The Senate Energy and Natural Resources Committee said Friday it postponed a hearing to consider the nomination of former New Mexico regulator Suedeen G. Kelly for a seat on FERC until September, expressing concern that Kelly could face hostile questions if her confirmation were held now due to the hot-button nature of negotiations over the electricity title and energy legislation. Her hearing had been scheduled for July 16.

“Our concern is the negotiations [over the energy bill and electricity amendment] will eclipse” discussion of energy issues during her confirmation hearing, and that would not be fair to Kelly, said committee spokeswoman Marnie Funk. The fear is “one is going to preempt the other.”

The Senate is in the middle of “intense negotiations” on a universal electricity amendment to be offered in the nature of a substitute to the comprehensive energy bill, according to Funk. Senate leaders are trying to get as many Republicans and Democrats on board, she said.

The negotiations are critical to the energy bill, which the Senate hopes to pass by the end of this month before it leaves for August recess, Funk noted. If the Senate is unable to complete the measure by then and it spills over into September, the Senate Energy Committee will go ahead and schedule a confirmation hearing for Kelly “sometime” in September, she said.

“There is so much debate around electricity in particular, FERC and SMD [standard market design] above all, any nomination could encounter tough waters…Senators are very concerned about electricity markets now…and that may show up in a nomination hearing.”

After Kelly’s hearing is held, Capitol Hill aides concede that “any number of things could happen” in the Senate to stall or block confirmation of Kelly and a fellow FERC nominee, Republican Joseph T. Kelliher, whose nomination was voted out of the Senate committee in March. Some believe that if the four-month-old hold on Kelliher’s nomination, which was placed by Sen. Ron Wyden (D-OR), isn’t lifted, a Republican senator may counter with a hold on Kelly’s nomination.

Wyden’s “hold will stand until he receives satisfactory answers” from Kelliher on SMD and on Pacific Northwest contract and refund issues, said Wyden spokeswoman Carol Guthrie last week. The nomination of Kelliher, a senior policy advisor at the Department of Energy (DOE), has been hanging in limbo since March. Some Senate Democrats vowed to block him until the White House tapped Kelly for the agency. They want the Senate to vote on the two nominees as a package deal.

Even if Wyden removes his freeze, there has been speculation that holds could be put on both Kelly’s and Kelliher’s nominations if FERC Commissioner William Massey isn’t re-nominated for a third term by the White House, an aide said. Massey’s term expired on June 30, but he is continuing to serve out a grace period that will end when Congress adjourns later this year. He has indicated that he is interested in another term at FERC, and has received support from Sens. Dianne Feinstein (D-CA) and Maria Cantwell (D-WA). But the White House has been silent on whether it intends to re-nominate Massey.

Another wrinkle is that Sen. Larry Craig (R-ID) is pushing Idaho regulator Marsha Smith as a candidate for the Commission, according to a Capitol Hill aide.

The Senate needs to confirm at least one of the FERC nominees in the next few months, given that the current Commission is down to three members — one of whose time in office may be nearing an end. Massey’s departure would leave FERC without a quorum and unable to conduct business.”We’re clearly moving into a crisis situation on FERC appointments,” one source told NGI.

Bill Wicker, spokesman for Democrats on the Senate Energy and Natural Resources Committee, agreed the Commission is “down to a bare quorum over there,” but he believes “the calvary [Kelly and Kelliher] are coming up over the hill.” The question, however, is when.

If confirmed by the Senate, Kelly would fill out the remaining term of former FERC Chairman Curt Hebert Jr., who left the Commission in the summer of 2001. That term would expire on June 30, 2004. She currently is an attorney and a professor of law at the University of New Mexico School of Law. Kelliher is seeking the seat formerly held by Commissioner Linda K. Breathitt, who departed the agency in December. His term would run until June 30, 2007.

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