[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2909 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 2909

To amend the Federal Power Act to establish requirements regarding the 
  operation of certain electric generating facilities, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            November 7, 1997

 Mr. Pallone (for himself, Mr. Campbell, Mr. Franks of New Jersey, Mr. 
Andrews, Mr. Pascrell, Mr. Saxton, Mr. Payne, Mr. Waxman, Mr. Smith of 
 New Jersey, Mr. Rothman, Mr. Pappas, Mrs. Roukema, Mr. LoBiondo, Mr. 
 Menendez, and Mr. Frelinghuysen) introduced the following bill; which 
               was referred to the Committee on Commerce

_______________________________________________________________________

                                 A BILL


 
To amend the Federal Power Act to establish requirements regarding the 
  operation of certain electric generating facilities, and for other 
                               purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. FINDINGS AND PURPOSES.

    (a) Findings.--The Congress finds that:
            (1) Restructuring of the electricity industry is intended 
        to promote competition among electricity providers, resulting 
        in lower electricity rates to consumers, higher quality 
        services, and a more robust national economy.
            (2) The benefits of competition will not be achieved if 
        some competitors enjoy an advantage resulting from 
        externalization of environmental or other costs, permitting 
        them to charge prices for electricity that do not reflect the 
        full economic and environmental cost of production.
            (3) Emissions into the air which endanger public health, 
        and threaten the quality of the Nation's air, land, and water 
        are classic externalities whose cost is frequently not 
        reflected in the price charged for products such as 
        electricity.
            (4) Emission control requirements on electric generating 
        units are substantially different depending on their age and 
        location, allowing older generating units to emit pollutants at 
        excessive rates, including emissions of nitrogen oxides 
        approaching 10 times that of other generating units per unit of 
        electricity generated.
            (5) The policy of exempting older generating units from 
        emissions limitations applicable to new units was based on the 
        expectation that over time older units would be retired, but 
        that, contrary to that expectation, such units continue to 
        operate and emit at excessively high rates.
            (6) The disparity in regulatory treatment among electric 
        generating units provides a significant competitive advantage 
        for older generating units and for those located in attainment 
        areas that will distort competition in a restructured 
        electricity industry, preventing the public from enjoying the 
        full economic benefits of competition.
            (7) The disparity of regulatory treatment among electric 
        generating units is unfair to competitors who achieve higher 
        levels of environmental performance in their operations.
    (b) Purposes.--The purposes are--
            (1) to ensure an economically efficient market in 
        electricity, in order to assure lower electricity rates to 
        consumers, higher quality services, and a more robust national 
        economy;
            (2) to assure fair competition among participants in the 
        free market in electric power that will result from 
        restructuring of the electric industry; and
            (3) to internalize the values of public health, air, land, 
        and water quality in the context of a competitive market in 
        electricity.

SEC. 2. ALLOWANCE PROGRAM FOR CERTAIN AIR POLLUTANTS.

    Part III of the Federal Power Act is amended by redesignating 
sections 320 and 321 as sections 323 and 324 respectively and by 
inserting the following new sections after section 319:

``SEC. 320. GENERATION PERFORMANCE STANDARDS AND TONNAGE CAPS.

    ``(a) Oxides of Nitrogen.--
            ``(1) Generation performance standard.--For each covered 
        period, the Commission shall calculate a generation performance 
        standard for oxides of nitrogen from covered electric 
        generating units in the applicable region. The standard shall 
        be equal to the statutory tonnage cap for the covered period 
        divided by the Commission's estimate (under section 322(a)) of 
        total electric generation from such units in the applicable 
        region, as set forth in paragraph (2). The Commission shall 
        publish such standard (expressed in pounds per megawatt hour) 
        at least 30 days prior to the beginning of the covered period 
        concerned.
            ``(2) Statutory tonnage cap.--The statutory tonnage cap 
        (expressed in millions of tons) for emissions of oxides of 
        nitrogen from covered electric generating units in the 
applicable region for each covered period shall be as follows:
      

------------------------------------------------------------------------
                                                       Statutory tonnage
       Covered Periods              Applicable Region     cap (million  
                                                             tons)      
------------------------------------------------------------------------
  May 1-September 30, 1999........     OTAG Region            1.5       
  May 1-September 30, 2000........     OTAG Region            1.3       
  May 1-September 30, 2001........     OTAG Region            1.0       
  May 1-Sept 30 after 2001 and                                          
   before 2005....................     OTAG Region            0.78      
  Jan. 1-December 31, 2005 and                                          
   each year thereafter...........    Continental US          2.0       
------------------------------------------------------------------------

            ``(3) Ozone episodes.--During each period coinciding with 
        exceedances of the National Ambient Air Quality Standard for 
        ozone, promulgated by the Administrator of the Environmental 
        Protection Agency under the Clean Air Act (and during the 8 
        hours preceding such exceedances), each covered unit with an 
        actual emission rate greater than the generation performance 
        standard shall be required to adjust its reported actual 
        emissions under section 321(b) by a factor of up to 3, 
        depending on the unit's distance from the exceedance. Units 
        affected by this subsection may meet their obligations under 
        section 321 either by emissions reductions at the affected 
        unit, or by surrendering allowances equal to the difference 
        between actual emissions and the emission limitation provided 
        in this subsection.
            ``(4) Default.--If the Commission fails to publish a 
        generation performance standard under paragraph (1) for any 
        covered period at least 30 days prior to the beginning of the 
        covered period, for that covered period the generation 
        performance standard for each covered electric generating unit 
        in the applicable region shall be 0.9 times the general 
        performance standard for the previous covered period. If no 
        generation performance standard has been published for the 
        previous covered period, the generation performance standard 
        for the covered period shall be 1.15 pounds of oxides of 
        nitrogen per megawatt hour.
    ``(b) Fine Particulate Matter.--
            ``(1) Generation performance standard.--In order to reduce 
        concentrations of sulfate fine particulate matter, for each 
        calendar year in a covered period, the Commission shall 
        calculate a generation performance standard for sulfur oxides 
        from covered electric generating units. The standard shall be 
        equal to the statutory tonnage cap for the covered period, as 
        set forth in paragraph (2) divided by the Commission's estimate 
        (under section 322(a)) of total electric generation from such 
        units in the applicable region. The Commission shall publish 
        such standard (expressed in pounds per megawatt hour) at least 
        30 days prior to the beginning of the covered period concerned.
            ``(2) Statutory tonnage cap.--The statutory tonnage cap 
        (expressed in millions of tons) for fine particulate matter as 
        measured by emissions of sulfur oxides from covered electric 
        generating units in the continental United States for a covered 
        period shall be as follows:
      

------------------------------------------------------------------------
                                                       Statutory tonnage
                        Covered Periods                   cap (million  
                                                             tons)      
------------------------------------------------------------------------
  Jan. 1, 2000-Dec. 31, 2004.........................         4.45      
  Jan. 1, 2005 and thereafter........................         4.0       
------------------------------------------------------------------------

            ``(3) Default.--If the Commission fails to publish a 
        generation performance standard under paragraph (1) for any 
        covered period at least 30 days prior to the beginning of the 
        covered period, the generation performance standard for each 
        covered unit for that period shall be 0.9 times the applicable 
        General Performance Standard for the previous applicable 
        period. If no Generation Performance Standard has been 
        published for the previous covered period, the generation 
        performance standard for the covered period shall be 1.75 
        pounds of sulfur oxides per megawatt hour.
    ``(c) Other Pollutants.--
            ``(1) Generation performance standard.--The Commission is 
        authorized to establish by rule a generation performance 
        standard for any other air pollutant released in significant 
        quantities by electric generating units as needed to limit 
        emissions that the Administrator of the Environmental 
        Protection Agency determines can reasonably be anticipated to 
        present significant risks to human health or the environment. 
        The standard shall be equal to the tonnage cap established 
        pursuant to paragraph (2) divided by the Commission's estimate 
        (under section 322(a)) of total electric generation from such 
        units in the continental United States. The Commission shall 
        publish such standard (expressed in pounds per megawatt hour) 
        at least 30 days prior to the beginning of the covered period 
        concerned.
            ``(2) Tonnage cap.--The Commission shall, in consultation 
        with the Administrator, promulgate by rule a national limit on 
        total annual emissions of any such other pollutant from covered 
        electric generating units, expressed in tons. The national 
        limit on annual emissions of such other pollutant shall be set 
        to protect human health and the environment.

``SEC. 321. ALLOCATION AND TRADING OF ALLOWANCES; COMPLIANCE.

    ``(a) Allocation and Trading of Allowances.--
            ``(1) In general.--For each covered period, the Commission 
        shall allocate allowances for oxides of nitrogen, sulfur 
        oxides, and any other pollutant for which a tonnage cap has 
        been established pursuant to section 320(c), among covered 
        units in the applicable region by multiplying the generation 
        performance standard for that covered period for each such air 
        pollutant by such unit's electric generation during the covered 
        period.
            ``(2) Energy conservation.--The Commission shall also 
        allocate allowances for such air pollutants to each person in 
        the applicable region who generates or markets electric energy 
        and who demonstrates to the Commission (in accordance with the 
        North American Verification Protocols) that such person has 
        achieved a reduction in gross electric energy demand during a 
        covered period, as certified by an independent body approved by 
        the Commission. The allowances allocated to any such person 
        shall be determined by multiplying the generation performance 
        standard for the air pollutant concerned for the covered period 
        by such reduction in electric energy demand. Only one person 
        may apply for allowances for any particular energy conservation 
        action.
            ``(3) Carryover and trading of allowances.--Allowances 
        allocated to any person for any air pollutant for any covered 
        period that are not used to demonstrate compliance with 
        subsection (b) for that pollutant during any covered period may 
        be retained and used to demonstrate compliance with such 
        requirements by any person in a subsequent covered period. Such 
        allowances may be transferred by the person to whom allocated 
        to any other person. Any person to whom such allowances have 
        been transferred may use the allowances in the covered period 
        or in a subsequent covered period to demonstrate compliance 
        with subsection (b) or may transfer such allowances to any 
        other person for such purposes.
    ``(b) Compliance With Allowance Limits.--For each covered period, 
the owner or operator of each covered unit in the applicable region 
shall surrender to the Commission a number of allowances for oxides of 
nitrogen, sulfur oxides, and any other pollutant for which a tonnage 
cap has been established pursuant to section 320(c), equal to the total 
tonnage of each such air pollutant emitted during the covered period. 
Emissions shall be determined based on continuous monitoring approved 
by the Administrator.
    ``(c) Excess Emissions.--The owner or operator of any covered unit 
that emits oxides of nitrogen, sulfur oxides, or any other pollutant 
for which a tonnage cap has been established pursuant to section 
320(c), for a covered period in any calendar year in excess of the 
allowances for such air pollutant that the owner or operator holds for 
use for the unit for the covered period shall be liable for the payment 
of an excess emissions penalty, and shall be liable to offset the 
excess emissions by an equal tonnage amount of such air pollutant in 
the following covered period or such other period as the Commission 
shall prescribe. The excess emissions penalty for oxides of nitrogen 
and sulfur oxides shall be calculated on the basis of the number of 
tons emitted in excess of the total number of allowances held, 
multiplied by $5,000, indexed by inflation under rules promulgated by 
the Commission. The Commission shall, by rule in consultation with the 
Administrator, establish penalties of equal effectiveness for other 
pollutants for which a tonnage cap has been established pursuant to 
section 320(c). Any such penalty shall be due and payable without 
demand to the Commission. Excess emissions penalties and offsets shall 
be determined and administered in accordance with regulations to be 
promulgated by the Commission within 6 months after the enactment of 
this section.

``SEC. 322. GENERAL PROVISIONS RELATING TO SECTIONS 320 THROUGH 321.

    ``(a) Estimate of Electric Generation.--For each covered period, 
the Commission shall publish the Commission's estimate of the total 
electric generation by covered electric generating units in the 
applicable region. Such estimate shall be computed based on total 
electric energy generation from all covered units during the current 
year or covered period plus the projected growth (as determined by the 
Secretary of Energy) in electric energy generation and expected 
verifiable electric energy conservation for the covered period. The 
Commission shall publish such estimate at least 30 days prior to the 
beginning of the applicable period for which the estimate is made.
    ``(b) Transfer.--If the President finds that any functions and 
duties vested in the Commission under sections 320 or 321 or any 
combination thereof can be more efficiently carried out by another 
department, agency, or instrumentality of the United States, the 
President shall transfer such functions and duties in accordance with 
such finding. In any such case, such other department, agency, or 
instrumentality shall be substituted for the Commission for purposes of 
suits under subsection (c).
    ``(c) Citizen Suit.--Except as provided in paragraph (4) of this 
subsection, any person may commence a civil action on his own behalf--
            ``(1) against any person (including (i) the United States, 
        and (ii) any other governmental instrumentality or agency to 
        the extent permitted by the Eleventh Amendment to the 
        Constitution) who is alleged to have violated (if there is 
        evidence that the alleged violation has been repeated) or to be 
        in violation of (A) any requirement of section 320 or 321 or 
        (B) an order issued by the Commission or a State with respect 
        to such requirements, and
            ``(2) against the Commission where there is alleged a 
        failure of the Commission to perform any act or duty under 
        section 320, 321, or 322 which is not discretionary with the 
        Commission.
The district courts shall have jurisdiction, without regard to the 
amount in controversy or the citizenship of the parties, to enforce 
compliance with the requirements of sections 320 and 321 or to order 
the Commission to perform such act or duty, as the case may be, and to 
apply any appropriate civil penalties (except for actions under 
paragraph (2)). The district courts of the United States shall have 
jurisdiction to compel (consistent with paragraph (2) of this 
subsection) agency action unreasonably delayed. In any such action for 
unreasonable delay, notice to the Commission shall be provided 180 days 
before commencing such action.
            ``(3) No action may be commenced--
                    ``(A) under paragraph (1)--
                            ``(i) prior to 60 days after the plaintiff 
                        has given notice of the violation (I) to the 
                        Commission, (II) to the State in which the 
                        violation occurs, and (III) to any alleged 
                        violator of the standard, limitation, or order, 
                        or
                            ``(ii) if the Commission or State has 
                        commenced and is diligently prosecuting a civil 
                        action in a court of the United States or a 
                        State to require compliance with the standard, 
                        limitation, or order, but in any such action in 
                        a court of the United States any person may 
                        intervene as a matter of right.
                    ``(B) under paragraph (2) prior to 60 days after 
                the plaintiff has given notice of such action to the 
                Commission.
            ``(4) The court in issuing any final order in any action 
        brought pursuant to paragraph (1), may award costs of 
        litigation (including reasonable attorney and expert witness 
        fees) to any party, whenever the court determines such award is 
        appropriate.''.

SEC. 3. DEFINITIONS.

    Section 3 of the Federal Power Act is amended by adding the 
following after paragraph (24):
            ``(25) For oxides of nitrogen, the terms `applicable 
        region' and `covered period' refer to the applicable regions 
        and each of the covered periods specified in the chart in 
        section 320(a)(2). For fine particulate matter and any other 
        pollutant for which a tonnage cap has been established pursuant 
        to section 320(c), the term `applicable region' means the 
        continental United States. For fine particulate matter, the 
        term `covered period' means each of the covered periods 
        specified in the chart in section 320(b)(2). For any other 
        pollutant for which a tonnage cap has been established pursuant 
        to section 320(c), the term `covered period' means each 
        calendar year period beginning with the second calendar year 
        following the establishment of a tonnage cap for such 
        pollutant.
            ``(26) The term `covered electric generating unit' means an 
        electric generating unit in the applicable region with a 
        nameplate capacity of 15 MWe or greater.
            ``(27) The term `electric generating unit' means a boiler 
        and associated turbine or turbines, or other device for 
        generating electricity using fossil fuels; or a device for 
        generating electricity from renewable sources of energy other 
        than hydroelectric power.
            ``(28) The term `electric energy generation' means the 
        total electric energy buss bar output of an electric generating 
        unit and cogenerated thermal energy, including sales of steam, 
        as converted to common units by the Commission by rule.
            ``(29) The term `OTAG region' means the 37 States 
        comprising the Ozone Transport Assessment Group.''.
                                 <all>