Permitting, Transmission, and Nuclear, Oh My!

Highlights of some not-so spooky energy actions in the past week.

Happy Halloween everyone! Times are spookier than ever, but in my ongoing search to find good-news stories and progress on the clean energy/climate front, the past week held some gems that you may have missed in the chaos.

First, this week a group of thirteen bipartisan governors, led by Governors Shapiro and Stitt, sent a letter to Congress highlighting a list of agreed-upon actions Congress should make to improve permitting. Many of the actions in the letter are low-hanging fruit that should find bipartisan support on the Hill – I know personally when on EPW’s permitting team, we included some of these ideas in former EPW Chairman Tom Carper’s PEER Act in 2023. The question now for me - has the well been too poisoned for bipartisan action with the Administration’s continued hostility toward permitting any renewables (and actions on funding) for there to be bipartisan action?

Second, the Department of Energy (DOE) took the unusual action of directing FERC to finalize a rulemaking by April to address large co-located load and generation interconnection. FERC doesn’t have to take the DOE’s direction, but I expect the agency will act in some way. I find the directive very interesting, if done well, could help AI datacenters come online faster and pave the way to release the logjam of renewable power waiting for interconnection. The queue for any new energy trying to connect to the grid is getting impossibly long, especially when we urgently need more power to meet surging demand. Improving interconnection timing and expanding FERC’s jurisdiction over interconnection to help overcome delays, was something Senate Democratic members prioritized when negotiating permitting reform last Congress and included in the Manchin-Barrasso permitting legislation. I can say from my perspective as the lead on energy issues for EPW, improving the interconnection process and process for transmission planning/deployment were all top priorities for former EPW Chairman Carper in any permitting discussion. What will be interesting to see is what states will do with any action taken by the Trump Administration in this space – especially Texas. Texas’s entire grid system is designed to keep FERC out of any grid decisions in the state and even the Manchin-Barrasso legislation exempted ERCOT from FERC’s expanded jurisdiction.

Third, the Trump Administration announced this week an $80 billion partnership with Westinghouse to build AP1000 in the United States, with the U.S. taxpayer entitled to up to 20 percent ownership of Westinghouse. The AP1000 is not considered advanced reactor technology, but is a solid light-water reactor that uses passive technologies that are more advanced (and safer) than conventional LWRs. This decision could be just what the nuclear industry needs to accelerate the construction of new reactors in this country. However, I do have many questions on the deal. The cost overruns under prior management at Westinghouse often get blamed on the NRC, but a large portion of the overrun costs were in part because of the mismanagement of subcontractors (and the lost expertise due to the fact we haven’t built a new reactor in decades). Will USG have more of a say on how these plants are built and managed with such a large stake in the game? For example, will USG restrict golden parachute payouts with taxpayer dollars, will USG have protections against cost overruns, and will USG require Davis Bacon apply to construction, as required with other taxpayer infrastructure investments? If there are cost overruns, do we have any outs for the taxpayer like we do with the loan guarantee program? And the USG stake creates an unusual dynamic with the NRC. I never expected it would be politically palatable for the U.S. taxpayer to take ownership of a company – other countries have taken this path, France and China are just two examples and been successful – but this approach does pick winners and losers and potentially exposes taxpayers to greater risk than traditional financing mechanisms. Color me optimistic, but I am watching this space closely.

- Laura Gillam, Founder and President of ResilientPath Strategies
Former Associate Director at the Office of Management and Budget in the White House and Former Senior Staff on the U.S. Senate Environment and Public Works Committee