June 18 (Bloomberg) -- Norman Bay and Cheryl LaFleur won Senate committee approval to be members of the Federal Energy Regulatory Commission as part of a compromise with the Obama administration on who would lead the agency.
The Democratic-led Senate Energy and Natural Resources Committee voted 13-9 today for Bay, FERC’s enforcement director who led probes of banks including Barclays Plc and JPMorgan Chase & Co. for alleged energy-market manipulation. The panel voted 21-1 for LaFleur, acting chairman and a commissioner since 2010.
The nominations created a Senate turf battle, leaving in question the leadership of the FERC, which oversees U.S. electric grid reliability. Energy Committee Chairman Mary Landrieu of Louisiana and top Republican Lisa Murkowski of Alaska had sought to keep LaFleur as agency head. Murkowski cited Bay’s lack of experience as a utility regulator.
Landrieu said she reached a deal with the administration and Senate leaders under which Bay, President Barack Obama’s pick for chairman, would take over the agency after nine months. LaFleur would remain acting chairman.
“That nine months will start at the point of confirmation on the Senate floor,” Landrieu told reporters after the meeting. She is recommending Bay’s nomination be considered by the full Senate in September.
FERC spokeswoman Mary O’Driscoll said in an e-mail that LaFleur and Bay are prohibited from commenting on developments related to their nominations.
The Senate must confirm nominees before they join the FERC as commissioners. The president designates the chairman and the administration is standing behind Bay.
“He will make an excellent chairman, and we are pleased he is headed towards confirmation to serve in that role,” White House spokesman Matthew Lehrich said in an e-mail.
Murkowski said White House officials never gave her assurance the terms of a deal would be met, and she also said she wanted to give LaFleur, the FERC’s only female commissioner, full authority as chairman.
Murkowski has previously said Bay will have to recuse himself from FERC decisions due to his role as enforcement director.
Powhatan Energy Fund LLC, a Pennsylvania hedge fund FERC is investigating for allegedly rigging a power-hub market, this year started a website to argue that the firm is being wrongly targeted and that the agency’s enforcement practices have gone too far.
Senator Joe Manchin, a West Virginia Democrat, said today he would support Bay, with a provision that his chairmanship begin in nine months.
Landrieu today voted to support Bay. Murkowski didn’t.
“I want to make sure that whoever is chairing the Federal Energy Regulatory Commission knows their stuff,” Murkowski said at the hearing.
Senate Majority Leader Harry Reid, a Nevada Democrat, has said he backs Bay, a former federal prosecutor from New Mexico, to lead the FERC. Reid controls Senate floor votes.
Former FERC Chairman Jon Wellinghoff stepped down in November, after his term had expired. The agency has operated with four commissioners since then.
Obama’s previous nominee to lead the agency, former Colorado energy regulator Ron Binz, withdrew in September after failing to win enough votes on the Senate energy panel.
In addition to overseeing the electric grid and policing energy markets, the FERC’s duties include reviewing utility mergers and regulating the transport of oil and natural gas on inter-state pipelines.
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