By Ted Caddell

The resignation of former FERC Chairman Norman Bay means the agency will be unable to act on major orders and rulemakings for months, although it can continue to issue routine decisions under authority delegated to office directors.

Bay’s resignation, effective Friday, will leave the agency with just two members — one short of the three-member quorum. While the commission can continue to issue decisions on routine items such as uncontested market-based rate requests, extensions of time and compliance filings, many rulings will be held up until at least one more member is nominated and confirmed.

Bay announced his resignation within hours of the Trump administration’s naming of Commissioner Cheryl LaFleur as acting chair of the agency Thursday. (See related story, Bay Resigns after Trump Taps LaFleur as Acting FERC Chair.)

LaFleur said the commission would work to issue as many orders as possible while it still had a quorum. “I am confident that, with the strong team we have here at the commission, we can continue to do our important work,” LaFleur said in a statement Friday. “We are evaluating how best to do the business of the commission after Commissioner Bay’s departure.”

On Monday, the commission posted an 11-minute Q&A podcast with LaFleur in an attempt to reassure FERC employees and those who deal with the commission.

“We are very focused on the next week” during which the commission will still have a quorum, she said. “Beyond that, we have already confirmed that all of the existing staff delegations that are in place, including such actions as hydro inspections, LNG safety reviews, audits and all the other things that staff does, will continue during the period of non-quorum.”

She noted that staff issues five times as many orders as the commissioners do and said the commission is “thinking about potential expansion of staff’s delegated authority … basing that on past commission orders on the subject and the experience of other [federal] agencies.”

Procedural, Jurisdictional Issues

The commission’s website says “delegated” orders “may serve to determine a procedural matter in litigation. An order also may rule on a jurisdictional issue.”

Carolyn Elefant, a former FERC attorney advisor and lead partner at a D.C. law firm specializing in energy regulatory issues, agreed with LaFleur that much of the work coming out of FERC is done by staff and doesn’t need commission approval.

“Many of the commission’s day-to-day actions are handled through delegated authority to offices like Office of Energy Projects [and] Office of Enforcement,” she said. “The media picks up all of the contested actions, but the large majority of commission actions are routine approvals of uncontested market-based rate requests, extensions of time [and] compliance filings, which will continue as usual.”

But attorney Ken Irvin, co-leader of Sidley Austin’s global energy practice, said the loss of the quorum could mean that many rate filings become effective by default — decisions that he said cannot be appealed.

And law firm Baker Botts said it feared Bay’s departure could mean a growing backlog of cases. “Given the backlog of Trump administration nominees currently pending before the Senate, it could take several weeks or months for a new FERC commissioner to be nominated and confirmed,” said Jay Ryan, a partner in the firm’s D.C. office.

Ryan said the lack of a quorum will be problematic for the commission’s oversight and enforcement operations because it will be unable to issue orders approving audit findings, settlements of investigations and orders to show cause.

The Natural Gas Act and Federal Power Act require regulated companies to file rate and tariff changes 30 and 60 days, respectively, prior to their effective date, he noted. “If the FERC fails to act within the time that those rates go into effect, the changes become effective automatically, and if the FERC wishes to order further changes, it would have to do so under statutory provisions that place a heavier burden on the agency,” Ryan said. “Further, any requests for rehearing of the FERC’s orders under those statutes that are not acted upon by the FERC within a prescribed period are automatically denied.”

Another Baker Botts partner, Brooksany Barrowes, said the shorthanded commission also will be unable to approve any natural gas pipeline projects currently pending, though FERC staff can continue to prepare environmental documents and do other permitting work. “Given the need for expanded gas infrastructure and the narrow construction window many projects face, this could be a major issue,” she said.