Washington Energy Update
On the budget front, and given the state of the various appropriations bills (none have yet cleared the Senate floor), chatter continues regarding what a potential continuing resolution for Fiscal Year (FY) 2015 will look like once Congress returns and the current fiscal years ends on September 30, 2014. At this juncture, the Senate is unlikely to consider any spending bill before Congress departs. The House has been busily working through its various measures. Earlier this month, the House passed H.R. 4923, the FY 2015 Energy-Water Appropriations bill. While fossil fuel research would see a boost in funding, the Energy Department’s energy efficiency and renewable energy programs would receive a six percent cut. Importantly, as part of the bill’s consideration, was the adoption by voice vote of a bi-partisan sponsored amendment offered by two New York Members, Reps. Gibson (R-19) and Maloney (D-18), to block Federal Energy Regulatory Commission (FERC) funding to enforce or administer the recently approved Lower Hudson Valley Zone in the New York Independent System Operator. Sources indicate that apparently there was no prior notice of the amendment as drafted being offered. Pursuant to House Rules under an appropriations bill, unless the Rules Committee does otherwise, bills can come up under an “open rule” that lets germane amendments be offered without prior notice. The NY Hudson Valley Zone issue has spilled over into the FERC nomination process (see below) and is likely to arise in other instances as the legislative process continues until the end of the 113th Congress.
In other budget related activity, and despite several Democratic attempts to eliminate policy riders blocking environmental regulations, the House Appropriations Committee approved the FY 2015 Interior and Environment Appropriations bill, 29-19. The proposed legislation represents an increase over current enacted levels, but most of that increase would go toward fire-suppression efforts and the payments-in-lieu-of-taxes program. The Environmental Protection Agency (EPA) would receive $7.5 billion, a nine percent cut from fiscal 2014 levels. Among the bill’s many policy riders are provisions that would block EPA from requiring power plants to lower carbon dioxide emissions and from increasing the number of streams and wetlands that get automatic protection under the Clean Water Act. Jim Moran (D-VA-08), Ranking Member of the Appropriations Subcommittee on Interior and Environment, offered an amendment to eliminate the provision blocking the EPA’s recently announced carbon dioxide regulations for existing power plants. The Moran amendment failed by a vote of 18-29.
Items of Interest:
EPA Administrator McCarthy to Testify Regarding Greenhouse Gas (GHG) Proposal for Existing Power Plants. In what is expected to be a hearing with predicable themes for Members on either side of the dais, Administrator McCarthy will come before the Senate Environment and Public Works (EPW) Committee on July 23, 2014. This is the first time she will have testified since the June 2, 2014, release of the proposal to regulate carbon emission standards for existing (ESPS), modified and reconstructed sources. The comment period for the ESPS is currently scheduled to close on October 16, 2014. The Agency is also holding hearings on the proposal in various cities across the country during the last week of July 2014, including Atlanta and Denver (July 29), Washington, D.C. (July 30) and Pittsburgh (July 31). Acting Assistant Administrator and nominee Janet McCabe testified before the House Energy and Commerce Committee regarding the proposal in mid-June. This is the first time McCarthy will have testified on the matter since its release.
In other EPA-related senior official news, Bob Perciasepe, the Agency’s long-time Deputy Administrator, who vied for the Administrator slot after the departure of Lisa Jackson, will leave EPA to serve as President of the Center for Climate and Energy Solutions, a Washington-based energy and climate change think tank. Rumors abound regarding Perciasepe’s replacement, especially given the very difficult confirmation process that person might face. The Agency currently has at least half a dozen individuals serving in an “acting” capacity as office heads. Sources indicate that Lisa Feldt, formerly Deputy Assistant Administrator for EPA’s Office of Solid Waste and Emergency Response, and the Agency’s current Associate Deputy Administrator since her promotion by McCarthy last summer, could be at the top of the list.
Stakeholders Await EPA’s Final Rule Release of 2014 Renewable Fuel Standard Renewable Volume Obligations (RVO); Rumors Abound Regarding its Potential Release. Obligated parties and others continue to visit with Congress regarding the Agency’s proposed 2014 RVO standard, which outlines the standards for the upcoming year. EPA has yet to announce the final 2014 RVO despite Administrator McCarthy’s commitment to do so by the end of June. Insiders believe that in contrast to the proposal issued last November, which would scale back or reduce targets for some renewable fuels, the final numbers could reflect renewable fuel increases so as to decrease GHG emissions as compared to conventional fossil fuels. Insiders seem to believe that the White House (Office of Management and Budget) could receive the revised final rule as early as this Friday, making a late August or early September release possible.
FERC Commissioners Confirmed by the Senate. On July 15, 2014, the Senate approved the nominations of Cheryl A. LaFleur and Norman C. Bay. LaFleur’s nomination cleared 90-7; Bay’s nomination was approved 52-45 with two Senate Democrats and one Independent voting no – Heitkamp (SD), Walsh (MT) and King (ME). Bay’s short time at FERC has been contrasted sharply with LaFleur’s 20 years of experience with energy policy, causing Senate Republicans to protest loudly against Bay’s eventual replacement of LaFleur. Under a White House/Senate Energy and Natural Resources negotiation, Bay was cleared by the Energy and Natural Resources Committee after the White House agreed to have LaFleur serve as FERC Chair until mid-2015. Insiders continue to wonder, however, if the White House will remain steadfast in its commitment, as the Senate has yet to receive written assurances. Further, the two nominees were only considered after Reid was able to assure New York Senators Schumer and Gillibrand that the incoming Commissioners would review FERC’s May approval of a plan to increase power generation in Hudson Valley, New York.
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