Hebert Signals Intent to Leave FERC; Madden Departs

Ending months of speculation, FERC Chairman Curt Hebert Jr. has informed the White House that he will step down from the Commission at the end of August. At the same time FERC General Counsel Kevin Madden, who has long had a hand in directing Commission activities, will also leave to take a position with AGL Resources in Atlanta.

Hebert, who has served on the Commission since 1997, did not say what he plans to do after he leaves the Federal Energy Regulatory Commission (FERC). He was appointed chairman within a few days after President Bush assumed office in late January, but rumors have been rampant since then that the president intended to replace him with former Texas regulator Pat Wood III, who recently joined FERC as commissioner (see NGI, March 5).

Hebert's hope of staying on as chairman went up in smoke when his long-time friend, Sen. Trent Lott (R-MS), lost his position as Senate Majority Leader in early June. Lott had been Hebert's biggest supporter on Capitol Hill and at the White House.

The White House has not yet formally announced who it will appoint as Hebert's successor, although Wood is considered a shoo-in. The Texas native, who has close ties to Bush, was in the process of moving his family from Texas to Washington, DC for much of last week, could not be reached for comment. A Wood staffer replied "not to my knowledge" when asked if the commissioner had been in contact with the White House. It is usual for a new chairman to appoint his own general counsel, which explains in part, Madden's move.

Also, Madden pointed out that during his 20-year career at FERC he had "a major hand in creating and carrying out most of the major actions moving toward a competitive environment. It's time for me to move on." He will be executive vice president of legal, regulatory and governmental strategy at AGL Resources. Madden has held a number of executive positions during his lengthy service with FERC, including deputy director of the Office of Markets, Tariffs and Rates, director of the Office of Pipeline Regulation, and director, Office of Hydropower Licensing.

His experience includes primary responsibility for crafting and implementing such landmark federal regulatory decisions as Order Nos. 636, 637, 888 and 2000, which resulted in the restructuring of the natural gas and electric utility industries."We are thrilled to have Kevin Madden, who has been a dominant force in the energy industry, join the AGL team," said Paula G. Rosput, president and CEO of AGL Resources.

Hebert likewise, claimed credit for guiding the Commission through turbulent times toward competitive markets."Electricity prices were stabilized while incentives for supplies were preserved, and the groundwork was done for regional transmission organizations to run the national power grid in a reliable manner embracing competition and free markets." Both Hebert and Madden performed under fire in recent months, appearing repeatedly before congressional committees seeking to make FERC a scapegoat for the western power crisis.

"I'm not surprised by the announcement. It just verifies what we've been talking about for months," said Jerald V. Halvorsen, president of the Interstate Natural Gas Association of America (INGAA). "I think he [Hebert] can hold his head up high" because he's done a "damn good job of holding things together" throughout the upheaval in the electricity and gas markets, he noted. Hebert has come out "smelling like a rose in spite of taking some bumps" from the market.

Throughout his seven-month stint as chairman, Hebert was often attacked by California Gov. Gray Davis and the California delegation on Capitol Hill --- notably Sen. Dianne Feinstein --- for refusing to impose hard price caps on wholesale power transactions in western markets. A self-styled champion of free markets, Hebert did not waver from his position during the market tumult. Instead, he and the Commission settled on a complex price-manipulation plan that appears to be working in the West.

"If the rumors are true, and so far they have been," Halvorsen said he expects the White House to name Wood to take over at the Commission effective Sept. 1. He knew of no other potential contenders for the chairman's spot.

"[I]t has been a pleasure and honor to serve this administration and the American people" during a "vital time" in the energy markets, said Hebert, a former Mississippi regulator and legislator, in a prepared statement last Monday.

With his departure, the Commission will be left with four members -- two Republicans and two Democrats. The president will now have to nominate a candidate to fill the Republican vacancy on the five-member agency, and seek Senate confirmation.

©Copyright 2001 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.