Bloomberg News

Coal Foe Named to FERC Is Latest Obama Pick for Industry Ire (1)

August 20, 2013

President Barack Obama’s nominee to head a little-known energy commission has become the latest appointee drawn into the contentious debate over climate change.

The nomination of Ron Binz to be chairman of the U.S. Federal Energy Regulatory Commission has sparked enough opposition that environmentalists have hired a public-relations firm to aid his Senate confirmation. Binz has drawn the ire of coal-industry interests for advocating policies that mining companies said encouraged the conversion of power plants to natural gas when he served as Colorado’s top utility regulator.

“He’s not a regulator, he’s an activist,” Amy Oliver Cooke, director of the Energy Policy Center at the Independence Institute in Denver that advocates for limited government, said in an interview.

The Green Tech Action Fund, a San Francisco-based non-profit that backs green energy technology, has hired VennSquared Communications LLC, a Washington-based political consultancy, to advocate on Binz’s behalf. The fund is affiliated with the Energy Foundation, which reported almost $100 million in revenue in 2011 and has connections to hedge fund billionaire Tom Steyer, an Obama fundraiser and opponent of TransCanada Corp. (TRP)’s proposed Keystone XL pipeline.

Energy Flashpoint

Binz’s nomination is the latest flashpoint in the battle between fossil-fuel and clean-energy groups as Obama makes tackling climate change a key goal of his second term. FERC nominees don’t usually have the support of public-relations firms, and the push for Binz follows an Internet campaign this year by groups including the Sierra Club and Natural Resources Defense Council to support the nomination of Gina McCarthy, now the Environmental Protection Agency’s administrator.

The criticism of Binz “fails to paint an accurate picture of who Ron was as a regulator, who he is as a person,” said Skip Arnold, executive director of Energy Outreach Colorado, a Denver-based non-profit group that helps low-income consumers afford electricity. “At his roots, Ron is a consumer advocate,” Arnold said in a phone interview.

Binz directed Colorado’s Office of Consumer Counsel from 1984 to 1995.

Nomination Challenges

The debate over Binz also underscores a growing challenge for nominees in general. In the past, a candidate lined up a key lawmaker to help win Senate confirmation. Now, with Congress in gridlock over many issues, supporters and opponents of nominees to lead agencies are conducting campaigns.

“Every aspect of public policy is lobbied these days, and with the difficulty of getting executive nominees confirmed, it doesn’t surprise me at all that this has occurred,” Thomas Mann, a senior fellow in governance studies at the Brookings Institution in Washington, said in a phone interview.

While the Senate Energy and Natural Resources Committee hasn’t scheduled a hearing to consider Binz’s nomination, conservatives and the mining industry in Colorado have already taken aim at him for backing legislation that they say forced coal plants to switch to natural gas at consumers’ expense. The Wall Street Journal’s editorial page called Binz “the most important and radical Obama nominee you’ve never heard of.”

Binz declined an interview request, saying he hasn’t granted interviews since Obama announced his nomination June 27.

Plaudits Readied

His allies have been prepared for the controversy, however. Hours after the White House announced its choice for the FERC chairman, VennSquared issued a statement with plaudits from the chairmen of Public Service Enterprise Group Inc. (PEG:US), Xcel Energy Inc. (XEL:US) and Lola Spradley, a Republican former speaker of the Colorado House of Representatives.

VennSquared’s support is an “insurance policy” so stories about Binz are accurate when “anybody with a blog can sit out there and make an assertion,” Michael Meehan, the firm’s president, said in an interview.

VennSquared doesn’t lobby, and it doesn’t have plans for an Internet campaign to support Binz, according to Meehan. The firm is helping to connect media outlets with people who have worked with Binz or who support his nomination, he said.

The public-relations push for Binz surfaced as environmental groups and fossil-fuel industries duel over government’s role in protecting air and water.

The campaign to support McCarthy included the website standwithgina.com and a Facebook page. Republican senators led by David Vitter of Louisiana dragged out the review, posing more than 1,000 questions to McCarthy, and boycotted a meeting to consider the nomination.

Four Months

The Senate confirmed McCarthy on July 18, more than four months after Obama named her to lead the EPA.

“You have to be prepared for people whose stated goals are to stop stuff,” said Meehan, a former aide to Democratic senators including John Kerry, now the secretary of state, Barbara Boxer and former Majority Leader Tom Daschle. He said Binz’s critics may “cherry pick pieces of fact and put it out of context.”

If confirmed, Binz would succeed FERC Chairman Jon Wellinghoff, who turned the agency from a sleepy regulator of the electric and natural gas network into an enforcement authority after Congress expanded its powers in 2005. FERC, an independent government agency, oversees the nation’s interstate transport of electricity and natural gas.

Action Fund

Wellinghoff also backed renewable energy and efficiency technologies. Advocates for Binz want to ensure FERC continues in that direction. The Green Tech Action Fund, which describes itself as a nonpartisan, not-for-profit grant-making organization, has the same street address as the 22-year-old Energy Foundation. The foundation in 2011 issued $76.4 million in grants on $96.8 million in revenue, the latest available tax records show.

Binz last year received at least $10,000 from the Energy Foundation for consulting work, according to a personal-finance disclosure document filed with the Office of Government Ethics in June.

Binz’s opponents, including the Colorado Mining Association, say that as a state regulator he blocked coal use at utility customers’ expense, while benefiting Minneapolis-based Xcel, which has operations in Colorado.

Mining Critics

The Colorado Public Utilities Commission under Binz allowed Xcel to receive a 10.5 percent rate of return on construction costs associated with building natural-gas generators, Cooke and co-author William Yeatman wrote in a 2010 paper. The plan stemmed from a Colorado clean-energy law backed by then-Governor Bill Ritter, a Democrat, they said.

Cooke and Chris Horner, a lawyer for the Burke, Virginia-based Free Market Environmental Law Clinic, on July 29 filed a Freedom of Information Act request with FERC to find out whether the agency has had any contact with VennSquared or the Green Tech Action Fund, even before Obama announced Binz’s nomination.

“Ron Binz’s regulatory approach as chairman of the Colorado Public Utilities Commission was sound,” Amy Fuerstenau, the fund’s executive director, said in an e-mail. “Our support includes helping to make sure accurate information about Ron and his record are in the media.”

Colorado energy prices from November through April have remained relatively flat for at least the last six years, said Arnold, the executive director of Energy Outreach Colorado who has known Binz since the early 1990s.

Binz is a “balanced regulator,” he said. “He looks out for the public interest.”

‘Damn-the-Voters’

The Wall Street Journal described the FERC nominee in different terms.

“Mr. Binz is part of the White House’s damn-the-voters strategy of imposing through regulation what Congress won’t pass,” according to the paper’s July 30 editorial, citing his comments that the Colorado agency was both an arbiter and an advocate. “Mr. Binz is the latest presidential nominee who doesn’t understand the difference between making laws and enforcing them.”

VennSquared’s Meehan said he isn’t surprised by the editorial or the dispute over Binz. Fights over nominees can become an extension of electoral politics and policy disputes and are less about a candidate’s qualifications, he said.

“The rule of thumb in political Washington is to prepare for the worst and hope for the best,” Meehan said.

-- Editors: Jon Morgan, Steve Geimann

To contact the reporter on this story: Brian Wingfield in Washington at bwingfield3@bloomberg.net

To contact the editor responsible for this story: Jon Morgan at jmorgan97@bloomberg.net


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Companies Mentioned

  • PEG
    (Public Service Enterprise Group Inc)
    • $37.39 USD
    • 0.15
    • 0.4%
  • XEL
    (Xcel Energy Inc)
    • $30.57 USD
    • 0.17
    • 0.56%
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