Manchin Urges FERC To Weigh Hill Democrats’ Clean Power Incentives

Source: By Rick Weber, InsideEPA • Posted: Thursday, September 30, 2021

Senate energy committee Chairman Joe Manchin (D-WV) is expressing concerns that House Democrats’ proposal for a clean electricity performance program (CEPP) as part of budget reconciliation legislation could undermine grid reliability, and is asking federal energy regulators to help him sort through such concerns.

“I just can’t for the life of me keep writing checks from our treasury for publicly traded companies that have shareholders that are basically benefiting off of the investments we’re making with no return to taxpayers,” Manchin said at a Sept. 28 Senate Energy and Natural Resources Committee hearing featuring testimony from all four members of the Federal Energy Regulatory Commission (FERC).

Manchin, whose stance on the climate-heavy reconciliation bill is crucial in the 50-50 Senate, used the hearing to reiterate his concerns with the House Democrats’ CEPP proposal, telling the FERC commissioners “I’ll be calling on you all to help me through this.”

The CEPP was included in a reconciliation package costing up to $3.5 trillion that House and Senate Democrats are negotiating this week.

Some lawmakers have tied the bill’s fate to a separate $1.2 trillion bipartisan infrastructure package, though House Speaker Nancy Pelosi (D-CA) is planning to hold a floor vote on the latter bill this week, a move that would send the measure to President Joe Biden’s desk and potentially cast doubts on the future of the reconciliation measure.

Manchin and other moderates have raised concerns about the cost of the bigger bill emerging from the House over the past several weeks, including the proposed $150 billion CEPP. The bill would enact much of Biden’s economic and climate agenda through budget reconciliation procedures without any Republican votes.

At the hearing, Manchin cited remarks by FERC Commissioner Mark Christie (R), who questioned the need for clean-energy payments since market forces are already pushing utilities away from the use of coal. Manchin said he “wholeheartedly” agrees with Christie’s assessment.

“If we give them, and pay them incentives to basically change their [energy generation] portfolio by 2030, reliability could be the big loser,” Manchin warned, adding “utilities will take every dime you want to give them, but they will not commit and basically be held accountable for reliability, and then they’re going to have to buy it somewhere, and the consumer is going to have to pay.”

FERC Chairman Richard Glick (D), a Biden appointee, said the panel is developing updated rules for approving transmission projects to accommodate zero-emitting renewables, and is also overhauling its policy for approving gas infrastructure to account for climate change and other concerns.

“The rapid shift in the resource mix and the growing threat to grid resilience due to the changing climate require significant investments in new and existing transmission,” Glick told the committee in his written testimony.

He added that the need to finish the gas policy review “is even more urgent in the aftermath of several appellate court decisions highly critical of aspects of the Commission’s approach to pipeline certification.”

Further, he argued that the nation’s power system already faces reliability threats from climate-related extreme weather, and that FERC is seeking public input on how to harden and modernize the grid against those storms.

“Whether it is prolonged record cold, heat waves, drought and wildfires in the West, or increasingly ferocious hurricanes in the Gulf, climate change poses a distinct threat to grid reliability. The commission recently initiated a docket to examine the impact of extreme weather on grid reliability. We will continue to focus on actions that utilities and others can take to address the growing threat of extreme weather,” he said in his testimony.

‘Dropping An H-Bomb’

While Glick did not directly address the merits of the Democrats’ proposed CEPP, other FERC members criticized the plan in response to questions from committee Republicans.

The House proposal “will add to the costs of living,” Barrasso said in his opening statement. “It’s a scheme. It would use an estimated $150 billion of taxpayer dollars to pay off the largest utilities in the country to deploy Democrats’ favorite energy sources. At the same time, it will allow those utilities to charge their customers for new transmission lines to service these facilities,” he added.

In response to a query from Barrasso, FERC member James Danly (R) charged that the House plan would “create an incentive and penalty structure that would absolutely change and frustrate every subtle expectation we have for these slowly-developed, incrementally-produced markets of ours. Effectively dropping an H-bomb into the middle of them.”

In an interview with E&E News after the hearing, Manchin said he remains in negotiations with fellow Democrats on clean energy incentives he can support. “We have had great conversations on this,” Manchin told he outlet.

Citing the chief Senate proponent of the CEPP plan, Sen. Tina Smith (D-MN), Manchin said she “is a tremendous lady and her heart is in the right place, we just have a different approach. I think you heard my state is in a different place than everyone else.”

Yet, environmentalist supporters of the proposal are continuing to make the case that the program would cut customer costs and preserve grid reliability. A Sept. 28 memo released by Evergreen Action and Natural Resources Defense Council cited ongoing plans by major utilities to deploy zero-emitting power, while also charging the proposal would “protect reliability.”

“This clean power transition is achievable and will not adversely affect grid reliability. In fact, moving to more carbon-free electricity is essential for reducing the risks that climate change-driven disaster events are wreaking upon America’s electric grid,” the memo says.

Hearing Debate

Manchin said one of his goals for the hearing was encouraging the continued use of natural gas amid the transition to cleaner energy sources.

“I believe that natural gas has an important role in the energy transition and we need to ensure an efficient, predictable permitting process for pipelines,” Manchin said in his opening statement.

“Congress expects FERC to update and revise its policies and practices in response to new facts and new technologies and certainly court decisions, of course. But that’s while following current law and current policies and processing application reviews expeditiously,” Manchin added.

Another point of discussion at the hearing was FERC’s recent release of an interim report with the North American Electric Reliability Corporation on the Texas power outages last winter caused by severe storms. Glick has described the report as validating FERC’s move toward assessing and mitigating the effects of climate change on the electric grid and gas pipeline networks. — Rick Weber (rweber@iwpnews.com)