FERC Chairman to Congress: ‘Make Energy Policy Boring Again’

  • Federal Energy Regulatory Commission (FERC) Chairman Neil Chatterjee wants Congress to take up a large energy-focused legislative attempt, he told an industry crowd at the nonprofit Resources For the Future on Wednesday.
  • Chatterjee wants Congress to modernize the 1978 Public Utility Regulatory Policies Act (PURPA). He listed the law among his near-term priorities, adding that FERC can make some improvements to better align PURPA “with the realities of today’s market” within existing regulations.
  • The last major Congressional effort focused on energy to become law was the Energy Policy Act of 2005, as most energy policies “come in the form of a rider to an omnibus appropriations bill or in the tax code,” he said. “The result of that is suddenly some of the pivotal decisions about our future are falling to agencies like the FERC.”

The chairman emphasized that an independent agency, like FERC, should not set national energy policy, as questions mount about priorities following the exit of Commissioner Cheryl LaFleur.

FERC, a five-member commission, has two vacancies starting this month, after being split between two Democrats and two Republicans for most of the year. Many stakeholders now anticipate decisions on dockets where LaFleur, a Democrat, would not have agreed with Chatterjee and fellow Republican Commissioner Bernard McNamee, such as an order on PJM’s capacity auction rules.

Many clean energy advocates and developers view a FERC order that seeks to limit the impact of state subsidies for zero-emission resources in the PJM market as detrimental to the prospects for renewable and nuclear energy resources. Clean energy advocates want to ensure that PURPA reform also does not adversely impact the development of new resources.

However, Chatterjee dismissed the possible impacts of those changes on renewables, quoting a FERC staff analysis about their strengths and prospects for the future.

“I think renewables are at a place where they can stand on their own and compete without government subsidies and policies,” he said. “And so any reforms that we make to modernize PURPA, in my view, should not [and] would not have a detrimental effect on renewables because I think renewables can compete on their own.”

FERC has also faced criticism over how it accounts for greenhouse gas emission impacts related to natural gas pipelines.

“If the commission wanted to take a different direction in how we evaluated the climate impacts of the pipelines that we evaluate, that directive would need to come from Congress. I don’t believe it is within our statutory purview to take that expansive view ourselves,” Chatterjee said.

Democratic Commissioner Richard Glick has also previously called for congressional action on the calculation of natural gas impacts during FERC meetings and with reporters.

Chatterjee, who spent the bulk of his career in the legislative branch before coming to FERC, called himself a “big believer” in the role of Congress to set the direction for policy.

“I would very much like to see Congress take a leadership role in some of these areas, because Congress has the tools to effectuate the necessary direction that the country should go, and then it should be up to agencies like the FERC to implement that direction,” Chatterjee said. “But we ought not be setting national energy policy at an independent regulatory agency.”

“A solution to all of this is to make energy policy boring again … You leave it to the engineers and lawyers, you know we can get positive things to happen for the grid and for the country.”

Congressional staffers from the Senate Energy and Natural Resources Committee and House Energy and Commerce Committee did not respond to requests for comment. However, Senator Lisa Murkowski, R, chairman of the Senate Energy Committee, told reporters she intended to have a hearing in the fall focused on energy storage bills.

For the short-term, FERC will focus on a number of issues, such as an update on its grid resilience proceeding, a review of its security policy statement, and a number of other projects.

Chatterjee did not comment on pending matters such as PJM’s capacity market.


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