TRP Clean Energy Report

September 23, 2014

After just eight days in session following a five-week summer recess, the House and Senate have adjourned until after the midterm elections. Last Thursday, the Senate voted 78-22 to approve a continuing resolution (H.J. Res. 124) that funds the government through December 11, and gives the Obama Administration the authority to equip and train Syrian rebels in their battle against the Islamic State. The House passed the stop-gap funding bill last Wednesday in a 319-108 vote. The CR continues base agency funding at the fiscal 2014 rate of $1.012 trillion. Among its provisions, the measure extends a moratorium on taxing Internet access, and extends authority for the Export-Import Bank through June 30. Lawmakers resorted to a short-term spending bill after both chambers failed to pass all 12 individual appropriations measures. The House passed seven fiscal 2015 spending bills, but the Senate did not approve any.

Aside from the CR, the House passed a consolidated ‘jobs’ bill (H.R. 4) last Thursday in a 253-163 vote. The GOP-backed package includes bills to repeal the Affordable Care Act’s (ACA) requirement that all employers with 50 or more workers provide insurance, to rescind the health law’s 2.3 percent medical device tax and to renew expired tax breaks. The House also voted 226-191 to pass a separate package of bills (H.R. 2) aimed at boosting domestic energy. Those measures include allowing construction of the Keystone XL oil pipeline, expediting natural gas exports and studying the impact of thermal insulation in federal buildings. In the Senate, members rejected a cloture motion on pay-equity legislation (S. 2199) 52-40, falling short of the 60 votes needed to advance. Elsewhere, Senators confirmed two executive branch nominations for the Nuclear Regulatory Commission.

Following the November 4 elections, members of the House and Senate are expected to return for two weeks before breaking for the Thanksgiving holiday. Congress should next be in session through December, when work will continue on appropriations, expired tax provisions and curbing corporate inversions. Other issues that could be considered during the lame-duck session include defense and intelligence operations reauthorizations, terrorism risk insurance (TRIA) reauthorization as well as bills related to commerce, sanctions and trade.


House Bill Would Extend Clean Energy Tax Incentives

On September 19, Representatives Earl Blumenauer (D-OR) and Dave Loebsack (D-IA) introduced legislation (H.R. 5559) that would extend a series of expired tax clean energy tax credits for two years. Their bill would extend tax breaks for wind-energy production (PTC), biodiesel sales, buying alternative fuel vehicles and installing energy efficient technology in homes. The measure would also allow the solar power industry to take advantage of new tax credits for new construction. Many of the tax credits in the Blumenauer-Loebsack bill were included in a Senate Finance Committee passed-package earlier this year, which never advanced to the floor for a vote. But Senate Majority Leader Harry Reid (D-NV) has pledged to hold a vote on the energy measures before the end of the year. (The Hill, Cama, 9/19)

Senator Wyden Eyes Performance Based Energy Incentives

On September 18, the top Democrat and Republican on the Senate Finance Committee said they would like to reinstate see dozens of clean energy tax credits by the end of the year. At a Finance Committee hearing on energy tax policy issues, Chairman Ron Wyden (D-OR) and ranking member Orrin Hatch (R-UT) said they would like a post-election Congressional session to be used to pass a ‘tax extenders’ bill, which includes about a dozen energy-related tax breaks such as the production tax credit (PTC) among its more than 50 provisions. In April, Senate Finance passed legislation to extend the tax breaks through 2015, but the measure stalled amid partisan squabbling earlier this year. The panel’s leaders said they hope the renewal legislation will be affirmed soon.

The $85 billion in tax breaks include a range of measures, including aid for wind energy, solar, biodiesel, plug-in vehicles and other energy sources. But disagreement remains over how to advance a tax reform proposal. Chairman Wyden has expressed support for an overhaul that includes performance-based energy subsidies, while ranking member Orrin Hatch (R-UT) has offered a vision that prioritizes more oil and gas development. Even if leaders agree on a framework for tax reform, it would still need to secure 60 votes in the Senate and avoid a veto from President Obama (E&E News, Juliano, 9/17).


EPA Extends Comment Period on GHG Power Plant Rule

On September 16, the EPA said it would extend the 120-day comment period on its draft rule to limit greenhouse gas emissions from existing power plants by an additional 45 days. The comment period will now end on Dec. 1. Released in June, the controversial rule would require power plants to reduce their carbon emissions by 30 percent by 2030. When proposing the rule, the EPA decided to allow stakeholders 120 days to comment, which is longer than the normal 60-day period typically set for regulations. The rule for existing power plants is the centerpiece

of President Obama’s initiative to counter the effects of climate change. On Sept. 9, a group of state regulators testified before a House panel on the importance of additional time to examine the draft and conduct their own analysis. EPA officials say they hope to finalize the rule by June 15, 2015, to allow stakeholders sufficient time to voice their concerns (E&E News, Juliano, 9/16).

Stop-Gap CR Overrides Ex-Im Bank Coal Project Ban

Last week, the House and Senate approved a stop-gap continuing resolution (H.J. Res. 124) that averts an Oct. 1 government shutdown and extends the U.S. Export-Import Bank’s ability to operate for through June 2015. The extension of the Export-Import Bank's charter through June 30, 2015, puts off any decisions about the trade finance agency's future and allows its Congressional opponents more time to build a case to close or reform the 80-year-old institution. In both chambers, lawmakers rejected a last-ditch attempt to push through a seven-year extension for the bank.

The CR also continues a policy provision that overrides Obama Administration guidance limiting the Export-Import Bank from financing overseas coal-fired power projects. Issued in December 2013, the guidance said the bank would no longer support new coal-fired power plants in developing nations unless there are no economically feasible alternatives or the plants use carbon capture technologies. The Ex-Im bank, which provides financing to expand U.S. trade, has authorized $1.5 billion in financing for coal projects. While the CR would extend the bank's charter until next June, the related coal rider expires Dec. 11 when the continuing resolution expires (The Hill, Shabad, Cox, 9/19; BNA, Natter, 9/15).


Senate May Split Up Shaheen-Portman Efficiency Bill

Supporters of the stalled Shaheen-Portman energy efficiency bill (S. 2262) are pressing Senate leaders to take up portions of the bill during the post-election lame duck legislative session. The bill has languished in the Senate due to disagreements over which amendments would be included to the measure. The bill would require DOE to provide assistance to states adopting energy standards, require the development of new Tenant Star and Supply Star energy efficiency recognition programs and facilitate a third-party certification process within the existing Energy Star program.

While the Senate has delayed action on the bill, the House has approved several of the legislation’s most noncontroversial parts under an expedited procedure known as suspension of the rules, which requires a two-thirds majority vote for passage. They include a bill (H.R. 4066) to loosen energy efficient standards for grid-enabled water heaters; legislation (H.R. 540) to increase efficiency in government data; and a measure (H.R. 3820) to incentivize energy efficiency in commercial buildings. The bills were included in the Better Buildings Act (H.R. 2126), which the House passed in March. It calls on the EPA to create a program to encourage

energy efficiency in commercial spaces, similar to the Energy Star labeling program for appliances. Aides for both Senators Jean Shaheen (D-NH) and Rob Portman (R-OH) have acknowledged that the talks are ongoing to move portions of their bill during the lame duck session (BNA, Natter, 9/16).

House Approves Bill to Exempt Replacement Chargers from Efficiency Rules

On Sept. 11, the House unanimously passed a bill (H.R. 5057) sponsored by Congressman Cory Gardner (R-CO) and Congressman Paul Tonko (D-NY) to let companies produce external power supplies (EPS) for older computers, phones and other devices that are out of production. The legislation clarifies that an EPS manufactured before 2016 is not subject to efficiency standards created by the 2007 Energy Independence and Security Act. The DOE updated efficiency standards in February 2014, but did not include an exemption for service and spare parts. Absent a change in the law, manufacturers would be required to redesign and qualify new service and spare EPS for existing products that are no longer in production – a costly prospect for manufacturers and consumers. The Gardner-Tonko bill establishes a four-year exemption from the 2014 efficiency standard for EPS service and spare parts, which will still be required to meet the 2007 standards. Senators Jeanne Shaheen (D-NH) and Robert Portman (R-OH) have introduced a companion bill (S. 2791), with they hope to advance in the lame-duck session (E&E News, Juliano, 9/12).


Senate Committee Approves New Deputy Energy Secretary

On Sept. 11, the Senate Energy and Natural Resources Committee voted to approve the nomination of Elizabeth Sherwood-Randall to be the deputy energy secretary. The panel reported her nomination to the full Senate for its consideration by voice vote. Nominated in July, Randall pledged during her confirmation hearing to seek timely review of liquid natural gas exports. If confirmed by the full Senate, she would replace Daniel Poneman, who announced in June to leave DOE after five years as deputy secretary (BNA, Natter, 9/12).