Former Republican FERC chairman joins group promoting carbon tax

Washington Examiner
August 30, 2021
By Josh Siegel

Neil Chatterjee, during his tenure as chairman of the Federal Energy Regulatory Commission, was eager to be among the first Republicans in government to signal support for carbon pricing.

That position put him at odds with the Trump administration that appointed him, which demoted Chatterjee in part because of his vocal interest in addressing climate change.

Now, Chatterjee is planning to advocate for a carbon tax after leaving government, announcing Monday he has joined the Climate Leadership Council as a senior policy adviser.

The Climate Leadership Council, a group founded by former GOP Secretaries of State James Baker and the late George Shultz, advocates for a federal carbon tax that would return the revenue from the fee to households to offset higher energy costs.

Chatterjee, a Kentucky native who used to work for Senate Minority Leader Mitch McConnell, will look to “bring Republicans to the table in support of a lasting and effective climate solution,” he said in a statement.

Outside of a few exceptions, Republicans in Congress have shown no signs of backing carbon pricing despite business groups endorsing the policy as a “market-based approach” to incentivize emissions reductions across the economy by making polluting goods more expensive.

Democrats and the Biden administration, meanwhile, are pursuing a different path than carbon pricing as they proceed on advancing a sprawling reconciliation package that favors direct government spending and tax subsidies for clean energy.

Greg Bertelsen, the CEO of the Climate Leadership Council, said he hoped Chatterjee will help “broaden support” for the group’s carbon tax proposal.

Chatterjee will work for the Council’s advocacy arm, Americans for Carbon Dividends, to promote the policy on Capitol Hill.

Chatterjee also announced Monday he will join the Washington office of the global law firm Hogan Lovells as a senior adviser.

Chatterjee, who twice served as FERC chairman, departed the commission Monday two months after the end of his term, staying on extra to give time for the Biden administration to nominate a replacement.

As chairman, he advanced a bipartisan policy encouraging power grid operators to incorporate state carbon pricing policies into their markets. He also pushed forward reforms allowing energy storage and distributed energy resources, such as rooftop solar and electric vehicles and their supply equipment, to participate in wholesale electricity markets and be compensated for it.

At the beginning of his tenure, Chatterjee, sympathetic to Kentucky’s coal industry, was supportive of the Trump administration’s pro-fossil fuel agenda. He opposed a contentious proposal pushed by former Energy Secretary Rick Perry to subsidize struggling coal and nuclear plants, but only after prodding by fellow Republicans who said the move would have upended competitive power markets.

But Chatterjee later expressed regret for his earlier approach and soon took actions to support clean energy and address climate change.

FERC is an independent body that regulates interstate transmission of electricity and reviews energy infrastructure projects.