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Former Arizona Regulator Among Top Candidates To Replace Powelson at FERC

Energy Daily, July 20, 2018 | By Jeff Beattie


Sources say the Trump administration is working quickly to replace outgoing GOP Federal Energy Regulatory Commissioner Robert Powelson, with former Arizona energy regulator Doug Little under serious consideration and other candidates including NRG Energy executive and former Energy Department general counsel David Hill, former Wisconsin energy regulator Ellen Nowak and Bruce Walker, assistant secretary of DOE’s Office of Electricity.

Another candidate that has been discussed is Travis Kavulla, past president of the National Association of Regulatory Utility Commissioners (NARUC) and vice chairman of the Montana Public Service Commission, the sources say. Powelson stunned FERC stakeholders June 28 by announcing he will leave the com-
mission in mid-August, after just a year at the commission, to become president and CEO of the National Association of Water Companies. 

At that time, Republicans will lose their 3-2 majority at FERC, evening the commission out at two Democrats and two Republicans, until Powelson’s replacement is approved by the Senate.

However, Senate Democrats may be inclined to block a vote on a GOP replacement for Powelson, and may not relent until they can pair that nominee with a Democratic appointee to FERC—the usual path for confirmation of appointees to key federal regulatory agencies in the politically riven Senate. The first opportunity to name a Democrat to FERC will come in June 2019 when Commissioner Cheryl LaFleur’s term expires.

Such a delay in getting a third Republican vote at FERC could pose problems for FERC Chairman Kevin McIntyre’s efforts to advance key initiatives because LaFleur and Richard Glick, the commission’s other Democrat, have strongly dissented on several decisions pushed through by FERC’s GOP majority. 

And with the prospect of partisan deadlock clearly looming after Powelson’s departure, McIntyre now has little time left to move his agenda.

In particular, FERC is unlikely to finish a comprehensive review of its natural gas pipeline permitting policies before Powelson departs, McIntrye acknowledged to reporters following the commission’s monthly open
meeting Thursday. 

Pipeline permitting has recently split the commission on a partisan basis, with LaFleur and Glick saying FERC should begin assessing the greenhouse impacts of new pipelines in deciding whether to issue permits, a view FERC’s Republicans do not share. 

More broadly, FERC’s Democrats have raised questions about efforts by the commission’s Republican majority to speed reviews of proposed pipeline projects. While McIntrye has launched a review of FERC’s 19-year-old policy statement on how it evaluates pipeline applications, Democrats are pushing for tougher assessments of new projects, including whether FERC should continue to rely heavily on shipper contracts signed by affiliates of pipeline developers as indicators of market need.

FERC is also likely to deadlock on a controversial case involving how regional transmission organizations should accommodate state-subsidized power plants in their wholesale markets, a stubborn problem for FERC that has led to several court conflicts.

On June 29, FERC’s GOP majority proposed a two-pronged plan designed to assure that the subsidized plants do not suppress wholesale prices in PJM Interconnection, the grid operator for most of the Mid-Atlantic and parts of the Midwest. Glick and LaFleur dissented strongly on a variety of grounds.

FERC gave parties 60 days for comment on its plan for PJM, meaning that FERC is likely to be deadlocked at 2-2 on next steps in the proceeding until Powelson’s replacement arrives.

As for the possible replacement, sources say some of the people under consideration made their interest known and others’ names were forwarded to administration officials. Two industry sources said Little is under serious consideration for the FERC slot.

Little joined DOE last year as deputy assistant secretary for intergovernmental and external affairs after more than three years at the Arizona Corporation Commission (ACC), including a year as chairman in 2016. At the
ACC and elsewhere, he was a strong supporter of fossil-fueled baseload power plants, which could give him a leg up with Trump, who has pledged to keep financially ailing coal plants and nuclear plants open.

Upon taking the job at DOE, Little told the Arizona Capital Media Services that he was joining the Trump administration to maintain “fossil baseload generation.”

One industry source pointed out that Little also has an advantage as a western-state candidate for FERC who could balance out a commission filled with eastern-state commissioners. That could please the several western state senators on the Senate Energy and Natural Resources Committee, which reviews FERC nominees.

Little’s nomination also would place a former state energy regulator on the commission, a background that is common among FERC commissioners and crucial to helping FERC through tricky federal-state jurisdictional debates over energy markets.

On Wednesday, NARUC passed a resolution urging Trump to appoint a state energy regulator to FERC, noting that past administrations have frequently done so.

All in all, Little “is a Trump guy, from a western state, with a state regulatory background—that is a pretty strong resume for what would fit FERC right now,” said one source.

Hill, meanwhile, is a familiar Washington hand, having served as DOE general counsel from 2005 to 2009 under President George W. Bush and more recently at NRG Energy, one of the nation’s biggest merchant generators. According to his LinkedIn page, Hill recently transitioned to a senior advisor role at NRG after having served as executive vice president and general counsel for more than five years.

Nowak joined the Wisconsin Public Service Commission in 2011 and was named chairman by Gov. Scott Walker (R) in 2015. She has served as Wisconsin’s secretary of administration since March, and earlier this year was one of Walker’s candidates to fill a seat on Wisconsin’s Supreme Court, although she was not chosen. 

Walker might offer a relatively quick and smooth confirmation process in the Senate, having won approval by the chamber only last fall to head up DOE’s electricity office. That would be attractive to Trump and Senate Majority Leader Mitch McConnell (R-Ky.) because it would help restore FERC’s Republican majority relatively quickly. One of FERC’s current Republicans—Neil Chatterjee—is a former McConnell aide.

Walker previously served as vice president of asset strategy and policy for National Grid–US, and director for corporate emergency management at Consolidated Edison, among other positions.

As always, the wild card for an open commission seat is whether a highly placed senator wants to promote an aide to the job. Before Chatterjee and Powelson were appointed, an aide to Energy and Natural Resources Committee Chairman Lisa Murkowski (R-Alaska), Patrick McCormick, was widely seen as a likely nominee to the commission. That never happened, however.

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