President Obama's two nominees to the Federal Energy Regulatory Commission testified in a confirmation hearing May 20, facing senators' questions about FERC's enforcement policies and whether Obama's choice for FERC chairman, Norman C. Bay, is sufficiently experienced to replace the other nominee, Commissioner Cheryl LaFleur, as chairman.
Obama renominated LaFleur to the commission this month. He appointed her acting FERC chairman in November in the wake of the withdrawal of his nomination of controversial Colorado consultant Ronald J. Binz to be a member, and chairman, of the commission.
Obama nominated Bay, currently director of FERC's Office of Enforcement, to a commission seat in February, with the intention to name Bay chairman once he is confirmed by the Senate. If confirmed, Bay would succeed FERC Chairman Jon Wellinghoff whose commission term expired in June 2013.
The Senate Energy and Natural Resources Committee convened a hearing May 20 to consider both nominations. Much of the discussion focused on FERC's enforcement activity, particularly in light of an opinion column in the Wall Street Journal a few days earlier in which former FERC General Counsel William Scherman complained that FERC's enforcement process had become unfair.
In response to questions, Bay said he is always open to suggestions for improvement but that the newspaper column was incorrect. He outlined procedures for handling enforcement actions.
Additionally, several senators questioned why Bay was to be named FERC chairman, superseding LaFleur, who several said had done a good job.
"You would have to ask the White House," Bay said, adding he has done "good work" to protect consumers and to ensure a level playing field in the energy marketplace.
Sen. John Barrasso, R-Wyo., said it appeared Bay had little experience in energy policy until he joined FERC in 2009. Bay responded that as U.S. attorney in New Mexico he worked with the national energy laboratories in that state.
Several senators questioned whether Bay would act to protect electricity system liability in the face of the Environmental Protection Agency's plans to issue carbon emission rules that are expected to shut down many of the nation's baseload coal-fired power plants.
Sen. Rob Portman, R-Ohio, noted his state is being forced to retire 41 coal plants, the most in the country, he said. He asked what Bay would do to help the EPA understand that their rules would affect reliability. Bay said FERC would provide technical assistance to EPA and work with stakeholders to help the agency recognize reliability issues.
The committee's ranking minority member, Sen. Lisa Murkowski, R-Alaska, said she had confidence in LaFleur and would like to see her continue as chairman. However, she said, in regard to energy policy, there are areas in which Bay lacks experience.
"I don't want FERC rolled over by the EPA," Murkowski added. "You have to stand shoulder to shoulder with that agency."
Prior to joining the commission, LaFleur, a Democrat, had more than 20 years' experience as a leader in the electricity and gas industries, retiring in 2007 as executive vice president and acting chief executive of National Grid USA. The former New England Electric System, National Grid USA delivers electricity to 3.4 million customers in the Northeast.
Since July 2009, Bay has been director of FERC's Office of Enforcement, responsible for protecting energy market consumers from fraud or market manipulation affecting FERC-regulated wholesale natural gas and electric markets. Before joining the commission staff, he was a law professor at the University of New Mexico, teaching criminal law, evidence and constitutional law.
From 2000-2001, Bay, a Democrat, was U.S. attorney for New Mexico. From 1989-2000, he was an assistant U.S. attorney in the District of Columbia and in New Mexico. Prior to his Justice Department service, he was attorney-adviser in the Office of Legal Adviser at the State Department.
There are three other sitting FERC members. The other Democrat on the commission is John Norris, whose term expires in 2017. Republicans on the panel are Philip Moeller, whose term expires in 2015, and Anthony Clark, whose term expires in 2016.
No more than three members of the same party may serve on the five-member commission.