Binz Hearing Opens as Nominee to Head FERC Draws Fire UPDATED

Before this month, it’s likely few Americans had even heard of the Federal Energy Regulatory Commission (FERC), let alone understood what it does. An unprecedented battle over Ronald Binz, the former head of the Colorado Public Utility Commission (CPUC) whom President Obama nominated in June to replace outgoing FERC chairman Jon Wellinghoff, may have changed that.

Binz’s confirmation hearing opened on Tuesday, but the conflict over his nomination flared up immediately after he was named.

Binz has been caught up in the ongoing struggle over the nation’s energy future, particularly between coal and renewable energy. Critics of Binz have highlighted his role in helping draft the Colorado Clean Air Clean Jobs Act, which was aimed at reducing emissions from coal-fired power plants and increasing the amount of wind generation. Those foes have argued that Binz improperly crossed the line between oversight and advocacy. A lawsuit over his involvement by the Colorado Mining Association later failed, with the judge ruling the CPUC had a right to be involved in legislative negotiations.

The campaign against Binz’s nomination has been spearheaded by a coalition of coal and fossil-fuel advocacy groups such as Americans for Prosperity, the Competitive Enterprise Institute (CEI), and American Energy Alliance, and has played out in the editorial pages of the Wall Street Journal and the Washington Times. Supporters of natural gas have also been concerned by a comment Binz made earlier this year about the fuel being a “dead end.”

In a press release issued before the hearing, CEI analyst William Yeatman argued, “Binz’s record as Colorado PUC chair makes it clear that he’s a green energy booster. It’s no wonder why green energy special interests are orchestrating an unprecedented collaboration with Binz to advance his nomination.”

Indeed, a variety of renewable energy groups have rushed to Binz’s defense, though his supporters also include Xcel Energy, which was the main target of the Colorado Clean Air Clean Jobs Act. In an unusual move for a normally obscure agency nomination, the groups hired a Washington D.C. public-relations firm to help coordinate support even before his nomination was formally announced by the president.

At the hearing, Binz opened by pledging to “work across regional, philosophical, and party lines to make regulatory decisions that work best for our nation’s energy consumers and market participants.” Under questioning from fellow Coloradan Sen. Mark Udall (D-Colo.), Binz defended the changes he oversaw with the CPUC as having led to “a very balanced portfolio” for Xcel without significant cost to consumers.

When pressed by Sen. John Barrasso (R-Wyo.), on his “dead end” comment, Binz backtracked, calling it an “inartful” remark. Natural gas, he said, “is a terrific fuel, it’s needed right now, and may be in the permanent energy mix.” He also promised to expedite pipeline applications as well as LNG exports, saying he supported them. But he also noted that progress would need to be made on carbon emissions. “By 2035 or so, we’re going to have to do better on carbon than even natural gas will allow us to do under current technology.”

Sen. John Hoeven (R-N.D.) brought up the problem of large-scale flaring of natural gas in his state as a result of insufficient gathering infrastructure. Binz agreed this was a challenge and stressed that gas-electric coordination on pipeline capacity was critical. “The electric industry needs to signal the gas industry for where pipeline capacity is needed.” Still, he said, FERC needs to look at how capacity is incentivized. The better question is, “are we compensating them the right way, are we giving them the right incentives for investment?”

Binz sparred with senators from fossil-fuel states on both sides of the aisle, drawing some hostile remarks from Barasso and Sen. Lisa Murkowski (R-Alaska)—who said that she was “not convinced” Binz’s views were compatible with FERC’s mission and would vote against his nomination—as well as from Sen. Joe Manchin (D-W.Va.), who complained that the coal states were getting “beaten up by this administration” and that unnecessary coal plant retirements were threatening reliability. Manchin’s support is thought to be crucial to Binz’s chances given expected Republican opposition.

Much of the questioning strayed into areas—such as climate change or a national renewable energy standard—well outside of FERC’s authority, which is primarily focused on infrastructure rather than policymaking. During the hearing, Chairman Ron Wyden (D-Ore.) repeatedly tried to remind committee members of the commission’s largely limited role. FERC, he said, “cannot discriminate against coal.” Binz as well stressed that “FERC does not take a position on fuels.”

Binz’s chances were in doubt Wednesday after Sen. Manchin announced that he would vote against him. “Mr. Binz’s actions prove that he prioritizes renewables over reliability,” Manchin said in a statement. “His approach of demonizing coal and gas has increased electricity costs for consumers. I believe Mr. Binz’s record is unacceptable for a FERC Chairman.”

The committee will be submitting additional questions to Binz and FERC before the nomination comes to a vote. No date for a committee vote has been set.

Sources: Energy and Natural Resources Committee, New York Times, Denver Post, Sen. Joe Manchin

—Thomas W. Overton, JD, gas technology editor (@thomas_overton, @POWERmagazine)