Beltway Roundup

by Jeff Genzer

The FY2015 appropriations season has begun in earnest. The House Appropriations Committee has begun marking up its bills, with the three easiest bills first: Legislative Branch (H.R. 4487), Military Construction-Veterans Affairs (H.R. 4486), and Commerce, Justice. The House version of the Energy and Water Development Appropriations bill is not expected until early June. That bill covers the Weatherization Assistance Program (WAP) and the State Energy Program (SEP). The Labor and Health and Human Services (HHS) bill is always the most controversial House bill and is likely to be the last bill considered. Labor-HHS includes the Low Income Home Energy Assistance Program (LIHEAP). Over on the Senate side, they will begin with Agriculture and the Military Construction–Veterans Affairs bills. It is too early to tell how funding levels for these individual programs will be addressed; however, in FY2014, SEP received $50 million, WAP received $174 million, and LIHEAP received $3.4 billion. Strong congressional support has been exhibited by the annual “Dear Colleague” letters sent to the appropriators from members of Congress, with the House letter in support of LIHEAP garnering 137 signatories, and 44 senators signing on. For the combined SEP/ WAP letter, 80 representatives signed on and 40 senators indicated their support.

Overall, the amount of discretionary spending authority for the federal government in FY2015 is $1.014 trillion, only slightly above the $1.012 trillion available in FY2014. Because this is an election year, the fight will be over an estimated 200 “policy riders” that members of both parties will want to debate on these appropriations bills. The Appropriations Committee chairs and ranking members from both parties, led by Hal Rogers (R-KY) in the House and Barbara Mikulski (D-MD) in the Senate, are trying hard to reduce the number of controversial riders. They want to utilize “regular order” and get these bills passed before Congress goes home to run for reelection in late September. That may be very difficult. It is possible that the bills, in whole or in part, will be jumbled together into an omnibus bill. Stay tuned.

The continuing debates over energy policy matters are focused on two major issues: (1) Whether the Shaheen (D-NH)/Portman (R-OH) energy efficiency legislation will move forward in the Senate (S. 2262), and (2) whether the Keystone XL pipeline will get a separate Senate floor vote (and whether Congress will actually direct the construction of this new oil pipeline from Canada). As of the date this article was written, it appeared that the Shaheen/Portman bill could be considered on the Senate floor as early as next week. They still need to get a time agreement, which would restrict the number of amendments, and this would include the treatment of Keystone as well as the issue of whether nongermane amendments would be considered. When this bill was ready to be debated last year, Senator Vitter (R-LA) insisted that an amendment dealing with health care be addressed. This issue remains a nonstarter for the Democrats. Meanwhile, the House did pass an energy efficiency bill (H.R. 2126), which is a scaled-down version of Shaheen/ Portman. The House Energy and Commerce Committee is also considering two energy efficiency bills this week: (1) the Energy Savings Through Public-Private Partnerships Act (Gardner [R-CO]/Welch [D-VT]; H.R. 2689), which would expand the use of energy savings performance contracts and utility energy service contracts in federal facilities; and (2) the Streamlining Energy Efficiency for Schools Act of 2014 (Cartwright [D-PA]; H.R. 4092), which would encourage sharing of energy efficiency information with schools. Congress and the Obama administration will also continue to consider steps to improve cyber security and electric grid reliability and security. These are big issues.

We remain concerned that the bill to reauthorize the WAP and SEP programs (S. 2052), sponsored by Senators Coons (D-DE), Collins (R-ME), Reed (D-RI), and Shaheen (D-NH), has not been added to the Shaheen/ Portman bill as an amendment. The cost of the reauthorizations has been a continuing deterrent. Other bills of interest to state and local governments include the EPIC/Race to the Top in Energy bill, introduced by Warner (D-VA) and Manchin (D-WV), which would provide competitive grants to state energy offices for innovative programs to improve energy productivity. Another bill, introduced by Murkowski (R-AK), Sanders (I-VT), and Wyden (D-OR), would create a Residential Energy Savings Act (RESA), which would provide federal loans to states for residential energy loans. Again, these bills have not been added to the revised version of Shaheen/Portman.

A hearing was also held before the Senate Energy and Natural Resources Committee on May 1, 2014, to discussthe supply constraints and high prices in the propane market this winter. This was a special problem in the upper Midwest. There was extensive use of propane for crop drying in the fall of 2013, followed by a cold winter, which helped exacerbate high prices. In addition, there have been significant changes in energy infrastructure, which could cause problems in the future. The larger issue of energy infrastructure is also the subject of the first planned report by the administration under the so-called Quadrennial Energy Review (QER). The QER is being led by two White House offices, with help from numerous federal agencies, and with the DOE providing the major staffing. Hearings were held in April in Washington, D.C., and Hartford, Connecticut. Numerous hearings are planned around the United States, and a final report is scheduled to be delivered to the president in January 2015. The definition of “energy infrastructure” for purposes of the QER is very broad; it includes not only electric, natural gas, and petroleum transmission, distribution, and associated generation, but also transportation and a wide variety of associated issues. State and local governments have a large role to play in providing input to this process.

Congress is also beginning to address so-called tax extenders. These extenders are intended to address the myriad provisions of the federal tax code that have expired over the past two years. The Senate Finance Committee approved the EXPIRE Act on April 3 (sponsored by Chairman Wyden [D-OR]), which includes extensions to several energy tax benefits, including the Production Tax Credit for wind and other technologies, the 179d commercial buildings energy efficiency tax deduction, and other provisions. The $85 billion price tag for the two-year extension could be an impediment to early action on the Senate floor. In the House, Chairman Camp (R-MI) of the House Ways and Means Committee, who will be retiring at the end of this Congress, is more focused on comprehensive tax reform, but has begun to move a much smaller tax-extenders package of seven items, led by the very popular R&D tax credit. It is unclear how Congress will resolve these tax issues before the election. Most commentators still believe that the tax extenders will be addressed after the midterm elections, during a lame-duck session this fall.

Congress is likely to continue to debate unemployment benefits, the minimum wage, the Keystone XL pipeline, EPA rules, the Affordable Care Act, and the shortfall in the Highway Trust Fund, which could limit road construction and repair across the country beginning this spring.