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Permitting overhaul: Before or after debt ceiling talks?

Barrasso and Capito expect to mark up a bill after the debt ceiling deadline

Sens. Joe Manchin, D-W.Va., and Shelley Moore Capito, R-W.Va., have both offered permitting overhaul bills.
Sens. Joe Manchin, D-W.Va., and Shelley Moore Capito, R-W.Va., have both offered permitting overhaul bills. (Tom Williams/CQ Roll Call file photo)

There is wide bipartisan consensus that Congress should make legislation to overhaul federal energy project permitting a priority. When lawmakers will act — as part of the debt ceiling negotiations or through separate talks — is emerging as a big question as the June 1 deadline nears for raising the debt limit.

At a Senate Energy and Natural Resources Committee hearing on permitting on May 11, Chairman Joe Manchin III, D-W.Va., noted that in addition to his reintroduced bill — which fell short as an amendment to the fiscal 2023 defense authorization — there are proposals from the committee’s ranking member, John Barrasso, R-Wyo., and from Senate Environment and Public Works ranking member Shelley Moore Capito, R-W.Va.

That committee’s chairman, Thomas R. Carper, D-Del., has promised his own proposal, and the House Republican energy bill included permitting provisions that were also in their bill to lift the debt ceiling.

While the House-passed bill was considered dead on arrival in the Senate, some have floated the idea that a debt ceiling compromise could include permitting provisions.

The U.S. Chamber of Commerce said that a deal on permitting should be included in any deal to reach the debt limit. Rep. Garret Graves, R-La., said that permitting could be an area negotiators could compromise on in a final debt ceiling agreement. But with the June 1 deadline, the Senate’s pace makes it unlikely it will reach any agreement on permitting overhaul by then.

Barrasso and Capito have expressed a desire for permitting legislation to go through a committee markup process. Carper has yet to introduce his promised permitting proposal and on May 17 will hold a second hearing on permitting in his committee, where White House Council on Environmental Quality Chair Brenda Mallory is due to testify.

Manchin said his goal is to have a compromise bill on the floor before the chamber leaves town for its August recess, a timeline he acknowledged was “aggressive.”

A sticking point in negotiations over any compromise legislation has been how it will address electric transmission.

An analysis released last year by the REPEAT Project at Princeton University found that the current pace of transmission expansion, at roughly 1 percent per year, needs to grow to 2.3 percent to fully realize the benefits of the tax incentives included in last year’s law. It also found that failing to do so would result in higher greenhouse gas emissions, making it all but impossible for the U.S. to reach its various climate targets.

White House goals

The White House included changes to expedite the approval of interstate transmission lines in a list of policy goals for any permitting overhaul legislation. Manchin’s bill includes a provision that would streamline the Federal Energy Regulatory Commission’s ability to approve transmission lines that are deemed to be in the national interest.

Republicans have expressed concerns that these provisions would effectively federalize the grid. At a Senate Energy and Natural Resources hearing on permitting Sen. Cindy Hyde-Smith, R-Miss., said these proposals under consideration would in effect limit a state’s role once a project is deemed in the national interest.  

In response, Jason Grumet, CEO of the American Clean Power Association, said that the current system has effectively “Balkanized” the U.S. power system and that interregional cooperation is necessary as the U.S. aims to bring more renewable energy projects online.

“It’s not happening,” Grumet said, “because the current processes do not create any incentive for the different regions to work together.”

The current system, he said, could be overhauled by giving states a chance to lead on transmission siting while using a federal backstop if Congress fails to act. On cost allocation, Grumet said Congress should direct FERC to require that regions create an agreed-upon single process for planning and allocating costs for interregional transmission lines.

“We think there’s a way forward that does not either accept the dysfunctional status quo, or accept what I think people fear is an over-federalization,” said Grumet. “And it’s time for the Congress to dig in and find those solutions.”

Christina Hayes, executive director for Americans for a Clean Energy Grid, suggested at a Senate Environment and Public Works hearing last month that the definition of a national interest project could be set to include only those that cross a certain number of miles or include high capacity lines, which would drastically narrow the number of projects that qualify.

While permitting overhaul has focused on the issues championed by Manchin, others have called for the final bill to take a wider look at the system. Sens. Steve Daines, R-Mont., and Maria Cantwell, D-Wash., said their bill that aims to shorten the amount of time needed to permit and license a hydropower project should be considered as part of a permitting package.

Some Democratic members have also suggested that any compromise bill needs to include certain protections to ensure that impacted communities are able to lodge objections. In its list of priorities, the White House asked that Congress require agencies to identify a chief community engagement officer to engage with affected communities.

Benjamin J. Hulac and Aidan Quigley contributed to this report.

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