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FERC chairman predicts action on 'significant matters' in the fall

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Federal Energy Regulatory Commission Chairman Neil Chatterjee speaks during a May 2017 Senate confirmation hearing.
Source: U.S. Senate

Federal Energy Regulatory Commission Chairman Neil Chatterjee on Sept. 4 said his agency could act on a range of big-ticket proceedings this fall despite lacking a full complement of five sitting members.

With the August departure of Obama appointee Cheryl LaFleur from the commission, Chatterjee and Commissioner Bernard McNamee both Trump appointees now occupy a new 2-1 GOP majority alongside Democrat Richard Glick. McNamee so far has recused himself from a fuel security plan that some say resembles a failed proposal he helped author as general counsel at the U.S. Department of Energy, but Chatterjee said he does not anticipate any commissioners declining to participate with respect to the most pressing matters before the commission.

"Individual recusal issues are up to individual commissioners," Chatterjee told reporters following an event in Washington, D.C., hosted by the independent research organization Resources for the Future. "That said, I'm confident looking at the docket before us that we will not have any recusal issues on any of the significant matters or other matters we have going forward."

Reiterating comments he made following FERC's last open monthly meeting in July, Chatterjee on Sept. 4 maintained that FERC's new makeup will not lead to a shift in how the agency approaches pending proceedings. "There are items that we'll be able to find agreement on, and there will be items that I'm certain will fall 2-1," Chatterjee said. "But none of this is being driven by a calculation that we were going to gain a majority at a certain point. We vote items when they're ready when we have the votes to secure them."

Regarding FERC's upcoming agenda, Chatterjee said he expects to have an update at the commission's Sept. 19 open meeting on its closely watched resilience docket (FERC docket AD18-7). That proceeding was initiated after a five-member FERC unanimously terminated a rulemaking in January 2018 proposed by the DOE as a way to provide more financial support to struggling nuclear and coal-fired generating units to prevent their premature retirement.

Meanwhile, Chatterjee said the three-member FERC also could move on a broad inquiry launched in March (FERC dockets PL19-4, PL19-3) aimed at examining the way the agency sets the base rate of return on equity for electric utilities. And he said the commission still could revise its regulations related to the Public Utility Regulatory Policies Act, or PURPA, a law passed in 1978 that requires U.S. electric utilities to purchase power from small renewable energy facilities.

"I think it's time to modernize PURPA and bring PURPA into the 21st century," Chatterjee told the audience Sept. 4. "I think major changes to PURPA need to come from Congress, but there are things that we can do within our regulations to make improvements to PURPA and better align it with the realities of today's market." Some sources predict that FERC could issue a notice of proposed rulemaking in the coming months that could affect the way states set rates for PURPA facilities, among other things.

Speaking to reporters, Chatterjee declined to discuss whether FERC has made progress with respect to needed changes to the PJM Interconnection's capacity market since issuing its July 25 order informing the grid operator that it cannot hold the auction that was supposed to have taken place on Aug. 14. That matter (FERC docket EL18-178), which centers on how PJM accounts for state-supported clean energy resources in its capacity market, prompted an Aug. 29 letter to Chatterjee from 10 Democratic senators expressing concern about a recent study that estimated the grid operator's pending proposal could increase consumer costs by $5.7 billion annually.

"When states make public policy decisions regarding their own resource mix that have implications in other states that may not share those same public policy goals, it creates challenges within our markets," Chatterjee said during the Sept. 4 event. "But these are not insurmountable challenges."

Chatterjee, a former aide to Senate Majority Leader Mitch McConnell of Kentucky, also said he had no insight into whether President Donald Trump plans to nominate only one commissioner instead of pairing a Republican with a Democrat for the upper chamber's consideration to fill the two open agency seats. The pairing tradition was established under previous administrations of both parties in part as a way to help preserve the quasi-judicial agency's reputation for independence from political interference.