LaFleur for FERC Chair, Hempling for the Vacancy

Washington, D.C., January 13, 2014 – The Obama administration could avoid a patch of trouble this icy season by naming Cheryl LaFleur, acting chairman of the Federal Energy Regulatory Commission, as the permanent chairman.

At the same time, the administration should soon name another Democrat with industry credentials as the third member of its political party to the five-member body, as the law establishes. How about Scott Hempling?

Under the rules of the road, FERC consists of five commissioners, each serving five-year terms, with a majority from the party of the sitting president, who also gets to name the chairman. Jon Wellinghoff, with ties to Senate Majority Leader Harry Reid (D-Nev.), got appointed to FERC in 2006 by George W. Bush. Wellinghoff was Nevada’s consumer advocate and a prominent Democrat. When the Obama administration came into power in 2009, the White House deferred to Reid (D-Nev.), who advised the administration to promote the strong-willed Wellinghoff to the chairmanship.

Wellinghoff, 64, has now left FERC for private law practice. Before his departure, the White House nominated Colorado’s Ron Binz, a former consumer advocate and utility regulatory, to replace Wellinghoff both as a FERC commissioner and chairman. Naming a novice to be the chairman was a bit of a reach. Sources in Washington have suggested that the White House again deferred to Reid; his acolyte, Wellinghoff, suggested Binz to the majority leader as a replacement, because the two had worked together as Western state consumer advocates.

The Binz nomination blew up leaving splattered political egg on the face of the administration, as chronicled in these pages.

For reasons unknown, Reid didn’t want to see either FERC commissioner and former Iowa state regulator John Norris, a steady Democrat, or LaFleur, a former National Grid executive and sitting FERC member and another Democrat, in the top spot.

When the Binz nomination crashed, the White House, without any other easy option, picked LaFleur, 58, the senior Democrat on the panel, to be the acting chair. She became chair by default.

The administration should now remove the “acting” designation and name LaFleur to head of the body. She’s qualified, very experienced in transmission issues, has good relations with the FERC staff and other commissioners. So far, she’s demonstrated a habit of communicating (within the arcane rules of federal regulation agenies) with the other commission members – including the two formidable Republicans, Phil Moeller and Tony Clark—on her approaches to FERC activities.

Most recently, LaFleur has worked out a compromise with the Commodity Futures Trading Commission over who gets to regulate energy trading. The deal seems to be a reasonable solution to a classic Washington turf fight.

Bumping LaFleur up to the permanent chair of the commission would avoid a needless confirmation fight with Senate Republicans. She has already been confirmed once and has done nothing to raise the ire of the GOP members of the Senate Energy and Natural Resources Committee. Then the administration would be free to nominate another Democrat (or independent) to the vacant seat, without raising the question of whether an untested nominee would run the panel.

This approach would allow the administration to name someone who might be a bit controversial, given that the new member of the commission would not be in control of the agenda. That was part of the problem with the Binz nomination, as he would have become the agency head as well as a new commissioner.

Do I have a name?

As I already said, I do. This is entirely without any orchestration or discussion with my preferred nominee for the FERC vacancy. If I were advising the White House (and, believe me, I’m not, and I doubt anyone there has ever heard of me or could spell my name correctly), I’d nominate veteran Washington utility lawyer Scott Hempling.

Hempling has a long and distinguished record in regulatory policy. He is one of the seminal thinkers about what utility regulation should be. He’s never been a state regulator (maybe a positive), but has advised many state regulators of both parties. He’s an experienced attorney who has practice regulatory law in multiple venues, and was the head of the National Regulatory Research Institute.

I have not discussed this with Hempling, whom I have known for many years. My advocacy of his candidacy is completely independent of any organized campaign and I’m not aware of any such endeavor. Hempling would be a great choice for a vacant seat at FERC. But only if the Obama administration made Cheryl LaFleur’s “acting” status permanent. Attempting to put Hempling into the FERC chairmanship would set off another contretemps reminiscent of the Binz brouhaha. Not a smart move.