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Congressional and Administrative Priorities for Energy Infrastructure Legislation
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By Isabel Lane

During President Trump’s campaign, he promised his Administration would seek to pass an “American Energy and Infrastructure Act” during his first 100 days in office. Following the 100-day mark, and Congress’ recent failure on healthcare reform, comprehensive legislation seems farther away than ever.

 

Improving the U.S.’s “energy infrastructure” means different things to both parties. Republicans look to support the oil, gas, coal and nuclear industries and do not favor stimulus-style investments to incentivize renewable production, though investment in the electric grid—including cybersecurity initiatives—is among the Administration’s list of priorities. The Senate-passed 2016 energy bill, which died during conference negotiations with the House of Representatives, proposed numerous grid infrastructure research & development and pilot programs. It is predicted these investments may not resurface until the next iteration of the energy bill.

 

On the renewables side, tax incentives such as the Investment Tax Credit, which would provide a 30 percent credit for installment of residential and commercial solar, are critical for development. Republicans, including House Energy & Commerce Subcommittee on Energy, Chairman Fred Upton, have identified these incentives as potential targets for tax reform, asserting that renewables may no longer require government subsidies.

With bipartisan agreement, Republicans and Democrats recognize the urgency of investment in American energy infrastructure. The disagreement lies in how to fund the investment. Republicans want a budget-neutral bill that leverages private financing. Private financing would rely on revenues from tax reform, which, in turn, would rely on revenues from healthcare reform. If Congress is not able to agree on healthcare reform, a comprehensive, budget-neutral infrastructure package may wither on the vine alongside tax reform.

With legislation stymied, the Administration has turned to the power of the pen. Recognizing that energy infrastructure is typically financed by private industry, the Administration is decreasing permitting time and costs for traditional energy infrastructure and pipelines by rolling back Obama-era environmental regulations that “impede” American energy development. These rollbacks have repealed regulations on carbon and methane emissions from power plants, expanded the availability of federal lands for energy development and eliminated federal guidance related to climate change. Yet, only so much can be accomplished administratively. For example, it’s Congress that must initiate proposals to authorize leasing programs for the Gulf of Mexico Outer Continental Shelf and in the Alaskan National Petroleum Reserve.

 

Senate Democrats have released an infrastructure plan, though specifics on energy infrastructure remain scarce. A smaller, piecemeal bill on transportation infrastructure is also in the works in the House. The earliest a bill could pass is July due to the complications from healthcare and tax reform; though, it is likely infrastructure legislation will be pushed to the end of 2017 or into 2018. Until then, we can expect more Administrative action and additional Executive Orders to further roll back environmental regulations to accompany deep budget cuts at EPA and DOE. Meanwhile, without the certainty of government support, renewables could face an increasingly challenging investment environment.

Isabel Lane is a legislative assistant at Holland & Knight LLP, where she specializes in renewable energy policy.


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