Nevada Public Utility Commission.

Career

FERC commissioner

In 2006, Wellinghoff was appointed by the President and confirmed by the Senate as one of the five commissioners at the FERC.

As commissioner, Wellinghoff was influential in moving FERC towards prioritizing the removal of barriers to integration of renewable energy into the electric grid. He has been an advocate of “demand response” and “smart grid” technologies that will facilitate coordination and communication between electricity consumers and providers, allowing consumers to have greater control over their energy usage and the associated costs.

Wellinghoff was an early proponent of improving energy infrastructure to accommodate future demands from automobiles powered primarily by electricity. He coined the phrase “Cashback Car” in a contribution to the Brookings Institution publication, “Plug-In Electric Vehicles: What Role for Washington?” In it, he envisioned a future where drivers not only save money by switching from gasoline but are paid by utilities for use of their batteries to provide and store electricity. Wellinghoff explained that while the necessary technology already exists, improvements to infrastructure will be needed to make the “Cashback Car” a reality.

In 2008, the Alliance to Save Energy honored Wellinghoff with its prestigious Charles Percy Award for Public Service. The non-profit group bestowed the award “in recognition of [his] decades of outstanding public service and his expertise and leadership on energy efficiency as the nation confronts the dual challenge of electricity supply security climate change.”

During his time as commissioner, Wellinghoff also received the EnerNoc Thought Leadership Award at a summit on energy efficiency and the Award for Leadership in Demand Response from the U.S. Demand Response Coordinating Committee.

FERC chairman

On March 19, 2009, President Barack Obama named Wellinghoff as FERC Chairman. Wellinghoff quickly established three top priorities for his term: the integration of renewable energy sources, including wind, solar geothermal and hydrokinetic energy, into the electric grid; the implementation of advanced technologies aimed at making the use and distribution of energy more efficient; and the promotion of demand-side energy practices, including real-time electricity pricing and the use of electric cars. All three of these priorities will emphasize improvements to the overall efficiency of the nation’s energy infrastructure.

Wellinghoff has vowed to pursue his priorities through the implementation of regulatory practices that ensure a fair and competitive energy market, pointing out that it is through competitive energy markets that consumers will reap the full benefits of new technology.

To promote policies that will increase renewable energy and improve energy efficiency, Wellinghoff created a new office within the Commission: the Office of Energy Policy and Innovation. The office is tasked with providing leadership in the development and formulation of policies and regulations to address emerging issues affecting wholesale and interstate energy markets.

The potential of renewable energy resources to expand our energy supply while decreasing adverse environmental impact has been an interest of Wellinghoff throughout his career. Obstacles remain, however, to the full utilization of wind, solar, geothermal, and hydrokinetic energy. While these resources provide a growing share of America’s energy, they remain hampered by their often remote proximity to major population centers and other impediments. Wellinghoff has made the integration of these resources into the energy market a key aspect of his agenda.

Renewable integration will also be facilitated by another of the Wellinghoff’s priorities, the development and implementation of advanced broadband and digital technologies collectively referred to as “smart grid.” This push to modernize the nation’s energy infrastructure will allow consumers and providers to make more informed decisions about how they use electricity. Problems stemming from the variable nature of some renewable energy technologies would be reduced if grid operators could easily rely on alternatives when encountering high demand or unfavorable natural conditions.

On July 16, 2009, the Commission released a Smart Grid Policy Statement setting priorities for the adoption of new standards and practices that will best enable FERC to facilitate the widespread and expedited use of smart grid technology.

A major component of an effective smart grid will be improved demand response capabilities, the third of Wellinghoff’s top priorities. Wellinghoff has labeled demand response the “killer app” for the smart grid. This form of enhanced, two-way communication would allow electricity providers to pay consumers to use less electricity. At times of peak demand (and peak prices) and other times of grid stress or need, consumers could respond by modifying their usage. Grid operators could, in turn, respond with more efficient management of available resources and avoid the high expenses associated with putting another power plant on-line to generate the electricity necessary to meet demand. Less wasted electricity would help lower prices for everyone and foster a more efficient and environmentally sustainable market. FERC’s most recent assessment of the country’s demand response potential concluded that peak demand could be reduced by as much 188 GW, or roughly 20%, by 2019.

Wellinghoff has worked to create a receptive environment for new and emerging energy technologies such as hydrokinetic energy. Under his leadership, the Commission has continued to collaborate with the Department of the Interior to incubate the growth of this technology. This partnership will facilitate the development of offshore hydrokinetic projects as well as wind and solar projects. Similarly, the Commission has signed agreements with states such as Maine and Washington that will help fast-track new projects while ensuring that associated environmental concerns are given careful agreement.

Under Wellinghoff's leadership the Commission issued FERC Order 745 on March 15, 2011, which prescribes how providers of demand response are to be compensated in the organized wholesale markets. This order was opposed by energy economists including Professor William W. Hogan of Harvard's John F. Kennedy School. Professor Hogan and Robert Borlick asserted that Order 745 overcompensates demand response and is likely to produce excessive curtailment of electricity usage and U.S. economic output at a time of high unemployment. Furthermore, Borlick said that these subsidies will primarily benefit large industrial companies but will be paid for by residential customers and small businesses. Order 745 was approved by the Commission on a 4-1 vote; Commissioner Phillip D. Moeller filed a dissenting opinion. The order's compensation scheme was supported by the late Alfred Kahn, then Robert Julius Thorne Professor of Political Economy, Emeritus, at Cornell University, and Special Consultant to National Economic Research Associates, Inc. Dr. Kahn asserted that because demand response is in all essential respects economically equivalent to supply response, it should be treated and rewarded the same as generation in competitive power markets. All resources selected by the market should receive the same market-clearing price, he said. However, Order 745 also mandates the application of a complex and controversial cost-benefit test that limits excessive payments for demand response. Professor Kahn died before this test was introduced and some of his colleagues at NERA believe that he would have opposed such a test.

A debate regarding the economic efficiency and fairness of Order 745 appeared in a series of articles published in The Electricity Journal.[2][3][4]

The Edison Electric Institute, American Public Power Association, Electric Power Supply Association, the National Electric Cooperative Association and the Old Dominion Electric Cooperative have filed suit in the United States Court of Appeals, DC Circuit, against the FERC on grounds that Order 745 is anticompetitive and discriminatory. [5] Twenty one prominent energy economists, including Professor Hogan and Mr. Borlick, joined the plaintiffs as Amici Curiae.[6]

On May 23, 2014 a three-judge panel of the United States Court of Appeals for the DC Circuit struck down FERC Order 745 on the grounds that the agency lacks jurisdiction over demand response because it is a retail activity and therefore exclusively subject to regulation at the state level. The panel further concluded that the FERC failed to properly consider Commissioner Moeller's persuasive arguments that Order 745 will result in unjust, discriminatory rates.[7] The FERC petitioned the court for an en banc review of the panel's decisions.

On May 4, 2015, the United States Supreme Court agreed to review the DC Circuit's ruling, addressing two questions:

  1. Whether the Federal Energy Regulatory Commission reasonably concluded that it has authority under the Federal Power Act, 16 U. S. C. 791a et seq., to regulate the rules used by operators of wholesale electricity markets to pay for reductions in electricity consumption and to recoup those payments through adjustments to wholesale rates.
  2. Whether the Court of Appeals erred in holding that the rule issued by the Federal Energy Regulatory Commission is arbitrary and capricious.[8]

On January 25, 2016, the Supreme Court upheld FERC 745, overruling the US Court of Appeals decision.[9] The Court affirmed that the FERC had jurisdiction over prices paid for wholesale demand response but did not endorse the specific compensation scheme prescribed by FERC 745, stating, " In upholding that action, we do not discount the cogency of EPSA’s arguments in favor of LMP-G. Nor do we say that in opting for LMP instead, FERC made the better call. It is not our job to render that judgment…. Our important but limited role is to ensure that the Commission engaged in reasoned decision making.[10]

Jon Wellinghoff submitted his resignation to U.S. President Barack Obama on May 5, 2013 and remained in the post until November 25, 2013, when the president appointed his successor, Cheryl A. LaFleur.[11]

For his work with the Energy Storage Community he received the Energy Storage Association's 2014 Phil Symons Award at their 24th Annual Conference.

SolarCity

On April 7, 2016, SolarCity announced Wellinghoff will join the company as Chief Policy Officer.[12]

Personal life

Wellinghoff is married to Karen Galatz and he has four children, Andrea, Sarah, Jules, and Jacob, and three grandchildren.

In October 2013, Jon joined the law firm Stoel Rives LLP as Co-Chair of the firm's Energy practice.

Bibliography

References

  1. ↑ Dixon, Darius (May 29, 2013). "FERC Chairman Jon Wellinghoff stepping down". Politico. Politico, LLC. Archived from the original on February 12, 2014. Retrieved February 12, 2014.
  2. ↑ Jonathan Falk, Paying For Demand Response at the Wholesale Level, The Electricity Journal, November 2010, Vol. 23, Issue 9, pp. 13-18.
  3. ↑ Robert Borlick, Paying For Demand Response at the Wholesale Level: The Small Consumer's Perspective, The Electricity Journal, November 2011, Vol. 24, Issue 9, pp. 13-19.
  4. ↑ Constantine Gonatas, Areas of Congruence, Yes, But 'Pseudo-Agreement' on LMP, The Electricity Journal, Jan./Feb. 2012, Vol. 25, Issue 1, pp. 1-4
  5. ↑ IN THE United States Court of Appeals for the District of Columbia Circuit, ELECTRIC POWER SUPPLY ASSOCIATION, ET AL., Petitioners, v. FEDERAL ENERGY REGULATORY COMMISSION, ET AL., ON PETITIONS FOR REVIEW OF ORDERS OF THE FEDERAL ENERGY REGULATORY COMMISSION, October 25, 2012.
  6. ↑ IN THE United States Court of Appeals for the District of Columbia Circuit, ELECTRIC POWER SUPPLY ASSOCIATION, ET AL., Petitioners, v. FEDERAL ENERGY REGULATORY COMMISSION, ET AL., ON PETITIONS FOR REVIEW OF ORDERS OF THE FEDERAL ENERGY REGULATORY COMMISSION, BRIEF OF ROBERT L. BORLICK, JOSEPH BOWRING, JAMES BUSHNELL, AND 18 OTHER LEADING ECONOMISTS AS AMICI CURIAE IN SUPPORT OF PETITIONERS, June 13, 2013.
  7. ↑ United States Court of Appeals for the District of Columbia Circuit, Electric Power Supply Association, Petitioner v. Federal Energy Regulatory Commission, Respondent, Madison Gas and Electric Company, Et Al., Intervenors, On Petitions for Review of Orders of the Federal Energy Regulatory Commission, Decided May 23, 2014.
  8. ↑ http://www.supremecourt.gov/orders/courtorders/050415zor_7648.pdf
  9. ↑ http://www.supremecourt.gov/opinions/15pdf/14-840_k537.pdf
  10. ↑ SUPREME COURT OF THE UNITED STATES, FEDERAL ENERGY REGULATORY COMMISSION v. ELECTRIC POWER SUPPLY ASSOCIATION ET AL., Opinion of the Court, Decided January 25, 2016, at 33.
  11. ↑ Federal Energy Regulatory Commission (November 25, 2013). "LaFleur Named Acting FERC Chairman". Federal Energy Regulatory Commission. Federal Energy Regulatory Commission. Retrieved February 12, 2014.
  12. ↑ http://www.prnewswire.com/news-releases/solarcity-appoints-jon-wellinghoff-chief-policy-officer-300248141.html

Further reading

Political offices
Preceded by
Joseph Kelliher		 Chairperson of the Federal Energy Regulatory Commission
2009–present 		Incumbent
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