Thursday, February 21, 2019

Democrats Urge McNamee’s Recusal from Resilience Docket

By Michael Brooks

WASHINGTON — Senate Democrats on Thursday pressed President Trump’s FERC nominee to recuse himself from the commission’s ongoing proceeding on resilience because of his role in crafting a controversial Energy Department proposal.

Sen. Ted Cruz (R-Texas) introduces his former aide Bernard McNamee, President Trump’s nominee to FERC, before the Senate Energy Natural Resources Committee. | © RTO Insider

Bernard McNamee, executive director of DOE’s Office of Policy, told the Senate Energy and Natural Resources Committee that he would “clearly” be unable to rule on the department’s already rebuffed Notice of Proposed Rulemaking for FERC to order RTOs and ISOs to compensate the full operating costs of generators with 90 days of on-site fuel. But he was less direct about whether he would rule on any other proceedings stemming from the NOPR.

McNamee worked on the NOPR as the department’s deputy general counsel for energy policy. After the commission unanimously rejected the NOPR in January and opened its own docket to explore how “resilience” is defined, McNamee left DOE to become the director of the Texas Public Policy Foundation’s Center for Tenth Amendment Action and Life: Powered initiatives, the latter described as a project to “reframe the national discussion” about fossil fuels. (See Trump Nominates DOE’s McNamee to FERC.) He returned to the department in his current role in June.

Sen. Catherine Cortez Masto (D-Nev.) asked McNamee whether he would recuse himself “from any issue related to the grid resiliency proposal.” McNamee responded, “I understand that the docket in which that proposal was offered has been closed, and I need to consult with ethics counsel about whether or not I could further participate in the issues. …

“The issue of resilience is constantly coming before FERC, and so I need to consult with ethics counsel to understand what I could or could not participate in,” he said.

Sen. Angus King, an independent from Maine who caucuses with the Democrats, picked up this line of questioning later in the hearing.

“I’m surprised you didn’t give a direct answer to Sen. Cortez Masto,” King said before quoting the section of the U.S. Code concerning recusals. “I don’t understand any argument where you would have to consult any counsel anywhere on Earth to understand that you have a conflict of interest when it comes to this issue of this so-called Grid Resiliency Pricing Rule, or any version thereof.” King asked again whether McNamee would recuse himself.

McNamee responded: “I believe that the statute that you read refers to a specific proceeding, and I would want to talk with counsel or ethics advisers…”

King interrupted him, noting the law says “‘expressed an opinion concerning the merits of the particular case in controversy.’ You have clearly expressed opinions on the merits of this issue repeatedly and in fact before this committee.”

McNamee said it would depend on what specific issue came before the commission and again said he would consult ethics advisers.

“I’m surprised and disappointed that you feel that you have to consult with counsel on something that’s so clear,” King replied.

After lambasting the NOPR, Sen. Ron Wyden (D-Ore.) said McNamee’s nomination wasn’t “like the fox guarding the chicken coop. This is like putting the fox inside the chicken coop.”

“I think that FERC has a tradition of making decisions, not based on whether they’re Republican or Democrat though they may be nominated as such, but making them based on working together and what’s the right thing to do, and my pledge to you is that I will work in that fashion,” McNamee responded.

“I believe you ought to recuse yourself, if you are [confirmed], on matters that deal with the specifics of what got such a resoundingly negative response earlier,” Wyden replied.

Most of the two-hour-plus hearing was not devoted to McNamee, as the committee also considered the nominations of Rita Baranwal and Raymond David Vela, Trump’s nominees to be DOE’s assistant secretary of nuclear energy and director of the National Park Service, respectively.

Committee Chair Lisa Murkowski (R-Alaska) said she plans to advance the nominees to the Senate floor shortly after Thanksgiving so they can be confirmed before the current Congress adjourns at the end of the year. If they are not voted on by then, Trump would need to resubmit them next year.

“I really don’t want to see all the good effort that this committee has put into advancing these nominees fall by the wayside,” she said, addressing committee members. “So I would ask that you all work with me to clear the nominations in [our] jurisdiction before the end of the year.”

The committee also considered Rita Baranwal (left) and Raymond David Vela (right), Trump’s nominees to be the Energy Department’s assistant secretary of nuclear energy and director of the National Park Service, respectively. | © RTO Insider

‘Impartial Arbiter’

McNamee told the committee that he understood the importance of FERC’s independent, apolitical status, and the difference between his work at DOE and the role of commissioner.

“If confirmed, I commit that I will be a fair, objective and impartial arbiter in the cases and issues that would confront me as a commissioner,” he said in his opening statement. “My decisions will be based on the law and the facts, not politics. And I don’t just say this because I’m trying to get your vote; it’s something I believe.”

King and Sen. Tina Smith (D-Minn.) quoted from an op-ed McNamee wrote for The Hill in April: “Some suggest that we can replace fossil fuels with renewable resources to meet our needs, but they never explain how.”

“As I am grappling with your ability to be a neutral arbiter of the facts and this very important role at FERC, can you just explain to me how you would do that given what appears to me to be a bias?” Smith asked.

McNamee pointed to his time as an energy lawyer with Virginia-based McGuireWoods, during which he said he helped get three utility-scale solar facilities built in the state. He also said he worked on Virginia’s and North Carolina’s renewable portfolio standards.

“So I understand the role that renewables can play in our electric mix,” he said. But “I think the primary thing for FERC is to make sure that they’re not picking and choosing what the resources should be but ensuring that the markets are able to function so that resources can compete and that the market decides what’s the right resource.”

But McNamee also dodged efforts by coal-state senators — Joe Manchin (D-W.Va.), John Barrasso (R-Wyo.) and John Hoeven (R-N.D.) — to get him to tout the importance of coal-fired plants to reliability.

He also distanced himself from Trump’s June 1 order to Energy Secretary Rick Perry to prevent further coal and nuclear plant closures under both Federal Power Act Section 202c and the Defense Production Act of 1950. (See Trump Orders Coal, Nuke Bailout, Citing National Security.) Asked by Sen. Martin Heinrich (D-N.M.) whether he believed that there was an urgent threat to the grid, McNamee said, “The secretary currently has not issued a 202c, and I have no reason to second-guess his determination about whether or not there is an emergency currently. And it does not appear at this point on a general, nationwide basis that there’s an emergency.”

“So that would be a ‘no’?” Heinrich asked.

“It’s only a ‘no’ in that I don’t have access to all the information the secretary does,” McNamee replied.

The status of Trump’s order with DOE is unknown; reports surfaced last month that the department has tabled it in the face of free-market conservative backlash. Its details are only known through a memo that was leaked in May. When asked about it by Heinrich, McNamee said he was not with the department when the memo was drafted. “My understanding is that it’s in the intergovernmental process. I’ve not been involved in that process for the past few months.”

Speaking to reporters after the hearing, Murkowski said she was satisfied with McNamee’s responses regarding the NOPR. “What I took away was that his role when he was at the Department of Energy was to take the secretary’s directive and to draft that policy. His role at the FERC would be different than that, and I would expect that he would respect those lanes.

“As far as the recusal issue goes, I think it is appropriate that he would consult with counsel. He stated clearly that that case he had worked on … has been closed down. So if it is a question as to that, then it seems to me you’ve got a recusal issue going on. But if it’s a question as to something else that spins off from it, is it something that would require a recusal? I think that’s where you get your lawyers in there, and you make clear one way or another. And he said he would follow that guidance, which is the appropriate course.”