On April 2, 2009, Senator Ben Nelson (D-NE) introduced an energy bill (S. 807) that would give the Federal Energy Regulatory Commission (“FERC” or “Commission”) transmission siting authority, provide nuclear power incentives, expand offshore drilling and use oil and gas revenues to fund renewable energy and efficiency.

Transmission “Superhighway”

The bill would give FERC exclusive jurisdiction over planning, permitting, siting and construction decisions to establish the “Energy Superhighway.” This would be a high-voltage transmission line that could carry renewable energy from North Dakota, Nebraska, Oklahoma and other wind-rich states to high-demand areas.

FERC would have to create a superhighway plan within a year and then Congress would have 30 days to disapprove the proposal. If Congress fails to pass a resolution of disapproval, FERC would have 18 months to enact the plan and begin work on the Energy Superhighway. FERC’s plan would have to provide for at least 10,000 miles of high-voltage transmission (defined as 400 kV or higher), include a plan for allocating costs among the federal government and state and private entities with an interest in the lines, incorporate smart-grid technology and include a plan to provide rebates from tariff rates for renewable and nuclear energy production.

There are several other bills that also would give FERC authority to site transmission, including proposals from Senate Majority Leader Harry Reid (D-NV) (see March 9, 2009 edition of the WER), Sen. Jeff Bingaman (D-NM) (see March 16, 2009 edition of the WER), and Sen. Byron Dorgan (D-ND) (see April 3, 2009 edition of the WER). However, Nelson’s bill goes further than the others by also giving FERC backstop siting authority for “secondary connections,” which are new lines that are rerouted or converted to support the superhighway transmission system. It also mandates that federally owned utilities would own the Energy Superhighway.

Oil and gas, nuclear energy

Another provision would establish an Energy Security Trust Fund with revenue from the tax on crude oil and natural gas as well as new Outer Continental Shelf production to pay for renewable energy. It would also establish a production tax credit for biogas and renewable syngas. In addition, the bill would expand energy efficiency block grants to fund the development of smart grid technologies.

Nelson’s proposal also would expedite the process for oil production on the Outer Continental Shelf in areas considered the most productive. The bill would impose an annual fee of $3.00 per acre on non-producing leases.

Nuclear energy would benefit from several provisions such as a production tax credit, five-year accelerated depreciation for new nuclear power facilities, and more staff at the Nuclear Regulatory Commission.

Regulating commodity futures

The bill would require more transparency and regulation over the energy commodities, including electricity and natural gas. Although this bill does not propose a cap and trade program for greenhouse gasses, it would mandate that any trading of those emissions be placed under the authority of the Commodity Futures Trading Commission. Rep. Henry Waxman (D-CA) and Rep. Edward Markey’s (D-MA) energy bill would give FERC authority over both emissions allowances and offsets. However, the House Agriculture Committee passed a bill (H.R. 977) in February that would give the Commodity Futures Trading Commission control to oversee those markets (see April 3, 2009 edition of the WER).

Sen. Nelson’s press release is available at: http://bennelson.senate.gov/news/