Tom Ewing’s Regulatory Update

* Don’t worry about the money: DOE has issued updated guidance for hydroelectric generation facilities to qualify for certain incentive payments, available when electricity is generated and sold for a specified 10-year period. This isn’t new, it was authorized under the Energy Policy Act of 2005. However, there have been recent changes: for federal fiscal year 2021 DOE received incentive funding. And the new Infrastructure Investment and Jobs Act made further amendments. In the big picture, this isn’t a lot of money. For FY 21 Congress appropriated $7 million for incentive funding. It’s worth noting, though, how these moves further the federalization of energy, particularly electric energy, which States and utility commissions used to dominate. That $7 million isn’t coming from ratepayers, it’s coming from US taxpayers. This is one important reason why utility executives can chirp in unison about the benefits of wind or solar or storage or net-zero. They are now pretty much carefree about costs to ratepayers. They know taxpayers will pick up the tab for costs that would be rejected by historically parsimonious state public utility commissions.

* Biofuels: wait, there’s uncertainty? EPA will hold a two-day virtual public workshop to advance biofuel greenhouse gas modeling for land-based biofuels used for transportation, including EPA’s methodology for quantifying GHG emissions under the Renewable Fuels Standard. EPA seeks a process that incorporates the “best available science into an update of our lifecycle analysis of biofuels.” EPA writes that greenhouse gas emissions from biofuels are an “important consideration of emerging policies designed to meet deep decarbonization goals.” The Agency seeks insight on the following: (1) biofuel-GHG data and how that data can best be used, (2) characterizing uncertainty (3) models that are available now. One can’t help but wonder: don’t “they” have this all figured out already? Otherwise, why are we headed full bore down one rigid energy pathway?

* Taking an EV to the CAFE: DOE received a petition for rulemaking from the Natural Resources Defense Council (NRDC) and Sierra Club requesting that DOE update its regulations concerning procedures for calculating a value for the petroleum-equivalent fuel economy of electric vehicles (EVs) for use in DOT’s Corporate Average Fuel Economy (CAFE) program. DOE seeks comments, data and information regarding this petition as it considers how or whether to act on it.  NRDC and Sierra Club assert that the data underlying the current regulation are outdated, resulting in higher imputed values of fuel economy for electric vehicles. This higher imputed value, therefore, means a smaller number of EVs enable fleetwide compliance at lower real world average fuel economy across an automaker’s overall fleet. In other words, more EVs are necessary to get the numbers right. Deadline for comments is February 28.

Have a great week!
Tom Ewing
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