Eight Western governors, joined by the CEOs of BPA, Portland General Electric and Edison International, met virtually on June 30 with President Joe Biden, Vice President Kamala Harris and Cabinet secretaries on preparedness for the wildfire season, which the White House said is on track to outpace last year's in severity.
The White House readout of the meeting said Biden and the three CEOs talked about reducing the likelihood of the power system sparking wildfires and about deploying "innovative new technologies to improve extreme heat management and wildfire prevention."
BPA Administrator and CEO John Hairston noted that dry conditions are affecting reservoirs in different ways, with low storage in parts of California and the Southwest, but with Columbia Basin storage at 90 percent of average.
"The thing we all share is the bulk electric transmission system, which allows the region to share resources," Hairston said. "This is why it is so important that we manage risk to transmission lines from wildfires. It's key that land management agencies, for example, expand agreements with utilities to take actions to reduce wildfire risk and respond to fire damage."
The Forest Service in 2020 finalized a rule to streamline permitting for routine and emergency tree trimming within power line corridors and on abutting lands in national forests. According to Forest Service figures, there are more than 3,000 transmission and distribution lines operating in national forests under special-use permits.
Also at the meeting, Energy Secretary Jennifer Granholm "noted the work being done to support reliable power generation during extreme weather events and prevent structural energy infrastructure failures that have the potential to ignite wildfires," the White House said.
Biden announced measures to boost federal spending on wildfire response, including increasing wildland firefighters' pay to $15 per hour, offering retention bonuses for fire crews, and extending hiring of temporary firefighters in response to longer fire seasons.
Biden Signs Resolution Tossing Methane Rule
Biden signed a resolution into law on June 30 killing a 2020 Environmental Protection Agency rule that dropped methane limits for new and modified upstream oil and natural gas facilities.
Biden signed Senate Joint Resolution 14, a resolution under the Congressional Review Act to throw out the 2020 rule.
Biden's action reinstated a rule the Obama administration adopted in 2016. In signing the measure, Biden called it "an important first step of cutting methane pollution," and pointed to the proposed bipartisan infrastructure package's inclusion of $16 billion to cap orphaned oil and gas wells.
Rep. Frank Pallone (D-N.J.), chairman of the House Energy and Commerce Committee, said Biden's signing of the resolution "is the most significant climate legislation enacted so far this Congress."
For new and modified facilities, the 2020 rule eliminated methane and volatile organic compound standards for transmission and storage facilities and discarded methane limits for production and processing facilities.
NRC Proposes NuScale Certification
The Nuclear Regulatory Commission on July 1 proposed a rule to formally certify NuScale's small modular reactor design.
The commission opened a 60-day comment period on the proposal, which if approved would clear the way for NRC licensing of power plants using Portland-based NuScale's design for its 50 MW small modular light-water reactor. Under NuScale's design, up to 12 reactors could be housed in a single reactor building, providing up to 600 MW of capacity.
NuScale's design is the first small modular reactor design to be considered for approval in the U.S. On Aug. 28, the NRC completed a safety evaluation report for the design, concluding that its passive safety features relying on gravity and convection would ensure the plant would shut down in an emergency.
The commission, however, said three design issues remain unresolved, including the design of shielding walls between reactor modules and steam gallery areas; the potential for leakage from the combustible-gas monitoring system; and the ability of steam-generator tubes to maintain their integrity during "density wave oscillations" in the secondary fluid system.
The commission said plant license applicants would have to provide design information to address those issues.
Potential projects using the NuScale design are moving forward. NuScale and Grant County PUD of Washington state signed an agreement May 26 to explore developing an SMR plant.
In January, NuScale received an order from Utah Associated Municipal Power Systems to prepare a plant license application in connection with the proposed Carbon Free Power Project at Idaho National Laboratory. The Utah group has contracted with Fluor Corp. and NuScale to carry out planning and cost-estimate work for the proposed project.
Biden Pushes Infrastructure Bill
Biden urged Congress on June 29 to pass infrastructure legislation reflecting an agreement he reached with a bipartisan group of senators.
Meanwhile, the House on July 1 approved a $715 billion surface transportation and water bill, HR 3684, that includes $4 billion for electric vehicle charging facilities. The House passed the legislation on a mostly party-line vote of 221-201.
In his June 29 speech in Wisconsin, Biden said the $973 billion infrastructure package, which includes $73 billion for grid projects, "will put Americans to work building transmission lines—the largest investment in clean energy transmission in American history."
"The majority of the nation's grid is aging," Biden said. "Some components are over a century old. And 70 percent of transmission and distribution lines are into the second half of their life spans."
Biden on June 26 walked back a statement he made two days before that he would not sign the bill unless Congress also passes a separate bill funding his health, education and tax-reform proposals.
In a statement, Biden said, "The bottom line is this: I gave my word to support the infrastructure plan, and that's what I intend to do. I intend to pursue the passage of that plan, which Democrats and Republicans agreed to on [June 24], with vigor."
Biden acknowledged that his statement at a press conference that he would refuse to sign the infrastructure bill if Congress doesn't pass the other bill "understandably upset some Republicans, who do not see the two plans as linked."
Biden said he will still push for passage of the other bill through filibuster-exempt budget reconciliation rules. He said he will ask Senate Majority Leader Charles Schumer (D-N.Y.) to schedule the infrastructure package and reconciliation bill for floor action in the Senate. House Speaker Nancy Pelosi (D-Calif.) has said she will not schedule a floor vote on the bipartisan package until the Senate passes it and the reconciliation bill.
Senate Minority Leader Mitch McConnell (R-Ky.) on June 28 called on Biden to press Democratic congressional leaders not to "hold a bipartisan bill hostage over a separate and partisan process."
The infrastructure package is supported by 21 senators, including 11 Republicans.
White House press secretary Jen Psaki on June 28 said that "in terms of vote counting, I will leave that to leaders in Congress."
Biden added that "some other Democrats have said they might oppose the infrastructure plan because it omits items they think are important; that is a mistake, in my view."
In addition to $73 billion for grid upgrades, the bipartisan package includes $7.5 billion for EV charging stations and $7.5 billion for electrifying buses and ferries.
The package would cost $973 billion over five years, including $579 billion in new spending above baseline levels. Over eight years, the package cost would total $1.2 trillion, including new and baseline spending, according to White House figures.
Court Declines to Hear Coal Terminal Case
The Supreme Court on June 28 declined to hear Montana and Wyoming's suit against Washington in connection with the state Department of Ecology's denial of a permit for the proposed Millennium Bulk coal export terminal on the Columbia River.
The court did not give a reason for its decision, but noted that Justices Samuel Alito and Clarence Thomas supported hearing the case.
Wyoming and Montana asked justices in 2020 to hear their challenge to Washington's 2017 denial of a Clean Water Act certificate for the terminal. Under the U.S. Constitution, the Supreme Court has original jurisdiction over legal disputes between states. The two states argued that Washington's denial of the certificate interfered with interstate commerce.
The Justice Department filed a brief with the high court on May 26 arguing that the bankruptcy of Millennium's parent company, Lighthouse Resources, made the case moot. Lighthouse filed for Chapter 11 bankruptcy on Dec. 3.
In their response to the brief, Montana and Wyoming argued that foreign markets want coal produced in their states. "And Montana and Wyoming still have no other export option, besides an already overburdened Canadian port," they said.
Justices Uphold Pipeline Eminent Domain Authority
The Supreme Court on June 29 upheld the authority of gas pipeline developers under the Natural Gas Act to acquire state-owned land through eminent domain for interstate projects that have received a FERC certificate.
In a 5-4 decision, justices overturned a 2019 ruling of the U.S. Court of Appeals for the 3rd Circuit that PennEast did not have authority to condemn land in New Jersey for a 116-mile gas line. The appeals court ruled in a suit brought by the state of New Jersey to block PennEast from acquiring a right of way over state-owned land for the pipeline, which FERC approved in 2018.
Chief Justice John Roberts was joined by Justices Samuel Alito, Stephen Breyer, Brett Kavanaugh and Sonia Sotomayor in reversing the appeals court. Justices Amy Coney Barrett, Neil Gorsuch, Elena Kagan and Clarence Thomas dissented.
Writing for the majority, Roberts rejected New Jersey's argument that the Constitution's 11th Amendment bars pipeline certificate holders from suing states in federal court.
Roberts said that when states entered the union, they consented implicitly to eminent domain suits filed against them by the federal government or by private parties to which federal law delegated such power.
In her dissent, Barrett dismissed the majority's argument, which she said "has no textual, structural or historical support."
The court decision was hailed by the Interstate Natural Gas Association of America, a pipeline trade group.
"In order to continue to harness the benefits of natural gas to achieve our energy and climate goals, we need a predictable regulatory framework that allows improvements and additions to our country's interstate natural gas transmission infrastructure," Amy Andryszak, CEO of the group, said in a statement.
House Panel Moves EPA, Interior Funding Bill
Fiscal year 2022 funding legislation for the Department of the Interior and EPA was reported out July 1 by the House Appropriations Committee.
The panel approved $15.6 billion in discretionary appropriations for Interior, $240 million below Biden's budget request. The legislation includes $80 million for sage grouse conservation and $120 million for an "energy community revitalization program" to clean up orphaned oil and gas wells and abandoned hard-rock mines.
For EPA, the subcommittee approved $11.34 billion, $110.8 million above Biden's request.
IRS Extends Tax-Credit Safe Harbor
The Internal Revenue Service on June 29 extended a "safe harbor" for renewable-energy projects to maintain their eligibility for production and investment tax credits.
The IRS action means that projects on which work started in calendar years 2016 to 2019 would be eligible for credits if they are placed in service after six years. For projects on which work began in 2020, projects could claim credits if they are placed in service by the end of 2025.
In May 2020, the Treasury Department approved a one-year extension of the safe harbor after the pandemic resulted in industrywide delays in project component supply chains.
The IRS notice also clarifies that developers can show compliance with requirements to maintain progress on projects under the "continuous effort" standard, regardless of whether they have begun construction, either through physical work or by incurring at least 5 percent of the project's cost.
Gregory Wetstone, CEO of the American Council on Renewable Energy, said the IRS notice "is a welcome development and will go a long way toward ensuring these important clean energy projects get done."
Clark Cautions Against Mandating RTOs/ISOs
A former FERC member on June 29 cautioned lawmakers against passing legislation that would force utilities to join organized wholesale power markets.
Tony Clark, who served on FERC from 2012 to 2016, spoke at a hearing of the House Energy and Commerce Committee's Energy Subcommittee, which took testimony on the Clean Future Act, a sweeping climate policy package backed by the committee's Democrats. One of the bill's transmission provisions would require utilities, within two years, to join a regional transmission organization or put their transmission assets under an independent system operator's control.
"My concern would be a federal mandate that you have to have one particular market model, like an RTO or an ISO, which has traditionally not worked in the Pacific Northwest," Clark said.
Nine former FERC members on June 2 called on the commission to expand organized wholesale markets into all regions of the U.S.
Clark also raised concerns about the bill's backstop transmission siting provision, under which FERC could override a state utility commission's rejection of a line proposed within a high-priority transmission corridor designated by the Department of Energy.
Clark said the provision is "much, much broader" than the backstop siting authority included in the Energy Policy Act of 2005, which a 2009 federal appeals court ruling narrowed. Rep. Scott Peters (D-Calif.) has introduced legislation, HR 1514, that in effect would undo the appeals court's decision.
Under the Clean Future Act, Clark noted, any proposed line could be subject to backstop siting authority if it improved integration of renewable resources. In his written testimony, he said the provision "effectively tells states and localities, 'You can site a transmission line for renewables, within a small, federally designated corridor, any way you want . . . as long as the answer is yes.'"
Rob Gramlich, president of Grid Strategies, testified in favor of a "bright line" separating projects subject to state or federal siting authority, suggesting that a proposed interstate line rated at 1,000 MW or higher would be subject to FERC permitting. "Keep it surgical and targeted," he said.
Gramlich also called for revising corridor-designation policy to give FERC control over both designation and permitting of projects within a corridor. Under the 2005 law, DOE is responsible for corridor designation in areas of high congestion, while FERC has backstop permitting authority.
Gramlich said the jurisdictional split results in extended review under the National Environmental Policy Act—"a few years of NEPA at one place and a few more years of NEPA at another place."
In other testimony, Patricia Hoffman, acting assistant secretary for DOE's Office of Electricity, said the Biden administration has not taken a position on the Clean Future Act's transmission provisions or on Peters' bill.
In response to questions from Peters, Hoffman said that "DOE feels we can do a lot with the existing authority that we currently have" to spur transmission development, including loan guarantees and the Western Area Power Administration's $3.25 billion revolving loan program.
Senators Introduce Nuclear Credits Bill
Five Democratic senators, including two committee chairmen, introduced legislation on June 25 making nuclear power plants eligible for production tax credits of 1.5 cents/kWh.
Sen. Tom Carper (D-Del.), who chairs the Senate Environment and Public Works Committee, said that "in recent years, too many of these plants have prematurely shut down due to market forces, and additional closures pose a growing threat to our efforts to cut greenhouse gas emissions from the power sector."
Sen. Joe Manchin (D-W.Va.), another bill sponsor and chairman of the Energy and Natural Resources Committee, noted in an April 20 letter to Biden that the number of U.S. nuclear plants has fallen from 104 to 94 in the past two decades. He added that about 5.1 GW of nuclear capacity is due to go off line this year.
Under the legislation, the credit would phase out if market revenues reach 2.5 cents/kWh, if GHG emissions fall 50 percent from 2020 levels, or after 10 years.
Other bill sponsors include Sens. Cory Booker (D-N.J.), Ben Cardin (D-Md.) and Sheldon Whitehouse (D-R.I.). The bill has drawn support from nuclear technology companies, trade groups and labor unions.
Cantwell Floats Dam-Improvement Incentive Bill
Sens. Maria Cantwell (D-Wash.) and Lisa Murkowski (R-Alaska) on June 24 introduced legislation authorizing a 30-percent investment tax credit for hydropower dam investments.
The credit could be claimed for safety upgrades, fish passage and other environmental measures, and investments enabling a project to support grid resilience, including provision of black start capability, voltage support and spinning reserves.
The legislation, S. 2306, also would authorize a 30-percent credit for removing, with owners' consent, obsolete river obstructions, including nonpowered dams or nonfederal hydropower dams that block fish passage, pose safety hazards or inhibit economic development. The bill includes a direct-pay option for claiming the credit.
The CEOs of the National Hydropower Association and American Rivers released statements supporting S. 2306.
IEA Calls Hydropower 'Forgotten Giant'
Hydropower is the "forgotten giant of clean electricity," the International Energy Agency's head said June 30 as the agency released a report calling on governments to clear obstacles to hydropower development.
IEA Executive Director Fatih Birol said hydropower "needs to be put squarely back on the energy and climate agenda if countries are serious about meeting their net-zero goals." He said hydro's "capabilities for providing flexibility and storage for electricity systems are also unmatched, making it a natural enabler for integrating greater amounts of wind and solar power."
To meet net-zero goals by 2050, according to IEA, hydro generation would have to double from today's level. Hydro generation totaled nearly 4.5 million GWh globally in 2020, according to IEA figures. About half of economically viable hydropower potential worldwide is untapped, the report says.
Under current policies, Birol said, hydropower growth globally "is set to slow this decade." Net additions between 2021 and 2030 are projected to fall 23 percent below growth in the previous decade, IEA said.
The report calls for market policies that recognize "the full value of hydropower's benefits for power system and electricity security," including long-term capacity, low-carbon power, fast ramp rates and ancillary services. IEA noted that the California ISO and other organized power markets in the U.S. do not offer payments for long-term capacity.
Pumped-storage capacity is projected to grow 7 percent to 9,000 GWh globally by 2030, but the report notes that "developing a business case for pumped storage plants remains very challenging" because of the projects' capital intensity. Pumped storage "is still the most cost-effective long-term electricity storage option," the report says.
IEA recommended "contracts that value long-term storage" for pumped storage in energy-only markets.
Replacements, upgrades and additions of turbines at hydro projects in the U.S. and other developed countries are expected to account for nearly 45 percent of capacity additions expected in this decade.
"Projected spending on existing plants is not enough to meet the global hydropower fleet's modernization needs," the report says, noting that by 2030, more than 20 percent of generating units worldwide are expected to be more than 55 years old and almost 40 percent at least 40 years old.
Modernizing all aging plants worldwide would cost an estimated $300 billion between now and 2030, "more than double the amount we currently expect to be spent on this," the report says.
House Passes Two Science Research Bills
The House passed two bills on June 28 to boost funding for scientific research, including legislation, HR 3593, that authorizes $8.8 billion in fiscal year 2022 for DOE's Office of Science, up 25.7 percent from this year's level, and rising to $11.1 billion by FY 2026.
In a floor statement, Rep. Eddie Bernice Johnson (D-Texas), chairwoman of the House Science, Space, and Technology Committee, said the legislation "authorizes research to advance the next generation of clean-energy technologies." The committee said the funding would support research into energy storage, solar, hydrogen, critical materials, nuclear fusion energy, carbon removal and bioenergy technologies.
The House passed HR 3593 by a vote of 351-68. In addition, it passed HR 2225, which authorizes nearly $72.6 billion for the National Science Foundation in fiscal years 2022 through 2026.
Biden praised the passage of the bills, saying he was "heartened" to see bipartisan support for research funding.
The Senate on June 8 passed a $200-billion-plus technology research and education bill, S. 1260, boosting federal research and development spending on "focus areas," including advanced energy.
The Senate bill would authorize $16.9 billion for DOE research into technologies such as energy storage, grid modernization and carbon capture, according to Sen. Maria Cantwell (D-Wash.), chair of the Senate Commerce Committee.
"My administration looks forward to continuing to work with the House and the Senate in producing a final bill I can sign," Biden said.