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Trump's FERC Pick Could Tip Balance in Favor of Coal Bailout

Bloomberg logo Bloomberg 10/3/2018 Stephen Cunningham
Emissions rise from the Duke Energy Corp. coal-fired Asheville Power Plant ahead of Hurricane Florence in Arden, North Carolina, U.S., on Thursday, Sept. 13, 2018. Hurricane Florence’s wrath hit the North Carolina coast, but the full effects of the storm, still centered 100 miles from shore, are yet to come.: Residents Prepare As Hurricane Florence Barrels Towards The Carolinas © Bloomberg Residents Prepare As Hurricane Florence Barrels Towards The Carolinas

(Bloomberg) -- U.S. President Donald Trump tapped Energy Department staffer Bernard McNamee to join the nation’s top energy regulator, potentially smoothing the path for a brewing bailout of money-losing coal and nuclear plants.

If confirmed, McNamee would fill a seat on the Federal Energy Regulatory Commission recently vacated by Robert Powelson, the panel’s most outspoken Republican critic of the administration’s bid to throw a lifeline to the coal industry.

McNamee, who directs the Energy Department’s Office of Policy, is widely regarded as being more amenable to the administration’s efforts than his predecessor. He previously served as the agency’s deputy general counsel under Trump and was involved in discussions on Perry’s ill-fated plan to compensate plants for their ability to store fuel on site for 90 days.

His nomination likely will face tough scrutiny in the Senate as opponents try to characterize him as an anti-free market coal advocate.

In an Earth Day op-ed in The Hill newspaper earlier this year, McNamee advocated for the continued use of fossil fuels. He also briefly worked for the Texas Public Policy Foundation, a conservative think tank, and was an aide to Senator Ted Cruz, a Republican from Texas.

“Confirmation is by no means a guarantee,” analysts at Height Securities LLC wrote in a note to clients before the announcement was made. “The process could drag late into the first quarter of 2019.”

READ: Likely Energy Regulator Nominee Was Advocate for Coal Bailout

Trump in June directed Energy Secretary Rick Perry to take “immediate steps” to stop coal and nuclear retirements. Officials from across the government are studying a plan to use emergency authority to order grid operators to buy electricity or generation capacity from a list of plants designated by the Energy Department.

While the energy commission rejected an earlier bid to subsidize coal and nuclear plants, FERC staff are now helping the administration to identify generators “critical” to maintaining both national and grid security.

Until the vacancy at the commission is filled, the panel faces a possible deadlock between two Republicans and two Democrats -- without a majority to approve key energy projects such as natural gas pipelines. The commission’s members have been divided over the extent to which they should take climate change into account when approving pipelines, with the commission’s two Democrats recently voting against major natural gas projects. The Republican majority has so far prevailed, approving on party lines Dominion Energy Inc.’s Atlantic Coast line and EQT Midstream Partners LP’s Mountain Valley project.

--With assistance from Jennifer A. Dlouhy.

To contact the reporter on this story: Stephen Cunningham in Washington at scunningha10@bloomberg.net

To contact the editors responsible for this story: David Marino at dmarino4@bloomberg.net, Catherine Traywick, Margot Habiby

©2018 Bloomberg L.P.

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