trending Market Intelligence /marketintelligence/en/news-insights/trending/XCaVeZJHLIFnxKngt0dNNw2 content esgSubNav
Log in to other products

 /


Looking for more?

Contact Us
In This List

FERC's Bay: Transition team knew I would leave; chair swap got lost in the mail

Blog

COVID-19 Impact & Recovery: Energy Outlook for H2 2021

Blog

US utility commissioners: Who they are and how they impact regulation

Video

Climate Credit Analytics: Linking climate scenarios to financial impacts

Blog

Essential Energy Insights, April 2021


FERC's Bay: Transition team knew I would leave; chair swap got lost in the mail

In an exclusive interview, former FERC Chairman Norman Bay said he told President Donald Trump's transition team that he would probably leave if he was replaced as the commission's leader, and when the news did come that Cheryl LaFleur would take over as acting chair, both learned of the transition two days after the fact because the notice was sent to the wrong address.

Bay, a Democrat, will be leaving FERC Feb. 3, after which the agency will have only two sitting commissioners, LaFleur and Colette Honorable, who also are Democrats. Because FERC needs to have three sitting commissioners to vote on major orders under federal statutory quorum requirements, FERC may be unable to rule on important infrastructure projects, including four pending pipelines, policy issues and other matters for some time.

Trump has not nominated anyone to fill the agency's two seats that are currently open, much less Bay's. Once he has nominated someone, the confirmation process could take months.

During the interview, Bay insisted that his pending departure from the agency should come as no surprise. When he met with the Trump transition team, Bay acknowledged that "elections have consequences" and the president's prerogative to pick the people he wants to lead government agencies. Bay further recalled telling the transition team that he "would likely leave" if he was replaced as chairman. He even talking about his desire to take time off after he left FERC, including possibly doing a pilgrimage to northern Spain to walk a trail called the Camino de Santiago.

Moreover, Bay recounted that with one exception — LaFleur, who agreed to stay on as commissioner after she was replaced by Bay as chairman in April 2015 — the longstanding tradition at FERC is that a chairman leave when replaced. Thus, he suggested that his decision to do the same is not unusual.

Bay also said he is not the only federal agency head that has resigned and left the agency without a quorum. The chairmen of the SEC and the CFTC have both done the same, and the chairman of the Federal Trade Commission will exit next week, he said. "Transitions happen, in other words," Bay said.

His position in this regard is a nonpartisan one, Bay added. If the circumstances were the same, but the new administration was a democratic one and FERC's chairman a Republican, "I would understand and respect the chairman's decision to leave," Bay maintained.

Besides, Bay said he had heard that "some Republicans regarded it a win-win if I left because it opened up a third seat at the commission for the Republicans to fill and put more pressure on the senate to move quickly to confirm nominations." According to Bay, at least one potential nominee has been vetted, and possibly more than one, but Bay would not name names. "So at this point I assume the system will work. FERC will become a priority, and the seat will be filled shortly," Bay predicted.

"I assume the administration has a plan as they've had more than two months to plan the transition. No one from presidential personnel reached out to me to ask me to stay, even though I put them on notice that they could not count on me remaining after I was no longer chairman," Bay said.

Lost in the mail

Both Bay and LaFleur learned about her new role in a bizarre fashion. LaFleur, on the afternoon of Jan. 25, received an order dated Jan. 23 that was delivered by a courier indicating that she had been appointed acting chair as of Jan. 23. Neither LaFleur nor Bay had received a phone call about the change, and at first they thought it might be fake. Only after they made several phone calls were they able to confirm that it was authentic.

Bay revealed they later discovered that the order was delivered two days late because it originally was sent to the wrong address, which an aide said was FERC's old headquarters, which no longer exists after its new offices were built more than 20 years ago.

Nevertheless, Bay maintained that all the orders that were voted on between Jan. 23 and Jan. 25, all of which were unanimous, are valid because they reflected the full vote of the commission.

When asked whether his former roles as a federal prosecutor and head of FERC's Office of Enforcement might have led to his demotion, Bay declined to comment. However, the Trump administration has made clear it is pro-business and its disdain for alleged regulatory overreach.

On whether FERC will be able to vote out may orders before he leaves, including certificates requested by natural gas pipeline developers, Bay said everyone on the commission was committed to the work. "We are all professionals," he said.

FERC a "gem"

Looking ahead, Bay foresees good things for the commission. He praised FERC as a "gem of an agency," with great staff and wonderful colleagues on the commission.

"FERC has a great tradition of being bipartisan if not nonpartisan in the way in which it addresses energy issues," Bay said. "And I very much hope that that tradition continues. I think the tradition is so ingrained in the agency that it will continue."

The commissioners are not divided by many issues, Bay added. "We believe in the value of markets. We understand the importance of reliability. We know that infrastructure can promote competition, more efficient markets, and reliability and resiliency," he said. "So because we have these shared understandings, there are very few things that we do that become politicized. And that's important. That goes to our effectiveness as an agency."

Bay offered some advice for the Republican chairman who will take over from LaFleur. "One thing I would [like] the next chairman to do would be to continue to provide greater transparency into FERC and its processes," he said. "That was something that was very important to me, and for that reason we developed video clips you can review online, we have been doing podcasts, we developed infographics and other materials to educate the public on how they can get involved. I think that is important for us to do."

LaFleur also supports that effort, Bay said.

After working six days a week for several years, Bay said he looks forward to some time off, possibly becoming a "fly-fishing bum." After that, he will "cast a wide net and try to find a job that really engages me, where I can make a difference." He ticked off positions with an academic administration, foundation, law firm or company as possibilities.