In less than a hundred days Congress will have 471 seats up for election, which includes all House seats and 36 Senate seats, of which Democrats are defending 21 and Republicans 15. Current polls indicate that of the “in-cycle” Democratic held seats, seven have been characterized as toss-ups; two Republican seats are currently categorized as toss-ups. With Democrats in control of the Senate, Republicans have a chance to gain control in the election if they can both maintain all current Republican seats and gain control of six more seats. On the House side, and with all seats up, Democrats are hoping to successfully defend as many seats as possible. Charlie Cook categorized - at the end of last month - 17 House seats as “toss-up or worse” with four GOP seats and 13 Democrat races in this category.
This week Congress races to leave Washington and begin its traditional August recess. At this juncture, neither the Senate nor the House will return until after Labor Day. Both chambers are scheduled to be in during the month of September, albeit very briefly.
On the budget front, Congress will depart this week without clearing traditional spending bills. They are, however, currently focused on consideration of a supplemental spending measure to address the current border crisis. Predictably, House and Senate leadership appear to have different views of what a supplemental spending bill would look like. The Senate version, S.2648, provides for $2.7 billion to address the child migrant crisis and also includes $615 million in funds for wildfire suppression, among other provisions. A vote on the measure is expected later this week. The House released its version earlier in the week and includes less funding. The $659 million emergency funding package lies well below the President’s request for $3.7 billion. These differing versions will set the stage for likely contentious negotiations once they return in September.
Items of Interest:
Climate Change Continues to Dominate the Agenda. In conjunction with the Environmental Protection Agency’s (EPA) public hearing road show this week in cities across the nation, and as reported in last week’s Washington Energy Update, the Agency is holding hearings on the proposal to regulate carbon emission standards for existing (ESPS), modified and reconstructed sources. The comment period for the ESPS is currently scheduled to close on October 16, 2014. Various policy makers spoke at Tuesday’s Washington, D.C. meeting. Administrator McCarthy testified before the Senate Environment and Public Works Committee last week, during which she emphasized the threat of climate change caused by carbon pollution from power plants as distinguished from other pollutants. Republican Senators, skeptical of the proposal, raised questions regarding the influence of environmental group stakeholders, including the National Resources Defense Council.
In conjunction with the onset of the public hearings, the White House released a report on climate change written by the White House Council of Economic Advisers. The report emphasized the importance of taking action immediately, as delayed action resulting in climate change will lead to significant economic damages. The report likens an effectual change in climate policy to the purchase of “climate insurance” and attaches a $150+ billion price tag if action is not taken.
Separately, Secretary Moniz also announced next steps related to methane regulation. The announcement marks the first steps that the Department of Energy (DOE) will take toward preventing natural gas transmission and distribution systems from leaking harmful methane gas. The DOE announced that it would set forth energy efficiency standards for new natural gas compressors, as well as work to improve research and development within the industry in an attempt to reduce methane leakage. Alongside new regulations, the DOE urges the Federal Energy Regulatory Commission (FERC) to come up with ways to reduce industry costs and modernize infrastructure. Regarding its fossil fuel projects, the DOE will conduct outreach in order to increase public awareness of the projects, which the Department hopes will reduce methane emissions from transmission and distribution systems.
Federal Energy Regulatory Commissioners Testified Before the House Energy and Commerce (E&C) Subcommittee on Energy and Power Regarding EPA Regulations and Grid Reliability Challenges. Entitled the “FERC Perspectives: Questions Concerning EPA’s Proposed Clean Power Plan and other Grid Reliability Challenges,” the hearing marked another E&C hearing in which its leadership continued to oversee EPA’s work on its New Source Performance Standard proposal. All five Commissioners were invited to testify, including recently confirmed Norman Bay, who has not yet been sworn in as a commissioner. FERC’s Acting Chairman, Cheryl LaFleur, admitted that FERC had not conducted any independent analysis of the reliability impacts during the drafting of EPA’s proposed rule, and indicated that judging the future success of the rule would be premature at this time. Commissioner Moeller shared his apprehension regarding the rule’s focus on state compliance plans tied to the planning process for operation of markets on an interstate level, and predicted that this incomplete analysis will result in regulatory conflict. While Commissioner Norris believes that this rule does not reflect the most effective method of addressing climate change, Commissioner Clark testified that the rule would require states to hand over large quantities of authority to the federal government. Responding to questions on EPA’s timeline for the rule, all the Commissioners concurred that the proposed compliance schedules leave little room for states to maneuver.
In other FERC-related news, LaFleur was sworn in as FERC Chair, until mid-April 2015 when Norman Bay is expected to become FERC Chair.
Stakeholders Await EPA’s Final Rule Release of 2014 Renewable Fuel Standard Renewable Volume Obligations (RVO); Rumors Abound Regarding Its Potential Release. Obligated parties and others continue to visit with Congress regarding the Agency’s proposed 2014 RVO standard, which outlines the standards for the upcoming year. Senator Al Franken (D-MN) met with Advisor to the President John Podesta along with eight other Senate Democrats, to discuss the proposed rule, with emphasis on the sections involving biodiesel. Attendees included Sens. Maria Cantwell (D-WA), Joe Donnelly (D-IN), Dick Durbin (D-IL), Tom Harkin (D-IA), Heidi Heitkamp (D-ND), Amy Klobuchar (D-MN), Patty Murray (D-WA), and Sheldon Whitehouse (D-RI). EPA has yet to announce the final 2014 RVO despite Administrator McCarthy’s commitment to do so by the end of June (pursuant to the Clean Air Act, there is a deadline of November 30 of the previous year for the announcement of the upcoming year’s standards). Insiders believe that, different from the released November proposal, which would scale back or reduce targets for some renewable fuels, the final numbers could reflect renewable fuel increases so as to decrease greenhouse gas emissions as compared to conventional fossil fuels.