Murkowski Reiterates Opposition to Nomination of Norman Bay to FERC

July 15, 2014

WASHINGTON, D.C. – U.S. Sen. Lisa Murkowski, R-Alaska, today spoke on the Senate floor in opposition to appointing Norman Bay to be the next chairman of the Federal Energy Regulatory Commission (FERC) and against demoting current chairwoman Cheryl LaFleur:

Sen. Murkowski speaks on the Senate floor about FERC nominees Norman Bay and Cheryl LaFleur.(Click for Sen. Murkowski’s floor speech on FERC nominees Bay and LaFleur)

“I’ve come to speak about two nominees on the Executive Calendar, number 839 and number 842, Mr. Norman Bay and Ms. Cheryl LaFleur. Both are nominated to be commissioners on the Federal Energy Regulatory Commission, an increasingly critical independent regulatory commission.

“As it has considered these nominations, it has been kind of a weird drama that has played out. The entire community that follows the FERC and I understand the agency itself have been very distracted by it. Many are concerned that the wrong person is set to take over as chair of the FERC, and that the commission is at risk of losing its reputation for objectivity. So, for the benefit of senators who are not on the energy committee – and for members of the public who have not followed the controversy surrounding these nominees – let me begin by providing some perspective.

“Both nominees have been serving at FERC. Ms. LaFleur, currently leads the agency as chair and has done so with distinction for the better part of a difficult year – for example, a year that brought the polar vortex and a challenge to bulk power system reliability. The other, Mr. Bay, is an employee, the director of the agency’s Office of Enforcement. He was appointed to that post by its controversial former chair, Jon Wellinghoff of Nevada.

“Now, if confirmed, Mr. Bay will become the first FERC employee in the agency’s history who would go directly and immediately to the commission itself – despite just five years of relevant experience. Furthermore, Mr. Bay will not only be elevated to the post of commissioner; President Obama has announced that Mr. Bay will be designated as chairman after his confirmation. That means Ms. LaFleur – FERC’s only female commissioner – will be demoted when Mr. Bay takes the chair. How soon Ms. LaFleur’s demotion will take place is unclear at this moment.

“At the energy committee’s business meeting to consider these nominees, there was talk of some kind of ‘deal’ that would allow Ms. LaFleur to temporarily remain as chair. It was suggested that this would give Mr. Bay some much needed ‘on-the-job training’ as a rank-and-file commissioner. So there was a lot of discussion going back and forth, and I was certainly part of that discussion. But talk of a deal and confirmation of a deal – giving assurances that certainly this senator had sought and was not given – talking about a deal and getting a deal are two different things. And so as we discuss where we are with these nominees, it’s important to recognize that even if Ms. LaFleur stays on for a period of months, whether it is nine months as some have suggested or a different period of time, what we understand is that Ms. LaFleur will only be allowed to continue in an ‘acting’ capacity.

“Stop and think about this.You have President Obama, who has nominated Ms. LaFleur twice for high office. And despite what I think has been her distinguished service as Commissioner and as Chair of the FERC, the White House dismisses her as an “acting” chair. The Administrations has reportedly limited her authority even to hire staff. Some have suggested that this is just a technicality – that this is what happens within in the commission. That is not my understanding at all. I would view it as an affront.

“If you’re going to be the chair, you should have the full authority of the chair.

“Now, even though I disagree with Acting Chair LaFleur on some key policy matters, by all accounts, from both Republicans and Democrats, she is doing a good job. She is fair.  She seeks balance. She has the temperament that we need. She has the personal qualities of leadership that we look for.  She clearly has experience – 25 years’ worth, in fact.  I hope and expect she’ll be easily confirmed today.  In fact, I hope Chair LaFleur’s bipartisan support has not hurt her prospects.

“Chair Landrieu observed during the Committee’s consideration of these nominees that Ms. LaFleur’s re-nomination ‘was not a sure thing just a couple of months ago.’ And why not?  Why wasn’t the re-nomination of the only woman serving as a FERC commissioner, a Harvard-educated Obama appointee from Massachusetts, a sure thing?  Was it her bipartisan appeal? I hope not. Her good work as chair? Again, I hope not. To me, those are reasons to choose her to lead FERC – not someone else. 

“One hint came from our Majority Leader, Sen. Reid. He recently told the Wall Street Journal that Ms. LaFleur ‘has done some stuff to do away with some of Wellinghoff's stuff’ – without, of course, defining what ‘stuff’ that was, and without acknowledging that much of Mr. Wellinghoff’s ‘stuff’ was either controversial or incapable of withstanding legal challenge. 

“Before turning to Mr. Bay, and his unprecedented promotion from director of the commission’s Office of Enforcement in the face of Ms. LaFleur’s demotion, let’s discuss the agency that the White House proposes he would lead for just a second. 

“Why does the chairmanship of FERC matter so much? In the energy world, FERC regulates ‘midstream everything.’ The Chairman is its CEO.  Under his or her leadership, FERC regulates:

  • Interstate natural gas and oil pipelines;
  • LNG import and export facilities;
  • The sale of electricity at wholesale (and therefore the large and wholesale power markets that increasingly affect the affordability of all electric service, including at the retail level);
  • The transmission of electricity in interstate commerce – basically the nation’s bulk power system, practically speaking, its high voltage transmission networks;
  • The reliability of that bulk power system;
  • The licensing of hydroelectric facilities and the safety of dams;
  • And the list goes on and on. 

“One further example is the safeguarding of sensitive information about our critical energy infrastructure, information that was compromised by FERC during the tenure of former Chairman Wellinghoff. That series of events is now subject to an ongoing inquiry by the Inspector General of the Department of Energy, and it is a breach that Ms. LaFleur has vowed will not happen again.

“Now, given the significance of this agency, let’s consider Mr. Bay. So, beyond the demotion of Ms. LaFleur, and beyond his unquestionable lack of relevant experience, what gives me pause? 

“To begin, there are questions about the fairness and transparency of the functioning of the FERC Enforcement Office during Mr. Bay’s tenure there.  I haven’t resolved those questions, but I know that others are looking at them. Sen. Barrasso has called attention to some of these questions and called for an independent review of facts in dispute. 

“Second, is the question of the circumstances under which Mr. Bay would recuse himself from at least 43 different matters – including some high profile matters – that have been pending in the Enforcement Office on his watch.  Unfortunately, Mr. Bay does not see a need to recuse himself from these proceedings. 

“Third, are the answers Mr. Bay provided to questions from those of us on the Energy and Natural Resources Committee. At best, too many were unclear; at worst, his responses were simply evasive.    

“Finally, I keep coming back to the ‘deal’ – the ‘waiting period’ that was needed to attract enough support on the Democratic side to report Mr. Bay’s nomination from committee. You have to ask the question: What are its terms? Will Acting Chair LaFleur have the opportunity to serve fully and completely as chair? Will it be clear that Mr. Bay is not a ‘shadow chairman’ or ‘chairman-in-waiting’ during this crucial period? At a minimum, before we make a choice about who should lead FERC, the president owes senators a clear timeline of who will be in charge, and what powers will be given to her or him.

“FERC is too important a commission. It’s too important for appointments to be handled like this. Today, I will be pleased to vote in favor of Ms. LaFleur, even though I do not always agree with her policy views. I regret that Mr. Bay will not have my support, and I urge other Senators to withhold their support as well.”     

Murkowski is the ranking member on the Senate Energy and Natural Resources Committee.