Analysis by Energy Workforce SVP Government Affairs & Counsel Tim Tarpley
Republicans are questioning the proposal to raise $600 billion for the bipartisan infrastructure plan by increasing IRS enforcement. The group voicing concern includes some who were part of the bipartisan team that originally drafted the proposal.
Sen. Jerry Moran (R-KS) said Republicans are wary of the IRS plan because the agency could use this new discretion to target particular industries for political purposes. This is a concern to the energy sector because the agency could use the tax code to “punish” carbon intensive sectors of the economy, as has been the case with federal support for projects abroad using federal loan guarantees.
Additionally, conservatives are generally opposed to increasing agency discretion because it can cause uncertainty about the true rules of the game and lead to significant changes in enforcement priorities when administrations change.
Sen. John Cornyn (R-TX) said his support of the infrastructure plan would partially depend on the financing question, and that that the current proposals are inadequate.
Senators are also worried that passing a bipartisan bill could open the door to partisan legislation that would include dramatic spending and other administration policy priorities.
“Part of the motivation is trying to make certain that we don’t spend $6 trillion,” Moran said. ”If this is lending itself toward that outcome, then I would no longer be a yes at that point in time.”
Complicating effort in the Senate is House Speaker Nancy Pelosi’s pledge not to allow a House vote on the bipartisan package until the more partisan package was ready for a vote as well. This “linkage” issue could be more of a problem for infrastructure legislation than the funding because not even the Democrats are aligned with each other on this aspect.
The package could move to a Senate vote as soon as next week.
ERCOT Releases Plan to Avoid More Blackouts
On Tuesday of this week ERCOT released a “Roadmap to Increasing Grid Reliability” that included 60 measures intended to avoid a repeat of the five-day power failure that hit the state in February. While the report is unlikely to quell political pressure or stem fallout from the winter storm, it provides a path forward for the beleaguered agency, which was nearly forced to impose rolling blackouts during a June warm spell that was only a few degrees above normal for most of the state.
The report calls for unannounced generator inspections, increased purchases of power reserves, tougher reliability requirements for generators, mandated CEO letters from generators detailing weatherization, and increased transmission capacity in the Rio Grande Valley. This blueprint is likely to expand because FERC Chair Rich Glick said the commission may enact tougher weather standards on generators.
In addition, earlier this month Gov. Greg Abbott ordered the Public Utility Commission of Texas to implement incentives for natural gas, coal and nuclear generation to avoid intermittency issues with some forms of renewable generation. Abbott also directed ERCOT to develop a system to penalize solar and wind providers that cannot provide base load minimum power at any given time.
Once enacted, these mandates will lead to increased incentives for the use of natural-gas powered generation within the ERCOT system. This is a positive policy outcome for the reliability of the Texas grid. Additionally, replacing coal with natural gas for power generation has allowed the United States to eliminate more carbon emissions since 2005 than any other effort.
For more information on the Council’s advocacy efforts or to get involved, contact SVP Government Affairs & Counsel Tim Tarpley.
Tim Tarpley, SVP Government Affairs & Counsel, analyzes federal policy for the Energy Workforce & Technology Council. Click here to subscribe to the Council’s newsletter, which highlights sector-specific issues, best practices, Council activities and more.
