NUCA Supports Democrats’ Many Provisions in New Infrastructure Package

In late January, Democratic leaders of the U.S. House Committees on Transportation and Infrastructure, Energy and Commerce and Ways and Means released a blueprint for a $760 billion infrastructure package over five years. The “Moving Forward” framework would fund water resources and environmental infrastructure, broadband deployment, electric grid modernization and other energy programs, as well as highway, airport, and railway systems.

Introduced by Transportation and Infrastructure Committee Chair Rep. Peter DeFazio (D-Ore.), Energy and Commerce (E&C) Committee Chair Rep. Frank Pallone (D-N.J.), and Ways and Means Committee Chair Rep. Richard Neal (D-Mass.), the plan hopes to “bolster the federal role in order to help communities around the country undertake transformative projects that are smarter, safer, and made to last,” according to a joint press release.

While at first glance one might see this as a utility contractor’s dream bill, proposals to address climate change such as moving toward a zero-carbon infrastructure are causing concern among many infrastructure advocates. This article summarizes both the promising infrastructure investment offered in the framework as well as some of policy concerns it presents.

Clean Water

The framework provides some $40 billion for the Environmental Protection Agency’s (EPA) Clean Water State Revolving Fund (SRF) for projects that repair and rebuild America’s wastewater infrastructure. Considering that national needs are approaching $300 billion, this would be a significant step in the right direction, recognizing the meager funding levels the program has received through the appropriations process.

However, the plan codifies a “green reserve” that would require a 15 percent set aside of SRF dollars to be used “to increase energy and water efficiency or to use natural or nature-based methods,” and supports “alternative-water-source projects and nonpoint source management programs.” The plan also directs utilities to evaluate and implement practices intended to recapture and reuse energy in wastewater treatment production, including methane recapture. Federal dollars would be also be provided to prevent the discharge of pollutants in rivers and streams, and the plan supports the installation of local detection and treatment systems.

Chairman Peter DeFazio emphasized the strong climate change provisions in the package. “Our country has changed dramatically since the 1950s, yet people and goods are now literally stuck trying to move on transportation networks first developed nearly 70 years ago,” he said. “It’s past time to for transformational investments to make our infrastructure smarter, safer, and resilient to climate change, or else we will keep throwing money at an antiquated system that is only holding us and our economy back.”

Republican reception to the package has been somewhat cooler. Rep. Sam Graves (R-Mo.), the committee’s ranking member, said that “I may not agree with all of the principles in the majority’s outline, but as the Republican leader of this Committee, I expect to play a constructive role in the development of infrastructure bills before us this year, including expected surface transportation and water resources legislation.”

Safe Drinking Water and Clean Energy

The framework provides some $60 billion for safe drinking water and clean energy, $25.4 billion of which would be for transformative drinking water investments into the Drinking Water SRF as well as a range of other water programs addressing the needs of Native American tribes, lead testing for schools and childcare programs, and other lead protection efforts. It also creates a new $2.5 billion grant program to research treatments for removal of chemicals from drinking water.

Attempts to reduce greenhouse gas pollution are offered by expanding renewable energy supply infrastructure and reducing energy use and costs to address climate change. In fact, $34.3 billion would be dedicated investments intended to make the electric power grid more secure, resilient and efficient.

Democrats also intend to expand renewable energy infrastructure in low-income and underserved communities to increase climate resiliency and reduce greenhouse gas pollution across the country. The plan also supports the development of an electric vehicle charging network to facilitate the transition to zero emissions vehicles.

“There is no better way to strengthen our economy for the future than to modernize our badly aging infrastructure. This bold framework not only helps us rebuild our nation, it also combats climate change by reducing carbon emissions and moving us towards a clean energy future,” E&C Committee Chairman Pallone said. “It will also create good paying jobs, ensure that no community is left behind in the digital economy and help protect Americans’ drinking water. These are investments that we must make for the American people, and I look forward to moving this proposal forward.”

While NUCA and the Clean Water Council (CWC) will likely be supportive of SRF funding increases, some of the policies that will come with them are raising concerns.

Bond Initiatives

The Ways and Means Committee sections of the framework address two bond programs supported by NUCA in the past. During debate over the 2009 American Recovery and Reinvestment Act, programs that floated taxable bonds such as Build America Bonds (BABs) used by state and local governments to finance thousands of infrastructure projects, are back on the consideration table. The Democrats’ framework would reinstate the BAB program, and would also increase the volume cap for Private Activity Bonds (PABs) for qualified highway or surface freight transfer facilities to allow for greater investment in surface transportation public-private partnerships.

NUCA is a longtime supporter of removing the volume cap on PABs for water and wastewater, which would unleash unlimited and badly needed private-sector dollars into the market. As the infrastructure debate begins in earnest, NUCA and the CWC will support both these bond initiatives, but if (and only if) Congress expands eligibility criteria to include water and wastewater infrastructure improvements. Limiting the huge potential to surface transportation projects would be shortsighted policy and must be corrected as the package is developed and moved through the legislative process.

Broadband Deployment

To expand access to broadband internet services in unserved and underserved communities, the plan provides $98 billion to fund projects for high-speed broadband deployment though low-interest loans and grants to support the adoption of “next generation 911” services. NUCA will do its part to support broadband provisions in any infrastructure package and will encourage use of fiber-optic systems, which are widely known as the most effective technology used to deploy broadband across the country.

Highway and Transit

The framework allocates $434 billon for highway and transit programs to modernize America’s transportation network and reduce carbon pollution in the transportation sector, including rail and highway freight traffic.

Of interest to NUCA, investments would be made to build fueling infrastructure along designated highway corridors for zero-pollution hydrogen and electric vehicles, and measures to reduce pollution and congestion. The framework includes funding the Highway Trust Fund through user fees, including at airports, airways and ports, as well as several bond structures that would fund transportation projects, and expands support for new technologies that generate green energy.

Encouraging a Balanced Approach to Policymaking

In addition to the obvious support for the robust increases in funding for the SRF programs provided in the Democrats’ infrastructure framework, we also understand the need to support lead testing and other pollution control measures. We will, however, continue to encourage Congress to keep their eye on the prize. The need to refurbish “pipe and mortar” infrastructure is not going away anytime soon, and the vast majority of funding should continue to go toward traditional SRF projects. NUCA and the Clean Water Council will lead the way in advocacy efforts to ensure that federal dollars are going where they are needed most.

Further, more information about the “replacement of existing energy infrastructure” will be needed. While sound policy that enables increased use of renewable fuels is laudable, ensuring renewables as our primary energy source won’t happen overnight. Clean burning, reliable natural gas will continue to be the most viable and efficient source of energy for some time, and fast-tracking shortsighted policy goals included in proposals such as the “Green New Deal” will not get us there any sooner. Natural gas actually enables the use of renewable energy sources, and will continue to do so. Infrastructure policy should support that concept.

In addition, the idea of opening the door for more electric cars is sound – but let’s just not throw out the baby with the bathwater. Natural gas is increasingly used to generate electricity, and if Democrats are serious about goals to increase the number of electric cars on our roads, significant natural gas and the pipelines that transport the fuel will be needed to provide the electric power required to charge them.

The chances of passing comprehensive infrastructure legislation are not great in the wake of what is widely considered a destructive impeachment process before an already polarized electorate, and in a monumentally important election year.

However, this is no reason for us to take a sideline position. This will be a priority issue discussed at our upcoming Washington Summit, being held May 19-21 on Capitol Hill, an event I encourage you to participate in to lend your knowledge and expertise. (EDITOR’S NOTE: the Washington Summit has been rescheduled for Sept. 21-23, 2020. For information, go to www.nuca.com/summit.) Progress made this year on this issue will likely follow into the future as the larger debate continues over how best to rebuild America’s infrastructure.

Eben Wyman is the principal of Wyman Associates, which represents NUCA governmental affairs.

 

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