Binz addresses skepticism of ulterior motives, use of influence as FERC chair

Despite repeated explanations that FERC’s role in the electric industry is to set and enforce just and reasonable rates, during his Senate confirmation hearing Ron Binz fielded questions about how his views on coal, natural gas and renewable energy would influence his leadership of FERC if successfully confirmed as the commission’s chairman.

After providing a description at the beginning of the hearing of what Binz’s duties would be in his role at FERC, Sen. Ron Wyden (D-Ore.), chairman of the U.S. Senate Committee on Energy and Natural Resources, interjected at least five times over the course of the hearing to explain that Binz’s personal views on the direction of the U.S. energy mix would have no impact on the selection of a national renewable energy standard or on the future of coal or natural gas.

Several senators homed in on a comment Binz made in March that natural gas would meet a “dead end” in 2035 without a way to capture its emissions, expressing concern that at the helm of FERC, Binz would cherry-pick “winners and losers” – namely, pick projects that further President Obama’s climate agenda over natural gas or coal interests.

Binz was tapped by Obama as the nominee to the FERC chairmanship and his nomination was announced the same week as the President’s Climate Action Plan, raising suspicions that the announcements were coordinated. Binz said the announcements were purely coincidental.

“I’ve never spoken with anyone at the White House about the Climate Action Plan,” Binz said. “The White House has never asked me for any commitment with respect to what I’d do if confirmed …. If I’m confirmed to the FERC, my jurisdiction or authority will be to evaluate proposals brought to us based on the value of those proposals.”

FERC’s role is to remove barriers for resources connecting to the electric grid and to remove barriers from the flow of natural gas to the places it is needed for generation, he said.

Binz said that the “dead end” comment he made in March meant to indicate that future constraints on carbon emissions would eventually come to affect natural gas-fired generation, which, though seen as cleaner than coal-fired generation, nevertheless emits fossil fuels.

“What I was talking about is that if we take seriously the need to reduce carbon in our generation fleet, natural gas is very great for doing that right now,” Binz said. “But eventually, as we move forward and learn how to do [carbon capture and] sequestration, that will benefit natural gas in the long run.”

He added that reducing carbon will be up to Congress and the Environmental Protection Agency, not to FERC.

Binz defended his views after Sen. John Barrasso (R-Wyo.) said they were “far outside the mainstream.”

“Rather than being outside the mainstream, they’re very much in the mainstream,” he said, citing research by the Electric Power Research Institute and the Massachusetts Institute of Technology.

“They’re publishing these graphs showing that [carbon capture and sequestration (CCS)] is ramping up to meet 2050 energy portfolio [goals],” he said. “I think they’re right. You may not agree with them but … if they’re right and we’re going to have to reduce carbon, then were going to have to make plans at some point. We’ve got 20 years to do it and I think there’s a very good chance the [CCS] technology will be perfected by that time.”

Binz also fielded questions about the amount of time it takes for a project to get approved. Sen. Rob Portman (R-Ohio) asked Binz whether he agreed with those who believe that the permit application process for natural gas pipelines is too lengthy.

“As a regulator I have no room for an agency which merely slows down applications just because it’s a large bureaucracy,” Binz replied. “I think we really need to move this quickly.”

To get infrastructure installed faster, Binz said in response to a question by Sen. John Hoeven (R-N.D.) that in addition to accelerating the timeline for natural gas permitting, there needs to be more coordination between the electric and natural gas industries, as gas now is used less for space conditioning and more for electric generation.

Binz also referred to the debate over rates of return on equity, which he said was “taking up a lot of oxygen” at FERC. Rather than focus on returns on equity, FERC should focus on whether it is compensating companies that own or invest in infrastructure projects in the right way.

“[That] has direct effects on both transmission and gas pipelines,” he said.

About Rosy Lum 525 Articles
Rosy Lum, Analyst for TransmissionHub, has been covering the U.S. energy industry since 2007. She began her career in energy journalism at SNL Financial, for which she established a New York news desk. She covered topics ranging from energy finance and renewable policies and incentives, to master limited partnerships and ETFs. Thereafter, she honed her energy and utility focus at the Financial Times' dealReporter, where she covered and broke oil and gas and utility mergers and acquisitions.