August 2021 Vol.76 No. 8
Washington Watch
Democrats Lay Out Speculative Marker for Water Infrastructure
By Stephen Barlas, Washington D.C. Editor
The U.S. House of Representatives passed the Invest in America Act (H.R. 3684) in June, which is the Democrats’ bid for the infrastructure piece that could be included in whatever bipartisan infrastructure bill Congress passes and President Biden signs. The Invest Act reauthorizes and funds, at higher levels than in the past, both the Clean Water and Drinking Water State Revolving Funds, which support local projects. The bill passed on July 1 by a vote of 221-201 with only two Republicans supporting it.
That the House bill has minimal Republican support means its contents, from highway to bridge to water infrastructure spending, may or may not survive in whatever Senate bipartisan bill emerges. It has not been written yet and may not pass the Senate or House. Moreover, a bipartisan “water only” bill passed in April has considerably smaller SRF funding numbers.
But for the moment, House Democrats want to spend $117 billion on drinking water projects and $51.25 billion on sewer projects, both those sums over five fiscal years, from fiscal 2021, starting Oct. 1, 2021, to fiscal 2026.
Of the drinking water proposed spending, $53 billion would be for the DWSRF and $45 billion to fully replace lead service lines throughout the nation.
Notable in the wastewater portion is $40 billion for the Clean Water State Revolving Fund and $2 billion for projects to capture, treat or reuse sewer overflows or stormwater – helping keep pollution out of local rivers and lakes – and $2.5 billion for state water pollution control programs.
To get a sense of how speculative the House funding numbers are, the Senate passed on April 29 a bill called the Drinking Water and Wastewater Infrastructure Act of 2021 by a vote of 89-2. It also reauthorizes both the SRFs for five years for a total of $14.7 billion each. Those annual allotments are substantially lower than what is in the House Invest Act, reflecting compromises Democrats in the Senate made in order to attract needed Republican support.
It is clear the House Invest Act is not going to sell well among Republicans in the Senate. Rep. Sam Graves (R-Mo.), top Republican on the House Transportation and Infrastructure Committee, blasted the Invest Act saying, “This bill is nothing more than the Green New Deal with a little infrastructure sprinkled on top.
“It’s completely unpaid for and it does nothing to fix the broken bureaucratic system that drags out major highway projects for years and eats up almost 30 percent of our transportation dollars. We need real bipartisan solutions to fix real infrastructure in America. This bill doesn’t do that, it’s just the first step in the Speaker’s $6 trillion spending plan that will drive more inflation – increasing the price of everything, from gas to groceries, and taxing middle-class families.”
Federal court increases democratic leverage at FERC on pipeline standards
A federal court decision stopping operation of the Spire STL pipeline in Missouri strengthens the hands of the Democratic leadership of the Federal Energy Regulatory Commission (FERC), as it considers pipeline-opposed changes to its 1999 pipeline approval policy standards.
The U.S. Court of Appeals for the District of Columbia, the second-highest court in the U.S. with authority over federal regulatory policy, on June 18, 2021, cancelled FERC’s 2018 certification of the 66-mile, St. Louis-area pipeline, citing FERC’s failure to adequately determine if there was an actual need for the additional capacity. FERC’s 1999 pipeline policy statement lays out general – some would argue, vague – guidelines for proving “need.” The pipeline is already in operation and serves about 650,000 people according to the company.
Jason Merrill, a spokesman for Spire, says the pipeline is still operating. “We’re evaluating our next steps,” he added.
Spire could petition the three-judge panel that issued the ruling for a rehearing within 45 days, which would put off the requirement to close down the pipeline. The panel might then reverse its decision to cancel the pipeline, based on the loss of service to customers if Spire couldn’t contract with another pipeline. One attorney in Washington familiar with the case called the court’s vacating a certificate a drastic remedy, which the court does not often use in FERC pipeline cases.
In a similar situation a few years ago, the DC court vacated the certificate for the Sabal Trail pipeline. FERC, under a Republican-controlled commission, reissued the certificate so there was no stoppage in service. But current FERC Chairman Richard Glick dissented when the Spire certificate was first approved so he may not feel moved to reissue it.
To establish “need,” Spire leaned on its contract with its subsidiary, Spire Missouri, for 87.5 percent of the pipeline’s capacity. Precedent agreements with subsidiaries and other connected partners are one of the aspects of the 1999 policy that FERC will examine. In particular, the appeals court said that FERC’s decision to approve the Spire pipeline “seemed to count the single precedent agreement between corporate affiliates as conclusive proof of need. Nothing in the Certificate Policy Statement endorses this approach.”
FERC Democratic Chairman Glick said the appeals court’s decision “shows that when FERC cuts corners with its analysis, it puts its decisions – and the investments made in reliance on those decisions – at substantial risk.” He expressed his desire to revisit the Commission’s approach to assessing the need for an interstate natural gas pipeline in its currently pending notice
of inquiry (PL18-1).
The Environmental Defense Fund (EDF) asked FERC initially to take a second look at its decision to approve the pipeline. When the commission rejected the rehearing request in December 2019, the EDF filed its legal case with the DC Court of Appeals arguing FERC had not established need and that there had been self-dealing by Spire.
A second petitioner who joined with the EDF filed a second complaint: that FERC should have done an environmental impact statement (EIS) instead of just an environmental assessment (EA). The court rejected this second argument because the petitioner, a woman who lived near the pipeline and complained about noise, emissions, eyesores and other things, did not have “standing.” But the standard for FERC to order a more searching, detailed EIS after an environmental assessment is performed, is another issue FERC is considering as part of its work on a docket numbered PL18-1.
The two Democratic commissioners (a third will be appointed later this summer when the term of the third Republican commissioner expires) have already signaled they want more impact statements. In fact, on May 18, at an open meeting, Chairman Glick and Commissioner Allison Clements issued partial dissents for two pipeline incremental expansion projects on grounds that FERC should have
prepared an EIS to assess the risks related to climate change.
Then, a little more than a week later, all five commissioners ordered EISs for somewhat small projects for which the staff had done EAs. The initiation of a follow-on EIS for the projects will add significant time to their FERC approval process. The impacted projects’ EAs were published either in first quarter 2021 or during the second half of 2020.
Emily Mallen, an attorney in Washington with Sidley Austin, said, “Whereas FERC typically would commit to issuing an order within 90-days of completing an EA, the pipeline operators subject to the new notices should not expect decisions on their pending applications before December 2021. However, each notice provides a project-specific timeline.”
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