Analysis: Confirmation of FERC chairman-appointee may not be a cakewalk

The man appointed by President Barack Obama to chair FERC may not find Senate confirmation to be a foregone conclusion, several sources told TransmissionHub.

Ron Binz, the former chair of the Colorado Public Utilities Commission (PUC) was nominated on June 27, to the surprise of some who thought FERC Commissioner John Norris, Obama’s first appointee to FERC, was a shoo-in for the chairmanship, and others who thought Arkansas Public Service Commissioner Colette Honorable, former Nevada Public Utilities Commissioner Rose McKinney-James, or former NARUC president Jim Kerr would have risen to the top of the short list.

Participants in any regulated industry are understandably hesitant to be openly critical of a regulator to whom they report, and nowhere is that more true than in the highly political atmosphere inside the Beltway. Even a group that has openly taken issue with current FERC policy is being circumspect.

The Coalition for Fair Transmission Policy (CFTP), which is opposed to Order 1000’s provisions that address transmission planning and the allocation of costs for new power lines, and which might be expected to oppose a successor chairman who would continue to support that order, said it has no formal position on Binz’s appointment.

“We hope the senators will find out as much as they can about his views on the Federal Power Act and the role of states,” Sue Sheridan, CFTP president and chief counsel, told TransmissionHub. “Those are our concerns about Order 1000 and the way it’s being implemented.”

Sheridan said she and other group leaders are looking forward to learning more through the confirmation process.

Though some, like Public Service Enterprise Group (NYSE:PEG) chairman and CEO Ralph Izzo, praised Binz’s “experience and intellect,” and proponents of wind, solar and other renewable technologies view Binz as the person who can advance those technologies, others view his past performance in that area as a negative.

During his tenure at the Colorado PUC, Binz promoted the Clean Air-Clean Jobs Act, which offered incentives for closing aging coal-fired power plants and switching to natural gas, a measure opposed by the coal industry and independent power producers. That bit of history could come back to haunt him when his nomination goes before the Senate Committee on Energy and Natural Resources, sources said.

The committee includes two coal-friendly Democrats: Mary Landrieu (D-La.), and Joe Machin (D-W.Va.). Those two votes could prove pivotal, as Democrats on the 22-member panel hold only a two-seat majority. If every Republican voted against Binz, a single Democratic vote against confirmation would result in a tie, and two against would mean outright rejection.

Further, sources said there is talk that Senate Majority Leader Harry Reid (D-Nev.) was behind Binz’s appointment, as he was behind Jon Wellinghoff’s appointments, first to FERC under President George W. Bush, then to the chairmanship under President Obama.

Other insiders, speaking on background, pointed to indications that Binz or his supporters may understand the road to FERC has its potholes.

For example, the Green Tech Action Fund hired a Washington, D.C.-based public relations firm to support Binz’s nomination and, less than two hours after the White House announcement, the firm sent an e-mail to reporters with “supporter statements,” according to an Aug. 1 article in Politico. A source inside the Beltway said that move “upped the ante politically.”

Strategy and tactics

The White House may have committed a tactical blunder by anointing Binz as chairman, or it could have been a clever political ploy, sources said.

The Senate must confirm appointments to FERC but, once confirmed, the elevation of a commissioner to the chairmanship is an administrative action that requires no such confirmation. Signaling the desire to have Binz at the head of the table, in the minds of some industry insiders, may have made it harder for him to win confirmation.

If there were an outside force driving Obama’s appointment of Binz, then it may have been a way of giving that force some of what it wanted while making it more difficult for Binz to ultimately win confirmation.

All this may be moot, however, as no confirmation hearing has been scheduled. Capitol Hill observers “expect” a hearing in September but, as of press time, the Senate Committee on Energy and Natural Resources had not scheduled a hearing, nor would any hearings be scheduled until the current August recess is over, a committee staff member told TransmissionHub.

Wellinghoff can continue to serve until the Senate confirms Binz, though the grace period for chairman and commissioners to stay in posts that have passed the end of their appointment ends when the Congressional session expires, a FERC spokesperson said.

If the session ends without a confirmation hearing, Obama could conceivably appoint Binz in a “recess appointment,” but that too could prove politically difficult.

In January 2012, Obama appointed three members of the National Labor Relations Board in appointments made during the holiday break, but three federal appeals courts ruled the appointments invalid because Republicans were holding brief, pro-forma sessions every few days as part of a GOP strategy to prevent the president from filling vacancies through recess appointments. While the administration contended that the break qualified as a recess because the sessions lacked a quorum, the courts ruled otherwise.

Whether supportive of, opposed to, or neutral about Binz’s nomination, many people are surprised by the level of interest and the amount of discussion. As one industry insider put it, “There’s a lot more conversation than you would expect about an obscure government agency.”