Trump abruptly replaces chairman of key energy commission

President Trump has removed Neil Chatterjee as chairman of the Federal Energy Regulatory Commission and replaced him with James Danly, the other sitting GOP member of the panel.

Why it matters: FERC is a powerful commission with jurisdiction around electricity markets, interstate natural gas and power transmission, liquefied natural gas (LNG) facilities and more.

Where it stands: Danly, in a statement, praised Chatterjee's tenure as chairman, citing a "lasting impact through his commitment to protecting competitive markets."

• And Chatterjee said he looks forward to working with Danly, and also noted via Twitter he intends to remain on the commission through his term. It ends next June.

The big picture: Chatterjee, a former aide to Senate Majority Leader Mitch McConnell, has recently helped boost the commission's work on climate change.

• Last month FERC issued a policy statement encouraging regional power market operators it oversees to consider incorporating state-based carbon pricing policies into those markets.
• "These rules could improve the efficiency and transparency of the organized wholesale markets by providing a market-based method to reduce GHG emissions," he said at the time.

The intrigue: The White House declined to comment on why it removed Chatterjee as chairman, a role he's held for multiple years under Trump.

But Alex Flint of the Alliance for Market Solutions, a group that pushes conservatives to embrace carbon pricing, said FERC's recent move in that area cost Chatterjee his gavel.

• "Chairman Chatterjee demonstrated tremendous integrity and independence by acknowledging the need to address climate change," said Flint, a former senior GOP aide on the Senate's energy committee.
• "That cost him his chairmanship, but it also set him apart and cemented his standing as one of FERC’s great leaders," Flint said.

What they're saying: Chatterjee told Axios that he was not provided the reason for the decision.

• But he noted FERC has been taking steps of late that he called “smart, market-based approaches to the energy transition and reducing carbon emissions," including removing barriers to entry for distributed energy resources and its recent technical conference and policy statement on carbon pricing “as an alternative to subsidies and mandates.”
• In his prepared statement, Chatterjee said the commission had notched several achievements, such as bringing regulations under utility law "in line with today’s realities," as well as approving LNG terminals, its work to bolster energy storage tech and more.

What's next: Danly's tenure could be short-lived. If Joe Biden becomes president next January, he would be expected to appoint a Democrat as chairman.

Currently the commission has two Republicans, while Richard Glick is the lone Democrat. Two nominees, Republican Mark Christie and Democrat Allison Clements, are pending before the Senate.

Go deeper: Trump ousts Chatterjee, taps Danly to lead FERC (Utility Dive)