Beltway Roundup

by Jeff Genzer

To the surprise of many in Washington, D.C., Congress and President Obama came to terms on an FY2015 Omnibus Appropriations Bill (H.R. 3547). The 1,582-page bill, which covers all 12 individual appropriations bills, was signed by the president on January 17. Of special interest to state and local energy officials, the Weatherization Assistance Program received $174 million (up from $68 million in FY2012 and $138 million in FY2013), the State Energy Program received $50 million, and the Low Income Home Energy Assistance Program received $3.425 billion. The final discretionary appropriations totals for the entire government (except for emergencies and war-fighting) are $1.012 trillion in FY2014, and they will be $1.014 trillion in FY2015. The final omnibus bill eliminated any further sequester, at least for two years. The House had sought a funding level of $967 billion, while the Senate was seeking $1.058 trillion (the FY2013 funding level was $986 billion). They basically split the difference. The big bill passed the House on a 359-to-67 vote and the Senate on a 72-to-26 vote. The objective of the congressional leadership is to avoid another budget showdown before the midterm elections in November 2014. The only near-term budget-related issue that must be addressed in February is the need to increase the debt ceiling. The president’s FY2015 budget is now scheduled for submission in early March.

No funding was provided in the FY2014 bill for the administration’s proposed $200 million “Race to the Top” on energy. Legislation had been introduced on this topic, now called EPIC, by Senators Mark Warner (D-VA) and Joe Manchin (D-WV). Other energy bills are moving forward in the Senate and House, though how a final bill will materialize is unclear. The long-delayed Jeanne Shaheen (D-NH)/Rob Portman (R-OH) energy efficiency bill (S. 1392) may be reintroduced in the next month, assuming there are 60 votes for passage. Because of the funds needed for authorization, it is unlikely that the compromise bill will include the reauthorization of the Weatherization Assistance Program and State Energy Program through the Chris Coons (D-DE)/Susan Collins (R-ME)/Jack Reed (D-RI) bill or the EPIC bill noted above. The sponsors are still working with Senators Lisa Murkowski (R-AK), Bernie Sanders (I-VT), and Ron Wyden (D-OR) to assess whether the Residential Energy Savings Act could be included. That legislation would allow states to borrow funds from the federal government to establish loan programs for consumers to implement energy efficiency and renewable energy. On January 28, the House Energy and Commerce Committee approved legislation from Representatives David McKinley (R-WV) and Peter Welch (D-VT) to establish a “Tenant Star” program (H.R. 2126), which is intended to help address the split incentives between building owners and lessees, in order to promote energy efficiency.

Legislation to address cybersecurity risks could move this year, with increasing attention being paid by government at all levels and business to the risks posed by these types of attacks, especially on energy infrastructure. A separate meeting was held on January 29 between key senators and leaders of the electric utility industry concerning recent attacks on electricity infrastructure. The Republicans are pushing other legislation to limit the EPA’s authority and to authorize the Keystone XL pipeline. There appears to be little interest in the Democratic-controlled Senate to move those bills.

On January 29, the House passed Energy legislation in another form. The multiyear farm bill (H.R. 2642), includes traditional agricultural support issues, and the Supplemental Nutrition Assistance Program (SNAP) includes two key energy provisions. First, the former trigger that permitted recipients of LIHEAP to receive SNAP benefits when they get $1 of LIHEAP funds has been modified to increase that level to $20. The SNAP program will be cut by $8 billion, rather than the House proposal of a $39 billion cut over five years. In addition, the conference committee followed the Senate’s lead and provided almost $900 million in so-called mandatory spending for the energy title of the farm bill. This includes the Rural Energy Assistance Program, which provides funding for ranchers, farmers, and rural small businesses to conduct energy efficiency and renewable energy programs.

Major tax legislation is likely to be delayed until after the midterm elections in November. The chairman of the Senate Finance Committee, Max Baucus (D-MT), immediately after issuing a white paper on energy tax policy in December, was nominated to serve as ambassador to China. He should be confirmed in early February. The new chairman, Ron Wyden, will move over from the Senate Committee on Energy and Natural Resources, and the musical chairs will elevate Mary Landrieu (D-LA) to the chairmanship of that committee. On the House side, David Camp (R-MI) is term-limited as chair of the Ways and Means Committee, and will step down at the end of this Congress. Paul Ryan (R-WI), the present chair of the House Budget Committee and the 2012 Republican vice-presidential nominee, is publicly interested in taking over. Of the more than 100 tax provisions that have expired through December 2013, 16 of them are energy tax provisions. There will be a big effort to extend those benefits, but it is not clear whether it will occur until after the elections.

It is likely that the administration will take action without congressional support in areas where new rules or executive orders can accomplish similar objectives. The president made that clear in his State of the Union address on January 28. This includes the greenhouse gas rules for new and existing power plants, increased fuel economy standards, and the issuance of appliance efficiency standards.

Also within the administration, the big new initiative is the development of a multiyear Quadrennial Energy Review, which is being led by the White House Domestic Policy Council and the Office of Science and Technology Policy. The effort is primarily being staffed by the new energy policy office created at the DOE and led by Melanie Kenderdine. State and local outreach at that office is being directed by Karen Wayland. (See page 18 for a discussion with Melanie and Karen.)

Program Funding Level
State Energy Program $50 million, equal to the FY2011 funding
Weatherization Assistance Program $174 million (including $3 million for training), up from $139 million in FY2013 and $68 million in FY2012
Low-Income Home Energy Assistance Program $3.4 billion, up from the $3.3 billion provided in the short-term Continuing Resolution (though still below the peak level of $5.1 billion a few years ago)
DOE Buildings Program Cut to $178 million from $218 million in FY2013, and specifically excludes funding of grants to members signing up for the Better Buildings Challenge
Federal Energy Management Program $28 million, down from $32 million in FY2013
Electricity Delivery and Energy Reliability Would receive $147 million
Nuclear Energy $889 million
Fossil Energy $562 million, including $392 million for Carbon Capture and Storage, and $142 million above the Budget Request
Strategic Petroleum reserve $189 million
Northeast Home Heating Oil Reserve $8 million
Energy Information Administration $117 million, equal to the Budget Request
Advanced Research Projects Agency Would receive $280 million, which is $119 million below the Budget Request, but $15 million above FY2013
Hydrogen and Fuel Cell Technologies $93 million, down from $103 million in FY2013
Bioenergy Technologies $232 million, up from $198 million in FY2013
Wind $88 million, down from $93 million in FY2013
Geothermal $46 million, up from $37 million in FY2013
Hydro and Hydrokinetic Power $59 million, the same as FY2013
Vehicles $290 million, $328 million in FY2013
Advanced Manufacturing $181 million, up from $115 million in FY2013
Program Direction at EERE $162 million
Tribal Energy Programs $7 million
DOE Science Programs $5.1 billion, $81 million below the Budget Request
No funding was provided for the administration’s $200 million request for the Race to the Top for Energy Efficiency and Grid Modernization, directed primarily for the states.
Overall, the energy programs (non-Defense) in the Energy and Water Bill total $10.2 billion, approximately $917 million below the Budget Request, with total Energy Department funding of $27.4 billion. An independent commission has also been set up to examine the effectiveness of the national laboratories, and they must report by February 2015. Also, Congress funded a Critical Materials Energy Innovation Hub at a level of $25 million. At EPA, funding was cut by $143 million to $8.2 billion, and cuts were made to a variety of regulatory programs.