Senate critics confront FERC nominee at confirmation hearing

Source: Hannah Northey, E&E reporter • Posted: Wednesday, September 18, 2013

The top Republican on the Senate Energy and Natural Resources Committee yesterday said she cannot support President Obama’s highly controversial pick to lead the Federal Energy Regulatory Commission, despite his efforts to respond to myriad attacks from libertarian and conservative groups.

Sen. Lisa Murkowski of Alaska said she could not support Ron Binz, a former Colorado regulator.

“I don’t think I’m going to be able to support your nomination, and I say that reluctantly,” Murkowski said. “The process will move forward; I recognize we need a full commission.”

Binz said he was aware that conservative groups would mount an attack against him, as they did in the Centennial State, but rebutted accusations that he is a pro-renewables radical intent on phasing out coal

Binz also attempted to quell concerns surrounding his past comments that natural gas is a “dead end” fuel by 2035 without carbon capture and sequestration, as well as emails that surfaced showing he received assistance from special interest groups and the White House in preparing for the confirmation hearing.

Binz dismissed accusations mounted by conservative groups in recent weeks that he’s intent on phasing out coal as part of Obama’s climate change plan. Binz said he learned of his nomination April 4, weeks before Obama announced his climate plan in late June (E&E Daily, June 25). Binz also said he spoke to Obama’s top aide on energy issues, Heather Zichal, in December but was never asked about his views on curbing greenhouse gases.

“As far as I’m concerned, that’s a coincidence,” Binz said of Obama’s decision to advance a climate change plan.

Binz also apologized to Murkowski for what he said amounted to a miscommunication about his coordination with the White House and other groups leading up to the confirmation hearing.

Murkowski criticized Binz for telling her in a meeting last week 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 (E&E Daily, Sept. 13).

“Mr. Binz, I am trying to reconcile some statements that you made that just don’t seem to line up with information that I learned that same day,” Murkowski said. “I’m sure that you can see the concern that I have when you sat in my office and assured me that there was no coordination with anyone outside of FERC, and then to read a series of emails … directly contradicting what I was told.”

Binz said he had not asked for such coordination and that the attacks were being mounted by outside groups, adding that he didn’t mean to mislead the senator and is attempting to be open.

Murkowski also said she wasn’t convinced that Binz’s past comments about regulating the energy markets were compatible with FERC’s “true independence” and freedom from political influence.

“There’s a lot at stake with FERC, probably more so than most people would realize,” Murkowski said, adding that the agency oversees power moving through pipelines and over transmission lines every year that is worth more than $400 billion.

Among the things that critics are using against Binz is a report he authored in April 2012 that supports regulators operating in a “legislative” mode by gathering information to find solutions to future problems. Such language has piqued the concern of an industry official who accused Binz of “negotiating” Colorado law to create incentives for coal plant closures (Greenwire, Sept. 16).

Votes of confidence from Democratic Sens. Mary Landrieu of Louisiana and Joe Manchin from West Virginia will be critical on the committee, which has 10 GOP members and 12 Democrats.

Manchin said Binz’s record shows that he strongly favors renewables over other fuel sources and that he supported the Clean Air Clean Jobs Act in Colorado, which, Manchin argued, triggered the closure of coal plants, higher rates and possible energy shortages in the future.

“It looks like discriminating against coal is hurting the reliability of our grid,” Manchin told the nominee. “Nothing personal, and I know you know it’s not personal.”

But Binz said he would like to “see a path forward” for coal, and he has pushed in the past for carbon capture and sequestration for coal plants. Binz also said that the law in Colorado was not “anti-coal” but that the commissioners on the state Public Utility Commission did what the Legislature directed them to do.

“I think eventually, the same path forward will be necessary for natural gas,” Binz said.

If confirmed, Binz would replace Jon Wellinghoff as chairman of FERC, a little-known Washington, D.C., agency tasked with regulating interstate transmission lines and fuel pipelines, liquefied natural gas import and export terminals, hydroelectric projects, and wholesale electricity markets.

Sen. Maria Cantwell (D-Wash.) expressed concern that if Binz’s nomination is held up, it could thwart the agency’s recent success in curbing market manipulation.

“I’m a little worried some of my colleagues might hold up your nomination,” Cantwell said. “I hope that doesn’t happen.”

‘Dead end’

Republican Sens. Jeff Flake of Arizona and John Barrasso of Wyoming asked Binz to explain his comment that natural gas is a “dead end” fuel by 2035 without carbon capture and sequestration, with Barrasso saying such language was disturbing and outside the mainstream.

Binz said while he believes natural gas is a “terrific fuel” in the near term, many highly esteemed reports show that carbon emissions related to natural gas must be tackled over the next two decades, and he’s hopeful that the technology will be developed during that time.

Gas supplies in the United States are growing “larger by the minute,” and the fuel source is critical and “near perfect for the next couple decades” but would need CCS to be considered a “permanently good fuel,” he said.

Gas is also critical to cleaning up criteria pollutants, Binz said, adding that he supports gas development, has talked to several companies hoping to export gas and supports moving their applications expeditiously through the licensing process at FERC.

Colorado Sen. Mark Udall (D), who introduced Binz to the committee by calling him a “pragmatist, a go-to person” in his state for decades, sympathized with the nominee and expressed frustration that “outside forces” can affect nominations.

But Republicans questioned whether Binz would use his future vision of gas to thwart pipeline and infrastructure development at FERC. Binz said he would not use his judgment about what would happen in the future to make decisions as FERC chairman.

“That’s not something that will be on my agenda,” Binz said, adding that he would not promote any particular energy resource.

Binz added that he believes FERC is “fuel-neutral but not reliability-neutral,” and that the commission is charged with building infrastructure that all resources can access. But he said it’s up to the states to determine those fuel choices.

“I understand this is a different job,” Binz said. “It removes barriers for resources connecting to the grid, but the economics of those fuels, the policies of those states and, frankly, the policies of these Congress are what’s going to make the determinations about what fuels are selected, not FERC.”

Republicans also attempted to direct questions about a renewable energy standard and wind production tax credits toward Binz, but Energy and Natural Resources Chairman Ron Wyden (D-Ore.) said those issues do not fall under FERC’s oversight.

“On the national renewable energy standard, Mr. Binz would have absolutely no authority to do anything on this matter unless the Congress were to pass this and enact it into law,” Wyden said.

Wyden also noted that FERC has no authority to impose unjust or unreasonable rates, saying “that means no backdoor taxes on coal or coal-generated electricity.”