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Chatterjee's vision for US FERC includes shoring up coal's place in fuel mix

Washington (Platts)--14 Aug 2017 456 pm EDT/2056 GMT


Coal and nuclear generation should be eyed as essential elements of the US fuel mix, the new head of the Federal Energy Regulatory Commission said Monday, adding that acting on natural gas infrastructure projects also will be a priority while he is at the helm of the commission on an acting basis.

The US Senate confirmed Neil Chatterjee August 3 to take a seat on the commission, and the White House tapped him August 10 to serve as chairman until Jones Day attorney Kevin McIntyre is confirmed.

In a commission podcast posted Monday, Chatterjee said his first priority would be "to get started on the accumulated backlog" of orders FERC was unable to address during the six months it lacked a quorum of at least three members to perform its full range of business.

Chatterjee and fellow Republican Robert Powelson were sworn in last week, officially restoring the agency's quorum and its ability to approve major natural gas pipeline projects, act on key power market policy issues and provide final decisions on disputed rate cases.

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Also a priority for Chatterjee is ensuring the resilience and reliability of the electric system as a national security matter, which he said will require recognition of baseload power's essential role in the fuel mix.


COAL, NUCLEAR MUST BE 'PROPERLY COMPENSATED'


"I believe that generation, including our existing coal and nuclear fleet, need to be properly compensated to recognize the value they provide to the system," he said, noting his Kentucky upbringing and that coal served more than 80% of his home state's power needs.

"As a nation, we need to ensure that coal, along with gas and renewables, continues to be part of our diverse fuel mix," he added.

His remarks are in line with the Trump administration's advocacy for the coal industry, an effort that has seen regulations viewed as overly burdensome to industry put on the chopping block and the initiation of a grid study to assess factors forcing baseload coal and nuclear plants into early retirement.

States have increasingly taken steps to protect certain assets in their energy portfolios from retirement for economic reasons, at times straddling the line of state and federal jurisdiction and triggering debate at the commission over how to navigate the development of state generation policies with the operation of wholesale power markets.

Power industry observers see the debate as one of the most challenging issues facing regulators. FERC has also been engaged in work to improve price formation in the capacity markets. Chatterjee will play a major role in shaping policy in this arena going forward.

Also being closely watched and awaiting commission action are a number of gas-pipeline projects, among them Nexus Gas Transmission's 1.5 Bcf/d project; Columbia Gas Transmission's 1.3 Bcf/d WB XPress project; Millennium Pipeline's 200 MMcf/d Eastern System Upgrade and the 1.1 Bcf/d PennEast Pipeline.


'VERY CONFIDENT' FERC CAN WORK THROUGH BACKLOG


Chatterjee said "evaluating the infrastructure projects before the commission really could help spur economic development," and, in that regard, he looked "forward to following the president's charge to create jobs and stimulate economic growth through infrastructure."

When asked how he would go about attacking the extensive six-month backlog of gas and power matters, Chatterjee praised commissioner Cheryl LaFleur and FERC staff for laying the groundwork, without which he said he "would be really daunted and worried about the task ahead of us."

LaFleur previously said in an interview that she and staff were batching orders into meaningful groups based on "time sensitivity, how long it's been waiting, if there are commercial dates that have been missed, ... [and] appellate sensitivity" as part of a "triage" system that would allow the restored quorum to most efficiently work through the backlog.

Chatterjee said he was "very confident" in the commission's ability to tackle the workload. "It's going to take some time, but because of all the tremendous work that has already been done to date, we'll work through them as soon as we can," he said.

Another priority for Chatterjee is "exploring what opportunities exist for" new technologies and innovation in the energy sector. "And, of course, electric reliability and cybersecurity will always be a priority for me and for the commission as a whole," he said.

Chatterjee is a former energy policy adviser to Senate Majority Leader Mitch McConnell, Republican-Kentucky.

--Jasmin Melvin, jasmin.melvin@spglobal.com

--Edited by Valarie Jackson, valarie.jackson@spglobal.com



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