Union Tribune

March 19, 2003

Power struggle could sidetrack FERC nominees


WASHINGTON As the Federal Energy Regulatory Commission deals with the aftermath of California's power crisis, appointments to the once-obscure panel have stirred the type of maneuvering more typical of judicial nominations.

Senators are squabbling and horse-trading over vacancies on the five-member commission, commonly known as FERC.

President Bush recently agreed to nominate a Democrat for one of the vacancies, clearing the way, as part of a package deal, for approval of a Republican nominee by the Senate Energy and Natural Resources Committee. But then two Western senators moved to hold up confirmation of the Republican by the full Senate.

Meanwhile, Sen. Dianne Feinstein, D-Calif., is pushing for the reappointment of a Democratic commissioner viewed as sympathetic to the state's plight during the power crisis. But Sen. Larry Craig, R-Idaho, has another Democrat in mind for the slot, an Idaho regulator who was critical of proposed federal price controls at the height of the Western power crisis in 2001.

While it may seem like inside political baseball, FERC has grown in stature and importance as it tries to manage the difficult transition to a competitive market for wholesale electricity and natural gas, once highly regulated commodities. Consumers have a huge stake in its decisions.

"It had been a real low-profile regulatory body. But all of that went out of the window with the Enron collapse and the energy problems out West," said one Senate aide.

FERC is weighing California's request for $8.9 billion in refunds from power sellers accused of price gouging during the 2000-01 crisis. The commission also will decide whether to scrap costly long-term electricity contracts the state agreed to at the height of the crisis and will make watershed decisions on how the power market will be policed.

The three current members of the commission two Republicans and a Democrat are expected to act on the California issues next week.

In the longer term, FERC is trying to chart a course toward a more seamless market, a move questioned by many lawmakers and state officials, particularly in the West.

Officials from the region are determined to exert more influence over FERC.

"I've always said that it is important for the West to have a voice on this key panel," said Sen. Jeff Bingaman, the top Democrat on the Senate Energy and Natural Resources Committee.

Bingaman was reacting to President Bush's intention to nominate Democrat Suedeen Kelly who, like Bingaman, is from New Mexico for a FERC vacancy. Bush's decision removed a Democratic roadblock to committee approval of Republican nominee Bill Kelliher, a top policy adviser to Energy Secretary Spencer Abraham.

Kelly, a lawyer and law school professor, formerly headed New Mexico's utility oversight commission and was regulatory counsel for the California power grid manager for part of 2000.

Gov. Gray Davis was "encouraged by the nomination of Suedeen Kelly," said Davis spokesman Steve Maviglio. "Finally, FERC will have a commissioner who knows about California's deregulation nightmare."

Sen. Feinstein supported Kelliher's nomination in committee.

But two other Democrats Sens. Ron Wyden of Oregon and Maria Cantwell of Washington said they would use a parliamentary tactic known as a "hold" to block his Senate confirmation, at least temporarily.

Wyden and Cantwell questioned whether Kelliher was sufficiently sympathetic to allegations of widespread price manipulation in the West during the 2000-01 crisis and to concerns in the region about FERC's plans to create a more standardized wholesale energy market.

A White House spokesman downplayed speculation that the hold on Kelliher could sideline Kelly's formal nomination. "No one has indicated anything along those lines," the spokesman said.

Another fight could erupt over the fate of Democratic Commissioner William Massey, whose term expires at the end of June. Sens. Feinstein and Cantwell recently urged Senate Minority Leader Tom Daschle, D-S.D., to recommend Massey's reappointment to President Bush, one of Daschle's informal leadership privileges.

Massey was a lone voice on FERC for price controls and other measures favored by California during much of the power crisis.

But Sen. Craig of Idaho, a critic of FERC's market design moves, is lobbying the White House to appoint Marsha Smith, a member of the Idaho Public Utilities Commission. Craig, who voted present on Kelliher's nomination in committee, called for "more equitable representation for the Pacific Northwest and the issues of critical importance to our region on the commission."