Key Democratic senator’s opposition could sink FERC nominee

Source: Hannah Northey, E&E reporter • Posted: Thursday, September 19, 2013

Democratic Sen. Joe Manchin from coal-rich West Virginia last night vowed to cast a critical “no” vote on President Obama’s pick to head the Federal Energy Regulatory Commission, throwing Ron Binz’s chairmanship of the agency into serious doubt.

Manchin’s opposition to the former Colorado regulator could result in a tie vote on the Senate Energy and Natural Resources Committee, which has 10 Republicans and 12 Democrats.

Such a tie would likely doom the nomination. A committee member could move to report the nomination without a favorable recommendation — but that would require a majority vote to pass, so the possibility is dim. Senate Majority Leader Harry Reid (D-Nev.) could also bring the nomination up for a vote on the Senate floor, but that would require unanimous consent, which also would be unlikely.

Calling Binz “unacceptable” for allegedly “demonizing coal and gas,” Manchin voiced his opposition after ranking member Lisa Murkowski (R-Alaska) and Sen. Dean Heller (R-Nev.) took similar positions. Binz “prioritizes renewables over reliability,” Manchin said.

Chairman Ron Wyden (D-Ore.) is working on scheduling a committee vote on Binz, said Keith Chu, a spokesman for the senator. Wyden respects members’ views but believes Binz’s “years of service in Colorado and views on respecting FERC’s role make him well-qualified to serve on the commission,” Chu said.

Current FERC Chairman Jon Wellinghoff has agreed to stay put until his replacement is confirmed by the Senate, although he has recused himself on some issues before the commission.

The rocky confirmation path for Binz has sparked rumors about other possible FERC nominees. Some sources point to Colette Honorable, chairwoman of the Arkansas Public Service Commission, who will soon take the helm of the National Association of Regulatory Utility Commissioners.

The controversy has also triggered talk about what stalled Binz, and whether his slip-ups were magnified by a rare and very public spat pitting clean energy advocates against conservative and libertarian-leaning groups.

Myron Ebell, director of energy and global warming policy for the Competitive Enterprise Institute, which is reported to have financial ties to the Koch brothers, in an email pointed to allegations that Binz lied to Murkowski during a private meeting.

At the confirmation hearing, Murkowski criticized Binz for telling her in a meeting the prior week that he had no contact with the White House. She later read a chain of emails — obtained by the Free Market Environmental Law Clinic and the Independence Institute in Colorado through a Freedom of Information Act request from FERC — that show Binz was in touch with the White House, as well as Democratic lobbyists and a public relations firm with ties to clean energy groups (Greenwire, Sept. 17).

“If he had told her a somewhat fuzzy version of his connections to the energy lobbyists, VennSquared, etc., then he would have protected himself from the truth coming out and my guess is Murkowski would eventually have voted for him or at least not come out swinging immediately,” Ebell wrote.

Nora Mead Brownell, a former Republican FERC commissioner who defended Binz against scathing editorials in The Wall Street Journal, said she has never seen such a controversial FERC nomination and ascribed it to “special interests” trying to sway policy rather than Binz’s mistakes.

“I’ve never heard of anyone having their phone records FOIAed throughout the nominations process,” she said. “That’s really brutal.”

Brownell, now an energy consultant, said her confirmation before serving on the commission from 2001 to 2006 also received a lot of attention because it occurred at the tail end of the California energy crisis. FERC was in the headlines every day, and she, as a new member of the commission, was tasked with improving the agency’s relationship with the state of California.

But she said she’s never seen it this bad.

“It was lively and spirited at times, but I’ve never seen anything like this, which I think is a proxy for the conservatives who don’t like the Obama agenda,” Brownell said. “I do think it could be, at the end of the day, the triumph of special interests over public interest.”

‘Cause donors’ got involved

Some sources said the heightened attention that Binz’s nomination has received in recent weeks could signal an increase in politics surrounding FERC, an agency that has traditionally been seen as a wonky regulator with complex cases that attract little attention on Capitol Hill.

Marc Spitzer, a former Republican FERC commissioner now at Steptoe & Johnson LLP, said the fight attracted “cause donors” on both sides of the issue.

On one side, clean energy groups, including the Green Tech Action Fund, a San Francisco-based nonprofit, enlisted the muscle of the public relations firm VennSquared Communications. Green Tech Action Fund is a grantee of the Energy Foundation, said Deb Greenspan, a spokeswoman for the fund. The Energy Foundation has received donations from billionaire climate activist Tom Steyer.

On the opposing side were groups like the conservative Institute for Energy Research. The group in recent weeks launched an educational campaign about what FERC’s role is in overseeing the energy markets and released a list of 10 questions for Binz focused on whether he would push Obama’s climate agenda, circumvent Congress or attempt to “socialize” the cost of long-distance transmission lines to tap into remote pockets of solar and wind. The Independence Institute in Denver, which advocates for limited government, has also taken to criticizing Binz for his work in Colorado.

“Tom Steyer wants fossil fuels eliminated yesterday; mining interests want coal for breakfast,” Spitzer said, adding that “FERC is an unusual venue” for such a hyper-political fight.

Spitzer also echoed Wyden’s point that FERC may oversee the construction of new transmission — that can benefit a variety of fuel types — but does not have direct influence on the coal industry.

“FERC has no authority to regulate coal,” Wyden said in a statement. “It has no authority to impose unjust or unreasonable rates or impose discriminatory or preferential charges on coal or coal-generated electricity — that means no backdoor taxes on coal or coal-generated electricity.”

Brownell agreed, saying FERC cannot influence the construction of coal plants and that the chairman must garner votes from his fellow commissioners. And if parties oppose what FERC does, a process exists for them to intervene or the courts can get involved, she added.

While remaining mum on Binz’s possible mistakes, Brownell said allowing special-interest groups to influence who is appointed to the commissions could drive away talented people from serving on FERC or put a chill on large investments that go into the transmission, energy and hydro sectors.

FERC sites interstate pipelines, helps create markets and makes decisions on cost allocation for transmission projects, as well as certifying and recertifying big hydro projects, Brownell said.

“That’s all long-term, big, expensive infrastructure that requires access to capital,” she said. “When you create uncertainty, you drive away capital.”