Congressional Schedule Legislators are in high gear, particularly on energy, climate and appropriations matters, as Congress tries to finish its work before the scheduled two-week Thanksgiving recess that begins on November 17. Leadership in both chambers has announced Members will return on a limited basis during the month of December to consider only appropriations bills and/or conference agreements. It is possible an "energy independence" bill agreement could be an item for consideration at that time, if a resolution on the final bill is reached.
Discussions Continue on "Energy Independence" Bill
Currently, House and Senate leaders are proceeding with an informal, "non-conference" strategy, because of limited time and strategic disagreements in the Republican Party. Closed-door discussions between key House and Senate Members and staff are ongoing, with leadership and those Members meeting to strategize and discuss controversial issues such as a renewable fuels mandate, renewable portfolio standard, vehicle fuel economy standards, tax incentives, among other things.
On the tax side, Senate Finance and House Ways and Means Committee staff are working to "tee-up" a package of tax provisions for consideration by Chairman Max Baucus (D-MT), Ranking Member Chuck Grassley (R-IO) House Chairman Charlie Rangel (D-NY) and Ranking Member Jim McCrery (R-LA). While a key piece of the puzzle, the overall size of an energy tax title, is still unresolved, many believe Baucus and Rangel are prepared to construct a bill similar to the size of the House package ($15 billion), but are awaiting approval from their respective leaders that they will support such an effort.
The White House, on the other hand, is signaling it will not support anything larger then a $7 billion energy tax title, because it opposes the rollback of oil and gas tax incentives included in the House bill and the Finance Committee approved tax title, (which did not make it into the final Senate bill). Of interest to NEPPA members is the expansion and reform of the Clean Renewable Energy Bond (CREB) provisions, included in the House bill and the Finance Committee approved tax title.
On the issue of a federal Renewable Portfolio Standard (RPS), originally most observers believed the exemption for federal utilities, municipal and cooperative systems would not hold. However, more recently Southeastern Senate Republicans and House leadership have pushed to keep the exemption - based on a belief that the exemption is needed to get enough votes to pass in the House and Senate. Investor-owned utilities, however, oppose an RPS and are advocating for public power's inclusion if an RPS makes it into the final bill. There are those that believe that if Democratic leaders do not compromise on this issue, there will not be enough votes for passage in the Senate.
Renewable Transmission Bills Advance in the House and Senate
On November 1, Rep. Jay Inslee (D-WA) introduced the "Rural Clean Energy Superhighways Act" (H.R. 4059) that would create "National Renewable Energy Zones" (NREZs) to help renewable energy projects, particularly in remote areas, gain access to the U.S. transmission grid. Senate Majority Leader Harry Reid (D-NV) has introduced a similar bill (S. 2076). The legislation would make significant changes to current federal transmission policy and on policies of federal power marketing agencies (PMAs).
Specifically, the bill would authorize the President to designate areas that meet certain criteria as NREZs and to identify specific high-voltage transmission facilities and interconnections needed to increase renewable electric generation within each zone. It would allow a surcharge to be levied on all transmission users in the region to pay the up-front costs of interconnecting renewable projects in those zones to the grid and allow FERC-jurisdictional utilities to cost-share the expense of building the high-voltage lines.
If private companies do not build identified facilities within three years, the federal PMAs and the Tennessee Valley Authority (TVA) are given $10 million in bonding authority to construct them. In that case, not less than 75% of a line's capacity must be used to carry energy generated by renewable resources. The bill is silent on what happens in the event a private utility does not build an identified line in a region not served by PMAs. Therefore, it is unclear how the Northeast or other RTO regions would be impacted by the legislation.
Public power, investor-owned utilities, and rural electric cooperatives have expressed concern to both the Inslee and Reid bills' approach. On the other hand, the bill is supported by the wind industry, which cites the efforts in California and Texas as examples of where this approach has worked.
Transmission Siting Amendment Voted Down on Farm Bill
The federal transmission "backstop" siting authority, approved by Congress in the Energy Policy Act of 2005, continues to draw opposition from Members of Congress whose districts or states are part of the two areas identified as "National Interest Electric Transmission Corridors" by the Department of Energy (DOE).
Sen. Robert Casey (D-PA) offered an amendment during the Senate Agriculture Committee's markup of the farm bill that would have prohibited the use of federal eminent domain on agricultural lands when siting transmission towers under the federal siting process. The amendment was, ultimately, defeated by the committee and the bill was subsequently adopted. It is expected that, during Senate floor consideration of the farm bill this week, Casey will again offer his amendment.
On October 31, a joint letter urging defeat of the amendment was sent to all Senators by key electric industry stakeholders, including the American Public Power Association (APPA), Edison Electric Institute (EEI), National Rural Electric Cooperative Association (NRECA), Electric Power Supply Association (EPSA) and the American Wind Energy Association (AWEA).
A similar effort to undermine DOE's NIETC authority was made during House consideration of the FY 2007 Energy and Water Development Appropriations bill, which funds DOE and other agencies. Reps. Maurice Hinchey (D-NY) and Frank Wolf (R-VA) offered an amendment to cut NIETC funds in the full committee and on the House floor; the amendment was defeated.
The NIETC controversy has flared again because DOE announced the designation of two transmission corridors in October 2007. One corridor covers seven counties in California and three in southwest Arizona; the second corridor runs from northern Virginia to New York.
Lieberman-Warner Climate Change Bill Voted Out of Subcommittee
On November 1, the Senate Subcommittee on Private Sector and Consumer Solutions to Global Warming and Wildlife Protection approved S. 2191, the America's Climate Security Act of 2007, by a vote of 4-3 and sent it to the full Senate Environment and Public Works Committee (EPW) for consideration. The bill is cosponsored by Subcommittee Chairman Joe Lieberman (I-CT) and Sen. John Warner (R-VA).
Sens. Max Baucus (D-MT) and Frank Lautenberg (D-NJ) voted with the bill's sponsors in supporting S. 2191. Sens. Bernie Sanders (I-VT), John Barrasso (R-WY) and Johnny Isakson (R-GA) voted against the measure.
The Lieberman-Warner bill establishes a federal program to reduce carbon dioxide emissions by 63% by 2050. The greenhouse gas (GHG) emissions cap targets electric power, transportation and manufacturing sources that account for 75% of GHG emissions. The cap on emissions starts in 2012 (based on 2005 emission levels) and then lowers it gradually, so that it reaches 19% below 2005 emission levels in 2020 and then reduces to 63% below 2005 emissions levels by 2050.
The Act allows companies to trade, save and borrow emission allowances and allows them to generate credits when they stimulate non-covered businesses, farms and others to reduce their GHG or capture and store the emissions. The bill allocates only 19% of available allowances to electric utilities. The rest are allocated to states, to entities that take "early action" to reduce emissions and to a range of other activities that the bill's sponsors want to promote. Of that 19%, six percent is allocated to load-serving entities based on their retail sales.
During the markup, Sen. Sanders offered many amendments which would have made the bill more stringent, but only one was approved. That amendment provided that, if the automobile industry received funding for advanced technology vehicles, it would be required to produce cars get a fuel efficiency level of 35 miles per gallon. Another Sanders amendment, voted down, would have increased required cuts in greenhouse gas emissions to 80 percent by 2050. Both Sanders and Lautenberg asked for stronger targets, citing scientific recommendations that included the warnings of dramatic climate change if those recommendations are not followed.
Senate EPW Chairman Barbara Boxer (D-CA) said that the legislation will be the "strongest...in the world" and that its "reach is enormous." Two full committee hearings will be held on the legislation, the first of which is scheduled for November 8, and the second on November 13. A markup has not yet been planned, but Boxer has said that she would like to move the bill to the Senate floor for a vote before the United Nations climate discussions in Bali, Indonesia, in early December.
In contrast, in the House, Energy and Commerce Committee Chairman John Dingell (D-MI) and Energy and Air Quality Subcommittee Chairman Rick Boucher (D-VA) announced that they would not begin consideration of climate change legislation until the energy bill conference was completed.
Community Broadband Act Advances In the Senate
On October 30, the Senate Commerce Committee approved S. 1853, the Community Broadband Act of 2007. The bill, sponsored by Sens. Frank Lautenberg (D-NJ), Gordon Smith (R-OR), Olympia Snowe (R-ME) and John Kerry (D-MA), would prohibit states from precluding municipal governments from offering telecommunication services. Prior to the markup, two compromises were made. One would allow private enterprises the opportunity to bid during a 30 day notice time period and another would put a restriction on federal funds being available for a municipal system if it fails due to bankruptcy. Both of these compromises were included in a committee-passed version from the 109th Congress and were required, politically, to ensure passage.
Kelliher re-Nomination to the FERC
Federal Energy Regulatory Commission (FERC) Chairman Joseph Kelliher's re-nomination hangs in the balance as Senators attempt to conclude the 1st session of the 110th Congress. Kelliher must be approved by the Senate before it adjourns for the session (expected in mid-December). The Senate Energy and Natural Resource Committee reported his nomination to the full Senate on May 23, but two Senators -- Robert Casey (D-PA) and Maria Cantwell (R-WA) -- have put a "hold" on his nomination - thereby preventing consideration of his reappointment.
Sen. Casey has expressed reservations about Section 1221 of the Energy Policy Act of 2005, which created "back-stop" siting authority for FERC in areas deemed National Interest Electric Transmission Corridors (NIETCs) by the Department of Energy. Much of eastern Pennsylvania is included in the Mid-Atlantic NIETC designation which was released in early October.
The reason for Cantwell's opposition is unclear, at this time. In addition, Senate Majority Harry Reid (D-NV) also wants assurances that the re-nomination of FERC Commissioner Jon Wellinghoff, whose term expires in June 2008, will advanced unopposed at that time.