Chatterjee Discusses Danly Nomination, Landowner Priority, NGA Reform at NARUC

This article appears as published in Foster Report No. 3286

In appearances at the winter policy meetings of state regulators, FERC Chairman Neil Chatterjee emphasized collaboration among state and federal policymakers, and the value of meetings to address a broad ranges of issues such as cybersecurity, infrastructure development, energy costs for consumers, and quorum concerns, with FERC at the bare minimum of three commissioners.

Hope for another member to be added received a boost February 12, when the White House sent the nomination of James Danly, currently general counsel at FERC, to the Senate. The White House announcement said Danly, who was nominated last year and approved by the Senate Energy and Natural Resources Committee, would fill the term of former Chairman Kevin McIntyre, which expires June 30, 2023.

There had been speculation that with Commissioner Bernard McNamee’s announcement that he would not serve beyond his current term, which ends June 30 of this year, the White House might nominate Danly for a term to fill McNamee’s spot, which would extend into 2025. McNamee has emphasized that he can serve beyond June and indicated he will not leave the Commission if doing so would leave FERC without a quorum. He is allowed to stay at FERC until the end of the current term of Congress.

Danly was approved by the Senate committee last year, but did not receive a floor vote before Congress adjourned, necessitating another nomination from the White House in 2020. His nomination had been held up by opposition from Sen. Kevin Cramer (R-N.D.), who has said he would vote against Danly because Danly has not committed to protecting coal and/or nuclear power plants from closing.

If the Senate approves the nomination of Danly, which is expected, Danly could be seated at a commissioner spot before McNamee leaves, which would provide three Republicans to the lone Democrat, Commissioner Richard Glick. The White House would then still have two nominations to put forth when McNamee exits, and sources have no insight on if or when such nominations might come.

Addressing the National Association of Regulatory Utility Commissioners (NARUC) February 11, Chatterjee acknowledged the stress of operating with three commissioners during a question and answer session with Commissioner Diane Burman of the New York Public Service Commission. Burman, who dealt with quorum concerns in New York, asked about commissioner turnover at FERC and the stress of operating without a full complement of five commissioners. “Yes, it has been stressful. Yes, it has been difficult,” Chatterjee said. But he takes a positive view of looking forward to “colleagues known and unknown” joining him at the Commission.

“It’s tough to deal with turnover” among commissioners, Chatterjee said, praising commissioners he has worked with. He reiterated that he believes FERC functions best when it has a full complement of five commissioners and can speak with one voice in a bipartisan manner.

While awaiting the additional nominations from the White House, “the three of us will continue to do the work together,” Chatterjee said of himself, McNamee and Glick, as the “real heroes” of the operation – FERC staff — keep addressing important issues.

Multiple sources during the NARUC meetings made similar points, asserting that the White House nomination process may seem slow and difficult to understand when there are multiple vacancies to fill, but the Commission staff has not seen the same turnover and continues to deal with nuts and bolts issues in FERC’s areas of expertise.

The staffing change to address landowner concerns in natural gas pipeline approvals was highlighted by Chatterjee during his remarks at NARUC. He announced the policy change in September of 2019 to deal with landowner rehearing requests promptly and minimize the use of tolling orders for landowners.

Chatterjee also changed the staffing in the Office of General Counsel to prioritize landowner rehearing requests and enhanced the landowner page on FERC’s website so information is easier to find.

“I’m confident this is the right direction,” he said.

Speaking with reporters after the remarks, Chatterjee said he is often asked about bifurcating the rehearing process by trying to address landowner issues within 30 days while rehearing requests from other stakeholders are addressed later. If the Commission were to try and tackle all rehearing requests without using tolling orders, it would require a significant change in resources. With the complexity of the work on landowner rehearing requests, “staff is already stressed to the brink” to get rehearing orders out within 30 days, he said.

FERC has not resorted to using tolling orders for nefarious purposes, he said, noting that the U.S. Court of Appeals for the District of Columbia Circuit will hold oral argument in the case where FERC’s use of tolling orders is the topic of concern at the court. That case (Allegheny Defense Project v. FERC, No. 17-1098) involves the D.C. Circuit upholding FERC’s approval of Transcontinental Gas Pipe Line Corp.’s Atlantic Sunrise project, with a lengthy concurring statement from Judge Patricia Millett. Millett questioned FERC’s process of not issuing final rehearing orders for months or years while eminent domain proceedings and pipeline construction are allowed.

Chatterjee wants to see that landowners have a judicially appealable order as quickly as possible. “It’s hard to predict which way the court may go,” he told reporters, expressing confidence in the Commission’s Solicitor’s Office and Office of General Counsel presenting FERC’s views.

Burman asked Chatterjee about the NARUC resolution that supports FERC having refund authority under the Natural Gas Act (NGA), which has been a point of contention among pipelines and shippers for years. The NARUC resolution expresses support for Congress reforming the NGA to provide FERC with authority to order refunds on pipeline rates found to be unjust and unreasonable, bringing the Commission refund authority under the NGA similar to that of the Federal Power Act (FPA).

The resolution had passed the Gas Committee at NARUC when Burman and Chatterjee spoke, then was approved by the NARUC board February 12.

“Ultimately, it’s up to Congress” to decide if the law should be amended to provide FERC with the ability to order refunds on pipeline rates, Chatterjee said. “I believe doing so would provide additional protection to consumers,” he said, expressing appreciation for NARUC’s work on the issue. He had not read the resolution and looked forward to viewing it to see the perspective of state regulators.

Other groups that are pipeline shippers applauded NARUC for adopting the resolution. The Natural Gas Supply Association said the measure is an important expression of support from NARUC to change the law to benefit all natural gas consumers.

The American Public Gas Association (APGA), which has led the charge on NGA reform for many years, thanked NARUC and said it is past due for FERC’s refund authority under the NGA to match that of the FPA.

“There is no good reason to treat gas and electric consumers differently, as natural gas consumers have been overcharged hundreds of millions of dollars by regulated interstate pipelines annually. APGA looks forward to working with NARUC and a host of other natural gas consumer groups towards the passage of legislation to fix this inequity and provide natural gas consumers with the protection they deserve,” said Dave Schryver, president and CEO of APGA.

By Tom Tiernan ttiernan@fosterreport.com

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