President Obama has tapped former Colorado regulator Ron Binz to sit on the five-member Federal Energy Regulatory Commission, succeeding Jon Wellinghoff.
If confirmed by the Senate, Binz, a Democrat and former chairman of the Colorado Public Utilities Commission, would become chairman of the FERC, succeeding Wellinghoff, who has chaired the agency since March 2009. Wellinghoff, who submitted a resignation to the president in late May (see Daily GPI, May 30), has served on the Commission since 2006. His term is due to expire Sunday (June 30).
“During the confirmation process, I will carefully consider the nominee’s qualifications and fitness to serve, not only as commissioner, but also as chair,” said Sen. Lisa Murkowski of Alaska, the ranking Republican on the Senate Energy and Natural Resources Committee.
Binz, a renewable energy and consumer advocate, resigned from the Colorado commission in 2011 under pressure from mining interests and Republican state legislators. He then went into private business. Binz currently is principal at Public Policy Consulting in Denver and a policy adviser for the Center for the New Energy Economy at Colorado State University in Fort Collins.
“Binz’ views on…a ‘legislative’ approach for regulators may suggest that a more activist FERC could materialize under his leadership. What’s not yet clear is what Binz’ priorities at the FERC will be and how he plans to achieve them,” wrote energy analysts with ClearView Energy Partners LLC following the White House announcement.
“We will be looking to see how his ‘legislative’ approach and personal philosophies will apply to the Commission’s various jurisdictional dimensions: electric-gas coordination, electric transmission planning and ROE [return on equity] policy, natural gas and oil product pipelines, and infrastructure permitting, including liquefied natural gas export facilities,” they said.
“How fast his nomination could proceed through the Senate is unclear…as Colorado Republicans and coal-mining interests resented his support of incentives to encourage the state’s utilities to move away from coal and toward natural gas and renewables,” the energy analysts added.
When Republican and Democratic nominees for FERC are paired together at the same time, the confirmation process tends to move more quickly, they said. However, “given the likely pushback from coal-fired generation supporters — particularly in retaliation for the promised greenhouse gas new source performance standards ordered by the White House [on Tuesday] — it’s hard to say how quickly his confirmation might move,” the ClearView analysts added.
If Wellinghoff “leaves he FERC before Binz is confirmed (either for a new job, or when his grace period ends at the conclusion of this Congressional session), we would expect Commissioner John Norris to be tapped in an acting capacity.”
Wellinghoff’s legacy will be the million-dollar fines that the agency imposed on leading Wall Street banks. During Wellinghoff’s term, FERC began to use the power it was granted under the Energy Policy Act of 2005, which allowed it to fine companies and traders up to $1 million each day they were found to be manipulating the electricity or natural gas markets.
During his tenure, FERC has gone after the trading desks of several large Wall Street banks, including Deutsche Bank, Barclays Bank and an affiliate of JPMorgan and Chase (JP Morgan Ventures Energy), for manipulation of the electricity markets (see Daily GPI, Nov. 19, 2012).
While FERC was successful in penalizing large traders for manipulation of power markets, an attempt by the agency to levy a $30 million fine on a former natural trader for failed hedge fund Amaranth Advisors LLC was overturned by the court (see Daily GPI, April 4; March 18; April 25, 2011). The court ruled that FERC lacked the authority to fine former Amaranth trader Brian Hunter because the Commodity Futures Trading Commission has exclusive jurisdiction over transactions involving commodity futures markets.
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