02-25-10 NEPPA e-Report
The House Energy and Environment Subcommittee, chaired by Rep. Ed Markey (D-MA), has rescheduled the oversight hearing on programs and activities under the jurisdiction of the Federal Energy Regulatory Commission (FERC), originally scheduled for February 10. The hearing will take place on Tuesday, March 23. FERC Chairman Jon Wellinghoff and Commissioners Phil Moeller, Marc Spitzer and John Norris will be the only witnesses to testify.
On February 24, the Senate passed a $15 billion bipartisan “jobs” bill, 70-28. Republicans who voted for the bill included: Sens. Scott Brown (MA), Olympia Snowe (ME), Susan Collins (ME), George Voinovich (OH), Kit Bond (MO), Lamar Alexander (TN), Richard Burr (NC), Thad Cochran (MI), Roger Wicker (MI), Orrin Hatch (UT), James Inhofe (OK), George LeMieux (FL), and Lisa Murkowski (R-AK). Majority Leader Reid did not allow amendments to be offered to the package.
The four-part bill includes: expansion of the Build America Bonds (BABs); tax credits for employers who hire new workers; a provision to allow small businesses to write off the cost of some capital investments; and a 10-month extension of the federal highway program.
Of interest to NEPPA, the BABs provisions in the bill would allow issuers of Clean Renewable Energy Bonds (as well as issuers of Qualified Energy Conservation Bonds, Qualified Zone Academy Bonds (QZABs) and Qualified School Construction Bonds (QSCBs)) to elect to receive a direct payment to the issuer, similar to the BAB model, instead of an interest payment to the bondholder. Any entity issuing less than $30 million in bonds in a calendar year would receive a subsidy equal to 65 percent of interest costs, and entities issuing more than $30 million in a calendar year would receive a subsidy equal to 45 percent of interest costs should they elect to issue the bonds as direct subsidy bonds.
BABs have been popular with investors since their creation in the 2009 stimulus bill and this election offered in the Senate jobs bill is meant to make other kinds of bonds easier to sell in a difficult bond market. The House bill would only allow holders of QZABs and QSCBs to issue the bonds as direct subsidy bonds. APPA is supportive of the option to issue CREBs as direct subsidy bonds.
The House passed a $154 billion package in December with a 217-212 vote, and several members have expressed frustration over the size and scope of the Senate bill. House Majority Leader Steny Hoyer (D-MD) said that it was possible the House would quickly take up the Senate package. However, the Senate is expected take up additional jobs bills, including a tax extenders title, in the coming weeks. So, it is possible that the House and Senate would wait for all the Senate bills to be acted on before scheduling a conference committee to reconcile the differing versions.
An exchange of letters this week between eight moderate Democratic senators and Environmental Protection Agency (EPA) Administrator Lisa Jackson underscored the increasing political tension surrounding legislative initiatives to block or slow EPA’s effort to regulate emissions of greenhouse gases (GHGs) from power plants and other stationary sources.
The February 19 letter, signed by Sens. Jay Rockefeller (D-WV), Mark Begich (D-AK), Sherrod Brown (D-OH), Carl Levin (D-MI) Bob Casey (D-PA), Claire McCaskill (D-MO), Max Baucus (D-MT) and Robert Byrd (D-WV), expressed serious concerns about “the possible impacts on American workers and businesses in a number of industrial sectors, along with the farmers, miners, and small business owners who could be affected” as EPA exercises authority under the Clean Air Act to regulate stationary sources.
Senators asked detailed questions about EPA’s proposed timetable, the cost impact of regulating stationary sources, how the agency would apply Best Available Control Technology standards for carbon dioxide to coal- and gas-fired plants, the impact of GHG regulations on domestic manufacturing and how passage of the Murkowski resolution to overturn EPA’s endangerment finding would affect the agency’s ability to provide resources and expertise to address various climate effects.
The Senators’ letter can be viewed here: http://rockefeller.senate.gov/press/Letter%20to%20Lisa%20Jackson%202-19-10.pdf.
The Senators who signed the letter are feeling strong pressure from both sides of the climate change debate: from constituents in their states who fear the economic impact of EPA regulations and want them to vote for the Murkowski resolution and from Democratic leaders who want them to oppose it.
In response, Administrator Jackson said she expects EPA will phase-in permit requirements and regulation of GHGs for large stationary sources, beginning in calendar year 2011. In the first half of 2011, only facilities that already must apply for Clean Air Act permits relating to non-GHG emission will need to address GHGs in their applications. Regulation of GHG emissions from other large sources will phase in starting in the latter half of 2011. EPA does not intend to subject “the smallest sources” of GHG emissions to permitting any sooner than 2016.
Although Jackson’s letter is reported to have been viewed positively by the Democrats, and might provide them enough assurance to enable them to vote against Murkowski’s resolution, there are reports that Sen. Rockefeller still has concerns and may introduce a bill to delay EPA regulation of stationary sources for from two to five years.
Jackson’s letter can be viewed here: http://epa.gov/oar/pdfs/LPJ_letter.pdf
On February 23, the American Public Power Association (APPA) sent a letter of support for the “disapproval resolution” (S. J. Res 26) put forward by Senate Energy and Natural Resources Committee Ranking Member Lisa Murkowski (R-AK) and 40 other Senators to prohibit EPA from regulating GHGs under the Clean Air Act (CAA). The letter was addressed to Senate Majority Leader Harry Reid (D-NV) and sent to all U.S. Senators.
In the letter, APPA President and CEO Mark Crisson stated, “Since 2007, APPA has been on record in support of congressional action to address climate change, while at the same time indicating that legislation should create a clear line between the existing CAA and a new law to reduce GHG emissions, and that the EPA should not move forward to regulate under the CAA in the absence of such legislation. The CAA is particularly unsuited for such a task because it was created to address criteria pollutants as opposed to ubiquitous GHG emissions.”
Crisson continued, “APPA supports the disapproval resolution to ensure that the EPA does not regulate GHGs under the CAA while workable legislation is being developed to reduce GHG emissions.”
In response, Chairman of the House Energy and Commerce Committee, Henry Waxman (D-CA), and Energy and Environment Subcommittee Chairman Ed Markey (D-MA) sent a strongly worded letter to Crisson expressing frustration over APPA’s position. The letter, dated February 25, stated, “We are disappointed to learn that the American Public Power Association has sent a letter to Senators urging them to overturn the US EPA’s scientific finding that greenhouse gasses from automobile tailpipes endanger public health and welfare. This scientific finding is supported by an overwhelming amount of scientific research that has been produced, reviewed and validated over a period of decades.”
The letter went on to say that “numerous APPA members have informed us in the last 24 hours that they do not support this position.” This angry response from Waxman and Markey suggests that House Democrats may be concerned that moderate Democrats will pursue a strategy similar to the Murkowski resolution in the House. If the Murkowski resolution or a similar legislative initiative becomes law, it would prevent EPA from regulating tailpipe emissions as well as stationary sources – seriously undermining Democrats’ climate change goals and strategy, which are a top priority for the Obama Administration and Congressional Democratic leadership.
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