Debt limit bill includes permitting reform and transmission study, authorizes Mountain Valley pipeline

Debt limit bill includes permitting reform and transmission study, authorizes Mountain Valley pipeline | Utility Dive

Dive Brief:

- The compromise debt limit legislation released Sunday by the White House and House Republicans includes measures aimed at speeding up the permitting process, such as setting deadlines for environmental reviews.
- The Fiscal Responsibility Act, or FRA, also requires the North American Electric Reliability Corp. to assess how much “prudent” transmission capacity is needed to share electricity with neighboring regions to strengthen grid reliability.
- Although Speaker Kevin McCarthy and other House Republicans said they and the White House will seek additional permitting legislation, the “mini-deal” on permitting reform may stall those efforts, according to ClearView Energy Partners, a research firm.

Dive Insight:

The bill, set to be voted on Wednesday in the House, amends the National Environmental Policy Act by requiring a single federal agency to lead environmental reviews for infrastructure projects. It also sets a one-year deadline for agencies to issue environmental assessments and a two-year deadline for environmental impact states.

Also, if an agency develops a “ categorical exclusion” for a type of project, such as electric vehicle chargers, another agency could use it instead of going through a separate review for chargers.

“These changes will help us build more quickly and responsibly; build more solar, build more wind, EV chargers, transmission, and the other infrastructure we need to secure a clean energy economy,” a White House official said during a media briefing.

The measures in the bill are a first step for permitting reform, according to McCarthy. “I pledged to [President Joe Biden] that we will continue working with them and with Democrats across the way because we need energy, all forms of energy,” he said Sunday during a press conference.

Biden and McCarthy committed to advancing permitting reform to include transmission, pipelines and other infrastructure, he said.

Those efforts are uncertain, according to ClearView. “The FRA mini-deal is more likely to undercut momentum for such efforts than to stoke it,” the research firm said in a client note Monday. “We currently think a reopening of debate looks more likely than an actual finalization, but we expect lawmakers to try.”

The bill gives NERC a year and a half to study whether more transfer capacity is needed between regions. The Federal Energy Regulatory Commission would then have a year to seek and consider public comments on NERC’s study and file a report with Congress.

In the wake of power outages and near outages, FERC Acting Chairman Willie Phillips has made increasing transfer capacity between regions a priority, according to Rob Gramlich, president of Grid Strategies, a consulting firm. With White House officials and Congressional leaders talking about the issue, it may be elevated at FERC, he said Tuesday.

While there are “fundamental problems” with transmission, Congress doesn’t understand the issue well, Rep. Garret Graves, R-La. and one of the House negotiators, said Sunday at the press conference.

“There's discussion about how we move forward in a bicameral, bipartisan way in really studying this and [making] sure that we move forward in a way that's going to solve problems not cause more,” Graves said.

With several permitting reform bills pending in Congress, Sen. Joe Manchin, D-W.Va., said earlier this month he aims to bring bipartisan permitting reform legislation to the Senate floor for a vote by July 31.

Other provisions in the bill make energy storage projects eligible for permitting under the Fixing America’s Surface Transportation Act, known as the FAST Act.

The bill would authorize the partly built $6.6 billion Mountain Valley natural gas pipeline, which has been delayed by successful legal challenges to various permits for the project. It would bar legal challenges to permits for the project.

The Center for Biological Diversity slammed the bill, partly over its approval of the Mountain Valley project.

“Biden has allowed Sen. Manchin and Republicans to hold the government hostage to ram through the climate-killing Mountain Valley pipeline, dramatically roll back bedrock environmental laws that give voice to frontline communities and sabotage agencies whose job is to protect the environment and working families,” Jean Su, the group’s energy justice program director, said in a statement. “Congress should reject these poison pills and pass a clean debt ceiling bill.”

The American Exploration & Production Council urged Congress to pass the bill. “This bill sets the stage for more comprehensive permitting reform and is a positive step toward modernizing our permitting system and streamlining the bureaucratic process,” CEO Anne Bradbury said in a statement.

The bill leaves unchanged tax credits for emissions-free energy projects found in the Inflation Reduction Act. House Republicans earlier sought to kill the tax credits.

The bill may be opposed by progressive Democrats and several conservative Republicans, such as Rep. Andy Biggs, R-Ariz., are already against it, according to ClearView.

“The vote could be close,” the research firm said.