1. ENERGY POLICY: Senate committee to tackle RES, building efficiency with 'end in sight' (E&E Daily, 06/01/2009)

Katherine Ling, E&E reporter

The Senate Energy and Natural Resources Committee will hammer out details of the renewable electricity standard at a markup Thursday, with hopes of finalizing language on building efficiency codes the same day.

To accomplish this, the committee must whittle down 49 amendments that have been filed on the RES provision, on topics ranging from adding nuclear power into the title to adjusting what counts toward feed for biomass to increasing the target levels. Staff members have started to discuss the amendments and will continue to work hard to agree on as many as possible before Thursday, said Bill Wicker, a spokesman for Chairman Jeff Bingaman (D-N.M.). Wicker could not comment on the progress of the negotiations over the past week.

Bingaman's RES provision would require utilities to supply 15 percent of their electricity from renewable generation by 2021 and allow them to substitute energy efficiency measures for slightly more than a quarter of the target. Bingaman has the 12 necessary votes to support the 15 percent target so it is not likely to change, but how the RES is measured and quantified is still open for negotiation, he said after the first RES vote late last month.

But ranking member Lisa Murkowski (R-Alaska) said the sheer number and diversity of the amendments questions the wisdom of including such a measure in a comprehensive energy bill.

Murkowski was among nine committee members who supported an amendment by Sen. Jeff Sessions (R-Ala.) to strike the entire provision, which was the only RES amendment voted on at the first markup. Sens. Bob Corker (R-Tenn.) and Sam Brownback (R-Kan.) joined the 11 Democrats who voted against Sessions' amendment. Sen. Mary Landrieu (D-La.) recorded a vote of "pass."

Brownback is one of the 12 votes that Bingaman is counting on to pass the RES provision. Brownback said while he supported the 15 percent requirement, he wants to see nuclear included in the title. This could mean possibly excluding new nuclear from the total base of electricity from which the target requirement is counted. Several other senators, including Corker and Murkowski, said nuclear is a "must have" provision if they were to consider supporting an RES.

Bingaman said he would only consider excluding new nuclear from the baseline, similar to how the House Energy and Commerce Committee handled its RES provision in the climate and energy bill passed just before the recess. The House committee has a 15 percent renewables standard by 2020, but states could drop that down to 12 percent if their utilities cannot meet the target.

Brownback also stressed at the markup that "keeping an eye on cost" was also key to his support.

Bingaman's RES provision has an "off ramp" that would allow utilities to ask the Energy Department for a one-year waiver if the standard would increase consumers' electricity prices by more than 4 percent in a given year, as well as a "phase in" of the initial 3 percent renewable energy requirements until 2013 and a grant program funded by penalty fees and compliance payments awarded to states to help invest in renewable energy or help offset consumer's costs.

On the other side, several Democratic senators, including Sens. Maria Cantwell of Washington, Byron Dorgan of North Dakota and Mark Udall of Colorado, and Sen. Bernie Sanders (I-Vt.) have balked at the lower standard and have vowed to try and raise it either in committee or on the Senate floor.

Building efficiency

While not as controversial, the committee may have a bit of work ahead of it in terms of a draft building efficiency measure, which will be the next title the committee will take up after the RES, Wicker said.

Members had filed about six amendments on the measure before the recess. "A week has passed and a better part of another week is coming so they could reach agreement on some of those, or there could be a couple of new amendments to show up," Wicker said. The committee agreed to freeze the number of amendments for the RES but not for the building efficiency measure.

Bingaman's draft would require a review of building codes at least every three years to reach a 30 percent energy savings through 2010, based on 2006 standards, and 50 percent by a yet determined time. DOE would provide technical assistance for creating the new model codes and the draft provides an exception if federal funding is less than $50 million per year.

It would also create a grant to improve building efficiency in multifamily units and manufactured housing constructed before 1976. DOE's weatherization assistance program would receive $1.7 billion and $250 million would be allocated for the state energy program, both for fiscal 2011 through 2015. It would also provide grants linked to set levels of efficiency savings in residential and commercial buildings achieved through retrofits made available through the state energy efficiency grant programs.

Also included in the draft is a framework for voluntary advanced model codes, building labeling programs and federal efficiency, renewable energy and performance contracts. The draft says the goal is to achieve 2.5 percent per year efficiency improvement of overall energy productivity each year to 2012 and to maintain that rate to 2030.

Republicans have stressed energy efficiency as part of their energy security policy and member positions on the efficiency measure is likely to fall more along regional and state lines, like many energy issues. States such as Indiana, North Dakota, Tennessee and Wyoming are further behind in setting commercial and residential building efficiency standards then other places.

The week before the recess the committee passed two joint staff amendments, a Bingaman amendment and two Udall amendments. The two joint staff amendments would strengthen competition requirements under energy savings performance contracts and boost grants for energy efficiency to health institutions. The Bingaman amendment would improve incentives for federal agencies to participate in energy efficiency programs.

Udall's amendments included a $200 million initiative parsed out through 2020 to support residential net-zero energy buildings and require all federal agencies to implement an energy efficiency "implementation strategy" for information technology and infrastructure.

Past the midway point but still a ways to go

If the committee can finish the RES and building efficiency provision this week "that will be a great day in the office," Wicker said. The committee has already gone through the amendment process for appliance efficiency; the energy and water nexus; the manufacturing sector's efficiency; work force training; a clean energy bank administration; transmission siting, planning and financing; grid cybersecurity; and a refined petroleum product reserve.

While the amendments for those provisions have been dispatched, the committee has not voted on any of the amended measures so they are technically still open for amendment. The committee will vote on all the measures at the same time once members have marked up each title.

There are still several key titles to be taken up by the committee, the most important being the oil and gas provisions. Wicker said staff is still working on a draft oil and gas provision, and it is close but not quite ready to be made public.

Bingaman has said there needs to be better information about the energy potential of the outer continental shelf and an undated draft obtained by E&E earlier this month would authorize $400 million to inventory offshore petroleum reserves, the potential alternative energy resources, and an assessment of navigation and fisheries.

Also considered by the unconfirmed draft would be land and resource rights, to create a lease and permit processing office for Alaska's OCS region, and to extend funding past 2015 for a program to streamline and coordinate the onshore oil and gas permit program created by the 2005 Energy Policy Act. The draft would authorize $20 million annually for fiscal 2016 through 2020.

The oil and gas provision will not likely pass the committee quickly, as it could provide an opening for Republicans and some Democrats to renew discussions on expanding domestic drilling -- a topic that heated up during last year's high gasoline prices.

There is also a carbon capture and sequestration provision that would undertake the liability, financial and technical assistance for 10 large-scale, private-sector demonstration projects, which aim to show the commercial application for "integrated" system for capture, injection, monitoring and long-term geologic storage. Murkowski has voiced her doubts about the precedence for undertaking the liability.

Bingaman may also choose to have the committee consider a provision that would add monitoring of the energy financial markets to the Energy Information Administration's physical market data analysis and a provision to expand the Federal Energy Regulatory Commission's "cease and desist" authority in the natural gas and electricity markets.

The committee had previously aimed to complete and the comprehensive energy bill before the Memorial Day recess, so there is a need to dispatch of the rest of the provisions quickly, Wicker said. "We really do have the end in sight and want to do this," he said.

When the energy bill may be taken up on the floor is still uncertain, according to Bingaman. Sen. Harry Reid (D-Nev.) said he would like to take up the bill after dealing with health legislation this summer.

Schedule: The markup is Thursday, June 4, at 9:30 a.m. in 366 Dirksen.

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