[Congressional Record Volume 148, Number 33 (Wednesday, March 20, 2002)]
[Senate]
[Pages S2161-S2174]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   NATIONAL LABORATORIES PARTNERSHIP IMPROVEMENT ACT OF 2001--Resumed

  The PRESIDING OFFICER. The clerk will report the pending business.
  The assistant legislative clerk read as follows:

       A bill (S. 517) to authorize funding the Department of 
     Energy to enhance its mission areas through technology 
     transfer and partnerships for fiscal years 2002 through 2006, 
     and for other purposes.

  Pending:

       Daschle/Bingaman further modified amendment No. 2917, in 
     the nature of a substitute.
       Feinstein modified amendment No. 2989 (to amendment No. 
     2917), to provide regulatory oversight over energy trading 
     markets and metals trading markets.
       Kerry/McCain amendment No. 2999 (to amendment No. 2917), to 
     provide for increased average fuel economy standards for 
     passenger automobiles and light trucks.
       Dayton/Grassley amendment No. 3008 (to amendment No. 2917), 
     to require that Federal agencies use ethanol-blended gasoline 
     and

[[Page S2162]]

     biodiesel-blended diesel fuel in areas in which ethanol-
     blended gasoline and biodiesel-blended diesel fuel are 
     available.
       Bingaman amendment No. 3016 (to amendment No. 2917), to 
     clarify the provisions relating to the Renewable Portfolio 
     Standard.
       Lott amendment No. 3028 (to amendment No. 2917), to provide 
     for the fair treatment of Presidential judicial nominees.
       Lott amendment No. 3033 (to amendment No. 2989), to provide 
     for the fair treatment of Presidential judicial nominees.
       Lincoln modified amendment No. 3023 (to amendment No. 
     2917), to expand the eligibility to receive biodiesel credits 
     and to require the Secretary of Energy to conduct a study on 
     alternative fueled vehicles and alternative fuels.
       Kyl amendment No. 3038 (to amendment No. 3016), to provide 
     for appropriate State regulatory authority with respect to 
     renewable sources of electricity.
  Mr. REID. Mr. President, if this unanimous consent agreement is 
approved, the majority leader has authorized me to announce there will 
be no more votes tonight.
  I ask unanimous consent there be 2 hours for debate remaining today 
with respect to the Kyl second-degree amendment numbered 3038, with the 
time equally divided and controlled in the usual form, with no 
intervening amendment in order prior to a vote in relation to the Kyl 
amendment; that when the Senate resumes consideration of S. 517 on 
Thursday, March 21, there will be 4 minutes of debate equally divided 
and controlled in the usual form; that upon the use or yielding back of 
that time, without further intervening action or debate, the Senate 
vote in relation to the Kyl amendment; provided further, 30 minutes of 
the Democratic time be under the control of Senator Landrieu.
  The PRESIDING OFFICER. The Senator from Alaska.
  Mr. MURKOWSKI. We have discussed this on our side and adhere to the 
proposal by the majority whip.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Who yields time?
  Mr. REID. Pursuant to the order previously entered, I ask that the 
Senator from Louisiana now be recognized for 30 minutes.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The Senator from Louisiana.


                           Amendment No. 3038

  Ms. LANDRIEU. I rise, Mr. President, to speak about the pending 
business, which is the energy bill that has been laid down by Senator 
Bingaman and worked on very aggressively on both sides of the aisle.
  We are trying to fashion an energy bill that works for our Nation and 
accomplishes a couple of very broad goals. One of those goals that I 
think is most crucial and critical to meet in terms of the outcome of 
this debate is the goal of energy independence for the United States of 
America.
  The goal is self-reliance. It is a value, a tradition of America that 
has served this Nation very well, that we produce what we consume. We 
relied on our strengths and our resources to lift this country from a 
cluster of small colonies over 200 years ago, to a great nation, 
perhaps the greatest nation ever to be born and developed in this 
world, using a political system that, while not perfect, is admired by 
many countries and used as a model.
  We have also proven that our free enterprise system, our economy, the 
rule of law, the transparency of our financing, the ability to gather 
capital and invest in business, really produces great wealth, not just 
for the few but for the many. That is the challenge of this world. It 
is not just to enrich a few, but it is to build a broad middle class, 
to lift those up off the bottom and to provide opportunity as far as 
the sky for those at the top. We, again, are perfecting that in the 
United States. We are not there yet. I would like to see this continue.
  I came to the Senate to try to work on a lot of different ideas, 
frankly, about how we could continue this great progress. One of the 
goals central to the continuation of this is--what does our economy 
need besides good ideas and a infusion of capital? What else does our 
economy need to grow? One of the things it needs is power. It needs 
electric power. It needs power to run the various factories and 
enterprises and systems that undergird this economic growth.
  We find ourselves debating how we can achieve greater efficiencies as 
well as greater supplies of energy to generate this power. There is a 
debate about what are the best ways to generate this power. That is 
part of what the Kyl amendment is about.
  I think the renewable portfolio that we are debating is something 
worth fighting for. Before I get into that, let me make a few broad 
comments.
  I spent some time last week on this floor, arguing that we have 
declared one Declaration of Independence, but we need now, after over 
200 years of living under that declaration, to declare a new 
Declaration of Independence, and that would be an independence from 
foreign sources of oil and gas.
  In my book, the No. 1 reason for that is national security. That is 
very clear to the American people now, post-September 11. The American 
people are beginning to put together the compromises that unfortunately 
have to be made in our foreign policy when we depend so heavily on 
sources of energy from some of the most unstable and unfriendly places 
in the world.
  Americans are starting to ask the question: Why would we import 
millions of barrels of oil from Iraq when we have sanctions against 
that country, when we are flying sorties over that country and bombing 
them at least once a week, trying to protect America's interests?
  Our veterans are starting to ask this question: Why are we sending 
our young people to try to protect these oil and gas supplies when we 
have such an ample supply here in the United States?
  Last week I spoke about why it was important for us to develop the 
supplies of oil and gas in our Nation. In Louisiana we have off our 
shores one of the great sources of energy for this country.
  There are any number of leases, both active and those that have not 
been leased yet, tracts of land, that can produce ample supplies of gas 
and oil which can move our country forward. We have to ask ourselves: 
Why would we be dependent on foreign sources when there are resources 
right here at home? There are resources not only off the shore of 
Louisiana and Mississippi and Alabama, but off Florida, some parts of 
the east coast and the west coast, as well as in a small portion of 
Alaska which could provide a tremendous resource for this Nation.

  Veterans are beginning to ask that question. Senior citizens are 
beginning to ask that question, as are taxpayers, who pick up the tab 
for this war on terrorism. Believe me, it is a heavy burden. It is a 
burden we are willing to bear.
  This chart shows the riches of offshore Louisiana. We have been proud 
to help this Nation produce the oil and gas necessary to fuel the 
greatest economy on Earth and we are doing it in a much more 
environmentally sensitive way. There is tremendous potential out here.
  The reason I am in the Chamber today is not to go into more detail 
about this exactly, but to also say that as strongly as I feel about 
increasing the production of fossil fuels, I also am aware--which is 
why I am going to oppose the Kyl amendment--this Nation needs to do a 
great deal more to pursue and develop our renewable portfolio. We need 
new sources of power that are not finite, sources such as solar and 
wind power.
  While I do not like all the details of the mandates, I do think we 
would be very remiss in the Senate if we did not attach to Chairman 
Bingaman's bill a renewable mandate. Our ultimate goal is not only low 
emissions. Not only do renewables lower our emissions and improve our 
environment, but most importantly it helps relieve our dependence on 
foreign sources of oil and gas.
  So I am opposing the Kyl amendment and joining with Senator Bingaman, 
asking both Democrats and Republicans to let us have a strong vote for 
renewables. I do not agree exactly with the way this amendment has been 
crafted. I am hoping in conference it will be perfected to make sure we 
are providing the right incentives for renewables in such a way that 
consumers do not have to pick up too great a tab.
  I think this amendment can be worked with. But to pass this energy 
bill off the floor of the Senate without a real commitment to 
renewables would be a mistake. It will not get us any closer any faster 
to a point where Americans can say we don't need Iraq, we don't need 
Saddam Hussein, and we don't need places in the Mideast to send us oil.

[[Page S2163]]

  With renewables, with a focus that Senator Domenici is leading us on 
in a more robust, safe, environmentally friendly nuclear 
infrastructure--which now produces 20 percent of the power in our 
Nation--with Domenici and Landrieu and others' amendments that have 
been offered to this bill, we can increase nuclear production in a 
smart and sophisticated way and provide even additional power.
  The third leg is opening up domestic production in our Nation.
  The Gulf of Mexico is divided into the western section, which is off 
Texas, and the middle section, which is off Louisiana and Mississippi. 
Then the eastern section, which is part of Alabama and Florida, has 
been closed to drilling. In the middle section, each one of these dots 
represents 3 miles. We are looking at about 200 miles off our shore. 
The red dots and red squares are leases that are actually under 
production.
  There is gas coming into our Nation through huge pipelines which 
distribute gas and power to many States in this country. It is 
estimated by MNF that there is 100 trillion cubic feet of natural gas 
in just this one section of the gulf.
  Natural gas meets the new environmental emission standards. Natural 
gas burns cleaner. Natural gas taken from the Gulf of Mexico is 
distributed to people all over the southern part of the United States. 
Supplies are shipped to the southern parts of the United States, 
thereby generating wealth, creating jobs, and creating opportunities--
good jobs where men and women can feed their families, pay the mortgage 
on their house, send their children to school, and put some money in 
the bank for their families so they can be upwardly mobile and become a 
solid part of the middle class--not jobs flipping hamburgers or 
carrying luggage that are in some ways dead-end jobs. They are good for 
starter jobs, but they are not good if you are trying to send kids to 
school or college. These are good jobs that can be created right here 
in the United States.
  We have 100 trillion cubic feet of gas. Technology allows us to get 
it. We could supply the Nation for 5 years from just this part of the 
gulf. We need about 22 trillion cubic feet a year.
  Imagine if we could have a bill that could leave this floor. That 
would be quite a miracle. I believe in miracles. I have seen quite a 
few of them in my life. If we had a bill that could leave this floor 
and open domestic production in an environmentally safe and sound way--
open production around the country that is closed, including ANWR--and 
have attached to this bill a real effort to create and generate 
renewable energy, we could potentially within a few years wean 
ourselves off the oil and gas coming from places in the world that we 
don't want to have to be involved in unless absolutely necessary, 
because it requires the support of the Treasury and the life and health 
of Americans.
  I know there will be Members who do not agree and want to support the 
Kyl amendment. But I oppose it on the principle that we need a strong, 
renewable portion.
  The Senator from New Mexico, understanding there were some initial 
objections, has modified his original amendment that was laid down. He 
has tried to hone it down to an acceptable principle on renewables.

  Again, we can fix it, enhance it, and massage it in conference. But 
we can make a strong statement on this floor about renewables and about 
independence and getting away from our dependence on foreign oil and 
gas sources.
  I will be back in the next couple of days to talk about some specific 
things that Louisiana, Mississippi, Alabama, Texas, Oklahoma, and other 
producing States are doing. The technology is advancing. We are making 
many improvements to the environment. We are minimizing the footprint 
and maximizing the advantages for the American public so the necessary 
power can be provided for the growth and development in this Nation.
  I wanted to speak about the Kyl amendment and to urge adoption of 
this particular amendment which will make renewables and conservation a 
strong part of our equation, and also to give us the independence we 
deserve, for which our veterans have fought. We will continue to fight 
for liberties, freedoms, and values. We will succeed in the long run.
  Thank you, Mr. President, I yield the remainder of my time.
  The PRESIDING OFFICER. Who yields time?
  Ms. LANDRIEU. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The legislative clerk proceeded to call the roll.
  Mr. NICKLES. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER (Mr. Dayton). Without objection, it is so 
ordered.
  Mr. NICKLES. Mr. President, I see my friend and colleague from New 
Mexico.
  I have mentioned in two or three speeches my displeasure about how 
this bill was brought to the floor. I will not repeat that speech 
again. But this bill presented to us is the third iteration. It is a 
590-page bill with a renewables section. I was preparing to debate the 
renewables section. Now I find the renewables section has been amended 
two or three times.
  I am looking at the renewables section. I ask my colleague from New 
Mexico to correct me if I am wrong. The mandate requiring utilities and 
retail electric suppliers to produce 10 percent of their electric power 
from renewable sources does not include public power. Is that correct?
  Mr. BINGAMAN. Mr. President, it does not include either public power 
or co-ops. Of course, the pending amendment is the Kyl amendment, which 
is a substitute for the amendment I proposed, which is also a change 
from the underlying bill to which the Senator is referring.
  Mr. NICKLES. If the Senator will yield a little bit further, in the 
original bill, public power was included in the renewable mandate. Is 
that correct?
  Mr. BINGAMAN. That is correct.
  Mr. NICKLES. I thank my colleague for the clarification.
  Mr. President, this is an important statement for my colleagues in 
the Northwest. It is an important exemption. I have heard many people 
on the floor of the Senate say: Well, renewables don't cost anything. 
If renewables don't cost anything, why do we exempt Bonneville Power?
  Why do we exempt the city of Los Angeles? Why do we exempt TVA, the 
Tennessee Valley Authority? Why do we exempt public entities, period, 
if this is so good for the private sector?
  People say it does not cost anything, and renewables are so 
beneficial to the general well-being of a national energy policy. Why 
are we exempting such a large portion--rural co-ops, public powers, 
large municipalities? I fail to see the wisdom in it. It may well be 
that if we did it, those public entities would be screaming because we 
would be increasing their costs.
  I hope everybody understands, I support the Kyl amendment because it 
will not cost nearly as much as the underlying Bingaman proposal, not 
the one that is in the bill but the one that has now been offered 
before the Senate.
  I have tried to calculate how much it costs. Costs happen to be 
important. I hope everybody realizes, if we do not adopt the Kyl 
amendment, or something close to it, we will be--by this act of 
Congress, by the Bingaman amendment, by the renewables mandate--
increasing utility costs, electricity bills all across the country. I 
say that because we may well do it. I want people to know there is 
going to be a cost involved.
  You don't put on a mandate on that says you have to have 10 percent 
of your power come out of what is classified as a renewable, an 
incremental renewable, with a new cost--and that power may cost two or 
three times as much as the marketplace power costs--and then pretend it 
does not cost anything.
  How much does it cost? I did some calculation of a utility in my 
State, Oklahoma Gas & Electric. We calculated how much energy they 
produce. We calculated the cost of compliance assuming they did not 
have wind power, and so on, so they would have to purchase it. In the 
bill, the replacement cost they could get from the Government would be 
for these credits which would be 3 cents per kilowatt hour.
  So if you calculate that, for Oklahoma Gas & Electric, the largest 
utility in my State, it would cost them $62

[[Page S2164]]

million--not an insignificant cost. It is an increase in the cost to a 
utility in Oklahoma of about 5 percent; in fact, that would be for most 
of the utilities in the country.
  Let's see if I have one from Minnesota. You are looking at a cost 
increase of about 5 percent. You might say, how did you calculate that? 
I will give you a thumbnail sketch.
  You mandate that 10 percent of the cost must be in renewables. The 
most efficient of the incremental renewables is wind energy. For wind 
energy, the cost will be at least 3 cents per kilowatt hour, plus there 
is a tax credit of 1.7 cents per kilowatt hour. So the total is 4.7 
cents.
  Guess what. The market wholesale cost of electricity right now is 
2.2, 2.3 cents. You are talking about an increase; you are talking 
about a cost to both the taxpayers and the consumers of 4.7 cents, just 
to start. So you are talking about something twice as much as the cost 
of electricity in the country, and you are saying 10 percent of it has 
to be in the renewables. If you take just 10 percent of the power 
costs--and it says the energy consumed or the energy produced must be 
more expensive or twice as expensive--you have increased their cost by 
at least 5 percent.
  I do not know if people around here are really cognizant, but the 
more I learn about this renewable section, the more I am flabbergasted 
of how people are thinking they are going to vote for it and not 
increase costs. It is an enormous cost increase--enormous, in the 
billions of dollars. It is billions of dollars that transfer from 
basically fossil fuel plants to certain areas or certain companies that 
produce so-called credits or they can buy the credits from the 
Government. If they can buy the credits from the Government, the 
Government has a big new fundraiser in this, a big tax increase that 
utility payers are going to be paying.

  I make mention of two or three issues. The original Bingaman 
amendment that was in this section did not exclude public power. It did 
not exclude the city of Los Angeles, which, incidentally, has a 
powerplant and consumption as big as Oklahoma Gas & Electric--pretty 
good size--and they are exempt. Oklahoma Gas & Electric is not exempt, 
but the city of Los Angeles is.
  I heard the Senator from California, Mrs. Boxer, say, yes, these 
renewables are great. If they are so great, why don't they apply to the 
city of Los Angeles? Why doesn't it apply to Bonneville? Why doesn't it 
apply to TVA? Why doesn't it apply to municipalities? Why doesn't it 
apply to co-ops?
  There is support from co-ops. They don't want to have their cost go 
up. Certainly, we don't want to mandate that the municipalities have 
their cost go up. We don't want the cost to go up for public power. We 
will exempt them and maybe buy some votes. But who are we going to sock 
it to? Oh, we will sock it to anybody else that happens to be a 
privately owned utility. We will sock it to them. There may be one or 
two that might benefit. Maybe they will produce enough of the credits 
so they can sell them, so they can sell the electricity. They can get 
tax credits of 1.7 percent. And they can get the credit from other 
utilities that do not have enough credits to meet their 10-percent 
mandate.
  They get three times the value of electricity from the Government. 
They will get almost a 200-percent rate of return from the Government, 
and they get to sell the electricity. That is a pretty good deal for a 
couple utilities. But for consumers, they get a bill.
  Some people say it does not make any difference because this is 
hidden. This is not going to come as a tax in the form of Congress 
issuing a tax increase. We are not doing that. We are telling the 
utilities: You go do it. We are mandating that you do it. And you bill 
your customers, who happen to be our constituents.
  We ought to rename this section, ``Renewable Section of Congress 
Increasing Electricity Prices,'' because that is what it is. It is a 
Btu tax. It is a tax increase. It is a utility rate increase, pure and 
simple. You cannot mandate that 10 percent of the marginal power has to 
be increased from certain renewable sources.
  It is very interesting to note, a renewable source is not hydro under 
the definition in the bill. They left out hydro, which is as renewable 
as any. Oh, it is left out. Why? I don't know why, but it was left out. 
It is renewable, but we are just not going to define it, so it is left 
out. The more you find out about this amendment, the proposal by my 
colleague from New Mexico, the less sustainable it is.
  I wish to mention a few companies--we have gotten this from the 
Energy Information Administration, Department of Energy--and with how 
much energy they produce, and with the 10-percent renewable 
requirement, and assuming they have to purchase the offset, the 
credits, how much will it cost: the Public Service Utility of New 
Hampshire, $21 million--a pretty good hit--Kansas City Power & Light, 
$16 million; Kansas Gas & Electric, $27 million; Nevada Power Company, 
$50 million; Sierra Pacific Power Company, $24 million; Arizona Public 
Service Company, $67 million; Tucson Electric, $24 million; Pacific Gas 
& Electric, $216 million.

  Guess what. Pacific Gas & Electric was having a hard time staying out 
of bankruptcy. They actually filed for bankruptcy. We are going to put 
on a mandate that they have to spend $216 million. We are exempting 
Bonneville but not exempting Pacific Gas & Electric. Maybe they have 
offsets to reduce that. Maybe they have enough wind energy to do it, 
but I doubt it.
  Georgia Power, $223 million. I could go on and on. My point being, I 
do not think this amendment has been well thought out. I do not think 
we have had a hearing on this proposal. The proposal deals with 
billions and billions of dollars of increases in electricity costs.
  Some people are saying, oh, let's just have a renewable standard of 
20 percent, 10 percent. Oh, it is all doable. We have to have 
renewables.
  I believe in renewables. I want to have renewables. And I want to 
encourage wind power and encourage other alternative sources of energy. 
But I just don't know that we want to pass a law that says you must 
have 10 percent of your power from this source defined as a renewable, 
and, oh, we forgot to include hydro, and we don't care how much it 
costs. That is really the impact of this amendment. Consumers beware.
  I compliment Senator Kyl because I think he has come up with an 
affordable substitute, one that encourages alternative sources but does 
not mandate it, does not dictate that your electricity prices will be 
increasing by 5 or 10 percent, which I believe is the case in the 
underlying amendment. Senator Kyl's amendment treats all utilities 
fairly. The amendment proposed by my colleague from New Mexico socks it 
to some utilities but it exempts a bunch of other utilities.
  Why should California be exempt and Texas and Oklahoma not be exempt?
  That doesn't quite seem right to me. Why is the Northwest exempt? Why 
is Bonneville exempt and the privately owned utilities are not? They 
already have lower utility rates in many cases because they have 
Federal hydropower, which is pretty cheap. It was built a long time 
ago. So they already have low rates, and we are going to exempt them. 
But the other rates, no, you are stuck. We are going to sock it to you. 
I just question the wisdom of that.
  I hope my colleagues will look at this long and seriously. Seldom do 
we have an amendment that will have such a significant impact of 
billions of dollars, and seldom do we have as many colleagues kind of 
absentee as far as knowing what the impact of this amendment would be 
on their constituents. I would like for people to pause and think.
  I will be happy to share information that the Energy Department has 
provided us on what this might cost your utilities and what your 
utilities will have to pass on to the constituents. It won't cost the 
utilities money. They will charge that added, mandated cost from this 
Senate to their customers. So the utilities won't pay it.
  I have mentioned a few of these. MidAmerican Energy Company faces 
44.6 million dollars in increased utility prices. They will only 
transfer these costs to their customers. The truth is, a lot of those 
customers are going to be companies that maybe are struggling to 
survive, that maybe are having a hard time creating jobs. And we are 
going to increase their utility prices by 5 or 10 percent. Some 
companies, some corporations, commissions, maybe the Texas Railroad 
Commission will say:

[[Page S2165]]

 We really don't want this to happen to the residential consumers, so 
we will just have the increase and sock it to the big users.
  There won't be as much political fallout. There might be a loss of 
jobs in the process. Maybe they will make it apply equitably to 
residential consumers as well. They will have a big increase. Then 
people will go ballistic.
  People will say: Wait a minute, where did this mandate come from? It 
came from Congress in the year 2002. We didn't see it in our bill until 
2004, or maybe we didn't see it fully implemented until 2008. It passed 
in the year 2002 because somebody thought it was a good idea.
  I think my colleague from Arizona has the right idea. I hope our 
colleagues will support it. I hope they will start looking at the 
underlying cost that is in this so-called Bingaman amendment. I hope 
they will look at the cost of that amendment and say: Isn't there a 
better way, a more affordable way? Should we not include hydro in 
renewables? Shouldn't we include public power? If we are going to 
mandate it on all private power, should we not include public power as 
well? If we are going to have a universal energy policy, why would we 
exempt rural electric co-ops? Why would we exempt municipalities, 
enormously large public power such as Bonneville and TVA?
  It is a mistake. I urge my colleagues to support the Kyl substitute 
to the Bingaman amendment.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time? The Senator from New Mexico.
  Mr. BINGAMAN. Mr. President, how much time remains on the two sides?
  The PRESIDING OFFICER. The Senator from New Mexico has 30 minutes, 
and the minority has 45 minutes.
  Mr. BINGAMAN. Mr. President, I yield myself 5 minutes. I know I have 
a couple colleagues here who also want to speak. I know there are also, 
perhaps, Members on the other side.
  First of all, the Kyl amendment is a stark contrast with what we are 
otherwise trying to do with a renewable portfolio standard. The Kyl 
amendment is very simple in that it says:

       Each electric utility shall offer to retail customers 
     electricity produced from renewable sources to the extent 
     that it is available.

  That is fine, but ``to the extent it is available.'' And they do that 
today. They offer electricity produced from renewable resources or 
sources to the extent that it is available.
  What we are trying to do with the Bingaman amendment, with 
establishing a renewable portfolio standard, is to provide some 
assurance that it will be available so that some portion of the power 
produced by large utilities will, in fact, be produced from renewable 
sources.
  My colleague from Oklahoma says usually the price of electricity is 
2.2 cents per kilowatt hour. I think that was the figure he mentioned. 
According to the figures we were given by the Energy Information 
Agency, the average cost in this country for electricity is 4.3 cents 
per kilowatt hour, not 2.2.
  Mr. NICKLES. Will the Senator yield? I am talking about wholesale 
cost which is the replacement cost where if you have incremental 
renewables going into the system, they are paid the wholesale cost, not 
the retail cost.
  Mr. BINGAMAN. This is a wholesale cost figure I just gave you, 4.3 
cents. We are glad to share the information with you.
  He says that we don't have hydro in here. We do have hydro as one of 
the items that a utility gets credit for when determining the base 
against which the percentage applies. So that we give them full credit 
for hydro in that.
  Then we say, taking that base to the extent that they expand their 
energy generation from increments of hydropower, that those will count.
  Mr. NICKLES. Will the Senator yield to make sure we are both on the 
same wavelength?
  Mr. BINGAMAN. I yield to my friend from Oklahoma.
  Mr. NICKLES. Any incremental new hydro would count as renewable. I 
concur.
  Mr. BINGAMAN. That is exactly right.
  Mr. NICKLES. Would the Senator agree with me, in your definition of 
10 percent renewables, existing hydro is not counted in that 
definition?
  Mr. BINGAMAN. Mr. President, regaining the floor, I agree that it is 
not. That is for a very simple reason. If you do count existing hydro 
in that 10 percent, certain States, particularly in the northwest part 
of the country--and also Maine--far exceed that. There would be a 
tremendous disparity between the extent of the renewables they have in 
their base or that they get credit for as compared to the rest of the 
country.
  What we are trying to do with the Bingaman amendment is to provide an 
incentive for the addition of additional renewable power. To the extent 
they can do that with hydro, we give them credit for it.
  Let me talk about some of the figures. I would be anxious to see the 
calculation to which the Senator from Oklahoma was referring. As I 
understood his explanation, he gave us figures for what each of these 
utilities would have to pay in order to comply with this provision, 
assuming they had to buy all their credits.

  Mr. NICKLES. That is correct.
  Mr. BINGAMAN. That was what I understood him to say. The truth is, 
many of the utilities--I don't know about all of them--he named are not 
going to have to buy any credits. They are already producing power from 
renewable sources, substantial amounts of power.
  To suggest that PG&E in California is going to have to be going out 
and buying credits at the highest possible price is just not the real 
world. PG&E already produces power from renewables. Arizona Public 
Service is another example. He mentioned MidAmerican and how this would 
cost MidAmerican $40-some-odd million.
  I have a letter here from David Sokol, chairman and chief executive 
officer of MidAmerican, where he writes:

       Dear Chairman Bingaman:
       I am pleased to write in support of your efforts to include 
     provisions to promote the development of renewable energy 
     resources for electric generation in the Senate's 
     comprehensive energy bill.

  Then he goes on to write that his company is ``one of the world's 
largest developers of renewable energy, including geothermal, wind, 
biomass and solar.''
  Continuing from the letter:

       Renewable electricity can play a critical role in 
     diversifying the nation's fuel mix and providing emissions-
     free electricity for American consumers.

  The PRESIDING OFFICER. The Senator's 5 minutes have expired.
  Mr. BINGAMAN. There will be other opportunities for me to speak. I 
know I have some colleagues who wish to speak at this point. I yield 
the floor.
  The PRESIDING OFFICER. The Senator from Oklahoma.
  Mr. NICKLES. Mr. President, I know my colleague from Virginia has 
been patient. I rise to make a couple points. The wholesale power cost, 
which my colleague alluded to, was 4.-some cents. The spot market on 
wholesale power cost in the Pennsylvania and New Jersey and Maryland 
exchange was 2.1 cents to 3 cents from January to March. And Palo Verde 
is 2.2 cents to 4.3 cents between January and March. Those are current 
prices that I just wanted to mention.
  If a utility, for whatever reason, doesn't have 10 percent 
renewable--and most all utilities don't; there might be one or two, but 
most of them don't---- they are either going to have to reduce it or 
buy it. If they have to buy it, the cost is up to 3 cents. There is 
also a 1.7-cent tax credit. That equals 4.7 cents. That is still 100 
percent more than what the marketplace is providing in the examples my 
colleague and friend from New Mexico mentioned.

  But I am just saying the spot price in some big areas in the country 
is 2 cents to 3 cents. You are talking about a rate of return for this 
incremental power of over 100 percent more than market price today. 
That is expensive. That will greatly increase costs, and somebody will 
have to pay for it. Ultimately, electric consumers will pay for it. 
They need to know that before we pass this amendment.
  I yield the floor.
  The PRESIDING OFFICER. Who yields time?
  The Senator from Texas is recognized.
  Mr. GRAMM. Mr. President, I think the Senator from Virginia was here 
before me.

[[Page S2166]]

  Mr. KYL. Mr. President, we are under a time agreement and we are 
going to be running out of time if things other than the pending 
amendment are allowed to intercede into this debate. Our vote is set to 
be cast first thing in the morning, as I understand it. So whatever 
debate we have, we have to do tonight.
  We have at least an hour of speakers on our side, starting with the 
Senator from Texas and myself, and the Senator from Oklahoma, I guess, 
is done, and then we have the Senator from Idaho and the Senator from 
Wyoming, at least. As a result of that, I think we ought to proceed 
with debate on the pending business so that we can fit within our 
timeframe and be ready to vote tomorrow morning.
  Ms. LANDRIEU. Mr. President, may I inquire if, under the previous 
order, we are entitled to alternate from one side to the other on the 
amendment, given the time allocated to us?
  The PRESIDING OFFICER. There was no order to provide for that.
  Ms. LANDRIEU. I ask unanimous consent that we simply alternate during 
the time of the amendment, within the amount of time allocated.
  Mr. KYL. Mr. President, to the extent that the time is available, we 
can do that.
  The PRESIDING OFFICER. Is there objection?
  Without objection, it is so ordered.
  The Senator from Texas is recognized.
  Mr. GRAMM. Mr. President, I will try to be brief. There are just a 
couple of points I want to make.

  First of all, a big deal has been made out of the fact that Texas, in 
its electricity deregulation legislation, had a renewable energy 
provision in it. In fact, the point has been made--erroneously--that 
this is just what you have in Texas and it was George W. Bush who 
signed that bill into law. I want to straighten that out because the 
Bingaman amendment is nothing like what we have in Texas.
  First of all, in Texas we have a provision that is related to 
renewable generation capacity, not to how much renewable power you 
sell, because when you have a windmill--and I may be the only Member of 
the Senate who owns a windmill, and I will talk about that later--but 
you have a windmill, sometimes the wind doesn't blow. Sometimes the sun 
doesn't shine. So the Texas provision is based on capacity, not 
generation.
  Secondly, the Texas provision is that, by 2009, we have the capacity 
to generate 2,000 megawatts from alternative sources. We currently 
generate about 73,000 megawatts, which is roughly 3 percent renewable 
energy, not the 10 percent provision in the Bingaman amendment.
  Finally, renewable energy in Texas is renewable energy. In the state 
of Washington, hydropower is not renewable energy according to this 
bill, even though it rains there constantly. Certainly, you can argue 
that hydropower is at least as renewable as chicken manure and pig 
manure and cow manure, all of which will be subsidized under this 
energy bill, in terms of electricity production. In Texas, we have a 
much broader definition of what a renewable is.
  So, one, our standard is based on capacity, not generation, because 
you have to have the flexibility with these alternative sources. Two, 
it is roughly 3 percent, not 10 percent. Three, it counts one of the 
most common renewable sources, which is hydropower. I think that is a 
very big difference. So to say that this is somehow what we did in 
Texas is simply not accurate.
  Now, I want to touch on a couple of other things. First of all, I 
think we are getting carried away here with these alternative sources. 
On my place in Texas, I have a windmill. It is a really pretty windmill 
and it is called High Lonesome Windmill; it is high and lonesome, and 
it is sitting on a hill. It pumps water into a storage tank, and there 
is an overflow valve that runs down to the pond that keeps water there 
for turkey, deer, hogs, and whatever happens by. I think it is fair to 
say that this windmill is beautiful. I also think it is fair to say 
that 100 windmills would be an eyesore.
  So when you are talking about generating 10 percent of the energy of 
the United States with things such as wind power, please consider that 
one windmill is not bad. But if you put a hundred or a thousand of them 
on my place, the place would be an eyesore. When we are talking about 
this, I think it is fair to keep that in mind.
  I join the Senator from Oklahoma in saying, look, you can have it one 
way, or you can have it another way, but you can't have it both ways. 
If this renewable energy is a good deal, how come it is not a good deal 
for everybody? It seems to me it is absolutely outrageous to say, Los 
Angeles, CA, doesn't have to abide by the law and sell renewable power 
through its municipal utility, but Dallas, TX, does. Bonneville Power 
doesn't have to abide by the law, but their competitor has to, and 
rural cooperatives don't have to abide by the law.
  Well, look, if renewable power and an inflexible federal mandate is a 
good thing, how come it is not good for everybody? There is no way that 
can be defended. That is plain old rotten, special interest vote-buying 
which basically says: We know this is a provision that will cost a lot 
of money. You have political interests that are for it, and in order to 
get it passed and impose it on the poor people who can't get out from 
under it by cutting a political deal, we are going to exempt Los 
Angeles, CA and other municipal and public power providers. Give me a 
break. That is about as outrageous as it can be.

  Finally, I believe there is a drafting error in this bill. In looking 
at this bill in a cursory way, I don't see any requirement that if I 
buy these credits, I buy them from Americans. Can I buy these credits 
from people in China? I don't see in the bill a provision that says I 
have to buy credits from Americans. Can I buy them from Mexicans, from 
the Canadians, from China, from Russia, or from Uzbekistan? My question 
is: How well is this whole process thought out? When you let people buy 
credits, you are not producing more energy, you are basically spreading 
the misery.
  I hope Senator Kyl's amendment passes. I am going to vote for it. But 
if it doesn't pass, maybe a fallback position ought to be that if any 
electric company is going to have to raise their power rates by more 
than 5 percent, maybe they ought be able to join Los Angeles, maybe 
they ought to be able to join Bonneville Power, maybe they ought to be 
able to join the cooperatives and be exempt. This is clearly going to 
cost a lot of money because if it weren't costing a lot of money, why 
does everybody want to get out from under it?
  I think the amendment of Senator Kyl is a good one. It sets a goal. 
But something is very wrong economically in telling people, no matter 
whether it is feasible or not, no matter whether it can be achieved or 
not, no matter how much it costs, that unless you are one of these 
privileged people who have an exemption, you have to generate 10 
percent of your power by 2020 with these alternative sources; and, 
after that, over the next 10 years, then the Secretary of Energy can 
set the rate at wherever they want to set it. God forbid we should have 
some lunatic as the Secretary of Energy in 2021. They would have the 
power under this bill, unilaterally, to set this rate anywhere they 
want to set it, other than below 10 percent.
  Is that a wise delegation of power? Should we give anybody in America 
that much unilateral power? I do not think so.
  This provision is riddled with special interest loopholes. I think it 
is an unworkable mandate of the worst sense and violates the logic of 
economics. It is nothing like the Texas provision. I hope we can adopt 
the Kyl amendment.
  I am afraid that all these people who have gotten exemptions are 
going to vote for it now. If I represented Los Angeles, maybe I could 
say: Look, this could hurt, it could be expensive, but it will not 
affect you; I cut this deal. Or maybe if I got power from the TVA, I 
could say: Yes, I am worried about this, but do not worry, I covered 
us.
  I sometimes think I have some persuasive power, but I do not think I 
am good enough to defend this provision. I do not think I could defend 
a provision, and standing with great righteousness, by saying: 
Renewable power is what we need, but we do not need it in Los Angeles, 
we do not need it in TVA, we do not need it in municipals, we do not 
need it for rural America. If it is so good, why do we not need it for 
those things?

[[Page S2167]]

  Mr. BINGAMAN. Will the Senator yield?
  Mr. GRAMM. That is my question. I will be happy to yield.
  Mr. BINGAMAN. The information I have been given--and I am interested 
if this is accurate, as the Senator from Texas understands it--Texas 
also excludes from their requirement municipals and co-ops, just as we 
are doing in this bill.
  Mr. GRAMM. I wondered how they got such a bad provision passed.
  Mr. BINGAMAN. They have a provision that requires 4.3 percent of all 
sales be from renewables in the year 2009, which is where their bill 
stops going forward. Our provision calls for 3.4 percent by the year 
2009 and has the same exclusions they have in Texas.
  If the Senator has any contrary information, I want to----
  Mr. GRAMM. Let me reclaim my time, and I will finish because there 
are other people who want to speak. First of all, I went through the 
differences with the Texas program. I do not see how you can defend 
exemptions if you support the policy. Had I been in the Texas 
Legislature, I would not have voted for this provision. Let me make 
that clear. I would not have voted for it.
  However, it is very different from the proposal here. It is much more 
modest. It does count hydroelectric power as a renewable. It is based 
on generation capacity, not actual sales. In other words, it is far 
more reasonable if you are going to adopt an unreasonable policy.
  Let me make one additional point. If this turns out to be nonsense 
and we get to 2007 or 2008 in Texas and we discover that our power 
rates are going through the ceiling because Texas did it, Texas can 
undo it. If they do not undo it, people can move. They can move to New 
Mexico.
  The problem is, when we mandate it from Washington, then the fact 
that it is a disaster in Texas does not mean it is going to get changed 
in Washington.
  Why not let the States do what Texas did: Set out a policy that makes 
sense for them, and then if it does not work, they can change it. Why 
should we be dictating in Washington what is good for the States--what 
is good for Louisiana, what is good for Arizona, what is good for New 
Mexico?
  My legislature adopted a policy they thought was good for Texas. We 
are going to override it with this Federal bill. If anybody thought it 
was good--I personally do not--but if anybody thinks it is so good, why 
not leave it alone? But we are not going to leave it alone; we are 
going to override it.

  I am afraid with all these exemptions, the fix is in, but this is 
really bad policy. The Senator from Arizona has a good amendment. I 
hope it is adopted, and I commend it to people. I hope they will vote 
for it. I hope people who received all these exemptions will simply 
say: If I needed the exemption to vote for it, what about people who 
represent States that did not get exemptions? That is why we need the 
Kyl amendment. That way, States can make up their own minds. They are 
no less responsible than we are. They care no less about the 
environment than we do. They are no less informed than we are. In fact, 
they are probably much better informed about their own circumstances.
  I am strongly in favor of the amendment, and I commend the Senator 
from Arizona.
  The PRESIDING OFFICER. The Senator from Louisiana.
  Ms. LANDRIEU. Mr. President, I rise in opposition to the Kyl 
amendment. I wish to speak for a few minutes to add to my remarks of 
just a few moments ago.
  Mr. BINGAMAN. Mr. President, how much time remains?
  The PRESIDING OFFICER. The Senator from New Mexico has 24 minutes 37 
seconds.
  Mr. BINGAMAN. How much time does the Senator from Louisiana intend to 
use?
  Ms. LANDRIEU. Ten minutes.
  Mr. BINGAMAN. That will be fine. I yield 10 minutes to the Senator 
from Louisiana.
  Ms. LANDRIEU. Mr. President, the Senator from New Mexico has done an 
extraordinary job in leading us through this obviously quite 
contentious energy debate. It is the result of so many different views 
of different regions, with each having its own set of natural resources 
and demands. It is very hard to come up with a national policy that 
works for our Nation and also respects our regions and States.
  If we do not change the direction in which this Nation is headed--
dependent and unable to produce the energy necessary for our Nation to 
grow and develop--our economy and our national security will be 
jeopardized.
  I commend the Senator from New Mexico for staying tough and holding 
the line and trying to move a bill out of the Senate and into 
conference where it can be perfected.
  I oppose the Kyl amendment and support Senator Bingaman's efforts on 
renewables. There might be a better way, a better method than mandates. 
Recognizing that the House did not put in any substantive provisions 
for renewables in its energy bill, I hope we can explore this issue 
between the time this bill leaves the floor and gets to conference 
where I hope it will be perfected and balanced in promoting renewables.
  While the Senator from Texas does not evidently think windmills might 
work and does not like the way they look, many people do like the way 
windmills look. There are many regions that are having success with 
wind power.
  In Spain, Germany, and Denmark, wind power supplies over 20 percent 
of their electricity. It really is a wonderful thought that we can use 
the brains God has given us to create technology to generate power from 
wind. I am sure it is somewhat more expensive. I am sure there are 
kinks to be worked out, but do not lead people to believe that it is 
not being done in an efficient way.
  Mr. President, I ask unanimous consent to print in the Record a fact 
sheet from the Union of Concerned Scientists, an EIA study that says: 
``National Renewable Energy Standard of 20 Percent is Easily 
Affordable.''
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                [From the Union of Concerned Scientists]

    EIA Study: National Renewable Energy Standard of 20% Is Easily 
                               Affordable

       A national renewable portfolio standard (RPS) to provide 
     20% of US electricity from wind, solar, geothermal, and 
     biomass energy by 2020 would cost energy consumers almost 
     nothing, according to a recent study by the U.S. Department 
     of Energy's Energy Information Administration (EIA). A 
     national RPS increasing these resources from 2% today to 20% 
     by 2020 is included in the Renewable Energy and Energy 
     Efficiency Act of 2001 (S. 1333), proposed by Sen. Jeffords 
     (I-VT) and five other Senators.
       The EIA report, using high estimates of renewable energy 
     costs (see discussion below), shows that under a 20% RPS, 
     total consumer energy bills (other than for transportation) 
     would be roughly the same as business as usual through 2006 
     and only $2.8 billion or 0.7% higher in 2010. By 2020, total 
     bills would be $580 million (0.1%) lower with an RPS.
       Other studies using more realistic assumptions and 
     incorporating the energy efficiency incentives in S. 1333 
     show that consumers could receive 20% of their electricity 
     from renewable sources and save billions of dollars (see 
     below).
       EIA found that a 20% RPS would increase average electricity 
     prices (the cost per unit of electricity) by only 3% over 
     business as usual levels in 2010 and 4% in 2020. With a 20% 
     RPS, electricity prices in 2020 are still projected to be 
     nearly 7% lower than they are today.
       Even these small increases in electricity prices are 
     largely offset, however, by lower natural gas prices. Because 
     an RPS creates a more diverse and competitive market for 
     energy supply, EIA finds that these market forces would 
     reduce natural gas prices and bills.
       Diversifying the electricity mix with renewable energy also 
     helps stabilize electricity prices by easing pressure on 
     natural gas prices and supplies. Under a 20% RPS, average 
     consumer natural gas prices are 3% lower than business as 
     usual in 2010 and 9% lower in 2020. These lower prices would 
     save gas consumers $10 billion per year by 2020.
       The net present value cost of a 20% RPS would be only $14 
     billion over the next 18 years. With ongoing natural gas 
     savings after 2020, an RPS would likely produce net savings 
     for consumers.
       A 20% RPS would also help reduce emissions from power 
     plants. Under an RPS, carbon emissions from power plants 
     would be 55 million metric tons or 8% lower than business as 
     usual in 2010 and 137 million metric tons or 18% lower in 
     2020, according to EIA.


    Correcting EIA Assumptions and Combining an RPS with Efficiency 
                      Produces Additional Savings

       Several other studies have found that using more realistic 
     assumptions and combining an RPS with strong energy 
     efficiency policies would produce additional savings for 
     consumers.
       The DOE Interlaboratory Working Group (IWG), consisting of 
     the five national energy

[[Page S2168]]

     research labs, corrected a number of EIA's assumptions (see 
     below) and found that, when combined with energy efficiency 
     programs, an RPS of 7.5% by 2010 would save consumers over 
     $65 billion per year by 2020 (1997$).
       At the request of Senator Jeffords, EIA used IWG 
     assumptions and found that the combination of an RPS of 7.5% 
     by 2010, advanced energy efficiency measures, and four-
     pollutant emission reduction targets similar to those 
     proposed by Senator Jeffords in S. 556 would save consumers 
     $64 billion per year by 2020 on their energy bills.
       UCS' Clean Energy Blueprint report, which used similar 
     assumptions to the IWG for renewable energy technologies, 
     shows that an RPS of 20% by 2020, with the energy efficiency 
     incentives in S. 1333, would save consumers $35 billion per 
     year by 2020 or a net present value of $70 billion over 18 
     years.
       The Clean Energy Blueprint found that additional efficiency 
     incentives, including for combined heat and power plants, 
     would increase annual savings to $105 million per year in 
     2020 and net present value savings to $440 billion over 18 
     years.


            EIA overestimates the Costs of Renewable Energy

       The DOE Interlaboratory Working Group found that EIA 
     significantly overestimates the cost of adding renewables to 
     the system. The EIA:
       Uses higher cost and worse performance assumptions for most 
     renewable technologies than recent experience and projections 
     by the utilities' Electric Power Research Institute and DOE;
       Arbitarily increases the capital cost of wind, biomass, and 
     geothermal technologies by up to 200% in a given region after 
     a fairly small amount of the regional potential is met;
       Limits the penetration of variable output resources like 
     wind and solar power to 15% of a region's electricity 
     generation; in parts of Germany, Denmark and Spain, wind 
     power is already providing more than 20% of total electricity 
     generation;
       Assumes that renewable energy generation will cost 4 to 5 
     cents more per kilowatt-hour than electricity from natural 
     gas plants between 2010 and 2020.
       USC also found that both the EIA and the IWG limit the 
     amount of biomass that can be co-fired in existing coal power 
     plants to 5% of the plant's input. Recent experience from 
     around the world has shown coal plants can be co-fired with 
     up to 10-15% biomass.

  Ms. LANDRIEU. Mr. President, Senator Bingaman is rightly arguing that 
while this amendment may need to be perfected, we must develop a 
portfolio of renewable fuels in this Nation if we are to reduce our 
dependency on foreign oil and other sources of power.
  Let me show a chart that will clearly illustrate that. This is 
electricity generation by fuel. We, right now, have most of our 
electricity generated from coal sources with a rising number of 
generators and powerplants fueled by natural gas. Since Louisiana is 
the second largest producer of natural gas, I most certainly represent 
the interests of people wanting to see more domestic production of 
natural gas.
  However, we have not been able to move very much this line 
representing renewables.
  We hope to increase renewables because by improving our domestic 
sources of energy, or increasing them, whether from coal, natural gas, 
nuclear, or renewables, we by virtue of that reduce our dependency on 
foreign oil sources.
  By increasing renewables, we can improve our domestic fuel supply. 
There are several reasons, I suggest, why this is a good thing to do.
  First, as I said, we need to reduce our dependency on fossil fuels. 
Even as someone who comes from a State that produces a lot of oil and 
gas, I know that one of these days those wells are going to dry up. I 
certainly hope this does not occur in the foreseeable future, but one 
day they will, because they are a finite source. Renewables are 
infinite. They are, as their definition says, renewable. We can get 
renewables, create renewable energy, and continue generating power for 
our industries.
  Domestic energy production, whether it is through oil, gas, wind, 
coal, biomass, or solar, increases jobs in our country. One of the 
things we spend a great deal of time talking about is how we can create 
good-paying jobs, jobs where people can make a living, have a living 
wage, save, send their children to college, purchase a home. Those 
things are really very important. They are important to all of our 
States.
  Investing in renewables technology generates jobs. Domestic 
production creates jobs in America. We are all for helping the world 
create jobs. We would like to see a great middle class created in every 
country in the world, but our first objective is to create jobs for the 
citizens of this Nation.
  The third reason renewables are a good thing is that they give us 
diversity. Why do we need diversity? We need diversity because in a 
competitive system no industry, no generator of electricity, or no 
region should be held hostage in the event natural gas prices soar. 
They potentially could switch to another source of fuel. If that source 
of fuel were too high, they could switch to another source of fuel, 
thereby keeping prices stable and low, and generating and increasing 
competition.

  So by increasing renewables, we increase the options for businesses 
and electric generators so the consumers are ultimately benefitted. 
Consumers see their prices rise when there are monopolies, and when 
people have no choice but to get power from either gas or oil.
  So as we write a bill that helps this country to expand the choices 
of fuel, consumers will be helped and taxpayers will see their bills 
lowered.
  The fourth reason I support renewables is that they are the cleanest 
option.
  Now I have been in this Chamber talking about natural gas. I am very 
proud of the work we do in Louisiana, as well as Texas, and 
Mississippi. We produce a lot of natural gas. It meets the standards 
set by the EPA and our own state laws and regulations. We hope to 
continue to produce natural gas for this country.
  I will put up the other chart which shows how much the natural gas 
comes off the shores of Louisiana and is literally piped through an 
extensive system of pipelines to other parts of the country. We are 
proud of this.
  We would like to see more pipelines coming from different places so 
we could provide clean natural gas for the Nation. People in Louisiana, 
even though we are proud of our natural gas and proud to be able to 
contribute it to the Nation, believe in renewables because they also 
give us additional sources that will come into the country from a 
variety of different places.
  Renewables are theoretically better dispersed around the country 
because they can be created through solar, wind, or biomass. So the 
advantage of renewables is not only that they are clean and efficient, 
but they also help us redistribute the sources of power, giving us a 
greater balance, so there are not blackouts in California or brownouts 
on the east coast. That is something in this debate I believe we have 
to keep foremost in our mind.
  The PRESIDING OFFICER. Will the Senator suspend. The Senator is under 
an existing order in which she had time in her own right which has now 
been expired. So does the Senator from New Mexico wish to yield 10 
additional minutes to the Senator from Louisiana, as he did before?
  Ms. LANDRIEU. Will the Senator yield an additional 1 minute?
  Mr. BINGAMAN. I will be glad to yield.
  The PRESIDING OFFICER. The Senator from Louisiana.
  Ms. LANDRIEU. The fifth reason is it is American technology that is 
at the base of these technological advances in renewable energy. 
However, we are not using them. They are being used by European 
nations. Our technology is developed at our universities, in our 
laboratories, with our scientists, with our engineers, but we are not 
taking advantage of these renewables. The Europeans have done it in a 
period of 5 years, from 1990 to 1995. As I said earlier, Spain 
increased its renewable resources by 300 percent, Denmark by 150 
percent, and the Netherlands over 50 percent.
  In conclusion, I think a solution to our dependence on foreign oil is 
more robust domestic production with a real commitment to renewables. 
If we do those two things, we can reach independence, which I think our 
country and our citizens, whether they live in California, Louisiana, 
or New York, would cheer about. That is why I am opposing the Kyl 
amendment and supporting Senator Bingaman. Again, I hope for perfection 
through the conference process, but I also hope this bill retains a 
renewable portfolio and sends an important message to the American 
people that we can stake our claim to an independent future.
  The PRESIDING OFFICER. As a point of clarification, the Chair 
announces the Senator from New Mexico has 22 minutes 29 seconds 
remaining; the Senator from Arizona has 29 minutes 54 seconds 
remaining.

[[Page S2169]]

  The Senator from Arizona.
  Mr. KYL. Mr. President, I will take a few minutes to respond to the 
Senator from Louisiana, and then the Senator from Alaska would like to 
speak, unless there is an intervention on the other side.
  The Senator from Louisiana had four basic reasons that she supports 
the Bingaman approach and opposes mine. I will go through each of 
those.
  Her first reason was we have become too dependent upon foreign oil 
and that if we have renewables to generate electric power, that will 
somehow solve the problem. Well, the Senator from Louisiana could not 
be more wrong. I wish she would put the chart back up which showed the 
dispersal of the various energy sources. We saw at the very bottom of 
that chart there was a red line. That is the oil that is used to 
generate electricity in this country--hardly anything. We do not 
generate electricity with oil in the United States, as the chart 
showed. Transportation flows on oil--that is how we drive our cars--but 
we do not generate electricity with it.
  So if the argument is we have to reduce our dependence upon foreign 
oil in the generation of electricity and therefore go to these 
renewable resources, nothing could be further from the truth.
  The Senator's chart was accurate that we produce electricity in this 
country with nuclear generation, with gas, and with coal. That is where 
we get our energy production. So the argument that somehow this will 
help us reduce dependency on foreign oil is absolutely untrue.
  I also will comment on the fact that the Senator from Louisiana said 
we will run out of oil and gas someday. Well, someday we will, but, 
again, we do not produce electricity with oil and we have a lot of 
coal, virtually an inexhaustible supply of coal. We could generate all 
of the electricity that this country could use for centuries on the 
coal we have in this country. We have been spending a lot on clean coal 
technology, so we can now do it in a very clean way. Nuclear power is 
essentially inexhaustible. So if one is talking about oil and gas 
running out as a reason we have to go to renewables, again, it is 
absolutely false.
  Finally, with regard to this first argument, the Senator from 
Louisiana said: After all, wind is free. She then went on to correct 
herself and say: Of course, there is some cost to producing it.
  Indeed, we subsidize the cost of wind power at 40 percent of what it 
costs, and it still cannot compete, which is why the proponents of wind 
power want to have the U.S. Government force people to buy their 
product, because it cannot compete on the open market. These renewables 
are, in fact, not free.

  The final point of the first argument was that the Union of Concerned 
Scientists, a reputable group, indeed, says that even a 20-percent 
mandate would be very affordable. Let's examine that for a minute, 
because the second reason was we needed to diversify our fuel for 
electrical generation in order to keep prices lower. The assumption was 
this would keep prices lower.
  Again, she is wrong. We have today the figures from the Department of 
Energy agency that puts these figures together, the Energy Information 
Administration. I can read the figures for every single utility in 
every single State as to what the increases will be. This is a pretty 
conservative estimate because they only take the power that is being 
purchased today--not 15 or 20 years from now--and they have not indexed 
for inflation.
  I suspect we all agree inflation will go up. All they took was the 3 
cents per kilowatt hour, which is the basic cost that you would buy it 
from the Department of Energy, and projected that 3 cents per kilowatt 
hour--not 3 cents per kilowatt hour adjusted for inflation.
  What would the costs be? I will take Louisiana, the State of the 
Senator who just spoke. I will leave out for part of this discussion 
the municipals, but I will bring them in to show it is the same for the 
municipals. I begin with private utilities in Louisiana.
  For the CLECO Power Company, the cost of this is $25.5 million, an 
increase in retail of 4\1/2\ percent. Entergy, Gulf States Louisiana 
and New Orleans is $60 million, $89 million, and $17 million, 
respectively, with an increase in prices to the retail customer of over 
5 percent, 4\1/2\ percent, and 3.86 percent.
  Mr. BINGAMAN. Will the Senator yield?
  Mr. KYL. I am happy to yield.
  Mr. BINGAMAN. I ask, why does my colleague, who sponsored this 
amendment, mention how much it will cost Entergy to comply with the 
underlying Bingaman amendment; why are they supportive of the Bingaman 
amendment and strongly opposing the Kyl amendment if this is going to 
be expensive for them?
  Mr. KYL. I am happy to answer the question of my colleague. It will 
not cost energy companies a penny but cost energy's customers. That is 
the whole point. We are the ones who will pay, not the power company.
  The reason this particular power company supports it--I understand 
they will have to answer for themselves--they have invested in wind 
power. As I pointed out yesterday, according to the Energy Information 
Administration of the Department of Energy, the only renewable that 
will provide any significant increase in power is wind power. 
Naturally, those companies that invested in wind power love it. They 
cannot sell it today, even with a 40-percent subsidy, but if the 
Federal Government makes people buy the product, then they will be able 
to sell it. That is why they like it. Their customers will pay for it; 
they won't be paying for it.
  Let me turn to my State. I will pick some other States at random. In 
my State of Arizona, the private utility Arizona Public Service is the 
biggest at $67 million, a 3.72-percent increase. The Salt River 
Project, which would be temporarily exempted, is $66 million, up 4.63 
percent. Another private utility, Tucson Electric, is $24.5 million, up 
3.69 percent.
  The percentage increases are from 3 percent up to under 30 percent. 
How would you like to be getting power from the Welton Mohawk 
Irrigation District, with a 29\1/2\-percent increase? Fortunately, it 
is one of the political subdivisions that is currently excluded from 
the bill. Certainly they hope to remain excluded.

  In California, Pacific Gas and Electric is $260 million, over a 3-
percent increase. San Diego Gas and Electric is $45 million. Southern 
California Edison is $221 million. The total in that State--again, 
under the conservative assumptions--is three-quarters of a billion 
dollars.
  Mr. BINGAMAN. Would the sponsor of the amendment yield for another 
question?
  Mr. KYL. I am happy to yield.
  Mr. BINGAMAN. As I understand these figures, they are calculations of 
what it would cost these utilities to buy 10 percent of their power 
now.
  Mr. KYL. At the end of the time they are required.
  Mr. BINGAMAN. To buy this on the assumption they are producing 
nothing from renewable power, is that correct?
  Mr. KYL. They had to have a number representing cost and the cost 
number that it used was the one in your bill, in your amendment, the 
amendment of the Senator from New Mexico, which is that you can buy 
this from the Department of Energy at 3 cents per kilowatt hour.
  Mr. BINGAMAN. There is nothing in this analysis that acknowledges 
that most, if not all, of the utilities that have been mentioned 
produce renewable power from renewable sources now and have great 
ability to add to that as the years progress, is that not right?
  Mr. KYL. No, it is not right. In fact, many of the people or 
companies that sell to power retail do not produce with renewable 
sources today. They have to buy credits. The assumption is based upon 
the value of the credits as set forth in the amendment of the Senator 
from New Mexico.
  Yes, some will build renewable energy electrical generation. The cost 
of that could well exceed that 3 cents per kilowatt hour. This could be 
a conservative estimate, especially since it is not indexed for 
inflation.
  We are talking about a number today that in 20 years is obviously 
going to be substantially higher. I am trying to indicate a relative 
fact; namely, that the cost to consumers is going to escalate 
dramatically. That is what this information demonstrates.
  Now to the next point. The Senator from Louisiana said we have to 
diversify to keep prices lower. I have indicated the Department of 
Energy knows

[[Page S2170]]

the prices are not going to be lower. These are all of the estimates 
from the Department of Energy itself.
  But there is another point about diversifying; that is, if you are 
going to diversify, you need a reliable source. Certainly if the wind 
does not blow, you did not generate power on a windmill. If the Sun 
does not shine, you don't generate power from a solar power. If the 
water does not flow through a dam, you do not have hydropower. That is 
why the baseloads of the utilities is coal, nuclear, and gas. Those are 
available, they are reliable, and that is why for these renewables you 
always have to have backup, a storage battery, or a backup when it gets 
dark and the Sun does not shine or you have a drought and the water 
does not flow or the wind does not blow.
  The third point is renewables would create jobs. I know my colleagues 
would agree exploring in ANWR would create more jobs than windmills. 
That is evident.
  The fourth argument is renewables are better dispersed and are clean. 
Nuclear is clean, too. Hydro is clean. But I don't see a big rush for 
hydro or nuclear power.
  With respect to dispersal, it is interesting that the chart the 
Senator from North Dakota exhibited yesterday showed the renewable 
fuels dispersed all over the country, but each one is conglomerated in 
a particular area.
  For example, solar is obviously going to be produced best in the 
Southwest. Hydro is best produced in the Northwest. Wind power, 
interestingly, is produced best in North Dakota, South Dakota, and 
Oklahoma, as I recall. The geothermal was in certain other areas. If 
you are not in one of those areas, and since wind is the only 
economical source of producing the power, you are out of luck; you will 
have to import credits; you will have to buy credits from the place it 
is produced and your customers get nothing for that. They do not get 
electricity; they just get credits. The electricity company gets 
credits so the owners do not go to jail or pay a big fine.
  The bottom line with respect to the arguments made, and they have 
been made by others as well, the renewables have some very limited 
potential, if they are highly subsidized, which is what we are doing, 
and we have extended the subsidy for them, and we are all for doing 
that, but you cannot count on renewables in any significant percent 
unless you are willing to pay a very high price, and unless you are 
willing to discriminate against some regions of the country, that is to 
say, unless you are willing to force the electric consumers in one part 
of the country to pay a lot more than the electric consumers in another 
part of the country. That does not make sense to me as a national 
energy policy.

  Unless there is someone on the other side wishing to speak, I yield 7 
minutes to the Senator from Alaska.
  The PRESIDING OFFICER (Mr. Nelson of Florida). The Senator from 
Alaska.
  Mr. MURKOWSKI. Mr. President, I ask how much time remains on our 
side?
  The PRESIDING OFFICER. Seventeen minutes.
  Mr. MURKOWSKI. I wonder if I can take 7 minutes.
  Mr. KYL. Yes, 7 minutes.
  Mr. MURKOWSKI. Mr. President, I would like to follow up a little bit 
on the Senator from Arizona, Senator Kyl. He has mentioned an awful lot 
about cost. I think we need to address this in specifics.
  Let's assume a utility must purchase the credits. Let's assume we 
have a utility that generates no new renewables. They make that 
decision. Let's take the hypothetical utility. I am going to be 
specific. I am going to take one that we can identify and we have the 
information relative to the cost.
  Let's assume retail sales are a billion kilowatt hours. What we would 
have to do is to take 10 percent of the renewable portfolio standard 
that is in effect times 10 because we are looking for a 10-percent 
renewability. That means roughly 100 million kilowatt hours of 
renewable--that is 10 percent of a billion--times 3 cents per kilowatt 
hour. That is $3 million for renewable credits. That $3 million would 
be passed on to the ratepayers.
  Let's take an actual utility. I hope the delegation from Wisconsin is 
here because the Wisconsin Electric retail sales for the year 2000 were 
3.173 billion kilowatt hours, times 10 percent renewable portfolio 
standard; that is, 317 million kilowatt hours, times 3 cents per 
kilowatt hour, which is $9.5 million for renewable credits. That is 
what they are going to go out and buy if, indeed, they do not develop 
renewables. Whether they make that decision or not, the point is it is 
going to cost their consumers. It is going to cost their consumers $9.5 
million. What is that going to amount to, to the average consumer? What 
is the ratepayer going to pay in Wisconsin? He is going to have a 5-
percent increase. I do not think it is fair to suggest, by any means, 
that somehow these renewables are going to just come on.
  I ask unanimous consent we have printed in the Record a letter from a 
group that happens to support specifically the Kyl amendment. They want 
to support the modified language in the Kyl amendment in order to 
mitigate and eliminate the harmful economic consequences for the 
renewable fuels portfolio mandate.
  I also ask unanimous consent a letter from the Florida Public Service 
Commission be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                        Senate Committee on Energy


                                        and Natural Resources,

                                    Washington, DC, March 5, 2002.
     Hon. Frank H. Murkowski,
     U.S. Senate,
     Washington, DC.
       Dear Senator Murkowski: We are writing to express our deep 
     concern over the economic impact of the renewable electricity 
     portfolio mandates contained in the Substitute Amendment (the 
     Energy Policy Act of 2002) to S. 517. This renewable 
     portfolio standard would require that 10 percent of all 
     electricity generated in 2020 must be generated by renewable 
     facilities built after 2001. The renewable portfolio standard 
     would become effective next year, and the amount of renewable 
     generation required would increase every year between 2005 
     and 2020. While we believe that renewable sources of 
     generation should have an important, and growing, role in 
     supplying our electricity needs, the provisions contained in 
     the Substitute Amendment was not reasonable and cannot be 
     achieved without causing dramatic electricity price 
     increases. This in turn would have the unintended consequence 
     of reducing the competitiveness of American businesses in the 
     global economy and, thereby, reducing economic growth and 
     employment.
       Today, according to the Energy Information Administration, 
     non-hydro renewables placed in service over past decades make 
     up only about 2.16 percent of the total amount of electricity 
     generated in the United States. However, even this modest 
     existing renewable capacity will not count under the 
     Substitute Amendment toward satisfying the renewable 
     portfolio requirement. Generally, under that Amendment, 
     renewable facilities that can be used to meet the 10 percent 
     minimum must be placed in service in 2002 or thereafter. 
     Therefore, compliance with the Substitute Amendment's 2.5 
     percent renewables mandate for 2005 would require doubling 
     the amount of non-hydro renewables that we now have in just 
     three years--even though it took us more than 20 years to get 
     to where we are today.
       In addition, because the Substitute Amendment requires that 
     10 percent of all electricity generation, not capacity, must 
     come from renewables, vast numbers of renewable electricity-
     generating facilities will have to be built. Wind energy, 
     perhaps the most promising non-hydro renewable technology, 
     operates effectively only between 20 percent to 40 percent of 
     the time. Solar is also intermittent. Therefore, the actual 
     amount of newly installed capacity needed to generate enough 
     electricity to meet the Daschle Amendment's requirements 
     could well exceed 20,000 megawatts by 2005. To put this into 
     context, according to the American Wind Energy Association, 
     we currently have less than 5,000 megawatts of installed wind 
     capacity in the United States.
       Simply imposing an unreasonably large, federally mandated 
     requirement to generate electricity from renewables will not 
     guarantee that enough windmills and other renewable 
     facilities can be built on schedule; that the wind (or sun or 
     rain) will cooperate; or that the generating costs will be as 
     low as would be the case from a more diverse, market-dictated 
     portfolio of conventional, as well as renewable and 
     alternative fuels. If retail suppliers do not comply with the 
     mandate, they would face a 3 cent per kilowatt hour civil 
     penalty. Some way suggest that this penalty would operate as 
     a ``cap'' on the inevitable run up of electricity costs under 
     the Amendment. Even if this penalty were effective at 
     limiting skyrocketing electricity costs--and experience with 
     similar ``penalties'' indicates that it will not--the penalty 
     still would constitute an almost doubling of current 
     wholesale electricity prices

[[Page S2171]]

     for renewable power. Clearly, electricity rates will 
     substantially increase if the Substitute Amendment becomes 
     law.
       The Federal Government's past record in choosing fuel 
     ``winners and losers'' is dismal. The Powerplant and 
     Industrial Fuel Use Act of 1978, which prohibited the use of 
     natural gas in electric powerplants and discouraged its use 
     in many industrial facilities, was essentially repealed less 
     than a decade later when its underlying premises were 
     conceded to be wrong. While holding back the use of natural 
     gas, the Federal Government spent billions of dollars 
     attempting to commercialize ``synthetic fuels,'' including 
     oil shale and tar sands, with little to show for its efforts.
       While we believe that the Federal Government has an 
     important role to play in encouraging the development of 
     renewable and other energy technologies, we are troubled when 
     that role turns to mandates and market set-asides for one 
     particular fuel or technology. Mandates and set-asides 
     usually don't work, and create unintended consequences far 
     more severe than the underlying problem being addressed.
       For these reasons, we respectfully request that you support 
     efforts to modify the language in section 265 of the 
     Substitute Amendment to S. 517, in order to eliminate or 
     mitigate the harmful economic consequences of the renewable 
     fuels portfolio mandate.
           Sincerely,
         Adhesive and Sealant Council, Inc.,
         Alliance for Competitive Electricity,
         American Chemistry Council,
         American Iron and Steel Institute,
         American Lighting Association,
         American Paper Machinery Association,
         American Portland Cement Alliance,
         American Textile Manufacturers Institute,
         Association of American Railroads,
         Carpet and Rug Institute,
         Coalition for Affordable and Reliable Energy,
         Colorado Association of Commerce and Industry,
         Edison Electric Institute,
         Electricity Consumers Resource Council,
         Independent Petroleum Association of America,
         Industrial Energy Consumers of America,
         International Association of Drilling Contractors,
         Interstate Natural Gas Association of America,
         National Association of Manufacturers,
         National Lime Association,
         National Mining Association,
         National Ocean Industries Association,
         North American Association of Food Equipment 
           Manufacturers,
         Nuclear Energy institute,
         Ohio Manufacturers' Association,
         Oklahoma State Chamber of Commerce & Industry,
         Pennsylvania Foundry Association,
         Pennsylvania Manufacturers' Association,
         State of Florida Public Service Commission,
         Texas Association of Business and Chambers of Commerce,
         U.S. Chamber of Commerce,
         Utah Manufacturers Association,
         Westbranch Manufacturers Association.
                                  ____

                                        Public Service Commission,


     Capital Circle Office Center, 2540 Shumard Oak Boulevard,

                                  Tallahassee, FL, March 18, 2002.
     Re: Energy Legislation (Substitute Amendment 2917 to S. 517)
     Hon. Bill Nelson
     U.S. Senator, Washington, DC.
       Dear Senator Nelson: The purpose of this letter is to let 
     you know that the Florida Public Service Commission has major 
     concerns with the 400-page Substitute Amendment currently 
     being addressed by the Senate. It is extremely preemptive of 
     State Commission authority. If legislation moves forward, we 
     ask that it provide a continuing role for States in ensuring 
     reliability of all aspects of electrical service-including 
     generations, transmission, and power delivery services and 
     should not authorize the FERC to preempt State authority to 
     ensure safe and reliable service to retail customers. Also, 
     we support the Kyl amendment on the renewable portfolio 
     standard.
       In particular, our concerns are:


                   (1) Electric Reliability Standards

       The substitute amendment would limit the States' authority 
     and discretion to set more rigorous reliability standards 
     than the Federal Energy Regulatory Commission (FERC) over 
     transmission and distribution. In fact, the Substitute 
     Amendment appears to provide no role for States at all on 
     transmission reliability. Yet, the Florida Legislature has 
     carefully set out statutory authority for the FPSC over 
     transmission.
       If legislation moves forward, Congress should expressly 
     include in the bill a provision to project the existing State 
     authority to ensure reliable transmission service. We note 
     that the Thomas amendment passed. The amendment appears to 
     strengthen state authority. In that regard, the amendment is 
     better than the overall bill under consideration. Our 
     interpretation is that the amendment will not restrict state 
     commission authority to adopt more stringent standards, if 
     necessary.


                     (2) Market Transparency Rules

       This section is silent on State authority to protect 
     against market abuses, although it does require FERC to issue 
     rules to provide information to the States. State regulators 
     must be able to review the data necessary to ensure that 
     abuses are not occurring in the market.


           (3) Public Utilities Regulatory Policy Act (PURPA)

       The FPSC supports lifting PURPA's mandatory purchase 
     requirement, but States should be allowed to determine 
     appropriate measures to protect the public interest by 
     addressing mitigation and cost recovery issues. Thus, we do 
     not support preempting State jurisdiction by granting FERC 
     authority to order the recovery of costs in retail rates or 
     to otherwise limit State authority to require mitigation of 
     PURPA contract costs. States that have already approved these 
     contracts are better able to address this matter than the 
     FERC.


               (4) Federal Renewable Portfolio Standards

       This requires that beginning with 2003, each retail 
     electric supplier shall submit to the Secretary of Energy 
     renewable energy credits in an amount equal to the required 
     annual percentage to be determined by the Secretary. For the 
     year 2005, it will be less than 2.5 percent of the total 
     electric energy sold by the retail electric supplier to the 
     electric consumer in the calendar year. For each calendar 
     year from 2006 through 2020, it shall increase by 
     approximately .5 percent.
       The Secretary will also determine the type of renewable 
     energy resource used to produce the electricity. A credit 
     trading system will be established. While a provision is 
     established to allow states to adopt additional renewable 
     programs, we continue to have concerns. Thus, we strongly 
     support the Kyl amendment which provides some flexibility 
     to the States.
       The FPSC believes that States are in the best position to 
     determine the amount, the time lines, and the types of 
     renewable energy that would most benefit their retail 
     ratepayers. This particularly true in the case of States 
     without cost-effective renewable resources. A one-size-fits-
     all standard will likely raise rates for most consumers.


                        (5) consumer protection

       The FPSC is concerned with language in Section 256 that 
     requires the State actions not be inconsistent with the 
     provisions found in the bill. While the FPSC favors a strong 
     consumer protection measures, preempting States by Federally 
     legislating retail consumer protections is not necessary. 
     States are better positioned to combat retail abuses. States 
     are partners with federal agencies in these efforts to ensure 
     consumer protection.
       The critical role of State Commissions in the analogous 
     area of implementing the Federal Telecommunications Act 
     provision against slamming (the unauthorized switch of a 
     customer's primary telecommunications carrier) serves as a 
     good example. The Federal Communications Commission saw the 
     benefit of having State Commissions carry out the anti-
     slamming program. State Commissions are simply better 
     situated and have a more in-depth understanding of the abuses 
     in the consumer protection arena. As a result, Florida's 
     slamming rules are actually more strict and provide better 
     remedies to the consumers than the FCC rules. We would like 
     to retain the ability to take similar steps in the energy 
     area if warranted.
       It is our understanding that there are now 100-200 
     amendments. We are in the process of reviewing all of them. 
     In the meantime, please call us with questions on them. We 
     appreciate that your staff has been in frequent contact with 
     FPSC staff.
       In conclusion, we request that you take these points into 
     consideration as energy legislation progresses. Please do not 
     hesitate to call if we may be of further assistance.
           Sincerely,
                                                    Lila A. Jaber,
                                                         Chairman.

  Mr. MURKOWSKI. I might observe, the State of Florida is in company 
here with a lot of other corporations. Nevertheless, I think what we 
have is people who are suggesting that, indeed, we have not examined 
sufficiently the ramifications of just what this mandate is.
  It has worked, in my opinion, with the States. Fourteen States have 
mandated renewables. It is working. Now we are coming out and saying 
one size fits all.
  In my State, if I want to have biomass, I am left out in the cold 
because I do not have anything but timber on public land. But it says 
in here that unless it is slashing, I can't even use waste from mature 
logs that happen to be harvested. I can't use the bark, can't use the 
sawdust, unless there is an amendment to this. Maybe we can get over 
that.
  There is not an awful lot of thought that has gone into this. In my 
opinion, it has been an effort to try to accommodate various concerns. 
Yes, renewables are good. We ought to really have

[[Page S2172]]

renewables. But we are forgetting how much it costs. We are also 
forgetting a very important feature associated with renewables, and 
that is we continue to support fundamentally the funding that we have 
had, which has been in the area of almost $7 billion in the last 5 to 6 
years in developing these renewables. But they do not come free.
  When we do a mandate, I really question the wisdom of it. I know it 
is very convenient to walk out of here and say we have all voted for 
renewables. That is comforting. It is good. But by the same token, the 
public ought to know there is no free ride here.
  As we look at biomass, a lot of people aren't knowledgeable. They 
don't really know what happens. What you do is you burn wood products. 
You get emissions. Emissions are a problem, and we are concerned about 
it. I do not see any great emphasis here for nuclear, which is clean 
and generates a tremendous amount of power.
  We have inconsistencies relative to whether we include hydro as a 
renewable. Certainly, in my opinion, it is. We are going to get into a 
debate on this, I think, over an amendment by one of our Republican 
Members from Maine who wants to exclude, if you will, Maine. I am going 
to have a hard time supporting an exemption for one State and not 
another.
  I see my friend, the Senator from New Mexico. I am going to sit down 
now and let Senator Domenici be recognized, if it is the preference of 
the junior Senator of New Mexico.
  The PRESIDING OFFICER. The Senator from Alaska has consumed the 7 
minutes.
  Mr. MURKOWSKI. I yield the remainder of my time, and I will give it 
to the Senator from New Mexico.
  The PRESIDING OFFICER. The Senator from New Mexico. The Senator has 
10 minutes remaining.
  Mr. DOMENICI. Senator Bingaman, I would not keep us here this 
evening, but I will be busy in the morning because of a markup, so I 
will use some time tonight.
  First, before we are finished with our debate and votes, I will 
return to the Chamber and give a rather detailed analysis of the 
positive things in this bill for nuclear power for the future of our 
country and the world. While I mention that, I thank Senator Bingaman 
again for his leadership on Price-Anderson.
  We have overcome one major hurdle. It is clear that you could not 
have been considering significant additions to the utility electric 
generating powerplants that would be powered by nuclear if we had not 
done that. But there are many things in this bill that will cause those 
who think nuclear power can, indeed, be part of the American scene to 
say that Congress is recognizing that and is paving the way for 
innovation, new approaches to nuclear power, which may, indeed, help us 
enormously in terms of ambient air quality and achieving minimal 
emissions in the generation of electricity.
  But I come to the Chamber tonight as one who looks at my record with 
reference to research on renewables. I think I have a pretty good 
record.
  Perhaps it would be fair to say that with all the support we have 
given to these kinds of sources of energy, we have not done as well as 
we should have. But during the 6 years I chaired the Energy and Water 
Development Subcommittee on Appropriations, we provided well over $2 
billion in support for research just in that one bill alone.
  There has been real progress on renewables, especially in the cost of 
wind power over time. I hope a lot more progress will be made as time 
progresses. But I have very great concerns with the imposition of this 
renewable standard on the American public.
  The current bill, as I understand it, requires that 10 percent of all 
electricity be derived from new renewable sources by the year 2020 or 
be subject to a 3-cent-per-kilowatt-hour penalty. I don't believe this 
standard can be met without causing significant increases in electric 
prices. If you were going to increase electric prices to get more 
electricity, that would be one thing. But I think we are going to 
increase all electric costs because of the mandate of 10 percent of 
these renewable sources that are enumerated in this bill.
  Remember that this mandate applies only to the privately owned 
utility companies. It does not apply to public ones, as I understand 
it. So it will just be a mandate on the privately owned companies in 
this country.
  At least in my office, there has been a bit of an outcry over this 
proposal, including a concern from the Public Service Company of New 
Mexico, the principal utility company, and indications that to meet 
this requirement they believe it is going to cost New Mexico users 
considerably more money. I met with them again today. They still 
believe that to meet this 10 percent mandate, the utility company costs 
in New Mexico will have to go up, and go up substantially. To put it 
simply, utilities have to provide power, whether the sun shines and the 
wind blows or not.
  The costs of Senator Bingaman's amendment are partly driven by the 
way the renewable portfolio is structured. We have discussed this with 
him and with his staff.
  One of my strongest concerns involves the wording in the amendment 
that focuses on energy generated by solar and wind renewable sources.
  To put it simply, utilities have to provide power, which I have just 
indicated, whether the Sun shines or the wind blows or not. Solar and 
wind, by their very nature, are intermittent sources of power. On 
average, these sources deliver about one-third of their capacity as 
actual energy. Under this bill, they are required to produce 10 percent 
of the electricity. But as I am indicating now, it is not based upon 
capacity but rather on energy produced and used. That means you will 
have to pay three times as much to get to the 10 percent.
  Now these renewables account for a small fraction of the portfolio. A 
utility can fairly easily find some other small source to cover those 
days when you don't have Sun or wind. But as that renewable fraction 
climbs, the utilities are placed in the position of having to build the 
renewable source to meet this mandate, and then, on top of that, build 
a stable baseload capacity from some other stable source to use when 
the Sun and the wind don't cooperate.
  This leads to what everyone should understand to be a double whammy 
on the ratepayer. I could even argue that it is a triple whammy on the 
ratepayer because they not only have to pay for the renewable 
capacity--that is only useful about one-third of the time--and the 
baseload capacity to cover the other two-thirds of the time, but they 
also have to pay the cost differential for renewable power. Even with 
wind, which is the most economical of the renewables, the cost 
differential is at least 2 cents per kilowatt-hour, translating in 
terms of costs today to the American public of at least $11 billion 
annually. Somebody will pay for it.

  By the year 2020, the annual cost will be what I have just described. 
It will be parts of that $11 billion as we move up, because you won't 
just wait and go to 2020 and start producing, you will clearly have to 
start using the solar, or wind, or whichever energy is allowed under 
this amendment.
  Another way of estimating it is the penalty of 3 cents per kilowatt-
hour that is imposed for the failure to meet the standard and to figure 
that as a cost. I have tried to do that. In New Mexico, this would lead 
to a figure as high as $40 million a year in additional electricity 
costs. States such as ours are already reeling from unfunded mandates 
such as the arsenic standard. They don't need more help from the 
Federal Government to extract higher electricity rates to meet new 
standards, unless there is no other way to get America's energy 
crisis--to control it and to preserve and protect our ambient air.
  I believe there are other ways. I believe we can change this 
amendment so it won't be so onerous. I will be discussing that prospect 
with the manager of the bill, but not this evening. I will not offer 
any amendment with reference to changing the structure, but I will talk 
about it. Perhaps it can be considered before we leave the floor or in 
conference as something that will be looked at to make it more 
realistic instead of this capacity and energy dichotomy which I have 
just explained.
  We can greatly simplify the planning of utilities and minimize the 
substantial burden of this new standard by simply switching from an 
``energy-generated'' basis to a ``capacity'' basis. That would make it 
easy to measure. It would produce a modicum of reasonableness in this 
bill. It would be completely predictable.

[[Page S2173]]

  When a company puts in a megawatt of wind capacity, the capacity is 
known, even though the power derived from the resource is not known. It 
is probably only around 300 kilowatts.
  Let me repeat that when a company puts in a megawatt of wind 
capacity, that capacity is known, even though the power derived from 
the resource is not known. And it is probably only 300 kilowatts, one-
third of the credit I have just described.
  When I talk about the intermittent nature of renewables, I hope my 
colleagues know this is no exaggeration. I have seen the actual data 
from a large wind farm in Minnesota. At times it does a great job, but 
there are times when that same farm has to draw power from the grid to 
power its instruments because they are inoperative when the wind hasn't 
blown for a certain amount of time. Thus, they are a user of energy 
during some period of time when the wind is down.
  It is not as simple as people think. If this is going to be 
implemented using the definitions in this bill, it will be extremely 
difficult. Interpretations will have to be made. I believe before too 
long we ought to straighten that out, make it far more intelligible, 
more simple, and something that is more rational.
  I yield the floor.
  The PRESIDING OFFICER. The Senator from New Mexico, the chairman of 
the committee.
  Mr. BINGAMAN. Mr. President, how much time remains in opposition to 
the Kyl amendment?
  The PRESIDING OFFICER. Twenty-two minutes.
  Mr. BINGAMAN. How much for the proponents?
  The PRESIDING OFFICER. The time has expired.
  Mr. BINGAMAN. Mr. President, I will not use the full 22 minutes, but 
I would like to summarize some key points in response to some of the 
debate we have heard today.
  A major criticism of the Bingaman amendment--which we have been 
talking about, as well as Senator Kyl's amendment--has been that the 
proponents of Senator Kyl's amendment--Senator Kyl, and others--believe 
that to require the generation of some portion of a utility's power 
from renewable sources is going to dramatically increase utility 
prices.
  All I will do is once again refer, as I did yesterday, to the study 
which Senator Murkowski, my colleague, the ranking member on the Energy 
Committee, requested of the Energy Information Administration. He asked 
them to study this exact issue. And he was very specific. He said: 
Please study this and do not consider any tax benefit we are providing 
for any of these renewable energy sources.
  They came back with their conclusion. They concluded--I am now 
quoting from an article in the Energy Daily dated March 12--``that a 10 
percent renewable portfolio standard would have little impact on future 
electricity prices.''
  That was their conclusion. They spent some time on this. They have 
capable people in the Energy Information Administration, and they were 
being asked to study this by Senator Murkowski, who was hoping, I am 
sure, they would conclude something else so he could use their study as 
part of his argument on the Senate floor.
  Let me go on with what is said in this article. It says:

       The study, released Friday, concludes that the retail price 
     impacts of a requirement that electricity generators provide 
     at least 10 percent of their output from renewable resources 
     by 2020 ``are projected to be small because the price impact 
     of [the program] is projected to be relatively small when 
     compared with total electricity costs and to be mostly offset 
     by lower gas prices.''

  It is clear to me that we have some scare tactics going on here. We 
have all these allegations: All these utilities are going to see this 
cost added, that cost added.
  The reality is that many of the utilities that were cited here as 
having to anticipate great cost increases will not see any cost 
increase because they will be sellers of renewable power, both to their 
customers and, perhaps, to other utilities because they have been 
forward thinking and they have been developing renewable power as one 
of the sources for energy.
  The simple fact is, every utility in this country--virtually every 
utility in this country--is going to have to add capacity. They are 
going to have to add additional generation capacity over the next 18, 
20 years, over the period that this amendment covers. Most of them are 
doing so now.
  In my home State, very near my hometown--I live in the southwest part 
of New Mexico; that is where I grew up, Silver City, NM--the three 
nearest communities to my hometown all have brandnew electricity 
generating plants going in. They are being constructed as we speak. 
There is one in Las Cruces, NM. There is one in Deming, NM. There is 
now going to be one in Lordsburg, NM. In each case, it is very 
interesting--and two of those are by one company; one is by another 
company--they are gas-fired generating plants. And that is typical. 
Ninety-five percent of the new generation which is being constructed in 
this country for meeting future demand is gas-fired generation. That is 
great. That is very good for my State because we produce a lot of gas 
in New Mexico. We can sell that gas, so we are very happy about it.

  If you look at this chart, you get a little concerned because when 
you go from 2000 out to 2020, you can see that our dependence upon 
natural gas as a source for energy electricity generation grows and 
grows and grows. Whereas today we are 69-percent dependent upon coal 
and natural gas to generate electricity in this country, and by 2020 we 
are going to be 80-percent dependent upon those two fuels, unless we 
adopt the Bingaman amendment to try to add some diversity to the 
different sources of power upon which we can rely.
  People might say: Why am I concerned about the fact that we are 
getting more and more dependent on natural gas? As I say, my State 
benefits from that. The reason I am concerned is, No. 1, we are not 
producing as much natural gas as we are consuming, and we are not 
expected to in coming years. Accordingly, there is going to be a 
shortfall, and we are going to start either finding more expensive 
natural gas somewhere or we are going to start importing more and more 
of our natural gas in the form of LNG from the Middle East and other 
places. So that as we are now dependent upon foreign sources of oil, 
then we will be dependent not only on foreign sources of oil but also 
foreign sources of natural gas in order to generate electricity in this 
country. So that concerns me.
  The other reason is the price. The price of natural gas today is low. 
Everybody is happy because their electric bills are low. But I can 
remember 18 months ago when the price of natural gas was $8 and $10 
rather than the $2.50 or so that it is today.
  We have provisions in this comprehensive energy bill that encourage 
more production of nuclear power. We have provisions that encourage the 
coal industry in this country by funding substantial additional 
research as to how we can use coal in an environmentally acceptable 
way. We have natural gas provisions that encourage more natural gas 
production. All of that I support. All of that is important for our 
future.
  But as well as that, we need to also have provisions that encourage 
more use of renewables. That is what we have. We have this provision in 
here that tries to say to these utilities: Fine, do all these other 
things, but, at the same time, start giving some serious attention to 
the need to develop renewable energy sources.
  This is not a heavy lift. We are saying, in the year 2005, we think 
each utility in the country ought to produce 1 percent--1 percent--of 
the power they generate from renewable sources of one kind or another. 
And then we say, in the year 2006, it ought to be maybe 1.6 percent. So 
it goes up in a very modest way. And we have all sorts of flexibility 
so they can trade with others if they are having difficulty in meeting 
their requirement.
  The truth is, a great many utilities will meet the requirements of 
this bill very soon. They will have no problem at all. The truth is, a 
lot of States have not gotten their act together to do anything. They 
should have. This will prompt them to do something.
  My State is one of those. We are listed as one of the top States in 
the country for wind energy as a resource because we have a lot of wind 
in New Mexico, particularly this time of year, in the spring. The 
reality is, though, we have no wind farms in New Mexico.

[[Page S2174]]

 If this becomes law, we will have wind farms in New Mexico. Frankly, 
the power produced from those wind farms, in my view, will likely be 
cheaper than the power produced from some of these gas generating 
plants if the price of gas goes up where I think it is likely to go 
over the next 10 to 15 years.

  All of these estimates about how much this is going to cost, and that 
it is going to cost these enormous amounts, all assume a very low price 
for gas. If you think the price of gas is going to stay below $3 per 
MCF, then you have no problem with using natural gas from now on.
  I am concerned, though, when the price of natural gas goes to $5, 
goes to $6, goes to $8, where it was before. In those circumstances, 
people are going to be very glad they have some alternative sources for 
energy so they can moderate the increase they will see in their utility 
bills. That is what we are trying to do.
  There are great environmental benefits from using renewable energy 
sources. We all know that. Also, I think it is just smart. We are 
having a lot of debates about Enron and pensions. We had a hearing this 
morning in the Health and Education Committee. Everybody said: Everyone 
knows you ought to diversify your investments, you ought to diversify 
your portfolio, that you should not put all your eggs in one basket. 
That is common sense when you are making investments. It is also common 
sense when you are looking for a portfolio of energy sources. It is 
common sense to say: Let us diversify so we are not too dependent upon 
any one source of power.
  That is exactly what we are trying to do with this amendment. I think 
my underlying amendment is a good one. The Kyl amendment just takes the 
guts out of it. The Kyl amendment is very simple. I cited this earlier 
in my comments. This is classic. It says:

       Each electric utility shall offer to retail consumers 
     electricity produced from renewable sources, to the extent it 
     is available.

  I favor that. That is what they are doing today. They are offering it 
to the extent it is available. The Kyl amendment is just a prescription 
for the status quo. What we are saying is, let's make it available, and 
let's make it available in large quantities. There are a lot of 
Americans who would like to buy more power from renewable sources. 
Let's make it available. That is what our renewable portfolio standard 
tries to do. The Kyl amendment would undo that.
  For that reason, I oppose it strongly and urge my colleagues to 
oppose it.
  The PRESIDING OFFICER. The Senator has 10 minutes remaining.
  Mr. BINGAMAN. Mr. President, until we can get a better read from the 
leadership as to whether they have additional business to transact, I 
suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The senior assistant bill clerk proceeded to call the roll.
  Mr. BINGAMAN. Mr. President, I ask unanimous consent that the order 
for the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. BINGAMAN. Mr. President, I yield back the remainder of my time on 
the Kyl amendment.
  The PRESIDING OFFICER. All time is yielded back.

                          ____________________