[Congressional Record Volume 148, Number 28 (Wednesday, March 13, 2002)]
[Senate]
[Pages S1835-S1840]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
NATIONAL LABORATORIES PARTNERSHIP IMPROVEMENT ACT OF 2001--Continued
Mr. BINGAMAN. Madam President, let me take a moment while there is a
lull in the proceedings to reiterate a request that I believe has been
made by both Democratic and Republican cloakrooms last night, to
Senators on both sides of the aisle, and it is my hope, as floor
manager, along with Senator Murkowski, that we can, at some stage later
this week, seek a finite list of amendments that would be in order on
the bill.
As all Members know, we have been on this bill now for all of last
week; and so far this week, we have addressed some significant issues.
There are some other amendments that are being negotiated and
finalized, and we have been working with some Members on those. There
are others that we just hear about. There are rumors of amendments
which we hear about.
I think the majority leader is trying to get as much done as possible
before we move to the issue of campaign finance reform, which he is
committed to move to later.
I think our chances of completing action on this energy bill would be
dramatically improved if we could get a finite list of amendments to
work through.
So I once again encourage all Members to cooperate with the two
cloakrooms and give copies of their amendments to those cloakrooms so
that we can see them and can talk to Senators about how to move ahead
with those amendments or with votes on those amendments, if those are
necessary.
I know there will be an amendment at some stage fairly soon by my
friend Senator Thomas. If he is ready, I yield the floor.
The PRESIDING OFFICER. The Senator from Wyoming.
Amendments Nos. 3000 Through 3006, En Bloc, to Amendment No. 2917
Mr. THOMAS. Madam President, I rise to send a series of amendments to
the desk and ask for their immediate consideration en bloc.
The PRESIDING OFFICER. Without objection, it is so ordered. The clerk
will report.
The legislative clerk read as follows:
The Senator from Wyoming [Mr. Thomas] for himself and
others, proposes amendments numbered 3000 through 3006, en
bloc.
Mr. THOMAS. Madam President, I ask unanimous consent that reading of
the amendments be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendments are as follows:
AMENDMENT NO. 3000
(Purpose: To clarify FERC merger, market-based rate, and refund
authority, and to strike the transmission interconnection provision)
On page 14, strike line 3 and all that follows through page
21, line 15, and insert the following:
SEC. 202. ELECTRIC UTILITY MERGERS.
Section 203(a) of the Federal Power Act (16 U.S.C. 824b) is
amended to read as follows:
``(a)(1) No public utility shall, without first having
secured an order of the Commission authorizing it to do so--
``(A) sell, lease, or otherwise dispose of the whole of its
facilities subject to the jurisdiction of the Commission, or
any part thereof of a value in excess of $10,000,000,
``(B) merge or consolidate, directly or indirectly, such
facilities or any part thereof with the facilities of any
other person, by any means whatsoever,
``(C) purchase, acquire, or take any security of any other
public utility, or
``(D) purchase, lease, or otherwise acquire existing
facilities for the generation of electric energy unless such
facilities will be used exclusively for the sale of electric
energy at retail.
``(2) No holding company in a holding company system that
includes a transmitting utility or an electric utility
company shall purchase, acquire, or take any security of, or,
by any means whatsoever, directly or indirectly, merge or
consolidate with a transmitting utility, an electric utility
company, a gas utility company, or a holding company in a
holding company system that includes a transmitting utility,
an electric utility company, or a gas utility company,
without first having secured an order of the Commission
authorizing it to do so.
``(3) Upon application for such approval the Commission
shall give reasonable notice in writing to the Governor and
State commission of each of the States in which the physical
property affected, or any part thereof, is situated, and to
such other persons as it may deem advisable.
``(4) After notice and opportunity for hearing, the
Commission shall approve the proposed disposition,
consolidation, acquisition, or control, if it finds that the
proposed transaction--
``(A) will be consistent with the public interest;
``(B) will not adversely affect the interests of consumers
of electric energy of any public utility that is a party to
the transaction or is an associate company of any part to the
transaction;
``(C) will not impair the ability of the Commission or any
State commission having jurisdiction over any public utility
that is a party to the transaction or an associate
[[Page S1836]]
company of any party to the transaction to protect the
interests of consumers or the public; and
``(D) will not lead to cross-subsidization of associate
companies or encumber any utility assets for the benefit of
an associate company.
``(5) The Commission shall, by rule, adopt procedures for
the expeditious consideration of applications for the
approval of dispositions, consolidations, or acquisitions
under this section. Such rules shall identify classes of
transactions, or specify criteria for transactions, that
normally meet the standards established in paragraph (4), and
shall require the Commission to grant or deny an application
for approval of a transaction of such type within 90 days
after the conclusion of the hearing or opportunity to comment
under paragraph (4). If the Commission does not act within 90
days, such application shall be deemed granted unless the
Commission finds that further consideration is required to
determine whether the proposed transaction meets the
standards of paragraph (4) and issues one or more orders
tolling the time for acting on the application for an
additional 90 days.
``(6) For purposes of this subsection, the terms `associate
company', `electric utility company', `gas utility company',
`holding company', and `holding company system' have the
meaning given those terms in the Public Utility Holding
Company Act of 2002.''.
SEC. 203. MARKET-BASED RATES.
(a) Approval of Market-Based Rates.--Section 205 of the
Federal Power Act (16 U.S.C. 824d) is amended by adding at
the end of the following:
``(h) The Commission may determine whether a market-based
rate for the sale of electric energy subject to the
jurisdiction of the Commission is just and reasonable and not
unduly discriminatory or preferential. In making such
determination, the Commission shall consider such factors as
the Commission may deem to be appropriate and in the
public interest, including to the extent the Commission
considers relevant to the wholesale power market--
``(1) market power;
``(2) the nature of the market and its response mechanisms;
and
``(3) reserve margins.''.
(b) Revocation of Market-Based Rates.--Section 206 of the
Federal Power Act (16 U.S.C. 824e) is amended by adding at
the end the following:
``(f) Whenever the Commission, after a hearing had upon its
own motion or upon complaint, finds that a rate charged by a
public utility authorized to charge a market-based rate under
section 205 is unjust, unreasonable, unduly discriminatory or
preferential, the Commission shall determine the just and
reasonable rate and fix the same by order.''.
SEC. 204. REFUND EFFECTIVE DATE.
Section 206(b) of the Federal Power Act (16 U.S.C. 824e(b))
is amended by--
(1) striking ``the date 60 days after the filing of such
complaint nor later than 5 months after the expiration of
such 60-day period'' in the second sentence and inserting
``the date of the filing of such complaint nor later than 5
months after the filing of such complaint'';
(2) striking ``60 days after'' in the third sentence and
inserting ``of''; and
(3) striking ``expiration of such 60-day period'' in the
third sentence and inserting ``publication date''.
SEC. 205. OPEN ACCESS TRANSMISSION BY CERTAIN UTILITIES.
Part II of the Federal Power Act is further amended by
inserting after section 211 the following:
``open access by unregulated transmitting utilities
``Sec. 211A. (1) Subject to section 212(h), the Commission
may, by rule or order, require an unregulated transmitting
utility to provide transmission services--
``(A) at rates that are comparable to those that the
unregulated transmitting utility charges itself, and
``(B) on terms and conditions (not relating to rates) that
are comparable to those under Commission rules that require
public utilities to offer open access transmission services
and that are not unduly discriminatory or preferential.
``(2) The Commission shall exempt from any rule or order
under this subsection any unregulated transmitting utility
that--
``(A) sells no more than 4,000,000 megawatt hours of
electricity per year;
``(B) does not own or operate any transmission facilities
that are necessary for operating an interconnected
transmission system (or any portion thereof), or
``(C) meets other criteria the Commission determines to be
in the public interest.
``(3) The rate changing procedures applicable to public
utilities under subsections (c) and (d) of section 205 are
applicable to unregulated transmitting utilities for purposes
of this section.
``(4) In exercising its authority under paragraph (1), the
Commission may remand transmission rates to an unregulated
transmitting utility for review and revision where necessary
to meet the requirements of paragraph (1).
``(5) The provision of transmission services under
paragraph (1) does not preclude a request for transmission
services under section 211.
``(6) The Commission may not require a State or
municipality to take action under this section that
constitutes a private business use for purposes of section
141 of the Internal Revenue Code of 1986 (26 U.S.C. 141).
``(7) For purposes of this subsection, the term
`unregulated transmitting utility' means an entity that--
``(A) owns or operates facilities used for the transmission
of electric energy in interstate commerce, and
``(B) is either an entity described in section 201(f) or a
rural electric cooperative.''.
SEC. 206. ELECTRIC RELIABILITY STANDARDS.
____
AMENDMENT NO. 3001
(Purpose: To clarify provisions on access to transmission by
intermittent generators and make conforming changes)
On page 24, strike line 1 and all that follows through page
27, line 20 and insert the following:
SEC. 207. MARKET TRANSPARENCY RULES.
Part II of the Federal Power Act is further amended by
adding at the end the following:
``SEC. 216. MARKET TRANSPARENCY RULES.
``(a) Commission Rules.--Not later than 180 days after the
date of enactment of this section, the Commission shall issue
rules establishing an electronic information system to
provide information about the availability and price of
wholesale electric energy and transmission services to the
Commission, state commissions, buyers and sellers of
wholesale electric energy, users of transmission services,
and the public on a timely basis.
``(b) Information Required.--The Commission shall require--
``(1) each regional transmission organization to provide
statistical information about the available capacity and
capacity of transmission facilities operated by the
organization; and
``(2) each broker, exchange, or other market-making entity
that matches offers to sell and offers to buy wholesale
electric energy in interstate commerce to provide statistical
information about the amount and sale price of sales of
electric energy at wholesale in interstate commerce it
transacts.
``(c) Timely Basis.--The Commission shall require the
information required under subsection (b) to be posted on the
Internet as soon as practicable and updated as frequently as
practicable.
``(d) Protection of Sensitive Information.--The Commission
shall exempt from disclosure commercial or financial
information that the Commission, by rule or order, determines
to be privileged, confidential, or otherwise sensitive.''.
SEC. 208. ACCESS TO TRANSMISSION BY INTERMITTENT GENERATORS.
Part II of the Federal Power Act is further amended by
adding at the end the following:
``SEC. 217. ACCESS TO TRANSMISSION BY INTERMITTENT
GENERATORS.
``(a) Fair Treatment of Intermittent Generators.--The
Commission shall ensure that all transmitting utilities
provide transmission service to intermittent generators in a
manner that does not unduly prejudice or disadvantage such
generators for characteristics that are--
``(1) inherent to intermittent energy resources; and
``(2) are beyond the control of such generators.
``(b) Policies.--The Commission shall ensure that the
requirement in subsection (a) is met by adopting such
policies as it deems appropriate which shall include the
following:
``(1) Subject to the sole exception set forth in paragraph
(2), the Commission shall ensure that the rates transmitting
utilities charge intermittent generator customers for
transmission services do not unduly prejudice or disadvantage
intermittent generator customers for scheduling deviations.
``(2) The Commission may exempt a transmitting utility from
the requirement set forth in paragraph (1) if the
transmitting utility demonstrates that scheduling deviations
by its intermittent generator customers are likely to have an
adverse impact on the reliability of the transmitting
utility's system.
``(3) The Commission shall ensure that to the extent any
transmission charges recovering the transmitting utility's
embedded costs are assessed to such intermittent generators,
they are assessed to such generators on the basis of
kilowatt-hours generated or some other method to ensure that
they are fully recovered by the transmitting utility.
``(4) The Commission shall require transmitting utilities
to offer to intermittent generators, and may require
transmitting utilities to offer to all transmission
customers, access to nonfirm transmission service.
``(c) Definitions.--As used in this section:
``(1) The term `intermittent generator' means a facility
that generates electricity using wind or solar energy and no
other energy source.
``(2) The term `nonfirm transmission service' means
transmission service provided on an `as available' basis.
``(3) The term `scheduling deviation' means delivery of
more or less energy than has previously been forecast in a
schedule submitted by an intermittent generator to a control
area operator or transmitting utility.''.
[[Page S1837]]
SEC. 209. ENFORCEMENT.
____
amendment no. 3002
(Purpose: To require states to consider requiring time-of-use metering)
On page 44, strike line 3 and all that follows through page
45, line 12 and insert the following:
SEC. 241. REAL-TIME PRICING AND TIME-OF-USE METERING
STANDARDS.
(a) Adoption of Standards.--Section 111(d) of the Public
Utility Regulatory Policies Act of 1978 (16 U.S.C. 2621(d))
is amended by adding at the end the following:
``(11) Real-time pricing.--(A) Each electric utility shall,
at the request of an electric consumer, provide electric
service under a real-time schedule, under which the rate
charged by the electric utility varies by the hour (or
smaller time interval) according to changes in the electric
utility's wholesale power cost. The real-time pricing service
shall enable the electric consumer to manage energy use and
cost through real-time metering and communications
technology.
``(B) For purposes of implementing this paragraph, any
reference contained in this section to the date of enactment
of the Public Utility Regulatory Policies Act of 1978 shall
be deemed to be a reference to the date of enactment of this
paragraph.
``(C) Notwithstanding subsections (b) and (c) of section
112, each State regulatory authority shall consider and make
a determination concerning whether it is appropriate to
implement the standard set out in subparagraph (A) not later
than one year after the date of enactment of this paragraph.
``(12) Time-of-use.--(A) Each electric utility shall, at
the request of an electric consumer, provide electric service
under a time-of-use rate schedule which enables the electric
consumer to manage every use and cost through time-of-use
metering and technology.
``(B) For purposes of implementing this paragraph, any
reference contained in this section to the date of enactment
of the Public Utility Regulatory Policies Act of 1978 shall
be deemed to be a reference to the date of enactment of this
paragraph.
``(C) Notwithstanding subsections (b) and (c) of section
112, each State regulatory authority shall consider and make
a determination concerning whether it is appropriate to
implement the standards set out in subparagraph (A) not later
than one year after the date of enactment of this
paragraph.''.
(b) Special Rules.--Section 115 of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2625) is amended
by adding at the end the following:
``(i) Real-Time Pricing.--In a state that permits third-
party marketers to sell electric energy to retail electric
consumers, the electric consumer shall be entitled to receive
the same real-time metering and communication service as a
direct retail electric consumer of the electric utility.
``(j) Time-of-Use Metering.--In a state that permits third-
party marketers to sell electric energy to retail electric
consumers, the electric consumer shall be entitled to receive
the same time-of-use metering and communication service as a
direct retail electric consumer of the electric utility.''.
____
AMENDMENT NO. 3003
(Purpose: To require states to consider adopting federal net metering
standard)
On page 50, strike line 10 and all that follows through
page 54, line 10, and insert the following:
SEC. 245. NET METERING.
(a) Adoption of Standard.--Section 111(d) of the Public
Utility Regulatory Policies Act of 1978 (16 U.S.C. 2621(d))
is further amended by adding at the end the following:
``(13) Net metering.--(A) Each electric utility shall make
available upon request net metering service to any electric
consumer that the electric utility serves.
``(B) For purposes of implementing this paragraph, any
reference contained in this section to the date of enactment
of the Public Utility Regulatory Policies Act of 1978 shall
be deemed to be a reference to the date of enactment of this
paragraph.
``(C) Notwithstanding subsections (b) and (c) of section
112, each State regulatory authority shall consider and make
a determination concerning whether it is appropriate to
implement the standard set out in subparagraph (A) not later
than one year after the date of enactment of this paragraph.
(b) Special Rules for Net Metering.--Section 115 of the
Public Utility Regulatory Policies Act of 1978 (16 U.S.C.
2625) is further amended by adding at the end the following:
``(k) Net Metering.--
``(1) Rates and charges.--An electric utility--
``(A) shall charge the owner or operator of an on-site
generating facility rates and charges that are identical to
those that would be charged other electric consumers of the
electric utility in the same rate class; and
``(B) shall not charge the owner or operator of an on-site
generating facility any additional standby, capacity,
interconnection, or other rate or charge.
``(2) Measurement.--An electric utility that sells electric
energy to the owner or operator of an on-site generating
facility shall measure the quantity of electric energy
produced by the on-site facility and the quantity of electric
energy consumed by the owner or operator of an on-site
generating facility during a billing period in accordance
with normal metering practices.
``(3) Electric energy supplied exceeding electric energy
generated.--If the quantity of electric energy sold by the
electric utility to an on-site generating facility exceeds
the quantity of electric energy supplied by the on-site
generating facility to the electric utility during the
billing period, the electric utility may bill the owner or
operator for the net quantity of electric energy sold, in
accordance with normal metering practices.
``(4) Electric energy generated exceeding electric energy
supplied.--If the quantity of electric energy supplied by the
on-site generating facility to the electric utility exceeds
the quantity of electric energy sold by the electric utility
to the on-site generating facility during the billing
period--
``(A) the electric utility may bill the owner or operator
of the on-site generating facility for the appropriate
charges for the billing period in accordance with paragraph
(2); and
``(B) the owner or operator of the on-site generating
facility shall be credited for the excess kilowatt-hours
generated during the billing period, with the kilowatt-hour
credit appearing on the bill for the following billing
period.
``(5) Safety and performance standards.--An eligible on-
site generating facility and net metering system used by an
electric consumer shall meet all applicable safety,
performance, reliability, and interconnection standards
established by the National Electrical Code, the Institute of
Electrical and Electronics Engineers, and Underwriters
Laboratories.
``(6) Additional control and testing requirements.--The
Commission, after consultation with State regulatory
authorities and nonregulated electric utilities and after
notice and opportunity for comment, may adopt, by rule,
additional control and testing requirements for on-site
generating facilities and net metering systems that the
Commission determines are necessary to protect public safety
and system reliability.
``(7) Definitions.--For purposes of this subsection:
``(1) The term `eligible on-site generating facility'
means--
``(A) a facility on the site of a residential electric
consumer with a maximum generating capacity of 10 kilowatts
or less that is fueled by solar energy, or fuel cells; or
``(B) a facility on the site of a commercial electric
consumer with a maximum generating capacity of 500 kilowatts
or less that is fueled solely by a renewable energy resource,
landfill gas, or a high efficiency system.
``(2) The term `renewable energy resource' means solar,
wind, biomass, or geothermal energy.
``(3) The term `high efficiency system' means fuel cells or
combined heat and power.
``(4) The term `net metering service' means service to an
electric consumer under which electric energy generated by
that electric consumer from an eligible on-site generating
facility and delivered to the local distribution facilities
may be used to offset electric energy provided by the
electric utility to the electric consumer during the
applicable billing period.''.
____
AMENDMENT NO. 3004
(Purpose: To clarify state authority to protect electric consumers)
On page 58, strike line 16 and all that follows through
line 23 and insert the following:
SEC. 256. STATE AUTHORITY.
Nothing in this subtitle shall be construed to preclude a
State or State regulatory authority from prescribing and
enforcing laws, rules, or procedures regarding the practices
which are the subject of this section.
____
AMENDMENT NO. 3005
(Purpose: To clarify the requirement for the federal government to
purchase renewable fuels)
On page 64, strike line 8 and all that follows through page
65, line 17, and insert the following:
SEC. 263. FEDERAL PURCHASE REQUIREMENT.
(a) Requirement.--the President shall seek to ensure that,
to the extent economically feasible and technically
practicable, of the total amount of electric energy the
federal government consumes during any fiscal year--
(1) not less than 3 percent in fiscal years 2003 through
2004,
(2) not less than 5 percent in fiscal years 2005 through
2009, and
(3) not less than 7.5 percent in fiscal year 2010 and each
fiscal year thereafter--
shall be renewable energy. The President shall encourage the
use of innovative purchasing practices by federal agencies.
(2) Definition.--For purposes of this section, the term
``renewable energy'' means electric energy generated from
solar, wind, biomass, geothermal, fuel cells, municipal solid
waste, or additional hydroelectric generation capacity
achieved from increased efficiency or additions of new
capacity.
(c) Tribal Power Generation.--The President shall seek to
ensure that, to the extent economically feasible and
technically practicable, not less than one-tenth of the
amount specified in subsection (a) shall be renewable energy
that is generated by an Indian tribe or by a corporation,
partnership, or business association which is wholly or
majority owned, directly or indirectly, by an Indian tribe.
For purposes of this subsection, the term ``Indian tribe''
means any Indian
[[Page S1838]]
tribe, band, nation, or other organized group or community,
including any Alaska Native village or regional or village
corporation as defined in or established pursuant to the
Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq.),
which is recognized as eligible for the special programs and
services provided by the United States to Indians because of
their status as Indians.
(d) Biennial Report.--In 2004 and every 2 years thereafter,
the Secretary of Energy shall report to the Committee on
Energy and Natural Resources of the Senate and the
appropriate committees of the House of Representatives on the
progress of the federal government in meeting the goals
established by this section.
____
AMENDMENT NO. 3006
(Purpose: To make conforming changes in the table of contents)
On page 2, strike the items relating to sections 205
through 210 and insert the following:
Sec. 205. Open access transmission by certain utilities.
Sec. 206. Electric reliability standards.
Sec. 207. Market transparency rules.
Sec. 208. Access to transmission by intermittent generators.
Sec. 209. Enforcement.
Mr. THOMAS. Madam President, these amendments are from Senator Thomas
of Wyoming and Senator Bingaman of New Mexico. They have been cleared
on both sides.
Mr. BINGAMAN. Madam President, I do support the amendments. We have
worked jointly with Senator Thomas and his staff to perfect these
amendments. I think they are acceptable on this side. As far as I know,
there is no objection to their adoption.
The PRESIDING OFFICER. Is there further debate?
If not, without objection, the amendments are agreed to en bloc.
The amendments (Nos. 3000 through 3006) were agreed to en bloc.
Mr. THOMAS. Madam President, I move to reconsider the vote.
Mr. BINGAMAN. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Mr. THOMAS. Madam President, I thank the chairman for his cooperation
in finding some areas on which we are in agreement and on which we can
move forward. This electric title of the energy bill is a very
important one. Probably nothing affects more people than the electric
aspect of energy. We are very pleased.
We do have several more amendments in this area, some of which will
come up for a vote. Certainly being able to agree on these and move
them forward is a great advantage. I appreciate the cooperation of the
Senator from New Mexico.
Mr. BINGAMAN. Madam President, I thank the Senator from Wyoming for
his leadership on this issue. He has been very focused on trying to get
these provisions right. We have worked hard with him and his staff to
be sure that that is what has happened. This package of amendments we
have now adopted moves us substantially toward a consensus on what
ought to be included in this bill in the way of electricity
restructuring.
There are going to be a couple of issues that probably will require
individual votes. We are still in the process of defining the areas of
disagreement that exist there. I see this as a substantial step
forward. I thank the Senator from Wyoming.
I yield the floor and suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. CAMPBELL. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. CAMPBELL. Madam President, I ask unanimous consent that the
pending amendment be temporarily set aside.
The PRESIDING OFFICER. Without objection, it is so ordered.
Amendment No. 3007 to Amendment No. 2917
Mr. CAMPBELL. Madam President, I send an amendment to the desk on
behalf of myself, Senator Gramm of Texas, Senator Enzi of Wyoming, and
Senator Brownback of Kansas, and ask for its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follow:
The Senator from Colorado [Mr. Campbell], for himself, Mr.
Gramm, Mr. Enzi, and Mr. Brownback, proposes an amendment
numbered 3007.
Mr. CAMPBELL. Madam President, I ask unanimous consent that further
reading of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
(Purpose: To strike the section establishing a program to provide
assistance for State programs to retire fuel-inefficient motor
vehicles)
Strike section 822.
Mr. CAMPBELL. Madam President, the bill we are considering is an
extremely large and expansive bill dealing with many important and
controversial topics. Although the bill was stripped from its committee
of jurisdiction pretty much completely behind closed doors, we have an
idea of the issues with which we have been dealing. CAFE, ANWR, and
renewables are all topics we are familiar with and which have been
debated for some days now.
I am here to discuss a very small provision that many of my friends
may not have noticed because it is buried pretty deeply. That
provision, unlike several others that have been discussed and studied,
will be discussed for the first time, I believe, now.
Before getting into my comments, I wish to state that a comprehensive
energy bill is no place to put this new and untested idea; such an
action is, at best, poor policy. In particular, I wish to discuss
section 822 of the current bill.
Section 822 sounds as if it is not very offensive in a big bill such
as this, but it lies within the CAFE title. In short, section 822
provides grants for States to establish scrappage programs for cars
that are 15 years old or older. Car owners who choose to turn in their
car for scrap receive a ``minimum payment.'' Section 822 does not tell
us what the ``minimum payment'' might be, but they pay now about $1,000
to $1,200 for scrapping cars.
Further, section 822 would have the Department of Energy pay the
former car owner a ``credit'' toward the purchase of a new vehicle.
Like the ``minimum payment'' language failing to state how much that
would be, this provision fails to tell us the value of the taxpayer-
subsidized ``credit.'' However, unlike the minimum payment, we have no
guidance what that ``credit'' might be because, as with so much of this
little section, this is the first time we have heard of it.
Since no hearings were held on section 822, we don't know how much it
would cost U.S. taxpayers. We do know, however, that the cost would be
enormous since there are approximately 38 million cars at least 15
years old or older currently on the roads. If we estimate that just
one-quarter of those car owners choose to scrap their automobile and
receive the $1,000 and get another $1,000 to purchase a DOE-approved
vehicle, the cost to the U.S. taxpayer would be about $19 billion--
deficit dollars that could go to much better uses as we approach
deficits next year.
When I first heard of section 822, I wondered: Why should we do this?
Why should States be burdened with establishing a voluntary program to
scrap old cars? Why should U.S. taxpayers be subsidizing some people to
buy new cars? I am a big supporter of the auto industry, but I don't
support Government subsidizing their sales.
Section 822 simply states its purpose: To retire fuel-inefficient
vehicles, the assumption being that any car 15 years old or older would
be inefficient.
This is a brandnew approach to address fuel efficiency and gasoline
consumption, an approach that has not been discussed at any level and
that has not been studied. In principle, I oppose the making of rash
decisions without adequate knowledge or public hearings, or input from
the public at large, particularly when the results could hurt the
American people, since section 822 was included in this bill without
any study whatsoever.
Beyond principle, I also oppose section 822 on its merits as it is
fundamentally flawed, expensive, and potentially a harmful policy. Some
States have elected to establish scrappage programs to get vehicles
with poor emissions off the road. Again, section 822's purpose is to
get fuel-inefficient cars off the road--the first of its kind.
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States that choose to enact scrappage programs are not in compliance
with clean air regulations. Those States choose scrappage programs as a
tool, among others, because they believe they are effective in meeting
health concerns.
Section 822 creates incentives not to further public health but to
further unfounded prejudices against older vehicles.
Under State scrappage programs, the State is able to means-test a
polluting vehicle so that only those affecting public health would be
scrapped. Yet this federally promoted, State-run scrappage program does
not provide any means testing to ensure that only fuel-inefficient
vehicles are scrapped. Therefore, a 1986 Ford Escort getting 41 miles
to the gallon would be treated the same as a Cadillac Seville of the
same year that only gets 17 miles per gallon.
The only criteria would be that they are both 1986 automobiles. I
give that example to show simply that section 822 is fundamentally
flawed: that older cars are all inefficient and, therefore, should be
treated the same.
Since this is the first time the Senate has heard about this
provision, we should review who is benefited and who is injured and
what are the costs and benefits of section 822.
First of all, section 822 would have a disproportionate impact on
low- and fixed-income individuals. It is more cost effective for people
of low means to maintain older vehicles than to buy new ones. However,
the scrappage program in section 822 would reduce the supply of car
parts, thereby increasing the cost to citizens with lower incomes.
The reduction of car parts would detrimentally affect the aftermarket
parts industry, 98 percent of which are made up of registered small
businesses.
I think it is safe to assume the authors did not intend to hurt low-
income individuals and small businesses during a recession. Yet that is
the unintended consequence that most surely would happen.
Who would benefit? Just as this provision hurts the most vulnerable,
section 822 unjustly enriches people of better wealth. In short,
section 822 is tantamount to corporate welfare for automotive companies
and upper classes.
I submit the Federal Government should not be in the advertising
business to sell cars. The Department of Energy credit to purchase new
cars is akin to a mail-in rebate as advertised on television, a
wasteful expense that cheapens important energy issues and the work of
this body.
Further, I do not believe the Federal Government should have any role
in pushing certain vehicles on consumers. The private market is
described as an ``invisible hand.'' However, section 822 would
certainly strengthen that hand. By paying people to choose certain cars
over others, the Federal Government would inappropriately insert itself
into private decisions.
I mentioned this provision would reward those people who do not want
to put money out for repairs. In addition to establishing a scrappage
program, section 822 also requires States to establish repair programs.
As provided in that section, a car owner paying 20 percent of the cost
would have the State fix his vehicle, normally through a tuneup, to
increase fuel efficiency.
The Federal Government and States should not be turned into tuneup
stations to have people properly maintain their vehicles, something
which they should do out of their own pockets.
The majority correctly states that section 822 is a voluntary
program, but it is not voluntary for the Federal Government which is
compelled to establish a carrot-and-stick approach to entice States to
engage in potentially disastrous and certainly burdensome actions.
The participating State must create two new programs just in case
someone might decide to volunteer to scrap their car or have the
Federal Government pay 80 percent of their repair costs. The burden on
States could be enormous.
My friends, the authors, might say the State would not be hurt
because the Federal Government provides funds through grants for those
programs, but we have no idea how much that will cost. We do not know
because we have had no hearings and no studies on this section.
We all know the Federal Government never provides enough money to
States to enact programs and, in uncertain times such as these, I do
not think we should approve ill-conceived and uncertain measures when
we do not know the bottom line pricetag.
How is the State going to administer the public notification and
salvage of parts? Who may participate in the parts salvage? Will that
be open to individuals or restricted to businesses? And how will a
State value and sell the parts of the cars? We simply do not know.
In closing, those of us who are cosponsoring this amendment have had
only a brief time to look at this section. We believe it is the wrong
approach. Our amendment will strike section 822 from the bill.
Madam President, I ask for the yeas and nays on this amendment.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The yeas and nays were ordered.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. BINGAMAN. Madam President, first, I am disappointed that the
Senator from Colorado has chosen to propose striking this provision
entirely. The provision is clearly written in a way that provides
absolute maximum flexibility to States to participate or not
participate.
The Senator starts out with the argument that we do not know how much
this will cost. That is right because this is strictly an
authorization. It will cost whatever we decide to appropriate for this
program. Congress will still have to make a judgment as to whether to
appropriate anything for this program.
This is a grant program to States that want to participate. We will
either put some money in to fund this grant program or we will not, and
we will specify each year the amount of funds we think should be made
available to the Department of Transportation to fund this program.
It is clear it is a purely voluntary program on the part of States.
There are some States that have vehicle scrappage programs in place
today. There may be other States that would want to consider that. The
purpose of the provision is obvious. The purpose of the provision is to
try to assist with getting extremely fuel-inefficient vehicles, high-
emission vehicles off the road where there is a desire on the part of
the owner of the vehicle to either improve the efficiency of that
vehicle or to trade that vehicle in and get something else. That is the
clear intent of these programs that some States have adopted.
What we are saying is that the Federal Government would be authorized
through the Department of Transportation to assist States in these
programs to the extent that we appropriate money to support them.
The argument by the Senator from Colorado is that this is a terrible
burden on people with low incomes. There is obviously a
misunderstanding about what this provision says. This is purely a
voluntary provision. Nobody is required to do anything under the
language of this section 822. If an individual wants to continue
driving a 30-year-old vehicle, that is their option. There is no
penalty; there is no requirement they do anything. They clearly would
not even have the opportunity to do anything if they were in a State
that did not have one of these vehicle scrappage programs.
If they were in a State that did have a vehicle scrappage program,
then at least if that program was receiving Federal funds, the State
could use some of those Federal funds under the program that is
designed by the State. The individual could use some of those funds to
compensate for having the vehicle scrapped or to repair the vehicle so
that it is more efficient, so that it has fewer emissions. That is
clearly the purpose of it.
As to the argument that this will cause a problem with the salvage of
valuable parts for vehicles, there is a specific provision in the bill
that the Secretary cannot provide any funds to a State under this
program. The Secretary could not provide funds unless the State's plan
allows for giving public notification before any parts are scrapped so
that those parts could be purchased or auctioned or otherwise salvaged.
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And as to the objections that the Senator has cited, we heard similar
objections to an earlier version of this section. Frankly, we thought
we had accommodated the concerns that were brought to us and modified
the amendment in order to do that.
Now, of course, after making the modifications, we are faced with an
amendment to strike the section entirely. I think it is good public
policy for the Federal Government to assist States that want to have
these programs. I do not see why it is in the public interest to strike
a provision that enables the Secretary of Transportation to pursue
this, to the extent the Appropriations Committee puts in funds to
support the program.
So I very much hope we will not adopt the Senator's amendment and
have this provision stricken from the bill. To my mind, it is a good
provision. It provides an opportunity for States to move ahead with
these programs where they would like to do that and where Federal funds
are made available.
As I see it, it is not onerous in any respect as to either what
States are required to do or what individuals are required to do. The
entire effort is purely voluntary.
I yield the floor.
The PRESIDING OFFICER. The majority leader.
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