Time Expiring for Reconciliation of Energy Reform Bill

Originally published by: SNLMay 17, 2016

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

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

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

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

Neither House nor Senate energy committees could provide an update on the status of the conference process as of May 17. David Popp, communications director for Senate Majority Leader Mitch McConnell, R-Ky., said May 13 that no scheduling announcements had been made with regard to combining the energy legislation. The House and Senate are adjourned for much of July, August and October ahead of the November general elections, which leaves little time for the two chambers to work out differences on key measures that are troubling Democrats.

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Dissenting views

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

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

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

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

Despite having more bipartisan support, S. 2012 includes a handful of divisive measures that may resurface in the conference process. Lawmakers voted to add an amendment to the Senate energy bill that would deem biomass a renewable, carbon-neutral energy source for the purpose of all federal rulemakings, a proposal that provoked leading environmental groups. And House GOP lawmakers may resist the permanent reauthorization of the Land and Water Conservation Fund contained in the Senate bill, sources say.