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Time, partisan divide make reconciling energy bills difficult for Congress

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Essential Energy Insights - September 17, 2020

Essential Energy Insights September 2020

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Time, partisan divide make reconciling energy bills difficult for Congress

U.S.lawmakers still hope major energy reforms will be signed into law in 2016, but thelegislation may be held up by Democratic resistance to certain provisions in theHouse of Representatives' energy bill and time constraints as the November electionsnear.

The Senatepassed a sweeping energybill with bipartisan support April 20. Spearheaded by Senate Energy and NaturalResources Committee Chairman Lisa Murkowski, R-Alaska, the legislation is intendedto modernize the grid, speed LNG export approvals and require a deeper look at RTOcapacity market rules, among other measures. That bill, S. 2012, is expected to go to a joint Senate-House conferencecommittee to be reconciled with the lower chamber's energy legislation.

But theconference process could prove tricky. Most Democrats voted against theHouse energy bill, H.R.8, and President Barack Obama threatened to veto the legislation, saying it would unnecessarily expandFERC's authority to impose deadlines on other federal agencies conducting environmentalreviews of natural gas pipeline applications and restrict the U.S. Department ofEnergy's ability to fully consider proposed LNG export projects. The House Energyand Commerce Committee voted largely along party lines to send the bill to the fullHouse after Chairman Fred Upton, R-Mich., added a manager's amendment opposed by nearly all the committee's Democrats.

"Althoughthere is noise that Upton and Murkowski want to appoint conferees, it is hard tosee how the bodies will ultimately connect," Sierra Club Legislative DirectorMelinda Pierce said. Calling the House energy bill a "parade of horribles,"Pierce said Upton "would break apart the fragile Senate energy coalition ofmembers" if he insists on keeping H.R. 8 intact in the conference committee.

NeitherHouse nor Senate energy committees could provide an update on the status of theconference process as of May 17. David Popp, communications director for SenateMajority Leader Mitch McConnell, R-Ky., said May 13 that no scheduling announcementshad been made with regard to combining the energy legislation. The House and Senateare adjourned for much of July, August and October ahead of the November generalelections, which leaves little time for the two chambers to work out differenceson key measures that are troubling Democrats.

Dissenting views

In additionto the time constraints, bill conferees may have to grapple with Democrats' dissatisfactionover several sections of H.R. 8.The House bill would make final decisions on federal authorization of new naturalgas pipelines due no later than 90 days after FERC issues a final environmentaldocument, unless a different schedule is otherwise established by law. That requirementis more stringent than the "sense of Congress" provision included in theSenate's energy bill,which encourages a 90-day deadline for federal pipeline authorizations after FERCdeems an application complete.

Democratsalso are displeased with language in H.R. 8 that would amend the Federal Power Actto require RTOs/ISOs to provide analyses to FERC on whether capacity markets includeresource-neutral performance criteria designed to ensure that electric generatingfacilities have certain reliability attributes, including on-site fuel storage andthe ability to operate on more than one energy source. Environmental groups andmany Democrats say the provision is meant to aid noneconomic coal and nuclear plantsat the expense of renewable generation such as wind and solar.

In contrast,the Senate energy legislation contains broader language requiring RTOs/ISOs thatoperate mandatory capacity markets to inform FERC on available electric capacityresources, projected reliability and whether and to what extent RTO/ISO market rulesmeet certain criteria for wholesale power prices, generation diversity and the self-supplyof electric capacity resources by public power entities.

The Obama administration and many Democrats also are unhappywith the House bill's hydropower licensing language, which they fear will exemptsome projects from review under the Clean Water Act and the Endangered Species Act.

Despitehaving more bipartisan support, S. 2012 includes a handful of divisive measuresthat may resurface in the conference process. Lawmakers voted to add an amendmentto the Senate energy bill that would deem biomass a renewable, carbon-neutral energysource for the purpose of all federal rulemakings, a proposal that provoked leadingenvironmental groups. And House GOP lawmakersmay resist the permanent reauthorization of the Land and Water Conservation Fundcontained in the Senate bill, sources say.