America's top energy regulator agonizes over the downfall of coal country

New York(CNN Business) Neil Chatterjee, America's top energy regulator, grew up in the heart of coal country. Now, he's agonizing over the collapse of the coal industry, and there's not much he can do to save it.

"It is really, really difficult for me to watch," Chatterjee, the chairman of the Federal Energy Regulatory Commission, told CNN Business in an interview.

The Republican from Kentucky said he's seen firsthand the "devastating impact" that the closure of coal-fired power plants and mines can have on local communities.

"People are left with no resources. There's not a Walmart or Burger King for 30 miles where they can get alternative employment," said Chatterjee, who was appointed to FERC, which regulates interstate power, in 2017 by President Donald Trump.

The pain goes beyond those directly employed by coal, spreading to indirect jobs that support the industry and even to the local real estate market.

"The only asset that people in these communities often have is their homes," Chatterjee said, "and their homes lose value because no one wants to move to an area without hope for economic prosperity."

Yet Chatterjee, a former aide to Republican Senate Majority Leader Mitch McConnell, stressed that his hands are tied. FERC is an independent agency run by bipartisan commissioners. Chatterjee has pledged to make decisions based on the facts, not personal feelings.

"I simply can't take into account the sentiments I have about the plight of coal communities," he said.

In early 2018, FERC unanimously rejected a daring plan proposed by Energy Secretary Rick Perry to prop up slumping coal companies. Chatterjee joined with three other Trump-appointed officials by voting down the bailout plan.

"We make decisions based on the record before us in a neutral way," Chatterjee said.

'Climate change is real'

The FERC chairman said he's "very proud" of the decline in power sector carbon emissions that has occurred since Trump took office.

Those declines have been driven in large part by the continued shift away from coal, which has not benefited from Trump's moves to gut environmental regulations. Coal has simply been unable to keep up with inexpensive natural gas and increasingly affordable renewables.

About 15% of the America's coal fleet has been retired since 2017, the year the president took office, according to S&P Global Platts Analytics.

Even though he was appointed by Trump, who has suggested climate change is a hoax, Chatterjee does not shy away from acknowledging the climate crisis.

"I believe climate change is real. I believe man has an impact and we need to take steps to mitigate emissions," Chatterjee said.

The FERC chairman said his agency is responding to the climate crisis by approving facilities to export liquified natural gas and by eliminating obstacles for battery storage, systems that that store energy to balance out the intermittent nature of solar and wind.

Betting on clean energy

Chatterjee also cheered the rise of solar, wind and other forms of renewable energy.

"Renewables just make good business sense," he said, adding that the fact that renewables have "no fuel cost" means they will "win out" in the long run.

Power companies including Duke Energy (DUK), Xcel Energy (XEL) and PSEG (PEG) have recently announced plans to close additional coal power plants in a race to achieve net-zero carbon emissions by 2050.

Natural gas and wind are projected to be the fastest-growing sources of US power generation, according to the US Energy Information Administration. Wind power alone is expected to increase by 6% this year and 14% in 2020. By comparison, coal-fired power generation is projected to shrink by 15% this year and 9% in 2020, according to the EIA.

"Renewables are to a point where they can compete on their own footing without subsidies and government regulations," Chatterjee said.

The FERC chairman declined, however, to wade into the controversy around Trump's claim that windmills cause cancer (they don't).

Despite the criticism the Trump administration has received for its approach to energy, Chatterjee emphasized that carbon emissions in the power sector have declined since the president took office.

However, he said those efforts to reduce pollution could be derailed if there is an acceleration in the retirement of nuclear power plants. He called nuclear power the single greatest form of carbon-free power.

"I don't think you can have a serious conversation about climate change and carbon emissions and not be a proponent of nuclear power," Chatterjee said.