Lawmakers Ramp Up FY25 Appropriations Hearings
Update provided by Meguire Whitney
The FY25 federal appropriations process is ramping up, with House and Senate committees holding several budget hearings this week. On April 16, Department of Energy Secretary Jennifer Granholm testified on DOE’s FY25 budget request before the Senate Energy and Natural Resources Committee. At the hearing, Granholm pushed back against criticism over DOE’s liquefied natural gas export pause, and was pressed by Chairman Joe Manchin (D-W.Va.) about the 45V clean hydrogen production tax credit’s incrementality provision requiring that hydrogen producers use local, new renewable energy. Granholm also called for additional funding to bolster grid resilience—noting that DOE’s Grid Resilience and Innovation Partnerships (GRIP) program to address transmission and distribution issues was oversubscribed—as well as for new legislation to help offset geothermal energy’s high upfront costs. Additional funding for DOE transmission programs has been proposed in broader discussions around permitting reform in Congress.
Department of the Interior Secretary Deb Haaland also made an appearance on Capitol Hill, defending Interior’s FY25 budget request before House Appropriations on April 17. Questions largely focused on the Fish and Wildlife Service’s Endangered Species Act regulations and the Bureau of Land Management’s final rulemaking raising royalty rates for oil drilling on public lands, tribal needs, and climate funding.
“We are very careful about how we are moving our green energy transition forward,” Haaland said in regard to Interior’s role in renewable energy development.
Also this week were appearances by Department of Agriculture Secretary Tom Vilsack to defend Agriculture’s FY25 budget requests; Bureau of Reclamation Commissioner Camille Touton to brief House appropriators on drought efforts; Federal Emergency Management Agency Administrator Deanne Criswell regarding the agency’s request for disaster reserves funding; Nuclear Regulatory Commission Chair Chris Hanson on his reappointment to NRC; Forest Service Chief Randy Moore to discuss wildfire concerns; and others. More hearings are anticipated in the coming weeks, with lawmakers hoping to avoid the tumult that characterized the previous year’s process.
Johnson Faces Renewed Pressure on National Security Spending, Delaying Action on Energy Agenda
Update provided by Meguire Whitney
On April 15, House Speaker Mike Johnson (R-La.) unveiled a plan to move long-stalled national security legislation through the House through four separate bills with aid for Ukraine, Israel, Taiwan, and other national security priorities. Johnson faced renewed pressure this week to hold a vote on the legislation following Iran’s attacks on Israel in retaliation for Israel’s attack on an Iranian consulate. House Republicans had originally teed up an agenda targeting the Department of Energy’s appliance standards, but after the attacks, leadership shifted attention to foreign aid.
In the Senate, where the national security sending package already passed, members voted 53-47 to approve a Congressional Review Act resolution to undo the Department of Transportation’s tailpipe emissions rule on April 11. The appliance standards resolution is expected to pass the House—after the national security legislation is completed—although President Joe Biden has indicated he will veto it.
IRS Issues Supplemental Guidance on Clean Hydrogen Production Tax Credit
Update provided by Meguire Whitney
On April 11, the Internal Revenue Service issued additional proposed guidance to supplement the initial guidance released in December 2023 on the 45V clean hydrogen production tax credit. The supplemental guidance clarifies the greenhouse gas-emissions value request process, including how to request a Department of Energy provisional emission rate analysis to determine the lifecycle greenhouse gas-emissions rate and the tax credit amount.
The level of the 45V credit amount is based on the carbon intensity of the hydrogen production pathway, with lower greenhouse gas-emissions rates yielding more valuable 45V credit amounts. The initial guidance proposed calculating the greenhouse gas-emissions value using the Greenhouse gases, Regulated Emissions and Energy use in Technologies (GREET) Model—used by most hydrogen producers—and requested comments on the DOE provisional emission rate process for hydrogen production pathways that fall outside the scope of the GREET Model, such as certain types of biomasses or geologic drilling. Specifically, the guidance notes that for a hydrogen producer to request a provisional emission-rate analysis from DOE, the applicant must complete the agency’s emissions value request form and have completed a front-end engineering and design study based on an Association for Advancement of Cost Engineering Class 3 cost estimate, which may add time and cost to claim the credit.
The deadline to submit comments to the supplemental guidance is May 13.
New Western Power Market Proposal Released
Update provided by Meguire Whitney
A group of state regulators, consumer-owned utilities, investor-owned utilities, environmental groups, and others tasked with exploring a Western power market proposed a new framework aiming to address long-standing governance questions. The straw proposal, released April 10, includes a three-step process to transition an existing real-time electricity market out from the California Independent System Operator’s oversight and instead build it into a full regional transmission organization.
While regulators have been working to organize Western utilities under one body to plan and share electric power production, many states and utilities expressed concerns about the market being managed by CAISO. The proposal seeks to balance these stakeholder concerns with those of California’s policymakers about the state ceding some control of its energy policies. The proposal aims to promote collaboration and grid reliability—particularly in facilitating the integration of renewable energy sources. The proposal is open for public comment through May 8. The group aims to implement step one by September and launch a regional organization later this year after refining its plans.
Lawmakers Reach Verbal House-Senate Deal on Nuclear Legislation
Update provided by Meguire Whitney
House and Senate lawmakers have reportedly reached a verbal deal on nuclear energy legislation as of April 16, after weeks of closed-door negotiations between leaders from the House Energy and Commerce and Senate Environment and Public Works committees. The agreed-upon package includes a compromise between H.R. 6544, the Atomic Energy Advancement Act, proposed by House Energy and Commerce Subcommittee Chair Jeff Duncan (R-S.C.) and Ranking Member Diana DeGette (D-Colo.) and S. 1111, the Accelerating Deployment of Versatile, Advanced Nuclear for Clean Energy (ADVANCE) Act, proposed by Senate Environment and Public Works Chair Tom Carper (D-Del.) and Ranking Member Shelley Moore-Capito (R-W.V.).
The deal focuses on speeding up the Nuclear Regulatory Commission’s licensing process and streamlining regulations to promote next-generation reactors. Earlier this year, Congress passed provision that would extend Price-Anderson nuclear liability limits. Text has yet to be released as lawmakers and staff look for a legislative vehicle to move the deal forward. At this point, the exact path forward for the compromise legislation is unclear, but lawmakers are “trying to get it done as soon as possible.”
House Natural Resources Committee Considers Draft Forest Management Bill
Update provided by Meguire Whitney
On April 17, the House Natural Resources Subcommittee on Federal Lands held a hearing on draft legislation from Committee Chairman Rep. Bruce Westerman (R-Ark.) aimed at addressing forest management to improve forest health and reduce the frequency and impact of wildfires. The bill draft focuses on several key priorities, including landscape-scale forest restoration, expanding collaborative tools to reduce wildfire risk and protecting communities in wildland-urban interface areas. Westerman, a professional forester, prepared the draft bill in hopes of streamlining several federal agency actions to speed up the permitting process for urgent forest thinning and prescribed fire activities.
Forest Service Deputy Chief Chris French agreed that endangered species consultations, environmental reviews, and litigation often delay forest management projects. However, French disagreed with a proposal to quickly extinguish all fires within 24 hours, saying this policy is largely to blame for the overgrowth and buildup of fuels in the forests. Subcommittee Ranking Member Rep. Joe Neguse (D-Colo.) said he was encouraged by several aspects of the draft bill, and he indicated his interest in working together with committee Republicans to move these ideas forward.
DOE Releases New Reports on Addressing Energy Demand, Grid Solutions
Update provided by Meguire Whitney
The Department of Energy recently released several new reports addressing energy demand and energy grid challenges. On April 16, DOE announced the “Pathways to Commercial Liftoff: Innovative Grid Deployment” report, focusing on the potential of advanced grid solutions to meet growing electricity demand. The report finds that the deployment of commercially available but underutilized advanced grid solutions could increase grid capacity by between 20-100 gigawatts during peak hours as well as bolster grid reliability and resilience.
DOE also released its “Future of Resource Adequacy” report on April 17 on additional solutions to meet growing energy demand, finding that investing in clean energy generation and storage; transmission expansion and enhancement; and efficiency and demand management tools can help meet this increased demand without relying on older technologies that do not meet carbon reduction goals.
Finally, DOE released its first-ever plan to address the grid’s renewable energy interconnection backlog, the “Transmission Interconnection Roadmap,” outlining goals to shorten interconnection queue times, lower cost variance, increase project completion rates, and decrease disturbance events that threaten grid reliability. DOE has called for demonstration projects to help establish and further understand the potential of grid technologies to address grid challenges, highlighting DOE funds available through the Grid Resilience and Innovation Partnerships (GRIP) Program and other programs to support these projects.
DOE-Funded Study Looks at Power Plants Seeking Transmission Interconnection
A study released this month by Lawrence Berkeley National Laboratory takes a look at interconnection queues, or the projects that have applied to connect to the grid and initiated the process to do so. The study, “Characteristics of Power Plants Seeking Transmission Interconnection As of the End of 2023,” contains a chart of national transmission queues, examines regional trends, and analyzes the interconnection study process and timeline. Among other findings, researchers determined that “completion rates are generally low” and “wait times are increasing.”
“The average time projects spend in queues before being built in 2023 took nearly 5 years from the interconnection request to commercial operations compared to 3 years in 2015 and <2 years in 2008,” researchers reported in the study.