FERC commissioner resigns after Trump replaces him as chairman

A U.S. energy regulator filed his letter of resignation on Thursday. And with that letter, he may have just brought federal decisions on multi-billion-dollar natural gas pipelines to a halt.

Norman Bay said he’ll leave the Federal Energy Regulatory Commission effective Feb. 3. His announcement followed President Donald Trump’s decision to replace him as the agency’s chairman with his fellow commissioner, Cheryl LaFleur.

With Bay’s departure, the commission will have just two commissioners and will lack the quorum needed to decide on everything from controversial gas pipeline projects to contested utility mergers. His resignation comes just as developers are rushing to build a network of pipelines to accommodate booming gas production from shale reserves in the Northeast, unlocking bottlenecks that have caused prices to plunge.

In Houston, the law firm Baker Botts, which has a large energy practice  and represents clients before the commission, said it was concerned that Bay’s departure would create backlog  of project reviews and potential gridlock.

“One of the more significant effects that the lack of a quorum could have is in delaying the approval of any natural gas pipeline projects currently pending before the agency,” Brooksany Barrowes, a Washington based Baker Botts partner, said in a written statement.

Only the commissioners acting on behalf of FERC can approve those projects, she said. This could be a major issue, given the need for expanded gas infrastructure and the narrow construction time frame of many projects.

Among the pipelines waiting for approval are: Energy Transfer Partners LP’s Rover project; the PennEast shale line being built by a group of companies including UGI Corp. and Spectra Energy Corp.; and the Atlantic Sunrise system by Williams Partners LP. Spectra Energy’s Nexus system and National Fuel Gas Co.’s Northern Access expansion may also be affected.

“Basically, if they don’t have a certificate by Feb. 3, they don’t get to start construction in the fall,” Christi Tezak, managing director of Washington-based industry consultant ClearView Energy Partners, said in a phone interview.

The pipeline developers didn’t immediately respond to requests for comment left after business hours.

Filling Seats

LaFleur, a Democrat and former utility executive, has been on the commission since 2010. The panel has been running with three Democrats since the resignation of Tony Clark, a Republican, last year. The only other commissioner is Colette Honorable. Bay didn’t immediately respond to a telephone request for comment left after business hours.

Filling the panel’s three vacancies will take time. The U.S. Senate still hasn’t confirmed the bulk of Trump’s chosen cabinet. Even a speedy confirmation process could take 30 to 60 days, according to David Wochner, a partner at the Washington-based law firm K&L Gates. That may lead to costly delays for companies awaiting their pipeline certificates.

“For those guys, a month matters,” said ClearView’s Tezak.

One name repeatedly floated as a likely pick by analysts including ClearView to fill the next vacancy is Neil Chatterjee, senior energy adviser to Senate Majority Leader Mitch McConnell and a former lobbyist for National Rural Electric Cooperative Association. His relationships on Capitol Hill may expedite the confirmation process — but not significantly.

First Priority

“If President Trump and Senator McConnell tomorrow were to meet and say this is high priority, I still would expect it’s going to be in the 60-day time frame,” Wochner said. “The Senate will be occupied with more significant votes. The cabinet will be first priority.”

Chatterjee didn’t immediately respond to requests for comment.

Industry groups are already putting pressure on the administration to act quickly.

“Given President Trump’s focus on infrastructure and domestic energy resources, we urge him to nominate candidates to fill the commission’s three existing vacancies as soon as possible,” Don Santa, president and chief executive officer of Washington trade group Interstate Natural Gas Association of America, said in a statement.

L.M. Sixel of the Houston Chronicle contributed.