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US Senate panel approves energy bills despite jitters over nuclear provisions

The U.S. Senate Committee on Energy and Natural Resources advanced 22 bills July 16, including legislation that would allow the federal government to sign power purchase agreements with electric utilities for terms of up to 40 years.

Approval of the bills took place at the committee's first business meeting in 2019 to vote on energy legislation.

"These measures will help develop innovative technologies, responsibly reduce our energy and water consumption, and protect our economy and national security," Committee Chairman Sen. Lisa Murkowski, R-Alaska, said in opening remarks.

One bill the committee advanced was S. 903, the Nuclear Energy Leadership Act, or NELA. The bipartisan legislation, which Murkowski introduced along with 17 cosponsors, seeks to reestablish U.S. leadership in civilian nuclear energy applications, including by directing the U.S. Department of Energy to set research and development goals for advanced reactors.

Another major provision of NELA would require the federal government to enter into at least one power purchase agreement with an advanced nuclear plant by 2023. To accomplish that goal, the bill would extend the maximum length of power purchase agreements that the federal government can sign with energy suppliers from 10 years to 40 years.

But given that in 2017, the DOE sought a rule aimed at propping up financially struggling coal-fueled and nuclear plants, some committee members worried that NELA could allow the current or a future administration to sign long-term power purchase deals with older resources.

"Forty-year contracting authority is a big change, and this committee should talk through the implications ... before making such a change," said Sen. Mazie Hirono, D-Hawaii. "We need to recognize that the Trump administration has already tried to stretch existing authority to support old coal plants and others that are struggling to compete in the power markets."

Hirono submitted an amendment to the bill that would only allow plants that enter into service after 2019 to qualify for 40-year power purchase agreements with the government, with generating facilities that start operations before that year only able to obtain contracts for the existing maximum of 10 years. However, Hirono agreed to withdraw the amendment in light of commitments from Murkowski and Senate energy committee Ranking Member Sen. Joe Manchin, D-W.Va., to address her concerns with S. 903.

For instance, Murkowski and Manchin said they will work on possible changes to emphasize that new renewable energy facilities also could qualify for the longer-term federal power purchase agreements. In 2015, Hirono introduced legislation that would have allowed the government to sign up to 30-year contracts with renewable and cogeneration projects.

"Our intent with this provision was to extend this authority in a technology-neutral manner so that renewables could also benefit," Murkowski said. "You have my commitment that we will work with you as this bill moves to the floor."

In addition to S. 903, the committee advanced several other energy-focused bills July 16. The measures included S. 816 from Sen. Bill Cassidy, R-La., which would amend the Natural Gas Act to expedite approval of small-volume LNG exports that total no more than 51.75 billion cubic feet per year.

Some committee members objected to S. 816. Sen. Angus King, I-Maine, said current and planned LNG export projects could total roughly half of daily U.S. natural gas output. He accordingly said the Congress should consider some kind of export volume control to avoid a "catastrophe of gas costs" domestically.

But after Murkowski noted that the small-scale export exception in Cassidy's bill would only apply to 0.17% of total U.S. gas production, the committee voted 11-9 to advance S. 816.

Other energy bills voted out of committee July 16 included S. 1685, which would require the secretary of energy to create a program for developing and demonstrating commercially viable carbon capture technologies for natural gas-fired power plants. The committee also approved S. 1201, the Enhancing Fossil Fuel Energy Carbon Technology Act, or EFFECT Act. Introduced by Manchin, the bill directs the DOE's Office of Fossil Energy to establish new research and development programs focused on coal and natural gas technology, carbon storage and utilization, and carbon removal.

Committee members also advanced S. 1064, which would require the DOE to study the national security implications of building a storage hub in Appalachia for ethane and other natural gas liquids-related petrochemicals, and S. 174, which would create a two-year DOE pilot program to identify energy-sector security vulnerabilities and evaluate technology to isolate critical energy infrastructure from cyberattacks.

In addition to energy bills, the committee also approved legislation to support domestic critical minerals production and research into extracting rare earth elements from coal and coal byproducts.

Where the bills go from here

Following the meeting, Murkowski told reporters that she wants to hold another markup in September to vote on several energy storage bills the committee considered at a recent hearing. The Alaska senator said she was prioritizing measures that have bipartisan support and are likely to be received favorably in the U.S. House of Representatives.

"What I am trying to do is bring together ... some energy-related proposals that I think could make good packages for floor time," Murkowski said. "I am very cognizant that we're not seeing a lot of legislation on the floor right now."

The next step for the energy bills will be to "figure out how will we advance them through the larger process," she added. Murkowski did not identify larger potential legislation to which the energy measures could be attached.