Calls mount for Trump’s newest energy regulator to recuse himself over coal bailout connection
Even before he participates in his first public meeting on Thursday, Bernard McNamee, the newest member of the Federal Energy Regulatory Commission (FERC), is facing multiple calls for his recusal from cases related to the resilience of the electric power grid.
Environmental and public interest groups believe McNamee’s past work on President Donald Trump’s coal and nuclear bailout proposals disqualify him from voting on those issues when they come before FERC.
In addition, 17 Democratic senators sent a letter to McNamee last week expressing concerns about the pro-fossil fuel positions he has taken, both while serving as a top official in the U.S. Department of Energy’s (DOE) and in the private sector. “We urge you to recuse yourself from any future FERC proceedings where your impartiality could be questioned,” the senators wrote.
FERC oversees the U.S. grid and regulates interstate electricity transmission and interstate gas projects. In its regulation of wholesale power markets, it is expected to maintain a nonpartisan, technology-neutral role. The arrival of a commissioner with a strong bias against renewable energy has created uncertainty among industry and environmental groups who fear FERC may begin taking a more heavy-handed approach in support of coal and nuclear power.
In its regulation of the nation’s natural gas infrastructure, the commission has played a different role. It has historically worked as a partner of industry, helping companies get their natural gas pipeline and liquefied natural gas projects built as quickly and efficiently as possible.
FERC will hold its final public meeting of the year on December 20, where McNamee likely will be warmly welcomed to the commission by his colleagues. Protesters, however, affiliated with Beyond Extreme Energy — a group that has disrupted several previous FERC meetings over the commission’s clear rubber-stamping of fossil fuel applications — are expected to attend the meeting.
McNamee, who was sworn in as a commissioner at FERC on December 11, previously worked with the DOE — in two separate stints — where he helped to craft and promote Trump administration proposals to bail out struggling coal and nuclear plants.
During his first stint at the DOE, McNamee signed the cover letter to the controversial grid resiliency plan sent by the department to FERC in September 2017. In the cover letter, McNamee also indicated that he should be contacted if anyone at FERC had any questions on the proposal.
In January, FERC, an independent federal agency, denied DOE’s proposed bailout of coal and nuclear plants, but the case is still under appeal at the commission. On the same day, FERC opened a second proceeding to examine the resilience of the bulk power system; Trump has argued that coal and nuclear power are crucial to grid resilience, an argument experts have pushed back against.
The Natural Resources Defense Council (NRDC), Sierra Club, and the Union of Concerned Scientists said in their joint motion submitted to FERC on Tuesday that McNamee should recuse himself from the commission’s grid resilience cases because of his work on Trump’s bailout proposals.
McNamee’s close association with the bailout plans, the groups said, create an unacceptable risk that he has already made up his mind on the issues underlying these cases.
“As a matter of law, Commissioner McNamee cannot participate as decisionmaker on the same case in which he previously participated on behalf of a separate entity, the Department of Energy,” the environmental groups argued in the motion.
.@NRDC joins @Earthjustice, @SierraClub, and @UCSUSA to file a formal request urging new @FERC Commissioner Bernard McNamee to recuse himself from two pending proceedings related to the Dept. of @Energy’s proposal to bail out coal and nuclear power plants. https://t.co/0I4Xo1qGQB
— NRDC (@NRDC) December 18, 2018
“If Commissioner McNamee participates in adjudicating the pending rehearing requests, it would amount to him deciding his own case,” Gillian Giannetti, an attorney with the NRDC’s Climate and Clean Energy Program wrote in a blog post on Tuesday. “To preserve the perception of fairness and to safeguard due process and the rule of law, Commissioner McNamee’s recusal is warranted in these two FERC rulemaking dockets.”
Tyson Slocum, director of Public Citizen’s Energy Program, said the recusal requests are a “no-brainer.”
“He was the attorney of record who signed the filing at FERC. So, he has to recuse himself,” Slocum told ThinkProgress.
McNamee’s work at DOE, according to Slocum, will necessitate his recusal from numerous grid resilience issues at FERC such as requests for rehearing of DOE’s coal and nuclear bailout proposal and the ongoing resilience proceeding launched by the commission in January. Such recusals, though, could serve as a detriment to the Trump administration’s hopes for propping up the coal and nuclear industries.
By nominating McNamee, most energy attorneys assumed Trump was trying to get a political ally inside FERC who would move the commission closer to supporting the administration’s preference for subsidies for coal and nuclear plants.
“But when you look at the scope of McNamee’s potential conflicts, he’s really going to turn into a liability here,” Slocum explained. “There are going to be a number of very important resilience-related dockets that it appears that McNamee is not going to be able to issue orders on.”
Federal employees, however, are required to comply with criminal conflict of interest statutes and Office of Government Ethics regulations. These rules prohibit employees from working on matters in which they have a financial conflict of interest, or on matters in which a reasonable person with knowledge of the relevant facts would question the employee’s impartiality. At FERC, recusal determinations are made on a case-by-case basis.
In response to a question submitted to him by Sen. Maria Cantwell (D-WA) in November, McNamee said that upon returning to DOE in June as executive director of the Office of Policy, he was not involved in the crafting of a draft memorandum — leaked to the press at the beginning of the summer — that proposed using emergency and national security authorities under the Federal Power and Defense Production Acts to support coal and nuclear generation resources on the electric grid.
Environmental groups have pointed to McNamee’s connection to advancing the national security draft memo as another part of his resume that could create potential conflicts with his work at FERC.
According to his written response to the question, McNamee said while he didn’t draft it, he did review the draft memorandum and began “trying to work through the substantive issues, as well as examining the statutes and legal justifications contained in the proposal.”
Another source of tension is the fact that McNamee also worked for the conservative Texas Public Policy Foundation think tank in between his two stints at DOE. During this time, McNamee said in a speech that the fossil fuel industry and its supporters need to help policymakers and the public understand that fossil fuels are “key not only to our prosperity” but “to a clean environment.”
McNamee also criticized renewable energy resources for their alleged role in “screw[ing] up the whole physics of the grid.”
Throughout its 40 year history, FERC has had numerous corporate lawyers serve as commissioners who ultimately had to recuse themselves when a case involving their former clients came before the commission. “But this is unique in that McNamee was involved in an entire policy initiative and therefore his involvement in any FERC consideration of those types of policy initiatives, there are going to be inherent conflicts of interest,” Slocum said.
The Harvard Electricity Law Initiative, under the leadership of Ari Peskoe, was the first group to formally call on McNamee to recuse himself from the electric grid resilience cases at FERC. In a December 6 filing, Peskoe argued that McNamee “is a central figure in this long-running campaign to subvert the commission’s exclusive authority over wholesale rates” and grant special accommodations to coal and nuclear plants.
The issues now facing FERC over whether one of its members will be able to participate in major decisions at the commission could have been avoided if the Senate had done a better job of vetting McNamee, according to Slocum.
FERC had not responded to requests for comment from ThinkProgress over how the agency will handle McNamee’s involvement in grid resilience cases at the time this article was published.
Sen. Lisa Murkowski (R-AK), the chairwoman of the Senate Energy and Natural Resources Committee, and Senate Majority Leader Mitch McConnell (R-KY) “were deeply irresponsible in rushing McNamee to a vote,” Slocum said.
A FERC nominee typically takes several months — sometimes more than a year — to get confirmed by the Senate and then sworn into the commission. But the process for McNamee went much faster.
Trump nominated McNamee to FERC in early October. On November 27, the Senate Energy and Natural Resources Committee voted along party lines in favor of sending McNamee’s nomination to the full Senate. By early December, only two months after his nomination, McNamee was confirmed by the full Senate to fill a vacant on the commission.
“The committee received zero information about the details of McNamee’s activities at its two different DOE posts. That’s unprecedented,” he said. “Now they are going to be dealing with the legacy of that lack of adequate vetting because now questions are being raised about significant conflicts of interest.”
Regardless of how FERC decides to handle the potential conflicts of interest, a federal court eventually will be asked to make a determination on what cases McNamee can vote on, according to Slocum.
“It raises another level of uncertainty,” he said. “If McNamee decides to participate in contested dockets where folks have raised conflicts-of-interest issues and he casts the deciding vote, that order is going to be in dispute until a court looks at the conflict-of-interest issue.”