Publisher Note: FERC Chairman Joseph T. Kelliher announced his resignation effective January 20, 2009.
GERRY NORLANDER, Pulp Network, November 5, 2008
With the election of a new president comes renewed speculation about leadership change at the Federal Energy Regulatory Commission (FERC) in an Obama administration.
The president . . . can designate a new chairman, who generally will belong to the party in the White House. But the president must await a commission vacancy to actually appoint a new commissioner and shift the balance of power if there is a change of party. No more than three commissioners can belong to the same party, so currently FERC has three Republican commissioners and two Democrats. Normally, however, a chairman who is replaced will not want to remain as a commissioner and will resign.
Currently FERC is filled with a bipartisan cadre of five pro-deregulation commissioners, all appointed by President Bush, who appear intent on approving mega mergers of utility holding companies and implementing the discredited Enron agenda to supplant traditional regulation with reliance on unfiled, unreviewable, and unrefundable “market-based rates” and “organized” spot markets such as those run by the NYISO.
As with recent presidents of both parties, the incoming president received significant campaign financial support from utility executives, investment bankers, and energy traders who still promote electricity deregulation, but hope still remains for change in the interest of consumers, for whose protection the Federal Power Act was enacted in 1935.
President Obama will name a new FERC Chair, to replace the current Chairman, Joseph T. Kelliher. A former lobbyist, congressional staff lawyer for Texas Rep. Joe Barton, and coordinator of Vice President Cheney’s controversial energy task force, Kelliher steadily continued the agency’s efforts to deregulate wholesale electric rates. Under his leadership FERC continued its unresponsiveness to widespread consumer concerns about unreasonable rates and problems with the spot markets and “market-based rates” FERC approved in an effort to supplant traditional filed rate regulation. Although he received Senate confirmation of a new term earlier this year, it has been reported that Kelliher agreed with Senator Harry Reid to resign if a democrat is elected President. That time has now come.
Commissioner Suedeen Kelly was mentioned a year ago as a possible FERC Chair in a democratic administration. A protege of deregulation democrat Senator Bingamon, Chairman of the Senate Energy and Natural Resourcees Committee, she was formerly an energy industry lobbyist, law professor, Chair of the New Mexico Public Service Commission, and was an attorney for the California ISO. It is not clear, however, if the democratic president envisioned last year when her name was floated for Chair was Barack Obama. If, instead of becoming Chair, another chair is picked, Commissioner Kelly might move on when her seat becomes vacant June 30, 2009.
Assuming that Chairman Kelliher leaves, will the two other republican commissioners making up the current majority — Marc Spitzer (former Arizona utility regulator and republican cousin of former New York Governer Eliot Spitzer) and Philip Moeller (a former utility lobbyist) — stay on under a new Chairman?
FERC has grown in importance to electricity consumers in states like New York that allowed their utilities to sell their power plants (formerly operated on a state-regulated cost of service basis) to new owners with “market-based rates” from whom they now must buy power for customers based on what the market will bear in flawed FERC-approved spot markets. It is thus essential for the new President’s FERC picks to be sensitive to more than the usual major utility, power generators, energy traders, lobbyists, and other institutional market “stakeholders.” The new picks must be more dedicated than the current FERC to the achievement of just and reasonable electricity rates, as the Federal Power Act requires.
November 25, 2008 — Obama Picks Transition Team for DOE, FERC.
December 8, 2008 — Las Vegas Review Journal says U.S. Senate Majority Leader Harry Reid supports Jon Wellinghoff for FERC Chairman:
At the Federal Energy Regulatory Commission, one of two Democrats is Reid ally Jon Wellinghoff, a former Nevada public utility consumer advocate. In Washington, Wellinghoff has aggressively pushed for energy efficiency and renewable technology, Energy Daily reported.
Asked about Wellinghoff in a recent interview with the Review-Journal, Reid said he definitely believes the Nevadan should chair the FERC.
December 18, 2008 — Other names floated for FERC commissioners or chairmen include two state utility commission chairmen, Charles Box from the Illinois ICC and John Norris from the Iowa Utilities Board.