With the Senate taking controversial votes this week to confirm Norman Bay to be a member of the Federal Energy Regulatory Commission and to confirm Cheryl LaFleur to another five-year term, what will the politics of the Senate's deal mean for the commission's near-term effectiveness? During today's OnPoint, Marc Spitzer, a former FERC commissioner and now a partner at Steptoe & Johnson, discusses LaFleur's success rate as acting chairwoman, a role that has been extended for nine months as part of the deal, and weighs in on who could be named the next chairman of FERC.
Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. With me today is Marc Spitzer, a former FERC commissioner and now a partner at Steptoe & Johnson. Marc, it's great to have you back on the show.
Marc Spitzer: Love being here. Thank you.
Monica Trauzzi: Marc, a busy week for the Federal Energy Regulatory Commission. The Senate voted to confirm Norman Bay to be a member of the commission and to confirm Cheryl LaFleur to another five-year term, and this was a highly politicized vote. It's still drawing criticism from the Senate GOP because of a deal that was struck on these two nominees. As part of the deal, LaFleur remains as chairwoman for nine months. What happens next?
Marc Spitzer: Well we've got five commissioners for the open meeting on Thursday; I don't know if Norman Bay will attend. It's always tough when you come in new to choose what to vote on and preparation, and so we'll have to see. And so I'll be watching like everyone else to see that. But it's better, the commission had been running very well. They were doing the blocking and tackling that they needed to do getting out the orders. The lawyers that practice in front of FERC were pleased, but it's better to have the full complement of commissioners. I enjoyed working with my colleagues when I was at FERC; I learned a lot from my fellow commissioners, both Republican and Democrat. And to have the five full commissioners, which has not been the case for some time, is a benefit to the agency.
Monica Trauzzi: How effective can LaFleur be though during this nine-month period, and are her hands tied in any way from doing anything substantive?
Marc Spitzer: Well acting Chairman LaFleur was acting chairman after the departure of Jon Willinghoff in November of last year. And she undertook a lot of initiatives. Reliability is the foremost of the issues, but she resolved some extremely meddlesome cases; one particularly with the state of Idaho had become problematic with a lot of the state utility regulators. So she had been an effective and active acting chairman, and I see no reason why she wouldn't continue to be equally effective as full chairman, not withstanding the potential for a subsequent change.
Monica Trauzzi: Right. So there is a question here of who the next chair will be. I mean is it Bay? Is it someone else?
Marc Spitzer: Well the president has the authority to appoint the chair. The Senate has advice and consent over the commissioners. But once the commissioners have been confirmed by the Senate, the leadership of the agency is within the authority of the president. And I probably know as much as you about the decisions and the discussions between the senators and the White House regarding what would happen after the confirmation, but that's within the discretion of the White House. But we do know that there are five commissioners present, including Norman and Cheryl.
Monica Trauzzi: Right. And we also know that Majority Leader Harry Reid did not really put full backing behind Cheryl LaFleur, so that is an interesting element to this story as well.
Marc Spitzer: Well there are lots of interesting elements, and in my prior life I think you know I was a state senator and was majority leader in Arizona and we had authority to confirm senatorial nominees. And the best discussion of that came from a woman who was in my office in a very controversial proceeding where I was moving her nomination. And she stood up and looked up at the sky and said, "My fate is in the hands of the Senate gods."
Monica Trauzzi: [Laughs]
Marc Spitzer: So that's the way it is.
Monica Trauzzi: On Norman Bay, The Wall Street Journal says, "Mr. Bay's tenure will not be pretty, and an inspector general investigation into his political dealings is richly deserved." Is he going to be an effective commissioner do you think?
Marc Spitzer: I've known Norman Bay during my tenure at the FERC. He was of course director of the FERC Office of Enforcement. I worked with him very closely for a period of about three years. This is my personal opinion and I'm still a card-carrying Republican having run for office with an R next to my name for seven elections. I feel Norman Bay's a very competent person. I have great confidence in him. I have great confidence in Cheryl LaFleur, and I have faith and confidence not only in the other three commissioners, my former colleagues, but I have confidence in the agency and the staff to do an effective job representing the ratepayers of the United States.
Monica Trauzzi: So you're not concerned that there might be an issue at the commission in terms of how folks are feeling about their work or because there was so much political wheeling and dealing on this nomination?
Marc Spitzer: This was a little bit unique, and maybe two thoughts sort of as a former elected official, a former politician who took pride in that term. The voters are much more polarized than they've been in the past. My first campaign was in 1992, and we're in a different era and it's logical to expect those who are elected to represent those who are doing the voting. And if the voters are more polarized, it's not unreasonable that the elected officials, the Republicans would be further to the right and the Democrats would be further to the left. And that may create more policy debates than would otherwise arise. Secondly, there hasn't been much legislation in the past two years, and members of tribunals, whether it's state legislature or the United States Senate, want to represent their constituents and want to be effective. And if you're not passing legislation, another way to be an effective member of House or Senate is oversight of agencies as well as policy discussions of the subject matter of the agency. So again it's not unreasonable to expect more activity and nominations and policy issues if in the absence of legislation. That being said, what FERC needs to do since 999 out of 1,000 of the orders that they deal with are not political at all, not partisan, and not particularly noteworthy to The Wall Street Journal or anyone else, unless you've got a case you know in front of them, is to do the blocking and tackling and do the work. And they've done that in the past, and I would expect them to do that in the future because these ...
Monica Trauzzi: And they're going to be very important when it comes to the export of LNG, which is a huge issue right now.
Marc Spitzer: Electric reliability, setting ROEs, returns on equity for natural gas pipelines, returns for oil pipelines, electric grid, RTOs, FERC Order 1000. There are a lot of issues, not particularly partisan, ideological or political but very important to the ratepayers of the United States. And during my tenure on the FERC and since I've left for the private sector, the FERC has done a very good job paying attention to those issues and not allowing the political noise to somehow disconcert them or make them less effective.
Monica Trauzzi: So I know that you're still in touch with your former FERC colleagues. What have you heard from them since the vote?
Marc Spitzer: I have not talked to them since the vote. They should be left alone. They probably hear enough from other people; they don't need to hear from me.
Monica Trauzzi: One final question. FERC's official response raised some questions because they had a full press release out on Cheryl LaFleur's confirmation but then just sort of a one-liner on Norman Bay's. Do you read into that at all?
Marc Spitzer: I wouldn't, so I didn't.
Monica Trauzzi: All right, OK. We'll end it there. Thank you for your thoughts as usual.
Marc Spitzer: Thank you. Thank you. Sure, my pleasure.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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