TRP Federal Clean Technology and Renewable Energy Update

November 17, 2014
After nearly two months on the campaign trail, Congress returned last week for new member orientation, leadership elections and a smattering of legislative business. The leadership elections offered few surprises, as Sens. Mitch McConnell (R-KY), Harry Reid (D-NV), and Rep. John Boehner (R-OH) all received their caucus’s endorsement to lead their party in the 114th Congress. McConnell was unanimously named to serve as majority leader when the new Congress convenes in January, while at least six Senate Democrats reportedly opposed Reid in the secret-ballot vote. House Speaker Boehner easily advanced to his post following a GOP wave election that effectively silenced any opposition to his leadership. House Democrats will hold leadership elections this week, where Minority Leader Nancy Pelosi (D-CA) seeks re-election unopposed. Perhaps the only notable addition came from the Democratic leadership, where Sen. Elizabeth Warren (D-MA) was elevated to the newly created position of Strategic Policy Advisor to the Democratic Policy and Communications Center (DPCC).  

In floor activity, legislative work resumed in both chambers, with the House debating a series of non-controversial suspension bills and the Senate advancing several judicial nominations. Senate Majority Leader Harry Reid (D-NV) plans to use his final weeks in power to confirm as many as 50 of President Obama’s nominees and move an omnibus spending bill before Democrats relinquish their majority. The House voted 252-161 on Friday to approve the $8 billion Keystone XL pipeline. Consideration of the measure (H.R. 5682) came as party leaders looked to bolster their candidates in the Senate runoff in Louisiana on December 6, where both sides are trying to display their clout on energy issues. Rep. Bill Cassidy (R-LA) is facing off against incumbent Sen. Mary Landrieu (D-LA), who persuaded the Senate to take up an identical Keystone measure this week, though it remains unclear whether it can gain the 60 votes needed to overcome procedural hurdles.
Work on other major legislation isn’t expected until after Thanksgiving. After recessing this week, lawmakers will return in December, when work will continue on an omnibus appropriations bill, extending expired tax provisions and efforts to curb corporate inversions. Other issues that could be considered include defense and intelligence operations reauthorizations and terrorism risk insurance (TRIA) reauthorization, as well as bills related to commerce, sanctions and trade. Congress may also take up a bill providing additional funds to combat Ebola and boost domestic preparedness against the virus.
The Week Ahead
This week the Senate will take up its version of the Keystone XL bill (S. 2280) that would provide for the approval of TransCanada Corp.'s pipeline, which the State Department has been reviewing for six years. The project would transport Alberta's heavy crude to refineries in the U.S. Gulf Coast. Senators will also debate an NSA surveillance bill (S. 2685) and a measure that reauthorize the Child Care and Development Block Grant program (S. 1086).  The Senate also plans to consider a series of judicial nominations.  In the House, members will consider three bills (H.R. 1422/HR 4012/H.R. 4795) designed to set new requirements for EPA regulations.
Climate Policy
U.S.-China Energy Partnerships Included in Emissions Agreement 
On Nov. 12, President Obama and Chinese President Xi Jinping agreed to a historic deal that commits each country to far-reaching goals to cap greenhouse gas emissions. Under the agreement, the U.S. will reduce its emissions between 26 percent and 28 percent below 2005 levels by 2025. It marks the first time the U.S. has agreed to cuts greater than the 17 percent reduction President Obama set as a goal in 2009. China agreed that its emissions of Earth-warming gases would peak by 2030 or earlier, according to the White House.
President Obama and Chinese President Xi Jinping also agreed to renew the U.S.-China Clean Energy Research Center (CERC), an effort at collaborating on advanced technology and intellectual property protections through 2020. Rolled out in 2009, CERC was set to expire next year.  Under the renewed engagement, the U.S. and China will continue funding for coal, electric vehicle, carbon capture and storage and launch a new energy and water venture. The proposal has met with significant opposition from Congressional Republicans. (E&E News, Kirkland, 11/13).
EPA Issues State “Carbon Budgets” in Updated Proposal
On Nov. 6, the EPA issued a long-anticipated memo outlining states’ responsibilities if they comply with a draft rule that aims to cut greenhouse gas emissions from power plants.  In the memo, the agency said states would have the authority to adopt carbon-reducing policies that meet the new federal emission targets.  EPA’s initial draft included a rate-based approach that limited the amount of carbon dioxide per megawatt-hour that each state power source could release. The updated draft allows states to comply through a statewide or regional cap, but it doesn’t specific how the caps are formulated.  The EPA is now seeking public comment by Dec. 1 on two separate approaches. Each formula would increase the agency’s carbon intensity standard, but one would look only at existing generation while the other would count both existing and new power plants. 
States are expected to review the accuracy of EPA projections about their power sectors, agency officials said. If EPA has overestimated a state’s growth, power officials would likely face a less restrictive overall target under the methodology that accounts for future generation. The converse if true if the EPA has underestimated how many new power plants they’ll bring online. Industry analysts said the updated draft rule could have significant implications for whether a state tries to comply with the federal rule through a cap-and-trade approach or by separating its carbon reduction responsibilities between its utilities (E&E News, Chemnick, 11/07).
Federal Agencies Outline Climate Change Plans
On Oct. 31, the Administration released a series of climate change documents, outlining 38 federal agencies’ vulnerabilities to global warming and how they will address them. No two agencies’ risks in dealing with climate change are alike, according to the documents. NASA found that 66 percent of its assets are within 16 feet of mean sea level, and that beach erosion is encroaching on the nation’s “access to space.” The Department of Agriculture estimates an increase of up to 100 percent in the number of acres burned by wildfires annually by 2050.  Under the sustainability plans, other agencies like the EPA will reduce heating and cooling loads in its labs. For instance, the FBI will incorporate design and construction standards for new buildings to be 30 percent more sustainable and cost effective. (The Hill, Barron-Lopez, 10/31).
Senator Hatch Indicates PTC Renewal Likely as Part of Tax Extenders Deal

On Nov. 12, Senator Orrin Hatch (R-UT), the ranking member on the Finance Committee, said he doesn’t expect significant changes to package of tax break renewals – which appears to welcome news for supporters of the wind production tax credit (PTC). The PTC’s next best shot at being renewed is as part of the broader extenders package, as lawmakers push to wrap-up work on a series of issues before the end of the year (E&E News, Juliano, 11/13).
Controversial Loan Guarantee Program Set to Turn Profit
According to a new report from the Department of Energy’s (DOE), the agency’s renewable energy loan guarantee program is turning a profit – earning $810 million from interest payments made by more than 30 DOE-backed projects.  The revenue more than covers the $780 million in losses the program endured during the bankruptcies of Solyndra, Fisker Automotive and others. The profitable numbers came amid an effort by DOE leaders to bolster the loan guarantee program as the agency prepares for four new solicitations for the remaining $40 billion in lending authority.  In addition, DOE recently issued the first guarantees since the 2011 bankruptcies when it finalized $6.5 billion in loan guarantees for a nuclear plant in Georgia.
According to DOE officials, of the 30 projects that have received agency backing, 20 are operational and generating revenue. Despite the positive news, Republicans on Capitol Hill are expected to continue oversight hearings with the GOP-controlled Congress in 2015. Capitol Hill aides say that Sen. Lisa Murkowski (R-AK), soon-to-be chairwoman of the Energy and Natural Resources Committee, will continue to scrutinize the program, while the House Oversight and Government Reform Committee is likely to do the same (E&E News, Ling, 11/13).
Renewable Energy
Ocean Energy Bill Passes Senate Energy Committee
On Nov. 13th, The Senate Energy and Natural Resources Committee passed the Marine and Hydrokinetic Renewable Energy Act of 2014 (S. 1419) a bill that seeks to encourage development of electricity from the water power in oceans, rivers and lakes.  The bill reauthorizes the Department of Energy’s national marine renewable energy research, development and demonstration centers around the country. It also allows developers seeking to invest in and deploy small MHK pilot projects to cut through regulatory red tape by designating the Federal Energy Regulatory Commission as the lead agency responsible for coordinating the permitting of such projects, and setting a goal of issuing pilot licenses within 12 months.  The bill passed by a voice vote and now goes to the full Senate for consideration. Sen. Ron Wyden (D-OR) introduced the bill last year with Sen. Lisa Murkowski, (R-AK).
Appropriations /Budget
Lawmakers Strategize on Omnibus Spending Package.
House and Senate leaders are working to craft an omnibus fiscal 2015 appropriations bill by Dec. 12 when present funding for the government expires.  But their actions could face opposition from House conservatives, who are pressing Speaker John Boehner (R-OH) to block President Obama’s plan to make immigration changes through executive action – an effort that could lead to another government shutdown.  While Mitch McConnell (R-KY), pledged not to shut down the government, on Nov. 12, House Appropriations Chairman Hal Rogers (R-KY), warned that unilateral action by the President on immigration could trigger a shutdown. Likewise, House Speaker John Boehner (R-OH) told his caucus that he would use every tool available to stop any effort by the President to go around Congress on immigration. (The Hill, Wong, Shabad, Marcos, 11/14; BNA, Wassen, Rowley, 11/12). 
Congress Prepares for Policy Rider Fight over Omnibus Appropriations Bill
An omnibus appropriations bill could provide a vehicle for lawmakers seeking to roll back Administration energy priorities, including EPA regulations on coal plants, coal ash, or portions of the U.S.-China climate deal. House Appropriations Chairman Hal Rogers (R-KY) is working on an omnibus spending bill, but aides have not said whether it will include new policy riders. Sen. Mitch McConnell (R-KY) has said he plans to ‘rein in’ the EPA and its efforts to regulate carbon-dioxide emissions at coal-burning power plants. McConnell, set to be next Senate majority leader, has acknowledged that overturning Administration-backed environmental initiatives through stand-alone bills will be difficult, given the President’s veto power.  Senate Appropriations Chairwoman Barbara Mikulski (D-MD) has said she will keep her chamber’s omnibus spending bill ‘clean’ of policy riders when the bills are introduced in early December. (E&E News, Quiñones, 11/12).
Other News
Senate GOP Energy-Related Committees Take Shape
In January, Senate Republicans will be taking over the 12 appropriations subcommittees.  Among the notable changes:
Appropriations Committee:  Senator Thad Cochran is set to take the gavel on the Appropriations panel, allowing the current ranking member, Senator Richard Shelby (R-AL) to assume the chairmanship of the Banking, Housing and Urban Affairs Committee.
Interior-Environment Appropriations Subcommittee: Senator Lisa Murkowski (R-AK) is expected to use her perch at the Interior, Environment Subcommittee along with her chairmanship of the full Energy and Natural Resources panel to push for expanded fossil fuel exploration. Her Appropriations subcommittee is likely to be the starting point for GOP efforts to force the EPA to roll back greenhouse gas regulations that the coal industry opposes. In a 2013 Energy paper, Murkowski said Interior must design exploration plans for development of the Outer Continental Shelf.  Murkowski has been a significant supporter of ocean renewable energy.
Energy and Water Development Appropriations Subcommittee: Senator Lamar Alexander (R-TN) is set to assume the top spot on the Energy and Water Appropriations subpanel.  He is a strong supporter of government research and nuclear power. He may work to cut funding for wind energy and for DOE innovation hubs, which he views as a poor investment for taxpayer funds.
Environment and Public Works Committee: Senator James Inhofe (R-OK) is likely to take the help at the EPW Committee. The Oklahoma Senator strongly disagrees with the Administration’s actions on climate change and will look to thwart EPA and other Administration efforts to curb greenhouse gas emissions (BNA, 11/12).
GOP Lawmakers Question Interior’s Handling of Sage Grouse Listing
On Oct. 17, House Natural Resources Chairman Doc Hastings and seventeen other lawmakers wrote to Interior Secretary Sally Jewell over the potential future Endangered Species Act (ESA) listing of the greater Sage Grouse, saying there has been a “lack of transparency.” Specifically, the letter notes concerns with the agency’s process for evaluating relevant data and science, and failure to coordinate with affected states that are developing their own conservation efforts to avoid the need for listing the Sage Grouse under the ESA.
To address their concerns, the lawmakers asked for written responses to a series of questions on how the Fish and Wildlife Service is gathering information and opinions. It also requests details and information on the identities and credentials of people being consulted by the Department of the Interior on the Sage-Grouse listing decision. The agency is working under a self-imposed September 2015 settlement deadline to determine whether to list the bird under the ESA. (BNA, Kovski, 10/17).