Kennedy Fights Capacity Market "Reliability" Provision as Energy Bill Goes Partisan

In This Issue:

• Kennedy Fights Capacity Market "Reliability" Provision as Energy Bill Goes Partisan
• FERC Position on Capacity Markets, Self Supply Shifting
• Elsewhere in Congress: Paul Ryan likely new Speaker, Cyber information sharing bill passes, Clean Power Plan published to immediate attacks

Kennedy Fights Capacity Market "Reliability" Provision as Energy Bill Goes Partisan

On Sept. 29 and 30, the House Energy and Commerce Committee considered H.R. 8, the "North American Energy Security and Infrastructure Act," a wide-ranging energy bill the Committee has been developing since the beginning of the year.  The bill was reported by vote of 32-20 with only three Democrats voting in favor.

Although the bill was initially intended to be a bipartisan effort, negotiations between majority and minority members of the Committee broke down over a handful of provisions.  A few hours before opening statements were scheduled to be heard, Chair Fred Upton (R-MI) released a Manager’s Amendment that added over 100 pages to the text of the bill, including several provisions Democrats had consistently opposed.  

Of interest to NEPPA, the Manager’s Amendment included a provision titled "Reliability and Performance Assurance for RTOs," similar to the Sec. 1108 that public power had opposed in earlier drafts because it would likely result in additional revenues for generators without benefits to consumers.  Although the new Sec. 1110 was much weaker than prior drafts, NEPPA, APPA, and Committee Democrats remained opposed to the provision.  

APPA sent a letter to the Committee, saying they have "significant concerns" about the provision, and said that while  "we appreciate the evolution of the language, it is still problematic for load-serving entities (LSEs), including public power utilities, forced to participate in the FERC-blessed mandatory capacity markets, and is silent on the issue of self-supply for such LSEs."   

Democrats offered two amendments, one by Rep. Joseph Kennedy III (D-MA) to strike Sec 1110 and the other by Rep. Paul Tonko (D-NY) to significantly modify the provision. Both were rejected on a party line vote.  Kennedy spoke at length about the problems in capacity markets and the fact that consumers are seeing little benefit to account for massive increases in costs.  Rep. Peter Welch (D-VT) joined the debate, saying that it should be possible to balance reliability needs with costs to consumers. 

One area of bipartisan agreement was on a compromise developed between Reps. Jerry McNerney (D-CA) and Cathy McMorris Rodgers (R-WA) to improve the current hydropower licensing process.  In offering the agreement, Rep. McMorris Rodgers said, "It takes approximately ten years to license a hydropower facility yet a natural gas facility can be up and running in only 18 months. Clearly, there is room for improvement."  

Numerous other amendments were considered, on topics ranging from distributed generation to liquefied natural gas, funding for a natural gas pipeline replacement program to address leaking methane, assistance to low-income communities affected by coal plant shutdowns, and the strategic petroleum reserve.  The vast majority of amendments were disposed of via party-line votes, with Democrats winning few of the votes. 

The bill is expected to be on the House floor the week of Oct. 26, stripped of provisions  that would authorize additional spending, such as workforce training grants and incentives for small hydro development.   The funds were removed after a key conservative action group made the bill a "key vote," essentially threatening to oppose Republicans who voted for it.

To read the complete legislative update including the following topics, click the links below: