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US senators reach $1 trillion infrastructure deal that could aid grid expansion

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US senators reach $1 trillion infrastructure deal that could aid grid expansion

A bipartisan group of U.S. senators reached a deal July 28 to move ahead on a more than $1 trillion infrastructure package that could ease the buildout of the nation's electric grid and provide funds for clean energy research.

The legislation, which includes $550 billion in new federal investment, follows a late June infrastructure agreement between U.S. President Joe Biden and a group of Republican and Democratic senators that sought $73 billion for power infrastructure.

"This deal signals to the world that our democracy can function, deliver, and do big things," Biden said in a statement. "As we did with the transcontinental railroad and the interstate highway, we will once again transform America and propel us into the future."

A July 28 fact sheet from the White House said the legislation "helps us tackle the climate crisis by making the largest investment in clean energy transmission and [electric vehicle] infrastructure in history."

The bill's text was not immediately available.

Historic transmission investment

The White House fact sheet noted that a recent U.S. Department of Energy study found that power outages cost the U.S. economy up to $70 billion annually. To help avoid a repeat of disasters like the deadly Texas blackouts in mid-February, the legislation would invest $73 billion in electric transmission and related infrastructure, described as "the single largest investment in clean energy transmission in American history."

Various academic studies have estimated the U.S. will also need to double or triple its electric transmission capacity by midcentury to completely decarbonize its economy.

To that end, the bipartisan package would create a new "Grid Development Authority" housed within the U.S. Department of Energy. Industry experts have argued such an authority needs a clear mandate to facilitate the development of a nationwide macro grid capable of transmitting renewable energy generated in remote locations to population centers.

The White House fact sheet did not specify whether the legislation includes several other key transmission-related provisions in a draft bipartisan bill unveiled in June by the U.S. Senate Committee on Energy and Natural Resources. That bill would clarify that the Federal Energy Regulatory Commission has backstop authority to site interstate power lines within national interest electric transmission corridors, potentially resolving long-running uncertainty over whether the agency can override state-level permit denials for those types of projects.

The Senate committee's draft bill would also direct FERC to conduct a rulemaking to increase the effectiveness of interregional transmission planning, something the agency is already pursuing through a major rulemaking effort announced in connection with a newly formed federal-state transmission task force.

But the July 28 fact sheet did indicate that the bipartisan deal includes other elements of the Senate committee's draft bill that seek to boost smart grids and grid-enhancing technologies, such as dynamic line ratings that rely on real-time weather data to squeeze more transmission capacity out of lines located in wind-rich areas.

The legislation would also provide $7.5 billion to build a national network of EV chargers, support the demonstration and research of advanced clean energy technologies, and reclaim abandoned mine land and cap orphaned gas wells. In addition, the National Hydropower Association said the proposal will create a grant program that provides $553 million for grid resilience, dam safety upgrades, and environmental enhancements at existing hydropower facilities.

The White House said the bill would be financed through a combination of "unspent emergency relief funds, targeted corporate user fees, strengthening tax enforcement when it comes to cryptocurrencies, and other bipartisan measures," as well as "revenue generated from higher economic growth as a result of the investments."

Congressional timeline

The Senate will hold a procedural vote on the bipartisan package during the evening of July 28, with Senate Majority Leader Chuck Schumer, D-N.Y., pushing to have the bill passed before the upper chamber's August recess.

Although key Senate Democrats back the legislation, many within the caucus see it as a starting point for bigger climate and clean energy action. Top Senate Democrats recently agreed on a $3.5 trillion budget reconciliation outline that is expected to include a federal clean electricity standard, a carbon border adjustment fee and other energy-relevant climate measures.

The bipartisan agreement "will hopefully make a good start in addressing the infrastructure needs of the American people," Senate Environment and Public Works Committee Chairman Tom Carper, D-Del., said.

But Carper added that the bill on its own "does not go far enough to meaningfully advance environmental justice and tackle the climate change crisis." He will, therefore, "continue to fight for more to be done in our upcoming reconciliation bill and work to get assurances from the White House and Senate leadership to ensure that it includes the policy and the resources we need to take bold, transformative action to invest in climate change and environmental justice."

Progressive advocacy groups echoed Carper's comments. "The bipartisan deal must only be the start," MoveOn Executive Director Rahna Epting said. "And let's be clear, it is not even remotely sufficient in and of itself. It now must be paired with a robust reconciliation package that meets the size and scope of the challenges that too many Americans face."