[Congressional Record Volume 145, Number 163 (Wednesday, November 17, 1999)]
[Senate]
[Pages S14726-S14733]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LEAHY:
  S. 1949. 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 review requirements, to promote 
the use of clean coal technologies, and to promote alternative energy 
and clean energy sources such as solar, wind, biomass, and fuel cells; 
to the Committee on Finance.


            clean power plant and modernization act of 1999

  Mr. LEAHY. Mr. President, Vermonters have a proud tradition of 
protecting our environment. We have some of the strongest environmental 
laws in the country. Yet despite this proud tradition of environmental 
stewardship, we have seen how pollution from outside our state has 
affected our mountains, lakes and streams. Acid rain caused from sulfur 
dioxide emissions outside Vermont has drifted through the atmosphere 
and scarred our mountains and poisoned our streams. Mercury has quietly 
made its deadly poisonous presence into the food chain of our fish to 
the point where health advisories have been posted for the consumption 
of several species. And, despite our own tough air laws and small 
population, the EPA has considered air quality warnings in Vermont that 
are comparable to emissions consistent for much larger cities. Silently 
each night, pollution from outside Vermont seeps into our state, and 
our exemplary and forward-looking environmental laws are powerless to 
stop or even limit the encroachment.

  The Clean Air Act of 1970 was a milestone law which established 
national air quality standards for the first time and attempted to 
provide protection for populations who are affected by emissions 
outside their own local and state control. That bill did much to halt 
declining air quality around the country and improve it in some areas. 
It also acknowledged that fossil fuel utility plants contribute a 
significant amount of air pollution not only in the area immediately 
around the plant but can affect air quality hundreds of miles away.
  While the bill has improved air quality, changes in the utility 
market since passage of the Clean Air Act make it necessary to consider 
important updates to the legislation. States throughout the country are 
deregulating utilities and soon Congress may consider federal 
legislation on this issue. I support these economic changes but 
Congress and the Administration should keep pace with this changing 
market. Breaking down the barriers of a regulated utility market can 
have important economic consequences for utility customers. More 
competition will drive down prices. But these lower costs will come 
with a price--the cheapest power is unfortunately produced by some of 
the dirtiest power plants. Most of these power plants were 
grandfathered under the Clean Air Act.
  So today I am introducing the ``Clean Power Plant and Modernization 
Act'' to address the local, regional, and global air pollution problems 
that are posed by fossil-fired power plants under a deregulated market.
  In the last few weeks, the EPA and the Administration have taken some 
important steps to address the power plant loophole in the Clean Air 
Act that allows hundreds of old, mostly coal-fired power plants to 
continue to pollute at levels much higher than new plants. Closing this 
loophole is critical to protecting the health of our environment and 
the health of our children.
  Last week the Justice Department and the Environmental Protection 
Agency filed suit against 32 coal-fired power plants who had made major 
changes to their plants without also installing new equipment to 
control smog, acid rain and soot. This is illegal, even under the Clean 
Air Act, and it spotlights the glaring need to level the playing field 
for all power plants. This is particularly as our country moves toward 
a deregulated electricity industry.

  Unfortunately, some of our colleagues decided that this move unfairly 
targeted some of their utilities that have benefitted from this 
loophole for almost thirty years. I would point out that many of us 
from New England and New York believe it is unfair that our states have 
been the dumping ground for the pollution coming out of these plants 
for the past thirty years. My colleagues have heard me speak on the 
floor about how this pollution is contaminating our fish with mercury, 
damaging our lakes and forests with acid rain, and causing respiratory 
problems and obscuring the view of Vermont's mountains with summertime 
ozone pollution from nitrogen oxide emissions.
  Now, added to these concerns is the growing body of knowledge showing 
that carbon dioxide emissions are having an impact on the global 
climate. More than a decade of record heat, reports from around the 
globe of dying coral reefs, and melting glaciers should be warning 
signals to all of us.
  In Vermont, one of our warning signals is the impact to sugar maples. 
Sugar maple now range naturally as far south as Tennessee and west of 
the Mississippi River from Minnesota to Missouri. Given the current 
predictions for climate changes, by the end of the next century the 
range of sugar maples in North America will be limited the state of 
Maine and portions of eastern Canada. Vermont's climate may not

[[Page S14727]]

change so much that palm trees will line the streets of Burlington and 
Montpelier, but the impact on the character and economy of Vermont and 
many other states will be profound.
  It is hard to imagine a Vermont hillside in the fall without the 
brilliant reds of the sugar maples, and it is hard to imagine a stack 
of pancakes without Vermont maple syrup. And it is unlikely that sugar 
maples will be the only species or crop that will be affected by 
climate change, or that the effects will be limited to Vermont. Many 
like to dismiss concerns about pollution from power plants as a 
``Northeastern issue.'' It is not; it affects all of us, perhaps in 
ways that we have not even begun to imagine.
  I can show you maps that mark the deposition ``hot spots'' for these 
pollutants in the Everglades, the Upper Midwest, New England, Long 
Island Sound, Chesapeake Bay and the West Coast. This clearly is not a 
regional issue. Collectively, fossil fuel-fired power plants constitute 
the largest source of air pollution in the United States, annually 
emitting more than 2 billion tons of carbon dioxide, more than 12 
million tons of acid rain producing sulfur dioxide, nearly 6 million 
tons of smog producing nitrogen oxides, and more than 50 tons of highly 
toxic mercury.
  These are staggering sums. Consider the fact that it would take 
nearly 25,000 Washington Monuments, weighing 81,120 tons apiece, to add 
up to 2 billion tons. And that is just one year.
  Why are we continuing to allow pollutants on that enormous scale to 
be dumped on some of our most fragile ecosystems, much less into our 
lungs through the air we breathe? It is because Congress assumed when 
it passed the 1970 Clean Air Act that these old pollution-prone plants 
would be retired over time and replaced by newer, cleaner plants. It 
has not worked out that way, and it is time for the Congress to rethink 
our strategy.

  More than 75 percent of the fossil-fuel fired plants in the United 
States began operation before the 1970 Clean Air Act was passed. As a 
result, they are ``grandfathered'' out from under the full force of its 
regulations. Many of the environmental problems posed by this industry 
are linked to the antiquated and inefficient technologies at these 
plants. The average fossil-fuel fired power plant uses combustion 
technology devised in the 1950's or before. Would any of us buy a car 
today that was still using 1950s technology? Of course not. So why are 
we still going out of our way to preserve 1950s technology for power 
plants?
  As long as we allow these plants to operate inefficiently they will 
produce enormous amounts of air pollution. My bill takes a new approach 
to reducing this pollution by retiring the inefficient 
``grandfathered'' power plants and bring new, clean, and efficient 
technologies for the 21st Century on line.
  Obviously, major changes in this industry will not occur over night. 
The ``continue-business-as-usual'' inertia is enormous. The old, 
inefficient, pollution-prone power plants will operate until they fall 
down because they are paid for, burn the cheapest fuel, and are subject 
to much less stringent environmental requirements. ``Grandfathered'' 
plants have the statutory equivalent of an eternal lifetime under the 
Clean Air Act loophole.
  Mr. President, this article in Forbes Magazine describes how valuable 
the old ``grandfathered'' power plants are. The article cites the 
example of the ``grandfathered'' Homer City generating station outside 
of Pittsburgh. Until last year, the utility valued this plant at $540 
million. According to the Forbes article, last year the utility sold 
the plant for $1.8 billion. That works out to $955 per kilowatt of 
generating capacity, or about the cost of building a new plant. Why are 
these old pollution-prone plants suddenly so valuable? Maybe their 
``grandfathered'' status has something to do with it.
  What does my bill propose to do? First, it closes the ``grandfather'' 
loophole. Second, it lays out an aggressive but achievable set of air 
pollution and efficiency requirements for fossil-fired power plants. 
Third, the emissions standards will allow clean coal technologies to 
have a fair chance to compete in the future mix of electrical power 
generation. Fourth, it provides industry decision-makers with a 
comprehensive and predictable set of regulatory requirements and tax 
code changes so they can see up-front what the playing field is going 
to look like in the future. This will allow them to make informed, 
comprehensive, and economically efficient business decisions. Public 
health and the environment will benefit, consumers will benefit, and 
the utility companies will benefit from this approach.
  As U.S. power plants become more efficient and more power is produced 
by renewable technologies, less fossil fuel will be consumed. This will 
have an impact on the workers and communities that produce fossil 
fuels. These effects are likely to be greatest for coal, even with 
significant deployment of clean coal technology. The bill provides 
funding for programs to help workers and communities during the period 
of transition. I am eager to work with organized labor to ensure that 
these provisions address the needs of workers, particularly those who 
may not fully benefit from retraining programs.

  The bill provides substantial additional funding for research, 
development, and commercial demonstrations of renewable and clean 
energy technologies such as solar, wind, biomass, and fuel cells. As 
utilities retire their ``grandfathered'' plants and plan for future 
generating capacity, renewable and clean technologies need to be part 
of the equation. My bill also authorizes expenditures for implementing 
known ways of biologically sequestering carbon dioxide from the 
atmosphere such as planting trees, preserving wetlands, and soil 
restoration.
  How will the environment benefit from the emission and efficiency 
standards in my bill? Mercury emissions will be cut from more than 50 
tons per year to no more than 5 tons per year. Annual emissions of 
sulfur dioxide that causes acid rain will be cut by more than 6 million 
tons beyond the requirements in Phase II of the Clean Air Act of 1990. 
Nitrogen oxide emissions that result in summertime ozone pollution will 
be cut by more than 3 million tons per year beyond Phase II 
requirements. And the bill would prevent at least 650 million tons of 
carbon dioxide emissions per year.
  Of course, this discussion should not just be about the impact to our 
environment. This debate should equally be focused on public health. 
There is mounting evidence of the health effects of these pollutants. 
The Washington Post Magazine ran an alarming article that documented 
the escalating number of children with asthma, jumping to 17.3 million 
in 1998 from 6.8 million in 1980. Asthma may not be caused directly by 
air pollution, but it certainly aggravates it and can lead to premature 
deaths.
  The American public still overwhelmingly supports the commitment to 
the environment that we made in the early 1970s. As stewards of the 
environment for our children and our grandchildren, we need to act 
without delay to ensure that in the new millennium the United States 
produces electricity more efficiently and with much less environmental 
and public health impact. There is no reason why we should go into the 
next century still using technology from the era of Ozzie and Harriet.
  Mr. President, I ask unanimous consent that a section-by-section 
overview of the bill, and an article entitled ``Poor Me'' from the May 
31, 1999, edition of Forbes Magazine, be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1949

       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 1999''.
       (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. Extension of renewable energy production credit.
Sec. 7. Megawatt hour generation fees.
Sec. 8. Clean Air Trust Fund.
Sec. 9. Accelerated depreciation for investor-owned generating units.

[[Page S14728]]

Sec. 10. Grants for publicly owned generating units.
Sec. 11. Recognition of permanent emission reductions in future climate 
              change implementation programs.
Sec. 12. Renewable and clean power generation technologies.
Sec. 13. Clean coal, advanced gas turbine, and combined heat and power 
              demonstration program.
Sec. 14. Evaluation of implementation of this Act and other statutes.
Sec. 15. Assistance for workers adversely affected by reduced 
              consumption of coal.
Sec. 16. Community economic development incentives for communities 
              adversely affected by reduced consumption of coal.
Sec. 17. 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 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 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) combined heat and power 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--
       (A) use of commercially available combustion technology, 
     including clean coal technologies such as pressurized 
     fluidized bed combustion and an integrated gasification 
     combined cycle system;
       (B) installation of pollution controls;
       (C) expanded use of renewable and clean energy sources such 
     as biomass, geothermal, solar, wind, and fuel cells; and
       (D) promotion of application of combined heat and power 
     technologies;
       (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 and clean energy sources 
     such as biomass, geothermal, solar, wind, and fuel cells;
       (5) to establish the Clean Air Trust Fund to fund the 
     training, economic development, carbon sequestration, and 
     research, development, and demonstration programs established 
     under this Act;
       (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 and the owner or 
     operator 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 provide worker retraining for workers adversely 
     affected by reduced consumption of coal; and
       (12) to provide economic development incentives for 
     communities adversely affected by reduced consumption of 
     coal.

     SEC. 3. DEFINITIONS.

       In this Act:

[[Page S14729]]

       (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 90 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
       (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 90 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.
       (D) Consumer disclosure.--Not later than 2 years after the 
     date of enactment of this Act, the Administrator shall 
     promulgate regulations requiring each owner or operator of a 
     generating unit to disclose to residential consumers of 
     electricity generated by the unit, on a regular basis (but 
     not less often than annually) and in a manner convenient to 
     the consumers, data concerning the level of emissions by the 
     generating unit of each pollutant covered by this section and 
     each air pollutant covered by section 111 of the Clean Air 
     Act (42 U.S.C. 7411).
       (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. EXTENSION OF RENEWABLE ENERGY PRODUCTION CREDIT.

       Section 45(c) of the Internal Revenue Code of 1986 
     (relating to definitions) is amended--

[[Page S14730]]

       (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. 7. MEGAWATT HOUR GENERATION FEES.

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

             ``Subchapter E--Megawatt Hour Generation Fees

``Sec. 4691. Imposition of fees.

     ``SEC. 4691. IMPOSITION OF FEES.

       ``(a) Tax Imposed.--There is hereby imposed on each covered 
     fossil fuel-fired generating unit a tax equal to 30 cents per 
     megawatt hour of electricity produced by the covered fossil 
     fuel-fired generating unit.
       ``(b) 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 any 
     succeeding calendar year to ensure that the Clean Air Trust 
     Fund established by section 9511 has sufficient amounts to 
     fully fund the activities described in section 9511(c).
       ``(c) Payment of Tax.--The tax imposed by this section 
     shall be paid quarterly by the owner or operator of each 
     covered fossil fuel-fired generating unit.
       ``(d) Covered Fossil Fuel-Fired Generating Unit.--The term 
     `covered fossil fuel-fired generating unit' means an electric 
     utility generating unit that--
       ``(1) is powered by fossil fuels;
       ``(2) has a generating capacity of 5 or more megawatts; and
       ``(3) because of the date on which the generating unit 
     commenced commercial operation, is not subject to all 
     regulations promulgated under section 111 of the Clean Air 
     Act (42 U.S.C. 7411).''.
       (b) Conforming Amendment.--The table of subchapters for 
     such chapter 38 is amended by inserting after the item 
     relating to subchapter D the following:

``Subchapter E. Megawatt hour generation fees.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to electricity produced in calendar years 
     beginning after December 31, 2000.

     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.--There are hereby 
     appropriated to the Trust Fund amounts equivalent to the 
     taxes received in the Treasury under section 4691.
       ``(c) Expenditures From Trust Fund.--Amounts in the Trust 
     Fund shall be available, without further Act of 
     appropriation, upon request by the head of the appropriate 
     Federal agency in such amounts as the agency head determines 
     are necessary--
       ``(1) to provide funding under section 12 of the Clean 
     Power Plant and Modernization Act of 1999, as in effect on 
     the date of enactment of this section;
       ``(2) to provide funding for the demonstration program 
     under section 13 of such Act, as so in effect;
       ``(3) to provide assistance under section 15 of such Act, 
     as so in effect;
       ``(4) to provide assistance under section 16 of such Act, 
     as so in effect; and
       ``(5) to provide funding under section 17 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. 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 (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.''; and
       (2) by adding at the end the following:
       ``(F) 12-year property.--The term `12-year property' 
     includes any 50-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 1999, 
     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) Conforming Amendment.--The table contained in section 
     168(c) of the Internal Revenue Code of 1986 (relating to 
     applicable recovery period) is amended by inserting after the 
     item relating to 10-year property the following:

  ``12-year property...................................12 years''. ....

       (d) Effective Date.--The amendments made by this section 
     shall apply to property used after the date of enactment of 
     this Act.

     SEC. 10. 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 12-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. 11. RECOGNITION OF PERMANENT EMISSION REDUCTIONS IN 
                   FUTURE CLIMATE CHANGE IMPLEMENTATION PROGRAMS.

       It is the sense of Congress that--
       (1) 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;
       (2) the base year for calculating reductions under a 
     program described in paragraph (1) should be the calendar 
     year preceding the calendar year in which this Act is 
     enacted; and
       (3) a reasonable portion of any monetary value that may 
     accrue from the crediting described in paragraph (1) should 
     be passed on to utility customers.

     SEC. 12. RENEWABLE AND CLEAN 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--
       (1) biomass (excluding unseparated municipal solid waste), 
     geothermal, solar, and wind technologies; and
       (2) fuel cells.
       (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, geothermal energy conversion, and fuel cells.
       (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 2001 through 2010.

     SEC. 13. CLEAN COAL, ADVANCED GAS TURBINE, AND COMBINED HEAT 
                   AND POWER DEMONSTRATION PROGRAM.

       (a) In General.--Under subtitle B of title XXI of the 
     Energy Policy Act of 1992 (42 U.S.C. 13471 et seq.), the 
     Secretary of Energy shall establish a program to fund 
     projects and partnerships designed to demonstrate

[[Page S14731]]

     the efficiency and environmental benefits of electric power 
     generation from--
       (1) clean coal technologies, such as pressurized fluidized 
     bed combustion and an integrated gasification combined cycle 
     system;
       (2) advanced gas turbine technologies, such as flexible 
     midsized gas turbines and baseload utility scale 
     applications; and
       (3) combined heat and power technologies.
       (b) Selection Criteria.--
       (1) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary of Energy shall 
     promulgate criteria and procedures for selection of 
     demonstration projects and partnerships to be funded under 
     subsection (a).
       (2) Required criteria.--At a minimum, the selection 
     criteria shall include--
       (A) the potential of a proposed demonstration project or 
     partnership to reduce or avoid emissions of pollutants 
     covered by section 5 and air pollutants covered by section 
     111 of the Clean Air Act (42 U.S.C. 7411); and
       (B) the potential commercial viability of the proposed 
     demonstration project or partnership.
       (c) Authorization of Appropriations.--
       (1) In general.--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 2001 through 2010.
       (2) Distribution.--The Secretary shall make reasonable 
     efforts to ensure that, under the program established under 
     this section, the same amount of funding is provided for 
     demonstration projects and partnerships under each of 
     paragraphs (1), (2), and (3) of subsection (a).

     SEC. 14. 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. 15. 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 2001 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. 16. 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 2001 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.

      Section-by-Section Overview of ``The Clean Power Plant and 
                      Modernization Act of 1999''


 What will the ``Clean Power Plant and Modernization Act of 1999'' do?

       The ``Clean Power Plant and Modernization Act of 1999'' 
     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, 
     pollution-prone, and inefficient generating capacity with 
     new, clean, and efficient capacity. The bill 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 far superior job of permanently 
     reducing the volume of carbon dioxide emitted.


               What will the bill do for the environment?

       The bill would prevent at least 650 million tons of carbon 
     dioxide emissions per year. Over time, even more greenhouse 
     gas emissions will be avoided annually as increases in power 
     plant efficiencies exceed 50%, more combined heat and power 
     systems are installed, and use of renewable energy sources 
     increases. Prevention of greenhouse gas emissions of up to 1 
     billion tons per year may be possible. Mercury emissions will 
     be cut from more than 50 tons per year to no more than 5 tons 
     per year. Annual emissions of acid rain producing sulfur 
     dioxide emissions will be cut by more than 6 million tons 
     beyond Phase II Clean Air Act of 1990 requirements. Nitrogen 
     oxide emissions that result in summertime ozone pollution 
     will be cut by 3.2 million tons per year beyond Phase II 
     requirements.
       Over a 50 year period, the proposal laid out in the bill 
     will prevent more than 30 billion tons in carbon dioxide 
     emissions, and maybe as high as 50 billion tons. Carbon 
     dioxide is further addressed in the bill by authorizing 
     expenditures for implementing known ways of biologically 
     sequestering carbon dioxide from the atmosphere such as 
     planting trees, preserving wetlands, and soil restoration.
       Over a 50 year period, more than 2,200 tons of mercury 
     emissions would be avoided. While this might not sound like a 
     lot in relation to the other pollutants, consider that a 
     teaspoon of mercury is enough to contaminate several millions 
     of gallons of water. And over a 50 year period more than 300 
     million tons of sulfur dioxide and 160 million tons of 
     nitrogen oxides will be prevented beyond the Phase II 
     emission limits specified in the Clean Air Act of 1990.
     Section 1. Title; table of contents
     Section 2. Findings and purposes
     Section 3. Definitions
     Section 4. Heat rate efficiency standards for fossil fuel-
         fired generating units
       On average, fossil fuel-fired power plants in the United 
     States operate at a thermal efficiency rate of 33%, 
     converting just one-third of the energy in the fuel to 
     electricity, and wasting 67% of the heat generated by burning 
     the fuel. Increasing efficiency in converting the energy in 
     the fuel into electricity is really the only way to reduce 
     carbon dioxide ``greenhouse'' emissions from these 
     facilities. According to the Energy Information 
     Administration, fossil-fired power plants in the United 
     States emit more the 2 billion tons of carbon dioxide per 
     year (or the weight equivalent of nearly 25,000 Washington 
     Monuments every year). This is approximately 40% of annual 
     domestic 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 heat rate 
     efficiency (at the higher heating value) 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 a heat rate efficiency 
     (at the higher heating value) of not less than 50%.
       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 ``grandfather'' 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. The average ``in service'' date for 
     fossil-fired generating units in the United States is 1964--
     six years before passage of the Clean Air Act. More than 75% 
     of operating fossil-fired generating units came into service 
     before implementation of the 1970 Clean Air Act and are 
     subject to much less stringent requirements than newer units.
       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, 90% 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 Btus of fuel 
     consumed), and 90 percent of nitrogen oxides (and not more 
     than 0.15 pounds per million Btus 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). Increased thermal efficiency will result 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).
       Furthering the public's right-to-know information on 
     emission volumes, Subsection (e) requires EPA to annually 
     publish pollutant-specific emissions data for each generating 
     unit covered by the ``Clean Power Plant and Modernization Act 
     of 1999.'' In addition, at least once per year residential 
     consumers will receive information from their electricity 
     supplier on the emission volumes.
     Section 6. Extension of renewable energy production credit
       Section 45(c) of the Internal Revenue Code of 1986 is 
     amended to include solar power,

[[Page S14732]]

     and to extend renewable energy production credit to 2010 (it 
     is currently set to expire in 1999).
     Section 7. Mega watt hour generation fee, and
     Section 8. Clean air trust fund
       The Clean Air Trust Fund is similar to the Highway Trust 
     Fund and the Superfund. Revenue for the Clean Air Trust Fund 
     will be provided through implementation of a fee on 
     electricity produced by fossil-fired generating units that 
     are ``grandfathered'' from the Clean Air Act's Section 111 
     new source requirements. Utilities will be assessed at the 
     rate of 30 cents per megawatt hour of electricity that they 
     produce from ``grandfathered'' units. For residential 
     consumers receiving power from ``grandfathered'' plants, the 
     cost of the fee would average 25 cents per month. Income from 
     the fee will be placed in the Clean Air Trust Fund to pay 
     for: a.) assistance to workers and communities adversely 
     affected by reduced consumption of coal; b.) research and 
     development and demonstration programs for renewable and 
     clean power generation technologies (e.g., wind, solar, 
     biomass, and fuel cells); c) demonstrations of the 
     efficiency, environmental benefits, and commercial viability 
     of electrical power generation from clean coal, advanced gas, 
     and combined heat and power technologies; and d.) carbon 
     sequestration projects.
     Section 9. 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. 
     New, cleaner and efficient generating technologies will 
     experience shorter physical lifetimes compared to their 
     dirtier, less efficient, but more durable predecessors. Over 
     a 20-year timeframe, most components of new generating units 
     will need to be replaced; some components will be replaced 
     several times. To update the Internal Revenue Code of 1986 to 
     reflect this change in the expected physical lifetimes of 
     generating equipment, Section 9 amends Section 168 of the 
     Code to allow depreciation over a 15-year period for units 
     meeting the 45% efficiency level and the emission standards 
     in Section 5(b) above. Section 168 is further amended to 
     allow for deprecation over a 12-year period for units 
     meeting the 50% efficiency level and the emission 
     standards in Section 5(c).
     Section 10. Grants for publicly-owned generating units.
       No federal taxes are paid on publicly-owned generating 
     units. Section 10 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 9. Units meeting the 45% 
     efficiency level and the emission standards in Section 5(b) 
     above 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 a 
     12-year period.
     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. The base year for 
     calculating reductions will be the year preceding enactment 
     of the ``Clean Power Plant and Modernization Act of 1999.'' 
     The bill stipulates that a portion of any monetary value that 
     may accrue from credits under this section should be passed 
     on to utility customers.
     Section 12. Renewable and clean power generation 
         technologies.
  This section provides a total of $750 million over 10 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, wind, and fuel cell 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, geothermal energy conversion, 
and fuel cells.
     Section 13. Clean coal, advanced gas turbine, and combined 
         heat and power generation demonstration program.
       This section provides a total of $750 million over 10 years 
     to fund projects and partnerships that demonstrate the 
     efficiency and environmental benefits and commercial 
     viability of electric power generation from clean coal 
     technologies (including, but not limited to, pressurized 
     fluidized bed combustion and integrated gasification combined 
     cycle systems), advanced gas turbine technologies (including, 
     but not limited to, flexible mid-sized gas turbines and 
     baseload utility scale applications), and combined heat and 
     power technologies.
     Section 14. 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 1999.'' 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 1999.'' The report shall include 
     recommendations for legislative or administrative measures to 
     harmonize and streamline these other statutes.
     Section 15. Assistance for workers adversely affected by 
         reduced consumption of coal
       With increased power plant efficiency, less fuel will need 
     to be burned to produce a given quantity of electricity. This 
     section provides a total of $1.125 billion over 15 years ($75 
     million per year) to provide assistance to 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 workers' 
     adjustment assistance program of the Department of Labor 
     authorized by Title III of the Job Training Partnership Act.
     Section 16. Community economic development incentives for 
         communities adversely affected by reduced consumption of 
         coal
       With increased power plant efficiency, less fuel will need 
     to be burned to produce a given quantity of electricity. This 
     section provides a total of $1.125 billion over 15 years ($75 
     million per year) 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 17. Carbon sequestration
       This section authorizes expenditure of $345 million over 10 
     years for development of a long-term carbon sequestration 
     strategy ($45 million) for the United States, and authorizes 
     EPA and USDA to fund carbon sequestration projects including 
     soil restoration, tree planting, wetland's protection, and 
     other ways of biologically sequestering carbon dioxide ($300 
     million). Projects funded under this section may not be used 
     to offset emissions otherwise mandated by the ``Clean Power 
     Plant and Modernization Act of 1999.''
                                  ____


                                Poor Me

                        (By Christopher Palmeri)

       Utilities are telling the rate regulators that their old 
     power plants are practically worthless. But they're selling 
     them for fancy prices.
       The Homer City Generation Station is a 34-year-old, coal-
     fired power plant near Pittsburgh. What's it worth? Until 
     last year it was carried on the books of two utilities for 
     $540 million. Then the companies sold it for $1.8 billion, or 
     $955 per kilowatt--about what it would cost to build a brand-
     spanking-new electric plant.
       Are old plants a millstone for utilities as they enter the 
     deregulated future? That's what the utilities are telling 
     rate regulators. We built all these plants over the years 
     because you told us to, they are saying--and now that 
     newcomers are about to undercut us, we need compensation for 
     the ``stranded costs.'' The logic of compensation for 
     stranded costs is unassailable. The only debate is over the 
     amount. Is the average power plant indeed a white elephant?
       According to data collected by Cambridge Energy Research 
     Associates, the average nonnuclear power plant put up for 
     sale in the last year sold for nearly twice its book value. 
     Granted, the plants being sold tend to be the more desirable 
     ones, by dint of their location or their fuel efficiency. 
     Still, the pricing makes one wonder whether the power 
     industry should be entitled to much of anything for stranded 
     costs.
       Some states--California, Maine, Connecticut and New York, 
     for example--have ordered utilities to sell all or part of 
     their generation capacity. That should set an arm's length 
     fair price. Thanks largely to the fat prices received for its 
     power plants, Sempra Energy, the parent of San Diego Gas & 
     Electric, says that its stranded-cost charges related to 
     generation--about 12% of a typical customer's bill--will be 
     paid off by July. That is two and a half years ahead of 
     schedule, a savings of $400 million for southern 
     Californians.
       Not every state legislature or utility commission has the 
     political will to force divestiture, however. If a utility 
     does not want to sell, the utility and the regulators have to 
     estimate the fair market value for a plant and then see if 
     that is a lot less than book value.
       This is tricky business. Last year Allegheny Energy, parent 
     of West Penn Power Co., estimated the value of its power 
     plant at $148 a kilowatt, half of their book value. An expert 
     hired by a number of industrial energy users suggested the 
     value should be $409. A hearing revealed that Allegheny had 
     bought back a half-interest in one of its plants two years 
     earlier at a price of $612 a kilowatt. Allegheny settled with 
     the Pennsylvania Public Utility Commission for a

[[Page S14733]]

     valuation of $225 a kilowatt, half again the original 
     estimate. At that price, Allegheny's 700,000 customers in 
     western Pennsylvania are stuck paying $670 million in 
     stranded costs.
       What happens if the utility doesn't get the compensation it 
     wants? Litigation. In New Hampshire the state legislature 
     passed a law designed to open up the power market in 1996. 
     New Hampshire's power companies and utility commission have 
     been tied up in court ever since over the issue of stranded 
     costs.
       For this reason, legislators and regulators sometimes feel 
     like they need to cut some deal, any deal, just to get a 
     competitive market moving forward. The state of Virginia, for 
     example, dodged any stranded cost calculation. In a move 
     supported by local utilities, the legislature delayed true 
     competition and simply froze electric rates until 2007. 
     Utilities had donated more than $1 million to Virginia 
     politicians in the last two election cycles.
       Last year Ohio legislators proposed a bill to open up the 
     power market. They figured stranded costs at $6 billion, 
     spread among Ohio's eight big utilities. Not liking that 
     number, the utilities came up with an $18 billion figure. The 
     latest compromise is $11 billion. This number represents, in 
     effect, the excess of the plants' book value over their 
     market value.
       Wait a minute, says Samuel Randazzo, an attorney for some 
     industrial power users. That $11 billion number is more than 
     the book value of all the plants. Can the utilities lose more 
     than their investment? Negotiations are to continue.
       ``We are applying a political solution to an economic 
     problem,'' shrugs Ohio utility commissioner Craig Glazer. 
     ``All intellectual arguments have been thrown out the window. 
     Now it comes down to who screams the loudest.
       Expect further screaming as utilities enter the deregulated 
     market.
                                 ______