Summary of House Energy Bill

Executive Summary on the House Committee on Energy and Commerce Comprehensive Energy Bill Package Released July 20, 2015

July 21, 2015

On July 20, 2015, the House Energy and Commerce Committee unveiled a package of bills aimed at bringing the country’s energy infrastructure, reliability, and other energy matters into the modern era. The bill package is the product of seven hearings held by the Energy and Power Subcommittee, which included testimony from nine governmental witnesses, including the Secretary of Energy, and thirty-nine private sector organizations and experts. While the measure attempts to gain bipartisan support by avoiding several of the controversial issues on Capitol Hill – such as repealing the ban on exporting crude oil ­– it does include a number of provisions that Republicans and Democrats alike have supported at some point.

The ninety-five page bill package includes the following titles: Title I, Modernizing and Protecting Infrastructure; Title II, 21st Century Workforce; Title III, Energy Security and Diplomacy; and Title IV, Energy Efficiency and Accountability. A brief summary of each section is provided below.

Title I – Modernizing and Protecting Infrastructure

Section 1101 reinforces the Federal Energy Regulatory Commission’s (FERC) role as the lead agency for siting interstate natural gas pipelines. This section requires FERC to identify all agencies considering an aspect of an application and set the schedule for review, including a deadline for a final decision. Cooperating agencies are directed to carry out reviews concurrently, identifying any issues of concern that may delay or prevent an agency from meeting the schedule established by FERC, and giving deference to FERC on the scope of the environmental review when appropriate and in accordance with applicable Federal law. The section also directs FERC to track, and make available to the public on its website, information related to the review of applications requiring multiple Federal authorizations.

Section 1102 resolves a conflict between the Federal Power Act and environmental laws and regulations in order to avoid forcing electric generators from choosing between complying with an emergency order form the Department of Energy (DOE) or violation an environmental obligation. Furthermore, if an emergency order is issued that may result in a conflict with any Federal, State or local environmental laws or regulations, it shall expire no later than ninety days after it is issued.

Section 1103 directs the Secretary of Energy to develop and adopt procedures to enhance communication and coordination between the DOE, Federal partners, the private sector, and state and local governments to improve energy response and recovery in the wake of a natural disaster or disruption to energy supply.

Section 1104 establishes a new section of the Federal Power Act – Section 215A – which provides the Secretary of Energy the authority to address grid security emergencies if the President provides a written directive or determination identifying a grid security emergency. The Secretary is authorized to take emergency measures to protect the bulk power system, which will expire no later than fifteen days after issuance. Section 215A also facilitates the protection and voluntary sharing of critical electric infrastructure information between private sector asset owners and the Federal government.

Section 1105 attempts to diminish the vulnerability of the U.S. to multiple risks facing electric grid reliability by requiring DOE to submit a plan to Congress evaluating the feasibility of establishing a Strategic Transformer Reserve for the storage, in strategically-located facilities, of spare large power transformers and other critical equipment in sufficient numbers to temporarily replace critically damaged large power transformers.

Section 1106 directs the DOE to establish a voluntary Cyber Sense program to identify and promote cyber-secure products and technologies intended for use in the bulk-power system.

Section 1107 directs electric utilities and State public utility commissions to consider increasing use of resiliency-related technologies, promoting investments in advanced energy analytics, and adopting or modifying policies to ensure the reliability of electric energy over a ten-year planning period.

Title II – 21st Century Workforce

Section 2101 directs the Secretary of Energy to establish a program to improve education and training for energy and manufacturing-related jobs. The Secretary is directed to also provide direct assistance to schools, community colleges, non-profits, etc. to carry out the program.

Title III – Energy Security and Diplomacy

Section 3101 provides the sense of Congress, which is that North America’s energy revolution has enhanced the energy security in the U.S., and the U.S. now has an opportunity to promote greater stability and affordability of energy supplies for its allies and trading partners through a more integrated North American energy system.

Section 3102 directs the Secretary of Energy to establish U.S. energy security valuation methods to ensure that energy-related actions that significantly affect the supply, distribution, or use of energy are evaluated with respect to their potential impact on energy security.

Section 3103 directs the Secretary of Energy to report to Congress with a plan to improve planning and coordination with Canada and Mexico to enhance North American energy security.

Section 3104 directs the Secretary of Energy, in consultation of the Secretary of State, to convene at least one Trans-Atlantic and one Trans-Pacific forum to foster dialogues among the governments of U.S. allies and trading partners, independent experts, and industry representatives with the goal to promote energy security.

Section 3105 ensures that the U.S.’s strategic stockpiles of petroleum are kept safely and readily accessible in times of national emergency by conducting the Secretary of Energy to conduct a long-range review to specific the long-term roles of the Strategic Petroleum Reserve and recommend a plan to achieve optimal capacity and storage capabilities.

Title IV – Energy Efficiency and Accountability

SUBTITLE A

CHAPTER 1 – FEDERAL AGENCY ENERGY EFFICIENCY

Section 4111 requires Federal agencies to coordinate with the Office of Management and Budget (OMB), DOE, and the Environmental Protection Agency (EPA) to develop an implementation strategy – that includes best practices and measurement and verification techniques – for the maintenance, purchase, and use of energy-efficient and energy saving information technologies. OMB would be required to track and report on each agency’s progress.

Section 4112 seeks to improve the energy efficiency of Federal data centers by, among other items, requiring DOE to update a 2007 report on data center energy efficiency and maintain a data center energy practitioner certification program. DOE also would establish an open data initiative to help share best practices and support further innovation, and develop a metric that measures data center energy efficiency.

Section 4113 directs the DOE to submit a report within one year on the impact of thermal insulation on both energy and water use systems for potable hot and chilled water in Federal buildings and on the return on investment of installing the insulation. The report must include: (1) an analysis based on the cost of municipal or regional water for delivered water and the avoided cost of new water; and (2) a summary of energy and water savings, including short-term and long-term (20 years) projections of such savings.

Section 4114 expands the definition of “renewable energy” in section 203 of the Energy Policy Act of 2005 to include thermal energy and qualified waste heat resources. The section also modifies the term “municipal solid waste” by excluding certain commonly recycled paper.

CHAPTER 2—ENERGY EFFICIENT TECHNOLOGY AND MANUFACTURING

Section 4121 directs the Federal Trade Commission to initiate a rulemaking to develop Energy Guide labels that promote the smart grid capabilities of certain products.

Section 4122 requires the DOE to recognize voluntary verification programs for air conditioning, furnace, boiler, heat pump, and water heating products to demonstrate compliance with DOE energy efficiency and conservation standards and the Energy Star program.

Section 4123 provides gas furnace stakeholders the opportunity to continue negotiations to facilitate the proposal for adoption of gas furnace standards that enjoy consensus support, while not delaying the current rulemaking, except to the extent necessary to provide such opportunity.

Section 4124 directs DOE-funded higher education-based Industrial Assessment Centers (IACs) to identify opportunities for optimizing energy efficiency and environmental performance, including implementation of information technology advancements for supply chain analysis, logistics, system monitoring, and industrial and manufacturing processes.

CHAPTER 3—ENERGY PERFORMANCE CONTRACTING

Section 4131 requires DOE to report on the status of each Federal agency’s energy savings performance contracts and utility energy service contracts, the investment value of such contracts, the guaranteed energy savings for the previous year as compared to the actual energy savings for the previous year, the plan for entering into such contracts in the coming year, and information explaining why any previously submitted plans for such contracts were not implemented. The section also revises the definition of “energy savings” to include (1) the use, sale, or transfer of energy incentives, rebates, or credits (including renewable energy credits) from governments or utilities; and (2) any revenue generated from a reduction in energy or water use, more efficient waste recycling, or additional energy generated from more efficient equipment.

CHAPTER 4—SCHOOL BUILDINGS

Section 4141 amends the Energy Policy and Conservation Act to direct DOE to establish a clearinghouse to disseminate information regarding available programs and financing mechanisms that may be used to help initiate, develop, and finance energy efficiency, distributed generation, and energy retrofitting projects for schools. DOE must: (1) consult with appropriate agencies to develop a list of programs and financing mechanisms that are, or may be, used for the projects, and (2) coordinate with appropriate agencies to develop a collaborative education and outreach effort to streamline communications and promote the programs and financing mechanisms.

SUBTITLE B

CHAPTER 1—MARKET MANIPULATION, ENFORCEMENT, AND COMPLIANCE

Section 4211 requires FERC to establish an Office of Compliance Assistance and Public Participation headed by a Director who shall be responsible for promoting improved compliance with Commission rules and orders by, among other things, providing entities regulated by the Commission the opportunity to obtain timely compliance guidance; making recommendations with respect to market behavior and enforcement; issuing reports and guidance; and performing outreach to regulated community.

CHAPTER 2—MARKET REFORMS

Section 4221 requires the Government Accountability Office to study whether and how the market rules, practices, and structures of regional transmission organizations produce rates that are just and reasonable.