Senate Democrats’ framework agreement for a $3.5 trillion party-line budget reconciliation infrastructure bill includes one of President Joe Biden’s signature climate change policies.
The package calls for implementing a clean electricity standard requiring utilities to generate 80% clean electricity by 2030, multiple senators said Wednesday.
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“A clean electricity standard is the cornerstone of the progressive, practical transformation to a clean energy future we urgently need,” said Sen. Tina Smith of Minnesota, a Democrat who is working on clean electricity standard legislation.
“Getting it included in the budget package sends a strong signal we are committed to tackling climate change,” Smith added in a statement.
Senate Budget Committee Chairman Bernie Sanders of Vermont also told reporters that a clean electricity standard is a part of the Democrats’ plans.
A Senate Democratic aide noted that party leaders agreed to other climate policies as part of the agreement, including clean energy tax credits and funding to create a Civilian Climate Corps, modeled off a New Deal-era program, to put people to work weatherizing homes, restoring coastlines, managing forests, and other climate-related projects.
The budget blueprint does not include specific clean energy policy details but directs individual committees to write legislation as part of a reconciliation package that fits within the spending limit. It will include direction for the creation of a clean electricity standard.
“There are many more days ahead,” Smith said Wednesday afternoon on a press call. “We now have to fill in the details of how a clean electricity standard would work into a broader framework and how that gets 50 votes.”
A clean electricity standard mandates targets for utilities to purchase a certain amount of low-carbon power. The policy ratchets up those targets each year until utilities are buying carbon-free power by a certain date.
An 80% carbon-free target by 2030 would fit the 10-year budgetary window of reconciliation and keep pace with Biden’s campaign promise of 100% carbon-free power by 2035.
But it remains unclear whether a clean electricity standard as typically defined could fit the “Byrd rule” that prohibits “extraneous matters” unrelated to the budget to be considered in reconciliation.
In February, Senate parliamentarian Elizabeth MacDonough, who would also rule on the fate of a clean electricity standard, rejected Democrats’ attempt to push a minimum wage increase through that process. Some experts say a standard is also not the neatest fit.
Democrats, however, are aiming to be creative in how they design a clean electricity standard, crafting it as a straightforward investment program, the Washington Examiner recently reported.
It would be different than the clean electricity standards or more narrow renewable portfolio standards that have been enacted in more than 30 states.
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Democrats would likely propose setting up annual targets for each utility to hit in terms of growing its share of clean energy. If utilities hit these targets, they would get financial support from the federal government. If they do not, they would face penalties.
Utilities would be assigned different targets based on their starting level for zero-carbon power, enabling utilities in carbon-intensive states to have more time to wean off fossil fuels.
“Regional flexibility is very important,” Smith added. “It makes it very practical.”
Smith confirmed the contours of that plan and said she is “confident” it would comply with reconciliation rules.
“This clean electricity standard is about investing in clean energy,” Smith said. “It is a budget-based plan. It clearly fits within a budget bill.”
