A Federal Energy Regulatory Commission ethics official said member Bernard McNamee can participate in the agency's ongoing grid resilience review but with a caveat: He must recuse himself from the matter if it starts to "closely resemble" a failed U.S. Department of Energy proposal to support financially struggling coal-fired and nuclear power plants that McNamee helped craft.
The guidance from FERC ethics official Charles Beamon was attached to a Jan. 7 letter McNamee sent to U.S. Sen. Catherine Cortez Masto, D-Nev. Cortez Masto is one of several Democratic lawmakers who urged McNamee, who was sworn in at FERC in December 2018, to recuse himself from any proceedings at the commission that involve possible subsidization of coal and nuclear plants.
The calls for recusal stem from McNamee's past work as the DOE's deputy general counsel when Energy Secretary Rick Perry asked FERC in September 2017 for a rule that would require regional grid operators to ensure full cost recovery for any power plant operating in wholesale markets that stores at least 90 days worth of fuel onsite — criteria that only nuclear facilities and some coal-fired units could feasibly meet. Although FERC unanimously rejected the DOE's request (FERC docket RM18-1), the commission launched a broad grid resilience review (FERC docket AD18-7) that could lead to new policies affecting specific generating resources.
During his ethics training in December, McNamee told Beamon he was recusing himself from any further action on RM18-1, including a request for rehearing on FERC's decision in the matter. But Beamon said McNamee could participate in the grid resilience review because his prior position and statements were not "demonstrative of an unalterably closed mind" on that docket. The ethics official cautioned, however, that McNamee must "exercise continued oversight to ensure that [the resilience review] does not develop in such a way as to replicate or closely resemble Docket RM18-1, which given your prior participation would require your recusal."
In addition to McNamee's work on the DOE rulemaking, Senate Democrats worried the commissioner's past comments defending fossil fuels and criticizing renewable energy could threaten his impartiality on a range of issues. While working for the Texas Public Policy Foundation in February 2018, McNamee said the intermittent nature of renewable power "screws up the whole physics of the grid" and that environmental groups are seeking to inflict "administrative tyranny" on fossil fuel producers.
Those comments prompted the group of Democratic senators to ask that McNamee abstain from "any future matters before FERC that might be characterized as pitting one fuel source against another," as well as any matters where his past statements, positions, and work might throw his impartiality into doubt.
But Beamon said he would make recusal decisions on other dockets on a "case-by-case basis," applying the appropriate legal standards. He noted that courts use two standards to determine when a recusal is necessary: one for adjudicatory proceedings, in which regulators should only be disqualified from matters where they have "demonstrably" already made up their minds and are impervious to contrary evidence; and another standard for rulemakings, where agency officials should only recuse themselves if they have clearly shown an "unalterably closed mind" on critical matters in a proceeding.
Beamon's guidance pleased at least one environmental group that wanted McNamee barred from deciding on issues similar to the DOE plan.
"The ethics guidance is a big step forward toward ensuring impartiality and integrity of FERC decisionmaking and a real win for the public," said Kim Smaczniak, a clean energy staff attorney for Earthjustice, which filed a motion on behalf of several environmental groups seeking McNamee's recusal from the DOE and grid resilience dockets.
But Sierra Club, one of the groups Earthjustice represented in the recusal motion, wanted more.
"This isn't good enough," said Mary Anne Hitt, senior director of the Sierra Club's Beyond Coal campaign. "To ensure fair and impartial proceedings, McNamee must recuse himself from anything that closely relates to his prior work on his coal bailout."