Wednesday, December 19, 2018

LaFleur, Chatterjee Discuss NOPR Ruling, Resilience Proceeding

By Rich Heidorn Jr.

WASHINGTON — FERC Commissioner Neil Chatterjee acknowledged Tuesday he has suffered some growing pains in his transition from Capitol Hill partisan to FERC commissioner, saying he hadn’t fully appreciated the commission’s “fact-based, evidence-based approach.”

In a panel discussion, Chatterjee and Commissioner Cheryl LaFleur discussed the commission’s Jan. 9 ruling dismissing Energy Secretary Rick Perry’s Notice of Proposed Rulemaking (RM18-1) and previewed the docket the panel created to investigate RTOs’ resilience practices (AD18-7).

FERC NOPR Resilience Cheryl LaFleur Neil Chatterjee

The Bipartisan Policy Center’s panel discussion with FERC Commissioners Neil Chatterjee and Cheryl LaFleur attracted an audience that included the heads of groups representing the nuclear and coal industries, merchant generators and state regulators | © RTO Insider

The session, sponsored by the Bipartisan Policy Center, attracted an audience that included the heads of groups representing the nuclear and coal industries, merchant generators, and state regulators. (See DOE NOPR Rejected, ‘Resilience’ Debate Turns to RTOs, States.)

FERC NOPR Resilience Cheryl LaFleur Neil Chatterjee

Chatterjee | © RTO Insider

Chatterjee, a Kentuckian and former energy advisor to Senate Majority Leader Mitch McConnell (R-Ky.), had pushed for “interim” financial relief for struggling coal and nuclear generators pending further proceedings but ultimately joined LaFleur and their three colleagues in the unanimous ruling.

FERC NOPR Resilience Cheryl LaFleur Neil Chatterjee

LaFleur | © RTO Insider

“During my time in the legislative branch I had spent time with lawmakers of all political stripes who stressed the importance of fuel diversity and the need for an all-of-the-above energy strategy,” Chatterjee, a Republican, said. “And so initially I did express some sympathy for what the secretary had laid out. … That said I was also very clear that if the commission were to take any action, it would have to be legally justified, and that it would not distort markets.”

“As we went through the process I came to really appreciate the fact-based, evidence-based approach that the commission takes. I was aware of it prior to my confirmation, but once you really get in there and start doing the work, you realize we do things in a cautious, steady, legally defensible manner. As we … went through the record and did the analysis, I came to the conclusion that my colleagues did, which is that while I feel Secretary Perry asked the right question, he proposed the wrong remedy.”

Chatterjee said he was pleased that all five commissioners also agreed “that resilience is something that needs to be explored further. The commission has looked at these kinds of issues throughout the last number of years, but we’ve never had a really hyper-focused analysis on resilience.”

LaFleur, a Democrat, said, “I disagree with Neil a little bit on how much we’ve done on this issue in the past.

“Since I’ve been on the commission for seven and a half years, a large percentage of our work has been driven by relentless changes in the nation’s resource mix. … And I would say that’s been driving our market work, our reliability work, and our transmission work for much of the last decade.”

FERC NOPR Resilience Cheryl LaFleur Neil Chatterjee

Left to right: Grumet, LaFleur and Chatterjee | © RTO Insider

LaFleur said although the resiliency proceeding is important, “I think we shouldn’t let this swallow everything the commission is doing. We have to continue on all fronts.”

LaFleur said she opposed interim subsidies for coal and nuclear plants because the commission lacked robust factual basis for the action. She likened it to the high burden of proof required of those seeking a preliminary injunction, who must show they have a likelihood of ultimately prevailing.

LaFleur also parted with Chatterjee on definitions, saying she believes resilience is part of reliability.

FERC NOPR Resilience Cheryl LaFleur Neil Chatterjee

Grumet | © RTO Insider

“I think resilience is distinct from reliability,” Chatterjee said “ … Perhaps the threats of a loss of resilience aren’t as dire as some generators are making them out to be. But they’re certainly not as insignificant as some proponents of new generating sources are making it out to be.”

BPC President Jason Grumet, who moderated the talk, praised the commission and Chairman Kevin McIntyre for their response to the NOPR. “I think for anyone who mistrusts government action, the rigor, the integrity and the independence, and the unanimity that FERC was able to show is really, I think, one of the brightest moments in basic public service that I’ve seen in a while,” Grumet said.

On McIntyre’s handling of the NOPR, Chatterjee and LaFleur were in agreement. “He threaded the needle very well,” Chatterjee said.