Signs of Life for Federal Clean Energy Legislation

By Christian Roselund

After months of inaction, signs are emerging that federal legislation that could contain clean energy provisions is being crafted in the U.S. Senate. In December 2021 Senator Joe Manchin killed the Democratic Party’s Build Back Better by withdrawing his support and joining united Republican opposition. Recent developments suggest that he is actively working to create a new omnibus bill. However, time is running out to pass legislation before the U.S. Congress takes its August recess.

As the first piece of evidence, E&E News reports that Senators have sent an agreement on prescription drug pricing to the Senate Parliamentarian for review. This is a necessary step to ensure that it will fit in the narrow rules for legislation to pass with a simple majority of only 51 votes. Drug pricing was part of the original Build Back Better Bill, along with extensions and other changes to solar and wind tax credits, expanded incentives for EVs, new tax credits for solar manufacturing, and other provisions.

As the second, Senate Minority Leader Mitch McConnell has warned that he will kill the America COMPETES Act, a wide-ranging bill that includes support for the domestic semiconductor industry, if Democrats put forward a bill using the reconciliation process. The reconciliation process allows votes to avoid the filibuster and pass with a simple majority. This would allow Democrats to pass a bill with no Republican support in the 50 – 50 senate, by using the Vice President’s vote in the event of a tie. Given his position as minority leader Senator McConnell would be unlikely to mention the reconciliation bill or issue a threat in response to it unless such a bill were viable, and therefore this is a sign that the bill may be moving forward.

Senator Manchin has been controlling the process of crafting a successor bill to Build Back Better. Manchin initially attempted to work with Republicans to write a bipartisan bill. However, he abandoned that effort after it was clear that the Republican Party saw no common ground with Democrats on a range of issues. In early June 2022 it emerged that he was again working with only Democrats on a reconciliation bill, but news on developments has been scarce.

Manchin has been openly critical of several provisions in Build Back Better, including additional incentives for electric vehicles made with union labor. It is not clear whether the extensions of the Investment Tax Credit (ITC) for solar and Production Tax Credit (PTC) for wind, including a direct pay option, will be in the new legislation. It is also not known whether the dedicated incentives for solar manufacturing, originally contained in Senator Ossoff’s Solar Energy Manufacturing for America (SEMA) Act will be in the successor bill. In June, lobbyist Rhone Resch put the odds of SEMA being in the new bill at 50 – 75%.

Any legislation that comes out of these efforts must pass the House of Representatives by July 29, when it goes to recess, and must pass the Senate by August 5. Otherwise, it must be re-introduced when Congress re-convenes for a new session in September.

Read more:

News/analysis: Democrats inch forward on reconciliation package (E&E News)

News/analysis: McConnell: No innovation bill if Dems pursue reconciliation (E&E News)