WHAT’S HAPPENING TODAY: Good afternoon and happy Wednesday, readers! Transmission is on everyone’s mind in Washington D.C. today, from the Capitol to all the way down Independence Avenue to the Department of Energy.
Democrats on the Energy and Natural Resources Committee described transmission projects as critical to meeting growing electricity demand during a hearing this morning, just minutes after the DOE pulled federal funding for a massive transmission line in the Midwest.
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Plus, with a little help from our editor Joe Lawler, today’s edition of Daily on Energy takes a closer look at the Environmental Protection Agency’s reported plans to claw back the 2009 Endangerment Finding.
Welcome to Daily on Energy, written by Washington Examiner energy and environment writers Callie Patteson (@CalliePatteson) and Maydeen Merino (@MaydeenMerino). Email cpatteson@washingtonexaminer dot com or mmerino@washingtonexaminer dot com for tips, suggestions, calendar items, and anything else. If a friend sent this to you and you’d like to sign up, click here. If signing up doesn’t work, shoot us an email, and we’ll add you to our list.
TRUMP ADMINISTRATION CANCELS MULTI-STATE TRANSMISSION PROJECT: The Department of Energy canceled a $4.9 billion loan guarantee for a massive Midwestern transmission project, marking a win for Missouri Sen. Josh Hawley, who directly lobbied the Trump administration to revoke the federal support.
The details: This morning, DOE announced that the Loan Programs Office had terminated the conditional commitment for the loan, claiming it was “rushed out the door” during the final days of the Biden administration. The agency said that, following a thorough review of the project’s financials, it determined conditions necessary to issue the loan were “unlikely to be met” and that it was not “critical” for the federal government to be involved.
It marks the latest strike from the Trump administration on the renewable energy industry, as the 800-mile transmission line, the Grain Belt Express, was poised to be primarily connected to solar and wind facilities.
Developer and owner Invenergy has insisted that the project is critical to advancing the Trump administration’s energy agenda, as it would add around five gigawatts of energy across four grid regions in Kansas, Missouri, Illinois, and Indiana.
Quick reminder: Hawley has lambasted the project, dubbing it a “green scam.” He has previously claimed it would rip “generational land” away from Missouri families and farmers. Earlier this month, he claimed he secured a promise from Energy Secretary Chris Wright to cancel the federal loan commitment.
Read more from Callie here.
SENATE SHINES LIGHT ON TRANSMISSION NEEDS TO MEET ENERGY DEMAND: As luck would have it, the Energy Department’s decision to revoke the loan agreement came less than one hour before the Senate Energy and Natural Resources Committee met to discuss why addressing transmission is crucial to meeting growing electricity demand.
The details: The hearing held this morning was intended to facilitate debate over what type of challenges the U.S. currently faces in meeting rapidly changing power needs. For many Democrats on the committee, building out transmission is central to that conversation.
“The only way to meet our growing energy demand is by building out the necessary transmission infrastructure to get power from where it’s generated to where it’s needed,” California Sen. Alex Padilla said.
This sentiment was overwhelmingly shared by Rob Gramlich, the president of power consulting firm Grid Strategies, who testified before the committee as part of the hearing. Gramlich insisted that transmission should be the “bipartisan and the unifying force” that drives congressional action on tackling energy demand.
“It has the highest impact. It’s a great integrator of all resources,” he said, attempting to dispel concerns that transmission projects are just for green energy.
“It may seem like it’s a renewable energy piece of infrastructure, but that’s just because over the last five years that’s all everybody was trying to connect to the grid,” Gramlich said, adding that new nuclear plants, data centers, and other large load facilities are going to face a constrained grid without more buildout.
Renewables in the short term: Several Democratic members pointed out that while there is a need for more firm baseload power – in the form of nuclear or natural gas – it is going to take several years before any new projects can be pumping electricity into the grid. Accordingly, they said, grid operators and companies are in no position to turn away power generated by renewable alternatives, despite the administration’s push against wind and solar.
Republican Sen. Lisa Murkowski, a proponent of the use of fossil fuels in her state of Alaska, agreed with her colleagues across the aisle on this issue, saying it is “dangerous to pick winners and losers” in the energy sector.
“We are picking the winners and losers,” Murkowski said, pointing to the Department of the Interior’s decision to have Secretary Doug Burgum review every single wind and solar project before his agency.
“I think this is going to be distracting and taking away the time that they need to be working on some of the issues…mentioned here this morning,” she said.
COUNTRIES MUST ACT ON CLIMATE CHANGE, UNITED NATIONS TOP COURT SAYS: In a landmark, nonbinding, opinion, the International Court of Justice said today that countries are under an obligation to take action mitigating and slowing climate change.
The United Nations’ top court issued the opinion after the General Assembly sought its advice on two questions:
- What are the obligations of states under international law to fight climate change?
- What are the legal consequences for states that cause significant harm to the environment?
The court unanimously agreed that states have obligations under both specific climate agreements and general international human rights law to mitigate their negative effect on the environment. If a state is found in violation, they would be required to end all actions determined to the be harming the climate and pay reparations. In the opinion, ICJ ruled that a “clean, healthy, and sustainable environment” is a human right.
The decision paves the way for legal actions regarding climate change, including lawsuits filed by developing nations against larger western countries whose emissions contribute more to climate change.
Worth noting: All members of the U.N. are parties to the court, but the Trump administration has rejected the authority of international courts in recent months. In February, the U.S. government issued sanctions against the International Criminal Court, the ICJ’s sister court.
EPA POISED TO TAKE STEPS ROLLING BACK BEDROCK CLIMATE FINDING: The Environmental Protection Agency is reportedly just days away from proposing that the U.S. overturn the 2009 Endangerment Finding, which has been the cornerstone of policies aimed at limiting greenhouse gas emissions and tackling climate change.
Both the New York Times and the Washington Post have reported that the EPA plans to propose rescinding the landmark opinion, just four months after administrator Lee Zeldin first said that the agency would reconsider it.
Quick reminder: The 2009 Endangerment Finding found that six greenhouse gasses, including carbon dioxide and methane, generated by human activity found in the atmosphere threaten public health and welfare. It was based on a 2007 Supreme Court ruling that affirmed greenhouse gases are pollutants under the Clean Air Act.
The landmark finding authorized the EPA to regulate greenhouse gas emissions from various sources, which the agency has done over the last few decades by targeting vehicles and power plants.
The proposal: In addition to proposing the rescission of the finding, sources told the New York Times that the EPA is also looking to walk back limits on tailpipe emissions imposed under the Biden administration. The sources said the EPA plans to argue that imposing these climate regulations on automakers specifically would harm humans by causing higher prices and reducing consumer choice. The agency is reportedly planning to argue that EPA does not have the legal authority to take such action to reduce the effects of climate change.
In a statement provided to Daily on Energy, an EPA spokesperson said that the agency sent its proposal to the Office of Management and Budget on June 30.
“The proposal will be published for public notice and comment once it has completed interagency review and been signed by the Administrator,” the statement continued.
EQUINOR SEES NEARLY $1 BILLION LOSS OVER WIND PROJECT STALLED BY TRUMP: Norwegian energy company Equinor has said it saw a $955 million impairment related to its Empire Wind project in New York, which was halted by the Trump administration for just over a month.
The details: The losses, detailed in the company’s latest earnings report, have been primarily attributed to the stalling of construction and an issue with the lease related to the project. Other factors include recently imposed tariffs that have driven up the cost of critical materials like steel, as well as removal of federal subsidies.
“(The impairment) is driven by regulatory changes in the U.S., particularly related to that investment tax credits have been taken away for new developments. You also have tariffs, and there’s also a presidential order stopping permitting of new offshore wind projects,” CEO Torgrim Reitan said to Reuters.
A reminder: Burgum ordered the Bureau of Ocean Energy Management to halt all construction activities on the project in April, claiming its approval had been rushed by the federal government. Equinor, which first secured the lease to build the wind farm during the first Trump administration, insisted the pause was illegal. The Trump administration ultimately lifted the stop-work order in mid-May. The company previously warned that the pause was costing Equinor around $50 million per week.
AI DEMAND IN FOCUS AS PJM PAYS RECORD PRICES: The largest U.S. power auction, held yesterday by grid operator, PJM Interconnection, resulted in prices 22% higher than last year’s record, Reuters reports.
The soaring prices reflect demand outstripping supply, which many analysts blamed on the consumption from data centers used for artificial intelligence.
PJM executive vice president Stu Bresler said in a press briefing that “the majority of the demand increase you saw was large loads and data center additions,” according to Bloomberg.
Virginia, home to the largest collection of data centers in the world, is one of the 13 states and the District of Columbia served by PJM.
PJM said that the wholesale price increase would translate to only a 1.5% to 5% increase in some customers’ bills.
Still, the auction has analysts warning of the price hikes coming thanks to AI demand.
“It literally tells you we are out of generation,” Sean Kelly, CEO of the forecasting firm Amperon Holdings, told Bloomberg. “It’s good for traders, it’s good for asset owners, it is not good for consumers.”
PJM said that it added 2,669 megawatts of new capacity, from upgraded and new power sources. It said the power mix would be 45% natural gas, 21% nuclear, 22% coal, 4% hydro, 3% wind and 1% solar.
The Sierra Club faulted PJM for failing to connect renewable energy sources quickly.
“PJM has failed our communities through its refusal to adopt substantive reforms, completely at odds with its mission of providing reliable energy at the lowest cost to its customers,” Sierra Club senior adviser Jessi Eidbo was quoted by Reuters as saying.
WHITE HOUSE UNVEILS AI ACTION PLAN: The White House released President Donald Trump’s long-awaited “AI Action Plan” today, which included several policy recommendations for developing an electric grid that can support rapid AI advancements.
The plan, which largely aims to scale back regulation for AI, calls for the swift stabilization of the U.S. grid by stopping “premature decommissioning of critical power generation resources” and exploring “innovative ways to harness existing capacity.”
It also calls for regulators to optimize existing grid sources to upgrade and build out the transmission system, as well as prioritize the interconnection of reliable and dispatchable power sources like nuclear and geothermal. Additionally, the plan orders the creation of a strategic blueprint focused on “navigating the complex energy landscape of the 21st century.”
JAPAN TRADE DEAL INCLUDES AN LNG JOINT VENTURE? Trump said yesterday that a newly struck trade deal with Japan will include a joint venture to ship LNG out of Alaska. Details, though, are scant.
“We concluded the one deal … and now we’re going to conclude another one because they’re forming a joint venture with us at, in Alaska, as you know, for the LNG,” Trump said, according to OilPrice.com.
An administration official told Bloomberg that funding for an Alaska LNG venture could come from a $550 billion Japanese-backed investment fund for projects in America that was part of the deal, and that most of the profits would be reserved for the U.S.
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