The most important reform to U.S. energy policy in more than a decade passed nearly unnoticed at the end of December.
Multi-billion-dollar reforms to one of the largest parts of the U.S. economy affecting millions of working families were wedged into a corner of the gargantuan $900 billion Coronavirus Response and Relief Supplemental Appropriations Act, which was passed simultaneously with the $1.4 trillion omnibus government spending measure, distinguishing the single 5,000 page, $2.3 trillion dollar bill as the largest in U.S. history.
Congress passed the first major energy reform in more than a decade as the year ended.
Photo courtesy Flickr user 100isnow
However, the sausage was made, the energy policy components of the bill finally, if not fully, brought some high priorities for the membership of the IBEW into law.
The energy-related sections of the bill included a decade’s worth of pent-up ideas with all or part of 37 Senate bills — including 29 bipartisan bills — sponsored by 70 Senators.
“Think about what has happened in the last 10 years: the revolution in renewables, the rise of domestic natural gas, the closure of nuclear power stations, smart metering and smart grids. That happened with Congress all but on the sidelines,” said Political and Legislative Director Austin Keyser. “We hope that this is just a sign of what is coming as new leadership steps up on Capitol Hill.”
The bill authorizes more than $35 billion over the next decade for carbon capture and removal, energy storage, wind, solar and advanced nuclear.
It extends renewable energy and building efficiency tax incentives, authorizes a record number of Army Corps of Engineers projects, opens the Federal Energy Regulatory Commission up to the public and phases out the use of hydrofluorocarbons, an extremely potent greenhouse gas thousands of times worse than carbon dioxide.
While Davis-Bacon prevailing-wage standards won’t apply to all the bill’s spending, as Democrats originally wanted, they will be applied for the first time to spending in solar, wind, waterpower, grid modernization, and carbon removal research and development.
“This is a win for organized labor, sure, but it’s also a win for taxpayers,” Keyser said. “Our industry has never been one where you want to cut corners on competence and safety.”
The majority of the reforms affecting IBEW members were in a section of the bill called the Energy Act of 2020.
The two largest beneficiaries were advanced nuclear research, which received a combined $6.6 billion, and carbon capture, storage and removal which received a combined $6.2 billion according to an analysis by Prof. Leah Stokes of the Bren School of Environmental Science & Management at the University of California, Santa Barbara.
“Despite the severe pressure it has been put under, nuclear power is a necessary component of the transition to a carbon-free energy future. We need to invest in it like our future depends on it, because it does,” said Utility Director Donnie Colston.
A separate section will release $24 billion to support the deployment of carbon-reducing projects that was already authorized but the Trump administration refused to disburse. The Title XVII loan program, first authorized in 2005 and expanded in 2009, now must use the $10.9 billion for advanced nuclear energy, $8.5 billion for advanced fossil energy, and $4.6 billion for renewable projects funding.
The money for advanced nuclear will support projects that use lower-radiation fuel, smaller, modular reactors that are cheaper to build, and can shut themselves down without human intervention as well as reactors that use recycled fuel now regarded as dangerous waste.
The Department of Energy also received nearly $5 billion to establish a program to bring fusion power — the process at work inside stars — from experiments on lab benches to the market.
While the funding for research that may reshape IBEW jobs in the future was substantial, there is a great deal in the bill that will boost IBEW jobs now.
One of the highest priorities for the IBEW was the extension of multiple tax credits that have kick started many renewable energy projects.
The investment tax credit (ITC, mostly used by solar) was extended two years to 2023 and will now include waste-heat-to-power projects; the production tax credit (PTC, mostly used by wind) got a one-year extension until 2023.
The 30% offshore wind credit was extended five years to 2025.
Research on renewables got a $4 billion bump and the energy secretary will be required to issue permits for at least 25 GW of solar, wind or geothermal electricity projects on federal land by 2025.
The carbon capture credit had given developers of carbon capture projects until the end of 2023 to start construction. Now, they will have until the close of 2025.
The Energy Department will also begin funding research projects on ways to remove carbon directly from the atmosphere.
The commercial building tax deduction for energy efficiency upgrades was made permanent and there was increased funding for myriad programs that encourage energy efficiency in existing buildings and industry including rebates for the installation of efficient motors and transformers.
There is also $1 billion for energy storage, $2.4 billion for grid modernization and $1.7 billion to expand the Weatherization Assistance Program, which helps fund energy-efficiency retrofits for low-income homeowners.
Billions in work from these initiatives could go to IBEW signatory contractors and result in thousands of IBEW construction jobs.
For utility members, Congress provided relief for struggling employers, weighed down by nonpayment from customers struggling from the pandemic related economic downturn.
Congress injected $3.75 billion into the Low-Income Home Energy Assistance Program and payments from the $25 billion rental assistance program in the coronavirus relief bill can now be used to pay utility bills.
It’s a good start, Keyser said.
“I’m not going to pretend this is anybody’s ideal bill,” he said. “But this one actually became law, which makes it the very rarest kind of bill these last few years.”
And with a new majority leader in the senate and a friend in the White House, International President Lonnie R. Stephenson said he is confident this is just the start.
“For too long working people have been told we have to choose between an energy sector that works with the environment and one that creates good jobs. It’s always been a lie, and this bill proves it again,” Stephenson said. “Now that they are in power, our job is to give our friends the support they need to create an energy sector that works for us and for future members of the IBEW.”