Electricity Markets

Energy Permitting Reform Proposal Pulled from Government Spending Bill

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Sen. Joe Manchin (D-WV) on Sept. 27 asked Senate Majority Leader Charles Schumer (D-N.Y.) to remove energy permitting reform legislation from consideration as part of a government spending bill prior to a vote on the spending bill, which is known as a Continuing Resolution (CR).

“Over the last several weeks there has been broad consensus on the urgent need to address our nation’s flawed permitting system,” Manchin said in a statement. “I stand ready to work with my colleagues to move forward on this critical legislation to meet the challenges of delivering affordable reliable energy Americans desperately need. “

The Senate passed the CR on Sept. 27.

Manchin released the text of his energy permitting reform legislation, the “Energy Independence and Security Act of 2022,” on Sept. 21. Manchin is chairman of the Senate Energy and Natural Resources Committee.

As part of the Inflation Reduction Act signed into law on August 16, 2022, Manchin secured a commitment from Schumer, House Speaker Nancy Pelosi, D-Calif., and President Biden a vote on comprehensive permitting reform before the end of the fiscal year on September 30, 2022.

The updated bill text is similar to a draft that was previously leaked, although it includes some changes. 

Specifically, there are two new sections on the definition of natural gas and another that would authorize the Mountain Valley Pipeline.

The first new section clarifies that the Federal Energy Regulatory Commission (FERC) has jurisdiction to regulate interstate hydrogen infrastructure under the Natural Gas Act.

The second new section would authorize the Mountain Valley Pipeline and expedite its approval process. The updated language removes the specific judicial review section that was in the leaked draft bill.

The transmission language in the legislation is mostly the same as it was in the leaked version of the bill.

There are two small changes that were made to the transmission language. The first changes the wording that allows the Department of Energy to designate “any electric transmission facility proposed to be constructed or modified to be necessary in the national interest.”

The second change would clarify that the Department of Interior would be lead agency regarding Outer Continental Shelf lands.

These changes appear to address concerns raised by others on offshore wind transmission facilities, but do not address concerns raised by the American Public Power Association, the Edison Electric Institute and the National Rural Electric Cooperative Association on changes to the Federal Power Act and the scope of FERC’s authority to require the construction of certain electric transmission facilities.

While this is a setback for Manchin’s permitting reform effort, it will likely not be the last attempt to get it attached to legislation this year. 

The CR funds the government through December 16 and full funding measures will need to be taken up before then.  The National Defense Authorization Act (NDAA) also need to pass this year and are likely two vehicles that Manchin would seek to move his efforts forward on.

Click here for additional details on the legislation.