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US FERC nominee grilled over grid resilience issues at nomination hearing

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US FERC nominee grilled over grid resilience issues at nomination hearing

Highlights

Democrats, King, press McNamee for recusal

Murkowski seeks to move on nominees this year

Washington — US Federal Energy Regulatory Commission nominee Bernard McNamee on Thursday declined to commit to recusing himself from decisions on thorny questions of electric grid resilience and whether to support struggling generating facilities in bulk power markets.

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Under stiff questioning from Senate Democrats and an independent on the matter at a confirmation hearing, he instead promised to consult with ethics counsel about whether specific proposals that come before the commission warrant his recusal.

McNamee is President Donald Trump's nominee to fill a fifth seat at FERC that could be an important tie-breaker on some natural gas projects. The seat could also represent a pivotal vote if the administration pitches further proposals that make their way FERC to help keep coal or nuclear power plants afloat.

In his testimony before the Senate Energy and Natural Resources Committee, McNamee promised to be an impartial arbiter and emphasized his support for diverse energy resources and for markets as the best way to allocate resources and set prices.

"My decisions will be based on the laws and the facts, not politics," McNamee said. As a lawyer representing electric and gas utilities, he benefited from state utility commissioners who were willing to hear out the arguments, he said.

Several senators, however, raised concerns over his prior statements and role in administration initiatives to help "fuel secure" resources.

And the panel's chairman, Senator Lisa Murkowski, Republican-Alaska, stressed the need for FERC to make clear its neutrality in light of prior proposals put forward by the Department of Energy and entertained by the White House.

"You've heard very clearly, we expect the Federal Energy Regulatory Commission to be that independent, unbiased entity," and avoid picking winners or losers or "tipping scales based on political perspectives," Murkowski said at the hearing's conclusion.

COMMITTEE ACTION

Murkowski told reporters she was generally satisfied with McNamee's responses, and was working toward action by the end of the year. She planned to schedule a committee meeting shortly after Thanksgiving to report out McNamee's nomination, along with two others considered Thursday. She said she hoped to see them confirmed along with seven others before the end of year, possibly as part of a larger package of nominees negotiated by Senate leadership. She was unsure whether leadership would be able to carve out time at this point.

Senator Ron Wyden, Democrat-Oregon, said he believed McNamee should recuse himself on decisions related to the resilience issue. "This is not like the fox guarding the chicken coop. [It's like] putting the fox inside the chicken coop," Wyden said, asserting that McNamee wrote the plan to support generators with 90 days of on-site fuel supplies that was unanimously rejected by the commission.

RECUSAL QUESTIONS

Going a step further on recusal, Senator Angus King, a Maine Independent, said he was "surprised and disappointed" that McNamee would feel he had to consult with counsel "on something that's so clear." He noted that McNamee had expressed a view on the matter even in prior testimony before the committee.

"I don't understand any argument where you would have to consult any counsel anywhere on earth" to understand that you would have a conflict of interest on a grid resiliency pricing rule or any version thereof, he said.

McNamee acknowledged he did work on the first proposal, a notice of proposed rulemaking pitched by Energy Secretary Rick Perry to FERC, but emphasized that FERC already concluded that proposal by rejecting it. "My role was primarily as a lawyer, he said.

He also downplayed his involvement in a subsequent draft DOE memo that offered a rationale for DOE to use emergency authorities under Section 202(c) of the Federal Power Act and the Defense Production Act.

"I was not at the DOE when the memo was drafted or leaked. When I returned to the department, I looked at the memo and was trying to understand what the issues were, what the law was, but came to no final conclusion," he said.

He also steered clear of saying whether he could see a scenario in which a shortage of supply could necessitate a need to mandate coal. "I would not get that far," he said, added that would need to be decided based on the facts. He noted that North American Electric Reliabilty Corp. has made observations about essential reliability services, fuel assurance and generation. "Those are issues that FERC is considering."

-- Maya Weber, maya.weber@spglobal.com

-- Edited by Joe Fisher, newsdesk@spglobal.com