Unyielding Approach May Imperil FERC Chief’s Job

Just weeks after he was selected by President Bush as chairman of the Federal Energy Regulatory Commission, Curtis Hebert Jr. is facing mounting criticism for his provocative style and unyielding views, which may cost him his post, according to Washington officials.

Hebert, a former Mississippi lawmaker, has infuriated California officials as they have struggled to work with the federal government to resolve the state’s energy crisis and the threatened financial collapse of its two biggest utilities.

With a new chairman, the officials say, the state would stand a better chance of winning commission approval for a key proposal to take over the power transmission grid now owned by California’s debt-laden utilities. Hebert, a fervent free-market advocate, has said such a move would amount to “nationalization.”

White House officials declined to discuss Hebert’s status publicly.

“He’s the chairman of FERC, and we don’t have anything to say beyond that,” said White House deputy press secretary Scott McClellan.

Other administration officials, however, confirmed that Hebert’s future is under active discussion in the White House and that he might be replaced. But those officials, who requested anonymity, said the direction of the agency would not change.

Hebert (rhymes with HEY bear) insists he is working hard for California and calls the criticism “intellectually dishonest.” On Friday, he pointed to a new commission order that could potentially result in refunding $69 million in power overcharges to utilities and the state.

He said Friday’s announcement was driven by deadlines for refunds, not by public opinion or political pressure. “It’s time to act and give the industry certainty and give the good people of California certainty,” he said.

Though critics characterized the refunds as a token amount, Hebert said that was “ludicrous.”

As for his future on the panel, he declined to say whether he would remain, should he be removed as chairman. He said he has not been approached by the White House about stepping aside.

“President Bush is going to do what he thinks is in the best interests of the American people,” Herbert said in an interview with The Times. “If that is me as chairman, or someone else, that is his option.”

Senate Majority Leader Trent Lott (R-Miss), who smoothed the way for Hebert’s appointment to the panel in 1997, was circumspect when asked whether his hometown protege would be removed as chairman.

“I know they’re considering a lot of different options. I’ve discussed it with the administration,” Lott said without elaborating.

Hebert’s agency historically has drifted through the quiet bureaucratic backwaters of Washington politics. But with the sudden chaos in California’s deregulation effort because of soaring wholesale prices, the federal energy panel has emerged at the forefront of the nation’s energy debate.

The commission wields tremendous influence through arcane regulatory decisions over how power is bought, sold and transmitted between among states. The panel’s decisions will help determine what millions of Californians will pay to keep the lights on.

Gov. Gray Davis and many California lawmakers are also pushing Hebert and his panel to authorize price ceilings on wholesale electricity sold throughout the West to avoid the kinds of stunning run-ups of recent months.

Hebert has insisted that he will be open-minded in considering the state’s proposals, despite firing off several verbal blasts to the contrary that have considerably raised his profile in recent weeks.

Hebert has said that price controls inevitably backfire and that government ownership of power lines is “not in the interest of the American public.”

Davis has suggested that Hebert is a “rigid adherent to ideology.”

Last week, members of the state’s congressional delegation confronted Hebert in a heated closed-door session. Afterward, some Democrats complained that he seemed not to care.

“I think Hebert is a problem,” said Sen. Dianne Feinstein (D-Calif.), who has introduced legislation that would authorize the Energy secretary to impose price ceilings, bypassing the commission.

“To have a $175 million-a-year federal agency, which is responsible for regulating the national energy market, refuse to take the necessary steps to help the nation’s largest state is inexcusable,” Feinstein said.

“If a change of leadership on the board is necessary to do this, so be it.”

Hebert defended his leadership of the agency and said he has always had California’s best interests at heart. He said the commission has spent so much time on the state’s problems that hundreds of other cases are backlogged.

“We are turning this agency upside down to aid California. Period,” Hebert said.

Utility industry representatives say Hebert is a steady hand at the helm, a man who believes in letting the marketplace largely dictate energy costs.

“He’s someone who is needed to bring certainty to energy issues,” said David K. Owens, a vice president at the Washington-based Edison Electric Institute, an umbrella group for many utilities. “He has very big challenges, and I think he’s up for the task.”

Still, some Washington officials believe that Hebert’s rigid and outspoken stance on energy issues is backing the administration into a corner as it tries to devise a solution with California officials. Other observers suggest that the president may want to name a chairman with whom he has worked more closely than he has with Hebert, who was backed by Lott.

The five-member panel has two vacancies that the president can fill, with Senate approval. That process, which requires extensive background checks, could take weeks or longer.

Sources say one official under consideration for the chairmanship is Pat Wood, 38, head of the Texas Public Utility Commission. Wood is an engineer and attorney with strong free-market philosophies. He was appointed to the Texas commission in 1995 by then-Gov. Bush.

Wood did not respond to calls for comment.

Those who have worked with Wood say he would be a good choice to help steer California through its crisis.

“He’s extraordinarily open and approachable and very smart . . . one of the stars,” said Ralph Cavanagh, who has dealt with many state regulators as energy programs director for the Natural Resources Defense Council.

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Times staff writers Peter Gosselin, Doyle McManus and Rich Simon in Washington and Nancy Vogel in Sacramento contributed to this story.