FERC Chairman Neil Chatterjee, who recently oversaw the agency’s efforts to encourage regional carbon pricing mechanisms, has been demoted and President Trump has named James Danly, the Commission’s other sitting Republican, as the new chief.

Danly

Chatterjee, a former energy policy adviser to Senate Majority Leader Mitch McConnell (R-KY), joined the Federal Energy Regulatory Commission in August 2017. Chatterjee’s term at FERC is set to expire at the end of June.

Danly offered nothing but praise for his colleague and the work accomplished during Chatterjee’s time at the helm. Chatterjee served as acting chairman in late 2017 before returning to the role in October 2018.

“I have learned a tremendous amount from his expertise and insight, and I am proud of the work we’ve been able to accomplish under his thoughtful watch,” Danly said. “Neil has truly left his mark on FERC and the energy sector by brokering a significant agreement allowing us to move forward with liquefied natural gas terminals, which helped secure our American energy independence.

“He also made a lasting impact through his commitment to protecting competitive markets, modernizing our policies” under the Public Utility Regulatory Policies Act, “expediting the approvals of much-needed critical energy infrastructure and so much more.”

Reflecting on the agency’s achievements and the adversity it has faced during his tenure, including “the significant no-quorum backlog” awaiting him when he first joined the Commission, Chatterjee called it “the honor of a lifetime” to serve as chairman.

Chatterjee, who at times during his tenure appeared sympathetic to the Trump administration’s efforts to support the coal industry, may have fallen out of favor with the president by recently signaling support for carbon pricing in regional electricity markets under FERC’s jurisdiction.

After holding a technical conference on the subject, FERC last month issued a proposed policy statement encouraging grid operators to “explore and consider the benefits” of potential carbon pricing rules.

Danly, conversely, called the policy statement “unnecessary and unwise” in a partial dissent issued alongside last month’s decision.

While FERC did not provide an official reason for the change at the top, analysts at ClearView Energy Partners LLC noted that the move follows the recent publication of a Washington Examiner article titled “Trump Appointee Becomes Leading Climate Problem Solver.”

Chatterjee promoted the article on his Twitter account.

The ClearView analysts also pointed to Danly’s recent dissent on a FERC order designed to help distributed energy resources participate in electricity markets.

“While we cannot say for certain, these two events appear to correlate with the move of the Chairman’s gavel,” the ClearView team wrote. “In our view, this suggests that the White House may not share Chatterjee’s enthusiasm for either policy.”

For his part, Chatterjee didn’t back away from his recent policy actions, describing FERC’s “groundbreaking action to consider carbon pricing” as among the major accomplishments during his time in charge.