By Darius Dixon

March 20, 2019 - The White House has dropped plans to nominate a veteran lawyer to serve on a key federal energy panel after pressure from Energy Secretary Rick Perry and major coal companies headed by allies of President Donald Trump, two people familiar with the effort told POLITICO.

POLITICO reported last month that David Hill, who served as the Energy Department's general counsel under President George W. Bush, was the likely candidate for a seat on the Federal Energy Regulatory Commission. A senior administration official said at the time that Hill was "almost certain" to be tapped.

Energy Secretary Rick Perry and major coal companies pushed against President Donald Trump's nomination of David Hill for Federal Energy Regulatory Commission.

Photo by Mandel Ngan, AFP/Getty Images

The White House has dropped plans to nominate a veteran lawyer to serve on a key federal energy panel after pressure from Energy Secretary Rick Perry and major coal companies headed by allies of President Donald Trump, two people familiar with the effort told POLITICO.

POLITICO reported last month that David Hill, who served as the Energy Department's general counsel under President George W. Bush, was the likely candidate for a seat on the Federal Energy Regulatory Commission. A senior administration official said at the time that Hill was "almost certain" to be tapped.

He had been expected to fill the vacancy created by former FERC Chairman Kevin McIntyre's death in January. But the parallel efforts by Perry and the coal industry proved to be more persuasive with Trump than his chief economic adviser, Larry Kudlow, who was lobbying for Hill.

FERC, an independent agency headed by a five-person board, oversees much of the nation’s electric grid as well as regional power markets. It has become a significant player in the debate about the Trump administration’s efforts to secure coal’s place in the U.S. power supply despite withering competition from alternatives like natural gas and wind.

A Republican, Hill worked as a DOE deputy general counsel for three years before becoming the agency’s top lawyer. And like several other Bush energy officials, Hill openly criticized a DOE proposal to FERC that was aimed at propping up money-losing coal and nuclear power plants, calling it "absolutely not the solution" to fix the electricity markets.

Hundreds of coal-fired power plants have closed in recent years. Both Craft and Murray have pressed the Trump administration to support the industry, which has seen its share of the nation's electricity generation plunge from more than 50 percent a decade ago to less than 30 percent last year.

Both Murray Energy and Alliance Resources have big stakes in whether FERC creates market supports for coal, a move the agency has so far resisted amid its effort to determine the resilience of the nation's power grid.

Craft has donated millions of dollars to a wide range of GOP campaigns for years.

Murrayalso is a staunch Trump supporter and significant GOP donor, and he met with Perry in 2017 to deliver a list of policy priorities that would benefit the coal industry. He blasted FERC last year after the commissioners unanimously rejected Perry’s plan.

In 2017, Murray pressed White House officials to help the coal industry, laying out in letters how Trump has instructed Perry to invoke emergency powers under the Federal Power Act to keep power plants operating.

A senior administration official this week told POLITICO that "influential detractors" leaped into action to derail Hill, but the person declined to pin the move on Craft and Murray.

Murray said Tuesday that he was unaware of anything related to Hill's nomination. "I have no knowledge regarding your inquiry. Thank you," he wrote in a note to POLITICO.

DOE referred questions on Hill's nomination to the White House. However, the White House declined to comment, and a spokesman for Alliance Resources did not respond to requests for comment.

A person familiar with the matter confirmed that senior DOE leaders have been consulted by the White House during the ongoing nomination process and that they met with Hill and other candidates.

A White House annual economic report released Tuesday again floated the idea of creating a carve-out to help coal and nuclear power plants.

Perry’s plan that FERC rejected early last year isn't the only failed effort to help coal plants. The White House also shelved the more aggressive DOE plan — pushed by Murray — to invoke an emergency to force power companies to keep what it called "fuel-secure" generators like coal and nuclear plants open.

Rejecting Hill without having another candidate clear the FBI background check would suggest that a new nominee is probably at least three months away. However, a handful of other candidates have been under consideration at the White House: former Texas utility, oil and gas industry regulator Barry Smitherman; former Wisconsin utility commissioner Ellen Nowak; and Pat McCormick, a former aide to Sen. Lisa Murkowski (R-Alaska).