[Congressional Record Volume 144, Number 147 (Thursday, October 15, 1998)]
[Senate]
[Pages S12648-S12653]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LEAHY:
  S. 2636. A bill to promote economically sound modernization of 
electric power generation capacity in the United States, to establish 
requirements to improve the combustion heat rate efficiency of fossil 
fuel-fired electric utility generating units, to reduce emissions of 
mercury, carbon dioxide, nitrogen oxides, and sulfur dioxide, to 
require that all fossil fuel-fired electric utility generating units 
operating in the United States meet new source review requirements, and 
to promote alternative energy sources such as solar, wind, and biomass; 
to the Committee on Finance.


            Clean Power Plant and Modernization Act of 1998

  Mr. LEAHY. Mr. President, as we approach the close of the 105th 
Congress, it is time to take stock of our accomplishments, and reflect 
on the work that remains. When the environmental record of this 
Congress is tallied up, there won't be much to show. At best, we have 
avoided a great roll-back of environmental protections. We can't claim 
to have broken much new ground.
  To her credit, Carol Browner and her staff at the Environmental 
Protection Agency have tried to push ahead in a very difficult 
political climate. Administrator Browner recently announced that EPA 
was ordering 22 Eastern states to make sharp cuts in emissions of the 
pollutants that result in summertime ozone pollution. A significant 
portion of these pollutants come from coal-fired power plants. The 
predictable howl from the utility companies and their lobbyists is 
being heard on Capitol Hill. I applaud Administrator Browner and her 
staff for their persistence on this important issue.
  Even though this is a good step, it doesn't go far enough. Stronger, 
more comprehensive action is needed to finally address the whole gamut 
of air pollution problems that spew from power plant smoke stacks.
  Taken collectively, fossil fuel-fired power plants constitute the 
largest source of air pollution in the United States. It is clear by 
now that the current Clean Air Act and its regulations are not up to 
the job of addressing the local, regional and global public health and 
environmental burdens imposed by the emissions from these plants. 
Congress took a big step to control air pollution with the Clean Air 
Act of 1970, and it did major rewrites of the Act in 1977 and 1990. 
Even with all this legislation on the books, most fossil fuel-fired 
power plants produce as much pollution as they did prior to 1970. The 
average fossil fuel-fired generating unit in the United States came 
into operation in 1964--six years before the 1970 Act. Seventy-seven 
percent of the fossil fuel generating units in operation in the United 
States began operation before the 1970 Clean Air Act was implemented, 
and are thus not subject to the full force of its regulations.
  At the very heart of the environmental problems posed by this 
industry are the antiquated and inefficient combustion technologies 
that are used. Nothing in the Clean Air Act, or in other energy related 
statues, tackles this inefficiency. The average plant uses technology 
devised in the 1950's or before, and has a combustion efficiency of 
33%. Put another way, 67% of the energy available in the fuel is 
wasted. When you get so little energy out of the fuel, you have to burn 
a lot more fuel to produce a given quantity of electricity. The more 
fuel you burn, the more pollution you get. Increasing efficiency is the 
only way to reduce carbon dioxide emissions, and burning less fuel will 
result in smaller amounts of all pollutants.
  Burning all this fuel may be good for the bottom line of the 
companies that produce the coal, oil, and natural gas, but it imposes 
great environmental and health consequences on the rest of us. Many of 
my colleagues came to the Senate after successful business careers. I 
imagine that most would agree with me that any other business that was 
this wasteful would not survive for long.
  To produce the power that our economy needs, some level of emissions 
is inevitable. But this inefficiency, coupled with the free ride on 
emissions that the pre-1970 plants get, exacts an enormous 
environmental cost. Consider the following power plant facts:
  Every year, fossil fuel-fired power plants in the United States 
produced a staggering 2 billion tons of carbon dioxide, the primary 
``greenhouse gas,'' the equivalent weight of 24,655 Washington 
Monuments.
  Over 600 of these generating units produce over one million tons of 
carbon dioxide per year--two produce more than 9 million tons per year.
  On average, coal plants emit over 2,100 pounds of carbon dioxide for 
every megawatt hour of electricity that is generated.
  Coal-fired power plants emit at least 52 tons of mercury per year and 
are the leading source of mercury pollution in the United States.
  Power plants emit particulate and urban ozone pollution that impair 
respiratory function in people with asthma, emphysema, and other 
respiratory ailments.
  Power plant emissions result in acid deposition, which damages lakes, 
streams and rivers, and the plants and animals that depend on them for 
survival.
  Technology exists that can raise power plant efficiencies to 35% to 
50% above current levels. The question is how to get utilities to 
retire their inefficient processes and bring new, clean, and efficient 
ones on line. We can see a better future, but we don't have a clear 
path to get there.
  Today, I am introducing the ``Clean Power Plant and Modernization Act 
of 1998'' to help us get to the other side. My goals with this 
legislation are to

[[Page S12649]]

chart a sensible and balanced course for the future that: protects 
public health and the environment; protects consumers, workers, and the 
economy; and provides electrical power producers with a clear set of 
achievable performance expectations and financial incentives for 
installing new, clean, and efficient electrical power generating 
capacity that will meet our needs into the 21st Century.
  This industry plays a central role in the U.S. economy and in our 
daily lives. We expect that electrical service will be reliable, 
predictable and affordable. We flip on the switch without giving a 
second thought that the light will go on. My bill will not change that.
  Major changes cannot be made over night. We know about inertia From 
Sir Isaac Newton's First Law of Motion that ``any object in a state of 
rest or uniform linear motion will remain in such a state unless acted 
upon by an external force.'' The inertia in the utility industry to 
continue business as usual is overwhelming. The old, inefficient, 
pollution-prone power plants will continue to operate in perpetuity 
because they are paid for, they burn the cheapest fuel, and they are 
subject to less stringent environmental requirements.

  My bill provides an ``external force'' in the form of financial and 
regulatory incentives to prompt modernization that is beneficial for 
the environment and the economy. It provides industry decision-makers 
with a comprehensive and predictable set of requirements and incentives 
to guide their long-term business planning.
  For investor-owned utilities, the bill provides accelerated 
depreciation tax incentives for plants that meet the efficiency goals. 
Under current tax law, new generating capacity is depreciated over a 20 
year period. Under my bill, new capacity that meets a 45% efficiency 
level would be depreciated over a 15 year period, and new capacity that 
meets a 50% efficiency level would be depreciated over a 10 year 
period. Publicly owned utilities would be eligible for grants that have 
the equivalent monetary value of the depreciation benefit received by a 
similarly-situated investor-owned utility. This approach will spur 
innovation, and will reward utilities that aggressively move to 
increase their efficiency and reduce their emissions.
  To pay for these incentives and to achieve this within the balanced 
budget constraints, my bill establishes a fee that would be levied on 
carbon dioxide emissions. The emission fees would also provide funds: 
for worker retraining for individuals adversely affected by reduced 
consumption of coal; community redevelopment funds; research and 
development for renewable technologies such as wind, solar, and 
biomass; development of a carbon sequestration strategy; and 
implementing carbon sequestration projects including soil restoration, 
tree planting, preservation of wetlands, and other ways of biologically 
sequestering carbon dioxide.
  I want to work cooperatively with the power companies on this 
legislation, and I want to work with my colleagues from coal-producing 
states to minimize the impact of reduced coal consumption on mine 
workers and mining communities. I also want to work with my colleagues 
on the Committees that are taking up utility restructuring legislation 
to ensure that this industry, whether in its current form or in a 
restructured form, finally comes to terms with the environmental costs 
of its operations.
  While the 105th Congress may not have much of an environmental record 
to brag about, pressure is mounting to dramatically reduce the 
environmental impact from fossil fuel fired power plants. The people of 
Vermont are willing, I look forward to working hard in the first 
session of the 106th Congress to enact this much needed and long-
overdue piece of legislation.
  Mr. President, I ask unanimous consent that the full text of the bill 
and the section-by-section overview be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2636

       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 
     Power Plant and Modernization Act of 1998''.
       (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. Definitions.
Sec. 4. Combustion heat rate efficiency standards for fossil fuel-fired 
              generating units.
Sec. 5. Air emission standards for fossil fuel-fired generating units.
Sec. 6. Accelerated depreciation for investor-owned generating units.
Sec. 7. Grants for publicly owned generating units.
Sec. 8. Clean Air Trust Fund.
Sec. 9. Carbon dioxide emission fees.
Sec. 10. Extension of renewable energy production credit.
Sec. 11. Recognition of permanent emission reductions in future climate 
              change implementation programs.
Sec. 12. Renewable power generation technologies.
Sec. 13. Evaluation of implementation of this Act and other statutes.
Sec. 14. Assistance for workers adversely affected by reduced 
              consumption of coal.
Sec. 15. Community economic development incentives for communities 
              adversely affected by reduced consumption of coal.
Sec. 16. Carbon sequestration.

     SEC. 2. FINDINGS AND PURPOSES.

       (a) Findings.--Congress finds that--
       (1) the United States is relying increasingly on old, 
     needlessly inefficient, and highly polluting powerplants to 
     provide electricity;
       (2) the pollution from those powerplants causes a wide 
     range of health and environmental damage, including--
       (A) fine particulate matter that is associated with the 
     deaths of approximately 50,000 Americans annually;
       (B) urban ozone, commonly known as ``smog'', that impairs 
     normal respiratory functions and is of special concern to 
     individuals afflicted with asthma, emphysema, and other 
     respiratory ailments;
       (C) rural ozone that obscures visibility and damages 
     forests and wildlife;
       (D) acid deposition that damages estuaries, lakes, rivers, 
     and streams (and the plants and animals that depend on them 
     for survival) and leaches heavy metals from the soil;
       (E) mercury and heavy metal contamination that renders fish 
     unsafe to eat, with especially serious consequences for 
     pregnant women and their fetuses;
       (F) eutrophication of estuaries, lakes, rivers, and 
     streams; and
       (G) global climate change that may fundamentally and 
     irreversibly alter human, animal, and plant life;
       (3) tax laws and environmental laws--
       (A) provide a very strong incentive for electric utilities 
     to keep old, dirty, and inefficient generating units in 
     operation; and
       (B) provide a strong disincentive to investing in new, 
     clean, and efficient generating technologies;
       (4) fossil fuel-fired power plants, consisting of plants 
     fueled by coal, fuel oil, and natural gas, produce nearly 
     two-thirds of the electricity generated in the United States;
       (5) since, according to the Department of Energy, the 
     average combustion heat rate efficiency of fossil fuel-fired 
     power plants in the United States is 33 percent, 67 percent 
     of the heat generated by burning the fuel is wasted;
       (6) technology exists to increase the combustion heat rate 
     efficiency of coal combustion from 35 percent to 50 percent 
     above current levels, and technological advances are possible 
     that would boost the net combustion heat rate efficiency even 
     more;
       (7) coal-fired power plants are the leading source of 
     mercury emissions in the United States, releasing an 
     estimated 52 tons of this potent neurotoxin each year;
       (8) in 1996, fossil fuel-fired power plants in the United 
     States produced over 2,000,000,000 tons of carbon dioxide, 
     the primary greenhouse gas;
       (9) on average--
       (A) fossil fuel-fired power plants emit 1,999 pounds of 
     carbon dioxide for every megawatt hour of electricity 
     produced;
       (B) coal-fired power plants emit 2,110 pounds of carbon 
     dioxide for every megawatt hour of electricity produced; and
       (C) coal-fired power plants emit 205 pounds of carbon 
     dioxide for every million British thermal units of fuel 
     consumed;
       (10) the average fossil fuel-fired generating unit in the 
     United States commenced operation in 1964, 6 years before the 
     Clean Air Act (42 U.S.C. 7401 et seq.) was amended to 
     establish requirements for stationary sources;
       (11)(A) according to the Department of Energy, only 23 
     percent of the 1,000 largest emitting units are subject to 
     stringent new source performance standards under section 111 
     of the Clean Air Act (42 U.S.C. 7411); and
       (B) the remaining 77 percent, commonly referred to as 
     ``grandfathered'' power plants, are subject to much less 
     stringent requirements;
       (12) on the basis of scientific and medical evidence, 
     exposure to mercury and mercury

[[Page S12650]]

     compounds is of concern to human health and the environment;
       (13) pregnant women and their developing fetuses, women of 
     childbearing age, and children are most at risk for mercury-
     related health impacts such as neurotoxicity;
       (14) although exposure to mercury and mercury compounds 
     occurs most frequently through consumption of mercury-
     contaminated fish, such exposure can also occur through--
       (A) ingestion of breast milk;
       (B) ingestion of drinking water, and foods other than fish, 
     that are contaminated with methyl mercury; and
       (C) dermal uptake through contact with soil and water;
       (15) the report entitled ``Mercury Study Report to 
     Congress'' and submitted by the Environmental Protection 
     Agency under section 112(n)(1)(B) of the Clean Air Act (42 
     U.S.C. 7412(n)(1)(B)), in conjunction with other scientific 
     knowledge, supports a plausible link between mercury 
     emissions from combustion of coal and other fossil fuels and 
     mercury concentrations in air, soil, water, and sediments;
       (16)(A) the Environmental Protection Agency report 
     described in paragraph (15) supports a plausible link between 
     mercury emissions from combustion of coal and other fossil 
     fuels and methyl mercury concentrations in freshwater fish;
       (B) in 1997, 39 States issued health advisories that warned 
     the public about consuming mercury-tainted fish, as compared 
     to 27 States that issued such advisories in 1993; and
       (C) the number of mercury advisories nationwide increased 
     from 899 in 1993 to 1,675 in 1996, an increase of 86 percent;
       (17) pollution from powerplants can be reduced and possibly 
     eliminated through adoption of modern technologies and 
     practices, including--
       (A) methods of combusting coal that are intrinsically more 
     efficient and less polluting, such as pressurized fluidized 
     bed combustion and an integrated gasification combined cycle 
     system;
       (B) methods of combusting cleaner fuels, such as gases from 
     fossil and biological resources and combined cycle turbines;
       (C) treating flue gases through application of pollution 
     controls;
       (D) methods of extracting energy from natural, renewable 
     resources of energy, such as solar and wind sources;
       (E) methods of producing electricity and thermal energy 
     from fuels without conventional combustion, such as fuel 
     cells; and
       (F) methods of extracting and using heat that would 
     otherwise be wasted, for the purpose of heating or cooling 
     office buildings, providing steam to processing facilities, 
     or otherwise increasing total efficiency; and
       (18) adopting the technologies and practices described in 
     paragraph (17) would increase competitiveness and 
     productivity, secure employment, save lives, and preserve the 
     future.
       (b) Purposes.--The purposes of this Act are--
       (1) to protect and preserve the environment while 
     safeguarding health by ensuring that each fossil fuel-fired 
     generating unit minimizes air pollution to levels that are 
     technologically feasible through modernization and 
     application of pollution controls;
       (2) to greatly reduce the quantities of mercury, carbon 
     dioxide, sulfur dioxide, and nitrogen oxides entering the 
     environment from combustion of fossil fuels;
       (3) to permanently reduce emissions of those pollutants by 
     increasing the combustion heat rate efficiency of fossil 
     fuel-fired generating units to levels achievable through use 
     of commercially available combustion technology, installation 
     of pollution controls, and expanded use of renewable energy 
     sources such as biomass, geothermal, solar, and wind sources;
       (4)(A) to create financial and regulatory incentives to 
     retire thermally inefficient generating units and replace 
     them with new units that employ high-thermal-efficiency 
     combustion technology; and
       (B) to increase use of renewable energy sources such as 
     biomass, geothermal, solar, and wind sources;
       (5) to establish the Clean Air Trust Fund for the purpose 
     of encouraging and facilitating the modernization of fossil 
     fuel-fired generating units in the United States;
       (6) to eliminate the ``grandfather'' loophole in the Clean 
     Air Act relating to sources in operation before the 
     promulgation of standards under section 111 of that Act (42 
     U.S.C. 7411);
       (7) to express the sense of Congress that permanent 
     reductions in emissions of greenhouse gases that are 
     accomplished through the retirement of old units and 
     replacement by new units that meet the combustion heat rate 
     efficiency and emission standards specified in this Act 
     should be credited to the utility sector in any climate 
     change implementation program;
       (8) to promote permanent and safe disposal of mercury 
     recovered through coal cleaning, flue gas control systems, 
     and other methods of mercury pollution control;
       (9) to increase public knowledge of the sources of mercury 
     exposure and the threat to public health from mercury, 
     particularly the threat to the health of pregnant women and 
     their fetuses, women of childbearing age, and children;
       (10) to decrease significantly the threat to human health 
     and the environment posed by mercury;
       (11) to promote energy efficiency in homes, including major 
     appliances;
       (12) to provide worker retraining for workers adversely 
     affected by reduced consumption of coal; and
       (13) to provide economic development incentives for 
     communities adversely affected by reduced consumption of 
     coal.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Administrator.--The term ``Administrator'' means the 
     Administrator of the Environmental Protection Agency.
       (2) Generating unit.--The term ``generating unit'' means an 
     electric utility generating unit.

     SEC. 4. COMBUSTION HEAT RATE EFFICIENCY STANDARDS FOR FOSSIL 
                   FUEL-FIRED GENERATING UNITS.

       (a) Standards.--
       (1) In general.--Not later than the day that is 10 years 
     after the date of enactment of this Act, each fossil fuel-
     fired generating unit that commences operation on or before 
     that day shall achieve and maintain, at all operating levels, 
     a combustion heat rate efficiency of not less than 45 percent 
     (based on the higher heating value of the fuel).
       (2) Future generating units.--Each fossil fuel-fired 
     generating unit that commences operation more than 10 years 
     after the date of enactment of this Act shall achieve and 
     maintain, at all operating levels, a combustion heat rate 
     efficiency of not less than 50 percent (based on the higher 
     heating value of the fuel), unless granted a waiver under 
     subsection (d).
       (b) Test Methods.--Not later than 2 years after the date of 
     enactment of this Act, the Administrator, in consultation 
     with the Secretary of Energy, shall promulgate methods for 
     determining initial and continuing compliance with this 
     section.
       (c) Permit Requirement.--Not later than 10 years after the 
     date of enactment of this Act, each generating unit shall 
     have a permit issued under title V of the Clean Air Act (42 
     U.S.C. 7661 et seq.) that requires compliance with this 
     section.
       (d) Waiver of Combustion Heat Rate Efficiency Standard.--
       (1) Application.--The owner or operator of a generating 
     unit that commences operation more than 10 years after the 
     date of enactment of this Act may apply to the Administrator 
     for a waiver of the combustion heat rate efficiency standard 
     specified in subsection (a)(2) that is applicable to that 
     type of generating unit.
       (2) Issuance.--The Administrator may grant the waiver only 
     if--
       (A)(i) the owner or operator of the generating unit 
     demonstrates that the technology to meet the combustion heat 
     rate efficiency standard is not commercially available; or
       (ii) the owner or operator of the generating unit 
     demonstrates that, despite best technical efforts and 
     willingness to make the necessary level of financial 
     commitment, the combustion heat rate efficiency standard is 
     not achievable at the generating unit; and
       (B) the owner or operator of the generating unit enters 
     into an agreement with the Administrator to offset by a 
     factor of 1.5 to 1, using a method approved by the 
     Administrator, the emission reductions that the generating 
     unit does not achieve because of the failure to achieve the 
     combustion heat rate efficiency standard specified in 
     subsection (a)(2).
       (3) Effect of waiver.--If the Administrator grants a waiver 
     under paragraph (1), the generating unit shall be required to 
     achieve and maintain, at all operating levels, the combustion 
     heat rate efficiency standard specified in subsection (a)(1).

     SEC. 5. AIR EMISSION STANDARDS FOR FOSSIL FUEL-FIRED 
                   GENERATING UNITS.

       (a) All Fossil Fuel-Fired Generating Units.--Not later than 
     10 years after the date of enactment of this Act, each fossil 
     fuel-fired generating unit, regardless of its date of 
     construction or commencement of operation, shall be subject 
     to, and operating in physical and operational compliance 
     with, the new source review requirements under section 111 of 
     the Clean Air Act (42 U.S.C. 7411).
       (b) Emission Rates for Sources Required to Maintain 45 
     Percent Efficiency.--Not later than 10 years after the date 
     of enactment of this Act, each fossil fuel-fired generating 
     unit subject to section 4(a)(1) shall be in compliance with 
     the following emission limitations:
       (1) Mercury.--Each coal-fired or fuel oil-fired generating 
     unit shall be required to remove 95 percent of the mercury 
     contained in the fuel, calculated in accordance with 
     subsection (e).
       (2) Carbon dioxide.--
       (A) Natural gas-fired generating units.--Each natural gas-
     fired generating unit shall be required to achieve an 
     emission rate of not more than 0.9 pounds of carbon dioxide 
     per kilowatt hour of net electric power output.
       (B) Fuel oil-fired generating units.--Each fuel oil-fired 
     generating unit shall be required to achieve an emission rate 
     of not more than 1.3 pounds of carbon dioxide per kilowatt 
     hour of net electric power output.
       (C) Coal-fired generating units.--Each coal-fired 
     generating unit shall be required to achieve an emission rate 
     of not more than 1.55 pounds of carbon dioxide per kilowatt 
     hour of net electric power output.
       (3) Sulfur dioxide.--Each fossil fuel-fired generating unit 
     shall be required--
       (A) to remove 95 percent of the sulfur dioxide that would 
     otherwise be present in the flue gas; and

[[Page S12651]]

       (B) to achieve an emission rate of not more than 0.3 pounds 
     of sulfur dioxide per million British thermal units of fuel 
     consumed.
       (4) Nitrogen oxides.--Each fossil fuel-fired generating 
     unit shall be required--
       (A) to remove 90 percent of nitrogen oxides that would 
     otherwise be present in the flue gas; and
       (B) to achieve an emission rate of not more than 0.15 
     pounds of nitrogen oxides per million British thermal units 
     of fuel consumed.
       (c) Emission Rates for Sources Required to Maintain 50 
     Percent Efficiency.--Each fossil fuel-fired generating unit 
     subject to section 4(a)(2) shall be in compliance with the 
     following emission limitations:
       (1) Mercury.--Each coal-fired or fuel oil-fired generating 
     unit shall be required to remove 95 percent of the mercury 
     contained in the fuel, calculated in accordance with 
     subsection (e).
       (2) Carbon dioxide.--
       (A) Natural gas-fired generating units.--Each natural gas-
     fired generating unit shall be required to achieve an 
     emission rate of not more than 0.8 pounds of carbon dioxide 
     per kilowatt hour of net electric power output.
       (B) Fuel oil-fired generating units.--Each fuel oil-fired 
     generating unit shall be required to achieve an emission rate 
     of not more than 1.2 pounds of carbon dioxide per kilowatt 
     hour of net electric power output.
       (C) Coal-fired generating units.--Each coal-fired 
     generating unit shall be required to achieve an emission rate 
     of not more than 1.4 pounds of carbon dioxide per kilowatt 
     hour of net electric power output.
       (3) Sulfur dioxide.--Each fossil fuel-fired generating unit 
     shall be required--
       (A) to remove 95 percent of the sulfur dioxide that would 
     otherwise be present in the flue gas; and
       (B) to achieve an emission rate of not more than 0.3 pounds 
     of sulfur dioxide per million British thermal units of fuel 
     consumed.
       (4) Nitrogen oxides.--Each fossil fuel-fired generating 
     unit shall be required--
       (A) to remove 90 percent of nitrogen oxides that would 
     otherwise be present in the flue gas; and
       (B) to achieve an emission rate of not more than 0.15 
     pounds of nitrogen oxides per million British thermal units 
     of fuel consumed.
       (d) Permit Requirement.--Not later than 10 years after the 
     date of enactment of this Act, each generating unit shall 
     have a permit issued under title V of the Clean Air Act (42 
     U.S.C. 7661 et seq.) that requires compliance with this 
     section.
       (e) Compliance Determination and Monitoring.--
       (1) Regulations.--Not later than 2 years after the date of 
     enactment of this Act, the Administrator, in consultation 
     with the Secretary of Energy, shall promulgate methods for 
     determining initial and continuing compliance with this 
     section.
       (2) Calculation of mercury emission reductions.--Not later 
     than 2 years after the date of enactment of this Act, the 
     Administrator shall promulgate fuel sampling techniques and 
     emission monitoring techniques for use by generating units in 
     calculating mercury emission reductions for the purposes of 
     this section.
       (3) Reporting.--
       (A) In general.--Not less than often than quarterly, the 
     owner or operator of a generating unit shall submit a 
     pollutant-specific emission report for each pollutant covered 
     by this section.
       (B) Signature.--Each report required under subparagraph (A) 
     shall be signed by a responsible official of the generating 
     unit, who shall certify the accuracy of the report.
       (C) Public reporting.--The Administrator shall annually 
     make available to the public, through 1 or more published 
     reports and 1 or more forms of electronic media, facility-
     specific emission data for each generating unit and pollutant 
     covered by this section.
       (f) Disposal of Mercury Captured or Recovered Through 
     Emission Controls.--
       (1) Captured or recovered mercury.--Not later than 2 years 
     after the date of enactment of this Act, the Administrator 
     shall promulgate regulations to ensure that mercury that is 
     captured or recovered through the use of an emission control, 
     coal cleaning, or another method is disposed of in a manner 
     that ensures that--
       (A) the hazards from mercury are not transferred from 1 
     environmental medium to another; and
       (B) there is no release of mercury into the environment.
       (2) Mercury-containing sludges and wastes.--The regulations 
     promulgated by the Administrator under paragraph (1) shall 
     ensure that mercury-containing sludges and wastes are handled 
     and disposed of in accordance with all applicable Federal and 
     State laws (including regulations).
       (g) Public Reporting of Facility-Specific Emission Data.--
       (1) In general.--The Administrator shall annually make 
     available to the public, through 1 or more published reports 
     and the Internet, facility-specific emission data for each 
     generating unit and for each pollutant covered by this 
     section.
       (2) Source of data.--The emission data shall be taken from 
     the emission reports submitted under subsection (e)(3).

     SEC. 6. ACCELERATED DEPRECIATION FOR INVESTOR-OWNED 
                   GENERATING UNITS.

       (a) In General.--Section 168(e)(3) of the Internal Revenue 
     Code of 1986 (relating to classification of certain property) 
     is amended--
       (1) in subparagraph (D) (relating to 10-year property), by 
     striking ``and'' at the end of clause (i), by striking the 
     period at the end of clause (ii) and inserting ``, and'', and 
     by adding at the end the following:
       ``(iii) any 50-percent efficient fossil fuel-fired 
     generating unit.''; and
       (2) in subparagraph (E) (relating to 15-year property), by 
     striking ``and'' at the end of clause (ii), by striking the 
     period at the end of clause (iii) and inserting ``, and'', 
     and by adding at the end the following:
       ``(iv) any 45-percent efficient fossil fuel-fired 
     generating unit.''.
       (b) Definitions.--Section 168(i) of the Internal Revenue 
     Code of 1986 (relating to definitions and special rules) is 
     amended by adding at the end the following:
       ``(15) Fossil fuel-fired generating units.--
       ``(A) 50-percent efficient fossil fuel-fired generating 
     unit.--The term `50-percent efficient fossil fuel-fired 
     generating unit' means any property used in an investor-owned 
     fossil fuel-fired generating unit pursuant to a plan approved 
     by the Secretary, in consultation with the Administrator of 
     the Environmental Protection Agency, to place into service 
     such a unit that is in compliance with sections 4(a)(2) and 
     5(c) of the Clean Power Plant and Modernization Act of 1998, 
     as in effect on the date of enactment of this paragraph.
       ``(B) 45-percent efficient fossil fuel-fired generating 
     unit.--The term `45-percent efficient fossil fuel-fired 
     generating unit' means any property used in an investor-owned 
     fossil fuel-fired generating unit pursuant to a plan so 
     approved to place into service such a unit that is in 
     compliance with sections 4(a)(1) and 5(b) of such Act, as so 
     in effect.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property used after the date of enactment of 
     this Act.

     SEC. 7. GRANTS FOR PUBLICLY OWNED GENERATING UNITS.

       Any capital expenditure made after the date of enactment of 
     this Act to purchase, install, and bring into commercial 
     operation any new publicly owned generating unit that--
       (1) is in compliance with sections 4(a)(1) and 5(b) shall, 
     for a 15-year period, be eligible for partial reimbursement 
     through annual grants made by the Secretary of the Treasury, 
     in consultation with the Administrator, in an amount equal to 
     the monetary value of the depreciation deduction that would 
     be realized by reason of section 168(c)(3)(E) of the Internal 
     Revenue Code of 1986 by a similarly-situated investor-owned 
     generating unit over that period; and
       (2) is in compliance with sections 4(a)(2) and 5(c) shall, 
     over a 10-year period, be eligible for partial reimbursement 
     through annual grants made by the Secretary of the Treasury, 
     in consultation with the Administrator, in an amount equal to 
     the monetary value of the depreciation deduction that would 
     be realized by reason of section 168(c)(3)(D) of such Code by 
     a similarly-situated investor-owned generating unit over that 
     period.

     SEC. 8. CLEAN AIR TRUST FUND.

       (a) In General.--Subchapter A of chapter 98 of the Internal 
     Revenue Code of 1986 (relating to trust fund code) is amended 
     by adding at the end the following:

     ``SEC. 9511. CLEAN AIR TRUST FUND.

       ``(a) Creation of Trust Fund.--There is established in the 
     Treasury of the United States a trust fund to be known as the 
     `Clean Air Trust Fund' (hereafter referred to in this section 
     as the `Trust Fund'), consisting of such amounts as may be 
     appropriated or credited to the Trust Fund as provided in 
     this section or section 9602(b).
       ``(b) Transfers to Trust Fund.--
       ``(1) In general.--There are hereby appropriated to the 
     Trust Fund amounts equivalent to the taxes received in the 
     Treasury under section 4691.
       ``(2) Authorization of appropriations.--There are 
     authorized to be appropriated to the Trust Fund such 
     additional sums as are necessary to carry out the activities 
     described in subsection (c).
       ``(c) Expenditures From Trust Fund.--Amounts in the Trust 
     Fund shall be available, as provided by appropriation Acts, 
     upon request by the head of the appropriate Federal agency in 
     such amounts as the agency head determines are necessary--
       ``(1) to offset reductions of revenues to the Treasury 
     resulting from the amendments made by section 6 of the Clean 
     Power Plant and Modernization Act of 1998;
       ``(2) to provide grants under section 7 of such Act, as in 
     effect on the date of enactment of this section;
       ``(3) to provide assistance under section 14 of such Act, 
     as so in effect;
       ``(4) to provide community economic development incentives 
     under section 15, as so in effect; and
       ``(5) to provide funding under section 16 of such Act, as 
     so in effect.''.
       (b) Conforming Amendment.--The table of sections for such 
     subchapter A is amended by adding at the end the following:

``Sec. 9511. Clean Air Trust Fund.''.

     SEC. 9. CARBON DIOXIDE EMISSION FEES.

       (a) In General.--Chapter 38 of subtitle D of the Internal 
     Revenue Code of 1986 (relating to miscellaneous excise taxes) 
     is amended by inserting after subchapter D the following:

              ``Subchapter E--Carbon Dioxide Emission Fees

``Sec. 4691. Imposition of fees.

[[Page S12652]]

     ``SEC. 4691. IMPOSITION OF FEES.

       ``(a) Tax Imposed.--There is hereby imposed on each fossil 
     fuel-fired generating unit with a generating capacity of 5 or 
     more megawatts a tax equal to $50 per ton of carbon dioxide 
     emitted by such generating unit.
       ``(b) Phased-in Rate.--In the case of--
       ``(1) calendar years 2003 through 2006, subsection (a) 
     shall be applied by substituting `$25' for `$50'; and
       ``(2) calendar years 2007 through 2009, subsection (a) 
     shall be applied by substituting `$37.50' for `$50'.
       ``(c) Adjustment of Rates.--Not less often than once every 
     2 years beginning after 2002, the Secretary, in consultation 
     with the Administrator of the Environmental Protection 
     Agency, shall evaluate the rate of the tax imposed by 
     subsection (a) and increase the rate if necessary for the 
     calendar year--
       ``(1) to ensure that emissions of carbon dioxide are 
     reduced to levels that are adequate to protect sensitive 
     populations, with an adequate margin of safety, against 
     adverse health effects;
       ``(2) to ensure that emissions of carbon dioxide are 
     reduced to levels (including, if necessary, a level of zero 
     emissions) that preclude any reasonable possibility that the 
     environment, including sensitive species or ecosystems, will 
     be seriously or permanently altered on a global, continental, 
     or subcontinental scale;
       ``(3) to provide adequate incentives for generating units 
     to minimize emissions of carbon dioxide to levels that are 
     technologically feasible, including a level of zero 
     emissions; and
       ``(4) to eliminate any economic benefit that a generating 
     unit may derive from the emission of carbon dioxide.
       ``(d) Payment of Tax.--The tax imposed by this section--
       ``(1) shall be paid quarterly by the owner or operator of 
     each fossil fuel-fired generating unit; and
       ``(2) shall be based on the measured emissions of the 
     generating unit.
       ``(e) Fossil Fuel-Fired Generating Unit.--The term `fossil 
     fuel-fired generating unit' means a generating unit (as 
     defined in section 3(2) of the Clean Power Plant and 
     Modernization Act of 1998) powered by fossil fuels.''.
       (b) Conforming Amendment.--The table of subchapters for 
     chapter 38 of such Code is amended by inserting after the 
     item relating to subchapter D the following:
``Subchapter E. Carbon dioxide emission fees.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to emissions in calendar years beginning after 
     December 31, 2002.

     SEC. 10. EXTENSION OF RENEWABLE ENERGY PRODUCTION CREDIT.

       Section 45(c) of the Internal Revenue Code of 1986 
     (relating to definitions) is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (A), by striking ``and'';
       (B) in subparagraph (B), by striking the period and 
     inserting ``, and''; and
       (C) by adding at the end the following:
       ``(C) solar power.'';
       (2) in paragraph (3)--
       (A) by inserting ``, and December 31, 1998, in the case of 
     a facility using solar power to produce electricity'' after 
     ``electricity''; and
       (B) by striking ``1999'' and inserting ``2010''; and
       (3) by adding at the end the following:
       ``(4) Solar power.--The term `solar power' means solar 
     power harnessed through--
       ``(A) photovoltaic systems,
       ``(B) solar boilers that provide process heat, and
       ``(C) any other means.''.

     SEC. 11. RECOGNITION OF PERMANENT EMISSION REDUCTIONS IN 
                   FUTURE CLIMATE CHANGE IMPLEMENTATION PROGRAMS.

       It is the sense of Congress that permanent reductions in 
     emissions of carbon dioxide and nitrogen oxides that are 
     accomplished through the retirement of old generating units 
     and replacement by new generating units that meet the 
     combustion heat rate efficiency and emission standards 
     specified in this Act, or through replacement of old 
     generating units with nonpolluting renewable power generation 
     technologies, should be credited to the utility sector, and 
     to the owner or operator that retires or replaces the old 
     generating unit, in any climate change implementation program 
     enacted by Congress.

     SEC. 12. RENEWABLE POWER GENERATION TECHNOLOGIES.

       (a) In General.--Under the Renewable Energy and Energy 
     Efficiency Technology Act of 1989 (42 U.S.C. 12001 et seq.), 
     the Secretary of Energy shall fund research and development 
     programs and commercial demonstration projects and 
     partnerships to demonstrate the commercial viability and 
     environmental benefits of electric power generation from 
     biomass, geothermal, solar, and wind technologies.
       (b) Types of Projects.--Demonstration projects may include 
     solar power tower plants, solar dishes and engines, co-firing 
     of biomass with coal, biomass modular systems, next-
     generation wind turbines and wind turbine verification 
     projects, and geothermal energy conversion.
       (c) Authorization of Appropriations.--In addition to 
     amounts made available under any other law, there is 
     authorized to be appropriated to carry out this section 
     $75,000,000 for each of fiscal years 2003 through 2015.

     SEC. 13. EVALUATION OF IMPLEMENTATION OF THIS ACT AND OTHER 
                   STATUTES.

       (a) In General.--Not later than 2 years after the date of 
     enactment of this Act, the Secretary of Energy, in 
     consultation with the Chairman of the Federal Energy 
     Regulatory Commission and the Administrator, shall submit to 
     Congress a report on the implementation of this Act.
       (b) Identification of Conflicting Law.--The report shall 
     identify any provision of the Energy Policy Act of 1992 
     (Public Law 102-486), the Energy Supply and Environmental 
     Coordination Act of 1974 (15 U.S.C. 791 et seq.), the Public 
     Utility Regulatory Policies Act of 1978 (16 U.S.C. 2601 et 
     seq.), or the Powerplant and Industrial Fuel Use Act of 1978 
     (42 U.S.C. 8301 et seq.), or the amendments made by those 
     Acts, that conflicts with the intent or efficient 
     implementation of this Act.
       (c) Recommendations.--The report shall include 
     recommendations from the Secretary of Energy, the Chairman of 
     the Federal Energy Regulatory Commission, and the 
     Administrator for legislative or administrative measures to 
     harmonize and streamline the statutes specified in subsection 
     (b) and the regulations implementing those statutes.

     SEC. 14. ASSISTANCE FOR WORKERS ADVERSELY AFFECTED BY REDUCED 
                   CONSUMPTION OF COAL.

       In addition to amounts made available under any other law, 
     there is authorized to be appropriated $75,000,000 for each 
     of fiscal years 2003 through 2010, and $50,000,000 for each 
     of fiscal years 2011 through 2015, to provide assistance, 
     under the economic dislocation and worker adjustment 
     assistance program of the Department of Labor authorized by 
     title III of the Job Training Partnership Act (29 U.S.C. 1651 
     et seq.), to coal industry workers who are terminated from 
     employment as a result of reduced consumption of coal by the 
     electric power generation industry.

     SEC. 15. COMMUNITY ECONOMIC DEVELOPMENT INCENTIVES FOR 
                   COMMUNITIES ADVERSELY AFFECTED BY REDUCED 
                   CONSUMPTION OF COAL.

       In addition to amounts made available under any other law, 
     there is authorized to be appropriated $75,000,000 for each 
     of fiscal years 2003 through 2010, and $50,000,000 for each 
     of fiscal years 2011 through 2015, to provide assistance, 
     under the economic adjustment program of the Department of 
     Commerce authorized by the Public Works and Economic 
     Development Act of 1965 (42 U.S.C. 3121 et seq.), to assist 
     communities adversely affected by reduced consumption of coal 
     by the electric power generation industry.

     SEC. 16. CARBON SEQUESTRATION.

       (a) Carbon Sequestration Strategy.--In addition to amounts 
     made available under any other law, there is authorized to be 
     appropriated to the Environmental Protection Agency and the 
     Department of Energy for each of fiscal years 2003 through 
     2005 a total of $15,000,000 to conduct research and 
     development activities in basic and applied science in 
     support of development by January 1, 2005, of a carbon 
     sequestration strategy that is designed to offset all growth 
     in carbon dioxide emissions in the United States after 2010.
       (b) Methods for Biologically Sequestering Carbon Dioxide.--
     In addition to amounts made available under any other law, 
     there is authorized to be appropriated to the Environmental 
     Protection Agency and the Department of Agriculture for each 
     of fiscal years 2003 through 2015 a total of $15,000,000 to 
     carry out soil restoration, tree planting, wetland 
     protection, and other methods of biologically sequestering 
     carbon dioxide.
                                  ____


      Section-by-Section Overview of the ``Clean Power Plant and 
                      Modernization Act of 1998''

       What will the ``Clean Power Plant and Modernization Act of 
     1998'' do?
       The ``Clean Power Plant and Modernization Act of 1998'' 
     lays out an ambitious, achievable, and balanced set of 
     financial incentives and regulatory requirements designed to 
     increase power plant efficiency, reduce emissions, and 
     encourage use of renewable power generation methods. The bill 
     encourages innovation, entrepreneurship, and risk-taking.
       The bill encourages ``retirement and replacement'' of old, 
     dirty, inefficient generating capacity. It does not utilize a 
     ``cap and trade'' approach. Many believe that the 
     ``retirement and replacement'' approach does a superior job 
     at the local and regional levels of protecting public health 
     and the environment from mercury pollution, ozone pollution, 
     and acid deposition. On a global level, the ``retirement and 
     replacement'' also does a much superior job of permanently 
     reducing the volume of carbon dioxide emitted.
       Section 4. Combustion Heat Rate Efficiency Standards for 
     Fossil Fuel-Fired Generating Units.
       Fossil fuel-fired power plants in the United States operate 
     at an average combustion efficiency of 33%. Put another way, 
     on average, 67% of the heat generated by burning the fuel is 
     wasted. Increasing combustion efficiency is really the only 
     way to reduce carbon dioxide emissions. Section 4 lays out a 
     phased two-stage process for increasing efficiency. In the 
     first stage, by 10 years after enactment, all units in 
     operation must achieve a combustion heat rate efficiency of 
     not less than 45%. In the second stage, with expected 
     advances in combustion technology, units commencing operation 
     more than 10 years after enactment must achieve

[[Page S12653]]

     a combustion heat rate efficiency of not less than 50%. 
     Carbon dioxide emission reductions of at least 650 million 
     tons per year are expected, and the potential exists for even 
     larger reductions.
       If, for some unforeseen reason, technological advances do 
     not achieve the 50% efficiency level, Section 4 contains a 
     waiver provision that allows owners of new units to offset 
     any shortfall in carbon dioxide emissions through 
     implementation of carbon sequestration projects.
       Section 5. Air Emission Standards for Fossil Fuel-Fired 
     Generating Units.
       Subsection (a) eliminates the ``grand father'' loophole in 
     the Clean Air Act and requires all units, regardless of when 
     they were constructed or began operation, to comply with 
     existing new source review requirements under Section 111 of 
     the Clean Air Act.
       Subsection (b) sets mercury, carbon dioxide, sulfur 
     dioxide, and nitrogen oxide emission standards for units that 
     are subject to the 45% thermal efficiency standards set forth 
     in Section 4. For mercury, 95% removal of mercury contained 
     in the fuel is required. For carbon dioxide, the emission 
     limits are set by fuel type (i.e., natural gas = 0.9 pounds 
     per kilowatt hour of output; fuel oil = 1.3 pounds per 
     kilowatt hour of output; coal = 1.55 pounds per kilowatt hour 
     of output). Ninety-five percent of sulfur dioxide emissions 
     (and not more than 0.3 pounds per million Btu's of fuel 
     consumed), and 90 percent of nitrogen oxides (and not more 
     than 0.15 pounds per million Btu's of fuel consumed) are to 
     be removed.
       Subsection (c) contains the same emission standards for 
     mercury, sulfur dioxide, and nitrogen oxides as those in 
     Subsection (b). Greater combustion efficiency results in 
     lower emissions of carbon dioxide, and the fuel specific 
     emission limits at the 50% efficiency level are lowered 
     accordingly (i.e., natural gas = 0.8 pounds per kilowatt hour 
     of output; fuel oil = 1.2 pounds per kilowatt hour of output; 
     coal = 1.4 pounds per kilowatt hour of output). Section 6. 
     Accelerated Depreciation for Investor-Owned Generating Units.
       Under the Internal Revenue Code of 1986, utilities can 
     depreciate their generating equipment over a 20 year period. 
     Section 6 amends Section 168 of the Internal Revenue Code of 
     1986 to allow for depreciation over a 15 year period for 
     units meeting the 45% efficiency level and the emission 
     standards in Section 5(b). Section 168 is further amended to 
     allow for deprecation over a 10 year period for units meeting 
     the 50% efficiency level and the emission standards in 
     Section 5(c).
       Section 7. Grants for Publicly-Owned Generating Units. No 
     federal taxes are paid on publicly-owned generating units. To 
     provide publicly-owned utilities with comparable incentives 
     to modernize, Section 7 provides for annual grants in an 
     amount equal to the monetary value of the depreciation 
     deduction that would be realized by a similarly-situated 
     investor owned generating unit under Section 6. Units meeting 
     the 45% efficiency level and the emission standards in 
     Section 5(b) would receive annual grants over a 15 year 
     period, and units meeting the 50% efficiency level and the 
     emission standards in Section 5(c) would receive annual 
     grants over 10 year period.
       Section 8. Clean Air Trust Fund, and Section 9. Carbon 
     Dioxide Emission Fees.
       To offset the impact to the Treasury of the incentives in 
     Sections 6 and 7, the bill establishes the Clean Air Trust 
     Fund. The Trust Fund is similar to the Highway Trust Fund or 
     the Superfund. The revenue for the trust fund will be 
     provided through phased implementation of a ``per ton fee'' 
     on emissions of carbon dioxide. Implementation of the fee 
     would begin 3 years after enactment at the rate of $25.00 per 
     ton. The rate would increase to $37.50 per ton seven years 
     after enactment, and would be fully implemented 10 years 
     after enactment at a rate of $50.00 per ton.
       The Trust Fund will also be used to pay for assistance to 
     workers and communities adversely affected by reduced 
     consumption of coal, research and development for renewable 
     power generation technologies (e.g., wind, solar, and 
     biomass), and carbon sequestration projects.
       Section 10. Extension of Renewable Energy Production 
     Credit.
       Section 45(c) of the Internal Revenue Code of 1986 is 
     amended to include solar power, and to extend renewable 
     energy production credit to 2010 (it is currently set to 
     expire in 1999). This section expands on S. 1459 (Senator 
     Leahy is a co-sponsor) which would extend the credit to 2004. 
     S. 1459 has been referred to the Finance Committee.
       Section 11. Recognition of Permanent Emission Reductions in 
     Future Climate Change Implementation Programs.
       This section expresses the sense of Congress that permanent 
     reductions in emissions of carbon dioxide and nitrogen oxides 
     that are accomplished through the retirement of old 
     generating units and replacement by new generating units that 
     meet the efficiency and emissions standards in the bill, or 
     through replacement with non-polluting renewable power 
     generation technologies, should be credited to the utility 
     sector and to the owner/operator in any climate change 
     implementation program enacted by Congress.
       Section 12. Renewable Power Generation Technologies.
       Beginning 3 years after enactment, this section provides 
     $75 million per year (for a total of $975 million over 13 
     years) to fund research and development programs and 
     commercial demonstration projects and partnerships to 
     demonstrate the commercial viability and environmental 
     benefits of electric power generation from biomass, 
     geothermal, solar, and wind technologies. Types of projects 
     may include solar power tower plants, solar dishes and 
     engines, co-firing biomass with coal, biomass modular 
     systems, next-generation wind turbines and wind verification 
     projects, and geothermal energy conversion.
       Section 13. Evaluation of Implementation of this Act and 
     other Statutes.
       Not later than 2 years after enactment, DOE, in 
     consultation with EPA and FERC, shall report to Congress on 
     the implementation of the Clean Power Plant and Modernization 
     Act of 1998. The report shall identify any provision of the 
     Energy Policy Act of 1992, the Energy Supply and 
     Environmental Coordination Act of 1974, the Public Utilities 
     Regulatory Policies Act of 1978, or the Powerplant and 
     Industrial Fuel Use Act of 1978 that conflicts with the 
     efficient implementation of the Clean Power Plant and 
     Modernization Act of 1998. The report shall include 
     recommendations for legislative or administrative measures to 
     harmonize and streamline these other statutes.
       Section 14. Assistance for Workers Adversely Affected by 
     Reduced Consumption of Coal.
       Beginning 3 years after enactment, this section provides a 
     total of $850 million over 13 years ($75 million per year for 
     the first 8 years and $50 million per year for the following 
     5 years) to provide assistance to coal industry workers who 
     are adversely affected as a result of reduced consumption of 
     coal by the electric power generation industry. The funds 
     will be administered under the economic dislocation and 
     worker adjustment assistance program of the Department of 
     Labor authorized by Title III of the Job Training Partnership 
     Act.
       Section 15. Community Economic Development Incentives for 
     Communities Adversely Affected by Reduced Consumption of 
     Coal.
       Beginning 3 years after enactment, this section provides a 
     total of $850 million over 13 years ($75 million per year for 
     the first 8 years and $50 million per year for the following 
     5 years) to provide assistance to communities adversely 
     affected as a result of reduced consumption of coal by the 
     electric power generation industry. The funds will be 
     administered under the economic adjustment program of the 
     Department of Commerce authorized by the Public Works and 
     Economic Development Act of 1965.
       Section 16. Carbon Sequestration.
       This section authorizes expenditure of $45 million over 3 
     years for development of a long-term carbon sequestration 
     strategy for the United States. This section also authorizes 
     EPA and USDA to fund up to $195 million over 13 years ($15 
     million per year) for carbon sequestration projects including 
     soil restoration, tree planting, wetlands protection, and 
     other ways of biologically sequestering carbon dioxide.
                                 ______