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Now that the Democrats have taken control of the U.S. House of Representatives, the body will shift its focus from easing regulations for energy producers to supporting clean energy and probing the Trump administration's efforts to revoke air and water quality rules, according to key lawmakers. Democrats also hope to take more action to address climate change, a problem they accuse the White House and GOP of ignoring over the past two years.
"One of our main priorities would be strengthening the economy and creating more good-paying jobs by rebuilding America through investments in green energy and drinking water infrastructure," U.S. Rep. Frank Pallone Jr., D-N.J., ranking member of the House Committee on Energy and Commerce, said in a September email to S&P Global Market Intelligence. "We would also focus on the need to address climate change by looking at its impacts on our communities and economy, and by holding the Trump Administration accountable for dangerous policies that only make it worse."
The Democrat House victories in the Nov. 6 midterm elections are expected to result in Pallone becoming chairman of the House Energy and Commerce Committee once the 116th convenes in early January. Both Pallone and Rep. Raul Grijalva, D-Ariz., the ranking member and expected future chairman of the House Committee on Natural Resources, have said they want to investigate the scientific underpinnings and processes that federal agencies used to propose repeals of Obama-era energy and environmental regulations and craft less stringent replacement rules, including the U.S. Environmental Protection Agency's Affordable Clean Energy proposal.
U.S. Rep. Frank Pallone Jr., D-N.J., is in line to be the next chairman of the House Energy and Commerce Committee. Source: Associated Press |
Democrats could also call on agency leaders to testify on ethics concerns, including those behind former EPA Administrator Scott Pruitt's resignation and inspector general investigations into Interior Secretary Ryan Zinke.
In addition to conducting oversight, Pallone has said House Democrats will work to restore environmental regulations that the Trump administration has rescinded since early 2017.
But undoing the GOP's regulatory rollbacks will be difficult, if not impossible. Republicans held onto their majority in the U.S. Senate after the Nov. 6 elections, and President Donald Trump is guaranteed to veto any legislation that runs counter to his goals of lowering regulatory requirements for fossil-fuel energy and its producers.
Continued Republican control of the Senate will also allow the GOP to more easily confirm Trump's judicial nominees, as well as Bernard McNamee's nomination to the Federal Energy Regulatory Commission.
Possible infrastructure bill faces challenges
Democrats are also considering developing an infrastructure bill that could facilitate new energy infrastructure and upgrades to existing infrastructure.
That legislation could mirror a proposal that House Democrats introduced in May 2017 that included $17 billion for energy-related initiatives. The Leading Infrastructure for Tomorrow's America Act, or LIFT Act, would set aside money for grid modernization and resilience, the creation of a federally owned strategic transformer reserve, and upgrades to methane pipelines and the Strategic Petroleum Reserve. The bill also directed the Energy Secretary to establish a program to incentivize natural gas distribution companies to upgrade their systems, including through state grants to replace leaky pipelines and for inspection and maintenance programs.
Although Democrats would need to introduce new infrastructure legislation in the upcoming 116th Congress, the LIFT Act "includes our priorities for infrastructure," Pallone spokesperson C.J. Young said. The LIFT Act "could certainly be updated" in the next Congress and is "a great starting point" for a new infrastructure bill, Young said.
After winning control of the U.S. House, Democrats may introduce an infrastructure bill that could support grid modernization projects. Source: Associated Press |
But as with the last Congress, lawmakers will have difficulty agreeing on how to pay for a public works bill. In 2018, Democrats in the U.S. Senate called for funding $1.0 trillion worth of infrastructure investment by raising individual tax rates for top earners, increasing the corporate tax rate to 25% from the current 21% and eliminating some tax benefits included in the GOP tax package signed into law in late 2017.
By contrast, a plan that Trump released in February would offer $200 billion of federal money with the goal of spurring at least $1.5 billion in total infrastructure investment, most of which would come from state and local governments or the private sector, including through public-private partnerships.
The Trump administration and Senate Republicans are unlikely to support raising the corporate tax rate after fighting to lower that figure in the 2017 tax bill. But Democrats have argued the federal government should foot more of the money for infrastructure development and that public-private partnerships and tax incentives would not be enough to spur major public works spending.
Democrats and Republicans could also be at odds over what infrastructure projects to prioritize, including with respect to energy. Trump's plan sought federal support for new hydroelectric generation and rural power projects and asked Congress to clarify the time states have to grant or deny water quality certifications for pipelines under Section 401 of the Clean Water Act.
But Democrats' infrastructure proposals have been more focused on grid modernization and expanding deployment of efficiency and renewable resources broadly and may not include measures to ease pipeline permitting, which would alarm environmental groups that are part of Democrats' base. An easier permitting process is a bigger priority for utilities than direct federal funding for new projects.
"The real impediment on the energy side isn't really access to capital [for infrastructure]... it is more so on the regulatory side," said John Godfrey, senior director of government relations at the American Public Power Association.
Godfrey said the public power sector would like to see changes in the U.S. tax code to spur investment in new infrastructure. Current "private use" rules for public power producers can make purchasing or developing new power with tax-exempt municipal bonds difficult unless they retire older, existing generation first. Revisions to those types of tax provisions could go a long way toward encouraging utilities to upgrade their system, according to Godfrey.
"Both Republicans and Democrats have a variety of ideas for making the tax code better suited to encouraging infrastructure investment," he said.



