California eyes power market move out West Presented by Chevron

With help from Anthony Adragna, Alex Guillén and Darius Dixon

HOW POWER MARKETS IN THE WEST COULD BE WON: When Enron’s market manipulation in the early 2000s caused widespread blackouts and power prices to skyrocket in California, it helped kill a FERC effort to expand competitive power markets into the state. California Gov. Jerry Brown, trying to leave his mark in his last year in office, is now laying the groundwork for a power market and transmission organization that would run across seven states, Pro’s Eric Wolff reports. The effort has the tentative support of some FERC commissioners and could advance greens’ agenda to fight climate change by driving down power prices while also greening up the grid.

A bill moving through the state Legislature with Brown’s support would let the California Independent System Operator expand its footprint across the West, but it would need to pass before state lawmakers adjourn Nov. 30. Environmentalists also worry the new market could relinquish some of California’s control over transmission lines to states that are more concerned about maintaining coal and natural gas production jobs than reducing emissions. “Suddenly we would have in the same balancing authority, a whole bunch of at-risk coal plants that California might have to subsidize,” said Matt Friedman, a staff attorney with The Utility Reform Network, a public advocacy group. "We don’t have that at-risk coal [in] California. There's no mechanism [right now] for FERC to use to force Californians to pay for those plants."

FERC has long advocated for the expansion of competitive power markets. "The resource mix is making it more advantageous for people to share power over a bigger footprint, and save money and increase reliability, so what’s not to like?” FERC Commissioner Cheryl LaFleur, a Democrat, told Eric. And the enthusiasm surrounding the idea has Regional Transmission Organizations headquartered as far away as Pennsylvania and Arkansas eyeing the region for possible expansion — though setbacks have occurred in some of those efforts, leaving the California Independent System Operator well positioned to expand its reach. Read the story here.

IT’S WEDNESDAY! I'm your host, Kelsey Tamborrino. Entergy’s Rob Hall knew the four former presidents who have half-siblings: Franklin D. Roosevelt, Gerald Ford, Bill Clinton and Barack Obama. For today: Which current House lawmaker represents the district with the highest median income in the nation? Send your tips, energy gossip and comments to [email protected], or follow us on Twitter @kelseytam, @Morning_Energy and @POLITICOPro.

JUDGE REJECTS NYT FOIA SUIT: A federal judge on Tuesday tossed a lawsuit brought by The New York Times against EPA that asked for Scott Pruitt’s detailed schedule to be released automatically on a rolling basis. The Times argued that a provision of the FOIA law requires agencies to post to electronic “reading rooms” any documents requested at least three times, and that Pruitt’s constantly-requested calendars should be released that way regularly. But Judge John Bates of the U.S. District Court for D.C. ruled that the FOIA law “does not enable plaintiffs to seek all future entries in the Administrator’s detailed calendar on a rolling basis; it only requires an agency to make publicly available documents that have already been created, requested, and released in the past.”

Bates was not unsympathetic to the plight of news reporters who have had to wait many months before EPA has released Pruitt's schedule. He told the Times that it should consider taking its complaint to Congress by seeking a change to the FOIA law. Bates also noted the "strong interest" in Pruitt's calendar, and said "EPA would do well to consider adopting a more proactive stance and releasing the calendar on a rolling basis." But EPA cannot be required to publish the calendars that way, he said.

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ABOUT THAT ARPA-E WE WANT TO AXE: The Trump administration has repeatedly told Congress that the Energy Department’s Advanced Research Projects Agency-Energy ought to be flushed down the budgetary toilet — only to have Congress so far insist on continuing to fund the program. Now, the administration has nominated someone to run it. Late Tuesday, the White House announced plans to nominate S. Lane Genatowski, an investment banker with an energy focus who has worked at Bank of America, Wells Fargo, JP Morgan Chase, and Kidder, Peabody, to run ARPA-E. The short list of ARPA-E directors has mainly been scientists with some business acumen, but Genatowski’s resume lines up with others in Rick Perry’s Energy Department, which focuses more on businessmen with energy sector experience.

EO REINS IN REGULATORY JUDGES: President Donald Trump signed an executive order Tuesday, tightening control over so-called administrative law judges and giving agency heads greater discretion over their selection, Pro’s Andrew Hanna reports. The executive order follows a June ruling by the Supreme Court that said the SEC’s administrative law judges must be hired by SEC commissioners and not professional staff. Although it remains unclear if that ruling applies to all such regulatory judges, the Trump White House seems to be taking the broadest view, Andrew writes. The EO will make it easier for the White House to compel regulatory judges to follow its anti-regulatory policies — and to fire them if they don't, he writes. Read more here.

FIRST TEST FOR THE NEW BOSS: Acting EPA Administrator Andrew Wheeler will address agency staff today at an all-hands meeting, with press invited to attend — a far cry from similar meetings under Pruitt where reporters were often shut out. Although there will be no question-and-answer session at today’s meeting, it arrives after EPA public affairs official John Konkus said earlier this week that “a change is coming” within the agency, and noted that Wheeler is aiming for less secrecy. ME will be watching especially for whether and how Wheeler seeks to calm his 14,000 employees. Pruitt’s abrupt departure following months of controversy and a year of deregulation and workforce reduction has left many at the agency feeling anxious about EPA’s future.

Blast from the past: Wheeler may have an easier time boosting EPA morale than Bill Ruckelshaus did following the turbulent 1983 departure of Anne Gorsuch Burford. ME dug up a 1983 copy of “EPA Journal,” a quarterly magazine the public could subscribe to, and it illustrates just how dire things were 35 years ago. The July edition from that year promised EPA workers a more stable, transparent EPA during Ruckelshaus’ second tour. “There will be no hit lists. There will be no big-P political decisions and there will be no sweetheart deals,” the magazine quotes Ruckelshaus as saying, referring to a list he discovered that Burford political appointees had made of career officials they wanted fired for disloyalty. Ruckelshaus also issued the famous “fishbowl memo” demanding transparency at EPA in 1983.

2 MORE EXIT EPA: On top of spokesman Jahan Wilcox’s exit from EPA Tuesday to work on Republican campaigns, ME confirmed both Hayley Ford and Lincoln Ferguson, aides to Pruitt, are also leaving the agency. “While I am proud of the important work that was accomplished under Administrator Pruitt’s leadership, my wife and I look forward to returning home to welcome our first son in the great state of Oklahoma,” said Ferguson, a senior adviser to the administrator, in a statement. “I wish Acting Administrator Wheeler and the hardworking EPA staff the very best as they continue to better our nation’s environment.” In his own statement, chief of staff Ryan Jackson thanked “all those who are moving on to new endeavors for their service to EPA.”

NO RUSH FOR EPA CONFIRMATION FIGHT: Coming off a series of contentious scandals centered around Pruitt, GOP senators say they aren’t looking to take up a confirmation fight for Pruitt’s permanent replacement any time soon. Nearly a dozen Republicans said this week that they are comfortable with Wheeler’s ability to run the agency indefinitely, POLITICO’s Anthony Adragna reports, especially with a Senate schedule chock full of spending bills and Supreme Court fights.

Still, corn-state Republicans remain concerned over Pruitt’s handling over the Renewable Fuels Standard, and are pushing for a meeting in the near future to discuss the matter with Wheeler. “The Senate shouldn’t rush to confirm a replacement for Pruitt until we more fully understand the damage done to the RFS by Pruitt and what can be done to make it right,” said Sen. Chuck Grassley. Read more.

NOT DONE YET: The top Democrat on the Environment and Public Works Committee said he hopes the more than a dozen ethics probes into Pruitt’s conduct continue. “A couple of them will kind of fade out, die out on their own accord, but there are a number that should keep going,” Sen. Tom Carper told reporters Tuesday, citing the investigations into Pruitt’s security expenses and travel in particular. The EPA inspector general said last week that up to four final reports are expected out this summer.

THE WORD ON WRDA: Carper told ME that lawmakers are working on a manager’s amendment for the bipartisan America's Water Infrastructure Act, S. 2800 (115), that would clear the way for floor consideration of the water resources package next week. “My hope is we’d do it next week,” he said, adding he expected the chamber would need a couple of days to process the legislation. A spokesman for EPW Chairman John Barrasso said he’s “working with members to have the bill hotlined ahead of floor consideration.”

GREENS ASK WHEELER TO ENFORCE GLIDER RULE: Three environmental groups on Tuesday asked EPA to resume enforcement of a 300-unit production cap for companies that make glider trucks (refresh yourself on the details in Monday’s ME). EPA on Friday said it would not enforce the production cap included in an Obama-era truck rule, allowing glider manufacturers to sell potentially 10 times as many units in 2018 and 2019. “It is telling that this indefensible decision to stop enforcing this vital regulation took place under cloak of administrative darkness, during the final night of Mr. Pruitt’s tenure,” the green groups wrote. “This decision mocks basic norms of transparency and accountability, as well as the rule of law, and it severely and needlessly harms the public that EPA is entrusted to serve.”

CEQ GIVES MORE TIME ON NEPA: The White House’s Council on Environmental Quality is giving the public until Aug. 20 to comment on its overhaul of the National Environmental Policy Act, according to a notice set to publish today in the Federal Register. The comment period for the advance notice of proposed rulemaking was initially scheduled to close on July 20.

NEXT UP: The Senate will likely take up the next minibus the week of July 23, Pro Budget and Appropriations’ Sarah Ferris and Jennifer Scholtes report. The Senate spending package is set to include its Interior-Environment bill, S. 3073 (115), as well as a Financial Services measure, S. 3107 (115). Both bills are slated for a vote in the House next week. More here.

MAIL CALL! WHAT’S THE GRID PLAN? Ranking members on four House Science subcommittees requested a GAO investigation Tuesday into cybersecurity threats to the electric grid. In a letter to Comptroller General Gene Dodaro, they call for an evaluation of whether utilities currently use Moscow-based Kaspersky Lab products on their networks and have qualified cyber experts in their ranks. Read the letter here.

— More than 450 veterans, through the Vet Voice Foundation, sent this letter to Mitch McConnell and Paul Ryan, calling on them to rid NDAA conference negotiations of any controversial riders including the sage grouse.

DRIVER CITED FOR MINE SPILL: A driver in Colorado was cited for careless driving Tuesday, following a truck crash that resulted in treated mine waste spilling into a nearby creek, The Associated Press reports. The driver lost control of his truck, while hauling the waste from a plant cleaning up water draining from the Gold King Mine — the same mine that dumped 3 million gallons of polluted water into Colorado’s Animas River in 2015. EPA says 7 cubic yards of waste spilled into the creek, AP reports.

MAINTENANCE BACKLOG ON TAP: The Senate Energy and Natural Resources Committee holds a subcommittee hearing this afternoon on S. 3172 (115), the “Restore Our Parks Act,” compromise legislation that would address the maintenance backlog of the National Park Service — an effort championed by Interior Secretary Ryan Zinke. If you go: The hearing begins at 3 p.m. in 366 Dirksen.

— Ahead of the hearing, Collin O’Mara, president and CEO of the National Wildlife Federation, sent a letter to the committee urging action on wildlife habitat restoration, maintenance of recreational infrastructure, and land conservation.

QUICK HITS

— “Major warning about Michigan PFAS crisis came 6 years ago,” MLive.

— “New York appeals court suspends lawyer who sued Chevron over Ecuador claims,” Reuters.

— “W.Va. governor pushing Trump for coal subsidy, but details of plan scarce,” S&P Global.

— “Pompeo leaves door open to waivers on Iranian oil imports,” The Hill.

— "CME Group, Cheniere Energy team up to launch LNG futures contract," The Wall Street Journal.

— "Former Putin adviser has secret investment in US energy firm praised by Trump," The Guardian.

CORRECTION: A previous version of Morning Energy misidentified the type of firm Rokala joined. Cassidy & Associates is a lobbying firm.

THAT'S ALL FOR ME!

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