In today’s episode, the hosts are joined by one of the most thoughtful — and occasionally controversial — voices in energy policy today.
Neil Chatterjee served on the Federal Energy Regulatory Commission from 2017 to 2021. During that time, he also served two stints as the chairman of the commission. At FERC, Chatterjee gained a reputation for his candor, as well as his divisive takes. For instance, in 2020, he embraced carbon pricing, a move that drew the ire of his boss and may have cost him the chairmanship.
More recently, Chatterjee frustrated his former colleagues shortly after the 2024 election when he publicly offered to give the President-elect advice on how to shrink FERC. As part of a recent media blitz, Chatterjee has celebrated the prospect of American energy dominance in the second Trump administration.
In today’s episode, Chatterjee delves into a range of topics: he makes the case for throwing out the playbook on energy politics to meet the demands of AI, digs into the potential of distributed energy resources and explains why he wants to “put the nerds back in charge” of our energy system.
Also in today’s episode: Emily explains what may have gone wrong for permitting reform in the lame duck session of Congress, and highlights the scenarios through which reform could get included in a 2025 reconciliation package instead.
Credits: Hosted by Julia Pyper, Emily Domenech, and Brandon Hurlbut. Produced by Max Savage Levenson. Edited by Anne Bailey. Original music and engineering by Sean Marquand. Stephen Lacey is executive editor.
Political Climate is co-produced by Boundary Stone Partners, a leading bipartisan climate change strategic advisory and government affairs firm. Their mission-driven approach combines innovative solutions with expertise in technology, finance, policy, federal funding, and advocacy. Learn more and get in touch today at BoundaryStone.com.
Concerned about how the 2024 election might impact the programs, policies, and incentives that matter most to you? Let Boundary Stone Partners’ Climate24 service help you navigate the political landscape with their policy navigator tool, resources, and bespoke services. Learn more at BoundaryStone.com/Climate24.
Transcript
Julia Pyper: What are you guys most excited to do over the holidays? You got any traditions?
Emily Domenech: I mean, I said this on the last episode. My family tradition is arguing about politics, so it’s basically what I do every day.
Julia Pyper: Consistency, training for the next go round.
Emily Domenech: That’s why I am so good (laughs).
Julia Pyper: Exactly. She flexes. Brandon, you’re on the road. You’re in Puerto Rico, New York, Texas.
Brandon Hurlbut: Yeah. Seeing family in New York and Texas and then get home right around Christmas time and then just want to be left alone off grid. Don’t email or text me or call me.
Julia Pyper: You’re most excited to stand in a TSA line.
Brandon Hurlbut: It’s going to be a busy 2025 with everything happening in DC, so I’m going to try to enjoy those few days of being left alone hopefully.
Julia Pyper: Welcome to Political Climate. I’m Julia Pyper. Although President-elect Trump’s picks for energy roles have made waves in the clean energy community, an appointee from Trump’s first term has stirred up a little controversy in recent weeks. Neil Chatterjee served as a Federal Energy Regulatory Commission commissioner from 2017 to 2021. During that time, he also served two stints as the chairman of the commission. At FERC, he gained a reputation for his candor and some divisive takes. For instance, in 2020, he embraced carbon pricing, a move that drew ire from his boss and may have cost him the chairmanship. More recently, Chatterjee frustrated his former colleagues shortly after the 2024 election when he publicly offered to give the president-elect advice on how to shrink FERC. As part of a recent media blitz, Chatterjee has celebrated the prospect of American energy dominance in the second Trump administration.
In today’s episode, Chatterjee joins us to discuss why he thinks we need to throw out the playbook on energy politics to meet the demands of AI. We also explore the potential of distributed energy resources and the significance of energy dominance. That’s all coming up on Political Climate. As always, I’m joined by my co-hosts Brandon Hurlbut and Emily Domenech. Brandon served as chief of staff and President Obama’s energy department and went on to found Boundary Stone Partners and Overture VC. Hola, Brandon. I know you’re in Puerto Rico.
Brandon Hurlbut: Hola.
Julia Pyper: Where you got married.
Brandon Hurlbut: I did get married, in Rincón, where I am today. I’m on a work-family trip, which includes Puerto Rico and then family time in New York and Texas.
Julia Pyper: That pack job must’ve been interesting. Long underwear and a bathing suit.
Brandon Hurlbut: Yeah, it’s very interesting.
Julia Pyper: Emily, who also joins us, served as senior energy advisor to speakers of the House, Kevin McCarthy and Mike Johnson, is now a senior vice president at Boundary Stone. Hey Emily. Are you getting into the holiday spirit over there?
Emily Domenech: Julia, I’m just out here trying to close out this lame duck session. I need to figure out how to get on Brandon’s travel schedule instead of being in Washington while we’re all voting into the night.
Julia Pyper: You work with him, you got to pass a little memo there what you need. Well, great. Glad to have you both on the line. We got a lot to cover on this episode. As we discussed, we’re going to have Neal Chatterjee on the show, but before he joins us, let’s take one last look at the lame duck session underway in Congress. So Emily, what have you been hearing? Is there still some reform momentum going on behind the scenes, or are we just going to run out the clock?
Emily Domenech: So I’ve been in constant communication with my friends at the House Natural Resources Committee, and others who are engaged in the permitting debate. I would say while there is lots of effort and work continues and I think will continue until the last possible second, I do think it is an uphill battle to get to a deal, frankly, because folks didn’t start really seriously engaging with Chairman Westerman and other folks in the House until after the election, which was a little bit too late.
Brandon Hurlbut: It hangs on Carper, Emily?
Emily Domenech: Carper is certainly, I would say the biggest hurdle at this point, and I think we’re running into what’s been an interesting dynamic, which is, you have an outgoing member with an outgoing staff that perhaps is maybe needs to be looking for jobs in the next year, and they’re worried about making their traditional stakeholders frustrated with them by cutting a deal. I think that’s a really common thing and it’s part of why we shouldn’t leave these things until the end of a Congress.
Julia Pyper: I had all this inbound news last week, like permitting’s on, everyone get riled up, and then it was over the weekend I was like, permitting’s off, probably ran. It died over the weekend and so it was like red light, green light.
Emily Domenech: Yeah. I mean, again, I think we made a little bit of progress in that. My understanding is that Senator Carper’s team was given a directive that they needed to negotiate with the House, which that was a big step forward. We hadn’t done that until a week and a half ago, but I think our listeners are, you can look at the Congressional calendar and know that that’s a little bit too late.
Julia Pyper: And when we say Carper, we’re referring to of course, Senator Carper, Democrat from Delaware. The one other thing I wanted to touch on before we turn to our interview is of course the state of reconciliation. Folks will have probably seen the news that incoming Senate Majority Leader, Senator Thune, who wants to break up the reconciliation bills, possibly doing an earlier one on energy and border security and then tackling tax later in the year. Quick gut reactions, of course, a lot is still up in the air. We should note that Jason Smith, chairman of the House Ways and Means Committee still wants to do a single larger package that tackles energy security and tax altogether in one big fell swoop. Emily, what are you hearing on the pathways that the Republicans could take here on reconciliation?
Emily Domenech: It sounds like momentum is leaning towards this two-package approach. Largely. I heard a rumor this morning that President Trump is likely to endorse it, although that hasn’t happened yet. I think the idea being there’s a lot of frankly easier wins for Republicans in getting some of our major priorities across the finish line, and we all know that it’ll take us a little bit longer to hash out this tax package. So rather than letting the whole thing hang over our head for the next six months, take an opportunity to take a few wins and move the ball forward on things that you care about.
I think the counterpoint here is if you’re, and this is something that Chairman Jason Smith has raised in his, I wouldn’t say full scale pushback, but concerns about this plan is that maybe then you leave some of the things that are carrots in a reconciliation package, you take them away from that tax discussion. So you got to take some hard votes to move a tax bill, but you already voted on all the stuff that your conservatives really care about, like funding the border wall and opening up energy leasing. So I think that could perhaps make the politics in the house a little bit more difficult.
I also think this is something we’re going to see over and over again in this Congress where the Senate is pretty used to being the one who says, “Hey, this is the high watermark of what we can do and this is what we can pass and the House is going to have to figure out how to get there.” Now, we’re in a situation where the Senate majority is larger than the House majority and the House is going to really have to set the table in terms of what’s possible when it comes to passing these major bills because frankly, it’s going to be the most difficult place.
Brandon Hurlbut: So Emily, would the energy provisions like the IRA move in the first reconciliation or the later reconciliation?
Emily Domenech: So this is a great example of how we think of energy differently. When Republicans talk about energy, we usually mean leasing, permitting production. We very rarely mean the tax side of the equation. I expect that most of the tax discussion will be in one tax package. It would be surprising to me if they split that up and put some IRA stuff in the first package and only tax in the second.
Brandon Hurlbut: And that’s later in the year, that would be the second reconciliation?
Emily Domenech: Exactly. Under this plan floated by Senator Thune, that would be I think the expected outcome. That said, I think we’re in untested waters here, so we’ve got to see a little bit of what you can get the votes for and the first test for this proposal is going to be the budget resolution process which outlines the instructions for those various reconciliation bills.
Julia Pyper: So what are the deadlines people really need to have in mind here, Emily, when we’re looking at when congress is going to come out with the budget resolution framework?
Emily Domenech: So there’s not a deadline. They can do budget resolutions at any time throughout the Congress, but what I would say is I would expect a budget resolution early, particularly if they’re looking to do instructions for an early reconciliation package that’s separate from the tax discussion. But that budget resolution process will give us some insight into what is going to be included in that reconciliation bill.
Julia Pyper: Do they often go back and change that, or once that’s public they’ve pretty much decided how they want to splice and dice things up?
Emily Domenech: Typically, you just want to do it once. Budget resolutions are pretty hard to move because they’re hard votes to take for a lot of people for a lot of reasons. In fact, actually when we look forward to this congress, there are actually three budget resolutions that Republicans could use during this congress because Democrats opted not to pass a budget resolution this year.
Brandon Hurlbut: So we could have done another reconciliation and we just decided not to?
Emily Domenech: I mean, if you wanted to do one with Mike Johnson, you could have.
Brandon Hurlbut: Good point. So Emily, if it is split into two reconciliations and the first one is energy leasing and whatnot, and then the IRA stuff goes into the second reconciliation later in the year, do you think that’s better for protecting the IRA or worse?
Emily Domenech: I mean, I think you could look at it as you have more time to engage and build relationships with members of Congress, and I think for proponents, you want to make arguments about regional benefits. Having more time helps them. I do think though that separating out the tax discussion means that you’re going to need to have some chips that bring your conservatives to the table, and that likely includes repealing provisions of the IRA. So I’m a little mixed on how it plays out for the IRA advocates out there.
Julia Pyper: Well, let’s turn now to our interview with former FERC commissioner Neil Chatterjee. After serving as an energy policy advisor for Senator Mitch McConnell, Chatterjee was appointed to FERC by then President Trump in 2017. In that role, he advocated for a wide range of positions, from lobbying for coal and nuclear subsidies to pushing for Order 2222, the policy that helps connect the dots between wholesale power and distributed energy resources. Chatterjee has been busy since stepping down from the commission. This year, he joined the boards of the virtual power plant company, Voltus and the AI asset management startup AiDash. He also serves as a senior policy advisor for the Climate Leadership Council. Neil Chatterjee, welcome to the show.
Neil Chatterjee: Thanks for having me back.
Julia Pyper: Thrilled to have you. Brandon, over to you.
Brandon Hurlbut: So Mr. Chairman, you said at the Deploy conference recently that we should throw out all energy policy from the last 15 years, what do you mean by that?
Neil Chatterjee: Not policy. I meant the politics.
Brandon Hurlbut: All right. Tell me what you mean by that and what we should do.
Neil Chatterjee: Yeah. Look, Emily, myself, you others, we’ve been working in this space for really the better part of the past, for me, 20 years, and I do think that early on at the start of my career, energy policy wasn’t really political, it was more regional. I remember when I first became an aide in the legislative branch, the chair and the ranking member of the Senate Energy and Natural Resources Committee were both from New Mexico, Domenici and Bingaman. And if you recall in the early years of the Bush presidency, the Senate majority flipped and flopped a little bit. Yet the agenda of the Senate Energy Committee never changed because they were doing what was in the best interest of New Mexico, not was in the best interest of Democrats or Republicans. I think shortly thereafter and probably during the Obama presidency, we started to see a shift towards this notion that if you’re for fossil fuels, you’re the political right and if you’re for clean energy and climate action, you’re the political left.
And that’s been the ethos the last decade, decade and a half, and I think that really was hardened by the IRA not because of the underlying substance of the IRA, but because of the manner in which it was enacted via budget reconciliation, which is an inherently partisan legislative vehicle designed to circumvent the minority party in the Senate. I think that’s all out the window now. I think that the coming surge in demand for power that will be driven by AI and data centers to support AI and cloud computing and Netflix and quantum computing and crypto and Bitcoin mining and onshoring of domestic manufacturing and semiconductor manufacturing, these are all hugely energy-intense endeavors. Building electrification, vehicle electrification, they’re going to require so much power that I actually do think it’s going to break us out of our partisan corners and get us away from this now antiquated notion that Republicans are for fossil fuels and Democrats are for clean energy.
Brandon Hurlbut: I have a quick follow up question. Do you think we can accomplish that, meeting that demand, doing it in an affordable and reliable way with 50 public utility commissions, 8 electricity markets and 3,200 utilities that some of them are monopolies? Do you think that structurally we can meet that, or do we have to make structural changes to accomplish those goals?
Neil Chatterjee: Yeah. Look, I think we have to be nimble. There’s no question about it. I do think it’s going to take leadership at the highest levels. I think particularly when it comes to AI, look, we’ve got to first have our national leaders make the case of why it’s important to win the AI race for national security purposes. I think that’s a key message. I think to the extent that voters who are consumers of electricity, if they think AI is about helping high school kids cheat on papers or making goofy cat videos, they’re not likely to tolerate increases in their utility bills. But if they understand clearly that there is a national security imperative to winning the AI race, then I think they will be tolerant of some of the policy changes that we will need to make to win the AI race. But in order to do that while keeping prices down, that’s going to mean embracing every available electron.
That likely means in the short term a greater reliance on natural gas, which means we’re going to probably have to build some new natural gas power plants, keep some plants that were perhaps slated to retire online longer, and build out more natural gas pipelines to supply those plants. But I also think it’s going to mean building transmission lines to get more clean energy on the grid to figure out ways to better navigate backups in the interconnection queues to get more available power deployed. I think it’s going to mean investing in technologies like geothermal relooking and reinvesting in hydro, doing what we can to support nuclear power because we’re truly going to need every available electron. And then I think utilizing AI and technological advancement and innovation to make our consumption more efficient, I do think all of these things are doable, but it’s going to take work.
Emily Domenech: Can I just follow up quickly? You mentioned something about having to emphasize the importance of AI, and say people won’t understand why their electricity bills have to go up if they don’t understand how important AI is. Do you believe that we’re going to have electricity prices go up regardless of what type of energy we use to power the AI revolution?
Neil Chatterjee: I hope not. Look, President-elect Trump made two energy-related promises to the American people. One was to win the AI race against China, and he understood that it’s going to take power to win that race. But two, we also promised to bring down the cost of electricity to help Americans who are suffering from inflationary pressure. Those seem to be antithetical goals, but I think some of what we need to explore is, look, I’m an energy guy, I’m coming from the energy side. I don’t know enough about AI, and I’m not certain folks who work in the AI space know enough about power generation and distribution. I have been told by people in the AI space that today a simple ChatGPT search takes about 10 times as much power as a simple Google search, but that’s with today’s technology.
But that advanced AI, that simple search will take a million times as much power as a Google search. One, I don’t know if that’s accurate. And two, I don’t have a sense for how much power that actually is, and I don’t think they have a sense of where they’re going to go to procure that power. So I really think that we’ve got to break down some of the barriers, because it’s not even that folks in energy don’t necessarily understand AI’s structures and mechanics and technology. I don’t even think we know each other. Do leaders in the AI space know leaders in the electric utility space? I’m not sure. And that’s something we have to work towards.
Julia Pyper: I mean, you see those AI companies suddenly becoming energy companies in their own buying up nuclear power plants and the Talen Energy Amazon deal. We’d be curious to get your thoughts of if you know anything about the thinking that went into rejecting that proposal. And for folks who didn’t catch it, the Federal Energy Regulatory Commission this fall rejected an interconnection service agreement that would’ve facilitated an expanded power sales to a co-located Amazon data center from a nuclear power plant in Pennsylvania, majority owned by Talen Energy. So Chairman, what do you think about why a deal like that got denied?
Neil Chatterjee: I think that that filing perfectly encapsulates the complex choices that have to be made in how to navigate this process. So you had a divided FERC that basically took two sides. The Chairman was in favor of approving the co-location deal on essentially national security grounds. On this idea that in order to win the AI race we needed power and co-location deals like this were essential to winning that race because we needed to go behind the meter because if we went in front of the meter because of the delays in the interconnection queue, the time to market would be so elongated that we would be significantly behind in the AI race against China.
On the other side, you had the Republican commissioners who approached the issue from the standpoint of cost and resource adequacy. And Commissioner Mark Christie really articulated this in a separate statement of his own. He said that, “In the region where this was all taking place PJM, that PJM’s latest capacity auction results, the prices were already through the roof. And that if you were now taking additional generation behind the meter at a time when costs were already going up, you’d be spreading out increased costs over a fewer number of ratepayers, further really raising those folks’ electricity bills.” And his concern was that this deal had been a precedent that had led to a flood of other co-location deals that you may potentially have a resource adequacy challenge where we’re already constrained capacity in PJM, we wouldn’t be able to meet the demands and you could have serious questions around reliability and resource adequacy.
And this is one of those situations where those are compelling arguments on both sides and neither one is really right or wrong. I, for one, I’m in favor of these co-location deals. I would like to see them move forward. I think they’re going to be important for us winning the AI race, but clearly we’ve got to make some changes at FERC and within the regions to thread some of the needle so that we can contain those consumer costs and address those challenges around resource adequacy. But I do believe we need to win the AI race, and I think these kinds of co-location deals could be important to doing that and achieving that.
Brandon Hurlbut: Mr. Chairman, you said that the AI folks and the energy folks may not know each other. Who do you think will be running AI policy in the Trump administration that should be dealing with the Doug Burghams or the Chris Wrights at the DOE? We know David Sacks has been appointed as the crypto AI lead in the White House, but who else should these folks be working with from the private sector?
Neil Chatterjee: I mean, I think it’s going to start with David Sacks. And I think he is the perfect person for this role. He’s somebody with a background in technology, came up through PayPal, has invested in this space and knows it, and he knows people on the power side and he’s invested in power deals. So I think he is actually someone that will have the know-how on both sides of this, and I hope and expect that he will surround himself with folks who are also at this intersection of technology and power generation. Everyone wants to focus on Elon, and obviously Elon Musk is somebody who’s at that intersection of AI and tech and power generation with his work in the solar space and with batteries and with Tesla and such but there are others. A good friend of mine, Chamath Palihapitiya, on the All-In Podcast, not to pimp a competing podcast with David Sacks, Chamath invested in energy and technology. There’s a lot of smart people that can advise this administration and bridge that gap that I was speaking towards.
Julia Pyper: So we can’t totally escape discussions in the clean energy space around tax credits, reconciliation, the future of the Democrats’ Inflation Reduction Act Bill. Maybe to put this in context, you wrote recently for Fox News in an op-ed that, “President Trump has always been driven by an ambitious goal to make America energy dominant in the world in order to drive down prices for consumers and manufacturers at home and to increase exports of American energy abroad.” So how do you reconcile that philosophy you think the president and his incoming administration will likely have with what you think they would advise Congress to do and what you think Congress itself will want to do in the future of those tax credits which will play into this affordability discussion? Do you have a read on that?
Neil Chatterjee: Yeah. Look, I think some of the tax credits are certainly in peril. I think there seems to be some consensus around the EV credits in particular, maybe offshore wind that could be under some scrutiny. But I think when you get beyond that, a lot of the credits would’ve gotten bipartisan support. And I mentioned this earlier, but for the process by which they were enacted. I actually think if the folks negotiating what ultimately became the IRA tax incentive package had reached out to Emily and tried to negotiate a deal that maybe would’ve encompassed some form of legislative permitting reform, I think there was potentially a deal to be had there. And I know particularly, I’m a senate side guy, there were 19 senators I believe who voted for the bipartisan infrastructure framework, who voted for the chips and sciences bill. I think those folks would’ve totally been in play for some permitting reform tax incentive laden compromise. Would the credits have been as robust as they were? Maybe, as long in duration. Maybe not, but they would’ve had some bipartisan durability.
That said, because of what I stated earlier, because we’re going to be focused on meeting this coming surge in demand while also trying to bring down the cost of electricity. I think you can do a dollar per dollar analysis and say that if you rescinded some of these credits like some of these ITCs around solar for instance, you would actually be increasing the cost of electricity for consumers at a time we’re trying to bring those costs down. And when I look at the narrow margins in the house and the Senate, 53 Republican senators, depending on timing of when these votes move forward, you’re going to have very, very thin margins in the House.
It’s not going to take a majority of Republicans to stand up for some of these IRA incentives. It’s not even going to take a minority. It’s going to take just a handful. And I think there are going to be a handful of Republican senators and Republican house members who do the math and who see that their constituents are benefiting from some of these incentives and that rescinding these incentives may actually increase the cost of energy in their districts and in their states. And I actually am pretty optimistic that not all of the IRA incentives are going to make it, but a lot of the ones that are demonstrating genuine benefits, I think will survive.
Emily Domenech: So I want to go back to my favorite topic, which is permitting reform of course, and ask you two things. One, what’s your answer to folks who say part of why it’s hard to land these deals… We’re about to see another Congress close with it being unlikely that we’ll see a permitting reform deal. Part of why it’s hard to do this is that we’re conflating market reform for the electric grid with permitting reform through NEPA or the Clean Water Act. How do we bridge that divide and get ourselves to a place where we can get the right people in the right room to cut these deals? Second part of this question is I’d love to know what you think about President Trump’s proposal on fast-tracking large projects that reach a certain cost threshold and whether or not you think that’s feasible?
Neil Chatterjee: On the first part, I think really what it comes down to is that it’s just hard to build things in this country. And I was actually screaming this from the rooftops during my waning days at FERC. So one of the ironies is the historical opponents of building energy infrastructure, because it was largely fossil infrastructure, have now become the proponents of building transmission lines to get more clean energy onto the grid. And what I was trying to tell these folks is you could not tie up the certification and evaluation process for natural gas pipelines and bureaucratic red tape and legal obstacles and not expect those same challenges to emerge on the Federal Power Act side when it comes to building transmission lines. Because the reality is that NIMBYism, not-in-my-backyardism, is not political. It’s not ideological. Americans don’t want energy infrastructure coming through their yards, whether it’s a pipeline to deliver gas or transmission line to deliver clean energy.
And I think these are just real tricky challenges and they’re serious questions that need to be tackled. When it comes to siting, the easiest way to site infrastructure in this country would be to use existing right-of-ways, but then you’re going through the same communities that have been subject to the last round of infrastructure buildout. Now, as an academic exercise, I think I could make the case that, well, in this particular instance, this transmission line is going to enable the retirement of a more polluting source of generation, which over the course of time will make your air and your water cleaner. As an academic exercise and I think I could sell that, but as a real-life one, going to this community and saying, “We’re going to build through you again,” they’re going to say, “No, why us? Why not go through our neighbors?” It’s hard to site infrastructure in this country.
The trickier part I think is the who pays part, particularly when it comes to long-haul transmission lines. So just the hypothetical, you’ve got state A that has a lot of renewable capacity, you have state C that has huge demand for power, what happens to ratepayers in state B in the middle? Now, I could argue, and I think as an academic exercise, credibly say that ratepayers in state B are going to receive a genuine benefit in the form of alleviated transmission congestion. That’s a real benefit. But as a real-world exercise going to rate payers and state B and saying, “You are benefiting from neither the generation nor the consumption of the power power, we’re going to build a transmission line through your backyard that you don’t want and we’re going to make you pay for it.” That’s a really, really, really tough sell.
So in a narrowly divided Congress where you’ve got to come up with compromises to get something like permitting reform done, because Republicans are not going to blow up the legislative filibuster to pass permitting reform, it’s not going to happen. So you’re going to need some cooperation from Democrats to get it done. Bridging these gaps between Republicans who are worried about their constituents having infrastructure come through their yard that they don’t want and having to pay for it, that’s a tough sell.
On the other side, you’ve got some Democrats who have concerns about the climate impacts and the environmental impacts of building natural gas pipelines, and it’s just been really, really hard despite the great efforts of folks like yourself to try and land this to get that coalition together. I thought we had a shot. When I looked at the footprint of the Mountain Valley pipeline, I thought maybe there’s enough Republican senators in that footprint that this could be the moment we could cut that deal. But then I looked at the utilities who are in that footprint and I thought, “Man, those are the folks that have the biggest concerns about some of the transmission policies,” and it just goes to show you how hard it’s to do this kind of stuff.
Julia Pyper: And the second part, I just want to make sure we close out and Emily, join reiterating part two.
Emily Domenech: Yeah. I’d love to know what you think about President Trump’s proposal to fast track major projects over a certain dollar amount. Obviously, it’s not dissimilar from what we saw from President Obama through the FAST-41 process at a lower level. So do you think this could really move the needle on these major projects?
Neil Chatterjee: I didn’t see a lot of detail around it, but I mean, this is one of the areas where I think President Trump has been really effective. It’s a simple message. You invest in America, and we’re going to help fast track building out the infrastructure that will be necessary to drive economic growth and the job growth that you want and what the American people have been clamoring for. And I think just having that message is helpful. People have been asking me, “Hey, there’s been a lot of talk about what President Trump might mean for the natural gas industry on day one and what possible policies could he enact?” And I actually don’t think he needs to enact policy on day one in regards to natural gas. I think just having clarity that the US is supportive of natural gas, will make such a significant difference.
The Biden administration tried to have it both ways and in some ways sent mixed messages, because on the one hand, they were saying, “US LNG exports can help our European allies swear off Russian gas and we can help Ukraine by supplying US LNG to our allies. US LNG creates jobs at home, economic growth. Has this geopolitical value, and by the way, it displaces more fossil-intense sources of fuel overseas actually lowers global carbon emissions.” That seemed to be a winning message that the Biden administration started to embrace.
But then after pressure from another constituency, they introduced the DOE pause on non-FTA licenses. And what that did is it just sent a confusing message to our allies. One of the reasons our allies around the world like to do business in the US is because we have a stable legal, regulatory and legislative framework that they know they can trust. But now they started to get uncertain that, well, if we enter into these long-term off-take agreements for US LNG, and a future administration reverses course and the US no longer supports LNG exports, then we might be locked into a really bad deal and we need to reconsider. So it had a chilling effect on some of these negotiations.
So I think President Trump just coming in on day one and clearly signaling that the US is going to support gas and support LNG exports will have a positive impact. I similarly think him putting out assertive messages like this saying, “You invest in the US and we’re going to help you with the permits,” even though we didn’t put a lot of details on it, that just sends the right message. That leads to announcements like what we saw with SoftBank announcing that they’re going to invest $100 billion in the US.
Julia Pyper: Just today.
Brandon Hurlbut: Mr. Chairman, I’m a big fan of virtual power plants and distributed energy. I’m an investor in Voltus. You just joined the company. It’s so exciting. It seems to me like the big barrier for those technologies has been a cumbersome regulatory environment. How do you think republicans think about VPPs and distributed energy and how does FERC 2222, which you played a massive role in play into that?
Neil Chatterjee: Yeah, it’s really interesting. When I first issued FERC Order 2222 in the fall of 2020, I think initially people thought, “Well, what is this Republican chairman doing finalizing this ostensibly clean energy rule?” And what I was pleasantly surprised is one of the first people that came out in support of it with the op-ed in the Atlanta Journal constitution was one of the founding members of the Tea Party who thought that this was a potential market based rule that would enable farmers who were being hurt by the trade war with China to find ways to otherwise recoup some of the earnings that they were sacrificing as patriots to win the trade war with China. That by giving them the ability to deploy DERs and be compensated for the value of those distributed energy resources, and for your listeners here, you think rooftop solar, think electric vehicles, batteries, advanced appliances. If you have a single rooftop solar installation, your ability to impact the power market is nil.
But if through the power of technology and aggregation, suddenly thousands upon thousands and thousands of rooftop solar installations are aggregating that power, now you’re competing against the power plant down the street and you’re doing it at the point of demand. So I still think there’s a lot of potential here. It’s complicated. Look, it took me three years to finalize 2222 because I understood the challenges with some of these complex behind the meter policies. There are legal obstacles. There’s technical obstacles. We didn’t want to, for instance, overwhelm smaller rural electric co-ops who would have to comply with this. So implementation and compliance has been slower than I’ve wanted, but I’m still optimistic. And I think particularly as we come into this high growth, high demand environment, I’m hoping that we’ll see quicker implementation and adoption. I’m hoping that we’ll see-
Brandon Hurlbut: Three years, Mr. Chairman, maybe the DOGE can clean this up. What do you think?
Neil Chatterjee: The DOGE won’t have oversight of the RTOs and the ISOs unfortunately.
Julia Pyper: And frankly, it goes to Brandon’s earlier question about all the different utilities and regional regulation of power markets because as a company, GoodLeap also participates in virtual power plant projects and every state’s got their different flavor to it. But what’s amazing is you’re seeing states engage. Everything from, obviously Texas is the leader in virtual power plants. You’ve got California, North Carolina, the list is growing where we’ve got real examples, now 500 plus virtual power plants. But I think what we need is more consistency around the rules of the road, and hopefully that’s the next phase we can get to because to your point, Mr. Chairman, we need the power and you can build these on-site assets a lot quicker sometimes, and the big stuff, you need all of it to be clear, but we don’t want to leave tools in the toolkit and untouched when we actually need them, the critical plan.
Neil Chatterjee: This is probably too wonky and technical, and I don’t want to put your audience to sleep, but-
Julia Pyper: Give it a go.
Neil Chatterjee: … there is a state opt-out under FERC Order 719 that if it were eliminated, I think would actually alleviate a lot of those burdens to where Brandon originally started with 50 states and 50 different commissioners, and how do you do this? The state opt-out I think is an outdated artifact, and if it were eliminated, I think it could actually speed up the deployment.
Julia Pyper: Hopefully Congress passes the REDUCE Act is what I think you’re referring to there to eliminate that opt-out. I’m totally-
Emily Domenech: Good luck guys.
Julia Pyper: Emily, close this out here with the final question.
Emily Domenech: Yeah. So I want to take it back to cost, which is something we talk a lot about on this program, which is how do we deal with the sometimes higher costs of renewable energy and higher cost of diversifying the grid and higher costs of the policies that it takes to do that. You, for example, have taken some criticism for supporting carbon pricing in the past. And I just wonder what you look at when you look at the landscape going forward, how are ways that we get ourselves to cost parity so we don’t need to have all of our deployment hinge on things like tax policy?
Neil Chatterjee: Yeah. Look, that’s why, again, I want to be clear, I was in favor of a price on carbon and for jurisdictional markets, but I’ve since done work on broader carbon pricing. And I actually think from a cost perspective, it is a superior policy to the regulatory burdens that if we are trying to decarbonize via regulations, I actually think market-based solutions will help address that. And then I think to what we discussed earlier, we got to build more permitting reform. We’ve got to get more efficient. I think one of the reasons I liked virtual power plans, demand response, energy efficiency, I think Republicans ought to see opportunities here. I used to work very closely with Senator Lamar Alexander of Tennessee and his team, and he used to always say that our American energy policy should be find more, use less. And I really agree with that.
We need to figure out how do we find more energy of all sorts and use less and use it more effectively. It really, at the end of the day, it comes down to supply and demand. One of the reasons costs are going up in certain regions of the country right now is I think too many politicians have gotten involved in energy policy and as an end result, plants are being retired for political reasons, not economic reasons. The engineers are no longer making these decisions, politicians are, and that has led to a mismatch between supply and demand, which is what’s leading to these increased prices. So people ask me, “Neil, well, what is the solution? This seems like a really complex challenge.”
To me, make energy policy boring again. Energy policy has gotten too exciting. We’ve got this really cool podcast that people tune into and listen. We’ve got everyone from celebrities to politicians to professional athletes talking about energy policy. We need to re-empower the engineers and the lawyers and the economists, put the nerds back in charge. When the nerds are in charge, they come up with constructive solutions without any of these ancillary distractions. I, at the end of the day, am optimistic that we can, to answer the original question we started this conversation with, we can meet this coming surge in demand while maintaining reliability and affordability and not backsliding on our decarbonization goals. And the reason I think we can meet it is because at the end of the day, it’s a math problem and who can solve math problems? Engineers. Re-empower the engineers, and I think we’ve got a path forward.
Julia Pyper: Nerds unite. Thank you so much, Chairman. We really appreciate your time. Such a great conversation.
Brandon Hurlbut: Somewhere, Steve Chu feels validated.
Julia Pyper: We will leave it there. Brandon, Emily, any hot takes on that discussion? We covered a lot of ground. Brandon.
Brandon Hurlbut: I was only going to say it’s just more evidence that Republicans are better at branding. They’ll “find more, use less.” It’s amazing.
Emily Domenech: It’s amazing to me that you think we’re better at branding. Because we all think that you guys are better at it.
Julia Pyper: Amazing. I was trying to make a branding Brandon joke, but I can’t pull it off.
Emily Domenech: Yeah. I mean my only takeaway from that discussion was that I always love the people who say, “I think a carbon price is better than our regulatory scheme.” And my first question is, okay, what regulations are we going to get rid of? Because we got to get rid of those first before we put a new tax on everybody. And no, we can never get rid of any of them. I mean, that’s the reality of it.
Julia Pyper: I also wonder about the affordability thing. Electricity prices have gone up like 3% per year for the past 25 years. They’ve always gone up. What is happening now that’s different and where is it happening? I think this is where we had to drill down a little bit further because clearly there’s more pain now. I’ve seen like 50% increases in some utility territories.
Brandon Hurlbut: And most of it, it’s infrastructure. It’s not the price of the generation.
Emily Domenech: It’s load growth needs and it’s only going to get worse under AI but we need it.
Julia Pyper: Super interesting interview. We’ll have to leave it there. Political Climate is a co-production of Latitude Media and Boundary Stone Partners. Max Savage-Levenson is our producer. Sean Marquand is our technical director. Stephen Lacey is our executive editor. You can get all of our show notes and transcripts at latitudemedia.com. If you want us to talk about a specific topic, please email us at politicalclimatepodcast@gmail.com. Please feel free to help spread the word about Political Climate on LinkedIn, X and beyond. I’m Julia Pyper. We hope you have a wonderful holiday season, and we’ll see you again in 2025.
