Legislative Developments

President Joe Biden signed the $1.2 trillion bipartisan infrastructure bill into law during a Nov. 15 signing ceremony, fulfilling the first of a two-part effort to combat climate change, among other priorities.

"Today, we're finally getting this done," the president said before signing the bill.

After a months-long struggle to pass the infrastructure bill along with a more partisan budget bill, the U.S. House of Representatives advanced the former on Nov. 5. Congress is still considering the budget reconciliation bill, dubbed the Build Back Better Act, and the House could act on it later this week.

Biden touted the infrastructure bill's investment in electric vehicle infrastructure, creating the first "true national network of charging stations for electric vehicles."

The infrastructure bill aims to help the U.S. meet Biden's goal of decarbonizing the power sector by 2035. Among other provisions, the legislation includes more than $65 billion for power infrastructure, including $29 billion for the electricity grid.

It also clarifies the Federal Energy Regulatory Commission's role in issuing construction and modification permits pertaining to interstate transmission facilities should a state deny approval for a project.

Additionally, the bill includes incentives to prevent nuclear plants from closing prematurely for financial reasons and will offer low-interest loans for CO2 transport projects.

Billions of dollars in grants would be devoted to battery processing, manufacturing, and recycling as well.

The president also issued a Nov. 15 executive order to implement the infrastructure bill, directing federal agencies to, among other things, implement the legislation's "Made-in-America requirements and [bolster] United States manufacturing and supply chains."

Economic Benefits

A recent S&P Global Infrastructure Ratings' conference panel (Oct. 13) considered the potential impacts of the roughly $545 billion bipartisan infrastructure bill as part of the larger Biden infrastructure agenda.

The implications of the bill were discussed at length by the S&P Global panelists who cover key areas such as transportation, telecommunication, power, sustainability, and economics.

Congress may bring to a vote this week a reconciliation bill targeted at social and climate change spending between $1.5 billion and $2 trillion, which would clear the way for the $1 trillion bipartisan infrastructure bill with about $545 billion in new spending.

President Biden has prioritized investment in America's infrastructure since his administration's early days. The agenda has faced many hurdles with pressure from both sides of the political spectrum contributing to intense debates over the bill's final status.

On the Path to Net Zero

The hydrogen production tax credit proposed in the Democrats' latest federal budget reconciliation bill favors hydrogen produced from zero-carbon energy, but is likely substantial enough to also support facilities that use natural gas as a feedstock.

The latest version of the bill left the overall tax credit, known as a PTC, intact: A facility developer would still qualify for a credit of $3 per kilogram of hydrogen produced, or 60 cents per kilogram if the project does not meet labor requirements. What changed is the way in which the credit phases out — and how that would affect blue hydrogen production, which pairs carbon capture technology with steam methane reformation or autothermal reforming of natural gas.

Clean Energy Incentives

A growing number of electric transmission and distribution companies are experimenting with grid-enhancing technologies as the U.S. Congress advances legislation that would offer billions of dollars in matching grants for those types of investments.

One of the latest companies to implement a grid-enhancing pilot project is Duquesne Light Co., or DLC, a utility with more than 600,000 customers in western Pennsylvania.

On Aug. 31, the DQE Holdings LLC subsidiary announced a new partnership with LineVision Inc., a company that manufactures no-contact sensors that give transmission operators the ability to implement dynamic line ratings.

Dynamic line ratings give transmission operators close to real-time visibility into a power line's potential operating capacity based on a variety of data inputs, including ambient temperatures and line sag.

LineVision already has dozens of customers globally and counts National Grid USA, Xcel Energy Inc., Dominion Energy Inc. and the Sacramento Municipal Utility District among its top U.S. clients.

DLC is starting small with just 12 sensors on a single line, but the company has high hopes for the technology's potential going forward, said Josh Gould, the utility's director of innovation.

"We are very excited about the potential for using this technology on other transmission lines," Gould said in an interview. The director declined to share details of the deal for confidentiality reasons.

Metals in the Midst

The long and winding road to reach a bipartisan deal on US infrastructure spending has finally come to an end, with the domestic steel and aluminum industries expected to see a boost to demand in the coming years as projects take shape.

The Infrastructure Investment and Jobs Act, signed into law by President Joe Biden Nov. 15, marks the largest investment in US infrastructure since the Federal Highway Act of 1956.

The bill allocates $1.2 trillion in infrastructure spending over a period of 10 years, including $550 billion in new spending over five years, to address a range of issues. Among the metals-intensive funding in the legislation is $110 billion for roads, bridges, and major projects, $66 billion for passenger and freight rail, $39 billion for public transit, and $7.5 billion for electric vehicles.

Effects on Energy

The Biden administration on Nov. 18 moved to reverse a Trump-era Clean Water Act rule that would have eased permitting obstacles for energy infrastructure by stripping the statute's protections from about half the nation's wetlands and nearly one-fifth of its ephemeral streams.

At issue is a Trump-era Navigable Waters Protection Rule, or NWPR, issued by the U.S. Environmental Protection Agency and U.S. Army Corps of Engineers. It replaced an Obama-era rule aimed at clarifying which waters are covered by the Clean Water Act's permitting programs.

Under the Clean Water Act's permitting program, project developers seeking to dredge or fill protected waters must obtain a permit under Section 404 of the statute. To obtain a permit, developers must show that they have taken steps to avoid impacts to wetlands, streams and other resources. Potential impacts must be minimized and compensation must be provided for all remaining unavoidable impacts.

Digital Implications

On Aug. 10, 2021, the U.S. Senate approved the much-debated Infrastructure Bill, a cornerstone of President Joe Biden’s agenda. The bill overall is worth over $1 trillion. Yet the impact on the digital asset community, while small from a dollar perspective, may be equally outsized. It is estimated that the bill will increase tax revenue collected from digital asset investors by $28 billion, not by raising tax rates or creating new taxes but rather by applying new information reporting requirements on participants in the digital asset industry.

Generally, under Section 6045 rules, those falling under the definition of a “broker” are required to issue a Form 1099 to report gross proceeds on a transaction-by-transaction basis together with their customers’ names, social security numbers, and other relevant information. The bill expands the definition of a broker to include “any person… effectuating transfers of digital assets, including any decentralized exchange (DEX) or peer-to-peer marketplace.”

Further Reading