Capital Thinking: Energy

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LEGISLATIVE ACTIVITY

 

Energy Efficiency Legislation Delayed

The Senate failed last week to fully consider S. 1392, energy efficiency legislation introduced by Sens. Jeanne Shaheen (D-NH) and Rob Portman (R-OH). While the legislation enjoys bipartisan support, consideration of the legislation has been delayed by negotiations regarding non-germane amendments related to the Keystone XL Pipeline and implementation of the Affordable Care Act. The Senate could resume consideration of S. 1392 this week if a deal regarding amendments can be reached.

Mcconnell Emissions Legislation Introduced

Senate Republican Leader Mitch McConnell (R-KY) introduced legislation on Tuesday, September 17 that would require the Environmental Protection Agency (EPA) to seek congressional approval before imposing new carbon emission regulations. The Saving Coal Jobs Act of 2013 (S. 1514) would force the EPA to consider state economic impact, including the estimated impact of the regulation on “employment levels and economic activity” before implementing emission-related regulations, among other provisions. The legislation was introduced in anticipation of the EPA publishing a new regulation to limit emissions on new coal-fired power plants.

FERC Nomination in doubt

On Tuesday, September 17, the Senate Energy and Natural Resources Committee held a business meeting to consider the nomination of Mr. Ron Binz to chair the Federal Energy Regulatory Commission (FERC), in addition to the nomination of Ms. Elizabeth M. Robinson to serve as Under Secretary of Energy, and Mr. Michael L. Connor to serve as Deputy Secretary of Interior. During the hearing Republican committee members lined up in apparent opposition to Mr. Binz’s nomination due to comments made previously by the nominee regarding the future role of natural gas in the U.S. energy portfolio, potential coordination between Mr. Binz and a team of consultants with business before the FERC, and previous actions taken by the Colorado Public Utility Commission under Mr. Binz’s chairmanship. After, several Republican Senators announced their opposition to Mr. Binz’s nomination, and were joined by Sen. Joe Manchin (D-WV), who announced that he also intends to oppose the nomination and finds Mr. Binz an “unacceptable” choice to lead the Commission. Sen. Manchin’s opposition raises questions about the viability of Mr. Binz’s nomination going forward.

Regulatory Activity

 

EPA Releases Proposed Rule Governing New Power Plant Co2 Emissions

On Friday, September 20, the EPA released a highly anticipated proposed rule to impose new carbon emissions restrictions on new fossil-fired power plants, including separate standards for new coal-fired power plants. In doing so, the agency withdrew the proposed rule that it put forward in April 2012. The proposed rule is a key item in the Administration’s Climate Action Plan.

The proposed rule would require coal-fired plants to meet a standard of 1,100 pounds of CO2 per megawatt-hour. New large and small natural gas-fired units must meet a limit of 1,000 and 1,100 pounds of CO2 per megawatt-hour limit, respectively. The proposed standard for new coal-fired plants is predicated on partial implementation of carbon capture and storage (CCS) technology. In response to the many stakeholders that have argued that CCS technology is not economically or technologically feasible to implement, EPA has countered by pointing to two new coal-fired plants under construction, which are 75 percent complete, that are installing CCS technology and two other plants that in the agency’s view, “have continued to make progress toward construction.” EPA Administrator Gina McCarthy foreshadowed this justification in her testimony before the House Energy and Commerce Committee on Wednesday, September 18, prior to release of the rule, when she explained to committee members that EPA had reviewed that issue at great length prior to releasing the proposal.

The proposed rule will be subject to a 60-day comment period following publication in the Federal Register. It will also be examined at a public hearing in the near future.

FERC Holds an Open Meeting

On Thursday, September 19 the FERC held an open meeting where the commission considered a number of items (including the release of the quarterly update on Gas-Electric Coordination), adopted a final rule regarding generator requirements at the transmission interface, and released a notice of proposed rulemaking regarding generator reliability requirements. The commission is still operating under the leadership of Chairman Jon Wellinghoff, who will soon depart, and the meeting agenda was therefore devoid of controversial items.