FERC Nominations Clear Big Hurdle
Posted June 18, 2014
The nation is one step closer to getting a full complement of commissioners on the Federal Energy Regulatory Commission (FERC), which regulates America’s transmission grid, wholesale sales of electricity, and gas pipeline infrastructure.
The Senate Energy and Natural Resources Committee voted today to approve the president’s nominations of Acting Chair Cheryl LaFleur and current FERC Director of Enforcement Norman Bay to five-year terms, but with a twist – the White House apparently has agreed to defer designating Bay as chair for nine months. These nominations now move to the full Senate.
(Images courtesy of FERC)
LaFleur joined the Commission in 2010, and we know her well. She is a master of electricity policy issues, and she supports the removal of unfair barriers to integrating wind and solar and energy efficiency into grid operations and markets. While we know less about Bay’s policy priorities beyond his strong enforcement background (he was U.S. Attorney in New Mexico, among other positions), we do know that he is a rock of integrity with a strong public interest bent and effective leadership qualities. (Also, you can read LaFleur’s and Bay’s recent responses to the Senate committee’s questions on some energy policy issues.)
Rise of Partisanship
Senate action to approve Bay has been many months in coming, and too long for FERC to be without a complete complement of commissioners. You may recall the history: Chairman Jon Wellinghoff announced his resignation in May 2013, effective November 2013. President Obama nominated Ron Binz, a distinguished former Colorado public utility commissioner, to take Wellinghoff’s place as commissioner. Obama also indicated his intention to name Binz to be FERC chairman, which is the president’s prerogative under the Federal Power Act. But, after a painful summer of sharp partisan attacks and much fact-twisting, Binz’s nomination went down in flames.
This past January, the president tried again, nominating Bay to fill Wellinghoff’s seat and indicating his intention to name Bay as chairman. (It’s widely understood that both Bay and Binz were Senate Majority Leader Harry Reid’s choices for a “western” seat on FERC and for the chairmanship.) Bay seemed like a solid and non-controversial choice, although unlike most recent FERC commissioner appointees he doesn’t have state utility commission experience. Still, with the white-hot partisan atmosphere in Washington, his nomination couldn’t escape controversy. In the “truth is stranger than fiction” category, a Pennsylvania hedge fund loudly opposed Bay’s nomination, and opposition to him gathered some steam after his Senate nomination hearing in mid-May.
Two Yes Votes and a Deal
The partisanship and dealmaking continued through today’s Senate Environment and Natural Resources Committee vote on the two nominations. Some of those opposed to Bay threatened to block his nomination unless the president kept LaFleur as chair. The Committee ultimately voted to approve Bay in a mostly party line 13-9 vote. It did so with the apparent White House commitment that LaFleur will remain acting chair for another nine months, after which Bay will take the reins as the Commission’s leader. LaFleur’s nomination easily passed the Committee 21-1, with only Vermont’s Bernie Sanders voting no.
Lots of Work Ahead
With the Senate committee vote out of the way, we hope the Senate will move quickly ahead with full approval of the nominations. A lot is on the Commission’s plate – electric grid reliability, long-term power market (“capacity market”) reforms, transmission investment incentives, and the Order 1000 inter-regional compliance filings, just to name a few. Another top priority will be working with EPA as it crafts a final rule for its seminal Clean Power Plan for existing coal and gas-fired power plants this year. Finally, in the wake of the May 23 federal court decision invalidating FERC’s compensation formula for demand response (Order 745), FERC is going to have to start unwinding some of its demand response electricity market rules. (FERC recently announced that it’s going to appeal the court’s decision).
FERC will be able to tackle all of these challenges much more smoothly if the Senate expedites approval of these nominations and we return to a full complement of five commissioners and a chair able to establish clear policy direction.