The Battle for FERC and the Future of Energy Security

on November 11, 2013 at 11:00 AM

Government Shutdown Continues Into Weekend

The failed nomination of Ron Binz to be the Chairman of the Federal Energy Regulatory Commission, which was formalized with his withdrawal from consideration last month, was unprecedented in Washington. The role of FERC has never been the subject of public of political interest – and I’d argue that few people (in Congress or otherwise) can actually explain what FERC does – so the sudden acute interest that resulted in no confirmation vote and Binz’s eventual withdrawal is well worth examining.

My friends at Operation Free (a campaign of the Truman National Security Project and Center for National Policy, a coalition of over 5,000 veterans and national security experts advocating for securing America with clean energy) have been watching the FERC nomination process, and have expounded the view of many energy insiders that Binz’s failed confirmation represents an important and troubling development in the evolution of America’s energy industry. – Elias Hinckley

Ron Binz, the once leading nominee to be the next Chairman of the Federal Energy Regulatory Commission, announced Monday evening that he had formally withdrawn his name from future consideration for the post.

To be sure, Binz is a highly qualified candidate who has spent his entire career working on energy regulatory issues, and he would have brought needed vision and leadership to a post that is critical for diversifying our energy portfolio and strengthening our national security.

Unfortunately, members of the Senate Energy and Natural Resources Committee resorted to bitter partisanship, dooming his confirmation based on a fear and misguided assumption he would encourage prioritization of renewable resources over legacy coal and oil sources of energy.

Their excuses not only illustrated a lack of understanding of FERC’s authority, but also they were inaccurate and pose a serious threat to America’s energy future.

As citizens from Ohio, Michigan, and West Virginia, we know the benefits that traditional energy sources have provided to the growth of our nation and states’ economies. While we acknowledge these sources – like coal- will continue to play an important part of our nation’s energy mix, in order to strengthen our national and economic security, it is critical that we continue to find ways to diversify our energy options and reduce our carbon emissions.

Without a doubt, energy is vital to our way of life – and yet, our current energy system is outdated and increasingly vulnerable to disruption from extreme weather events and increased risks of cyber attacks. Between 2003 and 2012, an estimated 679 widespread power outages occurred due to severe weather, costing our economy billions of dollars in damages. In addition, our current system relies on centralized production of electricity from dirty resources located far from where electricity is actually consumed.

It is clear is that we cannot meet the energy and security needs of the 21st century with a 20th century grid system, but to meet growing energy and national security concerns will require a massive overhaul of our electric grid system and diversification of our energy sources.

This is why the next chairman of FERC is so important. FERC plays a critical role in determining the future of our nation’s electrical grid – a part of our infrastructure that often goes unrecognized in our daily lives, but is paramount for ensuring our national security and facilitating a necessary transition to cleaner, less expensive energy sources.

More than 30 states, including both Michigan and Ohio, now require or encourage the use of renewable energy. Broad support for these policies across the Midwest and our nation is backed up by results. Diversifying our energy portfolio reduces costs for ratepayers, and spurs economic growth among clean energy businesses – an innovative outlet for our nation’s entrepreneurial spirit and manufacturing base.

In Michigan, that standard sparked $1.8 billion in economic activity in our state and helped bring down the costs of renewables to less than half the cost of building new coal plants. In Ohio, clean energy and energy efficiency standards have created more than 25,000 jobs and doubled saving costs for ratepayers.

But the rapidly changing energy technologies and utility business models that result from our transition to clean energy are placing a significant strain on our nation’s outdated transmission system. Effective and innovated leadership by the FERC Chairman is crucial to encouraging a diverse solution set, including the responsible siting of large scale renewable resources, clean distributed electrical generation and energy efficiency programs to avoid building unneeded transmission lines and improve grid reliability. To build on our progress, we must evolve our electrical system – all the while protecting American consumers and ratepayers.

This is an area where Binz has a long record of success – and this is why the Senate’s reckless pass over of such a qualified candidate hurts our energy situation.

As chairman of the Public Utility Commission in Colorado, his innovative solutions to better regulate utilities and protect ratepayers created a fairer market and spurred rapid growth in Colorado’s renewable energy sector.

Twelve former FERC commissioners recently wrote in the Wall Street Journal“Mr. Binz has an impressive 34-year career in energy policy. If the Senate confirms him, we think he will be a fair and impartial judge and further the public interest within FERC’s authority.”

Providing American consumers with reliable, efficient and sustainable energy services – all at an affordable cost — will require skilled leadership and innovative solutions-based thinking – skills that Ron Binz has proven time and again he possesses. His experience and expertise are exactly what FERC needs to bring our grid into the 21st century.

Shamefully, our elected officials in Congress have continued to make straw man excuses, and their refusal to confirm Ron Binz is yet another example of a qualified candidate succumbing to the fate of bad politics playing out over good policy.  If this becomes the new norm for FERC nominees, a transition to a modern energy system will be difficult and threatens to undermine our future energy security.

The authors:

Jack Schmitt is the Deputy Director of Michigan League of Conservation Voters and a Partner at the Truman National Security Project.

Zach Roberts is the Ohio Organizer for Operation Free, a national clean energy campaign, and a Partner at the Truman National Security Project. He is a Veteran of the United States Air Force and currently serves in the Ohio National Guard.

Jonathan Gensler is a consultant at the Cambridge Leadership Associates and a Fellow at the Truman National Security Project. He is a former Army Captain, completing two tours in the Middle East and is a proud native of West Virginia.

Elias Hinckley is a strategic advisor on energy finance and energy policy to investors, energy companies and governments. He is an energy and tax partner with the law firm Sullivan and Worcester where he helps his clients solve the challenges of a changing energy landscape by using his understanding of energy policy, regulation, and markets to quickly and creatively assemble successful energy deals.

Republished with permission from Energy Trends Insider