What the U.S. government shutdown means for the energy sector

Believe it or not, the U.S. government shut down on Tuesday for the first time in 17 years. The move will impact numerous industries across the country, but it has a handful of implications specific to the electric utility industry.

So who will be impacted? And how bad could it be? The answers can be found at the Department of Energy, Environmental Protection Agency and elsewhere. Here's an agency-by-agency breakdown of what to expect:

Department of Energy
In the near term, the Department of Energy (DOE) plans to operate on leftover funds from previous years’ appropriations. Once those are exhausted, a shutdown plan takes effect that would furlough 12,701 of its 13,814 employees. Activities will be limited to the safety of human life or the protection of property, DOE said. Numerous research and development activities would cease and work at national laboratories would be affected. The Energy Information Administration, whose data, analysis and forecasts are used throughout the energy sector to monitor market trends, would stop all work. 

The department’s Bonneville Power Administration is self-funded and will continue to operate normally. Likewise, the Tennessee Valley Authority is self-funded and there will no impact, a spokesman said Tuesday. At the Southwestern Power Administration and the Western Area Power Administrationboth of which produce hydropower and manage thousands of miles of transmissionmore than 400 employees will keep working to literally keep the lights on.

Environmental Protection Agency
Less than 7% of the Environmental Protection Agency's (EPA) employees will be working. Administrator Gina McCarthy said the agency ”effectively shuts down,” which may come as a comfort to critics of EPA’s ongoing efforts to curb emissions from energy generation and production.

Federal Energy Regulatory Commission
The agency charged with overseeing interstate transmission and natural gas and oil pipelines issued a notice Monday saying that it would continue normal operations until further notice using carryover funds from prior fiscal years. The Federal Energy Regulatory Commission (FERC) did not specify, though, how long that could go on.

If FERC exhausted the carryover funds and had to implement a shutdown, less than 5% of employees would be at work, assigned to the monitoring of energy markets, electric reliability and infrastructure and inspecting hydropower and liquefied natural gas facilities. The processing of filings tied to activities not excepted would be halted.   

Department of Interior
More than 58,000 of the Department of the Interior’s (DOI) 72,500 employees will be furloughed. More than half of the department’s offshore oil and natural gas activities, such as inspections and processing of drilling permits, will continue. However, leasing activities and reviews of exploration and environmental plans would cease. Processing of onshore oil and gas permits stops, but inspection activities would continue. Work on renewable energy would be suspended, including permitting and other regulatory activities.

Nuclear Regulatory Commission
Like FERC, the Nuclear Regulatory Commission (NRC) will not shut down right away but operate by using carryover funds to maintain all its operations. “By being careful with that money, the NRC should be able to remain open for at least one additional week of largely normal operations,” NRC said in a statement.

If the shutdown lasts longer than the carryover funds, NRC will keep less than 8% of its 3,900 employees on the job to perform inspections and respond to emergencies.

Department of Agriculture
The department, which houses the Rural Utilities Service, will stop processing loans and grants for electric cooperatives to build transmission infrastructure.

Department of Commerce
Meteorologists at the National Weather service will continue on the job, providing forecasts essential to utilities in trying to manage load.


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Filed Under: Regulation & Policy