President Biden Signs Second Spending Bill to Fund Government for Remainder of FY24
Update provided by Meguire Whitney
President Joe Biden signed the second FY24 spending package into law March 23, averting a partial government shutdown affecting agencies funded by the State/Foreign Operations, Financial Services/General Government, Legislative Branch, Labor/Health and Human Services, Defense, and Homeland Security appropriations.
The Senate passed the bill 74-24 in an early morning 2 a.m. vote March 23, two hours after the funding deadline, after the House voted 286-134 to pass the bill the afternoon before. The bill contains hundreds of millions for global climate and clean energy funds and related foreign aid programs, a policy rider to prohibit rulemaking by the Consumer Product Safety Commission to ban gas stoves, and $4.025 billion for the Low-Income Home Energy Assistance Program. The bill rejects most House Republican proposals to defund major climate and energy programs, but it freezes the budget of the Internal Revenue Service, which is the agency responsible for implementing guidance and administering elective pay of the Inflation Reduction Act energy tax credits.
While the bill’s signing concludes the FY24 appropriations cycle, backlash from some House Republicans—the majority of which voted against the package—who are angry with Speaker Mike Johnson (R-La.) about the compromises made in the spending package might threaten Johnson’s speakership, with Rep. Marjorie Taylor Greene (R-Ga.) filing a resolution to vacate the speaker’s chair following the vote.
FERC Holds Its March Open Meeting
Update provided by Meguire Whitney
The Federal Energy Regulatory Commission held its open meeting March 21, concurrently with the Senate Energy and Natural Resources Committee’s confirmation hearing on President Joe Biden’s three FERC nominees. During the meeting, FERC upheld its Order No. 2023, issued in July 2023, which imposes stricter deadlines and penalties on transmission owners to complete studies for interconnection requests to address interconnection backlogs and accelerate the addition of wind and solar power to the grid. FERC also opened an inquiry into pipeline practices and whether companies are inflating practices by bundling favorable and unfavorable pipeline capacity. Critics of the practice argue it makes customers pay for pipelines that they aren’t using, whereas pipeline companies have defended it as a part of risk management. FERC also established a Federal-State Current Issues Collaborative, following the final February meeting of the Joint Federal-State Task Force on Electric Transmission, and released its State of the Markets 2023 staff report discussing emerging issues in natural gas and electricity markets and energy market conditions.
FERC Commissioner Christie Discusses Cost Allocation in Letter to Lawmakers
Update provided by Meguire Whitney
In a March 25 response letter to lawmakers, Federal Energy Regulatory Commission Commissioner Mark Christie stated that states should not have to pay for transmission projects supporting other states’ policies without explicit consent. While Christie expressed his support for states to choose and implement their own energy policies, Christie argued in his letter that it would be “grossly unfair for FERC to force consumers in other states to pay for projects implementing the policies of politicians they never got the chance to vote for.”
FERC has been working to finalize its rule reforming transmission planning and cost allocation requirements since releasing an advance notice of proposed rulemaking in July 2021. In recent months, lawmakers have been urging FERC in multiple letters to finalize the rule, which Chairman Willie Phillips has assured members of Congress is a top priority for FERC, and it has been reported that the commission is expected to issue it shortly.
EPA Requests Public Input After Dropping Existing Gas Plants from Final Power Plant Rule
Update provided by Meguire Whitney
On March 27, the Environmental Protection Agency opened a docket for public input on the EPA’s efforts to reduce greenhouse gas emissions from existing stationary combustion turbines in the power sector.
The request for public comment follows an announcement at the end of February from EPA Administrator Michael Regan that the agency has decided to remove existing natural gas units from its pending rule on greenhouse gas emissions from power plants, instead splitting those units out into a separate rulemaking that will be proposed later this year. In the request for public comment, EPA notes that emissions from coal-fired turbines are expected to be surpassed by emissions from natural gas-fired turbines sometime in the later 2020s as reason to encompass all existing natural gas-fired combustion turbines. The request for public comment, which closes May 28, seeks additional input on the technologies EPA should consider as part of the Best System of Emission Reduction in addition to the carbon capture and sequestration and hydrogen co-firing proposed in May 2023, what market mechanisms EPA should use, compliance flexibilities, and interactions between existing source and new source standards, among other things.
The final rule for existing coal and new natural gas plants is expected sometime in April, and additional rulemaking may not be released until after the November elections.
IRS Releases Additional Guidance on Energy Communities Bonus Credit
Update provided by Meguire Whitney
On March 22, the Internal Revenue Service issued additional guidance for determining eligible “energy communities” and projects for a bonus tax credit under the Inflation Reduction Act. Clean energy projects placed in eligible energy communities may claim an increased credit amount of 10% for the production tax credit, or 10 percentage points for the investment tax credit. Consumer-owned utilities may also claim elective pay for the energy communities bonus credit.
There are three categories of energy communities: brownfield sites, certain metropolitan statistical areas (MSA), and non-metropolitan statistical areas (non-MSA). These areas qualify as energy communities based on unemployment rates, as well as if they are in census tracts or directly adjoining census tracts where a coal mine closed after 1999 or where a coal-fired electric generating unit was retired after 2009. The guidance clarifies the definition of fossil fuel employment to include construction of natural gas distribution and oil and gas pipeline and related structures, as well as includes appendices listing additional MSAs and non-MSAs that qualify as energy communities for 2023. The guidance also provides additional clarity on the nameplate capacity attribution rule for offshore wind facilities to include additional property such as supervisory control and data acquisition equipment to qualify for the increased credit amount.
Army Corps of Engineers Releases Wetland Conservation Plans
Update provided by Meguire Whitney
The Army Corps of Engineers issued a memorandum March 22 detailing a series of actions it will take to conserve wetlands. Per the memorandum, the Army Corps intends to pursue more ecosystem restoration projects, as well as support the integration of nature-based solutions into Civil Works projects to mitigate flooding and other challenges. Additionally, the Army Corps is making technical assistance available to states and tribes, including through the Tribal Partnership Program, Floodplain Management Services Program, and Planning Assistance to States Program, to assist with watershed restoration and implement new regulations protecting watersheds.
The memorandum follows the Supreme Court’s decision in Sackett v. EPA, where the court found that developers and energy companies will no longer need permits from the Army Corps to build over wetlands so long as they do not directly touch a major body of water—effectively excluding over half the nation’s wetlands from Clean Water Act coverage.
Lawmakers Split on National Forests Management
Update provided by Meguire Whitney
Democrats and Republicans pressed the Biden administration in different directions on how to manage national forests in letters to Secretary of Agriculture Tom Vilsack. Republicans sent a letter on March 20, and Democrats are reportedly circulating a letter for Vilsack among themselves.
The Republican letter—led by Senate Energy and Natural Resources Ranking Member John Barrasso (R-Wyo.), House Agriculture Chair Glenn Thompson (R-Pa.), Senate Agriculture Ranking Member John Boozman (R-Ark.) and House Natural Resources Chair Bruce Westerman (R-Ark.)—questioned whether the administration’s policies complied with requirements that national forests be managed for multiple uses, including timber production. Specifically, Republicans questioned whether a proposed provision that “vegetation management within old-growth forest conditions may not be for the primary purpose of growing, tending, harvesting, or regeneration of trees for economic reasons” complies with multiple use land management requirements.
In contrast, the Democratic letter—which has yet to be sent—praises the administration’s protections for old-growth forests and urges bolder moves to solidify the protections for future administrations. The letters follow the Forest Service’s proposed national forest plan notice of intent (which is still in development) to conserve old-growth forest areas. The administration has not clarified whether logging would be prohibited in old-growth areas, and said that specific language would vary by region.
CISA Files ANOPR to Implement CIRCIA Reporting Requirements
Update provided by Meguire Whitney
On March 27, the Cybersecurity and Infrastructure Security Agency (CISA) filed an advance notice of proposed rulemaking to implement reporting requirements under the Cyber Incident Reporting for Critical Infrastructure Act of 2022 (CIRCIA), which was signed into law by President Joe Biden in March 2022. CIRICA mandates covered critical infrastructure entities to report cyber incidents within 72 hours and ransomware payments within 24 hours to CISA. The law gives CISA significant discretion in implementation, and since the law’s enactment, CISA has convened a council and gathered stakeholder input to develop proposed rules.
The advance notice of proposed rulemaking requests comments on the definition of a covered entity, several areas of cyber incident reporting and payments, and how to harmonize duplicative requirements for various critical infrastructure, such as electric utilities that already comply with mandatory cybersecurity requirements, among other things. Comments to the proposed rule will be due 60 days following its publication in the Federal Register. A final rule is expected to be issued 18 months later, in September 2025.