White House reorganization plan draws broad rebuke

Source: Christa Marshall and Sam Mintz, E&E News reporters • Posted: Friday, June 22, 2018

The Trump administration’s reorganization plan for the Department of Energy sparked angry backlash today from Capitol Hill to the nonprofit world for calling to sell off transmission assets and for a sweeping shuffle of offices.

The proposal would merge DOE’s applied energy offices on renewables, nuclear and fossil energy into one “Office of Energy Innovation,” and create a separate “Office of Energy Resources and Economic Strategy.”

Elements of the Advanced Research Projects Agency-Energy, which currently is a separate program funded at $353 million, would be moved into the new innovation office (Greenwire, June 21).

The plan echoes President Trump’s budget requests in pushing the sale of transmission assets owned by the Tennessee Valley Authority and three power marketing administrations — the Southwestern Power Administration, Western Area Power Administration and Bonneville Power Administration — which together own more than 50,000 miles of transmission lines.

Privatizing BPA is a “terrible idea,” said Sen. Maria Cantwell (D-Wash.). “Replacing cheap cost-based power with more expensive energy is bad for consumers and bad for business. This is a bad idea that has been soundly rejected before and will be again.”

In explaining its reasoning on transmission, the White House Office of Management and Budget said reducing or eliminating the federal government’s role in transmission ownership “would encourage a more efficient allocation of economic resources and mitigates risk to taxpayers.”

It added that the current “siloed” nature of applied offices sectioned by fuel source hinders collaboration and “integrated solutions.” The existing framework causes the government to pick energy technology winners and losers and facilitates influence from specific industries that is not “good for the nation as a whole,” the White House said.

The proposal takes “a holistic view of energy innovation to ensure federal research keeps pace with the changing needs of the nation’s energy system while maximizing the value to the taxpayer,” the White House said.

The idea of merging ARPA-E is bound to face significant pushback on Capitol Hill, where key appropriators like Sen. Lamar Alexander (R-Tenn.) and Senate Energy and Natural Resources Chairwoman Lisa Murkowski (R-Alaska) are strong supporters. And instead of eliminating ARPA-E the past two budget cycles as Trump suggested, Congress increased its funding.

Many members of Congress also are fans of DOE’s existing applied research structure, which funds the majority of operations at some national labs like the National Renewable Energy Laboratory.

“Given the bipartisan support for ARPA-E’s remarkable success in jump-starting the creation of scores of private-sector companies and technologies, I doubt congressional leaders are going to have much interest in reinventing the innovation wheel,” said Paul Bledsoe, a former Senate staffer and DOE consultant in the Obama administration.

“Congress will rightly smell trouble since the Trump administration has been trying to deeply cut these programs despite their huge return on investment and demonstrable economic value,” he added.

Brad Townsend, an energy innovation expert at the Center for Climate and Energy Solutions, said it was promising that the White House is recognizing the value of ARPA-E’s approach for the applied offices. Stovepiping also is clearly a problem at DOE, he said.

“But I’m also concerned about what this means for DOE’s budget, as well as a number of details that we just don’t have yet,” he said.

Some conservative groups praised Trump’s plan.

“These reforms have the potential to create an operating culture and business model where DOE conducts basic research and development that meets important objectives for the United States while providing a pathway for more flexibility and collaboration at the national labs,” said Nick Loris, an economist at the Heritage Foundation.

The winners and losers argument about DOE has been hashed in various congressional hearings in the past year examining Trump’s budget requests. Many conservatives argue that DOE’s mission has strayed too far from “basic” or “early-stage” research, while supporters of the current system say the economy and U.S. competitiveness benefits from funding research on all fuels (E&E Daily, Feb. 16, 2017).

The OMB plan further calls for an overhaul at DOE’s Office of Science, which oversees the majority of the national labs. Ideas under discussion include merging site offices and “reducing staff and/or support costs.”

Additionally, it would review the structure of the Office of Environmental Management and consolidate international affairs staff from other offices into the main Office of International Affairs.