FERC, which regulates the electricity and natural gas sector in the US, is discussing an MoU with India's Central Electricity Regulatory Commission (CERC) to share its experience with the capacity market, oversight and enforcement, Chatterjee told reporters here.
Drawing from the experience of US markets, he said subsidies distort price signals in the market. "Markets provide efficiencies and benefits to consumers. Ultimately market forces will be to the benefit of India and Indian consumers."
On this fourth trip to India in two years, the son of a migrant Indian, Chatterjee said the US has seen states subsidizing a form of energy generation that they prefer but "when states step back and do maths, they will see that their consumers have benefited to stay in the market".
"For markets to work efficiently, pricing has to be accurate," he said, adding market forces are successfully driving down prices of all sources energy in the US.
He said India desires to move to a gas-based economy but will have to rely on imports as unlike the US it does not have abundant affordable domestic supply. The US is now a net exporter of energy.
"The US is providing an alternate source that is beneficial to our allies. And environmentally as well," Chatterjee said. "US gas can be competitive and I think there will an appetite for US gas here."
India has signed up long-term contracts for 5.8 million tonnes per annum of liquefied natural gas (LNG) from US companies but imports only small volumes out of it because the rates, after including freight and taxes, are not considered viable by users such as in the power sector.
"All the signals I see, people continue to be bullish about the price specs for US LNG," he said.
Also, India is looking at importing coal from the US, he said, adding such transactions will strengthen diplomatic ties between the two nations.
FERC, he said, is engaged with the CERC on market design such as the wholesale competitive electricity market in the US. "Thrilled we will be able to share the experience (with CERC)," he said.
"We have seen tremendous benefits in the US in terms of consumer cost, maintain electricity reliability and positive environmental impact," he said. ANZ BAL