Beltway Roundup

by Jeff Genzer

Congress and the Obama administration are heading towards another “train wreck” on energy and funding matters. The House is utilizing a $967 billion figure for all discretionary appropriations bills, while the Senate is using a figure of $1.1 trillion. The House budget and allocations among the appropriations subcommittees assume that the 2011 deficit reduction deal will be breached by shifting funds from domestic programs to defense accounts. The Senate is proposing to breach the same deal by using the higher funding level. It certainly looks like the FY 2014 funding will look a lot like the FY 2013 funding, less a sequester of some 2%. There is, of course, a possibility that Congress and the Administration can come to terms on the major issues of the day, however that looks unlikely. The Republicans want to hold up increasing the federal debt ceiling unless they get more cuts, especially in entitlement programs. The Administration says it will not negotiate on the debt ceiling. The Republicans want tax reform with no new net revenue. The White House says it wants tax reform, yet wants an increase in tax revenue.

For the Low-Income Home Energy Assistance Program (LIHEAP), the House suspended its attempt to mark-up the FY 2014 Labor, HHS appropriations bill on July 24. The differences between the House and Senate bills are quite stark. The Senate Appropriations Committee provided $150 million more than the $3.4 billion provided in FY 2013 for LIHEAP. A floor schedule is uncertain.

The House passed its version of the Energy and Water Development Appropriations Bill for FY 2014 on July 10, and they cut all the energy efficiency and renewable energy accounts in half. For the State Energy Program (SEP), the cut was even steeper, to $12 million for FY 2014, down from $47 million in FY 2013. For Weatherization (WAP), the cut was to $77 million for FY 2014. In FY 2013, the WAP number included in the Continuing Resolution was $64 million. The administration was able to cobble together funds from unspent accounts and increase that level to $138 million (In FY 2011, WAP received $174 million), however. For FY 2014, without a budget “anomaly”, it will revert to $64 million. In fact, a continuing resolution would not be bad for either LIHEAP or SEP, but a disaster for WAP. The Senate version of the FY 2014 Energy and Water Development Appropriations bill would provide $190 million for WAP and $53 million for SEP.

In the area of energy legislation, as of writing, it still appears possible that the bipartisan Jeanne Shaheen (D-NH)/Ron Portman (R-OH) bill (S. 761) could appear on the Senate floor before the August congressional recess. The real issue is whether members of the Senate can limit the number of amendments. At this point, it appears that 35 possible amendments are being considered. One of the possible “poison pill” amendments is a proposal by Senator John Barasso (R-WY) to require the construction of the Keystone XL pipeline. Another issue is a dispute about the most recent U.S. Green Building Council’s LEED standard, which is opposed by several interest groups, including the American Chemistry Council.

On the positive side, the bipartisan legislation bill S. 1213 offered by Senators Chris Coons (D-DE), Susan Collins (R-ME) and Jack Reed (D-RI) would reauthorize both SEP and WAP. The bill would also add two provisions to WAP, including a new, small competitive innovation program and language calling for increases in standards. This legislation would authorize funding in excess of present appropriations. A hearing was held June 25 before the Senate Energy and Natural Resources Committee. Mark Sylvia, the energy director in Massachusetts, testified in support of S. 1213, as well as other possible amendments to Shaheen-Portman.

Another bill that has received significant attention is S. 1209, a proposal by Senators Mark Warner (D-VA) and Joe Manchin (D-WV) to authorize a “Race to the Top” among the states. It would authorize $200 million for states to increase “energy productivity.” Up to 25 states would share in a first round of approximately $60 million; with the larger amount of about $120 million going to as many as six states depending on how much progress they made in the first 18 months. Small amounts are set aside for Department of Energy administration and for a comparable tribal program. The program would be expected to focus on energy efficiency and utility policy changes, among other options. Again, don’t spend it yet! This is an authorization bill – not an appropriation.

Other relevant legislation for the states includes S. 1200, a proposal from Senators Bernie Sanders (I-VT) and Ron Wyden (D-OR), which would create the “Residential Energy Savings Act of 2013”. The bill would provide loans to states which in turn would provide funds to homeowners for residential energy efficiency. Senator Al Franken (D-MN) is proposing legislation to promote combined heat and power and district heating and cooling. Senators Collins and Mark Udall (D-CO) and are pushing for school energy-efficiency programs.

Over at the House, bipartisanship on energy bills is not dead. Representative Peter Welch (D-VT) has been teaming with Representative David McKinley (R-WV) and Cory Gardner (R-CO) on a variety of bills. HR 2128, the Homes Act, by McKinley and Welch, would provide energy-efficiency rebates to homeowners. Another McKinley/Welch bill by is HR 2126, the Better Buildings Act, which would encourage landlords and tenants to work together to reduce energy costs. Senators Kelly Ayotte (R-NH) and Michael Bennet (D-CO) introduced a parallel bill in the Senate. Representative Paul Tonko (D-NY) continues to take the lead in pushing support for WAP and SEP.

Over at the Department of Energy, Secretary Ernest Moniz has been focusing on enhancing relations with state and local governments. His senior advisor, Melanie Kenderdine, is taking over an enhanced policy function at the department. She has been reaching out to state and local government. In another positive development, Assistant Secretary for Energy Efficiency and Renewable Energy Dave Danielson participated in a “summit” meeting with state energy officials on July 17. More to come on that.

At the time of writing, Congress has one week left in Washington before the August recess. When they come back in September, they will need to conclude a continuing resolution by September 30. Congress will also need to raise the debt limit in October or November. Tax reform and spending issues will also be on the front burner this fall. Chances for a grand bargain appear slim, but one never knows.

Jeff Genzer is the Vice-President of the law firm of Duncan, Weinberg, Genzer & Pembroke, P.C., where he has practiced energy and environmental law since 1985. Prior to work at the firm, he also worked at the National Governors Association as an energy lobbyist. Among other clients, he has represented the National Association of State Energy Officials, since it was formed in 1986.