The WasteWatcher: The Staff Blog of Citizens Against Government Waste

Trump Administration takes heat with FERC nominee

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact blog@cagw.org.


All the way back at the beginning of the year, a federal energy regulator unanimously repudiated a proposed rule that would have subsidized coal and nuclear powerplants.

The Federal Energy Regulatory Commission (FERC) said the rule failed to reach the “clear and fundamental” legal requirement that the rule was “just and reasonable.” FERC is an independent agency made up of five members that regulates the sale and transmission of electricity as well as interstate oil, and it criticized the rule as a disregard of the free-market principles the U.S. power grid has long operated on.

A man who helped craft the rejected rule, Bernard McNamee, has now been nominated by the administration to serve on the FERC.  McNamee is a former advisor to Sen. Ted Cruz of Texas and currently leads the Department of Energy’s policy office.

Some have speculated that McNamee’s ties to the Trump administration could signal that if appointed to FERC, he could represent a potential “yes” vote in favor of the Department of Energy’s (DOE) bailout plan.  DOE remains under pressure from President Donald Trump to subsidize failing coal and nuclear generators.

The President in June ordered DOE Secretary Rick Perry to take “immediate steps” to prevent the closure of any more coal and nuclear plants. The status of the President’s order with DOE is unknown.

Yesterday, the Senate Energy and Natural Resources Committee held a hearing on McNamee’s nomination. Republican Committee Chair Lisa Murkowski of Alaska said she plans to advance the nomination of McNamee after Thanksgiving so he can be confirmed before the current Congress adjourns at the end of the year.  Democratic Senator Ron Wyden of Oregon said the nomination wasn’t “like the fox guarding the chicken coop. This is putting the fox inside the chicken coop.”

Given FERC’s tremendous authority, the administration knows the energy regulator is its biggest hurdle to subsidizing its favored energy sources of nuclear and coal.

Bringing back the failing and unprofitable coal industry was one of President Trump’s signature campaign promises. It and nuclear have struggled to compete with cheaper natural gas and renewables; however, instead of a bailout, the best way the administration could help coal and nuclear industries would be to roll back unnecessary and duplicative regulations that have disadvantaged our energy sector for decades.

Instead of carving out new regulations to benefit specific sectors of the power grid, everyone — including coal and nuclear — would be helped by the administration making a more level playing field for all competing energy sources by removing existing special interest carveouts. The administration should not create new ones.

President Trump should be applauded for his efforts to fortify our nation’s energy sector by addressing its regulatory and taxation climate. But unnecessary bailouts of coal and nuclear would just be more harmful government interference that would hurt America’s energy resilience and could cost taxpayers up to $34 billion.

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