New FERC commissioner stays noncommittal on recusal

Source: Rod Kuckro, E&E News reporter • Posted: Thursday, January 10, 2019

The newest member of the Federal Energy Regulatory Commission, Bernard McNamee, made no specific promises to Democratic senators as to whether he would recuse himself from matters before the agency in which he may have played a role during his time at the Department of Energy.

In a Jan. 7 letter to Sen. Catherine Cortez Masto (D-Nev.), McNamee shared a memo from a FERC ethics officer, Charles Beamon, summarizing the guidance he was given during a meeting that all new commissioners have after being sworn in.

“As I stated in my confirmation hearing, I pledge to be a fair, objective and impartial arbiter in the cases and issues that will come before me as a Commissioner, and my decisions will be based on the law and the facts, not politics,” McNamee wrote.

He pledged to continue to seek the guidance of the FERC ethics officer.

But McNamee did not address directly the concerns that Masto and 16 other Senate Democrats had in their Dec. 12 letter, specifically how he would deliberate on FERC dockets “involving the potential subsidization of coal and nuclear plants.”

“We are concerned about positions you have taken, both while serving as the U.S. Department of Energy’s Deputy General Counsel for Energy Policy and in the private sector. These positions and statements suggest a lack of independence and an inappropriate predisposition on a number of topics likely to be involved in proceedings that will come before you in your new role as a FERC Commissioner,” the senators wrote.

Environmental groups on Dec. 18 also asked that McNamee recuse himself on proceedings that could result in subsidies for coal and nuclear plants.

While deputy general counsel at FERC, McNamee signed a letter of transmittal to FERC of a proposal by Energy Secretary Rick Perry that FERC change its rules to effectively value the fuel-secure nature of coal and nuclear power plants. The so-called grid resilience rule could have effectively resulted in financial subsidies for coal and nuclear plants that were unable to compete in power markets.

He left DOE for awhile and returned as executive director of the department’s Office of Policy, which had already been at work on a proposal to use emergency authorities under the Federal Power and Defense Production acts to favor coal and nuclear power plants.

In reply to questions after his confirmation hearing, McNamee said he was “not involved” in drafting that proposal because he was not employed by DOE at the time.

“When I returned to DOE as an employee, I reviewed the draft memorandum and began researching and trying to work through the substantive issues, as well as examining the statutes and legal justifications contained in the proposal. I stopped work on the draft memorandum in August 2018,” he said.

McNamee met with Beamon on Dec. 12, one day after being sworn in as a member of FERC and less than a week after a narrow 50-49 approval of his nomination by the Senate.

Beamon told McNamee that he does not think recusal is required in FERC’s open proceeding on grid resilience in regional transmission organizations and independent system operators that the commission put forth after rejecting 5-0 Perry’s initial request for a change in market rules.

“But I cautioned you that we must exercise continued oversight” to ensure that the proceeding “does not develop in such a way as to closely resemble or replicate” Perry’s proposal, “which given your prior participation would require your recusal,” Beamon said.

The ultimate decision on recusal is left to each commissioner, explained a former FERC general counsel. There is no process by which other commissioners can weigh in or that parties of interest can appeal a recusal decision by a commissioner or even know whether the advice of the ethics officer was to recuse, he said.

He likened the process to that which governs recusal by federal judges.

“It’s an individual’s choice based on their conscience regardless of possible advice to the contrary by ethics counsel,” he said.

McNamee did not reply to a question about his understating of the ethics officer’s guidance and specifically whether he can reject counsel to recuse himself on a particular matter.

The failure of a commissioner to recuse on a FERC decision because of a perceived conflict of interest could come into play during an argument by aggrieved parties in an appeal of a decision to federal court, said a Washington attorney who practices FERC law.