Obama’s nominee for chairman to face tough questions

Source: Hannah Northey, E&E reporter • Posted: Monday, May 19, 2014

Norman Bay, nominated by President Obama for the chairman spot on the Federal Energy Regulatory Commission, will be asked about energy policy, enforcement and the direction of his agency tomorrow as he faces the Senate Energy and Natural Resources Committee.

The confirmation hearing for Bay and FERC’s acting chairwoman, Cheryl LaFleur, will be watched closely for clues to the nominees’ positions on liquefied natural gas exports, transmission policy and renewable power.Bay would replace former FERC Chairman Jon Wellinghoff, who stepped down last year. Bay is Obama’s second choice for chairmanship. His first, former Colorado regulator Ron Binz, was forced to withdraw last year under fire from free market- and fossil-funded groups as well as from Energy and Natural Resources Committee members.

While Bay, who is currently director of FERC’s Office of Enforcement, has reportedly had positive meetings with Energy and Natural Resources Chairwoman Mary Landrieu (D-La.), he has received a less-than-enthusiastic response from Republicans, notably Sen. Lisa Murkowski of Alaska.

“Senator Murkowski continues to question why Cheryl LaFleur is being pushed aside for the position of chair by someone who has such a steep learning curve ahead of him and may have to recuse himself on dozens of cases,” said Robert Dillon, a spokesman for the senator. Murkowski met with Bay last Thursday for 45 minutes, said Dillon, who didn’t indicate how Murkowski would vote.

One source said there could be Republican push-back on the committee — made up of 12 Democrats and 10 Republicans — because of politics, concerns over FERC enforcement and questions about Bay’s experience in the energy field.

A barometer of Bay’s chances might be Sen. Joe Manchin (D-W.Va.), who has expressed concerns about Bay’s experience with energy policy but has also promised to keep an open mind.

Sources say FERC enforcement — and Bay’s oversight — will come up.

In the past, legal experts have disagreed with FERC officials over whether a string of multibillion-dollar settlements and confusion over what constitutes market manipulation will trigger a mass exodus of firms from the energy trading markets (Greenwire, Nov. 19, 2013).

The debate has centered on FERC’s increased policing of gas and electricity markets in recent months that led to high-profile Wall Street settlements, including JPMorgan Chase & Co.’s agreement to pay $410 million for gaming the markets in California and the Midwest.

William Scherman, FERC’s former general counsel and a partner with Gibson, Dunn & Crutcher LLP, and two other lawyers said in an Energy Law Journal article last week that FERC’s enforcement has become “lop-sided and unfair” and should be the subject of a technical conference.

Scherman, notably, criticized the commission last year for not providing clear rules about what constitutes market manipulation and said the agency appears to be setting new definitions and standards as it goes along.

Schedule: The hearing is Tuesday, May 20, at 10:15 a.m. in 366 Dirksen.