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Kelliher to Step Aside as FERC Chairman, Remain Commissioner

FERC Chairman Joseph T. Kelliher, who was tapped as agency head by President Bush more than three years ago, announced last Wednesday that he will step down as chairman effective Jan. 20, the day the government reverts to Democratic leadership, but he will continue to serve as a commissioner while he pursues job opportunities outside the Federal Energy Regulatory Commission (FERC).

"Although my term as commissioner does not end until 2012, I will...immediately begin to recuse myself from FERC business as I explore other career opportunities," Kelliher said. He will recuse himself from any proceedings that involve companies where he has interviewed, said FERC spokeswoman Mary O'Driscoll, but she could not say how long Kelliher will stay on at the Commission. Kelliher notified Bush of his decision by letter last Wednesday. His final meeting as FERC chairman will be Thursday (Jan. 15).

"It has been an honor to serve as chairman of FERC at this particular time, with the expanded power granted the agency in the Energy Policy Act of 2005," Kelliher said. "This law gave FERC better tools to discharge its historic missions of guarding the consumer from exploitation and promoting the development of a robust energy infrastructure, as well as giving the agency new missions on grid reliability and enforcement."

With the Commission left leaderless as of Inauguration Day, the new president would have to quickly pick an acting chairman to serve until a permanent chairman is selected and confirmed by the Senate. Either Commissioners Jon Wellinghoff, an independent, or Democrat Suedeen Kelly may be tapped as interim chairman. Both are said to be interested in replacing Kelliher full time. Senate Majority Leader Harry Reid (D-NV) has said he supports Wellinghoff, a fellow Nevadan and friend, to head FERC (see NGI, Jan. 5).

Regardless of who is named chairman, the Commission will continue to be dominated 3-2 by Republicans as long as Kelliher stays on the panel, or until a Republican commissioner's term expires. That could be a long time. Commissioner Philip Moeller's term would be the first to expire in June 2010.

Once there is an opening two FERC outsiders -- Charles E. Box, chairman of the Illinois Commerce Commission, and John Norris, chairman of the Iowa Utilities Board -- also have been named as possible successors to Kelliher. Norris is a close friend of Obama, and his wife, Jackie, has been selected as incoming First Lady Michelle Obama's chief of staff. Box, if selected, would be the first African-American to head FERC (see NGI, Dec. 8, 2008; Dec. 1, 2008).

"I wouldn't be surprised" if Obama picked someone from outside the agency for chairman, a Washington source said, adding that such a person was more likely to have actively supported Obama during his campaign than the sitting FERC commissioners. "By the time you win the White House, you owe a lot of favors along the way."

Kelliher was tapped as chairman of FERC in July 2005, after having served as commissioner since November 2003. He was nominated and approved for a second term to run for five years starting June 30, 2007. Prior to FERC, he was a senior policy advisor at the Department of Energy.

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