OVERNIGHT ENERGY: Nine, including former Michigan governor, charged over Flint water crisis | Regulator finalizes rule forcing banks to serve oil, gun companies | Trump admin adds hurdle to increase efficiency standards for furnaces, water heaters

HAPPY THURSDAY! Welcome to Overnight Energy, The Hill’s roundup of the latest energy and environment news. Please send tips and comments to Rebecca Beitsch at rbeitsch@digital-stage.thehill.com. Follow her on Twitter: @rebeccabeitsch. Reach Rachel Frazin at rfrazin@digital-stage.thehill.com or follow her on Twitter: @RachelFrazin.

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FLINT CHARGES: Nine people, including former Michigan Gov. Rick Snyder (R), have been charged in connection with the Flint water crisis, the state attorney general’s office announced Thursday.

News of charges against Snyder, specifically two counts of willful neglect of duty, had previously been reported.

The attorney general’s office also announced charges against Nicolas Lyon, the former director of the Michigan Department of Health and Human Services (MDHHS); Eden Wells, former Michigan chief medical executive; Nancy Peeler, manager of MDHHS’s early childhood health section; Gerald Ambrose, former Flint emergency manager; Darnell Earley, former Flint emergency manager; Jarrod Agen, former chief of staff in Snyder’s office; Richard Baird, a former adviser to Snyder; and Howard Croft, former Flint public works director. 

The charges against Snyder carry penalties of up to one year in prison or a $1,000 fine each. The charges against some of the other officials carry greater prison time. 

Lyon and Wells were charged with nine counts of involuntary manslaughter, each of which could result in a 15-year prison sentence, and Baird was charged with extortion, a 20-year felony. 

The charges announced Thursday were not the first in the Flint water crisis. In 2019, previous charges were dropped as prosecutors restarted the investigation. 

Read more about the charges here.

THEM’S THE RULES:

Bank on it: The Office of the Comptroller of the Currency (OCC) on Thursday finalized a controversial rule banning large banks from rejecting businesses based on their industry.

The rule comes as banks have pledged to avoid financing drilling at the Arctic National Wildlife Refuge. 

The move comes less than two months after the agency first proposed the regulations.

The rule makes it illegal for any bank regulated by the OCC with more than $100 billion in assets to reject a customer for reasons other than financial risk. Supporters and critics of the rule both say it is intended to prevent more banks from joining those who’ve stopped serving firearm companies and financing oil and gas drilling projects.

“As Comptrollers and staff in previous administrations have made clear in speeches, guidance, and testimony, banks should not terminate services to entire categories of customers without conducting individual risk assessments,” said Acting Comptroller Brian Brooks, who announced Wednesday he will leave the agency on Thursday.

“It is inconsistent with basic principles of prudent risk management to make decisions based solely on conclusory or categorical assertions of risk without actual analysis. Moreover, elected officials should determine what is legal and illegal in our country,” he said.

The OCC first proposed its fair access rule on Nov. 19 to praise from Republicans, who’ve fiercely criticized several major banks that dropped clients in the firearm industry or pledged to stop funding Arctic drilling projects.

Read more about the rule here.

Sufficiently efficient? The Trump administration is finalizing a rule that will make it harder to increase efficiency standards for some residential furnaces and commercial water heaters. 

The new regulation makes it so that less-efficient heaters that have a certain type of venting, called noncondensing venting, are considered a separate class of products, meaning that they will need to be regulated separately.

Critics say that this will hinder efforts from the incoming Biden administration to ramp up efficiency standards.

“The purpose of the rule is to tie the hands of the Biden administration,” Andrew deLaski, executive director of the Appliance Standards Awareness Project, told The Hill. 

DeLaski said that although each class of products can be regulated, if the next administration tried to regulate the noncondensing heaters, they would find that they “can’t increase the standard without eliminating the class, and the statute doesn’t allow you to eliminate the class.”

A joint report from his group and the American Council for an Energy-Efficient Economy last year found that new standards for residential furnaces is among the efficiency measures that could have the greatest potential carbon dioxide reduction. 

The new interpretation comes at the request of gas industry groups, which said in a 2018 petition that increasing the efficiency standards would make noncondensing heaters unavailable. They argued that this type of venting should be considered a “feature” that the government can’t legally eliminate from the market. 

The Biden administration could promulgate its own interpretive rule that disagrees with the new Trump rule, but this would add an extra step to the regulatory process. 

Read more about the rule here.

Grab your calculator: The Trump administration is finalizing a rule that will lessen the amount of money oil and gas companies that drill on public lands and in public waters pay to the federal government. 

The rule will make changes to the way that these royalties are calculated and, according to the administration, is expected to result in an annual decrease of $28.9 million in royalty collections. 

The rule, promulgated by the Interior Department’s Office of Natural Resources Revenue, notes that this figure is less than 0.5 percent of the total federal oil and gas royalties it collected in 2018. 

The industry has argued that a previous rule on how the royalties are calculated was burdensome and created uncertainties.  

Opponents of the changes, however, argue that the new rule helps fossil fuel companies and harms taxpayers. 

Read more about the rule here.

WE’LL SEE YOU IN COURT:

Endangering the endangered species rollbacks: Environmentalists sued the Trump administration Thursday over rules that limit protections for habitat used by endangered species.

Two separate suits challenge two related rules from the administration. 

A December rule from the Fish and Wildlife Service narrows the definition of habitat to areas that can currently support a species, a move environmentalists say ignores the changing climate and efforts that could be made to modify a landscape.

“The drafters of this rule were clearly more concerned with easing industry regulation than upholding the foundational purpose of the ESA — to ensure the protection, conservation and recovery of imperiled species,” Earthjustice attorney Elena Bryant said in a release, referring to the Endangered Species Act. 

A second suit filed by the same coalition challenges another December rule that allowed for greater industry consideration in determining whether to set aside habitat. Those interested in developing land could submit evidence showing the potential costs of protection. 

Fish and Wildlife would then be required not to give an area critical habitat protections if an analysis determined that there are more benefits to withholding protection.

Read more about the lawsuits here.

Throw it to the wolves: Environmental groups sued the Trump administration Thursday over its decision to remove endangered species protection for the gray wolf.

The Fish and Wildlife Service delisted the wolf in October, arguing it had begun to recover, but the environmental organizations reject the idea that the species’s progress justifies such a move.

“This is no ‘Mission Accomplished’ moment for wolf recovery,” Kristen Boyles, an attorney with Earthjustice, said in a release. 

“Wolves are only starting to get a toehold in places like Northern California and the Pacific Northwest, and wolves need federal protection to explore habitat in the Southern Rockies and the Northeast. This delisting decision is what happens when bad science drives bad policy.”

The delisting ended more than 45 years of protections for the species in the continental U.S., except for a small band of Mexican gray wolves present in Arizona and New Mexico. 

Read more about the suit here.

There’s always a Florida story: Environmentalists are challenging in court an Environmental Protection Agency (EPA) plan to return jurisdiction over some waterways to the state of Florida.

The grant from EPA gives Florida the authority to issue permits under Section 404 of the Clean Water Act, which regulates “fill for development” before building highways and other infrastructure such as dams and levees. 

EPA Administrator Andrew Wheeler called the move a road map for other states who want to take over responsibility for issuing permits under the Clean Water Act.

“Florida has a wealth of aquatic resources. And they care about their resources at least as much, and I would say probably more so, than the federal government. There’s no reason why they shouldn’t be running their own program,” he said in December.

But environmentalists argue the state’s poor record managing its water resources indicates the opposite.

“This reckless scheme violates several of our bedrock laws, including the Endangered Species Act and the Clean Water Act, and lets developers avoid the National Environmental Policy Act, also known as ‘the people’s environmental law,’” Tania Galloni, Earthjustice managing attorney for Florida, said in a release. 

Read more about the lawsuit here.

COMPARE AND CONTRAST: A first look at financial disclosures from Rep. Deb Haaland (D-N.M.) stands in stark contrast to those released by the current Interior secretary she is set to replace.

Beyond the $175 a year she receives as a member of the Laguna Pueblo tribe, Haaland receives no income outside the $174,000 she earns as a lawmaker. She lists no other assets, and neither she nor her husband claimed any retirement accounts.

Haaland also disclosed that she had between $15,000 and $50,000 in student debt.

Interior Secretary David Berhardt’s financial picture was more complex, listing several clients for which he did lobbying and legal work, including five energy companies. He also listed numerous investments, income from selling cattle and no debt beyond his mortgage.

SOME PERSONNEL NEWS: 

In Bidenland: The Biden transition on Thursday named several people it expects to staff its White House Domestic Climate Policy office, as well as other climate officials. 

Joining the climate policy office are:

• Sonia Aggarwal, as senior advisor for climate policy and innovation. Aggarwal was the co-founder and the vice president of Energy Innovation, an energy and climate policy research firm. 
• David Hayes, as special assistant to the president for climate policy. Hayes was the Interior Department’s deputy secretary under the Obama and Clinton administrations. l. 
• Maggie Thomas, as chief of staff for the domestic climate policy office. Thomas was a climate policy advisor to Sen. Elizabeth Warren (D-Mass.) and deputy climate director for Washington Gov. Jay Inslee (D). 
• Jahi Wise, as senior advisor for climate policy and finance. Wise was the policy director for the Coalition for Green Capital (CGC), an organization that works to accelerate investment in clean energy and climate infrastructure. 

The other newly announced climate officials are:

• Cecilia Martinez, who will be senior director for environmental justice at the Council on Environmental Quality. Martinez is the co-founder and executive director at the Center for Earth, Energy, and Democracy. 
• Jeff Marootian, who will be the special assistant to the president for climate and science agency personnel. Marootian directs Washington D.C.’s Department of Transportation. 

At E&C: Eight Republican lawmakers are joining the House Energy and Commerce Committee, according to a statement released Thursday. They are Reps. Kelly Armstrong (N.D.), Dan Crenshaw (Texas), John Curtis (Utah), Neal Dunn (Fla.), John Joyce (Pa.), Debbie Lesko (Ariz.), Gary Palmer (Ala.) and Greg Pence (Ind.). 

WHAT WE’RE READING:

Solving climate crisis will be at center of Biden’s job agenda – Deese, Reuters reports

Interior strips protections for owl species on decline, Roll Call reports

How a flurry of suspicious phone calls set investigators on Rick Snyder’s trail, The Intercept reports

ICYMI: Stories from Thursday…

2020 temperatures approximate warmest year on record, US agencies say

New Trump rule expected to cut costs for public lands drilling

EPA sued over plans to give Florida authority over managing wetlands, waterways

Green groups sue over administration rules limiting habitat protection for endangered species

Trump administration adds hurdle to increase efficiency standards for furnaces, water heaters

Nine, including former Michigan governor, charged over Flint water crisis

Green groups sue after Trump administration lifts protections for gray wolf

Regulator finalizes rule forcing banks to serve oil, gun companies