House Passes Energy Policy Bill

Sweeping aside concerns voiced by California legislators, the House of Representatives passed on a 249-183 vote comprehensive energy policy legislation based on a bill that failed to reach the president?s desk late last year. The bill, HR 6, focuses on opening new federal land to energy production and eliminating roadblocks to new energy facilities by streamlining permitting and limiting state and local jurisdiction. Representative Richard Pombo (R-California), a cosponsor of the bill, warned that the nation faces an energy shortage. ?We are not providing the energy we need to meet demand,? he said. Many Democrats said the bill focused too much on traditional fossil fuel and nuclear power technologies and not enough on conservation and renewable energy. House minority leader Nancy Pelosi (D-California) called the bill ?anti-consumer, anti-environmental, and anti-taxpayer? and said it will do nothing to reduce dependence on foreign energy. ?We need a bill for the future,? Pelosi said. ?Instead we have a bill that looks backward.? This year?s House bill would overhaul the nation?s energy policy. It would deregulate public utility holding companies, provide tariff incentives for new transmission lines, and give $8.1 billion in tax breaks and royalty payment relief to energy producers. The bill would streamline permitting for liquefied natural gas terminals, pipelines, transmission lines, and oil refineries. It would limit state licensing powers and appeal rights for such facilities. In addition to opening the Arctic National Wildlife Refuge to energy production, it would make it easier for energy firms to use federal lands for energy projects. HR 6 would provide a host of direct subsidies, including $4.8 billion for clean-coal technology projects, $2.15 billion for hydrogen-powered vehicle research and development work, and $635 million for an advanced reactor that could be used to produce hydrogen. The measure also would immunize companies from liability for drinking-water contamination caused by the gasoline additive methyl tertiary butyl ether, which is particularly widespread in California. The bill would provide $2 billion to clean up MTBE contamination, which is estimated to cost a total of at least $29 billion. The Congressional Budget Office said that by abridging the right of states and cities to recover cleanup costs from parties responsible for MTBE contamination, the bill would create an illegal unfunded federal mandate. On that basis, Representative Lois Capps (D-California) sought to strike the immunity provision from the bill, but her amendment failed in the final minutes of debate. HR 6 would call on the administration to set energy-efficiency standards for a wide variety of appliances but would preempt California?s ceiling fan standard. Representative Nathan Deal (R-Georgia) inserted the provision into the bill in committee on behalf of Atlanta-based Home Depot. The bill relaxes deadlines for meeting Clean Air Act standards in areas downwind of air pollution, such as the San Joaquin Valley. After all was said and done, lobbyists and policy analysts spanning the political spectrum did not embrace the bill. ?It looks like a mixed bag of provisions,? said Ben Lieberman, policy analyst for the Heritage Foundation. ?I?m not too sure it?s going to solve our energy problems.? Some provisions of the measure would encourage renewable energy and energy efficiency, but most agreed they would do little to change the status quo. ?It?s basically a big setback and a missed opportunity to move energy policy into the 21st century,? said March Wentworth, legislative representative for the Union of Concerned Scientists. The House rejected several amendments backed by California members. Representative Anna Eshoo (D-California), for instance, lost her bid to require the Federal Energy Regulatory Commission to order up to $2 billion in refunds to California for overcharges during the 2000-01 energy crisis. An amendment on liquefied natural gas licensing authority backed by California members failed. It would have deleted provisions to give FERC sole jurisdiction over new LNG terminals. ?We want LNG,? said Harvey Morris, principal counsel for the California Public Utilities Commission, which is suing FERC to assert its right to regulate a proposed terminal in Long Beach. ?We just want to make sure it?s safe and that there?s a check if there?s an exercise of market power.? The bill would prevent even FERC from controlling anticompetitive practices at LNG terminals through 2011, Morris said. He noted that European and Asian nations that rely on LNG all have regulations to moderate any price-gouging behavior. He added that the state could inspect LNG facilities for safety under the bill, but not take any action to correct problems, being able only to call on the federal government. The bill would require FERC to establish incentive-based rates for new transmission lines and give it the power to require open access to transmission lines operated by public power agencies. It would streamline approvals for transmission lines. For instance, the bill calls for federal agencies to approve easements and permits for a transmission line planned through the Cleveland National Forest in Riverside and San Diego counties within 60 days after the environmental impact report is completed. The line would bring power from a pumped-storage hydro project proposed at Lake Elsinore. Project proponents filed an application with FERC, and environmental analysis is under way, according to the U.S. Forest Service. The House also voted down an amendment offered by Representative John Dingell (D-Michigan) that would have stricken a provision to repeal the Public Utility Holding Company Act of 1935. Dingell?s amendment also would have strengthened FERC?s authority to investigate and prosecute fraud in electricity and gas markets, raising penalties to as high as $25 million from their current limit of $5,000. As passed, the bill gives FERC some expanded enforcement power and sets a $1 million maximum on penalties for fraud. The bill has a number of other provisions. One would prevent agencies from examining renewable energy projects as alternatives to traditional energy projects under the National Environmental Policy Act. The bill also would renew the Price-Anderson Act, which caps liability for the nuclear power industry in the event of an accident. It would upgrade the power of security personnel at nuclear plants and provide incentives for construction of small nuclear reactors. The bill also orders a number of reports to Congress, including one by the Department of Energy on the feasibility of building commercial nuclear plants at departmental facilities and military bases. With 424 military bases, California has more than any other state, according to the California Institute. Action now shifts to the Senate, where Energy and Natural Resources Committee chair Senator Pete Domenici (R-New Mexico) said a bill will be marked up late in May and considered on the floor sometime this summer. Domenici predicted that the bill would be ?bipartisan,? including provisions favored by Democrats that deal with such issues as global warming. A conference committee will have to iron out differences before Congress sends any final bill to the president.

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House Passes Energy Policy Bill

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