ENERGY POLICY:

Bingaman's panel set to mark up transmission, nuclear plans Wednesday

The Senate Energy and Natural Resources Committee meets Wednesday to mark up bills on federal transmission siting authority, financing of "clean" energy projects and managing the nation's nuclear waste.

The provisions are part of a comprehensive energy bill Chairman Jeff Bingaman (D-N.M.) hopes to steer through the committee before the Memorial Day recess. Wednesday's markup will be the second the committee has held on energy legislation this year but the first since March, underlying the difficulty Bingaman and Senate Democrats have with steering the bill through.

A major pillar of the Democrats' agenda is expanding the nation's power transmission system, an issue that lawmakers have wrestled with over the past few years.

The committee will consider a majority staff draft Wednesday that would give the Federal Energy Regulatory Commission authority to site "high priority" national transmission lines instead of just allowing each state to authorize its part of the long distance projects.

If the states reject the project, fail to act within one year or place unreasonable conditions upon it, FERC could review and site the project (E&E Daily, May 1).

The policy shift is meant to address the current average five- to seven-year siting timeline and uncertain cost allocation mechanisms for the construction of transmission lines. This has resulted in grid congestion and barriers to developing renewable energy that is abundant in the remote, unconnected areas of the country.

The committee has held two meetings to work out details on the new authority, but members still voiced several concerns when Bingaman held an informal "walk through" of the plan Thursday.

The top concern last week appeared to be the vague definitions of cost allocation and the authority FERC would have over the process in general. Leon Lowery, a Democratic committee aide that specializes in electricity, said the language is vague on purpose because many of the detailed decisions will have to be made by FERC on a project-by-project basis, such as who would benefit from -- and therefore have to help pay for -- the line.

Lawmakers had other complaints as well. Sens. Maria Cantwell (D-Wash.) and Byron Dorgan (D-N.D.) said the goal for the "high priority" lines was unclear, as there appeared to be more than 10 priorities of equal weight listed as "guiding policy" including congestion, reliability, renewable energy development, fuel diversity and emission reductions.

Cantwell said she was particularly concerned that the draft did not prioritize the national transmission for renewable energy generation -- a top selling point for environmental organizations who worry the lines will be used by coal-fired plants to access new markets. Dorgan does not support reserving capacity specifically for low-emission generation, but he said the goals of renewable energy and efficiency should be better stressed during the planning process.

Senate Majority Leader Harry Reid (D-Nev.) has emphasized the importance of using the lines primarily for renewable energy and it is likely to be one of the tougher debates as Bingaman does not believe the lines could or should be parceled out in such a manner.

Lowery said it was not likely that coal would dominate the new lines as cost-competitive coal plants are currently near capacity with their current markets and the likely passage of a limit on greenhouse gas emissions would deter energy companies from taking older, inefficient coal plants out of their mothballed status.

'Nuclear waste'-ing away

Republican members will get a chance to vote on their nuclear power priorities Wednesday, a topic that has been simmering under the surface of almost every hearing so far.

The most pressing concern: what to do with spent nuclear fuel now that the Obama administration has all but canceled the deep geologic repository at Yucca Mountain, Nev. Senators worry that the lack of a strategy for nuclear waste will dampen utilities' enthusiasm to build the 26 reactors whose applications are currently being reviewed at the Nuclear Regulatory Commission.

The committee released a joint staff draft Friday that would establish an 11-member nuclear waste commission chosen by the president -- with no more than 6 members from one political party -- whose mandate would be to study at least four ways to handle the nation's nuclear waste and write a report including recommendations for waste management. Under the draft, the commission is also to review the Yucca Mountain selection and site characterization to avoid similar mistakes in the future.

The bill would instruct the commission to consider deep geologic repository waste disposal, long-term storage on-site at reactors, long-term storage at one or more regional facilities, reprocessing, or any other alternatives or combinations the commission determines to pursue.

It also directs the commission to judge each of the strategies based on their ability to isolate the waste, and minimize transport and radiation exposure to workers and the public. Other considerations are security, total lifecycle cost, time for implementation and the cumulative effect on the environment. The commission is also to study an incentive program for communities to host a repository, reprocessing or regional storage facility -- as Sweden and Finland have done for their repositories.

The commission would have two years to write a report with their findings and recommendations and submit it to Congress. Energy Secretary Steven Chu has stated he has already begun the process of forming a "blue ribbon commission" on finding alternatives for nuclear waste disposal, in consultation with Reid. Sen. George Voinovich (R-Ohio) and others have also advised another option: creating a public-private corporation -- similar to the Tennessee Valley Authority -- to manage nuclear waste.

The near-cancellation of Yucca Mountain has also prompted calls from several lawmakers -- including Sen. John McCain (R-Ariz.) -- to return the more than $20 billion that nuclear electricity consumers have paid into the Nuclear Waste Fund for the repository.

And some senators may not be content with having reprocessing merely considered as one of the options for the commission. Sen. Bob Bennet (R-Utah) has repeatedly said he would like to see a reprocessing facility built in the United States. Sen. Mary Landrieu (D-La.) has also expressed interest in using reprocessing.

Proponents of reprocessing and recycling say the process takes advantage of important sources of energy in the plutonium and uranium that would otherwise just be buried, and it reduces the volume of high-level nuclear waste that would need disposal.

But critics oppose such a move, citing proliferation concerns of the separated plutonium -- which could be used for a dirty bomb or a nuclear weapon if considerably enhanced -- and the example the United States would set for the rest of the world if it blessed such a policy. There are environmental concerns as well as the process generates considerably more intermediate nuclear waste.

The economic plan of such a facility -- which would likely cost upward of $25 billion to construct -- is also a point of contention, as a reprocessing facility would not eliminate the need for a permanent geologic repository so the cost is compared to the need to build a second or third repository, as opposed to just one repository.

Clean energy bank has buy-in, but what about RES?

A third topic slated for the markup is a bipartisan bill to expand and improve Energy Department programs to provide loan guarantees and other financing for low-emissions energy projects.

Bingaman and ranking member Lisa Murkowski (R-Alaska) formally introduced S. 949 on Thursday following a hearing on a draft version days before. In the House last week, Rep. Jay Inslee (D-Wash.) introduced a companion bill with co-sponsors including former Energy and Commerce Chairman John Dingell (D-Mich.).

The bill's centerpiece is creation of a new, independent Clean Energy Deployment Administration, or CEDA, within the Energy Department that is authorized to provide a suite of financing options. The bill also includes what sponsors call reforms to DOE's loan guarantee program.

The committee sees CEDA backing promising commercial-scale projects that Wall Street would not support on its own. "The mission of CEDA is to encourage deployment of technologies that are perceived as too risky by commercial lenders and thus the agency is encouraged to back riskier technologies with a higher potential to address our climate and energy security needs," states a Senate committee summary.

While there is support for technology financing, Bingaman is having a much harder time steering a renewable electricity standard -- which would require utilities to supply escalating amounts of power from sources like wind and solar -- through the panel.

A tentative schedule for this week's meeting had included a "walk through" of the RES plan. But Bingaman spokesman Bill Wicker said Friday that this is no longer planned.

The idea of a "walk through" is to give members a chance to ask questions and raise objections, but there are not amendments and votes, which are saved for a formal markup.

"We are continuing to have an active conversation with members of the committee on both sides," Wicker said Friday afternoon. Bingaman floated a draft plan in February that requires power providers to obtain 16 percent of their supply from renewables by 2019, and 20 percent in 2021 and for almost two decades thereafter. The plan allows 25 percent of the target to be met with efficiency measures.

With Republicans largely opposed to renewables mandates, Bingaman needs to win over skeptical committee Democrats, including Sens. Evan Bayh of Indiana, Debbie Stabenow of Michigan and Blanche Lincoln of Arkansas.

House Energy and Commerce Chairman Henry Waxman (D-Calif.) included a more ambitious RES, reaching as high as 25 percent by 2025, in his energy and climate bill. But moderate and conservative Democrats on that committee have balked and are pressing for changes including a lower target as well as a role for nuclear power.

Schedule: The markup is Wednesday, May 6, at 10 a.m. in 366 Dirksen.

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