[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 687 Introduced in Senate (IS)]







105th CONGRESS
  1st Session
                                 S. 687

To enhance the benefits of the national electric system by encouraging 
 and supporting State programs for renewable energy sources, universal 
electric service, affordable electric service, and energy conservation 
                and efficiency, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                              May 1, 1997

 Mr. Jeffords introduced the following bill; which was read twice and 
       referred to the Committee on Energy and Natural Resources

_______________________________________________________________________

                                 A BILL


 
To enhance the benefits of the national electric system by encouraging 
 and supporting State programs for renewable energy sources, universal 
electric service, affordable electric service, and energy conservation 
                and efficiency, 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. SHORT TITLE.

    This Act may be cited as the ``Electric System Public Benefits 
Protection Act of 1997''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) the generation of electricity is unique in its combined 
        influence on the Nation's security, environmental quality, and 
        economic efficiency;
            (2) the generation and sale of electricity has a direct and 
        profound impact on interstate commerce;
            (3) the Federal Government and the States have a joint 
        responsibility for the maintenance of public purpose programs 
        affected by the national electric system;
            (4) notwithstanding the public's interest in and enthusiasm 
        for programs that enhance the environment, encourage the 
        efficient use of resources, and provide for affordable and 
        universal service, the investments in those public purposes by 
        existing means continues to decline;
            (5) the Nation's dependence on foreign sources of fossil 
        fuels is contrary to our national security; alternative, 
        sustainable energy sources must be pursued as the Nation moves 
        into the 21st century;
            (6) emissions from electric power generating facilities are 
        today the largest industrial source responsible for persistent 
        public health and environmental problems; and
            (7) consumers have a right to certain information in order 
        to make objective choices on their electric service providers.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Environmental Protection Agency.
            (2) Board.--The term ``Board'' means the National Electric 
        System Public Benefits Board established under section 4.
            (3) Commission.--The term ``Commission'' means the Federal 
        Energy Regulatory Commission.
            (4) Fund.--The term ``Fund'' means the National Electric 
        System Public Benefits Fund established by section 5.
            (5) Renewable energy.--The term ``renewable energy'' means 
        electricity generated from wind, organic waste (excluding 
        incinerated municipal solid waste), or biomass or a geothermal, 
        solar thermal, or photovoltaic source.
            (6) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.

SEC. 4. NATIONAL ELECTRIC SYSTEM PUBLIC BENEFITS BOARD.

    (a) Establishment.--The Secretary shall establish a National 
Electric System Public Benefits Board to carry out the functions and 
responsibilities described in this section.
    (b) Membership.--The Board shall be composed of--
            (1) 1 representative of the Commission appointed by the 
        Commission;
            (2) 2 representatives of the Secretary appointed by the 
        Secretary;
            (3) 2 persons nominated by the national organization 
        representing State regulatory commissioners and appointed by 
        the Secretary;
            (4) 1 person nominated by the national organization 
        representing State utility consumer advocates and appointed by 
        the Secretary;
            (5) 1 person nominated by the national organization 
        representing State energy offices and appointed by the 
        Secretary;
            (6) 1 person nominated by the national organization 
        representing energy assistance directors and appointed by the 
        Secretary; and
            (7) 1 representative of the Environmental Protection Agency 
        appointed by the Administrator.
    (c) Chairperson.--The Secretary shall select a member of the Board 
to serve as Chairperson of the Board.
    (d) Manager.--
            (1) Appointment.--The Board shall by contract appoint an 
        electric systems public benefits manager for a term of not more 
        than 3 years, which term may be renewed by the Board.
            (2) Compensation.--The compensation and other terms and 
        conditions of employment of the manager shall be determined by 
        a contract between the Board and the individual or the other 
        entity appointed as manager.
            (3) Functions.--The manager shall--
                    (A) monitor the amounts in the Fund;
                    (B) receive, review, and make recommendations to 
                the Board regarding applications from States under 
                section 5(b); and
                    (C) perform such other functions as the Board may 
                require to assist the Board in carrying out its duties 
                under this Act.

SEC. 5. NATIONAL ELECTRIC SYSTEM PUBLIC BENEFITS FUND.

    (a) Establishment.--
            (1) In general.--The Board shall establish an account or 
        accounts at 1 or more financial institutions, which account or 
        accounts shall be known as the ``National Electric System 
        Public Benefits Fund'', consisting of amounts deposited in the 
        fund under subsection (c).
            (2) Status of fund.--The wires charges collected under 
        subsection (c) and deposited in the Fund--
                    (A) shall constitute electric system revenues and 
                shall not constitute funds of the United States;
                    (B) shall be held in trust by the manager of the 
                Fund solely for the purposes stated in subsection (b); 
                and
                    (C) shall not be available to meet any obligations 
                of the United States.
    (b) Use of Fund.--
            (1) Funding of public purpose programs.--Amounts in the 
        Fund shall be used by the Board to provide matching funds to 
        States for the support of State public purpose programs 
        relating to--
                    (A) renewable energy sources;
                    (B) universal electric service;
                    (C) affordable electric service;
                    (D) energy conservation and efficiency; or
                    (E) research and development in areas described in 
                subparagraphs (A) through (D).
            (2) Distribution.--
                    (A) In general.--Except for amounts needed to pay 
                costs of the Board in carrying out its duties under 
                this section, the Board shall instruct the manager of 
                the Fund to distribute all amounts in the Fund to 
                States to fund public purpose programs under paragraph 
                (1).
                    (B) Fund share.--
                            (i) In general.--Subject to clause (iii), 
                        the Fund share of a public purpose program 
                        funded under paragraph (1) shall be 50 percent.
                            (ii) Proportionate reduction.--To the 
                        extent that the amount of matching funds 
                        requested by States exceeds the maximum 
                        projected revenues of the Fund, the matching 
                        funds distributed to the States shall be 
                        reduced by an amount that is proportionate to 
                        each State's annual consumption of electricity 
                        compared to the Nation's aggregate annual 
                        consumption of electricity.
                            (iii) Additional state funding.--A State 
                        may apply funds to public purpose programs in 
                        addition to the amount of funds applied for the 
                        purpose of matching the Fund share.
            (3) Program criteria.--The Board shall recommend 
        eligibility criteria for public benefits programs funded under 
        this section for approval by the Secretary.
            (4) Application.--Not later than August 1 of each year 
        beginning in 1999, a State seeking matching funds for the 
        following year shall file with the Board, in such form as the 
        Board may require, an application--
                    (A) certifying that the funds will be used for an 
                eligible public purpose program; and
                    (B) stating the amount of State funds earmarked for 
                the program.
    (c) Wires Charge.--
            (1) Determination of needed funding.--Not later than August 
        1 of each year, the Board shall determine and inform the 
        Commission of the aggregate amount of wires charges that it 
        will be necessary to have paid into the Fund to pay matching 
        funds to States and pay the operating costs of the Board in the 
        following year.
            (2) Imposition of wires charge.--
                    (A) In general.--Not later than December 15 of each 
                year, the Commission shall impose a nonbypassable, 
                competitively neutral wires charge to be paid directly 
                into the Fund by the operator of the wire on 
                electricity carried through the wire, this electricity 
                to be measured as it exits the busbar at a generation 
                facility, and which impacts on interstate commerce.
                    (B) Amount.--The wires charge shall be set at a 
                rate equal to the lesser of--
                            (i) 2 mills per kilowatt-hour; or
                            (ii) a rate that is estimated to result in 
                        the collection of an amount of wires charges 
                        that is as nearly as possible equal to the 
                        amount of needed funding determined under 
                        paragraph (1).
            (3) Deposit in the fund.--The wires charge shall be paid by 
        the operator of the wire directly into the Fund at the end of 
        each month during the calendar year for distribution by the 
        electric systems public benefits manager under section 4.
            (4) Penalties.--The Commission may assess against a wire 
        operator that fails to pay a wires charge as required by this 
        subsection a civil penalty in an amount equal to not more than 
        the amount of the unpaid wires charge.
    (d) Auditing.--
            (1) In general.--The Fund shall be audited annually by a 
        firm of independent certified public accountants in accordance 
        with generally accepted auditing standards.
            (2) Access to records.--Representatives of the Secretary 
        and the Commission shall have access to all books, accounts, 
        reports, files, and other records pertaining to the Fund as 
        necessary to facilitate and verify the audit.
            (3) Reports.--
                    (A) In general.--A report on each audit shall be 
                submitted to the Secretary, the Commission, and the 
                Secretary of the Treasury, who shall submit the report 
                to the President and Congress not later than 180 days 
                after the close of the fiscal year.
                    (B) Requirements.--An audit report shall--
                            (i) set forth the scope of the audit; and
                            (ii) include--
                                    (I) a statement of assets and 
                                liabilities, capital; and surplus or 
                                deficit;
                                    (II) a statement of surplus or 
                                deficit analysis;
                                    (III) a statement of income and 
                                expenses;
                                    (IV) any other information that may 
                                be considered necessary to keep the 
                                President and Congress informed of the 
                                operations and financial condition of 
                                the Fund; and
                                    (V) any recommendations with 
                                respect to the Fund that the Secretary 
                                or the Commission may have.

SEC. 6. RENEWABLE ENERGY PORTFOLIO STANDARDS.

    (a) Definition of Generation Facility.--In this section, the term 
``covered generation facility'' means a nonhydroelectric facility that 
generates electric energy for sale.
    (b) Required Renewable Energy.--Of the total amount of electricity 
sold by covered generation facilities during a calendar year, the 
amount generated by renewable energy sources shall be not less than--
            (1) 2.5 percent in 2000;
            (2) 3.0 percent in 2001;
            (3) 3.5 percent in 2002;
            (4) 4.0 percent in 2003;
            (5) 4.5 percent in 2004;
            (6) 5.0 percent in 2005;
            (7) 6.0 percent in 2006;
            (8) 7.0 percent in 2007;
            (9) 8.0 percent in 2008;
            (10) 9.0 percent in 2009;
            (11) 10.0 percent in 2010;
            (12) 11.0 percent in 2011;
            (13) 12.0 percent in 2012;
            (14) 13.0 percent in 2013;
            (15) 14.0 percent in 2014;
            (16) 15.0 percent in 2015;
            (17) 16.0 percent in 2016;
            (18) 17.0 percent in 2017;
            (19) 18.0 percent in 2018;
            (20) 19.0 percent in 2019; and
            (21) 20.0 percent in 2020 and each year thereafter.
    (c) Renewable Energy Credits.--
            (1) Identification of energy sources.--The Commission shall 
        establish standards and procedures under which a covered 
        generation facility shall certify to a purchaser of 
        electricity--
                    (A) the amount of the electricity that is generated 
                by a renewable energy source; and
                    (B) the amount of the electricity that is generated 
                by a source other than a renewable energy source.
            (2) Issuance of renewable energy credits.--Not later than 
        April 1 of each year, beginning in the year 2001, the 
        Commission shall issue to a covered generation facility 1 
        renewable energy credit for each megawatt-hour of electricity 
        sold by the covered generation facility in the preceding 
        calendar year that was generated by a renewable source.
            (3) Submission of renewable energy credits.--Not later than 
        July 1 of each year, a covered generation facility shall submit 
        credits to the Commission in an amount equal to the total 
        number of megawatt-hours of electricity sold by the covered 
        generation facility in the preceding year multiplied by the 
        applicable renewable energy source requirement under subsection 
        (a).
            (4) Use of renewable energy credits.--
                    (A) Time for use.--A renewable energy credit shall 
                be used for the calendar year for the renewable energy 
                credit is issued.
                    (B) Permitted uses.--Until July 1 of the year in 
                which a renewable energy credit was issued, a covered 
                generation facility may--
                    (A) use the renewable energy credit to make a 
                submission to the Commission under paragraph (3); or
                    (B) on notice to the Commission, sell or otherwise 
                transfer a renewable energy credit to another covered 
                generation facility.
    (d) Recordkeeping.--The Commission shall maintain records of all 
renewable energy credits issued and all credits sold or exchanged.
    (e) Penalties.--The Commission may bring an action in United States 
district court to impose a civil penalty on any person that fails to 
comply with subsection (a). A person that fails to comply with a 
requirement to submit renewable energy credits under subsection (b)(3) 
shall be subject to a civil penalty of not more than 3 times the 
estimated national average market value (as determined by the 
Commission) for the calendar year concerned of that quantity of 
renewable energy credits.
    (f) Public Utility Regulatory Policies Act of 1978.--
            (1) Repeal of cogeneration and small power production 
        provision.--Effective January 1, 2000, the Public Utility 
        Regulatory Policies Act of 1978 is amended by striking section 
        210 (16 U.S.C. 824a-3).
            (2) Existing contracts.--The amendment made by paragraph 
        (1) shall not affect the continued validity and enforceability 
        of contracts entered into under section 210 of the Public 
        Utility Regulatory Policies Act of 1978 before the date of 
        enactment of this Act.
            (3) Continued jurisdiction.--Notwithstanding the amendment 
        made by paragraph (1), the Commission shall retain jurisdiction 
        to--
                    (A) ensure the continued status of qualifying small 
                power production facilities under section 210 of the 
                Public Utility Regulatory Policies Act of 1978 (16 
                U.S.C. 824a-3); and
                    (B) continue exemptions granted under subsection 
                (e) of that section before the date of enactment of 
                this Act.
    (g) Powers.--The Commission may promulgate such regulations, 
conduct such investigations, and take such other actions as are 
necessary or appropriate to implement and obtain compliance with this 
section and regulations promulgated under this section.

SEC. 7. EMISSIONS STANDARDS AND ALLOCATIONS.

    (a) Definitions.--In this section:
            (1) Covered generation facility.--The term ``covered 
        generation facility'' means an electric generation facility 
        (other than a nuclear facility) with a nameplate capacity of 15 
        megawatts or greater that uses a combustion device to generate 
        electricity for sale.
            (2) Cogeneration.--The term ``cogeneration'' means a 
        process of simultaneously generating electricity and thermal 
        energy in which a portion of the energy value of fuel consumed 
        is recovered as heat that is used to meet heating or cooling 
        loads outside the generation facility.
            (3) Pollutant.--The term ``pollutant'' means--
                    (A) nitrogen oxide;
                    (B) sulfur dioxide;
                    (C) carbon dioxide;
                    (D) mercury; or
                    (E) any other substance that the Administrator may 
                identify by regulation as a substance the emission of 
                which into the air from a combustion device used in the 
                generation of electricity endangers public health or 
                welfare.
    (b) Nationwide Emissions Standards.--
            (1) Schedule.--Not later than July 1, 1999, the 
        Administrator shall promulgate a final regulation that 
        establishes a schedule of limits on the amount of each 
        pollutant that all covered generation facilities in the 
        aggregate nationwide shall be permitted to emit in each 
        calendar year beginning in calendar year 2000.
            (2) Limit.--The nationwide emissions standard for calendar 
        year 2005 and each year thereafter established under paragraph 
        (1) shall be not greater than--
                    (A) for nitrogen oxide, 1,660,000 tons;
                    (B) for sulfur dioxide, 3,580,000 tons; and
                    (C) for carbon dioxide, 1,914,000,000 tons.
            (3) Adjustment.--The Administrator may adjust the schedule 
        established under paragraph (1), within the limits established 
        by paragraph (2), if the Administrator determines that an 
        adjustment would be in the best interests of the public health 
        and welfare.
    (c) Generation Performance Standard.--
            (1) Annual determination.--
                    (A) In general.--Not later than October 1 of each 
                year, the Administrator, in consultation with the 
                Commission, shall determine the generation performance 
                standard for nitrogen oxide, sulfur dioxide, and carbon 
                dioxide emissions per megawatt-hour of electric 
                production by covered generation facilities for the 
                next calendar year.
                    (B) Method.--The Administrator shall determine by 
                regulation the method to be used in determining an 
                estimate under subparagraph (A).
            (2) Formula.--The generation performance standard shall be 
        determined by dividing the annual nationwide emissions standard 
        as established under subsection (b) by the Administrator's 
        estimate of the nationwide megawatt-hour production for the 
        next calendar year by all covered generation facilities.
    (d) Individual Emissions Allocation.--The amount of each pollutant 
that a covered generation facility shall be permitted to emit during a 
calendar year shall be equal to--
            (1) the facility's annual generation of megawatt-hours of 
        electricity multiplied by the generation performance standard 
        as established in subsection (c); plus
            (2) the facility's annual generation of thermal energy used 
        to meet heating and cooling loads resulting from the 
        cogeneration process, which shall be expressed by the 
        Administrator in units of measurement that provide a reasonable 
        comparison between energy generated in the form of electricity 
        and energy generated in the form of thermal energy and then 
        multiplied by the generation performance standard as 
        established under subsection (c).
    (e) Ozone Season.--In determining the individual emissions 
allocation for a covered generation facility under subsection (d), the 
amount of nitrogen oxide emitted by covered generation facility and the 
number of megawatt-hours of electricity generated by the covered 
generation facility during the period May 1 through September 30 of 
each year shall each be multiplied by 3.
    (f) Monitoring.--
            (1) Establishment of system.--The Administrator shall 
        establish a system for the accurate monitoring of the amount of 
        each pollutant that a covered generation facility emits during 
        a year.
            (2) Requirements.--The monitoring system under paragraph 
        (1) shall require--
                    (A) installation on each combustion device of a 
                continuous monitoring system for each pollutant; or
                    (B) use of an alternative mechanism that the 
                Administrator determines will provide data with 
                precision, reliability, accessibility, and timeliness 
                that are equal to or greater than those that would be 
                achieved by a continuous emissions monitoring system.
    (g) Emissions Credits.--
            (1) Comparison of actual combustion device outputs with 
        individual emission allocations.--At the end of each year, the 
        Administrator shall compare the amount of a pollutant emitted 
        by a generation facility during the year with the individual 
        emissions allocation as established under subsection (d) 
        applicable to the covered generation facility for the year.
            (2) Issuance of emissions credits.--Not later than April 1 
        of each year, the Administrator shall issue to a covered 
        generation facility 1 emissions credit for each ton by which 
        the amount of a pollutant emitted by the covered generation 
        facility during the preceding year was less than the individual 
emissions allocation as established under subsection (d) applicable to 
the covered generation facility.
            (3) Submission of emissions credits.--
                    (A) In general.--Not later than July 1 of each 
                year, a covered generation facility that emitted a 
                greater amount of a pollutant than the individual 
                emissions allocation applicable to the covered 
                generation facility during the preceding year shall 
                submit to the Administrator 1 emissions credit for each 
                ton by which the amount of the pollutant emitted was 
                greater than the individual emissions allocation as 
                established under subsection (d).
                    (B) Penalty.--A covered generation facility that is 
                required to submit an emissions credit under 
                subparagraph (A) that fails to submit the emissions 
                credit shall pay to the Administrator a civil penalty 
                in an amount equal to--
                            (i) $15,000 for each ton of nitrogen oxide 
                        emissions in excess of the individual emissions 
                        allocation applicable to the facility under 
                        subsection (d) for which a nitrogen oxide 
                        emissions credit has not been submitted under 
                        subparagraph (A);
                            (ii) $2,500 for each ton of sulfur dioxide 
                        emissions in excess of the individual emissions 
                        allocation applicable to the facility under 
                        subsection (d) for which a sulfur dioxide 
                        emissions credit has not been submitted under 
                        subparagraph (A); or
                            (iii) $100 for each ton of carbon dioxide 
                        emissions in excess of the individual emissions 
                        allocation applicable to the facility under 
                        subsection (d) for which a carbon dioxide 
                        emissions credit has not been submitted under 
                        subparagraph (A).
                    (C) Penalty adjustment.--The Administrator shall 
                annually adjust the penalty specified in subparagraph 
                (B) for inflation based on the Consumer Price Index.
            (4) Use of emissions credits.--A covered generation 
        facility may--
                    (A) retain an emissions credit from year to year 
                for future submission to the Administrator under 
                paragraph (3); or
                    (B) on notice to the Administrator, sell or 
                otherwise transfer an emissions credit to another 
                person.
    (h) Powers.--The Administrator may promulgate such regulations, 
conduct such investigations, and take such other actions as are 
necessary to appropriate to implement and obtain compliance with this 
section and regulations promulgated under this section.

SEC. 8. DISCLOSURE REQUIREMENTS.

    (a) Definitions.--In this section:
            (1) Emissions data.--The term ``emissions data'' means the 
        type and amount of each pollutant (as defined in section 7(a)) 
        emitted by a generation facility in generating electricity.
            (2) Generation data.--The term ``generation data'' means 
        the type of fuel (such as coal, oil, nuclear energy, or solar 
        power) used by a generation facility to generate electricity.
    (b) Disclosure System.--The Secretary shall establish a system of 
disclosure that--
            (1) enables retail consumers to knowledgeably compare 
        retail electric service offerings, including comparisons based 
        on generation source portfolios, emissions data, and price 
        terms; and
            (2) considers such factors as--
                    (A) cost of implementation;
                    (B) confidentiality of information; and
                    (C) flexibility.
    (c) Regulation.--Not later than March 1, 1999, the Secretary, in 
consultation with the Board, and with the assistance of a Federal 
interagency task force that includes representatives of the Commission, 
the Federal Trade Commission, the Food and Drug Administration, and the 
Environmental Protection Agency, shall promulgate a regulation 
prescribing--
            (1) the form, content, and frequency of disclosure of 
        emissions data and generation data of electricity by generation 
        facilities to electricity wholesalers or retail companies and 
        by wholesalers to retail companies;
            (2) the form, content, and frequency of disclosure of 
        emissions data, generation data, and the price of electricity 
        by retail companies to ultimate consumers; and
            (3) the form, content, and frequency of disclosure of 
        emissions data, generation data, and the price of electricity 
        by generation facilities selling directly to ultimate 
        consumers.
    (d) Access to Records.--The Secretary shall have full access to the 
records of all generation facilities, electricity wholesalers, and 
retail companies to obtain any information necessary to administer and 
enforce this section.
    (e) Failure To Disclose.--The failure of a retail company to 
accurately disclose information as required by this section shall be 
treated as a deceptive act in commerce under section 5 of the Federal 
Trade Commission Act (15 U.S.C. 45).
    (f) Regulations.--The Secretary may promulgate such regulations, 
conduct such investigations, and take such other actions as are 
necessary or appropriate to implement and obtain compliance with this 
section and regulations promulgated under this section.
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