Congress Advances Smaller Reforms After 2016's Energy Bill Collapse

S&P Global Market Intelligence
Written By: Molly Christian
S&P Global Market Intelligence
Written By: Molly Christian

Congress has worked to advance more modest bills to protect the electric grid, ease permitting requirements and encourage advanced nuclear energy research since lawmakers failed to pass a large comprehensive energy bill in 2016.

Divisions between U.S. Senate and House of Representatives negotiators stalled passage of compromise energy legislation last Congress. But in 2017, both chambers have moved less controversial measures on a stand-alone basis, including proposals that were part of the Senate's and House's respective energy bills last year.

"We'll have a number of bills on energy that we will take up and pass," House Energy and Commerce Committee Chairman Greg Walden, R-Ore., said April 26.

The committee has held several oversight hearings on potential power market reforms and removing barriers to energy infrastructure development, particularly as President Donald Trump pushes to create a massive infrastructure plan that could aid future energy projects.

The panel has floated discussion drafts of legislation to promote inter-agency coordination on natural gas pipeline reviews, cross-border energy infrastructure and hydropower development at existing nonpowered dams. The pipeline discussion draft includes language similar to provisions of last year's broad energy bills that would require the Federal Energy Regulatory Commission to grant or deny federal authorization for gas pipeline projects within 90 days of issuing its final environmental document.

Other committees have rolled out smaller energy-related proposals as well. The House Natural Resources Committee voted April 27 to advance the "Electricity Reliability and Forest Protection Act", or H.R. 1873, by 24-14. The legislation, which would streamline the process for removing vegetation around transmission and distribution lines on federal lands to reduce the chance for wildfires and protect grid reliability, was included in the House's broad energy bill last Congress.

The Senate Energy and Natural Resources Committee also advanced several energy bills recently, some of which were part of the upper chamber's broad energy package in 2016. On March 30, the committee passed nearly 60 bills by voice vote, including the "Nuclear Energy Innovation Capabilities Act of 2017," or S. 97, which seeks to enable civilian research and development of advanced nuclear reactors. Other bills passed by the committee included measures to extend construction deadlines for various hydroelectric projects and reform the Federal Power Act to lengthen preliminary permits and construction deadlines for hydropower facilities.

What is next

Trump's election has shifted the GOP-controlled Congress' energy priorities to some extent. Instead of focusing on rolling back Obama administration regulations — a task Trump is addressing through executive action — Republicans in Congress have been able to direct their efforts to other areas.

"I think you'll see regulatory relief, but I also think you [will] see more of an emphasis on things like using all of the fuels and finding ways to make all of them cleaner," U.S. Rep. Kevin Cramer, R-N.D., said at a recent press event on Capitol Hill.

Pipeline and transmission permitting reforms, including those that House and Senate lawmakers already are pursuing, could make up a big part of the legislative agenda for energy. Nuclear energy proponents also would like to see the Clean Air Act altered to allow nuclear facilities to qualify for power upgrade credits, said Jeff Merrifield, a former commissioner with the Nuclear Regulatory Commission who spoke alongside Cramer.

Scott Segal, the head of Bracewell LLP's Policy Resolution Group, called for U.S. national labs to do more applied research and for the NRC to change its permitting structure to allow "better, faster" approval of advanced or next generation reactors. To that end, the House passed legislation, both in the current and prior Congress, that would require the NRC to form a plan for creating a regulatory framework for advanced reactor licensing. The Senate Committee on Commerce, Science and Transportation later advanced the bill by unanimous consent, meaning the legislation can move ahead without consideration due to its noncontroversial nature and bipartisan support.

"These are all things we can do to lessen the footprint of the government and make it more responsive to market demands and have the happy benefit of encouraging a cleaner economy and an economy with a smaller carbon footprint," Segal said.