Washington Policy and Regulatory Updates

Our ENS Federal Report provides a summary and the status on select legislative and regulatory actions.

We normally issue a Report when both Chambers are in session

ENS Federal Report
May 13, 2022

USEPA Publishes and Seeks Comments on WIFIA BABA Waiver

As the U.S. Environmental Protection Agency (USEPA) develops its  implementation procedures for the Build America, Buy America (BABA) mandate  as it applies to the agency’s financial assistance programs, it is moving forward to establish waiver processes for project sponsors to utilize.  To this end,. This week, USEPA published  a request  for public comments on a proposed WIFIA BABA waiver that would provide for a program-wide “adjustment” period to avoid project disruptions. Comments on the proposed waiver memorandum are due by May 20, 2022. The proposed BABA WIFIA waiver memorandum can be accessed here

 

Specifically, USEPA is seeking comments on its determination that applying the BABA requirements on eligible projects of prospective borrowers that initiated project design plans prior to May 14, 2022, is not in the public's interest due to the critical need to repair and upgrade our nation's water infrastructure in a timely and cost-effective manner. This proposed waiver process, only applies to the WIFIA program. The Agency is expected to develop similar waivers for other programs, including the Clean Water and Safe Drinking Water Acts’ State Revolving Fund program.

 

The Office of Water has posted its explanation of BABA requirements following a series of webinars. During the webinars, Office of Water staff discussed how the Office plans to develop BABA implementation procedures for its water infrastructure assistance programs, what types of products would be covered under BABA, and the types of waivers the Office is considering. A copy of the slides can be accessed here.

 

Conferees to Begin Negotiations on Major Trade and Technology Legislation 

This week, House and Senate conferees met to officially begin negotiations on Senate-passed U.S. Innovation & Competition Act (S.1260) and the House-passed United States Innovation and Competition Act of 2021 (COMPETES Act, H.R. 4521) with the goal of reaching a compromise to pass a conferenced bill before the August recess.  Chair of the Senate Committee on Commerce, Science, and Transportation, Maria Cantwell (D-WA), leads Senate conferees and Representative Eddie Bernice Johnson (D-TX), chair of the House Committee on Science, Space, and Technology, will be the lead negotiator for the House delegation. The conference committee consists of 107 members representing a range of House and Senate committees with jurisdiction over trade, tax, and manufacturing issues.   

 

In February, the House voted 222-210 to approve the America COMPETES Act. The bill includes $50 billion to incentivize investments in facilities in the U.S. for fabrication, assembly, testing, or advanced packaging of semiconductors and to support semiconductor research and development, and authorizes $45 billion for grants, loans, and loan guarantees to support supply chain resilience and manufacturing of critical goods, industrial equipment, and manufacturing technology. Unlike S. 1260, which passed last June, H.R. 4521 Act does not establish a National Science Foundation - Directorate of Technology to support research and development and has slightly different climate change and trade provisions.  

 

The conferenced bill is also likely to be expanded, the Senate recently passed a motion that instructs conferees to “include provisions that expand the research and development tax credit for small businesses and preserve full and immediate expensing for research and development investments.”

 

Senate Committee Reviews Council on Environmental Quality One Year Later 

This week, the Senate Committee on Environment and Public Works held a hearing to examine the Council on Environmental Quality’s (CEQ) activities to address the nation’s environmental quality needs and what CEQ plans to act upon in the coming year. Testifying on behalf of CEQ, was Chair, Brenda Mallory. Chairman Tom Carper (D-DE) noted the growing need to address climate change impacts that pose risks to the nation’s infrastructure, economy, and environmental quality. Carper noted the crucial role the National Environmental Policy Act (NEPA) permitting process, which CEQ oversees, plays to ensure future infrastructure projects account for these challenges and protect the environment. Ranking Member Shelley Moore Capito (R-WV) also acknowledged NEPA as a central part of the planning and construction process for infrastructure projects. But she noted the Infrastructure Investment and Jobs Act (IIJA) updates NEPA to increase permitting process certainty for new projects by instituting a  timeline for NEPA  decision making. 

 

In addition to NEPA, the committee members also questioned Mallory on CEQ’s efforts to develop an environmental screening tool to identify where disadvantaged communities (DACs) exist to increase   federal investments into such areas . Responding to a question from Senator Ben Cardin (D-MD), Mallory explained the screening tool is a mapping tool to see which communities experience higher levels of environmental hazards and risks, due to historic underinvestment, and respond by better allocating federal resources to the identified communities. Mallory explained during the hearing that the screening tool is being designed for programs whose resources will be affected by the Justice40 Initiative, such as affordable housing, climate change impacts, poor air quality, etc. Senator Ed Markey (D-MA) asked Mallory to clarify how the tool will protect DACs when not all communities have the necessary documented data to be included in the tool. Mallory responded that CEQ will be working on expanding community datasets to include in the screening tool.  

 

Senator Alex Padilla (D-CA) asked Mallory to expand on the other tools CEQ has to respond to environmental justice needs. Mallory stated that the key to CEQ’s environmental justice efforts is to regularly communicate with those who are experiencing environmental risks firsthand both within the Administration and in the field. She added that the White House’s Interagency Council is helpful to support coordination and collaboration among the various federal agencies working on environmental justice. 

 

Senator Mark Kelly (D-AZ) focused his questions on the intensifying drought conditions communities are experiencing in the West and the adverse consequences the conditions are having on water resources. He asked Mallory what CEQ is doing to support projects that bolster and conserve water resources move through the environmental permitting process smoothly. Mallory explained that under NEPA, CEQ is considering the direct impacts of a project and what the potential repercussions would be of a project. Kelly asked if CEQ’s NEPA process would abide by the one federal decision rule for new projects. Mallory stated that the NEPA timeline would depend on the project in question, but it is the goal of CEQ is to identify a permitting schedule that can move a project along. 

 

House Holds "Uncommon" Hearing to Examine FERC Hydropower Reforms 

On May 12, the House Committee on Energy and Commerce, Subcommittee on Energy of the held a hearing entitled, "Modernizing Hydropower: Licensing and Reforms for a Clean Energy Future." The hearing focused on proposed reforms to the Federal Energy and Regulatory Commission hydropower licensing and relicensing process developed through an agreement between the hydropower industry and environmental and conservation organizations facilitated through Stanford University’s Woods Institute “Uncommon Dialogue.” The proposal is the product of a two-and-a-half-year dialogue and articulated in a document entitled: Climate Change, River Conservation, Hydropower and Public Safety: An Infrastructure Proposal for the Biden Administration and Congress

 

In his opening remarks, full committee Chairman Frank Pallone (D-NJ) praised the efforts of the signatories of this process to agree on reforms to the Federal Power Act’s hydropower licensing process.  Despite his praise, Pallone expressed concern about potential negative impact to FERC’s licensing authority specific to “navigable capacity of any navigable waters of the United States (Sec.4(e)) and efforts to recover waterways impacted by hydropower operations (Sec.18). 

 

Ranking Member Fred Upton (R-MI) stressed that the antiquated FERC process is a significant barrier to expanding hydropower production and noted the need for the strengthening of FERC’s lead agency status with a focus on holding coordinating agencies to strict timelines for project review.  Regarding the “Uncommon Dialogue” proposal, Upton expressed concern regarding the possibility for the provisions to expand the environmental review process related to climate change, expand responsibility for mitigation of past effects, and the use of off-site mitigation and dam removal. 

 

Testifying on behalf of the National Hydropower Association, Malcolm Woolf emphasized that “281 facilities (30% of total active licensees), representing 13.8 GWs of hydropower and pumped storage facilities, are set to have their licenses expire by 2030.”  Woolf testified that regulatory uncertainty, under the existing hydropower licensing process, may lead to hydropower operators considering retiring these assets due to the lengthy time and cost of relicensing. Woolf expressed strong support for a provision in the proposal requiring “that mandatory conditions imposed on a hydropower facility be reasonably related to the project’s effects.” Wolf called on the committee to support efforts to improve coordination between federal, tribal, and state entities with conditioning authority to ensure the coordinated and timely review of license applications.  Specifically, the proposal would by directing FERC to convene a technical conference to allow these conditioning agencies to work together to resolve inconsistent or conflicting licensing conditions. 

 

There was no mention during the hearing that the Subcommittee was looking to move legislation, containing provisions of the “Uncommon Dialogue” proposal, in the coming months. Also testifying at the hearing were: Tom Kiernan, Chief Executive Officer, American Rivers, Mary Pavel, Representing the Skokomish Indian Tribe; Richard Wallen, General Manager and Chief Executive Officer, Grant County Public Utility District; and, Chris Wood, President and Chief Executive Office, Trout Unlimited.

 

New Legislation 

H.R. 7696, Clean Water Standards for PFAS 2.0 Act of 2022 – Rep. Chris Pappas (D-NH) 

 

Reports and Regulation 

White House - Notice of Funding Opportunity - "Internet for All" initiative programs: 

 

Congress Next Week 

Tuesday May 17, 2022 

House Committee on Energy and Commerce – Hearing on the Fiscal Year 2023 EPA Budget

 

Thursday May 19, 2022 

Senate Committee on Energy and Natural Resources – Hearing on the Fiscal Year 2023 Budget Request for the Department of the Interior