Battle over Binz: an anomaly, or the first shot in a drawn-out war?

Source: Hannah Northey and Manuel Quiñones, E&E reporters • Posted: Wednesday, October 9, 2013

Ron Binz got a bull’s-eye on his back during the first week of August.

Roughly 20 leaders from prominent free-market and conservative groups — some enjoying ties to the tea party and Koch brothers funding — huddled in a downtown Washington, D.C., conference room to weigh Binz’s nomination to lead the Federal Energy Regulatory Commission.

After two hours, they resolved to oppose President Obama’s choice. “This confirmation deserves to have a wrench thrown in the gears,” Benjamin Cole, a spokesman for the Institute for Energy Research, later recalled the group’s thinking.

Their decision launched an unprecedented — and ultimately successful — campaign against a FERC nominee, throwing clean energy groups a curveball and raising the specter that the powerful but relatively little-known agency — tasked with overseeing the grid, gas pipelines and wholesale electricity markets — could be a new front for political warfare over national energy policy.

Binz, a former Colorado regulator, was already a known quantity to pro-fossil-fuel groups. IER had produced a video last year about the potential effects U.S. EPA clean air rules and Colorado’s renewable portfolio standard could have on one of the nation’s largest coal plants — Colorado’s 1,300-megawatt Craig Station.

“We knew the role Ron Binz [played] in trying to make Colorado the forerunner in the shift to renewables,” Cole said. “It didn’t take long to connect the dots.”

FERC had already popped up on many conservative groups’ radar after the House GOP suggested that the independent commission oversee the contentious proposed Keystone XL oil pipeline. And IER had recently hired Travis Fisher, a former FERC economist, before the nomination.

Cole said the group’s “shoestring budget” campaign consisted of reaching out to members of Congress, putting out letters and running ads on Facebook. The group also reached out to its 2 million-plus followers.

The Wall Street Journal’s editorial writers also played a prominent role in opposing Binz. They stamped him as a “radical” in July, even before the groups’ meeting, and went on to publish several more pieces urging lawmakers to reject the nomination.

Opposing Binz

Here are the conservative groups whose representatives met in early August and decided to oppose the nomination of Ron Binz to head FERC:

  • American Commitment
  • American Energy Alliance
  • Americans for Prosperity
  • American Tradition Institute
  • Caesar Rodney Institute
  • Competitive Enterprise Institute
  • Family Business Defense Council
  • Freedom Action
  • Frontiers of Freedom
  • National Center for Public Policy Research
  • National Taxpayers Union
  • Positive Growth Alliance
  • 60 Plus Association

The onslaught took green groups by surprise. Michael Meehan, the politically connected president of Washington, D.C.-based public relations firm VennSquared Communications, who worked to boost Binz’s chances, said there was little, if anything, that the nominee’s supporters could do.

“There are lessons to be learned here,” Meehan said in an interview, “but entrenched interests like Big Coal and Big Oil don’t want to see a disruption in anything that comes out of the government.”

Binz hoped to tackle growing lawmaker concerns during a September hearing of the Senate Energy and Natural Resources Committee on his nomination. But that only made things worse.

Ranking member Lisa Murkowski (R-Alaska), already concerned about Binz’s prior statements, including one in which he called natural gas possibly a dead-end fuel, accused the nominee of lying to her about his contacts with outside groups.

Another panel member, Sen. Joe Manchin (D-W.Va.), one of the Senate’s strongest pro-coal voices, soon expressed his intent to vote against Binz. With the path to confirmation increasingly bleak, Binz had little choice but to withdraw on Oct. 1.

Did ‘King Coal’ kill Binz?

Binz hasn’t been shy about pointing a finger at “right-wing advocacy organizations” and the coal industry since throwing in the towel. He said they created a “fictional Ron Binz” in their effort to defeat him Greenwire, Oct. 7).

Binz has also said their campaign was based on the erroneous assumption that FERC can dictate the country’s electric generation fuel mix and cap greenhouse gases, a role he said that belongs elsewhere in the government.

Lobbyists connected with the coal industry, who were granted anonymity to speak candidly about the issue, say they are not the ones who killed Binz’s nomination — conventional wisdom aside.

Coal-related companies didn’t withhold their dislike of Binz, but their representatives say the nominee’s own liabilities, including past controversies and his strong advocacy for renewable energy sources, are what did him in.

At least one lobbyist said companies were careful about publicly expressing their views about a man who could become one of their top regulators.

Nonprofit groups on both sides of the debate, however, were freer to get their hands dirty. They relied on the deep pockets of donors that they did not have to identify to press their case.

Founded in 1989 and known for its free-market analysis of energy and environmental issues, the Institute for Energy Research is a 501(c)3 nonprofit group and had about $3.6 million in revenues for 2011, according to Internal Revenue Service filings.

IER founded its advocacy arm, the American Energy Alliance, in 2008 to further participate in the ongoing debate over the nation’s energy future and engage in grass-roots advocacy.

That group is a 501(c)4 nonprofit, a social welfare organization that can engage in at least some political activities, with $1 million in revenues for 2011. It spent about $1.4 million during last year’s elections, according to the Center for Responsive Politics.

AEA’s president, Thomas Pyle, has strong connections to Charles and David Koch, the rich executives who often donate to candidates and groups that support fossil fuel development. Pyle has been a lobbyist for Koch Industries Inc.

Another anti-Binz group, the Competitive Enterprise Institute, reported about $5.3 million in 2011 revenues. CEI has also received donations connected with the Koch brothers.

Blame game

Binz did have deep-pocketed backers, mainly through Green Tech Action Fund, another 501(c)4 group. Green Tech affiliated with the San Francisco-based Energy Foundation, which hired VennSquared to help secure Binz’s confirmation (E&E Daily, July 23).

Green Tech, founded to push for energy efficiency measures and renewable energy sources, reported more than $3.7 million in revenues for 2011. Billionaire environmentalist Tom Steyer has donated to the group, which in turn has given money to various other outfits backing Obama administration rules affecting power plants, including Boston, Mass.-based Ceres Inc., IRS records show.

But Meehan, a skilled Democratic operative with close ties to Senate leaders, said the campaign was rocky from the start.

The Wall Street Journal editorials were a “clear starting gun” that a partisan battle was at hand, and it soon became clear that Binz — who wasn’t paired with a Republican nominee — was going it alone and was clearly about to be misrepresented as a radical by conservatives using his own statements and past work, Meehan said. And there wasn’t much clean energy groups could do to win over Manchin, who is loyal to the coal industry, he added.

“Typically, for Senate confirmations for commissions like FERC, you have a pairing; you usually have a Republican and Democrat up together,” Meehan said. “In this case, you had Ron up there by himself, and that complicated the Senate equation.”

Other green groups more familiar with heated battles over Supreme Court nominees or occasional high-profile Cabinet picks were caught off-guard by the FERC fight.

“We knew there was opposition, but everyone was surprised by how far Republicans were willing to go to paint him as someone who was wanting this job to take down the coal industry,” said John Coequyt, who directs the Sierra Club’s international climate programs and lobbied the Senate Energy and Natural Resources Committee for Binz.

Tyson Slocum, director of Public Citizen’s energy program, said Binz backers would have done well to focus on his role as a consumer advocate instead of trumpeting his green credentials. Consumer advocates did push for Binz, but there was no coordination with the clean energy community, he added.

But ultimately, he said, the White House is to blame for Binz’s failure.

The administration “couldn’t even move [the nominee] through a committee controlled by their own party,” he said. “Committee chairs need to be actively consulted by the White House for nominees in their jurisdiction, and the failure to do so in the Binz case most likely helped contribute to his withdrawal.”

Meehan disagreed. The Obama administration and Senate Majority Leader Harry Reid (D-Nev.) backed Binz until the bitter end. Binz later said it was his own decision to pull his name.

“I think if you had the best consumer advocate in the history of mankind, Manchin was not changing his mind about what he thought about Ron Binz and coal,” Meehan said. “The White House stood by him from the podium, and Reid’s [office] said they were for Binz, and he decided to take his name out.”

‘Harbinger of conflicts’

The jury is still out on what the future holds for FERC.

Whether Binz marks the commission’s emergence as a political battleground or stays an anomalous episode in its history could depend on Obama’s next nominee.

Industry players and senators say the Obama administration is eyeing a less controversial nominees like Colette Honorable, chairwoman of the Arkansas Public Service Commission (Greenwire, Oct. 4), or selecting a sitting Democratic FERC member like Cheryl Lafleur or John Norris to avoid Senate fights entirely.

Cole said the Binz nomination is a “harbinger of conflicts to come” and that conservatives will closely watch the commission’s implementation of Order 1000 — which lays out a host of rules about transmission planning and cost obligations — and fight any Obama nominee who attempts to circumvent Congress to implement Obama’s Climate Action Plan

Others say the high drama has come to an end.

“I mostly expect FERC to go back to being the technical agency it’s been for some time,” said the Sierra Club’s Coequyt.

Another environmental group official, speaking candidly on condition of anonymity, shrugged off the controversy as a self-promotional victory for industry-funded conservative groups

“The conservation community hadn’t engaged at all on Ron Binz’s nomination, not even a sign-on letter in support, which is usually the bare minimum,” the official said. “Big polluters going nuclear on a public servant from Colorado and trying to earmark the debt ceiling bill shows they know they can’t win on EPA carbon pollution limits where it counts — on the floor of the Senate.”

But Ralph Cavanagh, a senior attorney and co-director of Natural Resources Defense Council’s energy program, said that while the fight surrounding Binz appears to be an “anomaly,” it’s one that could portend looming changes.

“This changes the world of FERC nominations, and going forward, everyone will have to re-examine past practices,” he said, adding that NRDC’s Sustainable FERC Project has not weighed in on FERC nominees since it was founded in 1995.

“My preference would be a world in which FERC nominees are judged on their merits,” Cavanagh added.

That wasn’t the case with Binz, said a veteran of numerous Senate confirmation battles, who did not want to be named because he still lobbies Congress.

“It’s terribly destructive to governance, because a president only has four years or eight years,” the lobbyist said. “So if you keep a president’s nominee to lead the agency out of there, it places constraints on the agency.”

But for the conservative groups, that was just the point.

And if the states are any indication, FERC may see more time in the spotlight.

Richard Caperton, a clean energy expert with the liberal Center for American Progress, said the nomination fights stem from a larger trend of money and politics driving attention to lesser-known areas that include FERC and state regulatory fights.

Long gone are the days when an individual can put a relatively small amount of money or energy into a race on the level of a public utilities commission and win, Caperton said.

He pointed to Arizona, where elections to the Arizona Corporation Commission have become highly politicized and now center around battles over solar expansion and net metering.

“I think it’s a realization that there are a limited number of ways for people to fight the president’s Climate Action Plan, and the Koch-funded groups like AEA and IER are taking advantage of those limited opportunities,” he said.