By Suzanne Herel and Rich Heidorn Jr.

CAMBRIDGE, Md. — Two aides from the Senate Committee on Energy and Natural Resources gave PJM Annual Meeting attendees a behind-the-scenes look at the making of the Energy Policy Modernization Act of 2016 (S.2102), the Senate’s first major energy bill in nearly 10 years.

Patrick McCormick, chief counsel to Chairman Lisa Murkowski (R-Alaska), and Spencer Gray, an aide to ranking member Maria Cantwell (D-Wash.), were the featured guests in the second half of PJM’s general session. Moderator Craig Glazer, PJM vice president for federal government policy, promised the session would be “a cross between a high school civics lesson and ‘House of Cards.’”

Not ‘Revolutionary’

The bill passed the Senate on April 21 with a bipartisan vote of 85-12. To become law, however, it must be reconciled with a House bill that cleared in December with support from only three Democrats. (See U.S. Senate Energy Bill Faces Tight Calendar, Partisan Divide.)

Gray acknowledged the Senate bill didn’t contain the “revolutionary” changes of the 1992 Energy Policy Act, which mandated open transmission access and opened the industry to retail choice, or EPACT 2005, which created mandatory reliability standards.

But he and McCormick said it was nonetheless a victory over partisan gridlock — the product of weekly lunch and breakfast meetings between Murkowski and Cantwell, followed by several committee hearings and six weeks of bipartisan negotiations. It ended with a three-day markup at which some 90 amendments were considered. The final bill cleared the committee 18-4.

“I do think personal relationships matter,” Gray said. “The polarization in Congress … reflects, whether precisely or not, some level of polarization in the country. So it’s more difficult now I think to develop those relationships. And our bosses have worked hard at that.”

RTO Reporting Requirement

Section 4302 of the bill requires RTOs and ISOs to report to FERC on their reliability, capacity resources, wholesale electricity prices and generation diversity.

McCormick said the provision resulted from Murkowski’s concern over the loss of baseload and intermediate generation, an issue he said was brought to her attention by former FERC Commissioner Philip Moeller.

McCormick and Gray said the reporting requirement was a compromise between members who sought more prescriptive language and those opposed to federal mandates. (Separately, Murkowski and House Energy and Commerce Chairman Fred Upton (R-Mich.) also have asked FERC to study price formation. And the Government Accountability Office has begun a study at Congress’ direction to compare capacity markets in the Northeast to those in the Midwest.)

The aides noted that the 22-member committee — more than one-fifth of the Senate — is shifting from predominantly Western states but still dominated by members in regions without organized electricity markets.

‘Soft Touch’ or Not?

“We’re not well positioned to second guess individual provisions of market design, whether it’s capacity markets or energy markets or other provisions that RTOs and ISOs are considering,” Gray said. “So the approach that the committee’s taken on an issue like this has been a fairly soft touch.

“Members [of Congress] are very wary about having solutions from a particular region pushed, let alone forced on their region,” he added.

In a question-and-answer session, Marji Philips of Direct Energy took issue with the aides’ characterization of the reporting provision.

“It’s pretty widely admitted that that bill is the ‘Save the Nuclear and Coal Plant Bill,’” she said. “The language mirrors very closely PJM’s Capacity Performance requirements. And it’s great that it’s been turned from a mandate to a report, but … the report gets everybody abuzz almost as much as a mandate. So if MISO isn’t doing this or New York isn’t doing this — they all look at this and say, ‘I’m not going to be the one to report to Congress that we’re not meeting this Capacity Performance requirement.’ You actually really are in some ways imposing PJM on other regions through this legislation.”

Philips asked the aides to broaden the language in conference with the House to ensure a role for demand response, “so it doesn’t read that you must have … hard steel [in the ground] that runs baseload.”