Senate Democrats took aim at FERC nominee Bernard McNamee over his involvement in crafting a controversial Department of Energy (DOE) proposal to subsidize coal and nuclear power, but the energy sector attorney pledged to serve as an “independent arbiter” of grid resiliency and reliability issues that come before the Federal Energy Regulatory Commission.
Despite the pledge, Sens. Catherine Cortez Masto of Nevada and Ron Wyden of Oregon pressed McNamee — a former deputy counsel who currently serves as executive director of DOE’s Office of Policy — if he would recuse himself should issues related to the failed notice of proposed rulemaking (NOPR) reemerge.
“You played a key role in developing the legal underpinnings of a Trump energy bailout that was so flawed, every member of FERC rejected it,” Wyden said during a lame duck Senate Energy and Natural Resources Committee hearing on Thursday. “It would have benefited a handful of companies, most of them in the northeast, while jacking up ratepayers’ costs [by] billions of dollars. Now the president wants to put you on the commission that rejected the plan you wrote.
“This is not like having the fox guard the chicken coop — this is like putting the fox inside the chicken coop. Why should you be trusted to do anything differently?”
McNamee, who would fill a seat vacated by former Commissioner Robert Powelson, said he would serve as “an independent arbiter, and be able to look at the facts and the law and make an independent choice. I have no doubt that I can do that and that it won’t be influenced by politics.
“I understand the difference between my role as a lawyer when I worked on the secretary’s proposal and what the role of FERC is. I also recognize that FERC rejected the proposed remedy, but I also recognize that they unanimously agreed that it was an issue that needed to be looked into further.”
The nominee told Cortez Masto that he would “consult with ethics counsel” to see if he could participate in issues directly related to the DOE NOPR. “The issues of resilience are constantly coming before FERC. I don’t know if anything is going to be proposed, will be proposed, or in what format, [but] I commit that I will talk to ethics counsel to find out if I need to recuse myself.”
The committee’s chairman, Sen. Lisa Murkowski (R-AK), acknowledged that she had been “asked repeatedly” about McNamee’s role in crafting the DOE NOPR. “You have been supported by many, but your nomination has also been criticized by some due to your purported involvement in the administration’s effort to subsidize coal and nuclear power plants,” she said.
But McNamee countered that the NOPR was proposed by DOE Secretary Rick Perry “to address what he perceived as the problems and challenges of the retirements of a number of fuel-secure resources…
“That proposal went over to FERC. FERC considered it and FERC made a decision. They decided that the proposal, as set forth, was a combination — that the record wasn’t sufficient, and that it did not meet their standards for being able to act under sections 205 or 206 [of the Federal Power Act]. They rejected the proposal, but they also opened a new docket in order to consider the issues that were proposed in there, and it’s currently open.”
When the committee’s ranking member, Sen. Maria Cantwell (D-WA), asked if FERC “did the right thing” by rejecting the DOE NOPR, McNamee said he believed the Commission “acted within its authority.”
“The Commission recognized that resiliency was an issue that deserved further study,” McNamee said. “FERC’s examination of the issue is still outstanding. They’re looking at what attributes are necessary for resilience. They’ve recognized that there are issues of price formation, there were determinations about some attributes that weren’t being allowed to compete, and that wasn’t just and reasonable — such as fuel storage.
“I think FERC does its job of looking at what are the right attributes that are needed for the grid, and they do a good job of taking a hard look at the issues in trying to make those decisions.”
Cantwell then asked if there was a resiliency or supply shortage scenario under which McNamee could envision a proposal to mandate coal or nuclear power. “I would not go that far,” he said. “That’s something that would have to be based on the facts presented before them and the laws that are there.”
Not all of the Democrats on the panel had their pitchforks at the ready. Sen. Joe Manchin (D-WV), who last week won a tough reelection campaign, said he was “probably one of the only ones on my side that appreciates where you’re coming from.
“We are in concern of reliability in my quadrant,” Manchin said. “In West Virginia, prices have gone from 6-8 cents per kilowatt-hour to 11.39 cents, and we’re still depending on coal 90%. It’s been driven by all the regulations — that’s driven a lot of the coal-fired plants out of operation. We’re in a conundrum here and we’re trying to work through that.”
McNamee, perhaps recognizing that Manchin’s support is crucial to his confirmation to FERC, expressed sympathy. “Clearly, the challenges that the people of West Virginia have had — both from an employment side and in terms of electric prices — are substantial,” he said.
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