Congress faces permitting issues unresolved by debt ceiling law

Lawmakers are eyeing another stab at changes to the federal permitting system, hoping to return to issues left unresolved by the June debt ceiling law that included a requirement that a single federal agency lead environmental reviews and that deadlines be shortened.

Members of Congress left town last week for the August recess without delivering on pledges to make comprehensive changes. After enactment of both the 2021 bipartisan infrastructure law (PL117-58) and the 2022 tax and climate reconciliation law, renewable energy groups said changes to permitting laws were needed to realize the potential emission-reduction benefits.

That put the renewable groups in agreement with Republicans, at least about a need for legislation on permitting.

Republicans have been more supportive of changes to ease fossil fuel projects and want to make it easier to get pipelines laid and energy developments started on federal lands. House Republicans pushed through an energy bill in March that addressed a wide range of the issues.

The debt ceiling law in June clouded the path forward by including portions of the Republican bill: the requirement that the law known as the National Environmental Policy Act be amended to put a single federal agency in charge of reviews, with tighter deadlines for studies and impact statements.

The White House Council on Environmental Quality is scheduled to publish a proposed rule in the Federal Register on Monday that would implement these changes and take public comment for 60 days. The agency with lead review responsibility would vary from project to project.

Lawmakers' challenge now is the permitting issues left unresolved by the debt ceiling law. Among them are questions about siting interregional transmission infrastructure. The debt ceiling law opted only to require the North American Electric Reliability Corp. to conduct a study on interregional transfer capability. And some members of Congress want a law that will cut down on the legal challenges to energy production and infrastructure.

Democrats and renewable energy groups want to change how siting decisions are made, including by providing the Federal Energy Regulatory Commission with greater authority to approve interregional transmission lines, but Republicans are raising concerns about the federal government overriding states' authority.

The Senate Energy and Natural Resources Committee returned to the issue with a hearing last week. Chairman Joe Manchin III, D-W.Va., said the transmission lines are needed not only to hook up new renewable energy to the grid, but also to ensure the system is reliable.

"Long-distance transmission and inter-connectivity enables power to move to where it's needed," said Manchin. "And as we've seen in Texas and other parts of the country, the areas that need the power aren't just blue states with aggressive climate targets that some of us may not agree with."

Manchin also said Congress needs to "streamline" the judicial review process to ensure projects are not delayed by litigation. He has Republican support for these efforts, but some Democrats say that would block the most effective way for opponents to object to projects. Manchin was unable to steer a bill to Senate passage in the 117th Congress and returned to the issue this year.

Energy and Natural Resources ranking member John Barrasso, R-Wyo., said he was willing to discuss changes to laws addressing interstate electric transmission lines, but said they must follow two principles.

"First, any changes to laws governing transmission must actually address electric reliability," said Barrasso. "The biggest threat to reliability is not the lack of transmission lines. It is the premature retirement of coal, natural gas, and nuclear power plants."

The second principle, Barrasso said, was that "any changes to laws governing transmission can't be just another subsidy." He said that customers in states such as Wyoming shouldn't be required to "subsidize" the push toward renewable energy in Democratic-led states, and that changes should benefit all energy sources.

Given the uncertain future, some Democrats are encouraging FERC to move forward with rules to hasten the adoption of renewable energy. Senate Majority Leader Charles E. Schumer, D-N.Y., outline a series of potential changes in a letter to the commission on July 20.

Renewable energy advocates got a win last week. FERC approved a draft final rule on July 27 that will require grid operators and electric utilities to change how they study energy projects and face penalties if they don't complete interconnection studies on time. It will also prioritize projects that are further along and study the projects in groups.

FERC Chairman Willie Phillips, a Democrat, said the 2,000 gigawatts of generation and storage waiting in the interconnection queues underscored the need for reform.

"This new rule will enable America's vast power generation resources to connect to the grid in a reliable, efficient, transparent, and timely manner, and in doing so, help provide more reliable, resilient, and affordable electricity for all consumers," Phillips said.

Renewable energy and environmental groups said the commission's actions would help remove one hurdle standing in the way of U.S. climate targets. But the groups encouraged the commission to build upon the rule. Future action may depend on the White House announcement of a nominee for the fifth seat on the commission, which is currently split between two Republicans and two Democrats.