FERC

Outgoing chairman vows to steer clear of law firm's business, but others fear conflicts of interest

This story was updated at 4:17 p.m. EDT.

The outgoing chairman of the Federal Energy Regulatory Commission today said that despite having already announced he will join a law firm, he can avoid conflicts of interest until the White House nominates his replacement -- something sources say could take a long time.

Jon Wellinghoff said he has for months recused himself from all cases involving clients of Portland, Ore.-based law firm Stoel Rives LLP, where he plans to work after stepping down from leading the agency (Greenwire, Oct. 21).

"I currently am and have for several months recused myself from all cases where Stoel Rives has a client," Wellinghoff said in an email. "This has been since I first started discussing the possibility of joining their firm after FERC."

The chairman also said he will continue to recuse himself from such cases until he leaves the agency, and that all of his actions have been cleared by FERC's Ethics Office.

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For now, that hasn't limited him much, he said.

"Fortunately, Stoel Rives has very few cases before FERC," he said. "So I can continue to vote on the vast majority of cases while at FERC."

But agency watchers said the situation raises ethical issues.

"I find it troublesome, I know other people find it troublesome, and no one wants to talk on the record because we all have to live there," one source said.

The identities of sources quoted in this story are being withheld at their request because they have business before the agency.

Some observers said the situation is "somewhat uncomfortable" because Wellinghoff could work on policies that could affect the firm's clients.

"You're tied to a law firm while you're there," one source said. "It's not only that firm's clients but all the issues that could affect those clients and policy issues that are consistent with their interests."

Stoel Rives is widely recognized for its energy law practice and has nearly 400 attorneys in 11 offices across seven states. Clients include financial institutions, public and private utilities, energy and renewable energy companies, developers, manufacturers, and retailers. The firm's attorneys are currently representing clients in a number of cases involving wind farms and hydropower projects before the agency, according to FERC's database.

Another source said it's the "appearance" of a conflict of interest as opposed to a legal matter.

"I don't remember other chairmen announcing they were going to go somewhere else and just sitting there for an [unknown amount of time]," the source said. "He's put himself in a very uncomfortable place; it just sort of looks bad."

But Wellinghoff has said he will stay in his post until President Obama chooses a replacement who secures Senate confirmation, a process that was complicated when Obama's nominee, former Colorado regulator Ron Binz, asked earlier this year for his name to be removed from consideration.

Binz cited a deadlocked Senate panel and stiff opposition from right-wing groups that turned the confirmation process into a "blood sport" (Greenwire, Oct. 1). Names that are circulating as top contenders to either sit on the commission or lead the agency include Colette Honorable, chairwoman of the Arkansas Public Service Commission, and FERC Commissioner Cheryl LaFleur.

Sources have also pointed to Norman Bay, the director of FERC's Office of Enforcement; Lynn Evans, a board member at the Tennessee Valley Authority; and Rose McKinney-James, a former commissioner with the Nevada Public Utilities Commission, Las Vegas businesswoman, lobbyist and renewable energy consultant.

Wellinghoff first came to FERC to fill a vacant seat in 2006, with the backing of Senate Majority Leader Harry Reid (D-Nev.). He was reconfirmed in 2008 for a full five-year term as a commissioner, and Obama selected him in March 2009 to become chairman, a step that didn't require Senate confirmation. His current term expired June 30.

An energy law attorney with 37 years of experience in regulatory, consumer and commercial law, Wellinghoff focused on matters related to renewable energy, energy efficiency and distributed generation in private practice before joining the commission.

Even so, sources called Wellinghoff's position "troubling." They also suggested he follow in the footsteps of former Republican FERC Chairman Joseph Kelliher, who announced he would begin recusing himself from all agency matters in 2009 when he said he would step down and look for new career opportunities (Greenwire, Jan. 7, 2009).

But Kelliher also had to manage expectations. He faced opposition from environmentalists in 2009 after he voted on a liquefied natural gas project in Oregon on Jan. 15 that year, according to a Jan. 23, 2009, article in The Oregonian. But Kelliher, now NextEra Energy Inc.'s executive vice president for federal regulatory affairs, said in a statement today that he kept his commitment to recuse himself from FERC business once Obama named his successor as chairman, and that the vote occurred before Obama tapped Wellinghoff to lead the agency on Jan. 23, 2009.

For now, the electric sector and parties before FERC are doubtful that the White House will pick Wellinghoff's replacement before the year's end.

Upon Wellinghoff's departure, the White House will have to name a new chairman. Sources say the agency could be left with a split of two Democratic and two Republican commissioners.

Thomas Pyle, president of the American Energy Alliance, said a nominee could be chosen at the end of the congressional session. AEA, which was vocal in opposing Binz, could once again become involved if the administration chooses someone who is more of an "ideologue than an arbiter," Pyle said.

"Compared to Ron Binz, I don't hear any names that are anywhere near as controversial," he said.

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