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Senate Committee Passes Bill that Includes $1.2 Billion to Boost Grid Supply Chain

The Senate Committee on Appropriations on July 20 approved the Fiscal Year 2024 Energy and Water Development appropriations bill, which includes $1.2 billion to be spent through 2026 to “enhance the domestic supply chain for the manufacture of electric grid components.”

This supply chain funding is being reprogammed through various programs authorized under the Infrastructure Investment and Jobs Act. These include sections 40101, Grid Resilience for State and Tribal Formula Grants, 40106, Transmission Facilitation Program, 40107, Smart Grid Grants, and 40125(d) Modeling and Assessing Energy Infrastructure Risk.

The new funding provided under the appropriations bill can be used for “financial assistance, procurement, technical assistance, and workforce support.”

The provision was added as part of a “manager’s amendment” to the original version of the appropriations bill and authored by Senator Joe Manchin (D-WV), a member of the Committee on Appropriations and Chairman of the Senate Committee on Energy and Commerce.

Also, the report accompanying the appropriations bill expresses concerns over a notice of proposed rulemaking to increase energy conservation for distribution transformers.

The report’s language follows a provision in the House Committee on Appropriations Energy and Water Development Bill delaying the distribution transformer proposed rule by five years.

The American Public Power Association strongly supports the report language, the $1.2 billion in additional funding and the House provision blocking the proposed rule.

Combined, these provisions provide funding to address the underlying supply shortage issue and affirm that the Department of Energy needs to take into consideration concerns voiced by APPA relating to increasing efficiency standards, it said.

For over a year, the electric sector has been informing DOE about the severity of the supply chain challenges that have prolonged and complicated distribution transformer production and availability.

In June, 47 U.S. senators sent a letter to Secretary of Energy Jennifer Granholm saying that DOE should reconsider its proposed rule to increase conservation standards for distribution transformers.

In April, more than 60 House members urged Granholm to withdraw the proposed rule.

In February APPA, the Edison Electric Institute, the National Rural Electric Cooperative Association, and other impacted trade groups, sent a letter strongly urging DOE to reconsider its intention to increase energy conservation standards for distribution transformers.

Overall, the appropriations bill would provide $17.3 billion for the Department of Energy’s non-defense energy programs -- $17.7 billion if excluding the proposed savings from a proposed $400 million rescission from the Strategic Petroleum Reserve account. Also excluding the effects of past and proposed SPR rescissions, the Senate Appropriations Committee bill provides a $293 million increase over FY 2023 spending, a $825 million increase over the House Committee on Appropriations bill, but a $2.2 billion cut from President Biden’s proposed budget.

The Senate Committee bill joins with the House Committee on Appropriations in rejecting the Biden administration proposal to move the State and Community Energy Programs, Manufacturing and Energy Supply Chains Program, and the Federal Energy Management Program from the Office of Energy Efficiency and Renewable Energy to become their own separate offices.

However, unlike the House, the Senate bill agrees with the administration proposal to move the Grid Deployment program from within the Office of Electricity to become a standalone office within DOE.

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