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US infrastructure bill chock-full of transmission provisions, disappoints on EVs

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US infrastructure bill chock-full of transmission provisions, disappoints on EVs

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U.S. Senate Majority Leader Chuck Schumer, D-N.Y., is driving efforts in the Senate to pass a massive bipartisan infrastructure bill that includes a wave of energy measures.
Source: Drew Angerer/Getty Images News via Getty Images North America

Days after announcing consensus on the proposal, the U.S. Senate released a 2,702-page bipartisan infrastructure bill that could help expand the country's electric grid and bolster existing and new clean energy technologies.

The legislation, named the Infrastructure Investment and Jobs Act, also contains provisions to support existing nuclear plants and hydropower facilities, clean up orphaned wells and abandoned mine lands, and ease access to critical minerals needed in the production of clean energy.

"It has been decades — decades — since Congress passed such a significant, stand-alone investment," Senate Majority Leader Chuck Schumer, D-N.Y., said in unveiling the text of the proposal Aug. 1. "The bipartisan infrastructure bill is designed to bring our infrastructure up to date for a new century, and that is a significant achievement."

The legislation, which Schumer hopes to pass in the coming days, fell short of climate advocates' hopes in many areas, including with respect to funding for electric vehicle deployment. But top Democrats are vowing to advance a budget reconciliation package after the bipartisan bill is voted on that will include robust climate measures.

"A bipartisan infrastructure bill is definitely necessary — but to many of us it is not sufficient," Schumer said. "That is why, soon after this bill passes the Senate, Democrats will press forward with a budget resolution to allow the Senate to make further, historic vitally important investments in American jobs, American families and efforts to reverse climate change."

Electric transmission

With $73 billion for power infrastructure, the bill was touted by the White House as "the single largest investment in clean energy transmission in American history."

However, ClearView Energy Partners LLC noted that the Senate summary only authorizes approximately $28.8 billion for electric grid infrastructure.

Academic studies estimate the U.S. will need to double or triple its electric transmission capacity to achieve U.S. President Joe Biden's goal of completely decarbonizing the nation's economy by midcentury.

Among its many provisions, the bill would allow the U.S. Energy Department to allocate $5 billion in assistance for new electric transmission projects. Priority would be given to projects that bolster grid reliability and enable interregional transmission, an area that industry experts see as pivotal to accommodating a growing number of renewable energy resources.

It would empower the DOE to act as an anchor tenant by entering into transmission capacity contracts and later transferring those contracts to private transmission customers, potentially mitigating risk to investors. The DOE would specifically be authorized to procure up to 50% of a new project's transmission capacity, and the department could also issue loans for new projects of up to $2.5 billion.

The legislation includes $10 billion in transmission funding for the Bonneville Power Administration, which produces roughly one-third of the hydroelectric power in the Pacific Northwest.

The bill also addresses long-running uncertainty over the Federal Energy Regulatory Commission's electric transmission siting authority, clarifying that the agency can override state-level permit denials under certain conditions for projects sited in national interest electric transmission corridors.

FERC, meanwhile, is seeking to make headway on transmission siting through a newly formed federal-state task force expected to meet for the first time this fall.

With cyberattacks on the rise, the bill would also establish new financial incentives for programs aimed at safeguarding transmission facilities against hostile actors.

The bill also directs state utility commissions to consider establishing new demand response rules for electric utilities that compensate consumers for curtailing electricity use in response to price signals.

Initial White House fact sheets indicated the deal would establish a new grid authority within the DOE, but that provision was not included in the legislative text unveiled Aug. 1. An amendment to create the grid authority failed on a tie vote during committee, but it could still become part of the final Senate bill. An investment tax credit for new transmission facilities was also excluded from the legislation, although it could also get incorporated into a final budget reconciliation measure.

"It is significant that the Senate bill recognizes the importance of transmission as a key part of the nation's infrastructure," Rob Gramlich, executive director of Americans for a Clean Energy Grid, said in an email. "We've come a long way in just a couple years. There is still a lot more to do, like pass a tax credit for regionally significant transmission as the Biden/Harris American Jobs Plan called for."

Other power provisions

The bipartisan infrastructure legislation includes a number of other power sector-related provisions. It incorporated text from the Storing CO2 and Lowering Emissions Act, or SCALE Act, which would develop a program to provide low-interest loans for CO2 transport infrastructure projects.

The infrastructure bill would create a "civil nuclear credit program" to award incentives to nuclear power plants at risk of early retirement due to economic factors. The credits would be allocated across a four-year period and cannot exceed the average projected annual operating loss, in dollars per megawatt-hour, that the plant operator expects to incur over the four-year period. The program would receive $6 billion across fiscal years 2022 through 2026.

Turning to research, the bill directs the secretary of energy to develop at least four regional clean hydrogen hubs. The hubs must include at least one project each to demonstrate the production of hydrogen from fossil, renewable and nuclear energy that can serve the electric power, industrial and residential/commercial heating sectors.

Hydropower also got a boost from the bill. The legislation creates a new grant program that would provide about $553 million to support grid resilience, dam safety upgrades and environmental enhancements at existing hydropower facilities. The bill contains $125 million to encourage adding hydropower generation at existing non-powered dams and conduits and $75 million for hydropower efficiency improvements, as well as creates a demonstration project for new pumped storage hydropower facilities.

Furthermore, the Senate package would appropriate research funds authorized under the Energy Act of 2020, a bill signed into law by former President Donald Trump. The new Senate bill would provide money for demonstration projects focused on energy storage, advanced nuclear reactors, carbon capture, direct air carbon capture and certain renewable energy resources, among other technologies.

Car, building electrification

Although the Senate bill includes unprecedented funding for electric vehicle infrastructure and the electrification of school buses — $7.5 billion and $2.5 billion, respectively, along with billions more for other clean transit — EV and public health advocates said the money does not go nearly far enough.

Plug In America, a nonprofit pushing for transportation electrification, said President Biden had asked for $174 billion in the infrastructure proposal rolled out in March. The group said its members, "outraged by the dramatic cuts to EV funding," are now calling members of Congress, urging them to include the remaining funding in the budget reconciliation bill Democrats hope to pass once the infrastructure package is done.

The American Lung Association also expressed disappointment with the Senate bill. The money earmarked to transition the nation's diesel school buses is just a fraction of the $20 billion that Biden had asked for clean school buses, the group said.

Laura Kate Bender, national assistant vice president of the group's Healthy Air team, said the $20 billion Biden requested will only cover one-fifth of school buses, and the full funding is needed to help bring down costs for school districts to expand their fleets.

"That's really what we need, and we will be calling for it loud and clear," Bender said in an Aug. 2 interview. Nationwide, 25 million students ride school buses to and from school every day.

The infrastructure package would set up a 25-member electric vehicle working group co-chaired by the energy secretary and with representatives from the car manufacturing, utility and battery industries, labor groups, local governments, and other parties. This group must report regularly on vehicle adoption rates, grid capacity, charging infrastructure needs, EV and battery production costs and materials, consumer financing, and other critical pieces of the electrification puzzle.

It amends the Public Utility Regulatory Policies Act of 1978 to require states to "consider measures to promote greater electrification of the transportation sector" and to work with utilities to help them recover the marginal cost of servicing EVs and charging stations.

The bill also contains several measures that could bolster building electrification efforts. Those include $225 million in funding for competitive state grants to develop and implement updated building energy codes. The bill includes $250 million to help states establish funds that would underwrite loans and grants for commercial and residential energy audits, energy upgrades and retrofits. Another $60 million in appropriations would support related workforce training and educational programs.

Congressional Democrats unveiled a stand-alone building electrification rebate bill July 30.

Critical minerals, other provisions

The bill included an entire title on supply chains for clean energy technologies.

The bill would create an earth-mapping resources initiative within the U.S. Geological Survey to locate critical mineral resources and fund a USGS energy and minerals research facility. It would also support the build-out of a facility to demonstrate the commercial feasibility of a "full-scale integrated rare earth element extraction and separation facility and refinery."

On the permitting front, the bill encourages the secretaries of interior and agriculture to maximize the efficiency of permitting and review processes for critical minerals extraction on federal lands. The bill would issue awards, on a competitive basis, for basic research to advance critical minerals mining, recycling and reclamation strategies and allow projects that increase supply of domestically produced critical minerals to qualify for Title 17 loan guarantees from the DOE.

Turning to other sections, the bill would establish a program to plug, remediate and reclaim orphaned wells on federal lands and authorize $11.3 billion for the federal Abandoned Mine Reclamation Fund for fiscal year 2022 onward. The bill would extend the collection of fees under the Abandoned Mine Reclamation Fund to the end of fiscal year 2034, beyond its currently scheduled expiration at the end of fiscal year 2021.

The bill would require coordination with U.S. Customs and Border Protection to ensure "that no illegal products or materials produced with forced labor are procured with funding made available" under the legislation. The provision could affect money from the bill that may go to solar projects, with the solar industry heavily reliant on materials sourced from China's autonomous Xinjiang region where Beijing is accused of suppressing Uyghurs and other Muslim minorities.

The Senate resumed debate on the infrastructure bill Aug. 2. Schumer has repeatedly stated a goal for the Senate to vote both on the passage of the infrastructure legislation and a $3.5 trillion budget resolution before the upper chamber takes its summer recess.

If the Senate passes the legislation, the bill will head to the U.S. House of Representatives for consideration.