What to expect from Danly’s term as FERC chairman

Source: By Arianna Skibell, E&E News reporter • Posted: Monday, November 9, 2020

President-elect Joe Biden’s weekend victory all but guarantees that Federal Energy Regulatory Commission Republican Chairman James Danly’s tenure will expire in January, making it the second shortest in the agency’s 43-year history. President Trump unexpectedly named Danly chairman late last week, demoting former Republican head Neil Chatterjee to a commissioner on the influential panel.

As a lame-duck leader, Danly, a staunch conservative, will have scant time to take significant action, which analysts say is actually his preferred way to regulate.

“Danly has said he’s not going to be a proactive regulator,” said Ari Peskoe, director of the Electricity Law Initiative at the Harvard Law School Environmental and Energy Law Program. “I would be surprised if FERC comes out with anything it doesn’t have to do in the next few months.”

Others like Todd Snitchler, president and CEO of the Electric Power Supply Association who favors a carbon tax in regional markets, said it’s “premature to speculate” what actions Danly might take in terms of pricing CO2 emissions.

“Danly did have a different perspective,” he said. “But when you step into the role of chairman your responsibilities change a bit.”

Danly declined comment. But Travis Fisher, who worked on Trump’s FERC transition team and served as adviser to former Republican Commissioner Bernard McNamee, said he did not expect Danly to be an “activist” chairman.

“Which is what put Chatterjee on the president’s bad side,” Fisher said. “I think Danly believes in legal textualism and judicial restraint and will run FERC according to those principles.”

Chatterjee, who was first appointed chair in 2017, worked to approve natural gas infrastructure projects and enact market rules to ensure renewables were not advantaged over competing resources, but he also boosted clean energy and storage technologies.

His demotion came after he paved the way for states to implement a regional carbon price, issuing a draft policy statement on the subject (Energywire, Oct. 16). Chatterjee said he was also being punished for refusing to comply with the Trump administration’s governmentwide edicts against diversity training (E&E News PM, Nov. 6).

Devin Hartman, a former FERC employee who now heads energy and environmental policy at the libertarian R Street Institute, said there was already a “soft plan in place” for Danly to take over as chair under a second-term Trump administration.

But Danly’s early promotion — coupled with Biden’s win — amounts to an abrupt cancellation of Chatterjee’s agenda, which included bolstering high-voltage transmission systems, among other efforts. Danly’s tenure as chairman is set to be shorter than any previous FERC head except Bill Clinton appointee William Massey.

Jeff Dennis, general counsel and managing director at Advanced Energy Economy, said that even if Danly wanted to be proactive, there would be “very little” he could do, because the votes are the same. The five-member panel is currently two commissioners short, with Richard Glick being the lone Democrat and Biden’s likely pick for chairman.

“What [Danly will] really be able to do is ensure that things he disagrees with do not come up for a vote,” Dennis said. “For example, I wouldn’t expect to see the carbon pricing policy statement finalized.”

Danly criticized a technical conference FERC hosted at the end of September on carbon pricing, suggesting the commission was acting outside its jurisdiction (Energywire, Oct. 1).

Others cited Danly’s membership in the Federalist Society, an influential group of conservatives and libertarians that believes a regulator’s job is to stick to the text of a law (Energywire, June 10, 2019).

“I don’t think FERC does much under Chairman Danly in lame duck,” Hartman said. “The scenario to watch is President Biden with a GOP Senate. Then you have Chairman Glick with a Republican majority at FERC, potentially for an extended period of time.”

Hartman said that while it’s likely Republican Mark Christie and Democrat Allison Clements — who are currently awaiting Senate confirmation, with a potential vote slated for December — will be instated, that would still leave a Republican majority.

“[In this] case, the policy alignment of Democrats with Chatterjee takes center stage,” he said. “This arrangement would also allow Chatterjee to roll off next year without FERC losing a quorum, and a GOP Senate could decide whether to permit Democrats to hold a FERC majority.”

He added: “To be clear, I don’t think it’s good for FERC to be shorthanded. FERC works best with a full slate of qualified commissioners.”