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Bay nomination process marked so far by fewer fireworks, outcry by free market groups

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Bay nomination process marked so far by fewer fireworks, outcry by free market groups

Thus far, Norman Bay's nomination to lead FERC has been marked more by what hasn't happened than by what has.

Bay, the current enforcement chief at the commission, hasn't been the subject of strong public criticisms by conservative and free market interests, and hasn't been touted by critics as a "radical" environmentalist or, to be fair, a "radical" anything. On the flipside, his supporters have not felt the need to come out of the woodwork to defend him as a prudent nominee for the top job at FERC.

Bay nomination process marked so far by fewer fireworks, outcry by free market groups

And while observers say that the Senate confirmation process will be especially key in illuminating where Bay stands on major issues, his nomination is taking a far different track than that of Ron Binz, the former Colorado regulator and President Obama's initial nominee to replace former chairman Jon Wellinghoff in the middle seat.

"He's no Binz. I mean that in a good way," said William Yeatman, assistant director of the Center for Energy and Environment at the free-market Competitive Enterprise Institute.

Nominated in January, Bay would become the first person in the commission's history to be elevated directly from a staff position to a commission seat. Obama nominated him with the understanding that he would be appointed as FERC chairman upon confirmation, and would serve a term running through June 2018.

Given FERC's recent high-profile efforts to rein in market manipulation, sources have suggested that Bay's nomination may signal a shift in the commission's regulatory priorities. Sources have also said it is uncertain what level of opposition Bay will run into, particularly given that he is a somewhat unknown quantity in some corners of the energy industry.

The same could not be said for Binz, who was targeted roughly a month after his nomination last June by a scathing Wall Street Journal editorial saying that he would use the FERC gavel to promote Obama's environmental agenda to the detriment of coal and other fossil fuels. And a number of free market and conservative groups, including CEI, American Energy Alliance, Americans for Prosperity and National Taxpayers Union, similarly warned that Binz would not respect legal constraints in pursuing Obama's energy agenda.

"FERC and Commissioner Binz together are an essential piece of this administration’s costly energy vision," those groups and others said in a September 16 letter.

Despite support from a bipartisan collection of former FERC chairmen and commissioners, Binz withdrew his nomination October 1 after it became apparent that he would not have the votes on the Senate Energy and Natural Resources Committee to be sent to the floor. Following his decision to bow out, Binz said that his record had been distorted and that his critics had mischaracterized what he would have and could have done at FERC.

Bay has yet to meet with lawmakers as part of the confirmation process, sources say, and both Senator Joe Manchin, Democrat-West Virginia, and energy committee ranking member Lisa Murkowski of Alaska have expressed some concerns about Bay, with the latter saying she is hesitant to support him due to potential conflicts of interest which could arise between his previous enforcement work and future work before commissioners (IF, 17 Feb, 1).

"The fact that he has been on the enforcement side causes a little concern for me," Murkowski said last month. "I want to know what it will mean in terms of his need to recuse himself from certain commission actions. I don’t know the answer to that."

FERC officials have said that Bay is following all ethics rules during this period.

And while there is still plenty of time between now and an eventual confirmation hearing, those groups that strongly opposed Binz are either not taking a position at this point on Bay or are not exhibiting the same level of opposition, due in part to a lack of notoriety about his positions.

"It certainly appears that he doesn't have a track record on policy," Yeatman said, noting that CEI was outspoken on the Binz nomination because the group had wrangled with him while he was on the Colorado Public Utilities Commission. In terms of promising signs, Yeatman noted that Bay received tough questions from both the left and the right in a recent appearance before Congress and has experience working within the intricate markets that FERC regulates.

Yeatman also said that a shift at FERC toward enforcement and mastering the markets and away from advancing demand-side management resources and broad allocation of transmission costs would be a "welcome development." Barring Bay going before the Senate and making statements that are particularly objectionable, Yeatman said that CEI is not playing to get involved in the process.

American Energy Alliance is not taking a position at this point on Bay, said spokesman Chris Warren. And while noting his past political contributions to Democratic candidates, Warren said it "remains to be seen" whether Bay will be an ideologue or someone who can be a bipartisan leader of a nonpolitical agency.

Warren also noted that the Bay nomination is a different animal than the process for Binz, given that Bay has not made as many public statements as Binz had. Warren also noted that the nomination process will be key, saying that senators and others should do their due diligence and ensure that Bay is the right many for the job.

Pete Sepp, executive vice president at the National Taxpayers Union, agreed that the confirmation process will be pivotal for Bay given his lack of public track record. Said Sepp, "in this town confirmation hearings are often regarded as little more than political theater, but sometimes they actually serve the purpose for which they were intended — genuine discovery."

More broadly, Sepp hoped that lawmakers would approach any confirmation process with a high level of scrutiny, but particularly in this case given that Bay has served an investigatory role at FERC.

"When a nominee of any agency has a background in enforcement, Congress must exercise special care to ensure the candidate has a properly balanced perspective for the job, one that includes the need to sometimes work with stakeholders to achieve an outcome that benefits the economy as well as the government," Sepp said.

Yeatman as well highlighted the crucial role of the confirmation process, downplaying concerns that Bay is not a known quantity by saying that the process is designed for the Senate to ask Bay questions and investigate those answers. Yeatman also said that it is not beyond the pale to glean from his enforcement track record that his focus will potentially be ensuring that "people are playing by the rules of the game" and ensuring that the laws FERC is tasked to implement and oversee work as intended.

Through FERC spokeswoman Mary O'Driscoll, Bay had no comment on this story.