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MANCHIN BILL IS BACK: Sen. Joe Manchin‘s famed permitting reform bill is back — or it’s going to be.
Manchin said this morning he intends to reintroduce the bill and to hold hearings in Energy and Natural Resources since Senate leadership isn’t interested in giving Republicans’ Lower Energy Cost Act a shot.
“If we don’t get [permitting reform] done this year, we don’t get it done,” he said.
Where Democrats are: Manchin besides, Democratic interest in reforms is simmering now that the vote on H.R. 1 is out of the way. Electric transmission, which Republicans’ bill did very little on, is going to be the key to any deal as supportive Democrats want to make sure the electrons generated by clean energy projects enabled by the Inflation Reduction Act’s subsidies can actually make it around.
More than 2,000 gigawatts of generation and storage capacity now seek interconnection, 95% of which is made up of solar, batteries, or wind, according to new research from DOE’s Berkeley Lab.
Democratic Rep. Scott Peters, who has been working with Energy and Natural Resources Chairman Bruce Westerman to chart a bipartisan pathway on reform, said this morning that leaving things the way they are “simply isn’t compatible with science” and stressed the need for more transmission lines, citing Berkeley Lab’s data. Litigation and current implementation of NEPA and other environmental laws are actively decelerating projects, he said.
More liberal Democrats have been making suggestions for how to change things, too. Sen. Ed Markey, who voted against Manchin’s legislation in December, circulated a list of priorities last month recommending that Congress automatically designate FERC as the siting authority for transmission facilities with capacity ratings of 1,000 megawatts.
Markey also endorsed a proposal from Sen. Sheldon Whitehouse that would direct FERC to allocate the costs of transmission projects, something Democrats in the House Sustainable Energy and Environment Coalition have endorsed.
More negotiations to be had: Just seven Republicans supported Manchin’s permitting bill, which sought to preserve states’ authorities over siting transmission while still allowing FERC to step in if permits aren’t issued within a year’s time.
Sen. Shelley Moore Capito, the top Republican on the Environment and Public Works Committee, was one of those seven. But, she said, making FERC the backstop, especially on cost allocation, would be a problem.
“I don’t think we want to federalize the grid,” Capito told Jeremy.
“There’s a lot of questions about cost allocations, who’s going to pay for this, who’s going to benefit from it,” she said, adding that proposals to give FERC a suite of new or expanded authorities “tilts” the balance “in favor of the federal government making all those decisions, whereas now those are made by [public service commissions] and ratepayers and consumer advocates and states.”
Welcome to Daily on Energy, written by Washington Examiner Energy and Environment Writers Jeremy Beaman (@jeremywbeaman) and Breanne Deppisch (@breanne_dep). Email [email protected] or [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.
NEW VEHICLE TAX CREDIT RULES TAKE EFFECT: The new rules tightening eligibility for the full $7,500 clean vehicle tax credit take effect today, nearly four months behind schedule.
Vehicles must now meet the Inflation Reduction Act’s MSRP thresholds as well as the battery component and mineral requirements: 50% of the battery components must be manufactured or assembled in North America and 40% of critical minerals must be those extracted or processed in the United States or a country with which the United States has a free trade agreement, or recycled in North America — all numbers that rise in subsequent years.
Treasury’s rules, although they drop down the number of eligible vehicles to 10 in the immediate term, were written so as to make eligibility more widespread than some stakeholders originally feared.
The department found some wiggle room in the meaning of “free trade agreement” to mean more than the 20 comprehensive FTAs the U.S. has in place. That opened the door to strike new agreements to serve the tax credit rules, and the Biden administration did so with the Japanese.
It’s now working on a similar agreement with the European Union.
Left to issue: Guidance on foreign entities of concern. Beginning next year, eligible clean vehicles may not contain any battery components manufactured by a foreign entity of concern and beginning in 2025 a vehicle may not contain any critical minerals that were extracted, processed, or recycled by a foreign entity of concern.
The restrictions were put on to keep the U.S. from subsidizing an industry and strengthening the position of countries under U.S. sanctions or that are otherwise geopolitical foes.
Some automakers, including Ford, have pressed Treasury to avoid an “overly expansive interpretation” so as to avoid disrupting key parts of their supply chain.
By the way: These are the 10 models immediately eligible for the full credit:
- Chevrolet Bolt, Bolt EUV, Silverado, Equinox SUV
- Cadillac Lyriq
- Ford F-150 Lightning
- Chrysler Pacifica
- Lincoln Aviator Grand Touring
- Tesla Model 3 Performance and Model Y
A handful of other vehicles will receive at least half of the credit, and models eligible for at least part of the credit represent more than 90% of Q1 2023 sales volumes, according to the Zero Emission Vehicle Association.
More from Manchin: Manchin took aim again at the Biden administration this morning for how it’s implementing the tax credits. He said Treasury is “liberalizing” the rules and trying to implement the “BBB” rather than the IRA, referring to the Build Back Better legislation that he tanked.
MICHIGAN TO ANNOUNCE NEW BILLS TO CODIFY 100% CLEAN ENERGY PUSH: Michigan Democrats will formally introduce seven new bills in the Senate Wednesday as part of their Clean Energy Future plan announced last week by state Sens. Sam Singh and Sue Shink to meet the state’s goal of reaching 100% clean energy.
The plan includes phasing out coal by 2030–five years earlier than originally planned–and requiring utilities to produce 100% of their electricity using carbon-free sources by 2035, according to early text of the bills shared with us.
In introducing the effort, Michigan joins several other Midwestern states, including Minnesota, to set tougher goals for clean power and renewable energy.
But unlike some of the other states, Michigan is still deeply reliant on coal, which provided the single largest share of its energy mix in 2021. It has yet to set out a detailed timeline for the transition, though lawmakers said those are coming.
Still others fear that shortening the timeline for utilities to phase out coal could threaten grid reliability in the state–raising the risk of blackouts during extreme weather or peak demand.
While Michigan and MISO operators are certainly not the only ones facing a challenge in decarbonization, taking dispatchable resources like coal out of the equation too quickly could be a gamble.
“I question, did they actually talk to people in the utilities — the engineers, the people that are going to actually build the plants or put the solar panels on the ground?” Jason Hayes, the head of energy and environmental policy at the free market Michigan think tank Mackinac Center, told Breanne. “Because if they had, they wouldn’t have said 2030” as the deadline, he added.
MORE ON THE RUSSIAN PRICE CAP: India and China continued to snap up a majority of Russian oil volumes in April at prices above the G-7-backed cap of $60 per barrel, according to trading data and calculations from Reuters, allowing Moscow to continue to receive stronger than anticipated oil revenues.
According to traders, India and China have been receiving average discounts of around $13 to $9 per barrel of Urals-grade crude to dated Brent in their ports so far during April, amounting to prices that exceeded the $60 cap.
Shipping costs have also come down as ice eased around Russian ports, and as more tankers were freed up, Reuters notes.
In imposing the Russian price cap, coalition leaders hoped to drive down Russia’s oil profits while still keeping its barrels on the market. But obtaining an accurate picture of where and Mosow is shipping its barrels–and at what prices–has been difficult, due to the country’s increased reliance on unregistered ships (or its so-called “shadow fleet”) and other sanctions-evading methods, such as ship-to-ship transfers outside the coasts of Spain and Greece.
G-7 leaders agreed earlier this week to keep Russian oil capped at $60 per barrel, despite efforts by some member countries to lower it.
The Rundown
Financial Times The farmers challenging the EU’s green agenda
E&E News What 9th Circuit ruling means for building gas bans
