Fight erupts over Obama’s pick for top US utility regulator

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Michael Bastasch DCNF Managing Editor
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Green groups are gearing up for a fight with free-market organizations and the coal industry over President Obama’s pick to head the Federal Energy Regulation Commission.

In June, Obama announced he was nominating Ron Binz to head up FERC, which regulates electric grids, gas pipelines, natural gas export terminals and hydroelectric power plants.

Yet Binz’s tenure as the head of the Colorado Public Utilities Commission from 2007 to 2011 was controversial.

“Ron Binz has the temperament and experience needed to lead FERC and continue the agency’s important initiatives to expand and modernize the nation’s electricity infrastructure,” said Rob Gramlich, senior vice president of energy policy for the American Wind Energy Association.

“Ron Binz has the experience and vision needed to help America ramp up the transition to clean energy sources, including solar,” added Rhone Resch, president and CEO of the Solar Energy Industries Association.

Green groups are pushing Binz’s nomination, taking unusual steps to ensure that it goes through. Green Tech Action Fund hired the public relations firm VennSquared Communications to support Binz’s nomination.

Support for Binz among environmentalists has mainly focused on his advocacy for renewable energy and energy efficiency, but free-market groups are critical of his activism while serving as Colorado’s top regulator.

“FERC was a sleepy regulator until the Obama Presidency, but it has statutory powers that could be turned into anticarbon weapons, such as the authority to impose fines of up $1 million per day for what it claims are violations,” writes the Wall Street Journal editorial page. “They also include the power to block energy mergers and the construction of terminals, pipelines and transmission.”

“I saw the commission not simply as an umpire calling balls and strikes, but also as a leader on policy implementation,” Binz said in an interview.

In particular, Binz opponents point to his role as frontman of a legislative effort to shut down coal-fired power plants in the state.

“In Colorado, Binz actually participated in the crafting of legislation that mandated fuel switching from coal to gas for 1,000 megawatts of electricity generation, at a significant cost to consumers,” said William Yeatman, energy policy analyst at the Competitive Enterprise Institute and the Independence Institute. “He’s fully on-board with the president’s war on coal.”

Colorado’s “Clean Air, Clean Jobs Act” aimed to move the Boulder State away from coal power and towards cleaner energy. Binz took the lead in promoting this proposal, which offered incentives to companies for closing down older coal plants and switching over to burn natural gas. The bill included a $1.3 billion plan for Xcel Energy to make this switch.

The bill passed and the Colorado PUC voted to have Xcel shut down six coal-fired generators and replace them with natural gas-fired ones. However, the Denver Post reported that prior to the enactment of the bill, Binz had engaged in meetings with executives in the natural gas industry and from Xcel, according to government documents.

“By early March 2010, he was even reassuring Xcel officials on how the commission would treat cost recovery under draft language — eventually crowing, ‘The eagle has landed. The commission and Xcel have agreed on language for cost recovery,'” the Post reported.

The coal industry and others fought back against Binz, trying to have him and another PUC commissioner recuse themselves from any further involvement in crafting the clean energy bill, arguing the commissioners “breached their duties to the people of Colorado by making a private deal with Xcel Energy (‘PSCo’) to allow it to ‘spend itself rich.'”

The coal industry also argued that the clean energy law would eliminate hundreds of jobs in the state and raise electricity prices by as much as 1.5 percent.

Binz was also attacked for possible ethics violations regarding the numerous days he spent on the road — 200 days on the road during his three and a half year tenure, according to the Denver Post. An ethics complaint was filed against Binz by former Republican state Sen. Andy McElhaney for accepting travel reimbursement from a natural gas company.

However, the the Colorado Independent Ethics Commission found that Binz didn’t follow state travel rules, but also “did not breach the public trust for private gain because Mr. Binz did not personally benefit from the travel paid for by Bentek [the natural gas analytics company].”

“You can bet that Mr. Binz will be creative and political, and don’t be so sure his only target is coal,” the Wall Street Journal continues. “At an Edison Foundation panel this March, he called natural gas a ‘dead end’ technology because ‘on the carbon basis, you hit the wall in 2035 or so.’ He added that ‘We have to do better on carbon than even natural gas will allow us to do.’ This is unusual in that the greens usually pretend to support gas to make outlawing coal seem more reasonable. Mr. Binz let the mask slip.”

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