Energy Marketers of America weekly update on important national industry news
October 6, 2023 [WR-23-39]
Sponsored by ExxonMobil
who generously supports The Energy Marketers of America
Today marks the end of a whirlwind week in Washington as Congress averted a government shutdown by passing a Continuing Resolution (CR) to fund the government at current levels until November 14—but did so at the expense of now-former Speaker of the House Kevin McCarthy’s (R-CA) job. The abridged version is that after failing to pass a 30-day CR that included spending cuts and other Republican priorities on border security and immigration, Speaker Kevin McCarthy put forward a “clean” CR that was essentially the version crafted by the Democratically controlled Senate minus funding for Ukraine. This version passed the House and Senate with significant bipartisan support and was signed into law last Saturday night, shocking Washington and averting a shutdown most expected to last at the very least a few days, but some expected to last for weeks.
Unfortunately for Mr. McCarthy, several hardline members of the House Republican Freedom Caucus decided this was the last straw, and, led by Rep. Matt Gaetz (R-FL), took action to remove the Speaker. With eight Republican House members joining the whole Democratic conference, Speaker McCarthy became the first Speaker to be removed from office, and Rep. Patrick McHenry (R-NC), Chairman of the Financial Services Committee and a longtime McCarthy ally, was named Acting Speaker (officially Speaker Pro Tempore). He will now be tasked with finding overseeing the process for finding a new speaker (he has said he is not interested in the position). So far, Majority Leader Steve Scalise (R-LA) and Rep. Jim Jordan (R-OH) have made their interest in Speaker known (with the latter receiving an endorsement from Former President Trump), and they are expected to make their respective cases to the conference Monday ahead of, hopefully, a vote Tuesday. Despite all that, much is unclear about (1) whether Mr. McCarthy stays in Congress or resigns, (2) whether any of the proposed Speaker candidates can secure enough votes to win a gavel, (3) whether there is retribution towards Gaetz and the eight from the rest of the Republican conference, and (4) what happens with the government funding fight on issues like spending cuts and Ukraine under a different Speaker. With less than 40 days to another potential government shutdown, time is ticking for Congress to act, and the House is currently frozen until a new speaker can be chosen, halting the wheels of government for the time being.
Still, while Congress may be paralyzed, other aspects of the government are not. As such, there has been a lot of activity on the Hill regarding IRS-related matters like new 1099-K requirements thresholds and moratorium on employee retention tax credit (ERTC). Regarding the former, in the past, individual workers who were involved in more than 200 transactions totaling $20,000/year were required to submit 1099-K forms. A provision in the American Rescue Plan Act (ARPA) changed this threshold, and now anyone involved in any number of transactions must complete the form if they receive more than $600 - a steep drop from $20,000. As a result of this change, the IRS expects it may receive more than 44 million forms—about twice as many as it expected. Since opponents say this will be a burden for individual taxpayers, their employers, and the government, and, as a result, a number of groups have been lobbying to have these levels increased from $600. It is unclear what that would be, but for the time being there may be an increased threshold on both transactions and the dollar amount needed to trigger this reporting. Regardless, this is only relevant if Congress can pass a law to change it, and given the current state of Congress, it may be a reach. Regarding ERTC, due to significant fraud, the IRS has decided to pause applications for the tax credits. In response, the National Federation of Independent Business (NFIB), as well as House Ways and Means Chair Jason Smith (R-MO), have said this was too extreme a move, instead calling for IRS to address fraud, but to do so in a way that allows those who would benefit from the ERTC to continue to do so.
Finally, the Supreme Court has announced it will hear a case from the North Dakota Petroleum Marketers Association, North Dakota Retail Association, and Corner Post challenging the Federal Reserve’s (Fed) cap on debit card transaction fees. Specifically, they argue that the cap is set too high, and that the Fed violated the Durbin Amendment to the Dodd–Frank Wall Street Reform and Consumer Protection Act. At the core of the dispute is an issue of when the statute of limitations would be triggered—whether it is (a) when the regulation was published in the federal register (the Government’s position) or (B) when injury from the rule took place (Corner Post’s position). Previously, a District Court and Appellate Court had both ruled in favor of the Fed, noting that the time to challenge this rule has passed, but if the Supreme Court overturns those rulings, it could lead to a lower cap on debit card transactions going forward. The case will be heard sometime this year, with a ruling sometime next summer.
The U.S. Department of Energy (DOE) is proposing a new Annual Fuel Utilization Efficiency (AFUE) standard for residential boilers that calls into question the continued viability of oil and gas fired cast iron boilers. The Energy Policy and Conservation Act authorizes DOE to regulate the energy efficiency of residential heating oil and gas boilers. Under EPCA, any new or amended energy conservation standard must achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified. Under the proposal, cast iron hot water boilers fired by oil would be required to meet 88 AFUE, while similar hot water gas boilers would be assigned a 95 AFUE. If adopted, cast iron boilers will become more expensive, more complex with shorter life cycles and have higher service costs. In addition, cast iron boilers will become less efficient with a higher AFUE rating.
Achieving an 88 AFUE for oil-fired cast-iron boilers would be technically difficult according to manufacturers, requiring condensing heat exchangers that will add significantly to boiler cost, size and weight. Larger boilers increase jacket and idle loss resulting in higher annual energy consumption despite the increase in AFUE. Cast-iron boiler manufacturers are not sure they can reach an 88 AFUE without stack dampers which raise concerns about chimney temperatures and lack reliable sidewall vent options. Manufacturers contend they are already experiencing difficulty reaching 86 and 87 AFUE.
Moving gas boilers from 84 AFUE to 95 AFUE will likely eliminate gas cast iron boilers altogether according to manufacturers. Cast iron gas boilers have an approximate life span of 26 years while the alternative gas fired condensing boilers have a life span of only 10 years. Additionally, the water and flue passes in these boilers are too small to accommodate the proposed AFUE. Consequently, additional piping and filtering equipment is needed to keep them in service longer. The piping can cost $1000 to $1500 more to the consumer. Currently 2/3 of all cast iron boilers made are gas fired. The elimination of gas fired cast iron boilers will result in the closing of one of only two U.S. foundries resulting significantly higher costs for all boilers.
EMA will submit comments opposing the proposed oil and gas fired boiler AFUE and meet directly with the DOE to express the industry’s concern.
Recently, over 100 members of the Merchants Payments Coalition (MPC), including several EMA State Association Executives and marketers, flooded Capitol Hill to demand a vote on the Credit Card Competition Act as an amendment to the Senate’s $280 billion spending minibus which would ensure retailer choice in payment routing by requiring at least two unaffiliated processors on credit cards-- the same process that is currently used for debit card transactions. The industry overall sent more than 5,000 email messages to congressional offices along with hundreds of CEO calls last week alone. The big banks responded by flooding the Hill as well. It’s safe to say that this bill is the most heavily lobbied bill in recent history.
Unfortunately, the bill did not receive a vote on the Senate floor due to uncontrollable circumstances. The good news is that the bill’s Senate champions, Senators Roger Marshall (R-KY) and Dick Durbin (D-IL), remain committed to receiving an up and down vote before the end of the year. Additionally, Senate Banking Committee Chairman Sherrod Brown (D-OH) indicated he’s open to legislative action on the bill, and possibly holding a hearing.
EMA continues to urge all jobbers and retailers to reach out to their Senators and ask them to VOTE YES on the Credit Card Competition Act. This bill would reduce swipe fees and allow retailers a choice of network to handle the transaction through competition which would save Americans and businesses around $15 billion in swipe fees per year. Our industry’s share of that comes to around $9,000 per store per year.
Three steps — Let this be a guide in helping prevent a dangerous or deadly fire at your business. Take a look here to see how these action items could be applied today.
Fire prevention is an everyday practice. It could be the difference between a successful business and one that is gone the next day. To learn more about this important topic, and to review helpful risk management resources, please always feel free to reach out to your Federated regional representative or EMA’s National Account Executive Jon Medo at 800.533.0472 for any additional information or risk management questions. Federated is a Partner in EMA’s Board of Directors Council.
At Federated Insurance, It’s Our Business to Protect Yours®
This article is for general information and risk prevention only and should not be considered legal or other expert advice. The recommendations herein may help reduce, but are not guaranteed to eliminate, any or all risk of loss. The information herein may be subject to, and is not a substitute for, any laws or regulations that may apply. Qualified counsel should be sought with questions specific to your circumstances. © 2023 Federated Mutual Insurance Company.
Energy Marketers of America’s Marketer Defense Fund wants to thank the following individuals for their contributions during the September 1- 30 timeframe:
Louisiana: Luther Lott
Maine: Jim Carroll
Minnesota: Brent Staples
Missouri: James Maurer
Oregon: John Truax
Tennessee: Brooklyn Kimbro Vizard
Corporate donations are acceptable. MDF funds have been used to create a COVID-19 Situational Update & Resources webpage, to hire experts to cover important regulatory agencies and disaster relief dedicated to strengthening our lobbying efforts on Capitol Hill. Click here to donate to the EMA MDF.
LG Energy, Toyota announce longterm U.S. EV battery deal (yahoo.com)
EV Mandate Shaping Up To Be Key Election Issue In Virginia: POLL | Daily Caller News Foundation
Nearly 2.5 Million Barrels a Day of US Refining Capacity to Shut for Fall Maintenance | Bloomberg
California and Newsom prep for the future with new climate rules | The Hill
Electric cars draw a backlash across the U.S. and Europe | Politico
What McCarthy’s fall means for energy, environment policy | E&E News
Is your employee handbook due for an update?
Many organizations have employee handbooks which haven’t been updated to reflect current operations, size, or geography.
We’ll provide straightforward ideas for creating or refreshing your organization’s employee handbook, including Federated mySHIELD®, and Federated Employment Practices Network® resources for creating or updating a handbook.
Advanced registration is required for this 30-minute webinar.
For additional information or to discuss this in further detail, please contact your Federated regional representative or EMA’s National Account Executive Jon Medo at 800.533.0472. Federated is a Partner in EMA’s Board of Directors Council.
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