[Congressional Record Volume 147, Number 12 (Tuesday, January 30, 2001)]
[Senate]
[Pages S782-S785]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mrs. BOXER:
  S. 221. A bill to authorize the Secretary of Energy to make loans 
through a revolving loan fund for States to construct electricity 
generation facilities for use in electricity supply emergencies.
  Mrs. BOXER. Mr. President, since last week, I have introduced several 
bills to help California deal with the

[[Page S785]]

electricity crisis and to help prevent such emergencies from occurring 
in other States in the future. Today, I am introducing another such 
bill--the State Electricity Reserve Fund Act.
  Current electricity generating capacity is tied to the expected need. 
Private generating companies have no incentive to build or maintain 
facilities that would generate capacity greater than what is needed to 
meet consumer demand. The plants would be idle most of the time. As a 
result, electricity shortages can occur.
  A lack of rainfall, which means that hydroelectric facilities cannot 
be operated as often, as well as unseasonably hot or cold temperatures, 
or rapid population increases in a State can all result in a demand for 
electricity unexpectedly exceeding supply. But with supply tied to 
expected demand, this can result in devastatingly large price increases 
for consumers and/or electricity shortages, which in turn could cause 
brownouts or blackouts.
  This is exactly what has happened in California. In the late 1980's, 
the California Public Utilities Commission required utilities to 
determine demand for new power generating capacity. At that time, the 
state recognized that generation needs could increase. However, the 
utilities argued that no new capacity would be needed in California 
until 2005. The utilities fought the attempt by the state to make them 
build more generating capacity. The utilities argued it was not needed.
  It turned out that it was needed. And whether the utilities should 
have known is another argument for another day. But the point here is 
that we cannot rely on the private sector to create a ``rainy day 
fund'' of electricity in the event of emergencies.
  So, the State Electricity Reserve Fund Act would create a revolving 
loan fund for states to use to help pay for the creation of an 
electricity reserve capacity. These loans could be used by states to 
build electricity generation facilities that would be controlled by the 
state and would be kept in reserve unless the Governor of the State 
declares an electricity emergency.
  Mr. President, it is not an unusual thing for the federal government 
to prepare for energy emergencies. We have the Strategic Petroleum 
Reserve in the case of oil shortages, and last year we established the 
Home Heating Oil Reserve for the Northeastern States. My bill is based 
on the same premise.
  True, we cannot store electricity like we can store petroleum and 
heating oil. But we can financially help States build a reserve 
facility, including a reserve of the fuel that is needed to generate 
electricity, to be used in the case of electricity emergencies. If such 
a reserve had existed in California, we would not have reached State 
III emergencies and rolling blackouts over the past couple of weeks.
  Mr. President, I think being prepared for emergencies is always a 
good policy. Helping States be prepared for electricity emergencies is 
no different.
  I ask unanimous consent that a copy of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 221

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``State Electricity Reserve 
     Fund Act of 2001''.

     SEC. 2. PURPOSE.

       The purpose of this Act is to assist States in creating 
     electric generating capacity to be used in the event of an 
     electricity emergency.

     SEC. 3. EMERGENCY ELECTRICITY GENERATION FACILITIES.

       (a) Revolving Loan Fund.--There is established in the 
     Treasury of the United States a revolving loan fund to be 
     known as the ``State Electricity Reserve Loan Fund'' 
     consisting of such amounts as may be appropriated or credited 
     to such Fund as provided in this section.
       (b) Expenditures From Loan Fund.--
       (1) In general.--The Secretary of Energy, under such rules 
     and regulations as the Secretary may prescribe, may make 
     loans from the State Electricity Reserve Loan Fund, without 
     further appropriation, to a State.
       (2) Purpose.--Loans provided under this section shall be 
     used for the purpose of designing and constructing 1 or more 
     facilities in a State with capacity to generate an amount of 
     electricity sufficient to meet the amount of any intermittent 
     deficiencies in electricity supply that the State may 
     reasonably be expected to experience during any period over 
     the next 10 years.
       (3) Use of funds.--A facility designed or constructed with 
     a loan provided under this section--
       (A) shall be owned by the State and operated by the State 
     directly or through a contract with an electric utility or a 
     consortium of electric utilities; and
       (B) shall be operated to supply electricity to the 
     electricity transmission grid only during periods of 
     electricity emergencies declared by the Governor of the 
     State.
       (4) Determinations by secretary.--No loan shall be provided 
     under this section unless the Secretary determines that--
       (A) there is reasonable assurance of repayment of the loan; 
     and
       (B) the amount of the loan, together with other funds 
     provided by or available to the State, is adequate to assure 
     completion of the facility or facilities for which the loan 
     is made.
       (5) Loan amount.--The amount of a loan provided under this 
     section shall not exceed the lesser of--
       (A) 40 percent of the costs to be incurred in designing and 
     constructing the facility or facilities involved; or
       (B) $1,000,000,000.
       (c) Loan Repayment.--
       (1) Length of repayment.--
       (A) In general.--Before making a loan under this section, 
     the Secretary shall determine the period of time within which 
     a State must repay such loan.
       (B) Limitation.--Except as provided in subparagraph (C), 
     the Secretary shall in no case allow repayment of such loan--
       (i) to begin later than the date that is 2 years after the 
     date on which the loan is made; and
       (ii) to be completed later than the date that is 10 years 
     after the date on which the loan is made.
       (C) Moratorium.--The Secretary may grant a temporary 
     moratorium on the repayment of a loan provided under this 
     section if, in the determination of the Secretary, continued 
     repayment of such loan would cause a financial hardship on 
     the State that received the loan.
       (2) Interest.--The Secretary may not impose or collect 
     interest or other charges on a loan provided under this 
     section.
       (3) Credit to loan fund.--Repayment of amounts loaned under 
     this section shall be credited to the State Electricity 
     Reserve Loan Fund and shall be available for the purposes for 
     which the fund is established.
       (d) Administration Expenses.--The Secretary may defray the 
     expenses of administering the loans provided under this 
     section.
       (e) Appropriations.--Out of any funds in the Treasury not 
     otherwise appropriated, there are appropriated to the State 
     Electricity Reserve Loan Fund--
       (1) $5,000,000,000 in fiscal year 2002;
       (2) $4,000,000,000 in fiscal year 2003;
       (3) $3,000,000,000 in fiscal year 2004;
       (4) $2,000,000,000 in fiscal year 2005; and
       (5) $1,000,000,000 in fiscal year 2006.

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