LISTEN HERE.
Publish Date: August 30, 2022 | Total runtime: 31:50
Guest: Rep. Troy Balderson, Congressman (House Transportation Infrastructure Committee and House Agriculture Committee) representing Ohio’s 12th District
Host: Todd Snitchler, president and CEO, Electric Power Supply Association (EPSA)
TRANSCRIPT
Todd Snitchler, president & CEO, Electric Power Supply Association (EPSA): Congress recently passed one of the largest energy policy packages in recent years through the Inflation Reduction Act, which was signed into law by President Biden earlier this month. The IRA contains a mixed bag of policy elements. It includes tax credits and federal funding for emerging technologies needed to support reliable power, such as carbon capture, but also for more established energy resources like wind and solar.
EPSA released a statement on the legislation, which you can find on our website at www.epsa.org. We continue to advocate for policies like carbon pricing that allow competition to encourage reliable energy solutions at the least cost, putting the risk of investment on private companies, rather than customers and taxpayers.
But where do those in charge of policies stand? What’s next for energy legislation now that the IRA is law? In this episode, we check in with Congressman Troy Balderson, a Republican representing Ohio’s 12th district. He serves on the Commodity Exchanges Energy and Credit Subcommittee of the House Committee on Agriculture, as well as being a member of the Conservative Climate Caucus and the House Energy Action Team. You’ll hear why, even with all the important issues that cross his desk, Representative Balderson says energy, especially reliability, is a top priority. But, given all those competing interests, he also shares advice for getting your issue to rise to the top, how he forges bipartisan connections, and why industry can lead the way on bringing energy solutions to Americans.
Todd Snitchler: [To Troy] Well, good morning, Congressman Balderson, and thank you for joining us. Before we start our conversation today, I feel obligated to give a full disclosure statement here that, and listeners probably ought to know, that you and I have some history, having been elected together in the Ohio General Assembly, and then, of course, our paths diverged; you went to the Ohio Senate, I went to the Public Utilities Commission and then you decided that running for Congress was going to be your next step, and so you have been there now for more than two terms, correct?
Troy Balderson, Congressman (House Transportation Infrastructure Committee and House Agriculture Committee) representing Ohio’s 12th District: Yes. Two and a half years coming up next month.
Todd Snitchler: And you’ll be up for reelection again, of course, in November. So, just talk a little about what you’re focused on, and what it is you’re trying to do.
Troy Balderson: Sure. And I do have priorities, and energy is my top priority. But being a member of Congress, I mean, we’re bombarded every day with different issues and different things going on, so, you know, there’s that juggle there, and you know, with the background that I have, and you know, some of the folks that you and I made relationships with, have developed that and encouraged the focus for me to be on energy, and I just love it. And it’s important, you know, not only to the Congressional district, it’s important to my hometown, and it’s important to the region that I represent, both central Ohio and southeastern Ohio, and it’s played a major role in the economy here. And the economy going from pretty much a coal-dominated region to, you know, the natural gas boom that happened in 2010, and that’s going to be my main focus in Congress, and there are some other things, obviously, that, you know, I’m passionate about.
Todd Snitchler: Kind of talk a little bit about why energy is so important.
Troy Balderson: You know, the twelfth district was the fastest growing district in the State of Ohio this last census, and the biggest population gain, but as you move East from central Ohio and go to that Southeast region, it becomes a little bit more rural, and then the farther Southeast you go it becomes very rural. That’s where the coal industry had its mark. But it’s just, it was a huge economic driver for this region of the state and for the whole state. You know, they employ 300 people at $60,000 a year. That’s a lot of money in rural communities. And that kind of started going away in 2010. And it’s funny, and you know, I’ve talked about this beforehand, you know, it was always “there’s a, you know, war on coal.” There were some setbacks for coal, but then this thing happened called hydraulic fracturing, and they learned how to do that here in Southeast Ohio and the price of natural gas means, you know, $1.90 to $2.50, you know, kept driving the coal industry further down. But coal’s never gone away, but that natural gas piece has come in, when coal mines were closing down, and you know, people were trying to find other employment.
Todd Snitchler: I have to note, the switching from coal to natural gas was driven by competitive market forces. As the nation discovered a new abundant source of energy, its cheaper price drove power generators to invest in the resource, which by the way, also happened to be cleaner, and drove a massive drop in carbon emissions, passing the Obama Administration’s Clean Power Plan goal a decade early, with a 33% decrease between 2005 and 2019 in emissions according to the Carbon Tax Center.
So you kind of walked right into the next question and I wanted to get your thoughts on which is, you know, this question about assets that are retiring, whether it’s a coal plant or whether it’s a coal mine or what it takes to move the commodity around, but how do you think about that in Congress, as you look at questions around reliability, because from our seat, and I know you know this, but from our position, reliability is job one. How are you thinking about that?
Troy Balderson: You know, the baseload is something that’s been taught to all of us.
Todd Snitchler: A baseload resource is a source of dispatchable power generation, typically natural gas, coal or nuclear that is able to run around the clock to keep the lights on.
Troy Balderson: I’m hoping, and that’s kind of the focus for me—it’s that baseload—we’ve got to have that baseload. And that baseload comes from natural gas, coal, nuclear, I mean we’ve got to be able to turn that light on, and you know we’re all for solar panels and windmills and hydro and, you know, some of the renewables that are out there that have that conversation. To offset that peak demand timeframe so, but, you know, here, our focus is on that baseload and making sure that we have the ability to turn that light switch on, or that air conditioning thermostat to come on, you know, the heat to come on. So that’s my top priority, you know, with natural gas. It’s just vital here.
Todd Snitchler: Yeah, so let’s jump right to that. So how do you view the role of natural gas? I mean clearly, you know, our members own a substantial amount of natural gas resources all across the country. We, like you, think that they’re going to be vitally important as they integrate with other regenerating resources, of whatever type, whether it’s renewables, or whether it’s battery storage or whatever, you know, is on somebody’s garage workbench that we don’t know about yet, but may yet be deployed as the next innovative technology. There’s a, as Jim Robb describes it, there’s a long bridge that’s going to be required that’s going to—at today’s understanding—is going to require natural gas to fill that. Is that—kind of talk a little bit about how you’re thinking about the role natural gas, in your view, plays in order to keep the lights on.
Troy Balderson: Educating our constituents. And look, we can’t do it all, and I think that kind of goes back to what our prior question that we talked about with members of Congress, and, you know, all the things we have to juggle and focus on. And something we did here, I ran it past you, I was reading the Wall Street Journal back in November, and I saw the EU was going to make natural gas and nuclear part of the energy, you know, the green energy, and I thought, why can’t we do that here? I dropped the nuclear piece and did the resolution for natural gas and, look, I knew miracles weren’t going to happen, and, you know, as I reached out to you and kind of walked through that process. But it gets that conversation going to have an understanding of what natural gas can do and what baseload energy is and the importance of it. And it was funny, Todd, we went out to an actual site, we did the big media presentation—I say big, we had a couple TV channels from Columbus there and some reporters there—but we actually—no kidding—we went to a soybean field owned by Mr. Bean. Which, you couldn’t make that happen any better. A TV station that was there, a pretty prominent TV station here in central Ohio in Columbus, Channel four. And, you know, the beans went up to six feet within the pump jack two tanks from behind us.
And the best question I got out of that whole thing, no one was around me. Maybe a few people, but the TV guy from Channel four WCMH came up to me and said, “This is it; this is all there is?” And I said, it’s amazing, isn’t it? It’s the footprint, the minimal footprint. He couldn’t believe that. He had no sight of that. And I said, I know; you drive down the road five miles and you’ve got a 250-acre solar field that takes up all that farm ground. And you know, there’s a place for solar, but I mean I got excited, I said, I cannot believe you asked that, and I said, “This is what we’re trying to get that message out, this is what it entails.” And so, for me, the whole thing was successful just because one guy came up to me and said, “This is it, this is all there is?” Because this perception out there, that we put out is it’s this huge process. Now the process getting to that point: yeah, it’s a little bit bigger, but you know, Mr. Bean is still planting beans, on his corner on his field. And that’s important so that, you know, the more I can get that message out there, the better off we’re going to be.
Todd Snitchler: Do you get the sense that the public has enough of an appreciation for both the impact that that has on its community, but also what it’s doing to ensure that they have reliable power? Or is that something that we probably need to be communicating more effectively?
Troy Balderson: We definitely need to be communicating more effectively and we’ve been, you know, your organization that you run. Look, we all do, and I include the staff in my Congressional office that it’s important that they do the exact same thing. Look, people have their lives going on, school’s starting out, I mean all these things around them are going on. They don’t look at when they turn that light switch on that you and I talked about earlier, they just want to make sure it’s going to come on. They want to make sure that coffee pot’s going to brew, all these things they want to do. They don’t care where it comes from or how it gets there. They see powerline polls, but they’re not real sure about transmission. They don’t look at their bills, and now you look and see the transmission’s actually more expensive than the distribution of it all. So, we need to educate that more, you know, your organization, the more that we can get out there to do that, but, you know, people have busy lives, and I think, I think people are becoming a little bit more aware of the situation, you know, whether it’s the whole Russia piece or whether it’s what happened down in Texas, a couple years ago. So, I think it’s starting to, it’s had more movement in the last year and a half, and I think it’s having a long time.
Todd Snitchler: I guess, we don’t say that’s a good thing, other than the fact that people are paying attention, of course, we’re trying to avoid those big outages and real problems, because those have human impacts that you can’t unwind.
Troy Balderson: It is, you know when we lose our power here, and you lose it for 48 hours, I mean it’s a big deal. There’s a lot of money in that refrigerator now with—especially right now with inflation now that we’re dealing with, so it’s a big deal.
Todd Snitchler: Well, that brings me to the question and, as you know, we think energy is a bipartisan issue at EPSA. We think it ought to not be something that we’re taking broad or bright lines between parties but the Inflation Reduction Act, or the most recent legislation that was passed, had a pretty significant impact on where we’re going to go energy-wise in the future; I’m interested in your perspective about it. It’s relatively new; the President, as we’re recording, the President’s supposed to sign it today so I’d be interested in your observations and your thoughts about it.
Troy Balderson: I think the energy piece was disappointing, and how we’re going about it. I know that there are even some issues that you know, maybe you and I might not see eye to eye on, but I think you know that’s where we’re going to continue having those conversations and working, you know, with agencies like yourself and in the constituents, I think it’s going to be really impactful from an economic standpoint to members of my community and who I represent they’re seeing that now, I mean natural gas is up to $9 today, so a little bit over that.
So, you know, the bill doesn’t really address anything in my opinion that’s going to lower our energy costs. I don’t think we give the energy sector enough credit for things that they have been innovative about, and we don’t talk about it either. Members of Congress don’t talk about it, but you know, we just passed the House Friday night so, not a big impact yet, we’ll see how it plays out a little bit and see if there’s a lot of movement. Obviously, Mr. Manchin played a big role in this; I don’t see any favorability that he did for an industry that is so vital to his state. I thought he could have done a little bit more, and look, he had the pen. And I wish he would have resourced and reached out to Members of the Senate delegation, I know that it’s split, we have one Republican and one Democrat here, but also with the Pennsylvania delegation—just in those regions where it’s so important, in what we have here. So, I do know that a couple Members, myself and August Pflueger are going to do some introduce a bill probably next week, this week to take away that $1500 fee on there so-
Todd Snitchler: That’s the methane fee that you’re referring to.
Troy Balderson: Yeah, methane fee for that, so you know, I just, Todd, I think you know, so much is happening out there and the innovation out there, right now, that’s happening in with these industries—look, they know they’ve got to start doing something and they’ve been active about doing something, so I think you know there’s no better way than the market to let that play out.
Todd Snitchler: So obviously you’ve expressed some concerns about the Inflation Reduction Act. How are you thinking about in the next Congress, because this one, of course, you’re in full campaign season, it’ll be the rush to the finish line, so really in the next Congress, all the predictors seem to suggest we’ll have a divided government, that the R’s will take the House, the Senate is still in play, obviously the Administration’s only halfway through their first term. How are you thinking about energy issues that you want to address in the next Congress?
Troy Balderson: You know, for me, I would love the ability to have a communication with administration. That’s the only way we’re going to see something change. You know, I’ve heard references to when this happened in ‘94 with Speaker Gingrich and Bill Clinton as President and it brought him more to the middle. I’m concerned, I don’t know that we’ll get the Biden administration more to the middle, just because it’s much more, I’ll use the word aggressive, that might be a little harsh. From that standpoint, and much more pressure for this administration to cater and look, the Republicans are getting the same thing too. So that will be my goal but– don’t take this stuff so far, take baby steps with this stuff– and I think it’s something that—you know, you and I learned in the state legislature you from your role as chairman of the PUCO, me from being in the Senate side there and working on the Energy and Utilities Committee both. And you know, having the ability to sit down with you, as the Chairman of the Commission, meeting with your commissioners.
Ohio’s a little bit more unique than the rest of the country with how we do that, so I look forward to those conversations you know don’t just think we’re going to wipe this thing out, take steps. Again, and include organizations like yourself to give us some of that insight and we know the biggest impact’s going to be on FERC and where that lies. And I really want to dig into some of the regulatory issues that are going on here right now, because the pipelines are what needs to get this energy through, so that’s what I’m going to focus on.
Todd Snitchler: I did like hearing you mention that market-based solutions are one of the ways that we can best arrive at outcomes. Do you want to expound on that at all, or what is it that you want to see happen so that we can help get some favorable outcomes from your perspective?
Troy Balderson: We have experts in place that have been doing this business, and market in general. The free market, that is. That have been doing this for a long time. And to me, they’re the experts there, they have the guidelines, they have the technology, they have the insight. The expertise, so we call that, you know, we don’t have as members of Congress or any political position. I mean, you know, a political position is different than being from a free market, and I think that’s vital.
So, I need their insight—I need to be able to pick up the telephone and whether it’s call you or call—you know, they don’t have to be all one issue. I mean, I want to hear, I talked to solar people last Thursday, tell me what you’re thinking. I mean here’s what we’re hearing out here, you know, in some of these rural communities there’s concern for taking all this farmland that they’re dealing with right now. You know, they’ll figure it out, so that’s what it is to me.
Todd Snitchler: But I like the way you explained it because you talk to multiple times now about having open dialogue with the Biden administration, with your colleagues, and with Senator Manchin, and with others. And I know you’re a member of the Civility and Respect Caucus, and I know this is not an energy direct issue, but you know, as I mentioned before we view energy as it should be a nonpartisan issue. Everybody wants their lights on, beer cold, and water warm, and they don’t want to pay a lot for it. And they’re experiencing issues across the board now whether it’s inflation or whether it’s the impacts of conflict in Europe, or what have you. But there’s a way to approach this, so, just if you would, just kind of explain why you joined that Caucus and what it is that you hope to accomplish by participating in it.
Troy Balderson: I joined the Caucus with a little bit of hesitancy at first. Because I don’t need to join a Caucus to reach out to somebody. And that was somewhat of a struggle for me look it, it takes us as individuals to just– cowboy up and do what you need to do to make things happen and make things set apart.
I got a great story with Lizzie Fletcher who at the time was on transportation infrastructure and we were doing some pipeline and safety stuff, the bill, last Congress. And you know I had an amendment get in, which was pretty successful for a Republican to get an amendment in a Democrat driven bill. I didn’t really agree with what the bill with the direction that Chairman was moving it forward but got that amendment in. Well, within 24 hours that amendment came back out.
So, you know as I’m sitting there in committee, I’m looking at all the Democrat members of the committee I’m thinking, now who, and you know, you pick up your phone and you start googling! like who’s so-and-so from, where are they from. So, Lizzie Fletcher, she’s from Houston, she’s got pipeline, she’s got—this is big in her district probably. I Google her.
Well, lo and behold, I come to find out that she graduated from Kenyon college, which is right in Central Ohio. Damn! That’s how we’re going to get this conversation started. So, you know you give the hand signals and whatnot, and briefly talking. “Hey, I see you’re from Kenyon college we’ve got something in common here- I’m from central Ohio.” And, “Hey can you look at this amendment that I had that just got pulled out?” She said yeah, we’ll take a look at it, and I had no expectations, if she looked at it that’s a great start. She looked at it, changed a couple things, you know, do I get fussy about it? No, the bulk of what we wanted in there was in there. And guess what, lo and behold, it got back in the bill again and then passed, so I think you know that’s what we need to do. And let’s be honest, Todd, a lot of that does happen in Congress. I do see as we move forward, you know, more and more leaders, more and more political officials are communicating with each other, a little bit more, I mean could it be better? Sure, it can always be better. I think, as long as there’s, you know, a couple hundred of us trying to do the right thing and working hard I think we’re going in the right direction.
Todd Snitchler: Well, speaking of trying to reach across the aisle and work with others or play well in the sandbox with others you’re a member of the Climate or the Conservative climate Caucus. And, as you know, we just had John Curtis on few months ago now to kind of talk about what it is and what’s the Caucus been focused on, and, you know, what is it that you view from the Republican perspective that’s important to addressing, you know, the climate and energy conversation?
Troy Balderson: I think Republicans get stuck with this stigma that we’re not for any type of clean energy. That’s the farthest thing from the truth. I think that’s what John’s trying to convey. I think he’s up to 60 or 65 members now of the Caucus. So, it’s starting to pick up some momentum. You know, let’s shift back to this natural gas piece, I mean, in this Congressional district, in the new Congressional district that you know I’m hopefully representing next year, you know, natural gas will play a big role in that district. You know, I plan on trying to get some of the members of the Climate Conservative Caucus that maybe don’t know about some of the things about natural gas.
Todd Snitchler: To do a site visit with you.
Troy Balderson: Yeah, to do to do a site visit, and you know Jeff Duncan took us down to South Carolina and he didn’t take the Climate Conservative Caucus, it was HEAT, which I’m a member of, and I really, really enjoyed that the House Energy Action Committee. That’s really ticking right now. That has really picked up a lot of momentum. Jeff Duncan co-chairs that with Markwayne Mullin and obviously that’s one of, you know Steve Scalise’s pet projects, but that’s getting a lot of movement. That got me the opportunity to go to an offshore oil site in the Gulf. I went to a nuke and a hydro facility down South Carolina with Jeff, so we’ll try to do something up here with, you know, both Caucuses on doing that. I think it’s important that we do that. Look, there’s a lot of good things going on here right now, I think the education is starting to make more of an impact, and it has since I’ve been in Congress, with both political leaders, but also our consumers that we’re serving.
Todd Snitchler: I appreciate that. So, before I let you off the hook on that Conservative Climate Caucus, what do you think we should be thinking about as we try to balance reliability and addressing emissions or climate change, you know, pick your label, whatever you want you want, but how do you think we should be thinking about that?
Troy Balderson: Reliability. That needs to be the number one focus, it’s reliability. And you know, not to keep harping on the natural gas, but that’s where it is right now. What we’ve been talking about. I mean, people don’t like it when they lose their power for 12 hours, two hours,
Todd Snitchler: Or 10 minutes.
Troy Balderson: Yeah, 10 minutes, I mean it’s just it’s a big deal because, what’s in that refrigerator is going bad.
Todd Snitchler: That’s right.
Troy Balderson: Well, that needs to be the top priority, explaining, you know, what energy sources we have there right now that are reliable and 100% reliable.
Todd Snitchler: So, as you know, at EPSA, we’re all about finding competitive solutions to address the nation’s energy needs, we think that’s the right model, our members certainly have invested a lot of money and effort into doing that. And we think markets deliver power reliably but also at least cost which, as you know, this is, if there was ever a time it’s now, as some people are experiencing inflation for the first time in their adult life. But we also know that there’s maybe a need to incentivize innovation and try to drive some of that new technology and so we also have, you know, the balance to that is there seems to be a lack of support for market-based solutions. Everybody seems to have their pet project or their pet technology that they like, and “Well, we’ll just go ahead and support this and we will allow competition to drive better outcomes.”
So, what are your thoughts about that? Is there a way to get people thinking more about the competitive model as a way to drive the solutions that people want because it’s not, from my seat you don’t end up with bad outcomes, if you use competitive forces. You’ll get better outcomes you just have to explain what it is you want the market to deliver. And then let the market go do it because our members put their dollars at risk, it’s not ratepayer money or captive customers that are paying for it. It’s their investment and shareholder and investor dollars that pay for the technology that they deploy. And that seems like that’s a natural thing like we want to push risk off on you know big business, which is you know everybody’s either a favorite friend or whipping boy depending on where you fall on things. Why are we not doing more to incentivize, allowing the market to drive the outcomes? Does that require maybe Congress saying, this is what we want you to do now go do it, or how do you view that?
Troy Balderson: I view you guys just doing it and your members doing it, I don’t want a political person saying here you guys do this, you drive that it comes. To me, the better outcome is your members do it. We need to you know, take the strings off of all the attachments that you have to do to get this innovative stuff done and that kind of goes back to that whole regulatory thing that we talked about a little bit earlier and just, look. God bless you, your organization, your association and those that are after the competitive, I mean it’s all about the free market. I mean we can talk about the free market and you’re the innovators, you are the experts at this stuff, and you are driven, but you’re driven because that’s what your customers want. That, to me, is that they want reliability and cost efficient, those are the two biggest things they look at when they look at that $190 electric bill. “Holy cow, what happened?” Oh, I mean, what happened this month, to the $300? I mean you know they want you to figure out a different way to provide them the opportunity to lower that energy costs, but also make sure we don’t lose electricity for 10 minutes, as you said, I can’t emphasize enough the importance of that. Again, you know, we try to convey that message in our office. I think a lot of Members of Congress are trying to do that and just, you know, you’re getting in as holy ESG stuff now. I mean everything, I mean everybody wants to know what’s going on right now. Your risk takers are scared to take risks right now, because they can have the rug pulled out from them in the blink of an eye, and I think that’s a problem—we shouldn’t do that.
Todd Snitchler: Yeah, and as you know, we crave certainty because certainty will drive the investment.
Okay last question that I’ll ask you, because again, watching our clock.
So, what’s your advice to EPSA, and to our members and frankly to industry more broadly when it comes to communicating our issues to Congress? Whether it’s a member’s office or more broadly, what’s your best advice on how to break through the noise and actually deliver useful information that you can use when you’re making decisions?
Troy Balderson: We need to change that perspective of “Well I’m not going to talk to that member of Congress, because they’re not going to listen to me.” Man? They might not, but there might be one sentence in there, where you’re going to catch it and you’re going to just like fishing, you’re going to you’re going to get that first little bite. Don’t be afraid to pick up that phone, don’t be afraid to give council where it may need. And you know deal a lot more with the general public, I think, to me, the biggest thing that you all can do, yes, members of Congress, the state legislature, maybe, but again, the people that you are serving are what’s important and who needs to learn the message of what you’re putting out there.
Todd Snitchler: Well, that’s really good counsel and I think a good place for us to close so Congressman, I appreciate you taking an hour this morning to chat with us. Certainly, we’re grateful for your work and for your help in what you do, for the energy market, more broadly, for your interest in our issues, because energy, you know, as a utility executive has said once and I say this all the time, it’s the first 7% of the US economy, but if you take electricity out of the economy, the other 93% just doesn’t work. And so, you know, we appreciate your interest and certainly we’re going to do everything we can to try and make sure that that’s continued to be delivered in a reliable and affordable fashion, so thank you very much.
Troy Balderson: Thank you. I look forward to working with you, thank you.
Todd Snitchler: As lawmakers return to the Hill this Fall, ahead of November’s election, there will no doubt be much more competing for their attention. We’ll stay tuned as we check in with other leaders and players in the energy space, from both sides of the aisle. If you miss them, go deeper on this conversation by adding our episodes with Congressman John Curtis, co-chair of the Conservative Climate Caucus, and Jim Robb, president & CEO of North American Electric Reliability Corporation, to your list. You can also find EPSA’s policy recommendations and our analysis on our website, www.epsa.org.
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