Questions center on FERC nominee’s view on coal subsidies

Source: By Rod Kuckro, E&E News reporter • Posted: Friday, October 5, 2018

Bernard McNamee, the Trump administration’s pick to fill a vacancy at the Federal Energy Regulatory Commission, will be asked to articulate clearly his position on possible subsidies for coal and nuclear plants that are having trouble competing in a market dominated by cheap natural gas.

President Trump nominated McNamee yesterday to fill the vacancy at FERC created in August when Rob Powelson resigned after less than a year on the commission to become president and CEO of the National Association of Water Companies, the lobbying group for private water utilities.

FERC Chairman Kevin McIntyre, in a tweet, said McNamee is “eminently qualified for the job, and I look forward to serving with him.”

Commissioner Neil Chatterjee, also a Republican, said he was “pleased” by the pick and looks “forward to having a full slate of Commissioners here at FERC.”

The commission’s two Democrats, Cheryl LaFleur and Richard Glick, had no immediate comment.

It will be difficult for McNamee to be confirmed by the Senate before the November elections. The Senate is expected to adjourn for campaigning after the vote on the nomination of Brett Kavanaugh to serve on the Supreme Court.

If confirmed, McNamee would be the most overtly political person to serve on FERC in decades and the first since Martha Hesse in 1986 to be nominated while serving in the same administration as the president.

He has been executive director of the Department of Energy’s Office of Policy since June and previously served at the department from May 2017 to February 2018 as a political appointee in the general counsel’s office. Between those stints at DOE, McNamee was a director at the Texas Public Policy Foundation, a conservative think tank.

Before coming to DOE, McNamee had been chief of staff for Texas Attorney General Ken Paxton (R) and a senior adviser to Sen. Ted Cruz (R-Texas). He also served twice under Republican attorneys general in Virginia in the early 2000s and was the policy director for George Allen’s (R) successful U.S. Senate bid in 2000.

He has a long history of political donations to Republican candidates and political action committees.

“In our view, FERC has already become much more ‘political’ because the questions before it touch on issues that reflect current political questions,” said ClearView Energy Partners in a note to clients.

“Under conventional wisdom, we would expect that if the Republicans retain a majority in the Senate, the Trump Administration could be inclined to pair a Democratic nominee with McNamee,” said the analysts at ClearView.

ClearView doesn’t expect the White House to renominate LaFleur when her term expires June 30, 2019, and a new candidate could be paired with McNamee, who is nominated to fill the balance of Powelson’s term expiring June 30, 2020. LaFleur’s replacement and McNamee could see Senate floor time in early 2019. “While this scenario still seems likely, it is not the only one,” said ClearView analysts.

“These are increasingly unconventional times,” said ClearView analysts. “We do not rule out Majority Leader Mitch McConnell (R-KY) encouraging the Senate Energy Committee to take up the nomination as soon as McNamee’s paperwork arrives from the White House to restore the 3-2 Republican majority on the Commission,” Clearview said.

Reaction from FERC observers was swift.

Tyson Slocum, energy director for the group Public Citizen, said McNamee is “unqualified to serve at FERC because of his direct role in advocating for and developing the DOE coal and nuclear proposal” to offer financial subsides from consumers.

Nora Brownell, a former FERC commissioner, said: “I hope that he will respect the independence and objectivity that FERC represents. I will be interested to hear his views on the importance of that independence and further elaboration on his comments on market distortions. Given that he has already expressed his views on a coal bailout I assume he will recuse himself from those proceedings.”

John Moore, director of the Sustainable FERC Project at the Natural Resources Defense Council, noted that FERC has “a longstanding commitment to fuel-neutral regulation, but Mr. McNamee’s past writings and career track record suggest that he would seek every opportunity possible to support fossil fuels. He should be prepared to answer some very hard questions about his previous comments and positions, and how they would affect FERC independence.”

But Colette Honorable, a Democrat who recently served as a FERC commissioner, said the nominee “has a great mix of federal and state experience in public and private sectors which should serve him well at FERC, which frequently grapples with state/federal issues.”

McNamee’s nomination was hailed by Michelle Bloodworth, president and CEO of the American Coalition for Clean Coal Electricity, many of whose members have been pushing for subsidies based on the fact that coal plants have on-site fuel.

But the conventional wisdom that McNamee would be inclined to favor subsidies was disputed by a former DOE colleague who described McNamee as “through and through” a “free market guy” for whom such subsidies would run counter to his beliefs.

McNamee’s private-sector experience includes the law firms McGuireWoods, Williams Mullen, and Hunton & Williams.

He has no experience in the electricity or natural gas utility industry or as a regulator of those sectors.

The member of FERC that McNamee would replace, Powelson, had been chairman of the Pennsylvania Public Utility Commission, and as recently as 2017, he was president of the National Association of Regulatory Utility Commissioners.

Powelson warned before leaving against allowing politics to creep into deliberations of the commission, which has traditionally practiced independence from outside political pressure and made decisions based on a defensible legal record.

“I don’t make any decision based on the fact that I’m a lifelong Republican. I have a mean independent streak in me,” Powelson said.

McNamee has testified on behalf of DOE before the Senate Energy and Natural Resources Committee in support of a number of bills as well as on the administration’s plan to reorganize the department.

In April, McNamee penned a column for The Hill titled “This Earth Day, let’s accept the critical role that fossil fuel plays in energy needs.”

He wrote that “when we celebrate Earth Day, we should consider the facts, not the political narrative, and reflect about how the responsible use of America’s abundant resources of natural gas, oil and coal have dramatically improved the human condition — and continue to do so.”

The White House also vetted Art Graham, chairman of the Florida Public Service Commission, for the FERC seat.