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POLITICS: PennAve

Senate confirms two members, including new chair, to electric grid regulator

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The Senate confirmed a pair of nominees to join the Federal Energy Regulatory Commission on Tuesday in a move that will see one serve out a nine-month term as chairman before transferring power to the other.

Cheryl LaFleur, who has served as acting chair for the nation's electric grid regulator since November, will remain on the job for another nine months under a deal brokered by Senate Energy and Natural Resources Chairwoman Mary Landrieu, D-La.; Majority Leader Harry Reid, D-Nev.; and the White House. Norman Bay, President Obama's pick to run the independent commission, will take over thereafter.

The arrangement assuages concerns among Republicans and some Democrats that Bay, who led the FERC's enforcement office but has never been a commissioner, lacked experience to head the body. Getting Reid, who objected to LaFleur running the commission for a full term, on board helped seal the deal.

“Throughout Norman Bay’s tenure at FERC he has skillfully improved his department’s transparency and effectiveness and has successfully cracked down on energy market manipulation. Mr. Bay has shown that he is a reliable public servant who has the credentials and experience to lead the Federal Energy Regulatory Commission," Reid said in a statement.

Republicans, however, largely backed LaFleur for the chairmanship over Bay, who received a 52-47 vote. Sen. John Hoeven, R-N.D., explained that many GOP lawmakers weren't convinced the deal in play was a sure thing, noting that there was nothing stopping the White House from installing Bay as chairman immediately once both he and LaFleur were confirmed to the commission.

"We put a deal on the table, Senator [Lisa] Murkowski was the lead negotiator, and she didn't feel that we achieved the agreement," he told the Washington Examiner. Murkowski is an Alaska Republican.

Bay, once he takes over, will be charged with keeping a watchful eye on the electric grid's reliability as the nation's power delivery system shutters dirtier, older coal-fired power plants due to come offline as a result of mercury and air toxic standards that go into effect in 2016.

Several coal-heavy utilities, along with congressional Republicans, have warned of rolling blackouts as a result of the regulation, fearing that demand could outstrip supply in severe circumstances such as this past winter's polar vortex.

Sen. Joe Manchin, D-W.Va., peppered Bay with questions about reliability issues during his Senate Energy and Natural Resources Committee confirmation hearing, and appeared to be one of few Democrats who might vote against his nomination. But the pact to keep LaFleur on as chair for nine months pushed Manchin to support both her and Bay in the committee and on the Senate floor.

"I have serious concerns about Mr. Bay’s lack of regulatory experience, but after assurances from Senator Landrieu and the White House, I believe it’s acceptable that nine months on the Commission will help prepare him to take over as Chairman," he said in a statement.

The country's electric power system also is undergoing a shift toward natural gas-fired generation that the Environmental Protection Agency's proposed carbon emissions rule for power plants will likely accelerate. Much of that plan, which aims to cut power sector emissions 30 percent below 2005 levels by 2030, relies on a sizable transition from coal to natural gas -- FERC will be charged with handling infrastructure permitting decisions and other regulatory issues to aid that process.

The FERC also is assessing an influx of proposals to build terminals that would send liquefied natural gas abroad, an issue that's generated fierce debate on and off Capitol Hill.

Bay will also be responsible for overseeing regulatory changes LaFleur, who netted a 90-7 vote to stay on as commissioner, initiated for strengthening the electric grid's physical security. That push was in response to congressional pressure following an April 2013 military-style attack on an electrical substation near San Jose, Calif.

All that comes as the FERC is still trying to get a handle on cybersecurity, which has dogged the commission because it lacks authority to set standards for distribution utilities -- that belongs to states -- or to act decisively on the matter in the case of an emergency. It's also beefed up its enforcement activities in recent months in attempts to combat power market manipulation and fraud.

Growing interest in renewable energy resulting from lower prices and forthcoming EPA regulations will also keep the commission plenty busy, as it's charged with decision-making on siting and other steps regarding electric transmission infrastructure planning. The FERC could incentivize more renewable energy infrastructure as well through alterations to wholesale electricity markets.

That was a key reason Reid preferred Bay over other candidates as chairman, as he's sought to move Nevada off of coal-fired electricity.

"We must continue to support a cleaner and more secure energy future, which is good for our economy and our environment. I am confident Mr. Bay will do this as FERC chairman. I look forward to working with him to continue the legacy of clean energy in the state of Nevada and around the country," Reid said.

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