Week Ending October 5, 2018

All Eyes Turn to Senate as White House Picks DOE’s McNamee for FERC

This Article Appears as Published in Foster Report No 3218
All Eyes Turn to Senate as White House Picks DOE’s McNamee for FERC

While much of the country is watching the Senate confirmation debate of Supreme Court nominee Brett Kavanaugh, another Senate confirmation battle may be down the road as President Donald Trump on October 3 said he intends to nominate Bernard McNamee of the Department of Energy (DOE) for the open commissioner spot at FERC.

The move was praised by some fossil fuel energy groups, blasted by environmental or clean energy groups, and questioned by others. In other words, par for the course in the current political environment in Washington, D.C.

Among the questions looming in McNamee’s path to the Commission are whether Democrats can gain a majority in the Senate with the mid-term elections, if he will be paired with another nomination as part of a political bargain, and whether he would have to recuse himself from any Commission action on a power grid resilience effort to support coal and nuclear generation resources.

McNamee, currently the executive director of the Office of Policy at DOE, has had two stints at the department. In his brief time as deputy general counsel, from May 2017 to February 2018, he signed papers and was involved with the grid resilience notice of proposed rulemaking to FERC from Energy Secretary Rick Perry.

That NOPR was rejected in a 5-0 vote by the Commission, which continues to examine comments on grid resilience, and the White House has asked Perry to work towards ensuring that more coal and nuclear power plants do not retire due to market conditions such as low natural gas prices and cheaper power generation options.

If an attorney had a client before FERC on such a major issue and later became commissioner, a recusal from that case would be expected. Whether such protocols apply in any future FERC action on grid resilience given that McNamee was representing DOE is among the questions sources said they are examining.

Senators also are looking at such issues, and members of the Senate Energy and Natural Resource Committee will be sure to question McNamee about his past advocacy for fossil fuels and policy positions while at DOE, advocacy groups said.

During a hearing in July, he faced tough questions from Sen. Maria Cantwell (D-Wash.), ranking member on the committee, about the Trump administration’s plan to support coal and nuclear generation. Such a plan would make electricity much more expensive and Trump’s plan is crazy and illogical, Cantwell told McNamee. “You can’t mandate coal and say you’re for market-based solutions. You just can’t,” she told McNamee, who was representing DOE in a Senate hearing on a reorganization proposal for the department.[1]

A spokeswoman for Sen. Lisa Murkowski (R-Alaska), chairman of the committee, said the panel has not heard from the White House on when the nomination paperwork will be submitted. The October 3 announcement is the intent to nominate McNamee, and the nomination paperwork often lags such announcements. On October 5, the White House said it sent eight nominations to the Senate, including that of McNamee.

McNamee’s current position at DOE did not require Senate confirmation, the committee spokeswoman noted.

He has led DOE’s Office of Policy since June, and earlier this year he briefly led the Center for Tenth Amendment Action at the Texas Public Policy Foundation, a think tank with connections to Perry and Sen. Ted Cruz (R-Texas). Along with being deputy general counsel for energy policy at DOE for 10 months, he had two different stints at McGuire Woods law firm, served in the Attorney General offices in Texas and Virginia, and was senior domestic policy advisor and counsel for Cruz from the summer of 2013 to November 2014.

The White House announcement said he served four Attorneys General in two states, was a policy advisor to a Virginia governor and served as senior domestic policy advisor to Cruz. McNamee earned his B.A. degree from the University of Virginia and J.D. from Emory University School of Law, the White House said.

The timing on a Senate hearing is not known, and may come after the mid-term elections. Should Democrats gain a majority in the Senate, it might make for a tougher road to confirmation or bring in the prospect of pairing McNamee with a nominee Democrats would like to see in some other position at a different agency.

McNamee is being nominated to fill the vacancy left by former Commissioner Robert Powelson, with a term that expires June 30, 2020. He would join fellow Republicans Chairman Kevin McIntyre and Commissioner Neil Chatterjee, along with Democrats Cheryl LaFleur and Richard Glick.

LaFleur’s term, her second at the Commission, expires June 30, 2019, and it is not known if the White House will nominate her for another term. She has taken a stronger stance on greenhouse gas emission policies for FERC approval of natural gas pipeline infrastructure, sometimes dissenting or concurring with Glick, but Senate Democrats may want someone else to pair with McNamee if he is not confirmed soon.

That scenario was mentioned in a note to clients by Clear View Energy Partners, saying it does not expect LaFleur to be renominated by the White House. But it also did not rule out Senate Majority Leader Mitch McConnell (R-Ky.) trying to get McNamee confirmed soon to restore a 3-2 Republican majority at FERC. “These are increasingly unconventional times,” the company said, noting that if control of the Senate switches to Democrats, McNamee’s nomination could be moved in a lame duck session of Congress.

Pairing of nominees is common practice in the Senate, noted James Hoecker, a former chairman who went through the confirmation process twice and is an attorney with Husch Blackwell. “They like to pair people of the opposite party, often for different agencies,” to appease certain constituencies or as part of a political bargain, Hoecker said.

With a Republican majority, McNamee may face questions on his involvement with the grid resilience NOPR but might not have high hurdles to clear, Hoecker said. When he testified before the Senate committee earlier this year, along with former chairman Joseph Kelliher, Hoecker commented that having someone at the Commission with a different background – besides Capitol Hill or state regulatory experience – could be beneficial. Nominating someone with an engineering, economics, academic or even technology background can be beneficial, Hoecker said in a brief interview.

Being a commissioner involves “calling balls and strikes in a nonpartisan way,” but sometimes having two Republicans and two Democrats can result in divisions on important matters at FERC, Hoecker said.

McIntyre expressed support and offered congratulations to McNamee on his Twitter feed shortly after the White House announcement. “He is eminently qualified for the job, and I look forward to serving with him,” McIntyre said, adding that the Commission is “one step closer to our full complement.”

The Interstate Natural Gas Association of America (INGAA) and Natural Gas Supply Association (NGSA) said they are pleased to see the White House pick a nominee to fill the open seat at FERC. “We hope the nomination/confirmation process proceeds smoothly,” said Cathy Landry, spokeswoman for INGAA.

“As an independent regulatory agency, it’s important for FERC’s work to continue and that works best with a commissioner in every seat,” said Dena Wiggins president and CEO of NGSA. “We are especially interested in seeing FERC continue its work to support competitive markets as well provide a timely and thorough review of proposed pipeline projects. If nominated and confirmed, we look forward to working with Mr. McNamee,” she said.

The American Coalition for Clean Coal Electricity (ACCCE) expressed support for McNamee and hope for a swift confirmation. McNamee’s background at the state and federal level “make him well qualified to be the next FERC Commissioner,” said Michelle Bloodworth, president and CEO of ACCCE.

McNamee may be green, as in inexperienced, in the regulatory field, and he is not known as a supporter of green energy, with positions expressed in the past that have clean energy advocates concerned. Those concerns are in addition to questions about his role in the grid resilience NOPR and the notion that he is being planted at FERC to support White House energy policy positions.

FERC has a longstanding commitment to fuel-neutral regulation, as McIntyre, Glick and other commissioners have pointed out during their Senate confirmation hearings. “But Mr. McNamee’s past writings and career track record have been very supportive of fossil fuels,” said John Moore, director of the Sustainable FERC Project within the Natural Resources Defense Council. McNamee stated in an op-ed piece for The Hill that fossil fuels “dramatically improve” the human condition, Moore said. “He should be prepared to answer some very hard questions about his previous comments and positions, and how they would affect FERC’s independence.”

The op-ed piece was written in April, while he was at the Texas Public Policy Foundation, and in it McNamee said the U.S. should use renewable energy sources, but expressed doubt about their ability to replace other resources in meeting consumers’ energy needs.

It shows a lack of basic understanding about modern energy markets, and it’s not some long-ago writing that his views may have changed since then, said Tyson Slocum, director of the energy program at Public Citizen. McNamee is “absolutely unqualified to serve at FERC” and Public Citizen will ask the Senate to oppose the nomination, Slocum said.

The opposition is not based on partisan politics but McNamee’s role in the DOE policy office, advocating for the grid resilience “bailout” of coal and nuclear plants and how much of his work there has been in secret, without public participation, Slocum said.

“You can bet that this will be a central focus of any Senate hearing,” Slocum said, adding that Republicans have expressed concern about the White House support for coal and nuclear generation. “I view it as part of our job to make sure that the committee is educated on these issues” and question McNamee about his role at DOE.

The fifth commissioner spot at FERC “is critical” if the Trump administration wants to have the Commission pursue issues more to its liking, Public Citizen said in a statement. “Will the agency maintain its legacy of placing fact-based, empirical analysis over politics? Or will political rhetoric prevail?”

By Tom Tiernan TTiernan@fosterreport.com

[1]   For a past story, see, With Powelson Exit, White House Expected to Nominate DOE’s Bernard McNamee, FR No. 3211, pp. 1-3.

Want to try it out? Sign up for a free trial!
Subscribe Here