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Washington Week: Political pressure on Pruitt mounts, FERC to meet

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Washington Week: Political pressure on Pruitt mounts, FERC to meet

Mounting allegations of ethics breaches have placed U.S. Environmental Protection Agency Administrator Scott Pruitt in hot water with lawmakers and ethics officials, overshadowing his efforts to ease regulatory burdens for the energy sector and other industries.

Pruitt's work to unwind several of former President Barack Obama's policies and regulations for the energy sector has been widely attacked by Democrats, many of whom have sought Pruitt's resignation in light of the alleged ethics scandals. But even top Republican lawmakers have grown unhappy with the controversies. U.S. Sen. James Inhofe, R-Okla., a fellow Oklahoman who has been a long-time supporter of the EPA administrator, joined other GOP lawmakers recently in calling for a hearing on Pruitt's ethics issues.

Pruitt's actions while leading the agency are the subject of over a dozen ongoing investigations by Congress, the EPA inspector general and other federal entities. The probes relate to Pruitt's spending on security and first-class air travel, use of agency staff for personal errands and a deal to rent a condominium from the wife of an energy lobbyist, among other controversies.

Adding a new chapter to the saga, U.S. Rep. Elijah Cummings, the top Democrat on the U.S. House of Representatives' Committee on Oversight and Government Reform, sent a June 14 letter to the head of a public relations firm with energy clients regarding tickets the executive was said to have given Pruitt to attend the Rose Bowl college football tournament. The claims were made by Millan Hupp, Pruitt's former director of scheduling at EPA, in a May interview with oversight committee staff.

The new revelations have raised pressure on EPA's inspector general to complete its investigations into Pruitt's conduct. In a June 15 letter, the acting director of the U.S. Office of Government Ethics asked the inspector's office to expand its probes in light of new allegations against Pruitt in recent months and to complete its report as soon as possible so OGE can decide whether to pursue corrective action.

Despite the heightened scrutiny, Pruitt's fate ultimately rests with President Donald Trump. Trump told reporters June 15 that he was "not happy about certain things" related to Pruitt but that "he's done a fantastic job running the EPA, which is very overriding."

During his time at the EPA, Pruitt initiated the rollback of the Obama administration's Clean Power Plan, a sweeping rule aimed at slashing power sector carbon dioxide emissions from the power sector. The EPA under Pruitt has also worked to rescind the Obama-era Clean Water Rule defining federally protected waters. On June 15, the agency advanced its planned rewrite of the rule to the White House's Office of Management and Budget. Pruitt said the new rule would factor in feedback from farmers, ranchers and other stakeholders who had concerns with the existing regulation.

FERC causes waves on coal, nuclear debate

The Federal Energy Regulatory Commission is moving ahead with its review of electric grid resilience review but dealt a blow recently to coal and nuclear power advocates who want the agency to do more to save those plants from early retirement.

All five FERC members testified June 12 before the U.S. Senate Energy and Natural Resources Committee. At the hearing, FERC commissioners indicated they do not see an emergency for the power grid stemming from the closure of uneconomic coal-fired and nuclear plants. That stance undermined a key pillar of the U.S. Department of Energy's efforts to ensure cost recovery for struggling coal-fired and nuclear generating facilities.

The DOE asked FERC in September 2017 to craft a rule to subsidize "fuel-secure" plants in wholesale competitive markets in the name of grid resilience. FERC rejected the request, but the DOE is exploring other ways to support vulnerable coal and nuclear plants.

The DOE is still evaluating a petition from FirstEnergy Solutions Corp. to issue an emergency order requiring the PJM Interconnection to buy power from at-risk facilities that can store fuel onsite. The department also developed a draft plan dated May 29 that would direct grid operators to purchase power or capacity for 24 months from an undisclosed list of coal, nuclear and other plants deemed necessary for national security. That plan, however, was not final and has not yet received Trump's endorsement.

The issue of grid resilience, and what FERC may do to further ensure it, could come up at the commission's next monthly open meeting on June 21.

China announces tariffs on US energy products

Escalating trade tensions between the U.S. and China have extended to energy. The Chinese government announced new retaliatory tariffs on U.S. goods including coal, crude oil and gasoline, according to The Wall Street Journal. The decision came after President Donald Trump said on June 15 that the U.S. would impose 25% tariffs on $50 billion of Chinese goods.

The tariffs could present new pain for U.S. coal producers, who have turned more to export markets in recent years as demand for coal falls from domestic utilities. The trade disputes with China are in addition to rising trade tensions between the U.S. and Canada that could hurt U.S. coal exports to that country.

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US Congress

June 20

The House Energy and Commerce Committee's energy subcommittee will hold a hearing to examine the impact of the new tax law on the energy sector and consumers.

June 20

The House Committee on Natural Resources will hold a markup of four bills aimed at streamlining permitting for onshore energy development in federal areas.

June 20

The Senate Environment and Public Works Committee will hold a hearing on the nominations of Charles McIntosh to lead EPA's Office of International and Tribal Affairs and Peter Wright as assistant administrator for the Office of Land and Emergency Management.

June 21

The House Committee on Transportation and Infrastructure will review the implementation of the PIPES Act of 2016 and related pipeline safety programs.

June 21

The House Committee on Science, Space and Technology will hold a subcommittee hearing on regulating background ozone.

Federal agencies

June 21

The Federal Energy Regulatory Commission will hold its monthly open meeting at FERC's headquarters in Washington, D.C.

Industry events
June 19-20

The Renewable Energy Finance Forum will take place in New York City.

June 19

FERC Chairman Kevin McIntyre will be the guest speaker at the National Gas Roundtable's June luncheon in Washington, D.C.

June 19

Resources for the Future will hold a webinar on the economics of electricity system resilience.

June 20

The Center for Strategic and International Studies' Energy & National Security Program will host the launch of Bloomberg New Energy Finance's 2018 energy outlook at CSIS's headquarters in Washington, D.C.

June 21

CSIS will hold a webcast with Duke Energy CEO Lynn Good to discuss energy challenges and future opportunities.

June 22

The Brookings Institution will host a panel of experts to discuss climate financing for low-carbon infrastructure at Brookings' Washington, D.C., office.

Other notable stories from last week

Effort to stop Trump intervention in energy markets may need an act of Congress

US generator group assails FERC's take on Illinois nuclear credit program

US Senate committee rejects Trump's proposed EPA cuts

Germany launches task force to phase out coal

Commissioners: Pipeline cybersecurity standards should be set by FERC, not TSA