President Donald Trump has demoted the US Federal Energy Regulatory Commission's (FERC) chairman Neil Chatterjee and handed the top job at the agency to fellow Republican commissioner James Danly.
Chatterjee late last night said it had been the "honor of a lifetime" to serve as chairman, during which the agency approved orders related to battery storage, renewable energy and the approvals of LNG export approvals and pipelines. Chatterjee said he would serve out the rest of his term through June.
FERC is responsible for approving natural gas pipelines and LNG export terminals. It also regulates rates for interstate oil and gas pipelines and oversees regional electric grids such as the PJM Interconnection and the California Independent System Operator.
The abrupt leadership shakeup at FERC comes after Chatterjee supported a rule to make it easier for rooftop solar and other "distributed" energy resources to be integrated into the grid. Chatterjee also backed a bipartisan policy last month saying the agency is open to letting electric grids incorporate state-determined carbon prices. Danly opposed both measures.
Those two climate-related policies appear to have left Chatterjee in hot water with the White House.
Chatterjee's acknowledgement of the need to address climate change "cost him his chairmanship, but it also set him apart and cemented his standing as one of FERC's great leaders," the conservative climate group the Alliance for Market Solutions' executive director Alex Flint said.
The White House declined to comment.
The late-night leadership switch was baffling to energy industry officials, given that Trump appears on the verge of losing the election to Democratic candidate Joe Biden. That means Danly may only lead the agency for about two months before a new chairman takes over, leaving limited time to pursue any new policies.
"It seems that President Trump or the White House would be focused on the election rather than on FERC right now," one gas industry official said. "The whole thing is just weird to me."
Danly was sworn in as a commissioner in March and previously served as the agency's general counsel. Because only three commissioners are now serving on the five-member panel, Danly will need support from Chatterjee or Democratic commissioner Richard Glick to advance any orders.
Chatterjee joined the agency in August 2017 and became its temporary chairman for about five months, stepping into the role when FERC had a large backlog of decisions because it previously lost a three-member voting quorum. Chatterjee took over as chairman again in 2018 as the late agency leader Kevin McIntyre was being treated for a brain tumor.
FERC is at risk of losing its voting quorum again if any of its members resign. The US Senate could avoid that by confirming a pair of pending Democratic and Republican nominees, but industry officials say the lack of major gas pipelines or LNG export facilities requiring agency action could reduce the Senate's motivation to prioritize the nominations.
