Federal Energy Regulatory Commission member Neil Chatterjee defended his actions on clean energy and climate after President Donald Trump on Nov. 5 unexpectedly replaced him as chair of the independent agency.
Chatterjee said he also sees an outsized role for FERC, and himself, if former Vice President Joe Biden wins the presidency and Republicans maintain control of the U.S. Senate.
"If the current trend lines we're seeing in the election continue, I think I find myself squarely in the epicenter of the debate over the energy transition and climate change in between a Biden administration and a Republican-majority Senate," Chatterjee, a former aide to Senate Majority Leader Mitch McConnell, R-Ky., said in a Nov. 6 interview.
FERC issued a news release late Nov. 5 announcing that Chatterjee had been replaced as chair by fellow Commissioner James Danly, who in various dissents and statements has conveyed a narrow view of the quasi-judicial regulator's authority. Chatterjee has promised to stay on through the end of his term at the end of June 2021 or potentially longer if the Senate is unable to confirm a replacement before the next U.S. Congress is sworn in.
Chatterjee speculated that the decision to hand Danly the gavel may have been related to a draft policy statement issued by FERC last month outlining the commission's legal authority to approve wholesale power market rules that accommodate state-determined carbon pricing. Danly penned a partial dissent to the policy statement, arguing it was issued prematurely.
"It's pure speculation on my part but if that is in fact the case, that's something I'm quite proud of and it was totally worth it," Chatterjee said. "I think in many ways, it validates my integrity and independence, so I slept just fine last night."
A spokesman for the White House said it does not comment on personnel matters.
'Proud to be one of the first'
As of early Nov. 6, the presidential election results favored Biden in a handful of crucial swing states, with Senate control appearing to hinge on the outcome of special elections for Georgia's two U.S. Senate seats.
Chatterjee suggested during the interview that major legislation or sweeping executive branch rulemakings on energy and climate seem unlikely with a divided U.S. Congress and a Democrat in the White House.
"I think FERC will be the game in this space and I think I will be the center point of that game," Chatterjee said.
Explaining the reasoning behind FERC's draft policy statement on carbon pricing, Chatterjee said he saw an opening after a diverse coalition urged FERC to host a technical conference on the matter amid increasing tensions between the commission and states with aggressive clean energy policies.
"I'm proud to be one of the first people in the U.S. government to cast a vote in favor of moving this important conversation forward," Chatterjee said.
The New York ISO is currently the only regional grid operator with active plans to formally embed a carbon price in its electricity market, although offer prices from generators operating within the California ISO, PJM Interconnection, ISO New England and NYISO markets all reflect carbon prices set by regional cap-and-trade schemes. The CEO of ISO New England has also expressed support for an economy-wide price on carbon emissions.
Action on carbon pricing likely delayed
FERC is unlikely to finalize its draft policy statement on carbon pricing with Danly as chair, said Jeff Dennis, a former FERC legal adviser who is now managing director and general counsel of Advanced Energy Economy.
But that could change under a 3-2 GOP majority if the Senate confirms Trump's latest picks for the five-member commission, Dennis said.
In September, the U.S. Senate Committee on Energy and Natural Resources held a joint confirmation hearing for Republican Mark Christie of the Virginia State Corporation Commission and Democrat Allison Clements, an energy lawyer with a clean energy background. Clements would join Commissioner Richard Glick as the second Democrat at the agency if confirmed by the full Senate.
Biden would likely name a new FERC chair on the first day he is sworn in, Dennis said.
Dennis added that he could see FERC's policy statement on carbon pricing becoming more expansive under a Democratic chair, potentially detailing actions states can take beyond setting a carbon price.
"Of course, those changes would need to be able to garner support from Commissioner Chatterjee, as he would likely be the swing vote on that and many other things," Dennis said.
In the meantime, observers should not expect Danly to initiate proactive rulemakings in the same way FERC did for energy storage and distributed energy resources following the 2016 election, said Ari Peskoe, director of the Electricity Law Initiative at Harvard Law School.
"Danly has explained that he is not a proactive regulator, so I don't expect him to launch any agenda," Peskoe said in a Nov. 6 email.