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US Senate votes 50 to 49 confirm NcNamee to join FERC

Highlights

Close confirmation vote falls along party lines

Contentious power market decisions pending

Houston — The Senate voted Thursday to confirm Department of Energy official Bernard McNamee to the US Federal Energy Regulatory Commission in a 50-49 party-line vote that was unusually close for nominees to the agency.

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The confirmation comes as FERC is facing difficult decisions related to wholesale power capacity market redesign and as ambitious policy reviews on natural gas pipeline permitting and grid resilience are pending. It brings to three the number of Republicans seated at FERC, but with Commissioner Kevin McIntyre having scaled back participation in orders because of health concerns, it could mean an effective 2-2 split among the parties for the time being.

The close Senate vote was unprecedented in the commission's recent history, reflecting strong objections from Democrats. Most FERC confirmations have not proceeded to a roll call vote. The nomination of Commissioner Norman Bay faced opposition from key Republicans, but was approved July 2014 in a 52-45 vote.

MANCHIN CHANGES MIND

Senator Joe Manchin, Democrat-West Virginia, who voted for McNamee in committee, said in a statement late Wednesday that he changed his mind after viewing a video of McNamee's presentation on behalf of the conservative think tank Texas Public Policy Foundation earlier this year.

"After viewing video footage, which I had not previously seen, where Bernard McNamee outright denies the impact that humans are having on our climate, I can no longer support his nomination to be a FERC Commissioner," Manchin said. "Climate change is real, humans have made a significant impact, and we have the responsibility and capability to address it urgently."

Democrats have asserted that McNamee was biased in favor of fossil fuels and against renewables and unlikely to be a neutral arbiter at the commission, and said the video made that plain. They have also criticized his role in DOE initiatives to stem retirements of coal and nuclear plants struggling to compete in wholesale power markets.

Republicans, including Senate Energy and Natural Resources Committee Chairman Lisa Murkowski, Republican-Alaska, by contrast pointed to McNamee's experience in energy policy and law, and his commitments to be independent and decide matters based on the law and the facts. They said having a fifth member at FERC was important for advancing infrastructure projects.

The Center for LNG welcomed the Senate action, emphasizing the importance of having an orderly LNG project review process and a fully staffed agency. The Natural Gas Supply Association and the Edison Electric Institute also welcomed the confirmation.

CAPACITY MARKETS

On the electricity side, FERC decisions lie ahead related to the redesign of capacity markets in PJM Interconnection and ISO New England -- matters that previously split the commission.

In June, FERC launched a proceeding (EL18-187) for PJM to change the design of its capacity market to address the impact of state policies that subsidize renewable and nuclear power. FERC's plan would require PJM to modify its minimum offer price rule so it applies to new and existing resources that receive out-of-market payments.

Without McNamee, FERC lacks the votes to move forward a PJM proposal to respond to FERC's order, said Tyson Slocum of Public Citizen.

For the New England market, FERC is expected to rule on details of a contract for the gas-fired Mystic units in Massachusetts, following on its December 3 approval of ISO-NE's short-term fixes to its capacity market to address fuel security and accommodate a cost of service agreement with Mystic.

Slocum contends McNamee's ascension to the commission gives regional transmission organizations a green light to accelerate market-redesign proposals that could force consumers to pay for uneconomic energy resources.

Former Commissioner Tony Clark noted that power sector issues queued up also include price formation efforts, reform of Public Utility Regulatory Policies Act implementation, and incentives for transmission development.

The Harvard Electricity Law Initiative filed Thursday a comment at FERC arguing that McNamee must recuse himself from matters related to "fuel secure" generators, including FERC's docket on resilience in the RTO and ISO markets, and a request for rehearing on DOE's original notice of proposed rulemaking to support coal and nuclear plants.

In natural gas, FERC has launched an inquiry to consider whether its 1999 natural gas pipeline certificate policy needs a revamp. It has appeared divided along party lines on whether to alter the approach toward environmental considerations and needs assessments.

Clay Massey, a partner with Alston & Bird, said it is unlikely with the current commission makeup, and McNamee on board, that there would be significant changes to the policy for approving gas pipelines. The focus may be on advancing pending infrastructure applications, he added.

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

-- Kate Winston, kate.winston@spglobal.com

-- Edited by Valarie Jackson, newsdesk@spglobal.com