What’s Going on in Congress? | 2022 Midterms and FY23 NDAA

Congress Approaching the 2022 Midterms

Congress has been on recess since early October as members gear up for the 2022 midterms. As a result, there has been little movement on several key bills that Congress hopes to pass before the end of the calendar year. The FY23 appropriations bill is currently slated to be considered once the current continuing resolution (CR) expires on December 16.

Sen. Jack Reed (RI) and Sen. Jim Inhofe (OK), Chair and Ranking Member respectively of the Senate Armed Services Committee have signaled they hope to bring their chamber’s version of the annual National Defense Authorization Act (NDAA) up for consideration in the coming weeks.

Senate Lawmakers to Consider Manager’s Package of Amendments in FY23 NDAA

Before going on recess in early October, Senate Armed Services Committee leaders Reed (RI) and Inhofe (OK) opened deliberation over the FY23 National Defense Authorization Act (NDAA), filing an amendment in the nature of a substitute (S. Amdt. 5499) that includes the Committee passed bill text of H.R. 7900 and an additional 75 amendments submitted by other Senators. As one of two annual must-pass bills, Senate lawmakers will have little time to consider this draft version of the bill during the post-midterm lame-duck session. This version of the annual defense policy bill authorizes $817 billion for the Department of Defense (DoD) and $29 billion for defense-related programs under the Department of Energy (DOE). The manager’s package of amendments incorporated into the bill text includes a wide range of policy issues, as Senators sometimes use the bill as a legislative vessel for other priorities. The 75 amendments included were chosen out of over 900 submitted amendments to the bill. Some notable inclusions are:

For a complete list of submitted amendments that were incorporated into the senate manager’s package, see here. 

The Department of Energy Awards $2.8 Billion for Battery Materials

On October 19, the Department of Energy (DOE) announced recipients of $2.8 billion in Bipartisan Infrastructure Law (BIL) funding to strengthen domestic manufacturing of electric vehicle (EV) battery supply chains. This is the first major government funding for EV battery manufacturing since the 2009 American Recovery and Reinvestment Act. Nearly 200 companies submitted proposals to this highly competitive solicitation which resulted in 21 awards. The federal funding per award ranged from $50 million to $316 million with the average recipient cost share accounting for 69% of the total project cost. A list of all the recipients can be found here.

These awards constituted the first tranche of $6 billion in total funding provided by the Bipartisan Infrastructure Law to expand and strengthen domestic manufacturing and materials for batteries. Projects in the first round addressed the battery material supply chain, specifically sourcing critical minerals such as lithium, graphite, and nickel and critical components such as separators and electrolyte materials. While no cell or battery manufacturers were selected, the Inflation Reduction Act provides major tax incentives for companies.

SMI’s Mr. Patrick Davis, Dr. Drew Ronneberg, Mr. Mark Gillman, and Mr. Damian Kunko represented companies that won five of the 21 awards, totaling over $800 million in federal funding for SMI clients. SMI worked directly with these clients to develop highly responsive proposals, participating in the development of project concept, location, Diversity Equity and Inclusion (DEI) responses, red teaming, advice on cost share, and leveraged their network of grant writers, setting their clients up for success.

DOE is likely to announce the next round of BIL battery funding in the next 12 to 14 months. If you would like to speak with SMI’s team about submitting a proposal to the next round of manufacturing grants, please contact Dr. Drew Ronneberg at drew@strategicmi.com or Mr. Patrick Davis at patrick@strategicmi.com.

SMI Participates in the 2022 International Conference on Ocean Energy (ICOE)

SMI’s Mr. Damian Kunko and Mr. Paul Gay recently attended the 2022 International Conference on Ocean Energy (ICOE), held this year in Donostia/San Sebastian in the Basque Country of Spain. They met with international leaders who are also working to utilize various forms of marine energy (currents, tides, and waves) to help overcome the global energy crisis and climate change.

Damian and Paul attended the conference representing the National Hydropower Association’s Marine Energy Council (MEC), which they helped establish in 2015, along with other SMI clients developing technologies and testing capabilities to support this emerging clean energy sector. Paul noted that, “it was inspiring to see the progress being made by companies around the world, with targeted support from a select group of country governments, to bring these technologies online. However, as a co-chair of the MEC, it also made me appreciate that time is short and the moment is now for the US Federal Government to go ‘all in’ to support domestic marine energy commercialization efforts.” Deployment of marine energy technologies at scale in the US will increase localized economic development opportunities, create thousands of high-value jobs, support a just and inclusive clean energy transition, promote exports in manufacturing and services, and avoid a repeat of the current landscape in which international companies dominate global renewable technology markets. Please follow up with Damian or Paul if you would like to learn more about the conference, marine energy, or if you could benefit from SMI’s deep experience supporting this sector over the past 20 years.

Federal Agencies Begin Roll Out of Key Inflation Reduction Act Investments

On August 16, 2022, President Biden signed the historic Inflation Reduction Act (IRA) into law, spurring $300 billion in energy security and clean energy technology investments. As part of the historic law’s initial rollout and implementation, President Biden issued an Executive Order outlining his administration’s priorities regarding the implementation of the law’s energy and infrastructure provisions. The Executive Order also establishes the White House Office on Clean Energy Innovation and Implementation as the coordinating body of the IRA energy programs and expands the role of the National Climate Task Force to further ensure the effective implementation of energy provisions under the Act. While some inflation reduction funding has begun to be distributed (USDA provided assistance to struggling farmers with the law’s funding), the highly anticipated clean energy incentives are still in the process of development. Recently, the Department of Treasury and Internal Revenue Service (IRS) released six Requests for Information soliciting public comment on the development of a framework for these billion-dollar incentive programs.

For a detailed update on the implementation of energy security and climate provisions in the IRA, see here.

The energy team at SMI plans to provide further updates on IRA rollout as they are available.

SMI’s Mr. Jeff Leahy Moderates a Conference on the Implementation of Clean Energy Tax Provisions

On October 12, SMI’s Mr. Jeff Leahey moderated a session in Washington, DC at the Business Council for Sustainable Energy (BCSE) on the Department of Treasury’s implementation of the clean energy tax provisions adopted as part of the Inflation Reduction Act (IRA). The panel included representatives from utilities, clean energy project developers, and the natural gas and energy efficiency sectors. Each participant discussed their sector-specific incentives and the key issues for implementation as the Treasury Department develops guidance and proposed rules. On October 19, Jeff also participated as a speaker on the implementation of the IRA’s provisions of interest for the hydropower, pumped storage, and marine energy sectors as part of a panel at the National Hydropower Association’s (NHA) Clean Currents conference in Sacramento, CA. The panel provided interested hydropower industry members an opportunity to ask questions on the Treasury’s process for providing additional clarity around several of the provisions and to discuss the possible application of the incentives for activities at their projects or developments.

SMI’s Dr. Bret Strogen Speaks at Energy and Innovation Expo

On October 20, SMI’s Dr. Bret Strogen spoke on the energy security and climate resilience panel at the Power Up Energy Expo and Defense Innovation Forum in Florida. The panel session was moderated by Gulf Coast Energy Network’s Executive Director, Dave Robau, and other speakers included the Defense Innovation Unit’s (DIU) Program Manager for Advanced Energy and Materials, Nina Khan, and Converge Strategies’ Principal, Meredith Pringle, who coordinates the Military Energy Resilience Catalyst (for which Bret serves as a Faculty Advisor). Bret spoke about the importance of aligning project goals with mission priorities to attract support from a variety of Department of Defense (DoD) programs that fall into two general buckets: those that fund energy technology research and development, and those that facilitate the deployment of new technologies and infrastructure solutions via private sector partnerships.

Bret was encouraged to hear updates throughout the conference on the Tyndall Air Force Base post-Hurricane-Michael rebuilding efforts—where they are integrating a variety of innovative capabilities such as an Installation Resilience Operations Center (IROC) which feeds into a digital twin visualization system, robot dogs equipped with sensors and cameras to improve security, and an Engineering With Nature initiative to strengthen the base’s resilience in future storms. Bret also enjoyed having an opportunity to meet employees of two SMI clients that sponsored the event: Ameresco (a leader in providing DoD installation upgrades through performance contracting) and Enginuity Power Systems (an innovative developer of compact high-efficiency engines and combined heat and power systems).

SMI’s Ms. Camryn Anderson Attends American Shipbuilding Suppliers Association Annual Meeting

Last week, SMI’s Camryn Anderson attended the American Shipbuilding Suppliers Association’s (ASSA) annual meeting in Alexandria, VA. The conference hosted industry experts, including Dr. Eric Labs, Senior Analyst for Naval Forces and Weapons at the Congressional Budget Office, Mr. Ron O’Rourke, Navy Specialist for the Congressional Research Service, and CAPT Pete Small, Program Officer for New Attack Submarines under the Program Executive Office Attack Submarines. The event featured insightful discussions about the Navy budget and where the Navy will be focusing its fleet efforts in the coming years. Reports and analyses from Ron O’Rourke can be found here, and current and upcoming analyses from Dr. Eric Labs can be found here.