White House Leaves Industry Guessing on FERC Chairman

The White House remained mum throughout last week on its final choice for FERC chairman, but sources indicate that President Bush continues to champion Texas regulator Pat Wood III over current FERC Chairman Curt Hebert Jr. for the job despite mounting pressure from Capitol Hill to keep Hebert.

"...[T]here's been discussion that Pat Wood, a friend and ally of Bush, could very well be the next chairman," forcing Hebert to step aside after only about six weeks on the job, said a Capitol Hill aide. "The president says he hasn't made a final decision yet," he added, but sources believe Bush is leaning towards Wood.

"I'm not aware of the White House having made their final choice either," said Samantha Jordan, press aide for Rep. Joe Barton (R-TX). "I think they're still looking, but there was some discussion that it was possible that [Hebert] could be replaced."

The White House announced a series of nominations last week for the departments of Energy, Interior and Transportation, but an announcement about Wood was not to be found. One source speculated that the White House may be delaying it until it can find another top slot for Hebert within the administration.

There were reports Friday that Wood had accepted the position at FERC and that an FBI background check was under way already, but this could not be immediately confirmed.

Meanwhile, Hebert continues to have the backing of the "old line Republican leadership" in the Senate - namely Majority Leader Trent Lott (R-MS), Sen. Frank Murkowski (R-AK) and Sen. Larry Craig (R-ID) - for the FERC chairmanship, said an industry source in Washington D.C. "They all have spoken out forcefully in favor of the job he's done so far," she noted. Even some Republican heavyweights in the House - such as Rep. W.J. "Billy" Tauzin (R-LA) and Barton - have publicly advocated Hebert for the job.

"Sen. Craig.....firmly stands behind the chairman and says he'll continue to support him," said Craig spokeswoman Sarah Berk. Barton "certainly supports" Wood for a FERC commissioner, but he and Tauzin favor Hebert for Commission chairman, according to Jordan. "They feel he has done a good job." But despite these endorsements from Capitol Hill, "it's a presidential choice" in the end, a gas industry representative noted.

Given this strong leaning for Hebert on Capitol Hill, however, the White House could face an uphill battle in getting a Wood nomination through the Senate.

In the meantime, most energy companies are playing it safe by not indicating their support for either candidate. "We're not jumping to any conclusions one way or the other," remarked the industry source. Nevertheless, she questioned whether it was a "good time to change direction" at the Commission. "We're in the midst of an energy crisis" in California and elsewhere.

"We can't figure out who's opposing him [Hebert]," she said, speculating that it might be the California delegation in Congress, which has assailed Hebert for refusing to impose regional price caps on bulk power transactions. "Maybe they think there would be an advantage" if Wood were appointed to head up FERC, she noted.

Some of the opposition to Hebert is coming from inside the energy industry itself. At least two industry trade groups have refused to sign a resolution supporting Hebert for FERC chairman. The resolution was circulated at a recent meeting of gas representatives in Washington, said another source.

The same gas source openly favors Wood over Hebert, saying that Wood has a good grasp on gas and electricity issues and is well regarded by Bush.

On Capitol Hill, the issue of who will be the next Commission chairman has become something of a hot potato. What normally was considered a routine appointment suddenly has become too hot to talk about. "We're declining all comments on the issue of FERC appointments," said an aide to Murkowski. When asked why, he noted, "it's a Bush administration issue." Wood also is refusing to make any comment.

The White House notified Hebert, the only Republican currently on the Commission, on Jan. 22 that he was to take over from Democratic Chairman James Hoecker. But it was never clear at the time whether Hebert's appointment was as "acting" or permanent chairman. Hebert and FERC press spokesmen strongly indicated at the time that it was permanent, but the White House never made any formal announcement to that effect.

One industry source last week accused Hebert of misleading the regulated energy industries about the nature of his appointment. "He kind of told us, but didn't tell us. He has not been candid and forthright with the industry.....about the conditional aspect of his position."

Susan Parker

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