Subscribe today to the Washington Examiner magazine and get Washington Briefing: politics and policy stories that will keep you up to date with what’s going on in Washington. SUBSCRIBE NOW: Just $1.00 an issue!
UTILITY FAVORS DEMOCRATIC PLAN: Exelon, a Chicago-based utility, is backing Democrats’ plan to pay electric companies to generate a growing percentage of power from clean sources and to penalize those that fail.
Exelon’s advocacy comes as the future of Democrats’ “Clean Electricity Performance Program” hangs in the balance, as Senate centrists like Joe Manchin of West Virginia refuse to endorse the idea.
David Brown, Exelon’s senior vice president of government affairs and public policy, in an interview with me yesterday pushed back on Manchin’s argument that utilities are already transitioning so there’s no need for an extra government push. He said President Joe Biden’s 80% clean electricity target by 2030 won’t be met if current trends hold.
“The CEPP encourages companies not only to build clean generation, but to do it faster than we would see in a business as usual scenario,” Brown said. “You are paying them to go above and beyond business as usual.”
Brown was also insistent that the program needs to have a penalty component to have any teeth. Manchin has reportedly resisted the idea of fining companies for non-compliance.
“The key element is to have the penalty in there,” Brown said. “Otherwise you just have a voluntary program. If you want to recognize the value of clean electricity in a [competitive] power market, there needs to be consequences for failing.”
House Democrats’ version of the CEPP, which is likely to change in negotiations with the Senate, would use a carrot-and-stick approach to push the utility sector to reach 80% clean electricity by 2030, issuing grants to power companies to increase their clean energy portfolio while imposing financial penalties to ensure utilities don’t fall behind.
The House Energy and Commerce Committee plan makes a utility eligible for a grant from the Department of Energy if it increases the amount of clean electricity it supplies by 4% compared to the previous year, starting from 2023 through 2030.
Most utilities have been quiet about CEPP until they know what a final version of the program looks like. The utility trade group Edison Electric Institute has said it is “supportive of the concept” of the CEPP program, but that “the details will matter.” EEI has previously warned that reaching Biden’s longer-range target of 100% carbon-free power by 2035 could lead to reliability problems and rate increases for customers.
More about why Exelon supports the plan below…
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writer Josh Siegel (@SiegelScribe). Email [email protected] for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
More on why Exelon is out ahead of other utilities: Exelon, of course, has mostly zero-carbon nuclear in its fleet (about 60%), so it has a head start.
But natural gas is still about 20% of its generation and Exelon is confident the payments would make it easier for them to move off the gas to renewables (wind and solar make up only 3% of its fleet). Exelon is also optimistic carbon capture for gas could also be a factor this decade.
Natural gas is not counted as a clean power source as part of House Democrats’ program, unless utilities equip their natural gas plants with carbon capture technology that stops their emissions from entering the atmosphere, although such methods are expensive and unproven.
Exelon, it just so happens, is a partner in a first-of-its-kind carbon capture gas plant called NET Power being built in Houston.
Brown said though the timeline may be “a little tight” for NET Power to begin contributing zero-carbon electricity this decade, he expects carbon-free gas from the plant to eventually qualify under the program.
He’s doubtful, though, that it’d be practical to retrofit Exelon’s existing gas plant fleet with carbon capture.
What about the rest? For utilities that have been slower to adopt clean energy, Brown noted an “element of flexibility and fairness” built into the program.
Under CEPP, an electricity supplier with a smaller starting percentage would not need to reach as high an amount of clean power, enabling utilities in carbon-intensive states to have more time to wean off fossil fuels.
“You are not saying everyone has to be 15% next year, or 70% in year three,” Brown said. “You are letting folks start where they are and add accordingly.”
LIBERALS UNRELENTING ON INFRASTRUCTURE TIMELINE: Left-wing Democrats have not taken kindly to House Speaker Nancy Pelosi’s plan to bring the bipartisan infrastructure agreement for a vote tomorrow.
Party leadership agreed previously to advance that bill alongside President Joe Biden’s Build Back Better reconciliation package, which remains subject to significant negotiation over key provisions and overall cost, and liberals are accusing Pelosi of now going back on the agreement to tie the two bills together.
Pelosi already moved back the target date for consideration of the bipartisan bill from Monday to tomorrow, and she stressed to colleagues the importance of taking it up this week, citing the expiration of federal surface transportation funding on Sept. 30, but liberal members aren’t having it.
Congressional Progressive Caucus Chairwoman Rep. Pramila Jayapal promised last night that she and her colleagues “won’t back down” to support the bipartisan infrastructure deal before an agreement on the Democrats’ larger social welfare reconciliation package is made.
“It’s not the infrastructure bill THEN maybe the Build Back Better package down the road. That wasn’t the deal,” Jayapal said.
Fellow Progressive Caucus member Rep. Jan Schakowsky pledged her colleagues will ensure the bipartisan deal “will fail” as things stand, and Sen. Bernie Sanders is cheering them on.
“I strongly urge my House colleagues to vote against the bipartisan infrastructure bill until Congress passes a strong reconciliation bill,” he said.
CLIMATE ACTIVISTS ARE ANXIOUS TOO: Liberal environmental groups are warning Democrats against backing the bipartisan infrastructure bill without a deal in place to advance the larger social and climate spending package.
These groups worry the House passing the bipartisan legislation would relinquish leverage over moderates who might not be keen to support additional spending.
“Passing the infrastructure bill alone would be a historic failure by this Congress, and Congressional leadership cannot allow that to happen,” said Jamal Raad, executive director of Evergreen Action, a group close to the Biden administration. “House progressives and climate champions must stand strong and vote down the infrastructure package until both bills are ready to advance together.”
The Sunrise Movement, a liberal youth group, called Pelosi’s decision to delink the two bills a “betrayal.” Activists from the group and others confronted Pelosi as she headed to a fundraiser last night.
ALLIED GREENS BUCK UP PELOSI: Other environmental groups, led by Climate Power and League of Conservation Voters, stood by the House speaker at a press conference yesterday afternoon at the Capitol rallying for climate change measures.
Appearing with other House Democrats, Pelosi said passing the reconciliation package would enable Biden to meet his emissions reductions goals set under the Paris Agreement.
“Our goal is to pass this legislation, our goal is to meet the standards — 50% by 2030, 100% by 2050, and to do so in a way that is a model for the world. We fully intend to do it,” Pelosi said.
REMEMBER ME? Senate Majority Leader Chuck Schumer filed cloture last night on Biden’s embattled nominee to oversee public lands as director of the Bureau of Land Management, Tracy Stone-Manning, setting up a final vote to confirm her soon.
The move signals Democrats have the votes to confirm her by the slimmest of margins since no Republicans are expected to vote aye. She advanced through the Senate Energy and Natural Resources Committee in July on a deadlocked 10-10 vote only after Manchin endorsed her.
Republican senators have accused Stone-Manning of having a past affiliation with an “ecoterrorist” organization and deceiving the committee regarding a three-decade-old “tree spiking” criminal case.
Manchin said he did not see evidence that shows Stone-Manning “was an ecoterrorist, spiked trees, or lied to the committee.”
He called her a “very well qualified problem solver” who has “brought people together.”
WHITE HOUSE USING ‘EVERY TOOL’ TO COUNTER HIGH OIL PRICES: Oil prices remain elevated globally, and the Biden administration is looking for ways to bring them down as Brent crude hit a three-year high yesterday of $80 per barrel.
“We are closely monitoring the cost of oil and the cost of gas Americans are paying at the pump, and we are using every tool at our disposal to address anti-competitive practices in U.S. and global energy markets to ensure reliable and stable energy markets,” a White House official said, the Washington Examiner’s Jeremy Beaman reports.
The official cited a letter National Economic Council Director Brian Deese sent to the Federal Trade Commission in August asking the agency to use “all of its available tools to monitor the U.S. gasoline market and address any illegal conduct that might be contributing to price increases for consumers at the pump,” to which the FTC committed.
Biden has sought intervention through other means, including urging OPEC to boost global supply, but the continued increases show that oil prices are out of his hands.
OIL DEMAND STUMBLES: U.S. oil demand fell back last week after showing signs of recovery the week prior from outages caused by Hurricane Ida.
Oil demand decreased to 20.39 million barrels per day last week from 21.15 million barrels p/d the week prior, the Energy Information Administration said in its Weekly Petroleum Status report.
While gasoline consumption rose, jet fuel and diesel demand fell.
Aviation fuel has been the key laggard in the global recovery of oil demand.
Oil prices fell slightly this morning after the EIA also reported the first crude inventory build in eight weeks, increasing the amount of oil in storage.
The Rundown
Bloomberg China’s coal shortage means higher prices for the world
Reuters China seeks to quell power crunch fears, as coal prices soar, winter nears
Wall Street Journal Volkswagen, Ford, other big auto makers push to make solid-state batteries the next big thing for EVs
The Hill Interior Department to nix Trump rollback of bird protections
Calendar
WEDNESDAY | SEP. 29
10 a.m. SVC-217. The Senate Foreign Relations Committee will hold a closed hearing with Amos Hochstein, the State Department’s senior adviser for energy security, for an update on the Biden administration’s efforts “Regarding Energy Security Including Nord Stream 2.”
10:30 a.m. 2123 Rayburn. The House Energy and Commerce Committee will hold an oversight hearing on the Chemical Safety Board.
