Trump appointee becomes leading climate problem solver

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Neil Chatterjee, a Kentucky Republican, used to be known as Mitch McConnell’s coal guy, eager to advance President Trump’s pro-fossil fuel agenda as chairman of an obscure but powerful regulatory agency.

Now, as he nears the potential end of his chairmanship of the Federal Energy Regulatory Commission, Chatterjee is staking a claim as one of the government’s leading problem solvers on addressing climate change.

Chatterjee says his evolution is a natural outgrowth of his transition from political operative as McConnell’s former top energy staffer to an independent regulator.

Along the way, Chatterjee, 43, has inserted himself into the public discourse like few FERC chairmen before him.

In recent months, he created a Facebook group that teased his potential interest in running for Virginia governor next year (he says he was “playing around”) and posted photographs of himself on Twitter with Walker Buehler, an old friend from Lexington, Kentucky, who also happens to be the ace of the World Series-winning Los Angeles Dodgers.

While some critics accuse him of pursuing public affection at the expense of precision, supporters see his style and actions befitting the new position of FERC, an independent agency that has been thrust into contentious debates involving the transition to cleaner energy.

“At times, Chatterjee sacrificed quality for expediency. But he absolutely deserves credit for being honest in trying to reduce regulatory burdens on the overall community, clean energy and fossil fuels alike,” said Devin Hartman, electricity policy manager at the R Street Institute and a former FERC staff member.

This month, Chatterjee’s FERC issued a bipartisan statement encouraging regional power grid operators to incorporate state carbon pricing policies into their markets.

FERC, which regulates interstate transmission of electricity and reviews energy infrastructure projects, cannot establish a carbon price on its own. But Chatterjee was eager to be among the first Republicans in government to signal support for carbon pricing, looking to contrast that method to combat climate change with the subsidies and mandates increasingly favored by Democrats.

“The carbon-pricing issue is not going to go away,” said George David Banks, Trump’s former international energy adviser and a Republican staff member on the House’s special climate change committee. “If Biden wins and they bring their folks in to heavily push a climate agenda, it makes sense to influence that conversation as much as you can.”

Chatterjee told the Washington Examiner that he hopes action on carbon pricing would “change the conversation” among Republicans.

“I saw an opportunity for leadership,” Chatterjee said. “I learned early on the only way to make meaningful progress in today’s political climate was to be highly intentional in my agenda.”

Others said the Chatterjee’s leadership on carbon pricing proves his interest in upholding FERC’s independence.

“What he did on that validates a view that is not only he his own person but FERC is its own agency,” said Travis Kavulla, vice president of regulatory affairs at NRG Energy, a power company that joined a petition pressing the commission to consider carbon pricing.

By Chatterjee’s own admission, the move was a stark contrast to the beginning of his tenure, when he was sympathetic to a contentious proposal from former Energy Secretary Rick Perry in 2017 to subsidize struggling coal and nuclear plants.

“It’s been 180 degrees from the early days of the Trump administration when we were talking about the Perry proposal, which many criticized for aiding coal plants, to now talking about carbon pricing, the whole goal of which is to shutter oil and gas plants,” said Tony Clark, an energy industry attorney and former Republican FERC commissioner.

People with knowledge of the episode say Chatterjee was prepared to support the Perry measure, which critics said would upend competitive power markets by propping up failing plants and increasing prices for consumers.

But he was pressured to reject the proposal by Robert Powelson, a then-Republican commissioner who vehemently opposed the idea, and Kevin McIntyre, the Republican FERC chairman at the time who died of brain cancer last year. FERC unanimously batted down the Perry proposal in 2018.

“I had to learn from that experience, and I didn’t handle it particularly well,” Chatterjee said. “I ultimately made the right policy call, but I messed up my rhetoric and the way I went about it.”

Chatterjee said the situation challenged his instincts and put him in an uncomfortable position.

“I just came from spending a decade of my life working to support these coal communities. I didn’t appreciate … this was a national job, and I had to follow laws and statutes,” he said.

While Chatterjee secured goodwill with critics by taking action on carbon pricing, some still question his motives and doubt his ideological consistency.

Earlier this year, FERC’s Republicans, over the opposition of Democrat Richard Glick, issued an order that aimed to combat below-cost bids from subsidized renewable and nuclear energy in PJM, the largest power market in the United States.

Glick, who supported Chatterjee on carbon pricing, recently said the so-called MOPR order would “increase prices and stifle state efforts to promote clean energy.”

“Chatterjee’s actions have been a study in contrasts for us,” said Jeff Dennis, managing director and general counsel of Advanced Energy Economy, a group representing clean energy companies.

“We have had trouble squaring those two things,” Dennis said, comparing the carbon-pricing action to the order challenging clean energy subsidies.

Dennis credited Chatterjee with other actions that have opened doors for clean energy. Last month, the commission approved an order allowing distributed energy resources, such as rooftop solar and electric vehicles and their supply equipment, to participate in wholesale electricity markets and be compensated for it. The order is similar to another FERC action issued two years ago that broke down barriers to allow energy storage to compete in electricity markets.

But Dennis and Hartman faulted Chatterjee’s execution on the PJM MOPR, which has led to Democratic states with clean energy policies considering pulling themselves from the competitive power markets that FERC oversees.

“It was motivated by the right things, but it was economically unsound and politically unsavvy,” Hartman said.

Dennis said the move was demonstrative of the increasing tensions between states and the FERC over recent years. He said Chatterjee is inappropriately favoring carbon pricing over other solutions.

“They put the markets on a collision course with states, “ Dennis said. “We want states to have all the tools they can possibly have to promote carbon reductions.”

Hartman said Chatterjee acted on carbon pricing in reaction to the backlash he received targeting state clean energy subsidies, which had dented the green-tinted image he was cultivating.

“He was cognizant that FERC was being portrayed as enemies of the climate movement,” Hartman said.

Chatterjee insists his record is consistent and guided by his belief in competitive markets.

“I was very clear from the moment I came to the commission and had my own platform that I believe climate change is real and man-made. I was concerned about it and wanted to take steps to mitigate emissions,” Chatterjee said. “I don’t believe in heavy-handed regulations or mandates or subsidies, but I did think there was a constructive way to go about mitigation in a conservative, market-driven approach.”

Critics, however, see Chatterjee’s approach as opportunistic.

“His attitude and policy has been to change with the winds,” said a former Republican FERC staff member. “I have been trying to figure out if he has a true north. I am not sure if he does.”

Another hallmark of Chatterjee’s tenure has been FERC’s approvals of a gusher of pipelines and liquefied natural gas terminals. The commission’s Republicans, led by Chatterjee, have taken a limited view of FERC’s legal authority to review greenhouse gas emissions from fossil fuel infrastructure projects, arguing that the commission should not assess how the pollution from a given facility contributes to climate change.

Democrats, led by Glick, have attacked Chatterjee for that stance, and it’s likely to be the major point of tension if Democratic presidential nominee Joe Biden wins the election.

Chatterjee’s term ends at the end of June 2021. He says he is “absolutely” committed to staying through the end, even if Biden wins and appoints a Democratic chairman to lead an agenda that promises to be more skeptical of approving fossil fuel infrastructure.

“There is value to commission and the public that I stay, regardless of what happens,” Chatterjee said. “The commission should remain apolitical even if the administration is pushing an anti-fossil fuel agenda or pro-fossil fuel agenda.”

Tristan Abbey, a former Republican staffer on the Senate Energy and Natural Resources Committee, said Chatterjee’s forward-facing approach to the FERC is likely to be copied as policy fights beckon.

“It was inevitable in a world where natural gas has become highly politicized that the commission in charge with regulating natural gas activity is drawn into some political fights,” said Abbey, who now runs an energy consulting firm, Comarus Analytics.

Chatterjee, allies and colleagues say, is intent on playing an influential role in the conversation.

“He can weave a really persuasive argument. He is very good at political tactics. He definitely has political ambitions,” Banks said.

Chatterjee won’t deny that.

“I can say with great confidence this will not be my last job in public service,” he said.

But he’s still focused on forming his legacy at the FERC.

“While not everyone may agree with every decision, everyone can agree it’s been an impactful chairmanship,” Chatterjee said. “I hope history will judge me in one way. I may not have always got it right. But I did what I thought was right.”

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