Daily GPI / NGI The Weekly Gas Market Report / Regulatory / NGI All News Access

Obama's FERC Chair Nominee Hits Senate Turbulence

Acting FERC Chairman Cheryl LaFleur seems likely to have a smooth path to a second term as a commissioner, but it may be a rockier road for Norman Bay, who was President Obama nomination for the Chairman's seat, based on a hearing of the Senate Energy and Natural Resources Committee in Washington, DC, Tuesday.

"While you and I may not always agree on policy, you have demonstrated, I think, very strong leadership in your position as the acting chair," Sen. Lisa Murkowski (R-AK), the ranking Republican member on the committee, told LaFleur. "You've got steady leadership combined with your 25 years of work in the energy field. I think it demonstrates the experience; you've certainly got the temperament and the judgement that we need at the commission." La Fleur has been acting chair since November when the previous chairman departed.

But Murkowski and several other Senators clearly have more questions about Obama's nomination of Bay, who is currently director of the Federal Energy Regulatory Commission's (FERC) Office of Enforcement (OE) (see Daily GPI, Jan. 31).

"You clearly have an impressive personal story and resume, but as I reflected back on our conversations, I did feel that our discussions had raised additional questions regarding your nomination, not just to be a sitting commissioner, but to serve as the next chairman to FERC," Murkowski told Bay. "I have expressed some concern about your experience in the energy policy field as being recent and limited." She is also concerned about the number of issues Bay may have to recuse himself from if appointed, Murkowski said. "I do think it is important that I raise these issues, whether it is the issue of recusal, whether it is what I believe is perhaps limited relevant experience, and then...the fact that our lone female commissioner, who has clearly demonstrated her leadership, would be moved down from the position that she currently holds as chairman of the Commission."

LaFleur, a Democrat, was first nominated to FERC by Obama and confirmed by the Senate unanimously in 2010 to a term to end next month. Prior to joining the Commission, she was the executive vice president and acting CEO of National Grid USA. In November, Obama tapped LaFleur to be acting chairman following the departure of Jon Wellinghoff (see Daily GPI, Nov. 21, 2013). Prognosticators had seen LaFleur as one of the possible successors to Wellinghoff, but in January Obama instead nominated Bay to the Commission and to be designated chairman upon appointment by the Senate. Obama nominated LaFleur to a follow-up term on the Commission earlier this month (see Daily GPI, May 2).

Bay's nomination has been criticized in some quarters because he had no energy industry experience before going to OE in 2009 (see Daily GPI, March 27). Prior to his tenure at OE, Bay was a professor of law at the University of New Mexico 2002-2009 and served as U.S. attorney for New Mexico for two years before that. Several investigations of possible trading violations by banks have been initiated during his term as enforcement chief. It is unusual for a FERC staff member to be selected as a commissioner. Most FERC commissioners come from the ranks of state utility commissions or from the staffs of congressmen or congressional committees which have dealt with energy issues.

In his opening statement, Bay said his top priority if confirmed to FERC would be to be "fair, balanced and pragmatic in addressing issues." He also said he sees an important need for more natural gas and electric transmission infrastructure, and would look for ways to promote competitive markets and energy reliability.

Much of the conversation during the two-hour hearing focused on Bay's qualifications to be FERC chairman, his handling of investigations during his time at OE, and allegations made this week by attorney William Scherman in a Wall Street Journal op-ed. According to Scherman, who has represented clients under investigation by FERC, the agency doesn't work with a coherent definition of market manipulation; often doesn't provide those being investigated with information it has collected; and rarely dismisses cases once they are made public. OE's decisions under Bay have frequently been lopsided and unfair, according to his critics.

"I find this very troubling," John Barrasso (R-WY) told Bay. "I believe this raises serious questions about your fitness to be on the Commission."

Bay insisted that the allegations are untrue and that he would be a fair chairman if confirmed to FERC by the full Senate.

"The key is that you have to have a commitment to doing the right thing," Bay said. "Everything begins with that. And whether you are a U.S. attorney or whether you are the director of an Office of Enforcement and do civil work, you have to have a commitment to fairness, because fairness has to be a cornerstone of your office. It goes to the very legitimacy of the work that you do...

"FERC provides a tremendous amount of process to the subjects of investigations and, in my view, there's a lot of transparency into the work of the Office of Enforcement because it's been very important to the Commission over the years that transparency be provided."

Bay has supporters on the committee. "Under Mr. Bay's leadership, FERC has increased transparency in its work while bringing a number of enforcement actions that have helped protect the integrity of energy markets and provided about $300 million in relief to consumers," said Sen. Martin Heinrich (D-NM). New Mexico Gov. Susana Martinez submitted to the committee a letter supporting Bay's nomination, as did former committee chairman Jeff Bingaman, who was Democratic Senator from New Mexico until last year.

Another former committee chairman, Pete Domenici, who was Republican Senator from New Mexico 1973-2009, was glowing in his formal introduction of Bay to the committee. "This is such a fantastic nominee...if there are those who choose not to support him, that's their prerogative. I would urge that they understand that it isn't always that we get a candidate of this stature, with this background, coming before you for this kind of job," Domenici said. The departing Wellinghoff also strongly supported Bay.

LaFleur said if returned to FERC she would continue to focus on three areas that have been her priorities: changes in power supply prompted by increased availability of domestic natural gas, grid reliability and security, and cooperative relationships with federal and state agencies.

Bay is Obama's second nominee to fill the spot vacated by Wellinghoff. Last year Obama tapped former Colorado regulator Ron Binz (see Daily GPI, July 1, 2013). But the nomination of Binz, a renewable energy and consumer advocate, was met by stiff resistance in the Senate Energy and Natural Resources Committee, and he withdrew his name from consideration (see Daily GPI, Oct. 2, 2013).

ISSN © 2577-9877 | ISSN © 1532-1231 | ISSN © 1532-1266

Recent Articles by David Bradley

Comments powered by Disqus