By Michael Brooks

House Democrats last week released a draft bill that received attention for its ambition to set a national clean electricity standard, requiring utilities to get 100% of their power from net-zero-emission resources by 2050.

But tucked away in the 622-page draft Climate Leadership and Environmental Action for our Nation’s (CLEAN) Future Act is a provision making it mandatary for utilities to join an ISO or RTO.

Section 217c of the bill (page 91) would amend Section 202a of the Federal Power Act, which gave FERC the power to approve RTOs, by removing the word “voluntary” and adding: “The commission shall require each public utility to place its transmission facilities under the control of an ISO or an RTO not later than two years after the date of enactment of the CLEAN Future Act.”

The provision is part of a larger series of desired changes at FERC, reading as a wish list for Democrats and the agency’s critics.

The bill would create an Office of Public Participation and Consumer Advocacy at FERC; clarify that the commission must consider climate change in its environmental assessments of natural gas pipelines; prevent pipeline companies from using eminent domain until they have obtained all necessary federal and state permits; and allow the commission to approve carbon pricing regimes for wholesale power.

Perhaps as, if not more, significant than the RTO provision is a directive that would require FERC to conduct a rulemaking to increase the effectiveness of interregional transmission planning. Section 212 of the bill spells out what exactly this would entail, directing the commission to emphasize that “interregional benefit analyses made between multiple regions should not be subject to reassessment by a single regional entity” and “the elimination of arbitrary voltage, size or cost requirements for an interregional transmission solution,” among other requirements.

The bill would also require FERC to submit a report on its efforts to encourage deployment of technologies that increase transmission efficiency, such as dynamic line ratings.

Clean Energy Credits

The draft bill is an ambitious, sweeping plan to dramatically reduce the country’s emissions and address global climate change that includes requirements for states, FERC, EPA and the Department of Energy, and targets emission reductions from the grid, vehicles and buildings.

The core provision of the bill would require utilities to begin transitioning to net-zero-emission electricity in 2022, giving them 28 years to reach 100%.

This would be facilitated by a clean energy credit trading program, established by DOE, that would function similar to existing state renewable energy credit programs, but the department would dole out credits to generators based on their carbon intensity, not on their resource type. Non-emitting resources would receive credits equal to the amount of megawatt-hours they sell. Generators that emit less than 0.82 metric tons of CO2/MWh would be eligible for credits based on how far below the threshold they are, incentivizing their owners to clean them up.

Utilities would then be required to purchase credits from generators and submit a certain amount, increasing each year, to the department. Utilities that fail to submit enough credits would be subject to a penalty.

While the overall bill drew praise from environmental groups, their reaction to the credit trading program was mixed.

“This broad legislative package includes some policies that would be clear steps forward to address the climate crisis, but it’s concerning that on what is perhaps the central question of climate policy — what counts as clean energy — this bill includes options that could leave a door open to gas and coal,” the Sierra Club said.

The criticism from environmentalists could mean the bill would face some pushback from the more liberal wing of the party, which has supported more aggressive decarbonization plans such as the Green New Deal.

“The legislation includes a national clean energy standard that could be transformational if designed well,” said Rob Cowin, director of government affairs for the Union of Concerned Scientists’ Climate and Energy program. “A national clean energy standard must not increase our reliance on natural gas generation, as natural gas use economywide now contributes more to U.S. carbon emissions than coal. We will continue to work towards enacting legislation consistent with the science and that will provide a just and equitable transition to a clean energy economy.”

“This credit system would encourage emissions reductions through changes in dispatch or investments at a facility, consequently further reducing emissions and lowering costs by allowing low-carbon technologies to participate,” nonprofit Resources for the Future said in a brief on clean energy standard published a year ago.

“The provision of credits to clean resources will likely create an incentive to expand energy supply and consequently lead to lower wholesale market prices. This effect notably differs from that of a carbon price, which would likely raise wholesale prices,” RFF said. “The extent to which decreased wholesale market prices will lead to lower retail prices could vary with the policy target but would be especially likely when customers are served by a vertically integrated utility that generates more clean energy credits than it needs to comply with the standard.”

It is unclear if Democrats intend to introduce the bill this year given its assured death in the Republican-controlled Senate and the upcoming elections. In its press release announcing the draft, the House Energy and Commerce Committee only said that “as it continues to expand and refine” the draft, “hearings and stakeholder meetings will continue throughout the coming year.”

“The CLEAN Future Act treats this climate crisis like the emergency that it is, while also setting the foundation for strengthening our economy and creating good paying jobs for a clean and climate-resilient future,” committee leaders said. “We look forward to continuing to work with all impacted stakeholders on this proposal in the coming months.”

Republicans are also planning to release their own bills to address climate change, as soon as this week. The package aims to boost research and development funding in nuclear energy and carbon capture, as well as increase tree planting. Legislation being drafted by Rep. Bruce Westerman (R-Ark.) would commit the U.S. to planting some 3.3 billion trees each year over the next 30 years.