Watchdog raises concerns over Trump energy regulator

A watchdog group is spotlighting concerns about James Danly, a new Republican commissioner on the Federal Energy Regulatory Commission (FERC), over his connections to projects the agency regulates. 

Progressive watchdog Accountable.US is focusing on Danly’s ties to two energy companies with natural gas projects, which fall under the jurisdiction of the agency.

According to ethics forms obtained by the group and reviewed by The Hill, when Danly worked at a law firm from 2014 to 2017, his clients included Exelon Corp. and NextEra Energy. Both are energy companies with ongoing natural gas projects, which the agency has jurisdiction over from the Natural Gas Act.

Chris Saeger, Accountable.US’s director of strategic initiatives, said that the connection to the companies is problematic.

“There is clearly a conflict of interest in these cases, he told The Hill Thursday. “And I think the fact that they’ve already been approved with little transparency as to his involvement in these projects is incredibly disturbing,” he said about projects involving the two companies.

Danly was confirmed in a 52-40 Senate vote on Thursday, despite questions from Democrats and outside groups about his industry ties.

Danly had been serving as FERC’s general counsel prior to his confirmation on the commission’s board. The agency says he has followed ethics rules.

“Since his appointment to the position of General Counsel in September 2017, James Danly has been following the Trump Administration’s Ethics Pledge, which is signed by all Executive Branch officials,” said FERC spokeswoman Mary O’Driscoll in a statement on Friday. 

Asked if Danly would recuse himself from matters involving former clients, O’Driscoll said, “Any decisions on recusals have been made and will continue to be made by Mr. Danly in consultation with the Designated Agency Ethics Official at FERC.”

But Danly’s confirmation highlights a central concern that critics have expressed with the Trump administration, that officials often have close ties to the industries they are supposed to regulate.

The president has stocked his agencies with officials from industry. In one prominent example, it’s been reported that Interior Secretary David Bernhardt, who worked at a lobbying firm, has had to carry a card with a list of matters he must recuse himself from.

In Danly’s case, the two natural gas companies he had as clients are involved in projects that have been the subject of scrutiny and legal challenges from environmentalists.

NextEra US Gas Assets, a subsidiary of NextEra Energy, is the part-owner of the proposed Mountain Valley Pipeline (MVP) project in Virginia and West Virginia. 

MVP settled a lawsuit last year that accused it of violating environmental standards during construction, according to The Roanoke Times. 

Mountain Valley spokesperson Natalie Cox told The Hill in an email that the project submits weekly reports to FERC, as is standard practice during construction. Cox said at the time that the issues, which were fixed, were largely due to increased rainfall. 

The other former client, Exelon, partially owns the proposed Annova LNG export facility in Texas. 

A FERC environmental impact statement from last year found that the Annova project would “result in adverse environmental impacts” although it said that these impacts could be reduced to “less than significant” levels if certain steps were taken. 

Saeger said he thinks that Danly’s commissionership will have a negative impact on the environment. 

“We will see more dangerous pipeline projects approved… and ultimately the American people will pay the price,” he said. “It will mean more carbon in the atmosphere, it will mean more pipelines in communities that don’t want them.”

The Senate voted to confirm Danly on Thursday, including with votes from some Democrats such as Sen. Joe Manchin (D-W.Va.).

“This is the type of individual who knows his stuff, has a great grasp and a keen understanding of these energy related matters,” Sen. Lisa Murkowski (R-Alaska), the chair of the Senate Energy and Natural Resources Committee, said about Danly on the Senate floor ahead of the vote.

Senate Minority Leader Chuck Schumer (D-N.Y.) however pointed to his industry connections, saying that Danly “lacks the experience of past nominees and it seems his major qualification is … deep ties to the energy industry.”

Schumer has previously raised other ethics concerns about Danly, including over whether he gave bad advice to FERC officials with ties to companies or industries regulated by the agency.

Danly’s confirmation also sparked additional controversy because a Democrat was not nominated to the commission alongside him, a break from the tradition of nominating individuals from each party together.

Saeger told The Hill he believes that this will result in an imbalance on the commission and worries about the impact on the environment from the natural gas, oil and electricity projects FERC could green light.

“You overwhelmingly have a set of special interests that want to see the Trump administration stay in power and that want to see [Senate Majority] Leader [Mitch] McConnell stay in power and have spent a lot of money to make those things happen,” he said.