When you negotiate a 400-plus-page bill in secret, it’s pretty difficult – nay, downright impossible – to develop a product that is perfect on its first draft.
As such, not long after the Bipartisan American Affordability and Jobs Act (BAAJA) was released in late September, its authors began opening the door to a manager’s amendment – a package of changes that bundles technical fixes with any new deals struck since introduction. It was to be released before the Senate’s first procedural vote on the bill, set for Monday.
Two other developments have shaped the amendment over the last several weeks. First, with the release of the bill, it became clear that, beyond the usual technical issues that surface in any bill this size, there would be a need to address Tribal concerns about consultation under the National Historic Preservation Act (NHPA). Second, Democrats swept the midterms in a landslide that will return both the House and the Senate to Democratic control come January.
You can see the imprint of both in the manager’s amendment, released earlier this morning.
Let’s take a look at some of the key changes (and additions!):
National Historic Preservation Act:
One of the central concerns that emerged after the release of BAAJA was that Tribes could be written out of NHPA consultation. The manager’s amendment responds by expressly requiring consultation on the report covering an undertaking’s area of potential effects, historic properties, and effects.
In the bill as introduced, formal consultation on the early steps of Section 106 review – defining the area of potential effects and identifying historic properties – was discretionary, although agencies already had to solicit and consider information from Tribes and other parties. Under the manager’s, agencies cannot simply make a “no historic properties affected” determination on their own and close the review. Tribes get the report and a chance to respond before the determination.
Second, there was concern about language viewed as affecting Tribal sovereignty, specifically the language directing how Tribal Historic Preservation Officers (THPOs) spend their time, as well as the language allowing the federal government to take on the THPO’s role itself. As introduced, if the Interior Department found a Tribe’s historic preservation program out of compliance – for instance, for repeatedly missing the bill’s new consultation deadlines – it could suspend the program’s funding and, if the problems persisted, assume all or part of the THPO’s functions.
Under the manager’s, the requirement to spend at least half the workweek remedying missed consultation deadlines, which originally swept in Tribal and State officials, has been narrowed so it applies only to senior federal employees. The language that let the federal government take on the THPO’s role is also out. And the Advisory Council on Historic Preservation can no longer substitute for an Indian tribe, Native Hawaiian organization, or local government in specified consultation and agreement provisions.
The amendment also drops the proposed definition of property of traditional religious or cultural importance; this was a leading ask from a number of Tribal groups.
Finally, information in the new Tribal historic property databases is exempt from FOIA, reflecting an ask that certain Tribal information be kept confidential.
Project Certainty:
After the NHPA, the second most hotly debated provisions were those in the bill’s Project Certainty title, and in particular Sections 1401 and 1402 – the limitation on revoking or altering existing permits and the new cause of action for “disparate treatment” of entire project types.
The first concern with Sec. 1401 is that its broad language would bar agencies from legally amending or altering a project’s federal permits. Read literally, that would make it impossible to, say, require an existing plant to meet new or updated Clean Air Act standards.
The second concern, raised most prominently by former Biden climate adviser John Podesta, was that Sec. 1401 could act as a “rubber stamp” for projects illegally permitted under the current administration. For what it’s worth, the original draft of BAAJA read pretty clearly to me as not shielding illegally permitted projects from challenge in court, but this concern was widespread enough that it nevertheless demanded attention.
The manager’s speaks to both of these concerns by expressly allowing agency action taken “pursuant to any applicable law or regulation,” alongside a savings clause preserving authority under any applicable law, compact, or treaty.
Additionally, some commentators had raised concerns about gaming the payout section of Section 1401. Section 1401’s additional award of 25–50 percent of development and construction costs now requires a showing of bad faith, and eligibility is expressly limited to projects that have secured all necessary federal construction or operating approvals.
Next, on Sec. 1402, there was a concern that the 5-year lookback period for determining the disparate-treatment baseline would mean that the baseline for, say, wind permits would be set by the Trump administration’s actions. In other words, measured against years of obstruction, it would be hard for a wind developer to show the “substantial increase” in denials or delays the bill requires.
In response, the manager’s extends the lookback period from 5 years to 10 years.
Finally, there continue to be concerns about the current administration’s treatment of offshore wind project approvals. The bill as introduced already had a special rule: if a court had enjoined a stop-work order issued in the year before enactment, later challenges would go back to that same judge. The manager’s goes further, making subsequent federal actions interfering with a qualifying project’s approvals, construction, or normal operation ineffective without prior court approval.
Transmission:
The grid is hard, and so is writing grid policy. Many of the edits here are purely technical or clarifying in nature, but several are more substantive.
One issue is that under BAAJA as introduced, the eminent domain power that comes with federal backstop siting doesn’t reach state-owned property. In the many states that hold millions of acres of land, this could force re-routing lines potentially many miles out of their way around state parcels.
The manager’s fixes this by extending the federal backstop authority to state-owned property. This reform is likely good for states and transmission developers alike, as it lets developers route lines along state-owned rights-of-way rather than forcing them entirely onto private land.
Second, a concern elevated by states was the provision allowing developers of large (345 kV+) lines to file with FERC at the same time as their state application – “simultaneous processing”, if you will.
The manager’s strips out this simultaneous-processing provision wholesale.
The manager’s also tightens the bill’s exception to the backstop’s 230 kV voltage floor. As introduced, lines using advanced conductors could qualify below that floor at a level set by FERC. The manager’s clarifies that those lines qualify only if they offer throughput comparable to a conventional 230 kV line, as determined by FERC.
It also limits the consolidated planning process in Sec. 2106 to Transmission Organizations, principally RTOs and ISOs, dropping it for non-RTO regions like the Southeast, where it was a poor fit for how planning actually works there. This fix, I presume, will be welcomed by some of the big Southeastern utilities.
The amendment allows partial cost allocation for merchant lines. A merchant project can now have some of its costs allocated to customers – reflecting reliability benefits that are real but diffuse – while recovering the rest through voluntary contracts with offtakers.
And it lets developers seek the bill’s federal cost allocation without applying for a federal siting permit. In other words, a line that meets the eligibility criteria for the federal backstop, but is sited by the states, can still be cost allocated under the same framework. This way, developers no longer have to weigh whether they’ll be paid differently depending on who sites the line. This is a reasonably big deal, and in my view a commonsense reform.
Beyond these, there’s a large number of smaller or more technical fixes, which I’ll skip over here.
Additions:
Perhaps the most notable new language is a ride-along of nuclear provisions that have previously gained significant bipartisan support in Congress. In particular: the Efficient Nuclear Licensing Hearings Act, the American Enrichment Deployment Act, the NRC Staff Pay Alignment Act, and the Department of Energy Nuclear Transparency Act.
Also, a small Clean Air Act tweak which allows states to exclude smoke from prescribed fires, assisting with forest management and wildfire protection.
That’s all for now! More soon.