Special Report: The Senate Questions Trump's FERC Nominees
Earlier today, analysts from LawIQ attended a hearing held by the United States Senate Committee on Energy and Natural Resources (Committee) on the nominations submitted by President Trump for two of the three open positions on the Federal Energy Regulatory Commission (FERC): Neil Chatterjee, the top energy adviser to Senate Majority Leader Mitch McConnell (R-Ky.), and Robert Powelson, a former public utility commissioner in Pennsylvania. While Chairman Murkowski certainly seems to be pushing these nominations forward quickly, the Acting Ranking Member, Senator Franken, indicated that the Committee's Democrats may try to hold up these nominations until President Trump sends up a nominee to replace Commissioner Honorable, whose term ends in June.
Presuming the Democrats are not successful in slowing the nominations, it would seem that FERC's quorum could be restored by the end of June. But if the Democrats are successful, the quorum likely won't be restored until at least September.
Potential Impact on Pipeline Projects
In regard to energy infrastructure projects, Senator Murkowski asked the nominees how they would ensure that all projects, but particularly the Alaska LNG project, can proceed through the FERC process in a "timely and predictable manner." Mr. Chatterjee stated his support for states utilizing their domestic energy resources and promised to seriously consider stakeholders on all sides of the issue. Mr. Powelson, who raised some eyebrows earlier this year by claiming that pipeline opponents are waging a "jihad" against new pipeline projects, stressed that he would be "fair and balanced" in his assessment of new infrastructure projects. In his view, new projects should be safe and have a solid business case.
The nominees delved further into project timing in response to a question from Senator Lee about processing a long delayed water pipeline project. Mr. Powelson said that one of his first acts would be to undertake a root cause analysis to understand what is causing the slowdowns, specifically within the Office of Energy Projects. He also decried a "silo mentality" among federal agencies in Washington that fail to communicate on the permitting process. Mr. Chatterjee agreed that the process should be more efficient, but also stressed that it should be done in a responsible way, to avoid legal liability going forward.
The Importance of States Rights
The questions asked of the two FERC nominees and their responses were not particularly controversial. Much of the questioning was focused on FERC's regulation of the electric industry and grid, and whether the nominees would lead FERC in an effort to thwart efforts of the states to implement individual electric supply portfolio requirements with respect to encouraging coal, nuclear, or renewable sources. Generally, both Mr. Powelson and Mr. Chatterjee supported the rights of the states to put forward their own requirements but did caution that FERC has a role to play in making sure that the markets are not unduly affected by such portfolio standards. Mr. Chatterjee, a native Kentuckian who has been criticized by environmentalists for his support of coal, escaped substantive questioning on the issue. He repeatedly emphasized that he believes in an "all of the above" solution with respect to fuel for generation.
Potential Timing Constraints
As to timing for the confirmation of these candidates and restoration of a quorum at FERC, Senators Murkowski and Franken had opposing ideas on who was to blame for the lack of a quorum and also how critical it was to quickly restore the quorum.
Senator Murkowski squarely placed the blame on President Obama for failing to nominate Republican members to replace the Republicans who stepped down in the last two years of his term, and on former Chairman Bay who resigned "well before his term was scheduled to end." She also indicated to the committee members that if there were any questions that could not be put to the nominees during today's hearing, those questions would have to be submitted to the nominees in writing by the close of business today. She then encouraged the nominees to respond to the questions promptly, and indicated that the Committee members should be prepared to report these nominees out of the Committee immediately upon their return from the Memorial Day home state work period, which ends on June 2.
Senator Franken laid the blame for the lack of a quorum directly on President Trump and his transition team because he said Chairman Bay had warned the new administration that he would resign if he was replaced as Chairman and, after demoting Chairman Bay, President Trump then waited over three months to send the Committee any nominees. While Senator Franken expressed support for the need to restore a quorum, he said it was "equally" important that President Trump make two more nominations to fill the other current vacancy and the vacancy being created by Commissioner Honorable's decision to step down at the end of her term in June. He then noted that the Democrats on the Committee would be working with Senator Schumer to ensure that happens.
So it could be that while these two candidates do not appear to be particularly controversial, their confirmation could be delayed by Senate Democrats until President Trump sends the Senate two other nominees, one of whom must be a Democrat, as Senator Franken noted the law requires. If the Senate Democrats are able to delay the consideration of these nominees until that occurs, there could be quite a delay in the restoration of the quorum at FERC.
There were a number of brief shouted protests during the hearing about shutting FERC down, but the protesters were quickly removed and the hearing continued with only minor interruptions.