Stefani Reynolds

President Trump has replaced the head of the Federal Energy Regulatory Commission (FERC), who is now suggesting that his “independence” and support for carbon pricing may be behind the decision. 

James Danly’s surprise appointment to the top spot, replacing Neil Chatterjee, was announced Thursday night.

FERC regulates interstate transmission of natural gas, oil and electricity as well as natural gas and hydropower projects.

Both Danly and Chatterjee are Republicans. Chatterjee has recently signaled support for carbon pricing in electricity markets, which Danly opposes. 

Putting a price on carbon emissions raises the cost of energy from fossil fuels, which release carbon dioxide when burned.

In an interview with the Washington Examiner, Chatterjee suggested that this may have been the reason for his ouster, though he will remain on the commission until his term is up next year. 

“I have obviously been out there promoting a conservative market-based approach to carbon mitigation and sending signals the commission is open to considering a carbon price, and perhaps that led to this,” Chatterjee told the news outlet. “Quite frankly, if in fact this was retribution for my independence, I am quite proud of that.”

E&E News reported on Friday that Chatterjee did not want to abide by a White House memo seeking to limit diversity training, and this played a role in his demotion. 

Chatterjee, a former aide to Majority Leader Mitch McConnell (R-Ky.), was appointed to the commission by Trump in 2017 and was named chairman in 2018. 

In a Thursday night tweet, Chatterjee called it “the honor of a lifetime” to serve as the commission’s chairman and congratulated Danly. 

Trump appointed Danly to the commission and he was confirmed in March. Prior to his confirmation, Danly was serving as FERC’s general counsel, and he has also worked at a law firm representing energy companies.

House Energy and Commerce Committee Chairman Frank Pallone Jr. (D-N.J.) criticized Chatterjee’s demotion in a statement, calling it an “outrageous attack on an independent agency at a time of transition.” 

“His sudden removal as Chairman for merely starting a dialogue on markets and climate change, while working across the aisle to preserve state prerogatives on distributed generation, is as petty as it is wrong,” Pallone said. 

“Most importantly, President Trump took the extraordinary step of installing in the chairmanship a commissioner with little experience in the energy industry and views far outside the mainstream of both parties on energy policy,” he added. “Clearly, FERC needs to stop work immediately on all major controversial activities until a new president is sworn in.”

Danly is the newest appointee of the three people who currently sit on the bipartisan commission. FERC traditionally has five members, and Danly’s nomination stirred some controversy since he was appointed without a Democrat alongside him.

However, Trump has since nominated two people, one Democrat and one Republican, to the remaining seats and both are awaiting confirmation. 

Updated 5:04 p.m.

Tags Carbon pricing Donald Trump FERC Mitch McConnell Neil Chatterjee Regulation

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