New energy regulator Bernard McNamee tries to prove he’s not a rubber stamp for Trump’s coal agenda

Source: By Josh Siegel, Washington Examiner • Posted: Tuesday, March 19, 2019

HOUSTON — New Federal Energy Regulatory Commission member Bernard McNamee is eager to prove he is not a rubber stamp for the Trump administration’s unpopular mission of saving failing coal and nuclear plants.

“Hopefully those who had doubts about me see how I have been acting, that I was sincere I want to be an independent commissioner and not look at things through politics,” McNamee told the Washington Examiner this week at the CERAWeek energy industry conference in Houston, his first media interview since being confirmed.

McNamee survived an unusually contentious nomination vote in December, with even coal-state Sen. Joe Manchin of West Virginia joining all other Democrats to oppose him, because of his ties to the Trump administration and fossil fuel interests.

McNamee, a Republican, formerly worked as head of the Energy Department’s Office of Policy, which has spearheaded the effort to save coal and nuclear plants under Rick Perry. During the nomination, leaked video surfaced showing him criticizing renewable energy and favoring fossil fuels.

At FERC, the agency that oversees wholesale electricity markets and reviews interstate pipeline applications, he is now bullish about renewables.

McNamee said he’s excited about the potential for energy storage to help renewable use when the sun isn’t shining and the wind isn’t blowing. Energy storage has grown massively after the commission approved a rule last year, before he was confirmed, to allow the technology to compete with generators in wholesale power markets.

He also said he recognizes the need for FERC to review how it sets rates and incentives for the construction of transmission lines, which are critical for transporting electricity from places that may have an abundance of wind or solar to areas that don’t.

“Renewables are an important part of our energy mix, and once we get storage, that will totally change the way we can utilize renewables,” McNamee said.

McNamee acknowledged that he’s learning in his new role how to stop being a policy advocate and start being an independent regulator at FERC.

Before joining the Energy Department, he was a lawyer, representing electric and gas utilities before state utility commissions in which he had to argue for particular energy projects seeking approval.

FERC Chairman Neil Chatterjee, a fellow Republican nominated to the commission by President Trump, said he’s sympathetic to McNamee’s changing attitude. Chatterjee often references his own struggle upon joining FERC with putting aside his pro-coal background, from working for Senate Majority Leader Mitch McConnell and representing the interests of their home state, Kentucky.

“I was frustrated watching the Senate confirmation process,” Chatterjee told the Washington Examiner in a separate interview at the CERAWeek conference. “Because I know McNamee and felt he was unfairly maligned. Both of us, this is the first time we have been in roles where we are the ultimate decision-makers. You just evaluate things differently when the buck stops with you than when it does for your client or somebody you are advising.”

McNamee has had little chance to prove himself with votes so far, but in at least one major case, he made an impression on his peers.

Chatterjee has credited McNamee with brokering a compromise that allowed for a “breakthrough” approval of the Calcasieu Pass liquefied natural gas export project last month, the commission’s first approval of an LNG facility in two years.

A dozen other facilities are awaiting permit approval from FERC, which the oil and gas industry says are needed to transport the benefits of the shale boom abroad.

The breakthrough came because McNamee and Democratic Commissioner Cheryl LaFleur, the decisive vote on the Louisiana facility, negotiated a process to review the direct greenhouse gas emission impacts of the facilities.

“I’ve appreciated Commissioner McNamee’s collegiality and engagement on the issues, and certainly the Calcasieu Pass order is a good example of that,” LaFleur told the Washington Examiner via email.

LaFleur has pushed back on Chatterjee’s “breakthrough” characterization and vowed that her vote is not guaranteed for future projects if greenhouse gas emissions are too high.

McNamee said he agrees FERC won’t simply become a rubber stamp for all LNG projects because of its review process for emissions.

“Clearly, we are going to have to make each decision individually, but having a framework with which to do it, I am hopeful that helps us all continue to come together,” he said.

But FERC-approved LNG projects are a huge priority for the Energy Department, whose leader, Perry, has been forthright about his expectations and belief that McNamee is an ally.

Perry, in an address at CERAWeek, gave a shoutout to McNamee, who was sitting in the audience watching the speech.

Perry said McNamee is “one of the solutions” to the energy industry’s “biggest challenge” of receiving permits to build enough infrastructure to transport oil and gas domestically and abroad.

“Bernie is a good friend,” Perry said. “Thank God he is on the commission now, and we got his nomination approved.”

Those comments could be awkward for McNamee, but he insists he doesn’t have an agenda at FERC.

“When I started, I was surprised how many people I met with, the first question they asked me was ‘What is your agenda?’ I was surprised because I see my role as a commissioner as being more of a judicial role than a policy role,” McNamee said.

His biggest challenge is yet to come.

FERC, before McNamee joined it, rejected a proposal from Perry to directly subsidize financially struggling coal and nuclear plants that can store fuel on-site for help during a grid emergency.

But FERC is now considering a broader question of whether the grid is resilient as it evolves away from coal and nuclear to gas and renewables, and if the commission needs to alter how power generators are compensated to reflect the changes.

McNamee was the lawyer who reviewed the Perry coal and nuclear subsidies proposal that FERC rejected.

His role is different now.

“As a commissioner at FERC, the challenge is: How do we accommodate the changes in the market and not pick winners and losers?” McNamee asked.