FERC orders combating state lean energy policies “not political”

Source: By Josh Siegel, Washington Examiner • Posted: Wednesday, March 18, 2020

CHATTERJEE TRIES TO LEVEL WITH FOSSIL FUEL WORKERS: Federal Energy Regulatory Commission chairman Neil Chatterjee feels uniquely suited to level with the fossil fuel industry about the need to “adapt” as the nation depends more on cleaner energy.

Chatterjee, a Republican Kentuckian from coal country who used to advise Mitch McConnell on energy policy, is tackling the issue of helping fossil fuel workers despite it not being in the direct purview of FERC, an independent agency that oversees interstate power markets and approves pipelines and liquified natural gas export terminals.

“As market force drives this transition, communities will have to adapt,” Chatterjee told Josh in an interview this week.

Chatterjee has a particular sympathy for the struggles of coal, which he acknowledges he has had to set aside in his FERC role, given the agency cannot consider factors like potential job losses in its decisions.

In October, he hosted a conference in his home town of Lexington called EnVision, which brought together coal industry representatives, utility regulators, consumer advocates, clean energy groups, and more to discuss challenges to workers caused by the transition of the energy system away from fossil fuels.

“I wanted people to understand we don’t cling to coal as Kentuckians because we cling to the past or because we are dismissive of environmental concerns,” Chatterjee said. “It is part of our cultural economy and lifeblood. I wanted to bring together leaders from the clean energy space so Kentuckians can see opportunities for themselves in the clean energy transition and to present options for what they can be offered.”

Chatterjee said coal could still have a role on the future power grid in certain parts of the country, noting Kentucky still generates three-fourths of its electricity from coal.

While his comments focused on coal, Chatterjee’s recognition of the need to expand opportunities for fossil fuel workers is a striking contrast from industry groups that have dismissed the concept.

Mike Sommers, president and CEO of the American Petroleum Institute, recently said it’s “pretty insulting” for Democrats to suggest oil and gas workers harmed by policies to reduce fossil fuel use could receive assistance to transition to other jobs in clean energy, noting the high pay of fossil fuel employees.

“We can’t take these issues into consideration in overseeing power markets at FERC, but that doesn’t mean we can’t have a broader conversation as society on what happens in these communities,” Chatterjee said.

FERC ORDERS COMBATING STATE CLEAN ENERGY POLICIES ‘NOT POLITICAL’: Chatterjee dismissed critics who say FERC’s recent proposed orders targeting state-issued clean energy subsidies are intended to boost the fortune of fossil fuels.

“This was not political,” Chatterjee said. “This was not about favoring one fuel source over another. This was about subsidies and trying to ensure appropriate price signals in our markets that are being dictated by state policy actions.”

FERC’s Republicans have approved price floors in New York, New England, and in PJM — the nation’s largest power market — that aim to combat below-cost bids from subsidized renewable and nuclear.

Clean energy advocates have said the orders would result in higher payments to fossil fuel plants that will encourage companies to build more gas and to keep online coal, undermining state policies to combat climate change.

Chatterjee, however, said it’s too early to “speculate” on whether the orders would harm the progress of wind and solar, and further damage nuclear power. He argued clean energy is “at a point where it can compete without subsidies, mandates, and regulations.”

“Let’s see how the process plays out,” he said. “Let’s run the auctions and see what happens.”

ACTION TO BOOST STORAGE COULD HELP ENABLE 100% RENEWABLES: Chatterjee said that FERC’s order in 2018 to remove barriers for energy storage to participate in power markets could be a major factor in enabling a 100% renewable electricity future.

“We could look back 10 years from now and I dont think it’s hyperbolic to say [it] could be the single most significant government action taken to move forward the deployment of clean energy,” Chatterjee said. “We need that technology breakthrough to achieve 100% renewables.”

Chatterjee also cited the importance of building more transmission to deliver wind and solar from rural producing areas to population centers.

Though FERC does not have authority to directly site transmission projects, the commission is reviewing its incentives policy to encourage companies to build them.

“Transmission is essential to the grid of the future,” Chatterjee said. “For us to have that flexible, reliable grid of the future, we need the right transmission policies in place.”