Good Provisions in Senate’s DOE Budget Bill, but Gaps Remain

Gabe Alvarez co-authored this blog.

The Energy & Water spending bill approved last week by the Senate Appropriations Committee for fiscal year (FY) 2022 makes encouraging steps in funding the Department of Energy’s (DOE) vital clean energy programs. Compared to the counterpart legislation passed by the House, the Senate makes larger investments in some key areas and lags behind in others. Both the House and Senate bills boost the DOE’s annual budget (some of which supports the agency’s non-energy defense activities) by over $3 billion, but overall, the allocations proposed by both chambers of Congress fall short of the transformational budget we need to jumpstart clean energy innovation and confront the climate crisis head-on by building an equitable, clean economy. While the infrastructure bill passed by the Senate today includes major new investments in DOE-led demonstration projects, it is also critical to increase regular annual funding for DOE programs and refocus the agency's efforts on combating climate change, advancing equity and justice, and creating good jobs and economic opportunity.  

The new alarming report from the United Nations on climate change, sounding what U.N. Secretary-General Antonio Guterres called a “code red for humanity,” emphasizes once again the need to rapidly accelerate the transition to clean energy, including through massive investments in DOE programs. 

The Senate’s bill contains essential provisions that direct and fund the DOE to accelerate the development and deployment of clean energy technologies and center equity and environmental & energy justice in its programs. Nonetheless, the Senate allocates only a 15 percent budget increase to the DOE’s science and energy programs, coming up $1.6 billion short of the 28 percent increase requested by the Biden-Harris administration.

As this bill moves forward in the Senate and the conference committee reconciles the differences between the House and Senate spending proposals, lawmakers should act decisively to further bolster investment in clean energy by building on the increases present in both bills and aligning the overall budget strategy more closely with the President’s request.

Strong Senate Support for the Clean Energy Economy

In the report released alongside the Senate’s appropriations bill, the committee signals support for many important programs that seek to catalyze the clean energy revolution and gives direction that focuses the DOE’s work on addressing the climate crisis, creating good, green jobs, and championing equity. Below is a small sampling of the promising provisions included in the bill:

• Support of the Justice40 initiative and encouragement to engage with communities impacted by climate change, air and water pollution, systemic racism and underinvestment, high energy costs, and economic inequality
• Direction to advance distributed solar and energy storage technologies for households and communities in Tribal nations that lack connection to the electric grid
• Direction and funding to expand work to lower barriers to solar adoption for low-income households, renters, multi-family homes, and racially diverse communities
• Support for the development and deployment of transformative clean energy programs that create good paying jobs working with qualifying local governments and Tribal Nations, with a focus on energy communities and disadvantaged or small-to-medium jurisdiction
• Encouragement to develop programs that support a skilled, robust, and diverse solar energy workforce
• Direction to support innovative offshore wind demonstration projects to optimize their development, design, construction methods, testing plans, and economic value proposition
• Direction to develop strategies and activities to increase adoption of energy-saving and emissions-saving technologies for low-income households, multi-family buildings, and minority communities
• Encouragement to explore ways in which the Clean Cities Program can leverage funding to provide greater support for electrification efforts, including in underserved communities, recognizing the strong emissions reduction and public health benefits delivered by electrification

Moreover, in several crucial areas, the Senate backs up its strong language with robust funding which meets the urgency of the moment. For example, the Senate committee provides funding equal or greater to the amounts requested by the President for the offices dedicated to wind energy, advanced manufacturing, and building technologies. With these funds, these programs will be able to take advantage of enormous opportunities to improve offshore wind technologies, expand domestic clean energy manufacturing, and create a cleaner, more equitable building sector. We urge the House to follow the Senate’s lead in fully supporting these bold funding proposals.

Congress Must Address Gaps in the Bill

At the same time, the Senate legislation lags behind in other areas central to clean energy innovation. For instance, the White House called for more than five times as much additional funding for the Solar Energy Technologies Office (SETO) as the Senate committee includes with its 7 percent proposed increase. The House provides a significantly stronger budget for SETO, proposing a 25 percent increase over FY21 levels.

Additionally, Biden’s new Build Back Better (BBB) Challenge Grants program, designed to “incubate novel approaches to clean energy technology deployment, prioritizing investments that meet energy needs at the local level, and are inclusive in elevating impoverished and disenfranchised communities, and/or communities that have been marginalized or overburdened,” is given only $20 million by the Senate, less than a tenth of what the administration had outlined and a fifth of what the House allotted.

Similarly, the Senate bill suggests allocating only $100 million for the Office of Clean Energy Demonstrations, an essential component of the President’s proposed clean energy innovation plan, while the House proposed doubling the funding to $200 million. The President’s request called for the office to be funded with $400 million. We call on the Senate to increase the budgets of SETO, the BBB Challenge Grants program, and the Office of Clean Energy Demonstrations at least to the levels proposed in the House, and ideally to those requested by the President.

There are also differences in direction between the House and Senate reports which we hope can be resolved with environmental and equity concerns in mind. Take natural gas, for example, a dirty fuel whose growth and current usage are understood to be incompatible with climate goals. Whereas the House directs the DOE to “phase down all research, development, and commercialization work related to gas systems and appliances,” the Senate encourages them to “continue to explore research and development that can advance future natural gas and propane gas systems and appliances.”

Furthermore, while the House provides detailed direction to the DOE to incorporate equity and environmental & energy justice into agency planning and decisions through new analysis, grantmaking criteria, community engagement and support for state, local, and tribal governments, the Senate takes a less directive approach, calling on the Department to “survey its current programs, grant-making, policies, procedures, and rules to ensure that it is adequately meeting the clean energy, energy conservation, and energy efficiency needs of low-income, minority, and other marginalized communities.”

While both chambers directed DOE to expand important workforce development efforts, this language needs to be stronger to ensure that the agency supports good-quality jobs with family-sustaining wages and benefits.

We urge the Senate to support the House’s DOE direction to phase down work on natural gas appliances, to endorse the House’s call to immediately integrate the principles and practices of equity and environmental & energy justice throughout the entire Department, and to strengthen job quality protections and workforce development direction.

As the above budget breakdowns demonstrate, even in many cases in which a Senate-proposed increase exceeds the House’s, it is still dwarfed by President Biden’s request. For example, alongside other historic funding for clean energy, the President’s bold budget called for a total FY22 budget of $4.7 billion for the Office of Energy Efficiency and Renewable Energy (EERE), a 65 percent increase over FY21 levels. In allocating a 36 percent increase to EERE, the Senate surpasses the House’s suggested 32 percent, but still provides only slightly more than half of the new funding requested by the White House, a request which is in turn still too low to cover all the EERE funding needs identified by NRDC.

Despite both amounts being well above last year’s budget, the shortfall in the Senate and House allocations for EERE are concerning because—as noted in previous NRDC blogs—EERE’s efforts to support renewable electricity, zero-emission transportation, clean manufacturing and heavy industry, and building decarbonization are particularly underfunded relative to the need for investment, and the office will play a critical role if the Biden administration is to fulfill its promise to “Build Back Better.”

In order to deliver a federal budget ready and able to confront the climate crisis we are already living through, leaders in Congress must build on their hard-fought wins from the past few years and take bold steps to bring the funding and direction for DOE and other agencies in line with the President’s agenda on climate, equity, and environmental & energy justice. Aggressive funding and visionary direction are exactly what is required to build the inclusive clean energy economy we need for our communities.