There are reports that the debt ceiling negotiators are close to agreeing on permitting reform provisions as part of the final package. This may sound good, but the few details that have been leaked to the media look more like a disaster in the making.
Here’s what Kelsey Brugger and Emma Dumain report in Energy and Environment Daily:
The plan, from Rep. Scott Peters (D-Calif.) and Sen. John Hickenlooper (D-Colo.), would deliver on Democratic demands on permitting—namely the need to upgrade transmission lines required for the clean energy transition. In exchange, Republicans would win “modest, tech-neutral” changes to the landmark environmental law that could benefit the fossil fuel industry, according to a person familiar with the state of play.
Whether upgrading electric transmission lines is a good thing depends on whether the final package includes repeal of the green energy subsidies enacted last August in the so-called Inflation Reduction Act. The Limit, Save, Grow Act, the bill passed by the House on 26th April to raise the debt ceiling and reduce federal spending, repeals or rescinds all the energy tax credits in the IRA.
As Rep. Chip Roy (R-Texas) and other members of the House Freedom Caucus have argued, this is critical because these tax subsidies encourage the continuing massive misinvestment in wind and solar energy. Several decades of tax subsidies to wind and solar have already damaged the reliability of the electric grid and raised electric rates for consumers. Another decade of open-ended subsidies could make blackouts like the catastrophic Texas blackout of March 2021 a common occurrence across the country.
The climate industrial complex is prepared to take full advantage of the Inflation Reduction Act’s wind and solar subsidies, but is being hampered by the electric grid’s lack of capacity to handle all the projects that have been proposed. The New York Times reported that more than 8,100 projects, “the vast majority of them wind, solar and batteries — were waiting for permission to connect to electric grids at the end of 2021….”
Adding the Peters-Hickenlooper transmission proposals to the debt ceiling deal without also repealing the wind and solar subsidies in the “Inflation Reduction” Act could open the grid to thousands of these projects. That would increase the federal deficit by tens of billions of dollars, while at the same time reducing electric reliability.
House negotiators should insist on the House-passed provisions that repeal green energy subsidies before agreeing to anything like the Democrats’ permitting proposals.