[Congressional Record Volume 143, Number 55 (Thursday, May 1, 1997)]
[Senate]
[Pages S3907-S3912]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. JEFFORDS:
  S. 687. A bill to enhance the benefits of the national electric 
system by encouraging and supporting State programs for renewable 
energy sources,

[[Page S3908]]

universal electric service, affordable electric service, and energy 
conservation and efficiency, and for other purposes; to the Committee 
on Energy and Natural Resources.


       THE ELECTRIC SYSTEM PUBLIC BENEFITS PROTECTION ACT OF 1997

  Mr. JEFFORDS. Mr. President, America is currently considering an 
extremely important and contentious issue: Should we restructure the 
system by which we obtain our electric energy? And if so, how should we 
go about doing this? Hardly a day goes by in which one cannot find a 
news article on this subject. Across our Nation, 44 States have taken 
on the issue of restructuring, either in legislative debate or through 
the implementation of pilot programs. And even here in Congress, there 
are a number of proposals, in both the House and Senate, which address 
the various factors affecting the electric industry.
  Advocates on all sides are debating whether the Federal Government 
should direct States to move to a restructured system, both in terms of 
how they should do it and when.
  There are a number of ideas being offered as to whether utilities 
should be allowed to recover costs that were incurred under a regulated 
system, and if so, in what manner and to what degree. Who should bear 
the burden? The rate payer? The tax payer? The share holder?
  Arguments have been made for and against Federal protection of public 
power, both in terms of market power and fiscal subsidies. Must 
companies divest according to function? Does a municipality's tax 
exempt bond authority give it an advantage over the tax deferrals of 
the utility, or the less-than-cost loans to the cooperative?
  Mr. President, we continue to hear a great deal about how the effort 
to restructure the electric power industry may affect the Nation's 
economy. What is not being discussed, and what I believe is equally 
important, is how these changes will affect our society as a whole. How 
will it impact on the Nation's poor? How will it affect our children's 
health? How will restructuring affect our environment?
  Well, it doesn't have to be an either/or choice. In fact, it can't 
be. As we move towards a restructured industry, we must consider the 
issues not only in terms of what they mean to our economy, but also in 
terms of what they mean to our society. We must secure and enhance the 
public benefits that until now have been provided by the electric 
industry's unique structure and regulatory traditions. This can only be 
achieved by including certain safeguards in any new regulatory 
structure from the outset, before dramatic changes unravel the gains 
this industry has made.
  I rise today to introduce the Electric System Public Benefits 
Protection Act of 1997. This bill acknowledges the responsibility we 
have to our Nation, to its people and to the environment as we reassess 
the future of the electric power industry. It directly addresses the 
numerous public benefits we enjoy from our electric power structure, a 
system that has a unique impact on how we live. And it does this while 
creating a setting within the electric industry which promotes 
competition.

  Under the system in effect today, electric utilities have been 
granted franchises in order to serve the public good. In return for a 
guaranteed return on their investments, the utilities have, to varying 
degrees of success, implemented many public purpose programs from which 
we benefit. These initiatives have addressed the need for alternative 
fuels, assistance to needy and remotely located consumers, energy 
efficiency projects, and environmental safeguards. While the industry 
has made significant progress in the past few decades, recent years 
have seen a steady decline in investments relating to these 
initiatives. As the electric industry moves closer to competition and 
deregulation, utilities are becoming less inclined to support public 
purpose programs without a guaranteed return.
  My legislation creates a national electric system public benefits 
fund to enable and encourage State programs for renewable energy 
technologies, energy efficiency, low-income assistance, and universal 
access. It is supported by a broad-based, competitively neutral, 
systems benefits charge levied as a wires charge on all interconnected 
generation for sale on the electricity market. Revenues from the fund 
will be used to match funds raised by the States for the same public 
purposes and support the continuation and expansion of the benefits we 
enjoy today.
  A study of history divulges two important facts about energy 
efficiency. The first is that the potential for cost-effective savings 
from accelerated investments in energy efficiency is very large. Yet 
trends over the last few years raise serious questions about utilities' 
commitments to energy efficiency programs. Based on the uncertainty 
surrounding the change within the industry, many utilities have 
admitted that they have already cut programs and are planning on 
reducing or eliminating more. While this uncertainty makes long-term 
predictions in this area difficult, the Energy Information 
Administration has projected a 13-percent reduction in direct utility 
expenditures on energy efficiency programs during the period 1995 until 
1999. My bill affords States the opportunity to make necessary 
investments in efficiency technologies.
  The second important fact we have learned is that there exist 
significant structural and informational market barriers to the 
deployment of investments in energy efficiency in the absence of 
targeted programs. My bill will help negotiate these barriers within 
the industry.
  One of the benefits of energy efficiency is that reduced consumption 
avoids many of the environmental impacts associated with electric 
generation. The alternative is potentially devastating. In a recent 
national survey, respondents were advised that changes in how the 
utility industry operates could lead to further cutbacks in traditional 
efficiency programs. Seven out of ten Americans, polled across the 
Nation, stated that they support mandatory investments in energy 
efficiency, even if it means higher electric rates. They realize that 
what we invest today may save us billions of dollars during our 
lifetimes and those of our children.

  The loss of public purpose programs will affect one group in 
particular. For middle class families, the energy crisis of the 1970's 
is only a memory; for low-income customers, the energy crisis never 
ended. A recent study in my State of Vermont showed that residential 
customers in general spend 3.8 percent of their income on energy, while 
low-income households spend 15 to 20 percent, and in some cases even 
more. Unaffordable utility costs are a leading cause of loss of housing 
for low-income families. Yet another study found that visits by 
individuals from low-income households to emergency rooms increased 
after periods of severe weather, when those families had to make the 
choice to heat or eat.
  It is also clear that low-income families face greater barriers than 
other groups of customers to implementing the energy conservation 
measures I spoke of earlier, measures that would reduce their energy 
costs. Low-income families are more likely to live in rental property, 
in which they have neither the right to make major modifications 
themselves nor the ability to persuade their landlords to make energy 
conservation investments in their housing. While there are low-income 
homeowners, their incomes are generally insufficient to fund 
improvements in energy efficiency. My bill will provide a mechanism to 
help circumvent many of these barriers.
  In considering the impact of restructuring on the Nation's poor, we 
must also keep in mind that low-income customers are unlikely to be an 
extremely attractive and highly sought after segment of the electricity 
market. They are more likely than other customers to have difficulty 
paying their bills. They are more likely to require payment 
arrangements and other labor intensive involvement from the utility 
company. And they are less likely to use large quantities of 
electricity which might qualify them for volume discounts. We must 
accept the fact that access to electric power is a necessity in our 
society. My legislation will help guarantee that everyone has equal 
access to the benefits of the electric industry. It will target, 
through the encouragement and development of cooperatives and other 
market mechanisms, the millions of Americans who are from low-income 
families, remote rural areas and other groups who lack

[[Page S3909]]

market power. In short, Mr. President, it ensures that essential 
services remain affordable and the benefits of competition are 
available to all utility customers.
  We have learned the hard way that the Nation's economic well-being 
can be put at risk by rapid spikes in world energy prices. Future 
dislocations could result from fossil fuel supply interruptions or 
problems associated with nuclear powerplants. History teaches us that a 
policy of prudent energy diversification is a form of national economic 
security that is well worth purchasing.
  Additionally, renewable energy sources are good for our environment. 
Every megawatt of electricity generated by a wind turbine displaces 
another from a fossil fuel source and lessens the environmental impact 
of the industry.
  Yet, the future of renewable energy is in doubt. I would like to 
direct your attention to this chart. Scientists tell us that, despite 
the obvious advantages I have cited, the amount of electricity from 
renewable sources is projected to remain stable at about 2 percent well 
into the future. My legislation establishes a renewable portfolio 
standard for all electric generation companies. It begins with 2.5 
percent in the year 2000 and slowly grows to 20 percent in the year 
2020. These are not arbitrary numbers. They are based on information 
provided by the electric industry and account for realistic constraints 
on how fast these sources can develop.
  This bill enables States to play an active role in the development 
and fielding of alternative fuels technology. It recognizes the 
importance of fuel diversity, and it guarantees that renewable energy 
sources will play a significant role in this diversification and in 
providing consumer choice in the restructured industry.
  Mr. President, I am particularly concerned about what may be the 
single greatest market failure of the electric power industry: the 
protection of our environment. The electric industry accounts for about 
3 percent of the Nation's gross domestic product, yet it accounts for 
up to two-thirds of some of the country's deadliest pollutants. We have 
worked hard to reduce this problem, and there is no doubt that some 
success has been achieved. But it is not enough.
  Electric powerplants emit 65 percent of the Nation's annual total of 
sulfur dioxide, an invisible gas that adversely affects our health and 
environment. Asthmatics are particularly vulnerable to this pollutant. 
The leading cause of chronic illness in children, cases of this disease 
are climbing at a sharp rate and are exacerbated by our deteriorating 
environment.
  Sulfur dioxide also is the principal cause of acid rain. This chart 
illustrates the fact that while the annual emissions of sulfur dioxide 
are expected to come down slightly in future years, this decline is not 
sufficient. My bill would cause a dramatic change by the year 2005, 
decreasing the amount of this deadly gas from electric powerplants by 
roughly 60 percent.
  This next chart reveals the problem this Nation will face in the 
future as increasing amounts of carbon dioxide are released into the 
air from the electric industry. Powerplants currently generate close to 
40 percent of the nationwide emissions of this pollutant, a gas chiefly 
responsible for global warming and the creation of a greenhouse effect. 
The resulting climate change has the potential to inflict devastating 
damage on our environment for many years, well into the future. Unlike 
other pollutants, carbon dioxide remains in the atmosphere for decades. 
If we are to protect our children's future, we must act now. As you can 
see, my bill, designed to bring the industry back to the 1990 standard, 
requires a significant 13 percent reduction by the year 2005 and will 
double that by the year 2015.
  This legislation would bring about a major reduction in nitrogen 
oxide emissions. The electric power industry is the single largest 
source of this pollutant. Nitrogen oxide emissions are particularly 
offensive to me as a Vermonter because of the extreme ozone problem 
they present. There are days now when, standing atop Mount Mansfield, I 
can not make out the water tower on Mount Elmore, not even 20 miles 
away. This is disgraceful, and it is a problem faced in many areas 
across this Nation.
  Nitrogen oxides are now blamed for significant health problems as 
well. Scientists recently discovered that this pollutant may be 
responsible for increasing levels of cancer cases and breathing 
disorders. As depicted on this chart, my legislation will mandate a 70 
percent reduction in nitrogen oxide emissions from power plants by the 
year 2005.
  Cognizance of these environmental problems cuts across party lines. A 
recent poll in the State of Texas shows that 7 out of 10 residents who 
define themselves as very conservative favor significantly stronger 
environmental standards. In fact, in the nationwide survey I spoke of 
earlier, 80 percent of the respondents agreed that we need to act on 
the problem.
  Mr. President, we need to fix the problems attributable to electric 
power production. But as we move to a restructured industry, we need to 
fix it in a fair, competitively neutral manner. This bill does just 
that. Setting a single, nationwide emissions standard for all 
generators which use combustion devices to produce electricity, it says 
stop to some of the Nation's dirtiest powerplants. It means we as 
Americans will no longer tolerate the idea of giving a free ride to 
those that can't meet the standard. It levels the playing field so that 
all generators can compete in the market on an equal footing and with 
the same environmental responsibilities as their competitors.
  Finally, we need to give people the information they need to make 
intelligent choices regarding their electricity. My bill directs the 
Secretary of Energy to establish a system whereby electric service 
providers must disclose to the consumer adequate information on 
generation source, emissions and price. Only when the consumer has the 
ability to compare can we say we have a truly competitive market.
  In closing, I want to emphasize that any restructuring of the 
Nation's electric power industry must address the economic and the 
social aspects of the issue. It is not an either/or choice. We must do 
both.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 687

       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.

[[Page S3910]]

     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--

[[Page S3911]]

       (i) use the renewable energy credit to make a submission to 
     the Commission under paragraph (3); or
       (ii) 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--

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       (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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