Energy Bill Could Go to House Floor This Week
Though Congress was on recess the past two weeks, energy committee staff and leadership continued their negotiations on a final "energy independence" bill, in the hope that it would be brought to the House floor in early December and subsequently to the Senate.
The situation is very fluid, and, in a somewhat surprising move, over the weekend House and Senate leadership decided that they are going to bring one comprehensive energy bill to the floor for a vote and it will include a federal Renewable Portfolio Standard (RPS) and a tax title.
As of Friday afternoon (11/30), key staff and others were reporting that the bill would not contain a federal RPS or a tax title, as apparently neither has the 60 votes needed in the Senate to avoid a filibuster. It was thought that these two issues would be combined into a separate "message bill" that would be voted on at a later date and would pass in the House but die in the Senate.
However, over the weekend, after a deal was struck on the Corporate Average Fuel Economy (CAFE) standards for vehicles, Democratic leadership apparently decided that it would try to force a vote on the remaining controversial issues (RPS and tax) to see where the votes actually lie, before conceding that they do not have them and removing the RPS and tax language. If, in fact, Senate leadership is unable to overcome a filibuster (which requires 60 votes), then they will amend the bill as needed and send it back to the House for another vote.
As a reminder, the House-passed energy bill contains an RPS that exempts federal, municipal and cooperative utilities. The Senate bill is silent on an RPS, but Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D-NM) continued to support a program that would draw in munis and coops that sell more than 4 million megawatt hours of energy per year at retail.
The $16 billion tax title in the House bill is controversial because it gives tax incentives to a range of renewable energy technologies, and "pays for" those incentives by eliminating existing incentives for the oil and gas industry; there is no tax title in the Senate bill. The Senate Finance Committee approved about a $30 billion package that "pays for" renewable incentives in a similar fashion, but it was held from the bill by Senators from oil and gas states. This has prompted a number of Senators to say that they will not vote for the bill if the House tax title is included.
Draft texts of the revised bill are "leaking out," and it appears that the RPS provision included is the House-passed language, with one modification: that the exempt utilities will not be entitled to receive any credits they might otherwise have gotten under the bill unless they voluntarily "opt-in" to the program. The details of the tax title have not been released, other than that it is a $21 billion package and repeals $13 billion in incentives for the oil and gas industry to pay for renewable incentives.
As far as schedule, it is expected to go to the House floor as early as Wednesday or Thursday. Senate Majority Leader Harry Reid (D-NV) has not indicated when it might go to the Senate floor. In addition, on December 3, the White House sent a second letter to Speaker Pelosi indicating the President would veto a bill with an RPS, among other items.
Senate Committee to Mark-up Climate Bill Dec. 5
Despite complaints from some committee members that she is moving too quickly, Environment and Public Works (EPW) Committee Chairman Barbara Boxer (D-CA) has scheduled a Dec. 5 full committee mark-up on S. 2191, America's Climate Security Act, sponsored by Sens. Joe Lieberman (I-CT) and John Warner (R-VA). The Subcommittee on Private Sector and Consumer Solutions to Global Warming and Wildlife Protection approved the bill on Nov. 1.
The subcommittee approved Lieberman-Warner bill would establish a federal program to reduce greenhouse gas (GHG) emissions by 63% by 2050. Under the program, the U.S. Environmental Protection Agency (EPA) would allocate emissions allowances to electric power, transportation and manufacturing sources that, taken together, account for 75% of those emissions. The "cap" on emissions would be set at 2005 emissions levels for 2012 and ratchet down over time, to 19% of 2005 levels by 2020 and 63% of 2005 levels by 2050.
In advance of the full committee mark-up, last week Chairman Boxer released a revised version of the subcommittee-approved bill. The revised bill, called the Lieberman-Warner Climate Security Act of 2007, makes several changes in an apparent attempt to garner enough votes for committee passage. One major change to the bill Boxer makes involves an "upstream" cap placed on GHG emissions that come from natural gas processors. With the new bill's natural gas section, more than 80 percent of the greenhouse gas emissions that come from the U.S. economy will be covered under the legislation. (Previously, the bill dealt with emission from about 75 percent of the U.S. economy.)
Another change in the legislation is that it "ratchets up," by five years, from 2036 to 2031, the end date for the free emission credits given out to power plants, manufacturers and other industrial sources.
One of the potentially divisive issues of this bill is how to distribute emissions allowances to utilities. The question has been whether they should be allocated based on "historic emissions" that is, based on actual emissions of GHG in a baseline year, or if they should be allocated based on a utility's retail sales, which would provide significant allowances to utilities that do not burn coal.
The subcommittee approved Lieberman-Warner bill attempts to create a compromise by allocating 19 percent of 2020 allowances to "covered facilities" based on historic emissions and allocating another ten percent of 2020 allowances to "load serving entities" based on retail sales. Sens. Lieberman and Warner devised this compromise as a way to try to meet the concerns of senators from states where coal is burned (or coal-fired energy is consumed) and those from states that do not burn coal or use coal-fired energy.
Even if the bill passes out of committee this month, it is not likely to advance on the Senate floor next year, given an expected filibuster by Sen. James Inhofe (R-OK) and others and President Bush's opposition to mandatory emissions controls.
House Action On-Hold
Although earlier this year House Energy and Commerce Committee Chairman John Dingell (D-MI) and Energy and Air Quality Subcommittee Chairman Rick Boucher (D-VA) stated they would begin work on a comprehensive climate change bill this fall, they have reversed coarse and now say they will not move forward on climate issues until a final "energy independence" bill is completed. Therefore, no House climate change action will take place prior to adjournment.
Kathleen Carrigan Resigns from ISO-NE
Kathleen Carrigan, who joined ISO-New England as Vice President, General Counsel and Corporate Secretary in 2000, has resigned. In 2001, she became the Senior Vice President, General Counsel and Corporate Secretary. She played a leadership role in the development of New England wholesale electricity markets and helped establish the ISO as a regional transmission organization (RTO). Ray Hepper will take responsibility for her, effective immediately.
NIETC Rehearings Granted
The Energy Policy Act of 2005 created a process under which the Federal Energy Regulatory Commission could issue a permit for new transmission in areas designated as National Interest Electric Transmission Corridors (NIETCs) by the Department of Energy (DOE). Due to public questioning of the two most recent designations, DOE has issued orders granting rehearing requests for the Mid-Atlantic Area National Transmission Corridor and the Southwest Area National Transmission Corridor.
The orders can be found on the webpage "Applications for Rehearing" at http://nietc.anl.gov/index.cfm.