Week Ending November 30, 2018

Senate Floor Vote Set for McNamee After Committee Vote With Partisan Divide

This Article Appears as Published in Foster Report No 3226
Senate Floor Vote Set for McNamee After Committee Vote With Partisan Divide

With a Senate vote scheduled for December 3 after committee approval, Bernard McNamee appeared poised to become a commissioner at FERC, with several sources expecting full Senate approval based on a Republican majority in the chamber.

Senate Majority Leader Mitch McConnell (R-Ky.) late in the day November 29 filed for cloture on consideration of McNamee, executive director of the Office of Policy at the Department of Energy, to be commissioner at FERC. A vote is scheduled for 5:30 p.m. on December 3.

With only a simple majority needed for full Senate approval, sources said they expect McNamee to gain confirmation despite controversial remarks he made in February 2018 while working for the conservative Texas Public Policy Foundation (TPPF). McNamee criticized environmental groups, asserted that renewable resources cause power grid reliability problems and questioned the science associated with climate change.

McNamee will be “a liability as a commissioner” because his comments provide ample opportunity for groups to assert that he is biased and required to recuse himself from matters he discussed in the video, said Tyson Slocum, director of the energy program at Public Citizen. “He said outlandish things” and the video is not something from long ago, so his ability to distance himself from it should raise questions, said Slocum.

Another source, who asked not to be named, said he was surprised that the Senate Energy and Natural Resources Committee voted on McNamee when the video became public after his November 15 nomination hearing. Now that the committee has approved him, McNamee is likely to be confirmed by the Senate, which is inconsistent with the treatment of Ron Binz, the source said.

Groups who questioned McNamee’s qualifications and objectivity before the November 27 committee meeting brought up the fact that Republican senators who questioned and opposed the nomination of Binz, a former state regulator from Colorado who was nominated by former President Barack Obama to be chairman at FERC voted to confirm McNAmee. Binz withdrew his nomination in the fall of 2013 after intense partisan debate about his views on renewable resources and fierce opposition from fossil fuel interests.

Sen. Lisa Murkowski (R-Alaska), chairman of the Senate Energy and Natural Resources Committee, who was ranking member in 2013, was among those who opposed Binz. She questioned his ability to ensure that FERC is independent from the Obama administration and during his 2013 hearing said she was not prepared to support his nomination.

Binz termed it unfortunate if the raw, partisan politics and divide between fossil fuel interests and renewable resources turns into the new normal for FERC nominees. At the November 27 business meeting with the vote on McNamee, Sen. Martin Heinrich (D-N.M.) picked up on that theme. After expressing his disappointment that McNamee is the best the government can do for a FERC commissioner at this point, Heinrich said McNamee “is indicative of the divide in this country right now and our inability to have a realistic conversation about climate.”

The inconsistency of Murkowski’s views on Binz and her acceptance of McNamee’s comments were noted by Slocum, who said the energy committee did not delve into McNamee’s background or coordination with the Trump administration on subsidies for coal and nuclear generation as much as it should have. “There is a lot we still don’t know” about McNamee’s interaction with parties while he was at DOE and any effort to have FERC embrace the subsidy proposal from DOE that was ultimately rejected by the Commission, Slocum said.

Rehearing requests in that case are still pending, Slocum said, adding that if McNamee recuses himself from that case or related proceedings will be closely watched, assuming he is confirmed by the Senate.

In 22 pages of questions and answers with Senators that were submitted after the November 15 nomination hearing, McNamee made comments about being an impartial arbiter in the cases that come before FERC and not being influenced by government or outside interests. He said media reports that portray him as the most overtly political person to serve as commissioner in decades are not an accurate characterization of how he will perform his duties as commission if he is confirmed.

“I commit that, if confirmed, I will perform my duties as a FERC Commissioner independently from any outside influence, private or governmental.  As I stated at my confirmation hearing, I also commit that, if confirmed, I will be a fair, objective, and impartial arbiter in the cases and issues that would confront me as a Commissioner,” he said.

“I am committed to FERC’s mission under the Federal Power Act (FPA) and the Natural Gas Act to ensure that rates for jurisdictional services are just and reasonable and not unduly discriminatory or preferential.  Just and reasonable rates should both protect customers and offer service providers fair compensation for the services provided.  If I am confirmed, I commit to working with my colleagues to fulfill this mission to ensure just and reasonable rates under the law,” he said.

McNamee has said the things he needs to say to be confirmed, but the video is more reflective of who he is and the political background he comes from, said Slocum. “He’s a radical ideologue” that has given “far right, extremist” views within the energy policy realm that should be troubling for Republicans, Slocum said.

In posts on Twitter, Ari Peskoe, director of the Electricity Law Initiative at Harvard Law School, said courts may vacate orders from FERC if renewable resource advocates or environmental groups are able to claim McNamee is bias and he does not recuse himself. Case law “does not establish a hard line with regard to bias,” and challenging any order where McNamee does not recuse himself “is certainly not a slam dunk. But he’s a procedural liability for FERC,” Peskoe said.

Advocates of renewable resources and some Democrats in the Senate have opposed McNamee based on his background, lack of regulatory experience and comments supporting fossil fuels and the Trump administration plan to provide added compensation to coal and nuclear generation plants. The opposition ramped up when the video was made public of his comments in February 2018, in an hour-long presentation where he extolled the benefits of fossil fuels and said environmental groups are “always talking about more government control because it’s the constant battle between liberty and tyranny.”

In a supplemental question and answer with Sen. Maria Cantwell (D-Wash.), ranking member on the committee, after the video became public, McNamee said he sees no contradiction in his answers during his nomination hearing and comments about renewable resources presenting challenges to the grid based on their intermittency.

“When effectively integrated, all resources can enhance the functioning of the grid, and have the potential to contribute to our economic growth and national security,” he told Cantwell in the initial round of questions. “As a general matter, I think competitive wholesale electric markets should offer a level playing field for all types of resources and technologies to compete to provide services to the grid and not be biased for or against any particular resource.  Should I be confirmed to FERC, I will be not be biased for or against any resources or technologies,” he said.

“These answers show that I recognize the value of all resources to operating the electric grid while also recognizing that resources may have different operating characteristics that may be necessary to support the electric grid during different situations,” McNamee told Cantwell.

With a vote mostly along political party lines, the Senate committee on November 27 approved the White House nomination of McNamee to fill the term of former Commissioner Robert Powelson that expires June 30, 2020.

Republicans on the committee and Sen. Joe Manchin (D-W.Va.) voted in support of McNamee while Democrats and Independents voted against him. The 13-10 roll call vote moved McNamee’s nomination, along with two other White House nominees for different agencies, out of the committee to the full Senate.

The roll call vote was taken after Murkowski and Cantwell commented on the video that surfaced in the past week of McNamee disparaging renewable resources and advocating for fossil fuels. The video was recorded in February, when McNamee was between stints at DOE and had just started at TPPF.

In the video, which can be found on the website of the renewable resources watchdog group Energy and Policy Institute, McNamee says the intermittent nature of renewable resources “screws up the whole physics of the grid” and that carbon dioxide should not be defined as “real pollution.” He extolls the benefits of fossil fuels and nuclear generation in the video, which Murkowski termed “unfortunate.”

He also praised his son for questioning climate change in school, discussed public outreach efforts to show that fossil fuels are essential to society’s quality of life.

Murkowski said some of those who believe McNamee’s comments in the video are sufficient to warrant a vote against him may have made up their minds a while ago. She said she views it as one speech from 10 months ago in McNamee’s second day on the job at TPPF, a group with connections to Sen. Ted Cruz (R-Texas) and DOE Secretary Rick Perry, the former governor of Texas.

Murkowski said she takes McNamee’s comments to the committee that he will be independent and objective as a commissioner at face value, and that she expects him “to be fuel neutral and not a champion of one resource over another.”

Cantwell said she would like to take McNamee at his word when he answered questions about the importance of FERC as an independent agency and not to carry out policies favored by the Trump administration. But when the video shows him giving comments as a private citizen showing such a strong bias in support of fossil fuels, “I find it hard to believe that he’s going to be the impartial reviewer of these issues.”

Cantwell said it was not that long ago that the committee refused to consider the nomination of Binz when some said his views were “troubling and out of the mainstream.” But “that is far more clearly the case here, in my opinion” Cantwell said, asserting that McNamee’s views expressed in the video are clearly out of the mainstream in light of the government’s recent report on climate change and its impacts on the U.S. economy. “These impacts are real and are already being felt,” she said.

McNamee’s support for fossil fuels and belief that renewable resources cause power grid reliability issues do not take into consideration “the fairness and judiciousness” that Cantwell said she would like to see from a FERC commissioner. “I do not believe he is the right person for this job and I will vote against his nomination,” she said.

McNamee was approved by the committee, along with Rita Baranwal to be assistant secretary for nuclear energy at DOE and David Vela to be director of the National Park Service.

Speaking with reporters after the meeting, Murkowski said the committee in 2013, when Democrats had the majority in the Senate, did not have a vote on Binz. “I don’t know if there was ever a quote ‘Binz test,’ “ she said, indicating that she looks at each individual nominee and makes her determination based on the record.

Before the cloture vote on McNamee was scheduled, Murkowski expressed hope that Senate leaders could schedule votes on the 10 nominees that have been approved by the committee, with the three approved November 27 added to seven approved previously. “I don’t know that I can get a package of 10” to a full Senate vote as a group, she said, adding that McConnell knows that she has been pressing for Senate approval of the committee’s approved nominees before the end of the year.

At the November 15 hearing before the committee, questions centered on FERC’s rejection of a DOE proposed rule to improve compensation for coal and nuclear generation resources and the subsequent proceeding where it took comments on grid resilience issues. Several senators questioned whether McNamee would recuse himself from any FERC action due to his policy work at DOE in support of a Trump administration effort to subsidize coal and nuclear generation assets.

McNamee told senators he would seek the guidance of counsel and ethics officials on whether he would have to recuse himself, noting that because FERC rejected a proposed rule from DOE that he was involved in, that case is closed.

The Trump administration effort would increase power costs for all consumers only to support certain resources and it appears that the White House wants McNamee at FERC to support such efforts, Democrat members of the committee said during his nomination hearing.

McNamee’s background and comments on the video indicate that he will have a difficult time being fair objective “or anything close to impartial,” said Heinrich.

The Natural Gas Supply Association (NGSA) praised the committee for approving McNamee, putting the Commission closer to having a full complement of commissioners, as McNamee would fill the seat vacated by Powelson.

“As an independent regulatory agency, it’s important for FERC’s work to continue and that works best with a Commissioner in every seat.  We are especially appreciative of Mr. McNamee’s strong support for competitive markets and believe that he will work with his colleagues to ensure timely and thorough reviews of proposed pipeline projects,” said Dena Wiggins, president and CEO of NGSA.

While the Commission would have five commissioners if McNamee is confirmed, Commissioner Kevin McIntyre has not voted on orders for more than a month due to health issues.

By Tom Tiernan TTiernan@fosterreport.com

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