[Senate Report 114-176]
[From the U.S. Government Publishing Office]
Calendar No. 291
114th Congress } { Report
SENATE
1st Session } { 114-176
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ELECTRIFY AFRICA ACT OF 2015
_______
December 8, 2015.--Ordered to be printed
Mr. Corker, from the Committee on Foreign Relations,
submitted the following
REPORT
[To accompany S. 2152]
The Committee on Foreign Relations, having had under
consideration the bill (S. 2152) to establish a comprehensive
United States Government policy to encourage the efforts of
countries in sub-Saharan Africa to develop an appropriate mix
of power solutions, including renewable energy, for more
broadly distributed electricity access in order to support
poverty reduction, promote development outcomes, and drive
economic growth, and for other purposes, having considered the
same, reports favorably thereon with amendments, and recommends
that the bill, as amended, do pass.
CONTENTS
Page
I. Purpose..........................................................1
II. Committee Action.................................................1
III. Background.......................................................2
IV. Discussion.......................................................3
V. Cost Estimate....................................................6
VI. Evaluation of Regulatory Impact..................................7
VII. Changes in Existing Law..........................................7
I. Purpose
The purpose of S. 2152 is to establish a comprehensive
United States government policy to develop and coordinate
strategies and reforms that improve access to, and the
affordability, reliability, and sustainability of, power for
residents of sub-Saharan Africa. S. 2152 further requires a
progress report evaluating the effectiveness of policies and
investments made by the U.S. in expanding electricity access in
sub-Saharan Africa.
II. Committee Action
S. 2152 was introduced on October 7, 2015, by Senator
Corker and co-sponsored by Senators Cardin, Rubio, Coons. On
October 8, 2015, the committee considered S. 2152 and reported
it favorably, by voice vote, with amendments.
The committee took the following action with regard to
amendments:
Two amendments offered by Senator Markey passed by voice
vote. Among other things, the Markey amendments added language
requiring implementation of energy projects in a non-
discriminatory way and local consultation with respect to
energy project development and implementation.
III. Background
Chairman Corker and Ranking Member Cardin introduced S.
2152 to address the lack of electricity faced by nearly 70
percent of sub-Saharan Africa's population. The legislation
addresses solutions to the lack of overall access to
electricity, including a lack of access to affordable
electricity options, and an inability to ensure sustainable and
reliable power. It establishes goals of providing access to
50,000,000 sub-Saharan Africans by 2020 and adding 20,000
megawatts of electricity by 2020. With increased access to
electricity, sub-Saharan Africans can open new doors to private
sector investment and economic growth that aim to replace
unsustainable and unhealthy fuel sources such as kerosene,
wood, and charcoal. The bill supports financing for African
energy generation development, regulatory reforms in African
energy sectors to ensure long-term financial sustainability and
operational reliability of grids, and policy advocacy that will
significantly increase the continent's access to electricity in
a socially responsible and financially sustainable way, and
open new doors generally to increased economic growth and
improved public health.
On June 30, 2013, President Obama announced his ``Power
Africa Initiative'' to improve energy access and production in
Africa with the goal of doubling the number of Africans with
access to electricity. Power Africa focuses on leveraging
private investment to increase financing for power projects in
sub-Saharan Africa.
S. 2152 provides a framework for a coordinated strategy for
the United States to work with sub-Saharan African nations to
improve access to electricity. The bill encourages the Overseas
Private Investment Corporation (OPIC), the United States Agency
for International Development (USAID), the U.S. Department of
Treasury, the World Bank, the African Development Bank, and the
U.S. Trade and Development Agency as well as U.S.
representatives to such international institutions as the World
Bank and the African Development Bank to prioritize, as
appropriate, loans, assistance, and technical support that
promote private investment in projects that increase
electricity access and reliability. The bill also encourages
these agencies to partner with sub-Saharan African governments
to develop policies that reduce burdensome regulations that
hinder private investment in the electricity sector. To achieve
broader energy access for those currently living beyond the
reaches of the existing electricity infrastructure, S. 2152
places an increased emphasis on the promotion and development
of off-grid and distributed technologies to be used at a local
level.
The bill also requires a report to the committee in three
years outlining the strategies, investments, and policy changes
being made under the legislation. This report would detail the
electricity access programs supported by the U.S. government
and private investment, and would be accompanied by empirical
data outlining the return on investment in terms of electricity
access and reliability.
S. 2152 recognizes that improving electricity access in
Africa will require a broad mix of fuel sources, many of which
exist in Africa in abundance. S. 2152 therefore takes a fuel
neutral, all-of-the-above approach. As called for in the policy
section of the bill, Electrify Africa anticipates energy access
being addressed in sub-Saharan Africa using renewable and non-
renewable fuels.
The bill also places strong emphasis on the development of
economically sound utilities. To ensure appropriate cost-
recovery by electricity transmission and distribution
operators, an appropriate policy and legal framework must be in
place. For this reason, the bill focuses not only on
facilitating private sector development of electricity
generation, the bill also requires implementing industry best
practices with respect to transmission and distribution such as
commercial cost recovery practices, regulatory reforms to
improve efficiencies, strengthening independent regulators, and
implementing smart grid technologies. The goal is to ensure
that national electric grids, developed with U.S. assistance,
will remain financially sustainable over the long term.
The legislation also aims to improve access to electricity
for communities who, because of existing constraints and
obstacles, are not or will not be linked to national and
regional grids in the near term.
The bill also helps ensure that supported energy projects
are developed and deployed to improve access for all local
communities and in consultation with affected local
communities. The bill calls for off-grid and mini-grid
technologies to be employed as an alternative strategy to
provide communities with electricity in an economical way in
the short term.
IV. Discussion
A summary of the key provisions of S. 2152, as amended,
follows:
Section 2
Section 2 states that the purpose of S. 2152 is to
encourage the efforts of countries in sub-Saharan Africa to
improve access to affordable and reliable electricity to unlock
the potential for inclusive economic growth and other important
development outcomes.
Section 3
Section 3 declares that it is the policy of the United
States, in coordination with international financial
institutions, sub-Saharan African governments and the private
sector, to:
(1) promote first-time access to power and power services in
sub-Saharan Africa for at least 50,000,000 people
by 2020, in both urban and rural areas;
(2) encourage the installation of at least 20,000 additional
megawatts of electrical power in sub-Saharan Africa
by 2020 through a broad mix of energy options that
will reduce poverty, promote sustainable
development, and drive economic growth;
(3) promote reliable, affordable, and sustainable power in
urban areas in order to promote economic growth and
job creation;
(4) promote efficient institutional platforms and financing
for the provision of electrical service to rural
and underserved populations;
(5) encourage the necessary in-country reforms that will make
possible the expansion of power access;
(6) promote reforms of power production, delivery, and
pricing, as well as regulatory reforms and
transparency, in order to support long-term,
market-based power generation and distribution;
(7) promote policies to displace kerosene lighting with
safer, cleaner technologies; and
(8) promote an all-of-the-above energy development strategy
for sub-Saharan Africa.
Section 4
Section 4 requires the President to establish and submit to
Congress, within 180 days, a comprehensive multiyear strategy,
consistent with the policy goals of section 3, to encourage the
efforts of countries in sub-Saharan Africa in implementing
national power strategies and developing an appropriate mix of
power solutions. The strategy must address ways to attract
private investment in the power sector, both on and off the
grid, assess the financial viability of power utilities, and be
sufficiently flexible to allow for technological innovation in
the power sector.
The strategy must focus on the following components:
increasing power production; strengthening electrical
transmission and distribution infrastructure; providing for
regulatory reform and transparent and accountable governance
and oversight; improving the reliability of power; maintaining
the affordability of power; maximizing the financial
sustainability of the power sector; and improving access to
power.
The strategy reporting must include plans and descriptions
of: efforts to increase access to power in urban and rural
areas; efforts to address commercial, industrial, and
residential needs; efforts to reduce waste and corruption and
improve existing power generation through the use of a broad
power mix, distributed generation models, energy efficiency,
and other technological innovations; an analysis of existing
mechanisms to ensure commercial cost recovery; an analysis of
mechanisms to commercialize electric service through
distribution service providers, including cooperatives, to
consumers; ways to promote improvements in revenue cycle
management, power pricing, and fees assessed for service
contracts and connections; efforts to reduce technical and
commercial losses; and recommendations on the creation of new
service provider models that mobilize community participation
in the provision of power services.
The strategy report must make recommendations on how to
reform electricity policies to ensure the long-term economic
viability of power projects and to increase access to power,
including the following priorities: allowing third parties to
connect power generation to the grid; policies to ensure there
is a viable and independent utility regulator; strategies to
ensure utilities become or remain creditworthy; regulations
that permit the participation of independent power producers
and private-public partnerships; policies that encourage
private sector and cooperative investment in power generation;
policies that ensure compensation for power provided to the
electrical grid by on-site producers; policies to unbundle
power services; regulations to eliminate conflicts of interest
in the utility sector; efforts to develop standardized power
purchase agreements and other contracts to streamline project
development; and efforts to negotiate and monitor compliance
with power purchase agreements and other contracts entered into
with the private sector.
The strategy requires reporting on engagement with African
countries including: plans to ensure meaningful local
consultation, as appropriate, in the planning, long-term
maintenance, and management of investments designed to increase
access to power in sub-Saharan Africa; mechanisms to be
established for selection of partner countries for focused
engagement on the power sector; ensuring that project
development is pursued in a manner that does not discriminate
against or disadvantage particular regions or populations
within a country; monitoring and evaluating increased access,
reliability and affordability of power in sub-Saharan Africa
and the financial sustainability of power generation,
transmission, and distribution; establishing metrics to
demonstrate progress and terminating unsuccessful programs.
The strategy will include specific provisions related to
bringing power to African communities, given particular
constraints in Africa. These recommendations will include:
plans to promote trade in electrical equipment with countries
in sub-Saharan Africa; plans to lower or eliminate import
tariffs/ taxes for energy and other power production and
distribution technologies including equipment used to provide
energy access, including solar lanterns, solar home systems,
and micro and mini grids; plans to protect the intellectual
property of companies designing and manufacturing products that
can be used to provide energy access in sub-Saharan Africa;
plans to encourage the growth of distributed renewable energy
markets in sub-Saharan Africa, including off-grid lighting and
power; plans to address market barriers to the deployment of
distributed renewable energy technologies, including an
analysis of the efficacy of efforts by U.S. agencies to
facilitate the financing of the importation, distribution,
sale, leasing, or marketing of distributed renewable energy
technologies; and a description of plans to ensure that small
and medium enterprises based in sub-Saharan Africa can fairly
compete for energy development and energy access opportunities
associated with this Act.
Section 4 further states the President may establish, as
appropriate, an Interagency Working Group to coordinate
executive branch agencies involved in the implementation of the
strategy. The Interagency Working Group would also facilitate
partnerships between executive agencies, the private sector,
and other development agencies to ensure effective
implementation. With respect to provisions in Section 4 calling
for the Administration to partner with the private sector
entities, the Senate strongly encourages the Working Group
established under this section and Administration officials
charged with implementation of this Act generally, to consider
partnering with the National Rural Electric Cooperative
Association which has significant experience in working to
establish financially sustainable electricity grids in Africa.
Section 5
Section 5 directs the Administrator of the United States
Agency for International Development, the Director of the Trade
and Development Agency, the Overseas Private Investment
Corporation, and the leadership of the Millennium Challenge
Corporation to, as appropriate, prioritize and expedite
institutional efforts and assistance to promote the development
of power projects and markets consistent with the goals and
policies of the Act and with the strategy.
Section 6
Section 6 directs the United States representatives at the
appropriate international bodies, including but not limited to
the Executive Directors at the World Bank Group and the African
Development Bank to use the influence of the U.S., consistent
with the broad development goals of the United States, to
encourage those institutions to significantly increase efforts
in sub-Saharan electrification projects, consistent with host-
country absorptive capacity and provide technical assistance to
regulatory authorities. The committee believes these efforts
should include modifying regulatory and legal regimes to reduce
certain losses, implementing cost-based tariffs, providing for
commercial cost recovery, reducing corruption, improving
transparency, and implementing reforms that facilitate
efficient and responsible power generation, transmission and
distribution, as well as off-grid energy markets. These efforts
should use clear, accountable, and metric based targets to
measure effectiveness.
Section 7
Section 7 requires a 3-year evaluation of progress made
towards achieving the strategy described in section 4. The
report reviews policies advocated by the United States that
promote increased energy access and electricity sector reform.
The report also identifies the number and type of projects
receiving United States government support, the total costs of
the project, the amount of U.S. supported investment, and
empirical results of the project in terms of increased
electricity to businesses, communities, and individuals.
V. Cost Estimate
In accordance with XXVI, paragraph 11(a) of the Standing
Rules of the Senate, the committee notes that the cost estimate
provided by the Congressional Budget Office (CBO) estimates
that enacting S. 2152 would not increase net direct spending or
on-budget deficits in any of the four consecutive year 10-year
periods beginning in 2016. The CBO further estimates that
implementing new requirements, such as the development of the
comprehensive strategy and subsequent reports to the Congress,
would cost less than $500,000 each year and total roughly $1
million over the 2016-2020 period with such spending subject to
the availability of appropriated funds. Finally, CBO has
concluded that enacting S. 2152 would not affect direct
spending or revenues and that, therefore, pay-as-you-go
procedures do not apply.
VI. Evaluation of Regulatory Impact
Pursuant to the requirement of paragraph 11(b) of rule XXVI
of the Standing Rules of the Senate, the committee has
considered the regulatory and paperwork impact of S. 2508, as
amended, and concluded that such impact would be minimal. The
Congressional Budget Office estimate for S. 2152 has concluded
that S. 2152 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would not affect the budgets of state, local, or tribal
governments.
VII. Changes in Existing Law
In compliance with Rule XXVI, paragraph 12 of the Standing
Rules of the Senate, it is the conclusion of the committee that
S. 2152 will require no changes in existing law.
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