By Laura Barron-Lopez - 05/18/14 07:31 AM EDT
President Obama's second pick to head the agency tasked with monitoring the nation's electric grid is set to go before the Senate next week, but it still may not be smooth sailing.
In January, Obama tapped Norman Bay to lead the Federal Energy Regulatory Commission (FERC) after his first pick withdrew amid allegations of bias against the fossil-fuel industry.
But Bay, the current head of FERC's enforcement wing, may not fare much better.
Bay has been the director of FERC's Office of Enforcement since 2009, but has never held a spot as a commissioner for the agency, which is making senators wary.
"My initial reaction is that I was a little surprised that the president would appoint someone who is not part, who is not a commissioner to come and take over. That happened in the last round and it didn't work out so well," Sen. Lisa Murkwoski (R-Alaska) told reporters earlier this year.
Since then, Murkwoski still has not sat down with Bay but hopes to in the future.
"I need to find out who he is, want to talk to him about policy stuff because he doesn't have a track record in that venue. He has been working the enforcement side and I want to know okay are you going to be approaching FERC from everything is bad or how are you going to be looking at it," said to a group of reporters earlier this month.
Sen. Joe ManchinJoe ManchinElection-year politics: Senate Dems shun GOP vulnerables Mylan CEO should be ashamed of EpiPen prices Overnight Finance: Senate rejects funding bill as shutdown looms | Labor Dept. to probe Wells Fargo | Fed to ease stress test rules for small banks MORE (D-W.Va.) expressed similar sentiments about Bay after Obama announced the nomination.
"We're going to look him up pretty good," Manchin said. "I had concerns about the last one, I'm sure we'll have concerns about this one."
That skepticism may be fueled by a new development: twin energy traders are taking on Bay and FERC's enforcement office.
The twin brothers, Richard and Kevin Gates, of Powhatan Energy Fund may complicate matters for Obama's second pick.
The Gates brothers are fighting allegations from Bay's enforcement office of contracting a trader for their hedge fund, Powhatan Energy, that manipulated the energy market.
Powhatan adamantly opposes the allegations, and after a back and forth with FERC that yielded no solution, it has brought its case into the limelight.
A website launched by Powhatan releases the legal negotiations between it and FERC, with backing from 12 independent experts, one of whom is Susan J. Court, former head of FERC's enforcement office.
"The whole culture in that office is to try to extract fines, and to get publicity," Kevin Gates, of Powhatan Energy told The Hill. "It's is not to foster or support a well functioning market."
It all started after the 2008 financial crisis, leading to strong dislike for the culture on Wall Street. But the Gates brothers argue FERC has gone too far, and Bay is the one at the helm.
"Perhaps it's good politics in this environment to extract fines on corporate America, but it's an awful way to set policy," the brothers said. "It's bigger than Powhatan Energy, and bigger than Norman Bay. It's the entire staff and culture that's he has created."
The brothers hope the next head of FERC will take a hard look at the culture in its enforcement wing, and they may get their wish when Bay goes before the Senate committee on Tuesday.
Despite the blow back on Bay's nomination, he does have some supporters on the Senate Energy Committee.
After Obama announced Bay to lead the agency, committee member Sen. Martin HeinrichMartin HeinrichElection-year politics: Senate Dems shun GOP vulnerables New thinking on old tech for a secure future Dem senators back Navajo lawsuit against EPA MORE (D-N.M.) said he welcomed the nomination.
"Norman Bay is an admired public servant with outstanding credentials to lead the FERC," Heinrich said. "Energy is at the heart of almost every issue across the country and a cornerstone of New Mexico's economy. I look forward to meeting with Norman during his nomination process and given his record I am confident about his ability to serve with great distinction as chair of the FERC."