Lisa Murkowski wants to get down to work.
The Alaska Republican and Senate Energy and Natural Resources Committee chairwoman dropped 17 bills into the hopper Thursday as part of her big push to update energy efficiency, supply, infrastructure and accountability of agencies that oversee the nation’s power system.
Her task is a significant and daunting one — she wants to tackle broad, comprehensive reform in a way that Congress hasn’t seriously attempted since 2007, when it passed the Energy Independence and Security Act. Murkowski has previously acknowledged Congress has a tendency, to put it generously, to become fairly gridlocked when it comes to sweeping, voluminous legislation.
“We’ve done a lot of messaging around these parts of late, and I want to actually make some changes to our energy policy,” Murkowski told reporters Thursday. “We haven’t done that since 2007. It’s way past time.”
That’s why Murkowski has been working with top committee Democrat Sen. Maria Cantwell of Washington ahead of time. The two have agreed to set aside policy issues on which they strongly disagree — and there are many. What’s left are a suite of somewhat wonky, technical issue areas that nonetheless could yield sizable changes to U.S. energy policy.
Here are just a few examples of the legislation Murkowski introduced:
Energy Loan Improvement Act
The bill is a throwback to the Solyndra episode, the California solar panel maker that snagged a $535 million federal stimulus loan guarantee before going bankrupt in 2011. A summary from the Energy and Natural Resources Committee calls the measure a “stronger restatement” of changes already made to the program that ensured taxpayers would be repaid before private creditors in the event a recipient goes bankrupt. In a last-ditch refinancing effort to save Solyndra, Energy Department officials subordinated taxpayers to private lenders.
In an effort to shield taxpayers from losses from other failed Energy Department loans, the bill also would require borrowers instead of the public to pay the credit subsidy which, according to agency, is the “estimated long-term amount that a direct loan or loan guarantee will cost the federal government.” Currently, only one of three loan programs the department administers requires applicants to cover those costs.
The bill also would scrap the 2009 loan guarantee program that benefited Solyndra. That, however, is largely a bookkeeping measure at this point — the program expired in September 2011 and thus can’t issue new awards, though it continues to monitor previous recipients of loan guarantees.
The Condensate Act
Murkowski may steer clear of a hot-button topic like ending the 40-year-old ban on crude oil exports in her large bill, but the condensate legislation nibbles at the edges of ending those restrictions. It follows up on a Commerce Department decision last year to allow exports of condensate, a type of light oil than often gets lumped in with federal statistics on crude oil, so long as it’s lightly processed.
The bill would require the Energy Department to define condensate, as different agencies across the federal government have varying interpretations of the fuel. It also allows the Energy and Interior departments to assess condensate separate from crude. That’s significant because crude is still subject to an export ban, but separating condensate from that umbrella would open the gates for producers to ship it overseas.
Bulk-Power System Reliability Impact Statement Act and the Continuity of Electric Capacity Resources Act
The twin bills are designed to create the possibility for electric grid operators to maintain power in situations where doing so would run afoul of environmental regulations. In the bulk-power act, the bill requires agencies to detail in final rules the impact environmental regulations would have on the bulk-power system and to offer methods of compliance to address reliability concerns, including non-compliance. The Continuity of Electric Capacity Resources Act would go further by shielding operators from fines for violating regulations if the Energy Department has ordered companies to keep their systems running to maintain reliability.
Since Murkowski’s agency doesn’t have jurisdiction over Environmental Protection Agency rules limiting carbon, mercury and other air emissions from power plants, the bills aren’t necessarily a direct shot at some of the more far-reaching Obama administration regulations.
The bills are, however, a response to those rules. Murkowski and coal-state lawmakers have repeatedly warned of a scenario in which environmental regulations shutter so much power supply that electric utilities won’t be able to meet demand during periods of peak demand. They have pointed to the polar vortex of January 2014 in which 89 percent of American Electric Power’s generators due to close under the EPA’s mercury and air toxics rule were running. The utility, with its congressional allies, have warned that abiding by the environmental rules in a similar situation could cause widespread blackouts.
In terms of reliability, the Continuity of Electric Capacity measure also wades into territory closely guarded by electricity regulators by requiring regional transmission organizations, which oversee interstate electricity markets, to change their “tariffs” structure. Those tariffs guide capacity markets that ensure there’s enough supply on tap to meet demand. But operators of nuclear power plants and coal-fired generation argue those markets are being distorted by tax subsidies to (chiefly) wind power because operators are required to take the cheapest power source. Operators of base-load power contend their generators can’t ramp up or down quickly, so they’re forced to run them at uneconomical rates or shut them down entirely.
Strategic Petroleum Reserve Modernization Act
The Obama administration has suggested several reforms for the Strategic Petroleum Reserve, a 668-million barrel cache of oil created in the 1970s to keep U.S. refineries running following supply shocks from the Arab oil embargo. Chiefly, it wants to be able to tap the reserve to respond to large swings in the global oil market.
Murkowski disagrees, as she told reporters that the reserve is “not a safety net because you don’t like what the price of oil is or there’s something political going on.” Her bill would require the Energy Department to notify Congress before tapping the reserve and to submit a report afterward. The agency also would need to study the costs of operating and maintaining the reserve, and evaluate the reserve’s role in fulfilling international obligations and see if there’s an alternative means for satisfying those aims.
