James Danly, the nominee to fill an open Republican seat on the US Federal Energy Regulatory Commission, steered a cautious route Tuesday, as he was asked by senators to weigh in on contentious debates at FERC about wholesale power markets and gas infrastructure reviews.
Danly, who is currently general counsel at FERC, told lawmakers on the Senate Energy and Natural Resources Committee that he would have voted alongside other commissioners in January 2018 to reject a Department of Energy proposal aimed at staving off retirements of coal and nuclear units facing market pressure from cheaper natural gas and renewables.
But beyond that, he gave few hints of his views on wholesale power market design, grid resilience or support for "baseload" generation. Instead, he repeatedly cast FERC's role as striving toward "the most accurate price signal possible," and described refinement of wholesale markets as an "iterative process" by FERC and industry.
WINNERS, LOSERS
FERC, by statute, is "not in the business of picking winners and losers," he said when questioned on debate over support for coal. He left a narrow opening for FERC to use its transmission rate oversight to assist baseload generators stranded by transmission constraints. "I agree that the transmission system has to be designed and operated for the purpose of ensuring the best possible dispatch of the most efficient units, and those units are in many cases what you are terming baseload," he said.
Danly's nomination has faced some objection from Democrats, mostly targeting a White House decision to put forward a Republican without a paired Democratic nominee.
Still, the panel's ranking Democrat, Joe Manchin of West Virginia, after the hearing called Danly "very competent" and said he "should not be punished" because of the White House's approach. Manchin was "hopeful" the president would put forward in the next week the nomination of energy attorney Allison Clements so that both could move together, although he had received no such promise. Ultimately, he had "no doubt" Danly would be confirmed.
In one sign of some continued friction, Senate Minority Leader Charles Schumer of New York released a letter calling for an investigation of a "faulty ethics program" involved in advising FERC commissioners on recusals that Schumer suggested was managed by Danly. But Danly said that, as general counsel, he has "no role whatever in the provision of ethics advice." Rather, each federal agency has a designated ethics officer who reports to the agency head, he said.
POLARIZATION FEARS
Senator Martin Heinrich, Democrat-New Mexico, said he was "deeply worried ... that we are on the precipice of the FERC becoming another political entity, another extension of the White House or [Department of Energy]."
Heinrich said he was "frankly disappointed" in the conduct of FERC's current chairman, Neil Chatterjee. "He has engaged in a war with the media, he has posted things like, 'Come at me, bro' online to his critics. And when we do this and when we fail to pair nominees, we really risk tearing down the norms that have made this body so effective and so apolitical for so long."
While polarization might benefit one side in the short run, Heinrich called it "untenable" for the energy grid overall, and cautioned Republicans that a protestor escorted out of the hearing Tuesday could be appointed to FERC, in which case, "we can no longer permit gas lines at all in this country," he said.
Chatterjee in an email defended his actions, saying he made his views known in "isolated" instances, but that should not be misconstrued as broader disrespect for the media.
Democrats also pressed Danly about climate considerations in reviews of natural gas pipelines, for instance, on his legal arguments that it would be "an exercise in futility" to ask project developers about the destination of gas. In response, Danly offered little to show his hand.
He said he would follow "the black letter law" of Council on Environmental Quality regulation requiring agencies to consider all direct and indirect effects and cumulative impacts of every major federal action. And when asked about a key court ruling that found FERC's greenhouse gas considerations fell short and whose interpretation is in contention, he said, "I agree with the [US Circuit Court of Appeals for the District of Columbia] when it hands down a binding ruling."
Committee Chairman Lisa Murkowski, Republican-Alaska, voiced support for Danly, along with Katharine MacGregor, nominated to be deputy secretary of Interior. She reminded Democrats that FERC nominations by law are staggered and have not always been paired. Nonetheless, she committed to moving on a Democrat, if one is nominated.
