Sen. Jeff Bingaman of New Mexico, the ranking Democrat on the Senate Energy and Natural Resources Committee, signaled last Tuesday that he will block the Republican nominee for a seat on the Federal Energy Regulatory Commission unless the White House names a Democratic nominee for the other vacant position on the five-member Commission.

Last year, “I thought the administration had agreed to move ahead with nominations for both positions. That’s what they indicated to me…Obviously, they’ve not done that. They now urge that we proceed to pass on the Republican nominee,” said Bingaman. But “I’m not in a position to support moving ahead with just one of those positions” at FERC.

The addition of Joseph T. Kelliher, the Republican FERC nominee, alone would make for a lopsided Commission with three Republicans and one Democrat. The rules require a spilt, with no more than three commissioners from a single political party. However, if Kelliher were confirmed, there is nothing to force the president’s hand; the administration could leave the additional seat vacant and retain a 3-1 majority.

Kelliher is “well qualified,” but Bingaman said he may be forced to stall his nomination “in order to get the administration to honor its commitment” to nominate a Democratic candidate for FERC as well. Bingaman has backed former New Mexico regulatory commissioner Suedeen Kelly for the open Democratic seat on the Commission.

“I hope very much that they [the White House] will correct the situation very quickly,” he said during Kelliher’s confirmation hearing before the Senate committee last week. The next committee business meeting, where members typically vote on nominations, is scheduled for Feb. 26, but Kelliher’s nomination isn’t on the agenda, a Capitol Hill aide said. A “hold” could be placed on Kelliher’s nomination when it comes before the full Senate, which essentially would freeze the nomination and bar senators from voting on it.

In the meantime, Senate Energy Committee Chairman Pete Domenici (R-NM) reportedly “is working with the administration to get this sorted out,” the aide said.

Kelliher, a senior policy advisor at the Department of Energy (DOE), is seeking the seat formerly held by Commissioner Linda K. Breathitt, whose term expired in December.

Sen. Byron Dorgan (D-ND) said he supported Kelliher and intended to vote for him, but he noted “I also fear that you’re going to be a victim” of a squabble that’s brewing between the Bush White House and Senate Democrats over a Democratic FERC nominee. “Sen. Bingaman is quite right in his position,” said Dorgan, adding “my hope is that the White House will hear that, [and] send us the Democratic nominee.”

Kelliher’s nomination “will not move until the White House sends us the other, at which point we should move both of them,” he noted.

Senate committee lawmakers, both Republicans and Democrats, held Kelliher’s feet to the fire for what they believe are FERC’s shortcomings and the agency’s failure to properly police energy markets for abuses and manipulation, pointing to the Enron as a glaring example. “I really am not interested in sending a person down there [to FERC]…who is content to sit around and do nothing,” Dorgan told Kelliher. “I want people who are tigers in support of the consumer interest” in energy markets.

The Commission sat on the sidelines “dead from the neck up,” while Enron “fleeced” West Coast energy customers out of millions or perhaps billions of dollars, Dorgan said.

Kelliher agreed that “evidence [shows] there was manipulation” in both the electric and natural gas markets, but he noted there was nothing in the current federal electricity law, for example, that expressly prohibited manipulation. While the law bars unjust and unreasonable rates, it does not address manipulation, according to Kelliher. He suggested that Congress either beef up current laws or introduce new legislation to prohibit manipulation of energy markets in the future.

“I think that protecting the consumer interest is [the] first principle of responsibility” for the Commission, Kelliher said. “FERC has an absolute duty to prevent unjust and unreasonable rates. That’s not discretionary…So I would wake up in the morning knowing that that is my No. 1 duty.”

But “what are you going to do to get the lead out of the regulators and get us some real enforcement?” asked Sen. Ron Wyden (D-OR), who called the agency’s enforcement record to date “a dismal one.” Kelliher responded that he has been a long-time advocate of increasing the penalties that FERC can impose on violators. The agency’s current penalty levels are “inadequate.”

He shied away from a number of senators’ questions, noting that if he replied, he would be forced to recuse himself when the issues come up for a vote at the Commission, assuming he is confirmed.

When asked about a long-line Alaska natural gas pipeline, Kelliher said that while he agreed more gas supplies were needed in the U.S., he didn’t have a “personal view” as to whether the gas should come from Alaska. Currently, more than 1% of the nation’s gas supplies come from liquefied natural gas (LNG), and that is expected to grow substantially in years to come, he said. “That gas might arrive earlier than Alaska gas.”

Wyden quizzed Kelliher about his general feelings toward standard market design (SMD). “Conceptually,” the Commission has identified certain goals to pursue through SMD — prevent market manipulation, abuses and spur investment in new transmission facilities — which are “good goals” for the agency, but “how to accomplish them is an open question,” he said.

“If you gave that answer at a town hall meeting [in Oregon] people would be up in arms,” Wyden said. “I’m going to do everything in my power to block standard market design” at FERC.

If confirmed, Kelliher’s term to the Commission would expire on June 30, 2007.

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