Tuesday, March 28, 2017

GOP Remains Skeptical on Bay Nomination

Leading Republicans on the Senate Energy and Natural Resources Committee said last week they remain skeptical of President Obama’s nomination of Norman Bay to chair the Federal Energy Regulatory Commission.

Cheryl LaFleur and Norman Bay being sworn in to the Senate hearing.

Cheryl LaFleur and Norman Bay being sworn in to the Senate hearing.

Their comments came after the release of Bay’s and acting FERC Chair Cheryl LaFleur’s responses to written questions posed by the committee following their confirmation hearing May 20.

“Even though Senator Barrasso doesn’t always agree with Ms. LaFleur’s policy positions, he believes she is unquestionably qualified for her position. That’s why at the nomination hearing, he asked why the Senate should demote Ms. LaFleur to make room for Mr. Bay,” said Laura M. Mengelkamp, press secretary for Sen. John Barrasso (R-Wyo.). “Senator Barrasso continues to have concerns about Mr. Bay’s qualifications for the commission. His written responses following his nomination hearing raise more questions than answers.”

Robert Dillon, communications director for ranking member Lisa Murkowski (R-Alaska), said the senator also remains unconvinced that Bay is qualified to lead FERC and would prefer to see LaFleur remain chair.

“Don’t mistake us for loving LaFleur,” Dillon said. “We think she’s fair. We think she’s qualified. But she’s not a Republican.”

The senators had far more questions for Bay than LaFleur, who seems assured of confirmation. (See LaFleur Cruises, Bay Bruises in Confirmation Hearing.) Bay’s responses to the senators totaled 109 pages.

Among the questions Murkowski posed was whether Bay would accept a position on the commission if LaFleur remained chair.

Bay said he didn’t know whether he would have accepted the nomination if the president had not offered him the chairmanship. “It would not be appropriate for me to speculate on what I would do if I were designated for a position other than what the president has indicated,” he said.

No Horse Trading

“Senator Murkowski’s not dangling something out there as a proposal,” Dillon said, noting that Democrats outnumber Republicans on the panel 12-10. “There’s no horse trading going on. We don’t have the horses to trade.”

But he added, “Maybe the president and the Democrats will decide on their own it doesn’t look good to demote Cheryl LaFleur.”

Bay needs 12 votes to clear the committee and proceed to a floor vote. If Republicans remain united in opposition, the loss of one Democrat would result in an 11-11 tie, sinking his chances.

Last year, West Virginia Democrat Joe Manchin killed the nomination of President Obama’s first choice, former Colorado regulator Ron Binz, whom he portrayed as anti-coal. Although Manchin has not accused Bay of being a soldier in the “war on coal,” he joined the Republicans in questioning his qualifications for the chairmanship.

Manchin prefaced one post-hearing question with the assertion that Bay had “no direct experience in regulation of energy infrastructure or markets.”

“The previous five chairmen all had more than 20 years of experience in the energy industry and as regulators before becoming chairman,” Manchin continued.

Defends Policy Experience

Bay rejected Manchin’s predicate, citing his five years as the director of FERC’s Office of Enforcement (OE).

“As one of the 11 office directors, I participate in weekly meetings with the chairman and other office directors on a wide array of important issues,” Bay said. “OE has a broad portfolio that requires a deep understanding of the markets, including market rules and market fundamentals.”

While Bay — like LaFleur — was careful to avoid taking definitive stands on controversial issues, his answers did demonstrate a familiarity with a broad range of topics beyond enforcement, including Standard Market Design, capacity markets, qualifying facilities, Order 1000, returns on equity, smart grid and liquefied natural gas.

As at the hearing, many of the questions followed the script of former FERC general counsel William Scherman and other critics of FERC’s enforcement policies.

Enforcement Policy

Scherman’s critique was laid out in detail in an article in The Energy Law Journal, and summarized in an op-ed in The Wall Street Journal, days before Bay’s confirmation hearing.

In his written responses, Bay provided a more forceful rebuttal than he mounted during the in-person questioning.

Bay said the law journal article “confused SEC administrative hearing and investigation rules; failed to describe FERC’s actual investigation process and the significant transparency provided in that process; failed to discuss the significant transparency, guidance and analysis of how the Commission has implemented and applied Congress’s prohibition against market manipulation in FERC-jurisdictional markets; made various statements of law for which they provided no legal authority; and numerous other errors and unsupported assertions.”

“If confirmed, I would be open to considering how FERC can improve the way it does its work and always willing to listen to market participants who have constructive suggestions,” Bay continued. “But this article’s allegations of due process and substantive violations in FERC enforcement, and the analysis underlying those assertions, are wide of the mark.” (See related story, LaFleur Parts with Bay on Enforcement Procedures.)

No date has been set for a committee vote on the nominations, said Dillon, who noted the Senate has 150 other nominations pending on the floor.

“There is really no reason to rush this one through,” he said. “[Senate Majority Leader] Harry Reid has his hands full.”

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