Bush Chooses Wood-TX, Brownell-PA for FERC

President George W. Bush put an end to a lot of anticipation at FERC last Tuesday when he announced his plans to nominate Texas regulator Patrick H. Wood III and Pennsylvania regulator Nora M. Brownell for the two vacant commissioner spots on the Commission. But the president was mum on whether Wood would replace current FERC Chairman Curt Hebert Jr.

Wood, currently chairman of the Texas Public Utility Commission, was appointed to the PUC in 1995 by then-Gov. George W. Bush, and was a member of the Bush energy transition team. He will fill out a term at FERC expiring on June 30, 2005. Brownell has been a member of the Pennsylvania Public Utility Commission since April 1997. She was named for the remainder of a five year term at FERC expiring on June 30, 2001 and for an additional five-year term ending June 30, 2006.

Wood served as a FERC staffer from 1991-93 and was legal counsel to the chairman of the Texas Railroad Commission. Additionally, he was an engineer with Arco Indonesia and an attorney with the law firm of Baker & Botts in Washington, D.C. He is a graduate of Texas A&M University and Harvard Law School.

Brownell currently is president of the National Association of Regulatory Utility Commissioners. Previously, she acted as executive director of the Regional Performing Arts Center in Philadelphia, and served as senior vice president of Meridian Bancorp, Inc.'s corporate affairs unit. A native of Erie, PA, she attended Syracuse University.

Hebert said last week that he had already welcomed the Wood and Brownell on board, and did not appear to be overly concerned that Wood might replace him down the road. "I.....called them both yesterday [Tuesday and] congratulated both of them. [I] look forward to working with them," he told reporters during a press briefing following the Commission's regular meeting. Hebert noted he already knew the state regulators quite well.

When asked if he thought his own job would be jeopardized by Wood's arrival at FERC, Hebert simply said, "I serve at the will and pleasure of the President." He said he had not been told by President Bush that his days as FERC chairman were numbered.

While both nominees were slated for commissioner posts, Wood, who has close ties to Bush, still is expected to be named chairman of FERC, but not immediately, according to sources. "A deal has been struck" that calls for Hebert to remain in office until either late summer or early fall, and then to step aside for Wood, said a knowledgeable source. "I know there's a timetable scheduled" for Hebert's exit and Wood's appointment as chairman.

Some questioned the wisdom of such a move by the White House because it means that Hebert, who has been at the helm of FERC since late January, would be a lame-duck chairman for the next seven or eight months.

Rumors have been swirling around Washington, D.C. for nearly a month about the White House's plans to nominate Wood as commissioner and then appoint him as FERC chairman over Hebert (see NGI, March 5). But Hebert has dismissed these as "political rumors," saying that the Bush White House hadn't informed him personally that this was its intent.

Behind the scenes, Senate Majority Leader Trent Lott (R-MS), a long-time ally and friend of Hebert's, reportedly has been negotiating with the White House to keep him on as chairman. Hebert also has had strong support from other Republican heavyweights on Capitol Hill, including Sen. Larry Craig (R-ID), Sen. Frank Murkowski (R-AK), Rep. Joe Barton (R-TX) and Rep. W.J. "Billy" Tauzin (R-LA).

Despite this backing, it's unlikely that there will be any united opposition to Wood's nomination since senators generally concede the President's right to pick his administration staff.. Nor is Brownell's nomination likely to run up against any opposition in the Senate. The selection of Brownell for FERC commissioner was something of a surprise. A number of persons have been mentioned as candidates for the seat over the past months, but her name never surfaced.

Once Wood and Brownell are on board, it would mark the first time in more than a year that FERC will be operating with its full, five members. Former Commissioner Vicky Bailey departed in February 2000, leaving one vacancy, and former Chairman James Hoecker left in January.

This also will be the first time in a long while that the Commission will have a Republican majority - Wood, Brownell and Hebert. Commissioners William Massey and Linda Breathitt, both of whom were appointed by President Clinton, are Democrats.

Wood and Brownell share similar backgrounds - both have been very active in deregulating the electricity markets in their respective states. Pennsylvania is considered to have one of the best retail choice programs in the nation, while Texas - which expects to be fully deregulated by January 2002 - has been given high marks as well.

Since both Wood and Brownell come from areas where price caps are in effect for wholesale power sales, Hebert could soon find himself in the minority at the Commission in his opposition to caps. When asked if he thought the new Republican commissioners would side with him or with Commissioner William Massey (who advocates caps), Hebert said, "my friends will side with me." He continued, "I'm fortunate in that I have friends in this city, and we are like-minded."

Nor, he indicated would he be eager to bring the price-cap issue up for a vote if Commissioner Breathitt (who is undecided on the issue) were to join Massey in support of price caps. He said he would continue to stand firm against caps until someone can show him they would bring "long-term differences and not short-term mistakes."

Hebert said he would keep an "open mind" to an expected proposal from New York City Major Rudolph Giuliani for a $250/MWh price cap for the Northeast. "God bless the mayor."

If Rep. Joe Barton (R-TX) should call for FERC to conduct a Section 206 investigation into wholesale power prices as part of emergency legislation for California, the chairman said the Commission would carry out the directive. "Certainly, if we get congressional direction, we'll take it."

But he expressed some reservations about such a probe. "...[T]here are many people who want price caps in the Northwest. One way to get there is through a 206 [investigation]. It could be argued [that is] the only way to get there. So I have to be careful in doing that. We've not seen the need to do that at this point."

On a related issue, Hebert said the Commission will act quickly on the responses of power suppliers to the orders directing them to pay refunds in California. "I'll give people an up-or-down call as soon as possible."

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