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Washington Week: EPA gears up for Clean Power Plan repeal


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Washington Week: EPA gears up for Clean Power Plan repeal

Electric power producers this week will be closely eyeing the U.S. Environmental Protection Agency's next steps for the Clean Power Plan, the embattled Obama-era climate rule the Trump administration aims to repeal.

The EPA has created a draft proposal to repeal the rule, citing perceived conflicts between two sections of the Clean Air Act as the basis for its decision, according to a document obtained Oct. 6 by Politico. But the agency said it will solicit feedback on a possible replacement regulation.

The Clean Power Plan was expected to cut U.S. power sector carbon emissions 32% from 2005 levels by 2030. The plan included state-specific carbon emissions rate limits for existing fossil fuel-fired plants that many states and coal industry supporters said would be too tough to meet. Critics of the rule, which the U.S. Supreme Court stayed in February 2016, also said the EPA exceeded its authority by encouraging generation shifting to other energy sources, notably natural gas, as a compliance option.

Repealing the plan has been a key pillar of Trump’s energy agenda. Although several electric utilities opposing the Clean Power Plan support creating a more lenient successor rule, the Trump administration may not be so eager.

Beyond simply opposing the Clean Power Plan, key administration officials have questioned the role that manmade emissions play in climate change and could press the EPA to reconsider its finding that greenhouses gases endanger public health and welfare. That finding paved the way for the EPA to propose carbon regulations, including the Clean Power Plan, and a new determination could affect what, if any, rule the Trump administration ultimately will seek to regulate power sector emissions.

Perry to appear before Congress

The U.S. Senate is out of session this week, but the U.S. House of Representatives will take up some power-related matters. Energy Secretary Rick Perry will testify Oct. 12 before the House Energy and Commerce Committee's Energy Subcommittee on the U.S. Department of Energy's mission and management priorities.

That hearing comes shortly after the DOE made a controversial proposal aimed at helping to financially support struggling coal and nuclear power plants recover their costs, a move critics say is anti-competitive and unfairly disadvantages natural gas and renewable generation. Perry likely will face questions on that proposal, as well as on potential funding cuts for department research initiatives and the DOE's response efforts to recent hurricanes.

The House soon may vote on legislation to provide emergency funding for Puerto Rico and other parts of the country ravaged by hurricanes in the past two months. The White House has requested more supplemental funding for hurricane recovery and wildfire aid, including $12.8 billion for the Federal Emergency Management Agency's disaster relief fund. The request comes in the wake of Congress' passage in September of a measure to provide disaster assistance money following Hurricane Harvey.

Public power producers and electric cooperatives, including the Puerto Rico Electric Power Authority, can tap the FEMA fund to help restore infrastructure damaged by the storms. As of Oct. 5, at least 10.7% of customers in Puerto Rico had power restored, still leaving a substantial portion of the island without electricity.

Tax reform takes step forward

GOP hopes to overhaul the U.S. tax code took a step forward Oct. 5 when the House passed a fiscal-year 2018 budget resolution for the federal government. That resolution leaves room for a tax reduction over a 10-year period, setting the stage for Trump and Republican legislators to put their tax reform plan in motion.

The GOP's latest tax reform outline includes several items of interest for the power sector. Utilities applauded the framework's inclusion of a cut in the corporate tax rate to 20% from the current 35%. But to offset that lost revenue, the Trump administration has called for eliminating state and local tax deductions and limiting interest expensing for power producers and other companies — two proposals the utility sector dislikes.

But without actual legislation, much remains to be determined, and opponents of those provisions could lobby hard against the lost deductions and other facets of the GOP outline.

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Other stories from last week

FERC's Powelson pledges 'not to destroy' energy markets despite DOE directive

Federal Energy Regulatory Commission member Robert Powelson has promised that the agency will safeguard competitive wholesale electricity markets on the heels of a DOE proposal to ensure full cost recovery for certain coal and nuclear power plants. "We will not destroy the marketplace," said Powelson on Oct. 4 during a speech that drew loud applause and a standing ovation from attendees at the annual meeting of the Organization of PJM States Inc., or OPSI, in Arlington, Va. "Markets have worked well and markets need to continue to work well."

Energy groups: FERC needs to take its time on DOE reliability rulemaking

A large number of energy industry trade groups on Oct. 2 asked FERC to take its time in responding to the DOE's recent policy decree regarding power reliability. A group of 11 energy industry associations representing gas, wind, solar and other segments of the sector asked FERC to reject the DOE's proposed timeline to devise new rules to ensure that reliability and resiliency in power generation are "fully valued."

BLM intends to suspend key parts of methane rule until 2019

The U.S. Bureau of Land Management on Oct. 4 detailed its plans for suspending key parts of a rule limiting methane emissions from oil and gas production on federal and tribal lands. The new plans said the agency would delay certain provisions of the regulation until Jan. 17, 2019.

Trade investigators ding Suniva, SolarWorld for not providing competitive plan

Frustrating to U.S. trade investigators, neither SolarWorld Americas Inc. nor Suniva Inc. filed a formal plan outlining how they would adjust to foreign competition if President Donald Trump sets tariffs or other safeguards on imported crystalline silicon solar cells and panels. Without more details, U.S. International Trade Commission Chairman Rhonda Schmidtlein, a Democrat, questioned whether the picture the companies painted of a revived American manufacturing sector was simply a "wish list."

EPA misses deadline for issuing ozone designations

The EPA missed an Oct. 1 deadline for informing states as to which counties and regions are out of attainment with the 2015 National Ambient Air Quality Standards for ozone, a date the agency tried to postpone by a year before backing off on that effort in early August.

Lawmakers propose bipartisan fix to protect coal miners' pensions

A bipartisan group of lawmakers is sponsoring federal legislation to shore up coal miners' pension funds that could otherwise go bankrupt in the next few years. The bill would use some of the "excess funds" in the Abandoned Mine Land, or AML, fund to support the 1974 United Mine Workers of America Pension Plan. The proposal would also direct the U.S. Department of the Treasury to loan the pension plan up to $600 million a year, at an interest rate of 1%.