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Letter - Energy Updates


Feb 26, 2024
Letter

E&C Republican Leaders Demand Answers on the Biden Administration’s Ineffective EV Infrastructure Program

Washington, D.C. — House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA), Energy, Climate, and Grid Security Subcommittee Chair Jeff Duncan (R-SC), and Oversight and Investigations Subcommittee Chair Morgan Griffith (R-VA) sent a letter to Department of Energy Secretary Jennifer Granholm and Department of Transportation Secretary Pete Buttigieg regarding growing concerns over the Biden administration’s inability to implement the National Electric Vehicle Infrastructure (NEVI) Formula and the Charging and Fueling Infrastructure (CFI) Discretionary Grant programs, as well as the implications for American taxpayers. KEY QUOTE:   “The Infrastructure Investment and Jobs Act (IIJA) provided $5 billion for the NEVI Formula Program ($1 billion annually from FY22-FY26), and a total of $2.5 billion from FY22-FY26 for the CFI Discretionary Grant Program. Despite recent award announcements, little progress has been made in the buildout of electric vehicle (EV) infrastructure. On December 15, 2023, the Department of Energy and Department of Transportation announced the opening of America’s first EV fast charging stations funded through the NEVI Formula Program: in Ohio and New York. This announcement for merely eight charging stations comes more than two years after the passage of the IIJA.  “The problems with these programs continue to grow – delays in the delivery of chargers, concerns from States about labor contracting requirements and minimum operating standards for chargers, the fact that 22 States (44 percent) have not issued solicitations for NEVI funding, and the limited and questionable delivery of awards from the CFI Discretionary Grant Program.”  Members asked Secretaries Granholm and Buttigieg to answer the following questions by March 7, 2024: How many EV chargers does the administration expect to be constructed using NEVI Formula Program and CFI Discretionary Grant Program funds in 2024?   Because private sector deployment of EV chargers is outpacing the federal government, how is the Joint Office of Energy and Transportation updating its review of State plans to ensure federal dollars do not overbuild private sector investments?   In the Federal Highway Administration’s January 11, 2024, press release, it stated, “More than 70 percent of the CFI funding announced today will support project sites in disadvantaged communities.” Understanding EVs are extremely cost prohibitive for many, expensive to maintain, and have high insurance costs, can you please share how the Joint Office of Energy and Transportation is ensuring charging stations being awarded will receive maximized usage?   What changes is the Joint Office of Energy and Transportation making to ensure the timely review of State plans and delivery of awards?  Regarding the Joint Office of Energy and Transportation:   How many employees does the office have? What is the administrative budget for the office for each year since it has been in existence? Considering the Biden administration’s waiver of Buy America requirements for steel, iron, manufactured products, and construction materials in EV chargers, how will you ensure federal funds are not supporting Chinese or Chinese-affiliated entities?  IN THE NEWS:   “Republican leaders on the House Energy and Commerce Committee are demanding answers from two federal agencies regarding the Biden administration’s lagging electric vehicle (EV) charger subsidy program.”   […] “Beyond noting that the rollout has been sluggish to date, the lawmakers asked the agencies to provide estimates of how many chargers the administration is anticipating the program will help build by the end of the year and steps the agencies are taking to ensure that taxpayer dollars do not benefit Chinese interests in light of the administration’s ‘Buy America’ requirement waiver for certain charger components.”   CLICK HERE to read the full article from the Daily Caller.  CLICK HERE to read the full letter.



Feb 21, 2024
Letter

Chairs Rodgers and Duncan Probe FERC on Grid Reliability Implications of Breaching the Lower Snake River Dams

Washington, D.C. — House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA) and Energy, Climate, and Grid Security Subcommittee Chair Jeff Duncan (R-SC) sent a letter to Federal Energy Regulatory Commission (FERC) Chair Willie L. Phillips and the other Commissioners regarding the threats to the reliability of the electric grid if the Lower Snake River dams were breached and whether FERC was involved in President Biden’s efforts to breach the Lower Snake River dams.  KEY QUOTE:   "We are concerned that the Biden administration failed to consider the impact of dam breaches on electric reliability when conducting its secret negotiations. The Federal Energy Regulatory Commission (FERC) should have been involved in these discussions in order to ensure misguided policies do not further undermine grid reliability. The Lower Snake River dams provide over 3,000 MW of affordable nameplate capacity that communities in the western United States depend on for reliability and resource adequacy.   "As noted in responses to our letter dated December 29, 2023, Chairman Phillips stated that 'we cannot, as a country, afford to retire resources on which we depend for reliability without ensuring that they are replaced with sufficient resources to meet resource adequacy and other system needs.' This includes the affordable, dispatchable, and renewable hydroelectric dams in the Columbia River Basin that millions of Americans depend on for reliability. In fact, during the most recent cold snap in the Pacific Northwest, federal dams, including the Lower Snake River dams, 'were vital to keeping the lights on' by producing over 1,000 MW of electricity each day to help BPA and the region meet high demands. BACKGROUND:   Dams along the Columbia Snake River system provide more than one third of all the hydropower capacity in the United States. In Washinton State, hydropower accounts for 70 percent of the electricity consumed.  The dams helped transform Eastern Washington into one of the most productive agricultural regions in the world—over $3 billion worth of cargo is shipped on the Columbia Snake River System every year, including 40 percent of America’s wheat.  Despite the importance of the dams, the Biden administration has been leading secret negotiations with other federal agencies in an attempt to breach the Lower Snake River dams. In the process, they’ve ignored the concerns of people who live in the Pacific Northwest and who would be significantly impacted if these dams were breached.  Members asked Chair Phillips to answer the following questions by March 6, 2024: Was FERC consulted as part of the Columbia River Basin negotiations to examine or explain the impacts on electric reliability relating to the commitments contained in the Memorandum of Understanding (MOU)? Was FERC included in these negotiations in any capacity to assess the impacts to affordability, reliability, and resource adequacy in the western United States? Please describe any communications you have had with BPA, CEQ, the White House, or any other federal entity during the Columbia River Basin negotiation process.  Will FERC coordinate with other Federal entities, like BPA and the administration, to examine the reliability impacts of the potential loss of dispatchable, clean, renewable hydroelectric power in the west as the MOU is implemented?  How does FERC consider the negative impacts of policies that displace reliable generation when fulfilling its mission to safeguard reliability? How is FERC assessing the cumulative effects of state policies that impact wholesale system spanning multiple states and entire interconnections?  On January 30, 2024, Mr. Jeremiah Baumann from the Department of Energy (DOE) testified before the Subcommittee on Energy, Climate, and Grid Security hearing. During the hearing, Mr. Baumann was asked about replacing the electric generation that would be lost if the four Lower Snake River dams were breached. Mr. Baumann said “[Y]ou can use sort of existing off-the-shelf emissions-free technology like wind, solar, and current batteries for a big chunk, but then for the last bit, you really do need other technologies like hydrogen, something that is going to be that 24./7 dispatchable piece, and right now those are very expensive and hard to develop.” Do you agree with DOE’s assessment of the need for dispatchable replacement capacity if the Lower Snake River dams are breached? What cost-effective and commercially available technology would be the most efficient dispatchable replacement for the Lower Snake River dams?  The Columbia River Basin MOU describes several replacement energy resources for the hydroelectricity from the dams, including distributed energy resources, efficiency measures, demand response, and other generation, storage, and transmission resources. Do you consider those adequate replacements for the over 3,000 MW of dispatchable nameplate capacity from the Lower Snake River dams? What quantity, in MW, of distributed energy resources, efficiency measures, demand response, and other generation is needed to replace the capacity, energy, and essential reliability services provided by the dams? Can these replacement resources provide comparable quality and quantity of these services? What effect will this have on energy prices and capacity contracts for consumers in the region? Would you consider the total costs for replacement resources just and reasonable when they are higher than they otherwise would be with these dispatchable resources still in service? How will the loss of the dams and the characteristics of the proposed replacement resources affect system capabilities needs, especially during peak periods? CLICK HERE to read the full letter. 



Feb 5, 2024
Letter

More than 150 House Republicans Demand Biden End His De Facto Ban on American LNG Exports

Washington, D.C. — More than 150 Republicans, led by Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA), sent a letter to President Biden lambasting him for his de facto ban on U.S. liquefied natural gas (LNG) exports, a decision that jeopardizes the stability and affordability of natural gas domestically, hurts the American economy and jobs, undercuts our allies, and strengthens our adversaries. AS FIRST REPORTED BY FOX NEWS: More than 150 House Republicans are calling for President Biden to reverse his moratorium on liquefied natural gas (LNG) export projects, an action they argued negatively impacts the energy security of the U.S. and its allies.   The Republican lawmakers — led by House Energy and Commerce Committee Chair Cathy McMorris Rodgers, R-Wash., and joined by House Speaker Mike Johnson, R-La., Majority Leader Steve Scalise, R-La., and Conference Chair Elise Stefanik, R-N.Y. — penned a letter to Biden on Sunday evening, demanding his administration "expeditiously approve all pending applications to increase the global supply of natural gas."   KEY LETTER QUOTE: We write regarding the announcement that the Department of Energy (DOE) will stop issuing indefinitely permits to export liquefied natural gas (LNG) while your administration conducts an additional “public interest” review, including environmental, economic, and environmental justice criteria. This is economically and strategically dangerous and unnecessary. Under both Democratic and Republican administrations, DOE has consistently found that U.S. LNG exports serve the “public interest” because they contribute positive economic benefits and strengthen energy security for the American people, and also have the potential to reduce global greenhouse gas (GHG) emissions. BACKGROUND: On January 26, President Biden froze the approval process for new U.S. LNG export sites, prioritizing the wishes of radical activists over U.S. energy security and the security of our allies. Studies show that LNG exports could add upwards of $73 billion to the U.S. economy by 2040, create upwards of 453,000 American jobs, and increase U.S. held purchasing power by $30 billion.   Over the past seven years, the U.S. has increased its LNG export capacity from zero to 11.6 billion cubic feet per day. During the same period, the spot price of U.S. natural gas has remained relatively stable and affordable.  These actions will weaken global energy security, halt investment in American energy, and jeopardize U.S. energy leadership.  CLICK HERE to read the full letter.  CLICK HERE to read more on how President Biden’s efforts jeopardize American jobs, energy prices, the economy, and the security of our allies. 



Jan 29, 2024
Press Release

Chairs of Energy and Commerce, Science, and Natural Resources Committees Open Investigation into Chinese Influence in American Energy and Environmental Policy

Washington, D.C. — House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA), House Science, Space, and Technology Committee Chair Frank Lucas (R-OK), and House Natural Resources Committee Chair Bruce Westerman (R-AR) sent a letter to Energy Foundation China (EFC) President Zi Chou, requesting documents related to grants and financial resources provided to American organizations. The request comes after reports that EFC is funneling money to support US-based climate initiatives.  KEY LETTER EXCERPT :  “ China could greatly improve its economic and geopolitical position should renewable energy resource use and electrification increase in the United States . China dominates global renewable energy product supply chains, such as those for batteries, solar panels, and electrolyzers. The Office of the Director of National Intelligence also observed, 'China is central to global supply chains in a range of technology sectors, including semiconductors, critical minerals, batteries, solar panels, and pharmaceuticals.' It concluded, 'China’s dominance in these markets could pose a significant risk to U.S. and Western manufacturing and consumer sectors if the Government of China was able to adeptly leverage its dominance for political or economic gain.’ China has already attempted to influence United States policy and opinion regarding China through covert influence and exploit perceived societal divisions. As such, we are alarmed by reports of China-affiliated organizations attempting to influence United States energy policy. ”  BACKGROUND :  EFC is a Beijing-headquartered organization with a stated mission of furthering China’s sustainable energy development and employs staff with significant ties to the Chinese Government.  EFC’s President and CEO previously served as Deputy Director General of China’s National Center for Climate Change Strategy and International Cooperation, under the Chinese government’s National Development and Reform Commission.  EFC’s Environmental Management Program director, Mr. Liu Xin, previously served as Deputy Director of the Regional Air Quality Management Division of the Beijing Municipal Environmental Protection Bureau.  Prior to 2019, the organization operated jointly with the United States Energy Foundation.  EFC has awarded substantial funding to other organizations seeking to shape United States energy policy.  According to tax records, in 2021, EFC provided $195,000 to the Natural Resources Defense Council (NRDC) “to support education, analysis, and outreach to build a clean energy future.”  In 2021, EFC also gave the Rocky Mountain Institute (RMI) $820,000 to, among other things, “support education and analysis to phase out coal.”  The RMI has produced a study that it and other advocates for electrification have cited in pushing to eliminate the use of gas stoves.  The Department of Energy cited this study in one of its recent energy efficiency proposed rulemakings, and Secretary of Energy Jennifer Granholm also posted it to her account on X, formerly known as Twitter, stating that Americans would have greater access to electric and induction cooktops.   CLICK HERE to read the full letter. 



Jan 23, 2024
Press Release

E&C Republicans Threaten to Subpoena Documents Amidst Energy Official's Stonewalling of Investigation

Washington, D.C. — House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA), Subcommittee on Oversight and Investigations Chair Morgan Griffith (R-VA), and Subcommittee on Energy, Climate, and Grid Security Chair Jeff Duncan (R-SC), on behalf of the Oversight and Energy Subcommittee Republicans, today wrote to Department of Energy (DOE) Loan Program Office (LPO) Director Jigar Shah.  In the letter, the Chairs note Mr. Shah’s failure to adequately respond to multiple requests for information from the Energy and Commerce Committee and other Congressional Committees. KEY LETTER EXCERPT :  “Recent reports, your testimony before the Senate Energy and Natural Resources Committee, and the exponential expansion of the LPO’s loan authority of over $400 billion have raised legitimate questions regarding how the program plans to spend taxpayer dollars. As the LPO continues publicly to emphasize its commitment to transparency, full cooperation would have provided this program office with an opportunity to address these issues. However, you have failed to cooperate in a meaningful way with the Committee’s efforts to exercise its constitutionally based oversight responsibilities.”  The Chairs request Mr. Shah provide the previously requested information by February 6, 2024, or they will be forced to consider compulsory measures.  CLICK HERE to read the letter.  BACKGROUND ON PREVIOUS REQUESTS :  October 18, 2023 : Chair Rodgers and Senate Energy and Natural Resources Ranking Member John Barrasso requested more information about the nature of Director Shah’s involvement with Cleantech Leaders Roundtable during his time leading the LPO. CLICK HERE to read the letter.  December 4, 2023 : Chairs Rodgers, Griffith, and Duncan requested more information about the LPO’s process for vetting and approving loan applications in light of reports of the poor financial position of Li-Cycle, a company that received a conditional commitment for a loan. CLICK HERE to read the letter.  December 7, 2023 : Chair Rodgers and Ranking Member Barrasso wrote to Director Shah seeking more information about the LPO’s review and awareness of troubling business practices by Sunnova, a recent partial loan guarantee recipient. CLICK HERE to read the letter.



Chairs Rodgers and Johnson Urge EPA to Stop Targeting American Manufacturers with its Repeated Regulatory Overreach

Washington, D.C. — House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA) and Environment, Manufacturing, and Critical Materials Subcommittee Chair Bill Johnson (R-OH) sent the following letter to U.S. Environmental Protection Agency (EPA) Administrator Michael Regan demanding that the agency go back to the drawing board on its proposed risk management regulations given the detrimental impact the current proposal would have on American manufacturing and jobs.   BACKGROUND:   On August 31, 2022, the EPA issued a notice of proposed rulemaking (NPRM) in the Federal Register entitled “Accidental Release Prevention Requirements: Risk Management Programs Under the Clean Air Act; Safer Communities by Chemical Accident Prevention” or “RMP Proposal.”  This proposed RMP mandate would require manufacturers to publicly disclose information on vulnerabilities and extremely hazardous substances, which could be exploited to attack the facility or undermine the ability of the local community to respond to an attack.     The proposal also expands the EPA’s involvement in private companies’ facility operations and labor relations practices, something Congress has repeatedly rejected.  The Chairs expressed these and other serious concerns with the RMP proposal and the process by which it was developed, a process that lacked transparency and accountability to the public. They urged Administrator Regan to withdraw and repropose the proposed rule.  KEY QUOTE:    We write to you to express our concerns with the EPA proposal and the process used to develop it, and we urge you to withdraw and repropose this rule.   […]   As part of the rulemaking process, EPA should select only those requirements that make significant, cost-effective safety improvements, and not impractical and ineffective mandates, which are ideologically-driven.     Before finalizing any further changes to the RMP program, we urge the EPA to repropose the RMP rulemaking to align it with existing law and to solicit more information from the public, in part based on the issues identified in this letter.   Chairs Rodgers and Johnson asked Administrator Regan to provide answers to the following questions by February 1, 2024:  The RMP Proposal seems to suggest the mere occurrence of any accident is a justification for regulation. Is the EPA’s intention to promote plant designs that eliminate not just “human factors” but also those that are beyond any person’s control? Can such a facility containing Appendix A chemicals even operate if such assumptions are the purpose of the program’s rules?  RMP rules need to be “reasonable” and “practicable.” Yet, the RMP Proposal did not evaluate the costs of many of its provisions, including the proposed natural hazards and proposed gap analysis requirements for Process Hazard Analyses. In fact, the EPA’s Regulatory Impact Analysis states that the EPA “has no data or empirical estimates of the precise impact of each rule provision on the probability and magnitude of an accident, or on improved efficiency due to better information.” How does the EPA believe it is complying with the statutory directive on reasonableness when the EPA’s proposal does not demonstrate that the EPA understands what a reasonable universe might include? Is the EPA’s failure to conduct a fulsome cost-benefit analysis for the RMP Proposal a sign that the EPA sees RMP as a zero-risk program?  On October 5, 2023, the American Water Works Association, the U.S. Conference of Mayors, Association of Metropolitan Water Agencies, and the National Association of Clean Water Agencies met with the Office of Information and Regulatory Affairs (OIORA) to discuss this rulemaking, In a memorandum reiterating points made by those associations to OIRA, it states: “ EPA states the total cost of the rule has increased by $181.4 million (up from $75.8M to $257.2M) and the total cost for State/Local entities (which includes drinking water and wastewater utilities) is now $18.9M, but as proposed was less than $5M.“  On October 5, 2023, the American Water Works Association, the U.S. Conference of Mayors, Association of Metropolitan Water Agencies, and the National Association of Clean Water Agencies met with the Office of Information and Regulatory Affairs to discuss this rulemaking. If this is the case, the EPA — after its truncated public comment period closed — greatly expanded the scope of new regulatory requirements beyond the $75 million annual cost included in its initial proposed rule and without giving the public a basis for the updated cost analysis. Does the EPA now estimate the annual cost of the RMP Proposal to exceed $75 million? If yes, how much is the current estimate? What is the reason for the increase in the cost estimate? Will the EPA publicly notice and meaningfully reopen the comment period to allow interested parties a chance to examine and provide expert feedback on these changes?  Please detail all conversations and coordination the EPA has had with OSHA on the RMP Proposal and the intersection between RMP and OSHA’s Process Safety Management (PSM) program, including any efforts to prevent duplication and overlap between RMP and PSM programs. What efforts were undertaken to identify and avoid redundancy or conflicts between provisions in the RMP Proposal and existing laws administered and enforced by the EPA or other Federal departments or agencies?  Regarding the protection of sensitive facility and materials information that could be used to destroy a facility and community or disrupt emergency responses to such an event: Please identify those provisions that the Department of Homeland Security and the Department of Justice believe satisfy their decades-long-concern about inappropriate sharing of sensitive facility information. Please state whether any other law enforcement, defense, or intelligence agency raised concerns about the information disclosure provisions in the RMP Proposal. If the EPA believes currently operating facilities should use a STAA, why are the facilities in just a few sectors of the economy required to use a STAA?   Under the Emergency Planning and Community Response Act, local emergency planning committees (LEPCs) —are responsible for developing community response plans. The RMP Proposal appears to make RMP facilities responsible for the content of the community response plan. How does every RMP facility “ensure” the contents of a response plan if the facility is not a part or the majority on the LEPC? Is the RMP Proposal contravening local decision-making and resources, with this proposed requirement?  The “retail facility” definition for RMP and PSM has been in place for many years and is well understood by the industry. The RMP Proposal, though, proposes to amend the current RMP rule definition of “retail facility” and to add the requirement that “more than one-half of the annual income (in the previous calendar year) is obtained from direct sales.” Please state the justification to support claims of “uncertainty” that necessitate the proposed change.  CLICK HERE to read the full letter. 



Chairs Rodgers and Duncan Question FERC on Power Plant Retirements and Grid Reliability Issues

Washington, D.C. — House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA) and Energy, Climate, and Grid Security Subcommittee Chair Jeff Duncan (R-SC) sent a letter to the Federal Energy Regulatory Commission (FERC) requesting information on the increasing retirements of power plants across the country and the implications for America’s electric grid reliability.  KEY LETTER EXCERPT:   “Regulatory, policy, and environmental pressures on fossil-based generation resources that provide 60 percent of the nation’s electricity further threaten the reliability and flexibility of the grid. Because of these pressures, coupled with projections of electric demand growth, we are concerned about the reliability of the bulk-power system and the actions the Commission is taking or considering taking to ensure that it fulfills its mission to ‘[a]ssist consumers in obtaining reliable, safe, secure, and economically efficient energy services at a reasonable cost through appropriate regulatory and market means, and collaborative efforts.’”   BACKGROUND:   Concerns are mounting regarding the forced retirement of baseload power sources—like natural gas and coal—as a result of President Biden’s rush-to-green energy agenda.  At FERC’s recent annual reliability technical conference, Commissioner Danly argued that retirements are “not orderly” and are taking place before the capacity, energy, and essential reliability services they provide are able to be replaced.  At the conference, multiple stakeholders expressed concern that retirements are happening too quickly and that resources promoting reliability cannot be retained by any one single entity.   Regulatory, policy, and environmental pressures implemented on fossil-based generation resources—which provide 60 percent of the nation’s electricity—further threaten the reliability and flexibility of the grid.  Given these retirements, as well as the intermittent nature of newer resources, like wind and solar, America's grid reliability will continue to be strained, especially as demand for these resources grows, further threatening reliability.   Chairs Rodgers and Duncan asked Chairman Willie Phillips and the FERC Commissioners to respond to the following questions by January 16, 2024:  Are changes to the costs that electric generation resources can or should offer in capacity markets needed to ensure revenue sufficiency, especially for the resources that provide greater shares of energy and essential reliability services?  Is the Commission considering recommending changes to planning parameters, such as changes to reserve margins and the “one day in ten” standard, to ensure both resource adequacy and energy adequacy?  Should intermittent resources be required to firm or true up their capacity to compensate for their lower capacity ratings and intermittency?  Are current retirements orderly? Should retirement process timelines more closely align with timelines for entry in the capacity market? Would this better ensure that retirements do not create resource adequacy shortfalls and that new resources can provide sufficient replacement capacity and essential reliability services?  Procuring capacity without consideration of a resource’s energy availability and the essential reliability services it can provide may contribute to current issues on the grid. Should planning processes and capacity markets be required to consider the ability of electric generators to provide essential reliability services and/or operating reserves?  Should the Commission explore additional markets, such as forward-looking markets like capacity markets, that procure essential reliability services on a forward basis?  What actions is the Commission considering taking under its jurisdiction over retirement planning expressed by Commissioner Clements?  Are generators who are planning to retire required to enter a reliability must run agreement extended by an RTO/ISO? If not, who has, or should have, authority to retain resources planning to retire if it is determined that the resource is needed for resource adequacy?  Do current retirement study processes properly consider energy adequacy, essential reliability services, and/or fuel security?   Is the Commission exploring modifications to retirement planning and studies with RTOs/ISOs, NERC, states, and others to develop actionable and meaningful solutions to prevent further retirement of reliable generation?  Are new reliability standards or changes to existing reliability standards needed to address retirements, retirement studies, and resources that replace retiring generators?  CLICK HERE to read the letter. 



Dec 20, 2023
Press Release

Chairs Rodgers and Duncan Decry Administration’s Use of Wartime Authority to Subsidize Radical Rush-to-Green Agenda

Washington, D.C. — House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA) and Energy, Climate, and Grid Security Subcommittee Chair Jeff Duncan (R-SC) sent a letter to Department of Energy (DOE) Secretary Jennifer Granholm raising concerns that the DOE and President Biden are using a wartime statute to funnel Inflation Reduction Act (IRA) subsidies to the Biden administration’s favored energy industries.  BACKGROUND:    On November 17, 2023, the DOE announced that it was awarding $169 million for nine projects to manufacture electric heat pumps.   It is the members’ understanding that the awards are being carried out pursuant to an executive order, which broadened the Defense Production Act (DPA) for the purpose of expanding the domestic production capacity for electric heat pumps.  President Biden’s executive order waived numerous statutory requirements in the DPA meant to inform and justify such actions to the public and Congress.   By waiving these requirements, the public and Congress have been left in the dark as to the justification for these actions and without any assurances that this program will help reduce America’s energy reliance on adversaries, like Russia and China.   Chairs Rodgers and Duncan asked Secretary Granholm to respond to the following questions by January 5, 2024:   Has the Department of Defense or the DOE issued any report identifying electric heat pumps as essential to national defense?  According to the International Energy Agency, China is the largest producer and exporter of heat pumps. Will you provide the Committee with information verifying that none of the funds awarded will be made available either directly or indirectly by China or its affiliated entities?   Will you provide the Committee with information the DOE has justifying that there is a shortfall of electric heat pumps severely impairing national defense capabilities?  Will you provide the Committee with information the DOE has indicating a domestic industrial base shortfall for electric heat pumps prior to the November 17 awards?  Will you provide the Committee with information the DOE has justifying that the $169 million in grant funding is the most cost effective, expedient, and practical alternative method for meeting electric heat pump needs?  The DOE Heat Pump DPA Program stated its Purpose and Strategic Goals will aim to, “[e]xpand United States electric heat pump manufacturing to reduce the amount of energy needed in our buildings, leading to less reliance by the U.S. and allies on adversaries, such as Russia, for oil and gas.” There was no citation provided for this statement detailing how electric heat pumps will reduce reliance on adversarial sources of energy. Can you provide the study, research, or applicable materials supporting this claim?   Because approximately $339 million in DPA funds from the IRA remain and the President has issued separate determinations expanding the DPA to produce solar, transformers and electric grid components, insulation, and electrolyzers, fuel cells, and platinum group metals, will you commit to providing the Committee with appropriate explanatory materials that justify the use of the DPA for these energy resources should further awards be announced? CLICK HERE to read the full letter to Secretary Granholm.  



Dec 4, 2023
Letter - Energy

E&C Republicans Question Energy Department over Loan to Li-Cycle after Company’s Construction Halted, Stock Prices Plummet

Washington, D.C. — House Energy and Commerce Committee Chair Cathy McMorris Rodgers (R-WA), Subcommittee on Oversight and Investigations Morgan Griffith (R-VA), and Subcommittee on Energy, Climate, & Grid Security Chair Jeff Duncan (R-SC), on behalf of Oversight and Energy Subcommittee Republicans, today wrote to Department of Energy (DOE) Loan Programs Officer (LPO) Director Jigar Shah. The letter , which follows up on a previous correspondence regarding the LPO, requests information related to a $375 million conditional loan commitment to Li-Cycle, a company whose stock is reportedly tanking and is facing a class action lawsuit. DOE has failed to respond to the Committee’s October 19 letter with Senate Energy and Natural Resources Committee Ranking Member John Barrasso (R-WY) regarding ethical concerns with Mr. Shah’s association with the Cleantech Business Leaders Roundtable.  KEY LETTER EXCERPTS :  “While some have observed that ‘green’ energy companies have experienced difficulties this year, these developments suggest serious struggles for this company. This raises concerns about the LPO’s vetting and due diligence processes as well as potential attempts to implore companies to incur obligations they cannot meet. For example, in 2022, you reportedly met with Li-Cycle Chief Executive Officer Ajay Kochar regarding DOE’s program to encourage him to apply for an LPO loan. When he expressed uncertainty about Li-Cycle’s ability to repay the loan quickly, you urged him to attend a clean-energy conference in Pittsburgh. While news reports did not confirm it was this specific conference, you participated in an event of Cleantech Business Leaders Roundtable, a trade association you helped found, in Pittsburgh on September 22, 2022.” […]  “We also seek more detail on some of your statements before the Senate Committee on Energy and Natural Resources at an October 19, 2023, hearing. In response to questions from Chairman Joe Manchin, you stated that you ‘don’t make any decisions on which loans we actually underwrite or approve.’ You also stated that ‘[t]hese loans are being overseen by, you know, career federal staff.’  As part of our oversight responsibilities, it is critical that we understand who the decision-makers are in the LPO.”  BACKGROUND :  On February 27, 2023, the LPO announced a conditional commitment to Li-Cycle for a $375 million direct loan to help finance a lithium-ion battery resource recovery facility in Rochester, New York.   However, since that date, disturbing updates about Li-Cycle and the proposed facility have emerged.   On October 23, 2023, Li-Cycle announced it was “pausing construction work” on the Rochester facility, known as the “Rochester Hub,” pending a comprehensive review of the strategy of the project and citing “escalating construction costs.”  Additionally, Li-Cycle stock prices recently plunged following a recent disappointing quarterly earnings report and the pause on construction of the Rochester Hub.   Reportedly , Li-Cycle stock recently lost half of its value following this quarterly report, and, as of November 15, its stock prices had fallen 88 percent year-to-date.  Finally, two law firms recently announced they filed class action suits against Li-Cycle for making false and/or misleading statements and failing to disclose rising construction costs for the Rochester Hub, as well as the severity and impact of those costs.  The Committee has also learned of potential challenges with the DOE loan itself. Reportedly, Li-Cycle stated the DOE loan was to close in June of this year, but that target has been pushed back twice.   Li-Cycle also stated it will need to secure additional financing to meet DOE’s loan terms.  The Chairs requested the following information by December 18, 2023: All documents and information sufficient to show the entire LPO process for reviewing and deciding whether to approve applications for LPO loans and loan guarantees, at both the conditional and final stages, including:  Each step or stage of the review and approval process.  The names and titles of each individual federal government official, employee, consultant, or contractor who participates in each step of the process.   The names and titles of each individual federal official, employee, consultant, or contractor who must grant approval at each stage for an application to progress to the next stage.  The role of any review panels or advisory boards that participate in this process.   Any and all minutes, transcripts, or memoranda from any review panels or advisory boards that participate in this process.  All internal guidance, memos, criteria, or policies governing each stage of the loan and loan guarantee application review process, including both the conditional and final stages. CLICK HERE to read the full letter.