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Policy: Environment & Energy

Ethics issues shadow Obama's anti-coal FERC nominee

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White House,Watchdog,Michal Conger,President,Colorado,Climate Change,EPA,Ethics,Energy and Environment

Ron Binz, former chairman of the Colorado Public Utilities Commission, is President Obama's nominee to head the Federal Energy Regulatory Commission.

Binz is a favorite with environmentalists because of his crusading efforts to shut down coal-fired power plants with Colorado's Clean Air Clean Jobs Act, which incentivized switching from coal to natural gas and renewable sources such as wind farms.

Coal-fired power plants currently account for about 40 percent of all electricity used in the U.S., but the U.S. Environmental Protection Agency has promulgated regulations that are pressuring owners to close many of the plants.

Even so, among Binz' chief advocates was Ralph Izzo, CEO and president of the Public Service Enterprise Group, who said, "the electric industry is experiencing rapid change and technological advances and Ron Binz is a strong and timely choice to lead FERC. Ron has both the experience and intellect to hit the ground running and ensure thoughtful consideration of emerging opportunities."

But the nomination was met with dismay by free-market advocates concerned by Binz' history of promoting renewable energy development regardless of the higher costs such sources inevitably imposes on consumers.

"Binz has a proven track record of working the administrative state to advance green energy policies on the back of ratepayers and the economy," said Chris Horner, senior fellow at the Competitive Enterprise Institute.

The Colorado PUC was constantly embroiled in ethics controversies during Binz's four-year term between 2007 and 2011, centering around questionable travel practices and his involvement with utilities in crafting and implementing the Clean Air Clean Jobs Act.

"Ron Binz's legacy at the Colorado PUC is littered with controversy including an ethics violation, a scathing state auditor's report, and disregard for consumer costs," said Amy Oliver Cooke, director of the Energy Policy Center at the Independence Institute.

"His nomination to head up FERC does not bode well for American consumers," she said.

The Colorado Independent Ethics Commission in 2011 said Binz violated state ethics laws when he was reimbursed $1,000 in travel costs by energy company Bentek for a Bentek-sponsored energy conference.

The state constitution prohibits government officials from accepting more than $50 from a for-profit company unless the trip is for business. The commission found Binz's trip to the conference had no "legitimate state or local purpose."

The commission also found in May 2012 that between 2008 and 2011, the PUC violated the same ethics rules Binz broke with his trip to Houston.

"The commissioners did not consistently follow applicable State Fiscal Rules or Department policies related to travel," the audit report said. Commissioners took 128 trips during that time; 27 of those lacked evidence that they complied with state ethics laws on payment by third parties.

Binz also drew fire for his involvement with representatives of the natural gas industry in crafting Colorado's Clean Air, Clean Jobs Act and subsequently voting on Xcel Energy's plan to comply with the law.

The Colorado Mining Association filed a motion seeking to force Binz and Commissioner Matt Baker to recuse themselves from voting on Xcel's plan.

The commissioners rejected the motion, saying there was no bias or conflict of interest in legislators voting on a plan for complying with legislation.

Documents obtained under Colorado's Open Records Act showed Binz met with executives from Xcel Energy natural gas company months before he helped write the bill. Emails show the PUC worked with the utility company to negotiate the bill's language on cost recovery.

Seven Colorado state senators called for Binz's removal in 2010 in a letter to then-Gov. Bill Ritter.

"I have difficulty seeing how Chairman Binz can be an impartial judge in adjudicating a case that stems from a bill that he himself negotiated and drafted, in concert with the utility they purport to regulate," said the letter's signers, all Republicans.

The American Tradition Institute has also called for Obama to withdraw the Binz nomination.

"With Binz's proven disdain for coal and even-handed use of an agency position already proven, and Obama's stated war on coal now inarguable, is there any question at all where he will come down when overseeing and promulgating regulations impacting America's coal industry as the nation's FERC Chair?" said David Schnare, who sued Colorado on behalf of ATI over the state's renewable energy mandate.

Binz has promised to "put his consulting firm in stasis and and may shed $51,000 in stocks and options if he's confirmed," Politico reported recently. He also told the Office of Government Ethics that he will divest stocks he owns in Warren Buffet's Berkshire Hathaway. The Buffet firm owns MidAmerican Energy, which likely would have pending business at FERC.

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