Author Archives: Andrew Soto

Andrew Soto Department of Energy proposes to use full-fuel-cycle analyses in developing energy efficiency standards

Posted on August 20, 2010 by Andrew Soto | Comments Off


Today, the U.S. Department of Energy, Office of Energy Efficiency and Renewable Energy, issued a notice of proposed policy, proposing to incorporate a full-fuel cycle analysis into the methods it uses to estimate the likely impacts of energy conservation standards on energy use and emissions.  See Energy Conservation Program for Consumer Products and Certain Commercial and Industrial Equipment; Public Meeting and Availability of Statement of Policy for Adopting Full-Fuel-Cycle Analyses Into Energy Conservation Standards Programs, 75 Fed. Reg. 51,423 (Aug. 20, 2010).  Here is the DOE proposal and a memorandum summarizing the proposal.

In general, DOE is proposing to use full-fuel-cycle measures of energy and greenhouse gas emissions, rather than the primary energy measures it currently uses.  DOE is also proposing to work with the Federal Trade Commission to make full-fuel-cycle energy and emissions data available to the public to enable consumers to make cross-class comparisons.  DOE is proposing this policy change to implement the recommendations of the National Academy of Sciences that DOE consider moving over time to use of a full-fuel-cycle measure of energy consumption for assessment of national and environmental impacts, especially levels of greenhouse gas emissions, and to providing more comprehensive information to the public through labels and other means, such as an enhanced website.  DOE is soliciting public comment on its proposed policy, its methods for modeling energy consumption and emissions impacts, and the ways in which this information can be disseminated to the public.

DOE will hold a public meeting on its proposal on Thursday, October 7, 2010, from 9:00 a.m. to 4:00 p.m. EDT, in Washington, DC, and will accept written comments from interested parties up to October 19, 2010.

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Andrew Soto Can you be fair when you’re prosecutor, judge and jury?

Posted on April 20, 2010 by Andrew Soto | Comments Off


When it comes to enforcing its rules, a federal agency is called upon to wear several hats.  In determining whether a rules violation has occurred, the agency must investigate and bring enforcement proceedings against an alleged wrongdoer (perform a prosecutorial role).  If the subject of the investigation contests the violation, then the agency must determine the facts (act as jury) and ultimately decide the matter and order appropriate remedies if necessary (act as judge).  How does the same agency perform all three roles and ensure that targets of an investigation are given a fair hearing before penalties or other remedies are assessed?

These issues came up at the AGA Federal Energy Regulatory Commission (FERC) Manual Users Forum held March 31, in AGA’s offices in Washington, DC.  The Forum was held to roll out the AGA FERC Manual: A Guide for Local Distribution Companies, a comprehensive guide to the FERC’s regulation of the natural gas industry with a particular focus on the needs and perspectives of gas distribution utilities.  The Manual was written by lawyers at Dewey & LeBoeuf LLP and is available for sale to the general public via AGA’s Web site.

Answering the question above usually entails trying to separate as much as possible the prosecutorial role from the adjudicatory (judge and jury) role.  The idea is that in order to ensure fairness, or at least the appearance of fairness, the same person should not both prosecute and ultimately decide an issue.  In FERC’s case, a separation of function rule applies once a case has gone to hearing before an administrative law judge that prevents the enforcement staff involved in a particular investigation from advising the Commissioners.  The intent is to put enforcement staff on equal footing with the subject of the investigation both before the administrative law judge who must determine the facts and the Commissioners who must ultimately decide the issues and impose any remedies.  Some would argue that the separation should occur even earlier and apply during the preliminary stages of the investigation.

Former FERC Commissioner, Suedeen Kelly (the keynote speaker for the Forum), however, suggested that a separation of functions ends up vesting the prosecutor with greater power because the Commissioners may be less able to provide a supervisory role over enforcement staff as to whether an investigation should be brought in the first place or otherwise guide the conduct of the investigation.  She makes a good point.  I firmly believe decision-makers at FERC at all levels must be held accountable for their actions.  But, how do Commissioners hold enforcement staff accountable while at the same time remaining impartial to decide enforcement matters?  This is an issue that admits of no easy answers and one that I think FERC and the industry will struggle with for some time.

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Andrew Soto The AGA FERC Manual is now on sale

Posted on April 14, 2010 by Andrew Soto | 1 Comment


AGA has made available for sale to the general public the AGA FERC Manual: A Guide for Local Distribution Companies. You can visit AGA’s web site to pick up a copy of the manual.

In the Energy Policy Act of 2005, Congress gave the Federal Energy Regulatory Commission (FERC) powerful enforcement authorities, including the ability to assess civil penalties of up to $1 million per day for violations of any FERC rule, regulation or order.  Users of pipeline services, in general, and gas utilities, in particular, have been the subject of a large number of FERC enforcement settlements in which civil penalties have been assessed.  These settlements have focused on the interstate transportation and sale of natural gas by LDCs, the relationship of an LDC to its affiliates, and LDCs as shippers on interstate pipelines.

In response to this increased scrutiny, AGA, with the support of over 30 sponsoring members, has published the AGA FERC Manual: A Guide for Local Distribution Companies.  The Manual, written by lawyers at Dewey & LeBoeuf LLP, is a comprehensive guide to FERC’s regulation of the natural gas industry.  It was intended to be one of the first places to which industry participants can turn for quick answers about FERC’s rules as well as for more detailed explanations and guides to additional research.  It was also written with the front line employee involved in buying and selling wholesale natural gas and arranging transportation and storage transactions in mind.  Its language is straightforward and not overly legalistic.

While the Manual was developed for AGA members with the needs of gas utilities in mind, anyone involved in the wholesale natural gas markets would find the Manual useful.  It broadly discusses rules regarding buying and selling natural gas, obtaining and releasing pipeline and storage capacity, preparing compliance plans, and other topics of general interest to natural gas market participants.  A set of DVDs accompanying the Manual contain lectures on each of the major topics of the Manual that are useful for training.

We hope that users of the Manual find it a valuable tool for building and maintaining a robust plan for compliance with FERC rules and regulations.

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Andrew Soto Diversification of natural gas supply is an essential consumer protection

Posted on March 10, 2010 by Andrew Soto | 1 Comment


As the old adage goes, “don’t put all your eggs in one basket.”  You don’t need to have been in the energy industry long to see examples of the dangers of relying on a single fuel source to meet essential needs.  The more you rely on one source for a particular fuel, the more vulnerable you become to price changes in that fuel source.  Having a diverse supply portfolio helps protect consumers from the adverse impacts of price volatility by limiting the impact of significant price changes that may occur in any one source.

Supply diversity is important both within and across fuels.  I often hear people advocate that we should generate electricity with: ___ (pick your source – wind, solar, fuel cells, nuclear, natural gas, etc.). But in my view, we need a diverse electric generation fleet that draws from ALL sources of supply in order to mitigate the impacts of price volatility in any one particular fuel source.  I think a large part of our concerns about the price of oil and our dependence on foreign sources of it stems from the fact that nearly all of our transportation needs are met by a single fuel source.  According to the Energy Information Administration’s 2008 Annual Energy Review, the transportation sector relies on petroleum products to supply 95 percent of its needs.

Even within a fuel type we need a diverse resource base.  As my colleague, Chris McGill, has said, when it comes to natural gas, North America is blessed with resource abundance.   And that abundance is diverse geographically and geologically.  Whether on-shore or off-shore, conventional or non-conventional, we are fortunate that we have many sources of natural gas supply to meet our energy needs.  And, that diversity has helped keep natural gas prices low for consumers.  For example, in 2005 when hurricanes shuttered much of our off-shore natural gas production, prices rose dramatically in response to the supply constriction. In 2008, however, when off-shore supply was again taken off-line due to hurricanes, natural gas prices fell.  What changed?  On-shore production from new shale plays as well as increased LNG imports more than made up the supply shortfall.  Indeed, according to Pan EurAsian Enterprices, Inc., increased LNG imports this winter helped stabilize natural gas prices in New England.  See AGA’s Natural Gas Market Indicators (Feb. 26, 2010).

I believe that our ability to import natural gas via LNG import terminals is an important element of our diverse natural gas resource base that helps keep natural gas prices affordable for consumers.  Several U.S. Senators have introduced legislation (S. 3056) that would remove from the Natural Gas Act provisions that make clear that the Federal Energy Regulatory Commission (FERC) has exclusive jurisdiction over the siting of LNG import terminals.  The Natural Gas Council, of which AGA is a member, opposes this legislation with good reason.  The legislation, if passed, would create uncertainty in the siting process and may ultimately lead to fewer import facilities being sited or built.  While some local interests might cheer at that result, in the long run we only hurt ourselves by chipping away at our natural gas supply diversity.

We should not put artificial limits on LNG imports.  The market should decide where and how many of these facilities should be built, with FERC ensuring that each facility is sited and constructed in an environmentally responsible manner.   For the benefit of all natural gas consumers, we should not remove one of the “baskets” that has contributed to our diverse natural gas resource base.

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