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Wellinghoff Tapped as FERC Chairman; Kelly Nominated for Third Term

President Obama Thursday tapped Acting Chairman Jon Wellinghoff to be chairman of the Federal Energy Regulatory Commission, confirming speculation that has been rampant in Washington, DC, energy circles for the past week. The president also announced his intent to nominate existing FERC Commissioner Suedeen Kelly for a third term at the agency.

The appointment of Wellinghoff, 59, as chairman came nearly a week after former FERC Chairman Joseph T. Kelliher resigned from the Commission, opening the door for Obama to bring in his own candidate for commissioner. Obama, however, did not name anyone Thursday for the seat vacated by Kelliher.

After taking office in late January, Obama quickly tapped Wellinghoff, a favorite of Senate Majority Leader Harry Reid (D-NV), as acting chairman of the Commission (see Daily GPI, Jan. 26). Wellinghoff, whose background is in renewable energy, energy efficiency and distributed generation, is the first Democratic chairman at FERC since James Hoecker left in January 2001.

Kelly, a Democrat, has been a FERC commissioner since 2003. Her current term expires June 30. Kelly was chair of the New Mexico Public Service Commission, professor at the University of New Mexico School of Law and a legislative aide to Sen Jeff Bingaman (D-NM), chairman of the Senate Energy and Natural Resources Committee.

Wellinghoff has presided over two FERC meetings since being named acting chairman, and the agenda has reflected issues that are important to the Obama administration -- renewable energy and electricity transmission rather than natural gas. "It seems he's going to have more of a focus on electric issues," a producer source said. Wellinghoff "can't totally ignore" natural gas, but it will "not be a front burner item" during his term, she noted.

"I don't think he will promote natural gas," she said. Wellinghoff is not expected to be friendly to proposals to build liquefied natural gas (LNG) terminals, according to FERC observers. In September 2008 he was the sole opponent to FERC issuing a certificate for Bradwood Landing LLC's LNG terminal in Oregon (see Daily GPI, Sept. 19, 2008).

"I determined that there are reasonable alternatives" to the Bradwood Landing facility to "serve the projected needs of the Pacific Northwest in a more efficient, more reliable [and] more environmentally preferable manner," Wellinghoff said at the time. He indicated that "we don't need more gas-fired generation," the producer source said.

However, she recalled that in September 2007 Wellinghoff was the the lone supporter of immediate rate relief for customers -- producers and end-users -- who brought a complaint against Southwest Gas Storage for allegedly charging excessive rates (see Daily GPI, Sept. 5, 2007).

Until Obama fills the seat vacated by Kelliher, the political makeup of the Commission will be evenly split -- two Democrats and two Republicans. The president's replacement for Kelliher will surely be a Democrat, thus tipping the scales in favor of the Democrats at FERC.

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