[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 2724 Introduced in Senate (IS)]
109th CONGRESS
2d Session
S. 2724
To amend the Clean Air Act to establish a national uniform multiple air
pollutant regulatory program for the electric generating sector.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 4, 2006
Mr. Carper (for himself, Mr. Alexander, Mr. Chafee, Mr. Gregg, Mr.
Dodd, Mrs. Feinstein, and Mr. Graham) introduced the following bill;
which was read twice and referred to the Committee on Environment and
Public Works
_______________________________________________________________________
A BILL
To amend the Clean Air Act to establish a national uniform multiple air
pollutant regulatory program for the electric generating sector.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Clean Air Planning
Act of 2006''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
Sec. 3. Integrated air quality planning for the electric generating
sector.
Sec. 4. New source review program.
Sec. 5. Revisions to sulfur dioxide allowance program.
Sec. 6. Air quality forecasts and warnings.
Sec. 7. Relationship to other law.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--Congress finds that--
(1) fossil fuel-fired electric generating facilities,
consisting of facilities fueled by coal, fuel oil, and natural
gas, produce nearly \2/3\ of the electricity generated in the
United States;
(2) fossil fuel-fired electric generating facilities
produce approximately \2/3\ of the total sulfur dioxide
emissions, \1/3\ of the total nitrogen oxides emissions, \1/3\
of the total carbon dioxide emissions, and \1/3\ of the total
mercury emissions, in the United States;
(3) the Clean Air Act (42 U.S.C. 7401 et seq.) regulates
substances (including carbon dioxide) that--
(A) are emitted into the ambient air; and
(B) affect the weather and the climate;
(4)(A) many electric generating facilities have been exempt
from the emission limitations applicable to new units based on
the expectation that over time the units would be retired or
updated with new pollution control equipment; but
(B) many of the exempted units continue to operate and emit
pollutants at relatively high rates;
(5) pollution from existing electric generating facilities
can be reduced through adoption of modern technologies and
practices;
(6) the full benefits of competition will not be realized
if the environmental impacts of generation of electricity are
not uniformly internalized;
(7) the ability of owners of electric generating facilities
to effectively plan for the future is impeded by the
uncertainties surrounding future environmental regulatory
requirements that are imposed inefficiently on a piecemeal
basis; and
(8) States and regions have increasingly adopted programs
to address carbon dioxide emissions from electric generating
facilities, and Federal regulations relating to carbon dioxide
emissions should take those programs into consideration.
(b) Purposes.--The purposes of this Act are--
(1) to protect and preserve the environment and safeguard
public health by ensuring that substantial emission reductions
are achieved at fossil fuel-fired electric generating
facilities;
(2) to significantly reduce the quantities of mercury,
carbon dioxide, sulfur dioxide, and nitrogen oxides that enter
the environment as a result of the combustion of fossil fuels;
(3) to encourage the development and use of renewable
energy;
(4) to internalize the cost of protecting the values of
public health, air, land, and water quality in the context of a
competitive market in electricity;
(5) to provide a period of environmental regulatory
stability for owners and operators of electric generating
facilities so as to promote improved management of existing
assets and new capital investments; and
(6) to achieve emission reductions from electric generating
facilities in a cost-effective manner.
SEC. 3. INTEGRATED AIR QUALITY PLANNING FOR THE ELECTRIC GENERATING
SECTOR.
The Clean Air Act (42 U.S.C. 7401 et seq.) is amended by adding at
the end the following:
``TITLE VII--INTEGRATED AIR QUALITY PLANNING FOR THE ELECTRIC
GENERATING SECTOR
``Sec. 701. Definitions.
``Sec. 702. National pollutant tonnage limitations.
``Sec. 703. Nitrogen oxide trading program.
``Sec. 704. Inlet mercury program.
``Sec. 705. Carbon dioxide allowance trading program.
``SEC. 701. DEFINITIONS.
``In this title:
``(1) Affected unit.--
``(A) Mercury.--The term `affected unit', with
respect to mercury, means a coal-fired electric
generating facility (including a cogeneration facility)
that--
``(i) has a nameplate capacity greater than
25 megawatts; and
``(ii) generates electricity for sale.
``(B) Nitrogen oxides and carbon dioxide.--The term
`affected unit', with respect to nitrogen oxides and
carbon dioxide, means a fossil fuel-fired electric
generating facility (including a cogeneration facility)
that--
``(i) has a nameplate capacity greater than
25 megawatts; and
``(ii) generates electricity for sale.
``(C) Sulfur dioxide.--The term `affected unit',
with respect to sulfur dioxide, has the meaning given
the term in section 402.
``(2) Carbon dioxide allowance.--The term `carbon dioxide
allowance' means an authorization allocated by the
Administrator under this title to emit 1 ton of carbon dioxide
during or after a specified calendar year.
``(3) Clean coal technology.--The term `clean coal
technology' means--
``(A) an advanced pulverized coal technology;
``(B) an atmospheric fluidized bed combustion
technology;
``(C) a pressurized fluidized bed combustion
technology;
``(D) a integrated gasification combined cycle
technology; and
``(E) any other highly efficient and low-emitting
technology for the production of electricity using coal
or coal-based fuels.
``(4) Cogeneration facility.--The term `cogeneration
facility' means a facility that--
``(A) cogenerates--
``(i) steam; and
``(ii) electricity; and
``(B) supplies, on a net annual basis, to any
utility power distribution system for sale--
``(i) more than \1/3\ of the potential
electric output capacity of the facility; and
``(ii) more than 25 megawatts of electrical
output of the facility.
``(5) Covered unit.--The term `covered unit' means--
``(A) an affected unit;
``(B) a nuclear generating unit with respect to
incremental nuclear generation; and
``(C) a renewable energy unit.
``(6) Greenhouse gas.--The term `greenhouse gas' means--
``(A) carbon dioxide;
``(B) methane;
``(C) nitrous oxide;
``(D) hydrofluorocarbons;
``(E) perfluorocarbons; and
``(F) sulfur hexafluoride.
``(7) Incremental nuclear generation.--The term
`incremental nuclear generation' means, as determined by the
Administrator and measured in megawatt hours, the difference
between--
``(A) the quantity of electricity generated by a
nuclear generating unit in a calendar year; and
``(B) the quantity of electricity generated by the
nuclear generating unit in calendar year 1990.
``(8) New renewable energy unit.--The term `new renewable
energy unit' means a renewable energy unit that has operated
for a period of not more than 3 years.
``(9) New unit.--The term `new unit' means an affected unit
that has operated for not more than 3 years and is not eligible
to receive--
``(A) sulfur dioxide allowances under section
417(b);
``(B) nitrogen oxide allowances under section
703(c)(2); or
``(C) carbon dioxide allowances under section
705(e).
``(10) Nitrogen oxide allowance.--The term `nitrogen oxide
allowance' means an authorization allocated by the
Administrator under this title to emit 1 ton of nitrogen oxides
during or after a specified calendar year.
``(11) Nuclear generating unit.--The term `nuclear
generating unit' means an electric generating facility that--
``(A) uses nuclear energy to supply electricity to
the electric power grid; and
``(B) commenced operation in calendar year 1990 or
earlier.
``(12) Renewable energy.--The term `renewable energy' means
electricity generated from--
``(A) wind;
``(B) organic waste (excluding incinerated
municipal solid waste);
``(C) biomass (including anaerobic digestion from
farm systems and landfill gas recovery);
``(D) fuel cells; or
``(E) a hydroelectric, geothermal, solar thermal,
photovoltaic, or other nonfossil fuel, nonnuclear
source.
``(13) Renewable energy unit.--The term `renewable energy
unit' means an electric generating facility that uses
exclusively renewable energy to supply electricity to the
electric power grid.
``(14) Sequestration.--The term `sequestration' means the
action of sequestering carbon by--
``(A) enhancing a natural carbon sink (such as
through afforestation); or
``(B)(i) capturing the carbon dioxide emitted from
a fossil fuel-based energy system; and
``(ii)(I) storing the carbon in a geologic
formation; or
``(II) converting the carbon to a benign solid
material through a biological or chemical process.
``(15) Sulfur dioxide allowance.--The term `sulfur dioxide
allowance' has the meaning given the term `allowance' in
section 402.
``SEC. 702. NATIONAL POLLUTANT TONNAGE LIMITATIONS.
``(a) Sulfur Dioxide.--The annual tonnage limitation for emissions
of sulfur dioxide from affected units in the United States shall be
equal to--
``(1) for each of calendar years 2010 through 2014,
4,500,000 tons; and
``(2) for calendar year 2015 and each calendar year
thereafter, 2,000,000 tons.
``(b) Nitrogen Oxides.--
``(1) Definitions.--In this subsection:
``(A) Zone 1 state.--The term `Zone 1 State' means
the District of Columbia or any of the States of
Alabama, Arkansas, Connecticut, Delaware, Florida,
Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana,
Maine, Maryland, Massachusetts, Michigan, Minnesota,
Mississippi, Missouri, New Hampshire, New Jersey, New
York, North Carolina, Ohio, Pennsylvania, Rhode Island,
South Carolina, Tennessee, Texas, Vermont, Virginia,
West Virginia, and Wisconsin.
``(B) Zone 2 state.--The term `Zone 2 State' means
any State within the 48 contiguous States that is not a
Zone 1 State.
``(2) Applicability.--
``(A) Zone 1 prohibition.--
``(i) In general.--Beginning on January 1,
2009, it shall be unlawful for an affected unit
in a Zone 1 State to emit a total amount of
nitrogen oxides during a year in excess of the
number of nitrogen oxide allowances held for
the affected unit for that year by the owner or
operator of the affected unit.
``(ii) Limitation.--Only nitrogen oxide
allowances under paragraph (3)(A) shall be held
in order to meet the requirements of clause
(i).
``(B) Zone 2 prohibition.--
``(i) In general.--Beginning on January 1,
2010, it shall be unlawful for an affected unit
in a Zone 2 State to emit a total amount of
nitrogen oxides during a year in excess of the
number of nitrogen oxide allowances held for
the affected unit for that year by the owner or
operator of the affected unit.
``(ii) Limitation.--Only nitrogen oxide
allowances under paragraph (3)(B) shall be held
in order to meet the requirements of clause
(i).
``(3) Limitations on total emissions.--
``(A) Zone 1 limitations.--The Administrator shall
allocate an annual tonnage limitation for emissions of
nitrogen oxides from affected units in the Zone 1
States in an amount equal to--
``(i) for each of calendar years 2009
through 2014, 1,450,000 tons; and
``(ii) for calendar year 2015 and each
calendar year thereafter, 1,300,000 tons.
``(B) Zone 2 limitations.--The Administrator shall
allocate an annual tonnage limitation for emissions of
nitrogen oxides from affected units in the Zone 2
States in an amount equal to--
``(i) for each of calendar years 2010
through 2014, 450,000 tons; and
``(ii) for calendar year 2015 and each
calendar year thereafter, 320,000 tons.
``(c) Mercury.--The emission of mercury from affected units shall
be limited in accordance with section 704.
``(d) Carbon Dioxide.--Subject to section 705(c), the annual
tonnage limitation for emissions of carbon dioxide from covered units
in the United States shall be equal to, as determined by the
Administrator based on certified and quality-assured continuous
emissions monitoring data for carbon dioxide reported to the
Administrator by affected units in accordance with this Act--
``(1) for each of calendar years 2010 through 2014, the
quantity of emissions projected to be emitted from affected
units in calendar year 2006; and
``(2) for calendar year 2015 and each calendar year
thereafter, the quantity of emissions emitted from affected
units in calendar year 2001.
``(e) Review of Annual Tonnage Limitations and Mercury Emissions
Requirements.--
``(1) Determination by administrator.--Not later than 10
years after the date of enactment of this title, the
Administrator shall determine--
``(A) after considering impacts on human health,
the environment, the economy, and costs, whether 1 or
more of the annual tonnage limitations should be
revised; and
``(B) whether the mercury emission requirements
under section 704 should be revised in accordance with
the risk standards described in section 112(f)(2).
``(2) Determination not to revise.--If the Administrator
determines under paragraph (1) that none of the annual tonnage
limitations or mercury emissions requirements should be
revised, the Administrator shall publish in the Federal
Register a notice of the determination and the reasons for the
determination.
``(3) Determination to revise.--If the Administrator
determines under paragraph (1) that 1 or more of the annual
tonnage limitations or mercury emissions requirements should be
revised, the Administrator shall publish in the Federal
Register--
``(A) not later than 10 years and 180 days after
the date of enactment of this title, proposed
regulations implementing the revisions; and
``(B) not later than 11 years and 180 days after
the date of enactment of this title, final regulations
implementing the revisions.
``(4) Administration.--The duty of the Administrator to
make a determination under paragraph (1) shall be--
``(A) considered to be a nondiscretionary duty;
``(B) enforceable through a citizen suit under
section 304; and
``(C) subject to rulemaking procedures and judicial
review under section 307.
``(f) Reduction of Emissions From Specified Affected Units.--
Notwithstanding the annual tonnage limitations and mercury emissions
requirements established under this section, the Federal Government or
a State government may require that emissions from a specified affected
unit be reduced.
``SEC. 703. NITROGEN OXIDE TRADING PROGRAM.
``(a) Regulations.--
``(1) Promulgation.--
``(A) In general.--Not later than January 1, 2007,
the Administrator shall promulgate regulations to
establish for affected units in the United States a
nitrogen oxide allowance trading program.
``(B) Requirements.--Regulations promulgated under
subparagraph (A) shall establish requirements for the
allowance trading program under this section, including
requirements concerning--
``(i)(I) the generation, allocation,
issuance, recording, tracking, transfer, and
use of nitrogen oxide allowances; and
``(II) the public availability of all
information concerning the activities described
in subclause (I) that is not confidential;
``(ii) compliance with subsection (e)(1);
``(iii) the monitoring and reporting of
emissions under paragraphs (2) and (3) of
subsection (e); and
``(iv) excess emission penalties under
subsection (e)(4).
``(2) Mixed fuel, co-generation facilities and combined
heat and power facilities.--The Administrator shall promulgate
such regulations as are necessary to ensure the equitable
issuance of allowances to--
``(A) facilities that use more than 1 energy source
to produce electricity; and
``(B) facilities that produce electricity in
addition to another service or product.
``(b) New Unit Reserves.--
``(1) Establishment.--For each calendar year, based on
projections of electricity output from new units, the
Administrator, in consultation with the Secretary of Energy,
shall establish by regulation a reserve of nitrogen oxide
allowances to be set aside for use by new units that is not
less than 5 percent of the total allowances allocated to
affected units for the calendar year.
``(2) Unused allowances.--For each calendar year, the
Administrator shall reallocate, to all affected units, any
unused nitrogen oxide allowances from the new unit reserve
established under paragraph (1) in the proportion that--
``(A) the number of allowances allocated to each
affected unit for the calendar year; bears to
``(B) the number of allowances allocated to all
affected units for the calendar year.
``(c) Nitrogen Oxide Allocations.--
``(1) Timing of allocations.--The Administrator shall
allocate nitrogen oxide allowances to affected units--
``(A)(i) not later than December 31, 2007, for
calendar year 2009 for all Zone 1 States; and
``(ii) not later than December 31, 2007, for
calendar year 2010 for all Zone 2 States; and
``(B) not later than December 31 of calendar year
2008 and each calendar year thereafter, for the fourth
calendar year that begins after that December 31.
``(2) Allocations to affected units that are not new
units.--
``(A) Quantity of allowances.--
``(i) Zone 1 states.--The Administrator
shall allocate to each affected unit in a Zone
1 State that is not a new unit a quantity of
nitrogen oxide allowances in the proportion
that--
``(I) the number of megawatt hours
of electric power generated by the
affected unit in the Zone 1 State;
bears to
``(II) the number of megawatt hours
of electric power generated by all
affected units in all Zone 1 States.
``(ii) Zone 2 states.--The Administrator
shall allocate to each affected unit in a Zone
2 State that is not a new unit a quantity of
nitrogen oxide allowances in the proportion
that--
``(I) the number of megawatt hours
of electric power generated by the
affected unit in the Zone 2 State;
bears to
``(II) the number of megawatt hours
of electric power generated by all
affected units in all Zone 2 States.
``(iii) Factors for consideration.--In
allocating allowances under clauses (i) and
(ii), the Administrator shall take into
consideration the average megawatt hours of an
affected unit, calculated for the most recent
3-calendar year period for which data are
available and updated each calendar year.
``(B) Adjustment of allocations.--
``(i) In general.--If, for any calendar
year, the total quantity of allowances
allocated under subparagraph (A) is not equal
to the applicable quantity determined under
clause (ii), the Administrator shall adjust the
quantity of allowances allocated to affected
units that are not new units on a pro-rata
basis so that the quantity is equal to the
applicable quantity determined under clause
(ii).
``(ii) Applicable quantity.--The applicable
quantity referred to in clause (i) is the
difference between--
``(I) the applicable annual tonnage
limitation for emissions from affected
units specified in section 702(b) for
the calendar year; and
``(II) the quantity of nitrogen
oxide allowances placed in the
applicable new unit reserve established
under subsection (b) for the calendar
year.
``(3) Allocation to new units.--
``(A) Methodology.--The Administrator shall
promulgate regulations to establish a methodology for
allocating nitrogen oxide allowances to new units.
``(B) Quantity of nitrogen oxide allowances
allocated.--The Administrator shall determine the
quantity of nitrogen oxide allowances to be allocated
to each new unit based on the projected emissions from
the new unit.
``(4) Allowance not a property right.--A nitrogen oxide
allowance--
``(A) is not a property right; and
``(B) may be terminated or limited by the
Administrator.
``(5) No judicial review.--An allocation of nitrogen
allowances by the Administrator under this subsection shall not
be subject to judicial review.
``(d) Nitrogen Oxide Allowance Transfer System.--
``(1) Use of allowances.--The regulations promulgated under
subsection (a)(1)(A) shall--
``(A) prohibit the use (but not the transfer in
accordance with paragraph (3)) of any nitrogen oxide
allowance before the calendar year for which the
allowance is allocated;
``(B) provide that unused nitrogen oxide allowances
may be carried forward and added to nitrogen oxide
allowances allocated for subsequent years; and
``(C) provide that unused nitrogen oxide allowances
may be transferred by--
``(i) the person to which the allowances
are allocated; or
``(ii) any person to which the allowances
are transferred.
``(2) Use by persons to which allowances are transferred.--
Any person to which nitrogen oxide allowances are transferred
under paragraph (1)(C)--
``(A) may use the nitrogen oxide allowances in the
calendar year for which the nitrogen oxide allowances
were allocated, or in a subsequent calendar year, to
demonstrate compliance with subsection (e)(1); or
``(B) may transfer the nitrogen oxide allowances to
any other person for the purpose of demonstration of
that compliance.
``(3) Certification of transfer.--A transfer of a nitrogen
oxide allowance shall not take effect until a written
certification of the transfer, authorized by a responsible
official of the person making the transfer, is received and
recorded by the Administrator.
``(4) Permit requirements.--An allocation or transfer of
nitrogen oxide allowances to an affected unit shall, after
recording by the Administrator, be considered to be part of the
federally enforceable permit of the affected unit under this
Act, without a requirement for any further review or revision
of the permit.
``(e) Compliance and Enforcement.--
``(1) In general.--For calendar year 2009 and each calendar
year thereafter for Zone 1 States, and for calendar year 2010
and each calendar year thereafter for Zone 2 States, the
operator of each affected unit shall surrender to the
Administrator a quantity of nitrogen oxide allowances that is
equal to the total tons of nitrogen oxides emitted by the
affected unit during the calendar year.
``(2) Monitoring system.--The Administrator shall
promulgate regulations requiring the accurate monitoring of the
quantities of nitrogen oxides that are emitted from each
affected unit.
``(3) Reporting.--
``(A) In general.--Not less often than quarterly,
the owner or operator of an affected unit shall submit
to the Administrator a report on the monitoring of
emissions of nitrogen oxides carried out by the owner
or operator in accordance with the regulations
promulgated under paragraph (2).
``(B) Authorization.--Each report submitted under
subparagraph (A) shall be authorized by a responsible
official of the affected unit, who shall certify the
accuracy of the report.
``(C) Public reporting.--The Administrator shall
make available to the public, through 1 or more
published reports and 1 or more forms of electronic
media, data concerning the emissions of nitrogen oxides
from each affected unit.
``(4) Excess emissions.--
``(A) In general.--The owner or operator of an
affected unit that emits nitrogen oxides in excess of
the nitrogen oxide allowances that the owner or
operator holds for use for the affected unit for the
calendar year shall--
``(i) pay an excess emissions penalty
determined under subparagraph (B); and
``(ii) offset the excess emissions by an
equal quantity in the following calendar year
or such other period as the Administrator shall
prescribe.
``(B) Determination of excess emissions penalty.--
The excess emissions penalty for nitrogen oxides shall
be equal to the product obtained by multiplying--
``(i) the number of tons of nitrogen oxides
emitted in excess of the total quantity of
nitrogen oxide allowances held; and
``(ii) 2 times the average price of a
nitrogen oxides allowance for the Zone and
calendar year in which the excess emissions
occurred, as determined by the Administrator.
``(f) Treatment of Existing Programs.--
``(1) Seasonal cap and trading program.--The provisions of
the rule of the Administrator entitled the `Clean Air
Interstate Rule' (70 Fed. Reg. 25,162) (May 12, 2005) providing
for the establishment of a seasonal emissions cap and ozone
trading program for oxides of nitrogen shall remain in full
force and effect.
``(2) Annual cap and trading program.--The provisions of
the rule referred to in paragraph (1) providing for the
establishment of an annual emissions cap and trading program
for oxides of nitrogen shall terminate on the later of--
``(A) the effective date of the regulations
promulgated under this section; and
``(B) January 1, 2009.
``SEC. 704. MERCURY PROGRAM.
``(a) Definition of Inlet Mercury.--In this section, the term
`inlet mercury' means the quantity of mercury found--
``(1) in the as-fired coal of an affected unit; or
``(2) for an affected unit using coal that is subjected to
an advanced coal cleaning technology, in the as-mined coal of
the affected unit.
``(b) Annual Limitation for New Units.--An affected unit that
commences operation during the 1-year period beginning on the date of
enactment of this title shall be subject to the less stringent of the
following emissions limitations on an annual calendar year basis with
respect to inlet mercury:
``(1) 90 percent capture of inlet mercury.
``(2) An emission rate of 0.0060 lbs/GWh.
``(c) Annual Limitation for Existing Units.--An affected unit in
operation on the date of enactment of this title shall be subject to
the following emissions limitations on an annual calendar year basis
with respect to inlet mercury:
``(1) Calendar years 2010 through 2014.--For the period
beginning January 1, 2010, and ending December 31, 2014, the
less stringent limitation of--
``(A) 60 percent capture of inlet mercury; and
``(B) an emission rate of 0.02 lbs/GWh.
``(2) Calendar year 2015 and thereafter.--Beginning January
1, 2015, the less stringent limitation of--
``(A) 90 percent capture of inlet mercury; and
``(B) an emission rate of 0.0060 lbs/GWh.
``(d) Averaging Across Units.--An owner or operator of an affected
unit may demonstrate compliance with the annual limitations under
subsections (b) and (c) by averaging emissions from all affected units
at a single facility in operation on the date of enactment of this
title.
``(e) Monitoring System.--The Administrator shall promulgate
regulations requiring--
``(1) operation, reporting, and certification of continuous
emissions monitoring systems to accurately measure the quantity
of mercury that is emitted from each affected unit; and
``(2) verification and reporting of inlet mercury at each
affected unit.
``(f) Reporting.--
``(1) In general.--Not less often than quarterly, the owner
or operator of an affected unit shall submit to the
Administrator a report on the monitoring of emissions of inlet
mercury carried out by the owner or operator in accordance with
the regulations promulgated under subsection (e).
``(2) Authorization.--Each report submitted under paragraph
(1) shall be authorized by a responsible official of the
affected unit, who shall certify the accuracy of the report.
``(3) Public reporting.--The Administrator shall make
available to the public, through 1 or more published reports
and 1 or more forms of electronic media, data concerning the
emission of inlet mercury from each affected unit.
``(g) Excess Emissions.--
``(1) In general.--The owner or operator of an affected
unit that emits inlet mercury in excess of the emission
limitation described in subsection (b) shall pay an excess
emissions penalty determined under paragraph (2).
``(2) Determination of excess emissions penalty.--The
excess emissions penalty for inlet mercury shall be an amount
equal to $50,000 per day for each pound of inlet mercury
emitted in excess of the emission limitations for inlet mercury
described in subsections (b) and (c).
``(h) Previously Required Reductions.--For calendar year 2015 and
each calendar year thereafter, in evaluating the quantity of inlet
mercury emitted from an affected unit and determining whether to impose
a penalty under subsection (g), the Administrator shall--
``(1) take into consideration any reduction in inlet
mercury emissions at the affected unit during the preceding
calendar year pursuant to any other Federal regulation or any
State regulation; and
``(2) adjust each applicable penalty accordingly.
``SEC. 705. CARBON DIOXIDE ALLOWANCE TRADING PROGRAM.
``(a) Definitions.--In this section:
``(1) Allowance.--The term `allowance' means--
``(A) a carbon dioxide allowance;
``(B) an offset allowance; or
``(C) an early reduction allowance.
``(2) Early reduction allowance.--The term `early reduction
allowance' means a carbon dioxide allowance issued under
subsection (h) for a project in the United States to reduce
emissions of greenhouse gases or to sequester greenhouse gases
that is carried out in calendar years 2000 through 2010.
``(3) Offset allowance.--The term `offset allowance' means
a carbon dioxide allowance issued under subsection (g) for a
project to reduce emissions of greenhouse gases or to sequester
greenhouse gases.
``(b) Regulations.--
``(1) In general.--Not later than January 1, 2008, the
Administrator shall promulgate regulations to establish an
allowance trading program for covered units in the United
States.
``(2) Required elements.--Regulations promulgated under
paragraph (1) shall establish requirements for the carbon
dioxide allowance trading program under this section, including
requirements concerning--
``(A) the allocation, issuance, and use of carbon
dioxide allowances;
``(B) the issuance, certification, and use of
offset allowances;
``(C) the issuance, certification, and use of early
reduction allowances;
``(D) the transfer of allowances;
``(E) the monitoring, tracking, and reporting of
carbon dioxide emissions;
``(F) the public availability of carbon dioxide
emissions information;
``(G) compliance and enforcement; and
``(H) the reserve and allocation of carbon dioxide
allowances for new units and new renewable energy
units.
``(3) Interaction with department of agriculture.--
``(A) In general.--Except as provided in
subparagraph (B), the Administrator shall promulgate
all regulations relating to offsets under this title.
``(B) Offsets.--The Administrator, in consultation
with the Secretary of Agriculture, shall promulgate
regulations relating to offsets produced by
agricultural sequestration practices.
``(c) Carbon Dioxide Tonnage Limitation.--The annual tonnage
limitation for emissions of carbon dioxide from affected units in the
United States shall be equal to--
``(1) for each of calendar years 2010 through 2014, the
quantity of emissions projected to be emitted from affected
units in calendar year 2006, as determined by the Administrator
based on certified and quality-assured continuous emissions
monitoring data for carbon dioxide or based on data that the
Administrator determines to be of similar reliability for units
without continuous monitoring systems, reported to the
Administrator by affected units in accordance with this Act;
and
``(2) for calendar year 2015 and each calendar year
thereafter, the quantity of emissions emitted from affected
units in calendar year 2001, as determined by the Administrator
based on certified and quality-assured continuous emissions
monitoring data for carbon dioxide or based on data that the
Administrator determines to be of similar reliability for units
without continuous monitoring systems, reported to the
Administrator by affected units in accordance with this Act.
``(d) New Unit Reserve.--
``(1) Establishment.--For each calendar year, based on
projections of electricity output from new units, the
Administrator, in consultation with the Secretary of Energy,
shall establish by regulation a reserve of carbon dioxide
allowances to be allocated--
``(A) to new affected units for the calendar year;
and
``(B) to the clean coal technology reserve under
subsection (e).
``(2) Limitation.--The number of allowances allocated under
paragraph (1) during a calendar year shall be not more than 7
percent of the total number of allowances allocated to affected
units for the calendar year.
``(3) Unused allowances.--For each calendar year, the
Administrator shall reallocate, to all affected units, any
unused carbon dioxide allowances from the new unit reserve
established under paragraph (1) in the proportion that--
``(A) the number of allowances allocated to each
affected unit for the calendar year; bears to
``(B) the number of allowances allocated to all
affected units for the calendar year.
``(e) Incentives for Clean Coal Technology.--
``(1) Establishment.--The Administrator shall establish by
regulation a reserve of carbon dioxide allowances to be set
aside during a calendar year to encourage the deployment of
clean coal technologies.
``(2) Defining qualifying advanced clean coal
technologies.--
``(A) In general.--Not later than July 1, 2008, the
Administrator, by regulation, shall establish criteria
and standards to define the term `qualifying advanced
clean coal technologies' with respect to electric power
generation.
``(B) Requirement.--In establishing criteria and
standards under subparagraph (A), the Administrator
shall ensure that the qualifying advanced clean coal
technologies represent an advance in available
technology, taking into consideration--
``(i) net thermal efficiency;
``(ii) measures to capture and sequester
carbon dioxide; and
``(iii) output-based emission rates for--
``(I) carbon dioxide;
``(II) sulfur dioxide;
``(III) oxides of nitrogen;
``(IV) filterable and condensable
particulate matter; and
``(V) mercury.
``(C) Review and revision.--
``(i) In general.--Not later than July 1,
2009, and each July 1 thereafter through July
1, 2014, the Administrator shall review and, if
appropriate, revise the criteria and standards
under subparagraph (A) based on technological
advances during the preceding calendar year.
``(ii) Notice and comment not required.--
Subject to clause (iii), after the initial
criteria and standards are established under
subparagraph (A), no subsequent review or
revision under this subparagraph shall be
subject to the notice and comment provisions of
section 553 of title 5, United States Code.
``(iii) Effect.--Nothing in clause (ii)
precludes the application of the notice and
comment provisions of section 553 of title 5,
United States Code, as the Administrator
determines to be practicable.
``(3) Treatment of correspondence.--The correspondence of
the Office of Air Quality Planning and Standards addressing
best available control technology requirements for proposed
coal-fired power plant projects and dated December 13, 2005--
``(A) shall be considered to be inconsistent with
section 169(3); and
``(B) shall be treated as void and of no effect as
of the date of issuance of the correspondence.
``(f) Carbon Dioxide Allowance Allocation to Covered Units That Are
Not New Units or New Renewable Energy Units.--
``(1) Timing of allocations.--The Administrator shall
allocate carbon dioxide allowances to covered units that are
not new units or new renewable energy units--
``(A) not later than December 31, 2007, for
calendar year 2010; and
``(B) not later than December 31 of calendar year
2008 and each calendar year thereafter, for the fourth
calendar year that begins after that December 31.
``(2) Allocations.--
``(A) In general.--The Administrator shall allocate
to each covered unit that is not a new unit or a new
renewable energy unit, a quantity of carbon dioxide
allowances that is equal to the product obtained by
multiplying--
``(i) the quantity of carbon dioxide
allowances available for allocation under
subparagraph (B); and
``(ii) the quotient obtained by dividing--
``(I) the annual average quantity
of electricity generated by the unit
during the most recent 3-calendar year
period for which data are available,
updated each calendar year and measured
in megawatt hours; and
``(II) the total of the average
quantities described in subclause (I)
with respect to all such units.
``(B) Quantity to be allocated.--For each calendar
year, the quantity of carbon dioxide allowances
allocated under subparagraph (A) to covered units that
are not new units or new renewable energy units shall
be equal to the difference between--
``(i) the annual tonnage limitation for
emissions of carbon dioxide from covered units
specified in section 702(d) for the calendar
year; and
``(ii) the sum of--
``(I) the quantity of carbon
dioxide allowances placed in the new
unit reserve established under
subsection (d) for the calendar year;
and
``(II) the quantity of carbon
dioxide allowances reserved to provide
incentives for advanced clean coal
technologies under subsection (e) for
the calendar year.
``(g) Offset Allowances.--
``(1) In general.--Not later than January 1, 2008, the
Administrator shall promulgate regulations that provide for the
issuance, certification, and use of offset allowances for
greenhouse gas reduction or sequestration projects carried out
in the United States or any other country.
``(2) Required elements.--Regulations promulgated under
paragraph (1) shall establish requirements for the issuance,
certification, and use of offset allowances for greenhouse gas
reduction or sequestration projects, including requirements--
``(A) that projects not cause or contribute to
adverse effects on human health or the environment;
``(B) that projects result in greenhouse gas
reductions that are real, surplus, enforceable,
verifiable, permanent, and not used more than once, as
determined by the Administrator;
``(C) for methodology for calculating the carbon
dioxide equivalent reductions attributable to projects;
``(D) for the monitoring, reporting, and
verification of the greenhouse gas reductions from
projects;
``(E) for accounting principles used to quantify
the greenhouse gas reductions of projects that
require--
``(i) the consideration of all greenhouse
gas impacts of a project;
``(ii) the consistent application of
accounting principles;
``(iii) transparency;
``(iv) to the maximum extent practicable,
accuracy; and
``(v) the use of conservative assumptions
in cases in which uncertainties require the use
of assumptions; and
``(F) for conditions under which allowances traded
under any other United States or internationally
recognized carbon dioxide reduction program may be
used.
``(3) State offset allowances.--In promulgating regulations
under paragraph (1), the Administrator shall take into
consideration offset allowances issued by California or any
other State pursuant to the Regional Greenhouse Gas Initiative
or a similar regulatory program with a comparable offset
provision.
``(h) Early Reduction Allowances.--
``(1) In general.--Not later than January 1, 2008, the
Administrator shall promulgate regulations that provide for the
issuance, certification, and use of early reduction allowances
for greenhouse gas reduction or sequestration projects carried
out during calendar years 2000 through 2010.
``(2) Eligible projects.--A greenhouse gas reduction or
sequestration project shall be eligible for early reduction
allowances if the project--
``(A) is carried out in the United States;
``(B) meets the regulations promulgated by the
Administrator under paragraph (1) that the
Administrator determines to be applicable to the
project; and
``(C) was reported--
``(i) under section 1605(b) of the Energy
Policy Act of 1992 (42 U.S.C. 13385(b)); or
``(ii) to a State or regional greenhouse
gas registry.
``(3) Limitation.--The quantity of early reduction
allowances available for greenhouse gas reduction or
sequestration projects in calendar years 2000 through 2010
shall not exceed 10 percent of the tonnage limitation for
calendar year 2011 for emissions of carbon dioxide from
affected units under subsection (c).
``(i) Use and Transfer of Allowances.--
``(1) Use in other carbon dioxide allowance trading
programs.--Allowances may be used in any other carbon dioxide
allowance trading program that is approved by the Administrator
for use of the allowances.
``(2) Use before applicable calendar year.--Allowances may
not be used before the calendar year for which the allowance
was allocated.
``(3) Transfer.--
``(A) In general.--Notwithstanding paragraph (2),
allowances may be transferred before the calendar year
for which the allowances were allocated.
``(B) Limitation.--The transfer of an allowance
shall not take effect until receipt and recording by
the Administrator of a written certification of the
transfer, which is executed by an authorized official
of the person making the transfer.
``(4) Use by persons to which carbon dioxide allowances are
transferred.--Any person to which carbon dioxide allowances are
transferred under paragraph (3)(A) may use the carbon dioxide
allowances in the calendar year for which the carbon dioxide
allowances were allocated, or in a subsequent calendar year, to
demonstrate compliance with subsection (j)(1).
``(5) Permit requirements.--An allocation or transfer of
allowances to an affected unit shall be considered to be part
of the federally enforceable permit of the affected unit under
this Act, without a requirement for further review or revision
of the permit.
``(j) Compliance and Enforcement.--
``(1) In general.--For calendar year 2011 and each calendar
year thereafter, the owner of each affected unit shall
surrender to the Administrator a quantity of allowances that is
equal to the total tons of carbon dioxide emitted by the
affected unit during the calendar year.
``(2) Penalty.--The owner of an affected unit that emits
carbon dioxide in excess of the allowances that the owner holds
for use for the affected unit for the calendar year shall pay
an excess emissions penalty equal to the product obtained by
multiplying--
``(A) the number of tons of carbon dioxide emitted
in excess of the total quantity of allowances held; and
``(B) $100, adjusted for changes in the Consumer
Price Index for All-Urban Consumers published by the
Department of Labor.
``(k) Allowance Not a Property Right.--An allowance--
``(1) is not a property right; and
``(2) may be terminated or limited by the Administrator.
``(l) No Judicial Review.--An allocation or issuance of an
allowance by the Administrator shall not be subject to judicial
review.''.
SEC. 4. NEW SOURCE REVIEW PROGRAM.
Section 165 of the Clean Air Act (42 U.S.C. 7475) is amended by
adding at the end the following:
``(f) Revisions to New Source Review Program.--
``(1) Definitions.--In this subsection:
``(A) Affected unit; covered unit.--The terms
`affected unit' and `covered unit' have the meanings
given the terms in section 701.
``(B) New source review program.--The term `new
source review program' means the program to carry out
this part and part D.
``(2) Performance standards.--
``(A) In general.--Except as provided in
subparagraph (B), beginning January 1, 2020, and on
each January 1 thereafter, each affected unit that has
been in operation 50 or more years as of that January 1
shall meet performance standards of--
``(i) 2 lbs/MWh for sulfur dioxide; and
``(ii) 1 lbs/MWh for nitrogen oxides.
``(B) Exception.--
``(i) In general.--Notwithstanding
subparagraph (A), an affected unit that, as of
January 1, 2020, is required to meet a more
stringent performance standard than the
applicable standard under subparagraph (A)
shall continue to meet the more stringent
standard.
``(ii) Modification of affected units.--The
requirements of this section shall not affect
in any way any requirement under section
111(a)(4), this part, or part D governing
modifications of major stationary sources.
``(3) No effect on other requirements and retention of
state authority.--Nothing in this subsection affects--
``(A) any State authority under section 116; or
``(B) the obligation of any State or local
government or any major emitting facility to comply
with the requirements of this section.''.
SEC. 5. REVISIONS TO SULFUR DIOXIDE ALLOWANCE PROGRAM.
(a) In General.--Title IV of the Clean Air Act (relating to acid
deposition control) (42 U.S.C. 7651 et seq.) is amended by adding at
the end the following:
``SEC. 417. REVISIONS TO SULFUR DIOXIDE ALLOWANCE PROGRAM.
``(a) Definitions.--In this section, the terms `affected unit' and
`new unit' have the meanings given the terms in section 701.
``(b) Regulations.--Not later than January 1, 2007, the
Administrator shall promulgate such revisions to the regulations to
implement this title as the Administrator determines to be necessary to
implement section 702(a).
``(c) New Unit Reserve.--
``(1) Establishment.--Subject to the annual tonnage
limitation for emissions of sulfur dioxide from affected units
specified in section 702(a), the Administrator shall establish
by regulation a reserve of allowances to be set aside for use
by new units.
``(2) Determination of quantity.--The Administrator, in
consultation with the Secretary of Energy, shall determine,
based on projections of electricity output for new units--
``(A) not later than June 30, 2007, the quantity of
allowances required to be held in reserve for new units
for each of calendar years 2011 through 2015; and
``(B) not later than June 30 of each fifth calendar
year thereafter, the quantity of allowances required to
be held in reserve for new units for the following 5-
calendar year period.
``(3) Allocation.--
``(A) Regulations.--The Administrator shall
promulgate regulations to establish a methodology for
allocating allowances to new units.
``(B) No judicial review.--An allocation of
allowances by the Administrator under this subsection
shall not be subject to judicial review.
``(d) Existing Units.--
``(1) Allocation.--
``(A) Regulations.--Subject to the annual tonnage
limitation for emissions of sulfur dioxide from
affected units specified in section 702(a), and subject
to the reserve of allowances for new units under
subsection (c), the Administrator shall promulgate
regulations to govern the allocation of allowances to
affected units that are not new units.
``(B) Required elements.--The regulations shall
provide for--
``(i) the allocation of allowances on a
fair and equitable basis between affected units
that received allowances under section 405 and
affected units that are not new units and that
did not receive allowances under that section,
using for both categories of units the same or
similar allocation methodology as was used
under section 405; and
``(ii) the pro-rata distribution of
allowances to all units described in clause
(i), subject to the annual tonnage limitation
for emissions of sulfur dioxide from affected
units specified in section 702(a).
``(2) Timing of allocations.--The Administrator shall
allocate allowances to affected units--
``(A) not later than December 31, 2007, for
calendar year 2011; and
``(B) not later than December 31 of calendar year
2008 and each calendar year thereafter, for the fourth
calendar year that begins after that December 31.
``(3) No judicial review.--An allocation of allowances by
the Administrator under this subsection shall not be subject to
judicial review.''.
(b) Definition of Allowance.--Section 402 of the Clean Air Act
(relating to acid deposition control) (42 U.S.C. 7651a) is amended by
striking paragraph (3) and inserting the following:
``(3) Allowance.--The term `allowance' means an
authorization, allocated by the Administrator to an affected
unit under this title, to emit, during or after a specified
calendar year, a quantity of sulfur dioxide determined by the
Administrator and specified in the regulations promulgated
under section 417(b).''.
(c) Technical Amendments.--
(1) Title IV of the Clean Air Act (relating to noise
pollution) (42 U.S.C. 7641 et seq.)--
(A) is amended by redesignating sections 401
through 403 as sections 801 through 803, respectively;
and
(B) is redesignated as title VIII and moved to
appear at the end of that Act.
(2) The table of contents for title IV of the Clean Air Act
(relating to acid deposition control) (42 U.S.C. prec. 7651) is
amended by adding at the end the following:
``Sec. 417. Revisions to sulfur dioxide allowance program.''.
SEC. 6. AIR QUALITY FORECASTS AND WARNINGS.
(a) Requirement for Forecasts and Warnings.--The Secretary of
Commerce, acting through the Administrator of the National Oceanic and
Atmospheric Administration, in cooperation with the Administrator of
the Environmental Protection Agency, shall issue air quality forecasts
and air quality warnings as part of the mission of the Department of
Commerce.
(b) Regional Warnings.--In carrying out subsection (a), the
Secretary of Commerce shall establish within the National Oceanic and
Atmospheric Administration a program to provide region-oriented
forecasts and warnings regarding air quality for each of the following
regions of the United States:
(1) The Northeast, composed of Connecticut, Maine,
Massachusetts, New Hampshire, New York, Rhode Island, and
Vermont.
(2) The Mid-Atlantic, composed of Delaware, the District of
Columbia, Maryland, New Jersey, Pennsylvania, Virginia, and
West Virginia.
(3) The Southeast, composed of Alabama, Florida, Georgia,
North Carolina, and South Carolina.
(4) The South, composed of Arkansas, Louisiana,
Mississippi, Oklahoma, Tennessee, and Texas.
(5) The Midwest, composed of Illinois, Indiana, Iowa,
Kentucky, Michigan, Minnesota, Missouri, Ohio, and Wisconsin.
(6) The High Plains, composed of Kansas, Nebraska, North
Dakota, and South Dakota.
(7) The Northwest, composed of Idaho, Montana, Oregon,
Washington, and Wyoming.
(8) The Southwest, composed of Arizona, California,
Colorado, New Mexico, Nevada, and Utah.
(9) Alaska.
(10) Hawaii.
(c) Priority Area.--In establishing the program described in
subsection (a), the Secretary of Commerce and the Administrator shall
identify and expand, to the maximum extent practicable, Federal air
quality forecast and warning programs in effect as of the date of
establishment of the program.
(d) Authorization of Appropriations.--There are authorized to be
appropriated such sums as are necessary to carry out this section.
SEC. 7. RELATIONSHIP TO OTHER LAW.
(a) Regulation of Hazardous Air Pollutants.--Section 112(n)(1) of
the Clean Air Act (42 U.S.C. 7412(n)(1)) is amended by striking
subparagraph (A) and inserting the following:
``(A) Regulations.--
``(i) In general.--Not later than 18 months
after the date of enactment of the Clean Air
Planning Act of 2006, the Administrator shall
promulgate regulations under this section
limiting the emission from electric utility
steam generating units of hazardous air
pollutants, other than mercury, as the
Administrator determines to be appropriate and
necessary in accordance with the standards
under subsection (b)(2).
``(ii) Requirements.--The regulations under
clause (i) shall--
``(I) require compliance with
applicable standards as expeditiously
as practicable, but not later than 3
years after the effective date of the
regulations; and
``(II) be in accordance with other
applicable requirements under this
section.
``(iii) Effective date.--The regulations
under clause (i) shall be effective on the date
of promulgation of the regulations.''.
(b) No Effect on Other Federal and State Requirements.--Except as
otherwise specifically provided in this Act, nothing in this Act or an
amendment made by this Act--
(1) affects any permitting, monitoring, or enforcement
obligation of the Administrator of the Environmental Protection
Agency under the Clean Air Act (42 U.S.C. 7401 et seq.) or any
remedy provided under that Act;
(2) affects any requirement applicable to, or liability of,
an electric generating facility under that Act;
(3) requires a change in, affects, or limits any State law
that regulates electric utility rates or charges, including
prudence review under State law; or
(4) precludes a State or political subdivision of a State
from adopting and enforcing any requirement for the control or
abatement of air pollution, except that a State or political
subdivision may not adopt or enforce any emission standard or
limitation that is less stringent than the requirements imposed
under that Act.
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