Who's Looking Out For Consumers at FERC?

So far, I've managed to resist being drawn onto the Binz bandwagon.  While I received several emails from people jumping up and down with excitement about the nomination of their "friend" Ron Binz back in June, I was unimpressed and cautious.

Ron Binz for Chairman of the WV PSC?  Why, sure!  I think that would be lovely!  Ron Binz for Chairman of FERC?  I don't think so.

There's no surer way to know you've come to a proper conclusion than to make one based on first hand experience, and there's just too much to ignore in this WSJ opinion piece that resonates with my experiences over the past several years.

Sure, Binz's "Practicing Risk-Aware Electricity Regulation" is revolutionary and I would love to grab WV PSC Chairman Albert by the scruff of his neck and force him to read it, but how is it applicable or helpful at FERC?  FERC isn't supposed to be making decisions about what types of generators are built. 

This report is primarily addressed to state regulatory utility commissioners, who will preside over some of the most important investments in the history of the U.S. electric power sector during perhaps its most challenging and tumultuous period. This report seeks to provide regulators with a thorough discussion of risk, and to suggest an approach—“risk-aware regulation”—whereby regulators can explicitly and proactively seek to identify, understand and minimize the risks associated with electric utility resource investment. It is hoped that this approach will result in the efficient deployment of capital, the continued financial health of utilities, and the confidence and satisfaction of the customers on whose behalf utilities invest.

Those cheering Binz are doing so because they believe he will champion their goals to promote and enable utility scale renewables as the fastest way to a carbon-free future, social and consumer costs be damned. The WSJ reports:

Speaking of which, after Mr. Binz left the Colorado post in 2011, he maintained a paid relationship as a consultant with an outfit called the Energy Foundation.

Yet the Energy Foundation has an affiliated political committee called the Green Tech Action Fund, which has taken the very unusual step of hiring an outside public relations firm on behalf of Mr. Binz.

The Natural Resources Defense Council (NRDC) runs something called the Project for Sustainable FERC Energy Policy. Lo and behold, the Energy Foundation contributed more than a half-million dollars to NRDC in 2011 to support such advocacy, according to its most recent grants disclosure form.

So, the NRDC believes they can buy a seat for their "friend" Binz, paid for by what I call The Environmental One Percent.  A FERC controlled by environmental interests is no more preferable to consumers than one controlled by fossil fuel interests.  Who's representing the interests of consumers?  Oh, that's right, there is no consumer advocate at FERC, it's all controlled by corporate lobbyists.

I'm really not seeing the connection this writer makes between what Binz did in Colorado, the Ceres report, and how that makes him the best pick for FERC Chairman.  But then again, she also starts out proclaiming her misconception of what Binz can do for us:

FERC oversees the nation’s electricity and natural gas networks, and the grid is badly in need of upgrades—up to $2 trillion worth by 2030. Binz has the track record to ensure that money is well spent.

I've lost count of how many times I've said this recently:  FERC is not some "national" public service commission with jurisdiction over state regulators.  The two regulators operate in separate, parallel universes.  Only states have jurisdiction over the permitting and siting of high voltage transmission lines.  FERC has no authority to meddle in state jurisdiction, but that hasn't stopped them from trying.

The WSJ says:

He's mused about the rule of law as a nuisance when regulators want to exercise a "legislative role"...

Snip

The larger policy context here is that a core goal of the green movement is to pack FERC with commissioners who will expand and use its powers more assertively in the name of global warming, never mind a lack of legal authority.

Putting Binz in place at FERC would be like dropping an alcoholic into a brewery, don't you think?  FERC has a history of overstepping its bounds and attempting to take on a legislative or other inappropriate role.  Just two years ago we were sitting here in disbelief as Wellinghoff and Chu dithered over FERC taking on the role of designating National Interest Electric Transmission Corridors.

FERC attempts to revive NIETCs to trump state authority on new transmission projects

There's just too much temptation for someone predisposed to legislate from a regulatory position.

The WSJ also has an opinion on the former FERC Commissioners who tried to defend Binz, most of whom now work for other energy interests that have a financial stake in a Binz chairmanship:

Our reporting on all of this was too much for a dozen former FERC commissioners, both Democrats and Republicans. In a letter we published—a version is being circulated in the Senate—they assert that Mr. Binz fits FERC's "long nonpartisan tradition" and "will be a fair and impartial judge."

The 12 commissioners offer no evidence for that proposition other than an appeal to their own authority, but that's not their most notable omission. They somehow forgot to mention that, since their FERC tenure, most of them have taken the revolving door to become lobbyists, strategic advisers, utility executives and white-shoe attorneys with business in front of FERC.

Snip

All of this reflects the "long nonpartisan tradition" of monetizing federal political connections. What travels under the euphemism "public service" is often really a form of deferred compensation, and the folks whose livelihoods depend on favorable FERC policy rulings will naturally try to bank goodwill with their new master—at least until Mr. Binz cashes out his political options too.

The industry/regulatory/industry revolving door isn't new.  In fact, I've written about this and the legislative/regulatory mischief it causes several times:

Former FERC Commissioners' Opinions - A $2.98 Value!

FERC's Transmission Siting Federalism Coup

This does not serve consumers.  It serves the corporate interests that make money building transmission or other FERC-jurisdictional business ventures.

So, let's put all this together:

The one thing the former FERC members are right about is that the agency's chairman really is supposed to be "a fair and impartial judge," not a political soldier. Perhaps that helps explain why Mr. Binz and his letter-writing and check-cashing partisans are so defensive.

Let's cut the crap, get rid of the propaganda and politics, and find someone who's looking out for consumers.

Not Ron Binz.