Monday, February 18, 2019

Who is Ron Binz, And What Will He Do at FERC?

Ron Binz - Consultant & FERC Nominee (Source - Public Policy Consulting)

Ron Binz – Consultant & FERC Nominee (Source – Public Policy Consulting)

President Obama last week tapped former Colorado utility regulator Ron Binz to replace outgoing FERC Chairman Jon Wellinghoff.

Who is he? A Democrat, Binz served as chairman of the Colorado Public Utilities Commission from 2007 through 2011, during which he drew praise from renewable energy advocates, opposition from the coal industry and criticism for his travel practices. He joined the PUC after serving as head of the state Office of Consumer Counsel from 1984 to 1995.

What is he likely to do at FERC?

Here are some clues: In a 2012 article he co-wrote for an electricity policy journal, Binz called for a new regulatory compact, saying that current utility regulation is “cumbersome … overly judicial and confrontational.” As a result, he wrote, it “provides limited motivation for utilities to innovate, diversify to manage risks, or undertake new efficiencies.”

The electric utility industry, he said, is in the midst of “what may be the most uncertain, complex and risky period in its history” due to large investment needs, stricter environmental controls, decarbonization, changing energy economics, new technologies and reduced load growth.

Will he face trouble winning Senate confirmation? He shouldn’t count on the votes of coal-state senators. But his support from industry and even some Colorado Republicans suggest he’ll survive, barring some unforeseen revelations. One potential snag: Obama has appointed him to not only join the commission but to immediately become chairman, a departure from past practice.

Dual Role

As is the case at FERC, the Colorado PUC served both a judicial and policy-making role. Binz saw the PUC’s role as “not simply as an umpire calling balls and strikes, but also as a leader on policy implementation” he said in an interview with a demand response group.

In that role, Binz participated in the drafting of Colorado’s Clean Air-Clean Jobs Act which offered utilities incentives for replacing coal-fired power plants with natural gas. Binz later rejected requests that he recuse himself from PUC cases implementing the law.

The bill, which was opposed by both the coal industry and independent power producers, led to the retirement of six coal-fired generators, the addition of pollution controls at two others and the construction of new gas generation at a cost of about $1 billion, according to the Denver Post.

Frequent Flyer

Binz also generated controversy for his frequent travel, spending 200 days at conferences during his tenure. In an apparent reference to Binz, a report by the state auditor said one unnamed commissioner was traveling so often that it was “difficult for division staff to meet with him and ensure his preparedness for meetings and hearings.”

In 2011, the Colorado Independent Ethics Commission found he had violated state travel policy by accepting free travel to speak at an industry conference in Houston. The panel declined to fine him, however, saying he did not personally benefit.

Binz was unapologetic about his travel, telling an interviewer that utility regulators and staffs “need much greater access to educational resources: publications, conferences [and] seminars” to prepare for emerging issues and not be “only reactive.”

Since leaving the PUC, Binz has worked with a Colorado renewable energy institute and run a consulting firm with clients including homebuilders, trade associations and environmental and consumer groups.

Industry Reaction

Binz’ nomination won praise from executives at Public Service Enterprise Group Inc., NextEra Energy Inc., Xcel Energy Inc. and the American Wind Energy Association.

NextEra CEO Jim Robo called Binz “a superb choice,” saying he “recognizes the need for diversity in the U.S. electricity supply and understands our country needs smart policies to modernize the grid to match up with today’s changing energy mix.”

Public Service Enterprise Group Chairman Ralph Izzo called Binz “a strong and timely choice.

“In Colorado, he showed a willingness to work with diverse groups and elected officials of both parties to develop and implement commonsense legislation,” Izzo said.

Previous FERC Chairmen (Source FERC)

(Source FERC)

He also received an endorsement from former Colorado House Speaker Lola Spradley, a Republican, who said his “expertise and leadership proved critical to advance a balanced approach in Colorado.”

Alaska Sen. Lisa Murkowski, ranking Republican on the Energy and Natural Resources Committee, issued a statement that was noncommittal on Binz’ qualifications but skeptical of Obama’s plan to elevate him immediately to chairman.

Murkowski said she “strongly believes that each of the commissioners, and especially the chair, must have and maintain a judicial temperament and must demonstrate a record for balance and a scrupulous regard for the law and the rules. It is noteworthy that in recent decades it has been rare to elevate the newest member of the commission directly to chairman. Under the law, FERC’s chair is responsible for setting the agenda and managing the agency.”

The last five chairmen served a median of 30 months before becoming chair. Only one, Patrick H. Wood III, served less than a year on the panel before his promotion.

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