American Gas: Commissioner Fedorchak, congratulations on your election as president of the National Association of Regulatory Utility Commissioners for 2024. You have a distinguished career in the regulatory arena. How do you plan to apply your substantial experience working with North Dakotans and others to this new role? And how do you plan to support this year’s theme of “Focused on the Future: State Regulators Leading the Way”?
Julie Fedorchak: I’m excited to assume this role because my experience and perspective gives me the confidence now to do this job justice, to help highlight the big and sometimes controversial issues that need our attention. State regulators play a vital role in ensuring a smooth evolution, and that requires us to be tireless advocates for reliability and affordability.
The energy industry faces incredible opportunities as well as real challenges right now. Decarbonization goals and federal environmental regulations are driving policies faster than technologies, supply chains, natural resources, the workforce and regulatory processes can deliver. These are significant challenges, but I believe we can and will overcome them.
Many are pushing to go faster than the pace of technology change. Regulators need to be cautious of this and be voices for sustainability, ensuring we don’t sacrifice the core principles of reliability and affordability in a rush to meet some of these aggressive deadlines. We’ve already seen the devastation of pushing the system farther than the technology and infrastructure is capable of handling. Storms like Uri and Elliott are painful examples of that.
In addition to these lived experiences, warning signs are coming consistently from the North American Electric Reliability Corporation. Its most recent nationwide reliability assessment again shows that two-thirds of the nation is at an elevated risk of being unable to satisfy power needs if demand is high when production from wind and solar is low. These warnings aren’t coming from biased stakeholder groups with a vested financial interest. NERC is the third-party watchdog charged with safeguarding reliability. We need to heed these warnings. Our nation is infinitely blessed with energy resources. Running short of power for our people is simply not acceptable.
State regulators are uniquely positioned and responsible to address these challenges. That’s why I chose the theme “Focused on the Future: State Regulators Leading the Way.” We can and must work with our utilities and state policy leaders to manage the pace of change so reliability and affordability are not sacrificed.
American Gas: As one of the nation’s top energy producers, North Dakota’s gas industry provides jobs, attracts investment and contributes to U.S. energy security. What has your experience as a public service commissioner in the state taught you about the importance of balancing the needs of multiple stakeholders—citizens, industry, the environment, landowners—to achieve energy security?
Fedorchak: In North Dakota, “all of the above” isn’t just a catchy talking point. It is the foundation for our state’s energy policy and has been for 30 years. North Dakota is a leading producer of oil and gas, wind energy, coal-fired power and hydropower, and it is on the leading edge of developing hydrogen and carbon capture and storage technologies. We have a proud history of balancing the needs of the environment, citizens, landowners, ag producers and industry. North Dakota has some of the most stringent and effective coal reclamation regulations in the nation, and we are one of a handful of states that meets all the U.S. Environmental Protection Agency Air Quality Standards. At the same time, the North Dakota Public Service Commission alone has permitted more than $10 billion in new energy-related infrastructure in the last 10 years. All this to say, my experience proves that balancing the interests of multiple stakeholders is achievable, and it is done most effectively at the state level.
American Gas: One of your priorities has been connecting rural areas to natural gas service. What can NARUC do to help utilities bring needed infrastructure to unserved and underserved regions of the country? Also, why should infrastructure expansion and replacement continue to be a priority?
Fedorchak: Our nation has been infinitely blessed with energy resources. There is no excuse for running short. We need to start putting aside some of our policy differences and work together on short-term and long-term solutions to address our nation’s energy needs in a way that is sustainable, not just in environmental terms but in terms of reliability and affordability as well. Regarding energy infrastructure, we need a lot of it in our nation and world, no matter what policy preference you share. So, we should replace infrastructure on an ongoing basis and build more, because transitioning to new energy technologies will demand even more energy infrastructure. These investments are critical to providing the energy Americans depend on for our daily lives. So, industry and regulators can’t grow weary of permitting and building energy infrastructure. We need to work even harder to do it right.
American Gas: You are also known as a tireless advocate for consumers, particularly those most susceptible to economic challenges. How can you and other leaders work together to develop solutions that result in greater energy system reliability while keeping costs low for consumers?
Fedorchak: Keeping prices low is going to be a real challenge in today’s environment, especially when many are pushing the pace of change even faster. But the solution isn’t all that complicated. From a supply and demand standpoint, if everyone wants the same product at the same time—like solar panels or batteries or transformers—the price is going to go up. By staggering our adoption of these technologies and developing thoughtful, orderly plans for retiring old resources and incorporating new, we can reduce, if not eliminate, reliability challenges and make the entire process more affordable.
Furthermore, we need to be clear about the costs and benefits of new technologies. Different regions demand different solutions. Electrification simply doesn’t make sense in northern climates with the technologies we have today. Using natural gas for electricity generation and then using that electricity to heat homes in northern climates is far more expensive, far less efficient and therefore much worse for the environment. Policymakers need to start hearing a lot more from people with the technical understanding of these systems rather than advocates, many of whom are educated largely by social media or have a vested financial interest in the outcome they are advancing.
American Gas: NARUC’s Annual Meeting and Education Conference hosted discussions on innovations in the natural gas sector, such as certified natural gas and hydrogen. How can NARUC continue to support a robust dialogue on the emerging roles of these innovations?
Fedorchak: NARUC will always be a venue to exchange ideas about emerging technologies. One of the conversations I intend to promote this year is “Pathways to Decarbonization.” Under this umbrella, I hope to stimulate thoughtful debates about the many different approaches to decarbonization, including the strengths, weaknesses, costs and timelines of technologies under development, including carbon capture and storage, hydrogen, advanced nuclear, certified natural gas, batteries and more.
American Gas: At the NARUC Annual Meeting, you also announced the new GEAR (Gas-Electric Alignment for Reliability) task force. Would you please share a little about the group and what you all hope to accomplish?
Fedorchak: GEAR is a working group that is bringing together state regulators and industry representatives to develop solutions that better align the natural gas and electric industries, to maintain and improve the reliability of the gas and electric energy systems on which our nation depends for power. GEAR intends to gather regulator and industry stakeholder feedback and recommend solutions to better harmonize communication protocols, operations and planning of the gas and electric systems, and markets. Findings from many previous studies on this issue—including after-storm reports by the Federal Energy Regulatory Commission and the recent North American Energy Standards Board Gas-Electric Harmonization Forum—will serve as a starting point for the working group.
Over the last two decades, the U.S. electric and natural gas industries have undergone significant transformation driven by new technologies, replacement of aging infrastructure, environmental regulations, and state and federal policy goals. New technologies for renewable electricity generation—combined with the significant increase in natural gas production and correlated decrease in gas prices—have transformed the electric industry and increased dependence on natural gas for electricity generation. As a result, the electric industry is more reliant than ever on the natural gas industry. However, since the natural gas industry was largely designed and constructed to deliver gas for home heating and industrial processes, gas infrastructure and markets are misaligned from electric markets.
The lack of coordination between these two systems poses serious reliability concerns, as demonstrated during winter storms, where dependence on natural gas in both systems is high. In February 2021, Winter Storm Uri caused numerous outages, derates or failures to start at electric generating plants scattered across the region. The Texas grid operator (Electric Reliability Council of Texas, or ERCOT) ordered a total of 20,000 megawatts of rolling blackouts to prevent grid collapse; this represents the largest manually controlled load-shedding event in U.S. history. More than 4.5 million people in Texas lost power—some for as long as four days. Not quite two years later, during Winter Storm Elliott, unprecedented electric generation outages coincided with winter peak electricity and natural gas demands. As a result, several balancing authorities in the eastern United States declared energy emergencies to maintain electric grid reliability, ordering firm load shed exceeding 5,000 MW during the extreme cold-weather event. Future trends and technologies indicate that natural gas and electric system interdependence will continue to grow. To support this transition while maintaining reliability and affordability for customers—and encouraging investments and growth in both industries—reforms are needed to address the areas of friction, disconnect and failure.
GEAR will focus on near-term problems—largely related to real-time operational challenges—and longer-term challenges related to expanding the infrastructure needed to support demand for both natural gas and electric utilities. The working group will present a status report at the November 2024 NARUC Annual Meeting and a final report of recommendations at the February 2025 NARUC Winter Policy Summit.
American Gas: Finally, you’re a writer as well as a former communications guru. Putting on your public relations hat, how will these skills help you in your new role?
Fedorchak: Hopefully, my communications background will help me effectively shine the light on reliability and affordability during this energy transition and, in doing so, inspire my fellow state commissioners to be strong leaders in their states for those vital issues.