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After Six Years, Kelly to Leave FERC

In a surprise move last Monday, FERC Commissioner Suedeen Kelly, who was nominated for a third term at the agency in March, announced that she has decided to decline the nomination (see NGI, March 23).

"I would like to thank President Obama for the honor of his nomination and for the trust he placed in me by asking me to serve another term at the Federal Energy Regulatory Commission. But after much reflection, I have decided to respectfully decline the nomination," Kelly, a Democrat, said in a three-paragraph statement.

She is expected to stay at FERC until the Senate confirms her replacement, said Bill Wicker, spokesman for Sen. Jeff Bingaman (D-NM), chairman of the Senate Energy and Natural Resources Committee. Bingaman lobbied the White House to name Kelly to FERC in 2003, and has been her biggest advocate in Congress. The White House has not named her replacement yet.

"It is time for me to move on and pursue opportunities to advance these objectives in the private sector," she said.

This is code for "she wants to go make some money" in the private sector, a source said. Others believe the fact that she was overlooked for chairman, even though she was the Democrat member with the most experience on the Commission, may have been a factor.

"Her resignation announcement, even though she will not leave immediately, will be viewed as a negative in the short run for traditional FERC-regulated entities," wrote William F. Hederman, an analyst with Washington Research Group and former director of FERC's Market Oversight and Investigations.

"Industry viewed her as a tough, capable regulator and the immediate expectation appears to be that her replacement will be less likely to have the same perspective that she brought to the Commission's decision-making. There is no substantive basis for such concerns at this time, in terms of a likely successor, yet Kelly has generally been considered an exceptionally strong commissioner," he said.

Hederman said that some believe Kelly may have awaited the resolution of the enforcement action against Energy Transfer Partners LP before announcing her resignation because "there were rumors that former Chair [Joseph] Kelliher was ready to take much less to get the settlement done on his watch." FERC announced the record $30 million fine for Energy Transfer last Monday just hours before Kelly said she intended to resign (see related story).

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