On November 5, 2019, the Senate Committee on Energy & Natural Resources (“Committee”) held a hearing to consider the nomination of James Danly as a FERC Commissioner. Mr. Danly, currently FERC’s general counsel, was nominated to fill the vacancy on the Commission left by the passing of FERC Chairman Kevin McIntyre in January of this year.

Committee Chairman Lisa Murkowski (R-AK) noted in her opening remarks that she was pleased with Mr. Danly’s nomination, and impressed with Mr. Danly’s resume, referencing his service both in the military, where he served two tours of duty in Iraq, and as FERC’s general counsel, where he tackled complex issues including energy storage, infrastructure, and regulatory reform. Senator Murkowski noted that, if confirmed, Mr. Danly would be expected to address pressing issues pertaining to system reliability, including grid resilience and capacity reform. In asserting her support for Mr. Danly’s nomination, Senator Murkowski acknowledged that Mr. Danly’s confirmation would likely be opposed by some Democrats because his nomination was not paired with the appointment of a Democratic nominee to the other vacancy on the Commission that was created by the August 2019 departure of Commissioner Cheryl LaFleur. In response to these concerns, Senator Murkowski stated that such bipartisan pairings are neither necessary nor required, noting that similar unpaired confirmations have happened as recently as 2014.

Committee ranking member Joe Manchin (D-WV), also delivered opening remarks and noted that, though he supports Mr. Danly’s appointment, he is concerned that the administration has not submitted a Democratic nomination to fill the vacancy left by Commissioner LaFleur’s departure. Senator Manchin emphasized that FERC should function as an independent and impartial body that “reflects the wisdom” of five Commissioners.

Following opening remarks, Senator Murkowski asked Mr. Danly about as allegations of inconsistent ethics advice provided by FERC’s Office of General Counsel that resulted in waivers allowing Commissioner Bernard McNamee to participate in matters related to his previous legal work. Mr. Danly responded that he as general counsel plays no role in rendering ethics advice, and that such advice is exclusively within the control of the agency’s designated ethics official who reports directly to FERC’s Chairman.

Senator Martin Heinrich (D-NM) expressed concern about FERC becoming a politically-charged body, rather than an impartial regulator, which in his view could have significant impacts on the electric grid and result in stalemates on the Commission. Mr. Danly responded that, while FERC does occasionally engage in rulemaking under the Administrative Procedure Act, he views the role of FERC Commissioner as primarily that of an adjudicator and stated that, if confirmed, he would pledge to confine his decisions to the law on the record.

Mr. Danly also faced questions from Democrats on renewable energy resources and climate change, including by Senator Catherine Cortez Masto (D-NV), who asked Mr. Danly whether he considers renewable energy resources to be an important part of our nation’s electric mix and can be reliably integrated into the power grid, to which he responded in the affirmative. Senator Cortez Masto also inquired about FERC’s role in assessing climate impacts of infrastructure it approves, to which Mr. Danly responded that he would follow the “black letter of the law,” including the National Environmental Policy Act, which requires FERC to consider direct, indirect, and cumulative impacts of every major federal action that comes before it. When asked whether he agreed with a decision of the U.S. Court of Appeals for the D.C. Circuit finding that FERC’s consideration of greenhouse gas emissions in a natural gas pipeline proceeding fell short, he stated, “I agree with the D.C. Circuit when it hands down a binding ruling, yes.”

Finally, Senator Manchin questioned Mr. Danly about grid securitization, including the proposed “Protect Act” that would direct FERC to undertake a rulemaking to establish rate incentives for cyber security investments, as well as what role FERC should play in protecting the grid from cyber-attacks. Mr. Danly responded that cyber security threats are “truly important,” and that, while FERC has limited processes to set mandatory standards, its Office of Energy Infrastructure Security creates best practices and conducts architectural reviews to “enhance the awareness of the jurisdictional utilities” to cybersecurity threats. With respect to the Protect Act, Mr. Danly confirmed his support for “Congress having specific subjects that it wants to direct ratemaking on,” and acknowledged that FERC has undertaken single-issue ratemaking in the past.

Click here to access to the full hearing webcast.