Congressional Record, Volume 148 Issue 47 (Wednesday, April 24, 2002)

[Congressional Record Volume 148, Number 47 (Wednesday, April 24, 2002)]
[Senate]
[Pages S3233-S3257]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

NATIONAL LABORATORIES PARTNERSHIP IMPROVEMENT ACT OF 2001

The ACTING PRESIDENT pro tempore. Under the previous order, the
Senate will now resume consideration of S. 517, which the clerk will
report.
The legislative clerk read as follows:

A bill (S. 517) to authorize funding for 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.
Landrieu/Kyl amendment No. 3050 (to amendment No. 2917), to
increase the transfer capability of electric energy
transmission systems through participant-funded investment.
Schumer/Clinton amendment No. 3093 (to amendment No. 2917),
to prohibit oil and gas drilling activity in Finger Lakes
National Forest, New York.
Dayton amendment No. 3097 (to amendment No. 2917), to
require additional findings for FERC approval of an electric
utility merger.
Murkowski/Breaux/Stevens amendment No. 3132 (to amendment
No. 2917), to create jobs for Americans, to reduce dependence
on foreign sources of crude oil and energy, to strengthen the
economic self determination of the Inupiat Eskimos and to
promote national security.
Feinstein amendment No. 3225 (to amendment No. 2917), to
modify the provision relating to the renewable content of
motor vehicle fuel to eliminate the required volume of
renewable fuel for calendar year 2004.
Feinstein amendment No. 3170 (to amendment No. 2917), to
reduce the period of time in which the Administrator may act
on a petition by 1 or more States to waive the renewable fuel
content requirement.
Fitzgerald amendment No. 3124 (to amendment No. 2917), to
modify the definitions of biomass and renewable energy to
exclude municipal solid waste.
Cantwell amendment No. 3234 (to amendment No. 2917), to
protect electricity consumers.

Amendment No. 3231, as modified, which was to have been printed in
yesterday's Record, is as follows:

(Purpose: To clarify the structure for, and improve the focus of,
global climate change science research)

On page 470, beginning with line 10, strike through line 7
on page 532 and insert the following:

TITLE XIII--CLIMATE CHANGE SCIENCE AND TECHNOLOGY

Subtitle A--Department of Energy Programs

SEC. 1301. DEPARTMENT OF ENERGY GLOBAL CHANGE RESEARCH.

(a) Program Direction.--The Secretary, acting through the
Office of Science, shall conduct a comprehensive research
program to understand and address the effects of energy
production and use on the global climate system.
(b) Program Elements.--
(1) Climate modeling.--The Secretary shall--
(A) conduct observational and analytical research to
acquire and interpret the data needed to describe the
radiation balance from the surface of the Earth to the top of
the atmosphere;

[[Page S3234]]

(B) determine the factors responsible for the Earth's
radiation balance and incorporate improved understanding of
such factors in climate models;
(C) improve the treatment of aerosols and clouds in climate
models;
(D) reduce the uncertainty in decade-to-century model-based
projections of climate change; and
(E) increase the availability and utility of climate change
simulations to researchers and policy makers interested in
assessing the relationship between energy and climate change.
(2) Carbon cycle.--The Secretary shall--
(A) carry out field research and modeling activities--
(i) to understand and document the net exchange of carbon
dioxide between major terrestrial ecosystems and the
atmosphere; or
(ii) to evaluate the potential of proposed methods of
carbon sequestration;
(B) develop and test carbon cycle models; and
(C) acquire data and develop and test models to simulate
and predict the transport, transformation, and fate of
energy-related emissions in the atmosphere.
(3) Ecological processes.--The Secretary shall carry out
long-term experiments of the response of intact terrestrial
ecosystems to--
(A) alterations in climate and atmospheric composition; or
(B) land-use changes that affect ecosystem extent and
function.
(4) Integrated assessment.--The Secretary shall develop and
improve methods and tools for integrated analyses of the
climate change system from emissions of aerosols and
greenhouse gases to the consequences of these emissions on
climate and the resulting effects of human-induced climate
change on economic and social systems, with emphasis on
critical gaps in integrated assessment modeling, including
modeling of technology innovation and diffusion and the
development of metrics of economic costs of climate change
and policies for mitigating or adapting to climate change.
(c) Authorization of Appropriations.--From amounts
authorized under section 1251(b), there are authorized to be
appropriated to the Secretary for carrying out activities
under this section--
(1) $150,000,000 for fiscal year 2003;
(2) $175,000,000 for fiscal year 2004;
(3) $200,000,000 for fiscal year 2005; and
(4) $230,000,000 for fiscal year 2006.
(d) Limitation on Funds.--Funds authorized to be
appropriated under this section shall not be used for the
development, demonstration, or deployment of technology to
reduce, avoid, or sequester greenhouse gas emissions.

SEC. 1302. AMENDMENTS TO THE FEDERAL NONNUCLEAR RESEARCH AND
DEVELOPMENT ACT OF 1974.

Section 6 of the Federal Nonnuclear Energy Research and
Development Act of 1974 (42 U.S.C. 5905) is amended--
(1) in subsection (a)--
(A) in paragraph (2), by striking ``and'' at the end;
(B) in paragraph (3) by striking the period at the end and
inserting ``, and''; and
(C) by adding at the end the following:
``(4) solutions to the effective management of greenhouse
gas emissions in the long term by the development of
technologies and practices designed to--
``(A) reduce or avoid anthropogenic emissions of greenhouse
gases;
``(B) remove and sequester greenhouse gases from emissions
streams; and
``(C) remove and sequester greenhouse gases from the
atmosphere;'' and
(2) in subsection (b)--
(A) in paragraph (2), by striking ``subsection (a)(1)
through (3)'' and inserting ``paragraphs (1) through (4) of
subsection (a)''; and
(B) in paragraph (3)--
(i) in subparagraph (R), by striking ``and'' at the end;
(ii) in subparagraph (S), by striking the period at the end
and inserting ``; and''; and
(iii) by adding at the end the following:
``(T) to pursue a long-term climate technology strategy
designed to demonstrate a variety of technologies by which
stabilization of greenhouse gases might be best achieved,
including accelerated research, development, demonstration
and deployment of--
``(i) renewable energy systems;
``(ii) advanced fossil energy technology;
``(iii) advanced nuclear power plant design;
``(iv) fuel cell technology for residential, industrial and
transportation applications;
``(v) carbon sequestration practices and technologies,
including agricultural and forestry practices that store and
sequester carbon;
``(vi) efficient electrical generation, transmission and
distribution technologies; and
``(vii) efficient end use energy technologies.''.

Subtitle B--Department of Agriculture Programs

SEC. 1311. CARBON SEQUESTRATION BASIC AND APPLIED RESEARCH.

(a) Basic Research.--
(1) In general.--The Secretary of Agriculture shall carry
out research in the areas of soil science that promote
understanding of--
(A) the net sequestration of organic carbon in soil; and
(B) net emissions of other greenhouse gases from
agriculture.
(2) Agricultural research service.--The Secretary of
Agriculture, acting through the Agricultural Research
Service, shall collaborate with other Federal agencies in
developing data and carrying out research addressing soil
carbon fluxes (losses and gains) and net emissions of methane
and nitrous oxide from cultivation and animal management
activities.
(3) Cooprerative state research, extension, and education
service.--
(A) In general.--The Secretary of Agriculture, acting
through the Cooperative State Research, Extension, and
Education Service, shall establish a competitive grant
program to carry out research on the matters described in
paragraph (1) in land grant universities and other research
institutions.
(B) Consultation on research topics.--Before issuing a
request for proposals for basic research under paragraph (1),
the Cooperative State Research, Extension, and Education
Service shall consult with the Agricultural Research Service
to ensure that proposed research areas are complementary with
and do not duplicate research projects underway at the
Agricultural Research Service or other Federal agencies.
(b) Applied Research.--
(1) In general.--The Secretary of Agriculture shall carry
out applied research in the areas of soil science, agronomy,
agricultural economics and other agricultural sciences to--
(A) promote understanding of--
(i) how agricultural and forestry practices affect the
sequestration of organic and inorganic carbon in soil and net
emissions of other greenhouse gases;
(ii) how changes in soil carbon pools are cost-effectively
measured, monitored, and verified; and
(iii) how public programs and private market approaches can
be devised to incorporate carbon sequestration in a broader
societal greenhouse gas emission reduction effort;
(B) develop methods for establishing baselines for
measuring the quantities of carbon and other greenhouse gased
sequestered; and
(C) evaluate leakage and performance issues.
(2) Requirements.--To the maximum extent practicable,
applied research under paragraph (1) shall--
(A) draw on existing technologies and methods; and
(B) strive to provide methodologies that are accessible to
a nontechnical audience.
(3) Minimization of adverse environmental impacts.--All
applied research under paragraph (1) shall be conducted with
an emphasis on minimizing adverse environmental impacts.
(4) Natural resources conservation services.--The Secretary
of Agriculture, acting through the Natural Resources
Conservation Service, shall collaborate with other Federal
agencies, including the National Institute of Standards and
Technology, in developing new measuring techniques and
equipment or adapting existing techniques and equipment to
enable cost-effective and accurate monitoring and
verification, for a wide range of agricultural and forestry
practices, of--
(A) changes in soil carbon content in agricultural soils,
plants, and trees; and
(B) net emissions of other greenhouse gases.
(5) Cooperative state research, extension, and education
service.--
(A) In general.--The Secretary of Agriculture, acting
through the Cooperative State Research, Extension, and
Education Service, shall establish a competitive grant
program to encourage research on the matters described in
paragraph (1) by land grant universities and other research
institutions.
(B) Consultation on research topics.--Before issuing a
request for proposals for applied research under paragraph
(1), the Cooperative State Research, Extension, and Education
Service shall consult with the National Resources
Conservation Service and the Agricultural Research Service to
ensure that proposed research areas are complementary with
and do not duplicate research projects underway at the
Agricultural Research Service or other Federal agencies.
(c) Research Consortia.--
(1) In general.--The Secretary of Agriculture may designate
not more than two research consortia to carry out research
projects under this section, with the requirement that the
consortia propose to conduct basic research under subsection
(a) and applied research under subsection (b).
(2) Selection.--The consortia shall be selected in a
competitive manner by the Cooperative State Research,
Extension, and Education Service.
(3) Eligible consortium participants.--Entities eligible to
participate in a consortium include--
(A) land grant colleges and universities;
(B) private research institutions;
(C) State geological surveys;
(D) agencies of the Department of Agriculture;
(E) research centers of the National Aeronautics and Space
Administration and the Department of Energy;
(F) other Federal agencies;
(G) representatives of agricultural businesses and
organizations with demonstrated expertise in these areas; and
(H) representatives of the private sector with demonstrated
expertise in these areas.
(4) Reservation of funding.--If the Secretary of
Agriculture designates one or two consortia, the Secretary of
Agriculture shall reserve for research projects carried out
by

[[Page S3235]]

the consortium or consortia not more than 25 percent of the
amounts made available to carry out this section for a fiscal
year.
(d) Standards of Precision.--
(1) Conference.--Not later than 3 years after the date of
enactment of this subtitle, the Secretary of Agriculture,
acting through the Agricultural Research Service and in
consultation with the Natural Resources Conservation Service,
shall convene a conference of key scientific experts on
carbon sequestration and measurement techniques from various
sectors (including the Government, academic, and private
sectors) to--
(A) discuss benchmark standards of precision for measuring
soil carbon content and net emissions of other greenhouse
gases;
(B) designate packages of measurement techniques and
modeling approaches to achieve a level of precision agreed on
by the participants in the conference; and
(C) evaluate results of analyses on baseline, permanence,
and leakage issues.
(2) Development of benchmark standards.--
(A) In general.--The Secretary shall develop benchmark
standards for measuring the carbon content of soils and
plants (including trees) based on--
(i) information from the conference under paragraph (1);
(ii) research conducted under this section; and
(iii) other information available to the Secretary.
(B) Opportunity for public comment.--The Secretary shall
provide an opportunity for the public to comment on benchmark
standards developed under subparagraph (A).
(3) Report.--Not later than 180 days after the conclusion
of the conference under paragraph (1), the Secretary of
Agriculture shall submit to the Committee on Agriculture of
the House of Representatives and the Committee on
Agriculture, Nutrition, and Forestry, of the Senate a report
on the results of the conference.
(e) Authorization of Appropriations.--
(1) In general.--There are authorized to be appropriated to
carry out this section $25,000,000 for each of fiscal years
2003 through 2006.
(2) Allocation.--Of the amounts made available to carry out
this section for a fiscal year, at least 50 percent shall be
allocated for competitive grants by the Cooperative State
Research, Extension, and Education Service.

SEC. 1312. CARBON SEQUESTRATION DEMONSTRATION PROJECTS AND
OUTREACH.

(a) Demonstration Projects.--
(1) Development of monitoring programs.--
(A) In general.--The Secretary of Agriculture, acting
through the Natural Resources Conservation Service and in
cooperation with local extension agents, experts from land
grant universities, and other local agricultural or
conservation organizations, shall develop user-friendly,
programs that combine measurement tools and modeling
techniques into integrated packages to monitor the carbon
sequestering benefits of conservation practices and net
changes in greenhouse gas emissions.
(B) Benchmark levels of precision.--The programs developed
under subparagraph (A) shall strive to achieve benchmark
levels of precision in measurement in a cost-effective
manner.
(2) Projects.--
(A) In general.--The Secretary of Agriculture, acting
through the Farm Service Agency, shall establish a program
under which projects use the monitoring programs developed
under paragraph (1) to demonstrate the feasibility of methods
of measuring, verifying, and monitoring--
(i) changes in organic carbon content and other carbon
pools in agricultural soils, plants, and trees; and
(ii) net changes in emissions of other greenhouse gases.
(B) Evaluation of implications.--The projects under
subparagraph (A) shall include evaluation of the implications
for reassessed baselines, carbon or other greenhouse gas
leakage, and permanence of sequestration.
(C) Submission of proposals.--Proposals for projects under
subparagraph (A) shall be submitted by the appropriate agency
of each State, in cooperation with interested local
jurisdictions and State agricultural and conservation
organizations.
(D) Limitation.--Not more than 10 projects under
subparagraph (A) may be approved in conjunction with applied
research projects under section 1311(b) until benchmark
measurement and assessment standards are established under
section 1311(d).
(E) National forest system land.--The Secretary of
Agriculture shall consider the use of National Forest System
land as sites to demonstrate the feasibility of monitoring
programs developed under paragraph (1).
(b) Outreach.--
(1) In general.--The Cooperative State Research, Extension,
and Education Service shall widely disseminate information
about the economic and environmental benefits that can be
generated by adoption of conservation practices (including
benefits from increased sequestration of carbon and reduced
emission of other greenhouses gases).
(2) Project results.--The Cooperative State Research,
Extension, and Education Service shall inform farmers,
ranchers, and State agricultural and energy offices in each
State of--
(A) the results of demonstration projects under subsection
(a)(2) in the State; and
(B) the ways in which the methods demonstrated in the
projects might be applicable to the operations of those
farmers and ranchers.
(3) Policy outreach.--On a periodic basis, the Cooperative
State Research, Extension, and Education Service shall
disseminate information on the policy nexus between global
climate change mitigation strategies and agriculture, so that
farmers and ranchers may better understand the global
implications of the activities of farmers and ranchers.
(c) Authorization of Appropriations.--
(1) In general.--There are authorized to be appropriated to
carry out this section $10,000,000 for each of fiscal years
2003 through 2006.
(2) Allocation.--Of the amounts made available to carry out
this section for a fiscal year, at least 50 percent shall be
allocated for demonstration projects under subsection (a)(2).

Subtitle C--International Energy Technology Transfer

SEC. 1321. CLEAN ENERGY TECHNOLOGY EXPORTS PROGRAM.

(a) Definitions.--In this section:
(1) Clean energy technology.--The term ``clean energy
technology'' means an energy supply or end-use technology
that, over its lifecycle and compared to a similar technology
already in commercial use in developing countries, countries
in transition, and other partner countries--
(A) emits substantially lower levels of pollutants or
greenhouse gases; and
(B) may generate substantially smaller or less toxic
volumes of solid or liquid waste.
(2) Interagency working group.--The term ``interagency
working group'' means the Interagency Working Group on Clean
Energy Technology Exports established under subsection (b).
(b) Interagency Working Group.--
(1) Establishment.--Not later than 90 days after the date
of enactment of this section, the Secretary of Energy, the
Secretary of Commerce, and the Administrator of the U.S.
Agency for International Development shall jointly establish
a Interagency Working Group on Clean Energy Technology
Exports. The interagency working group will focus on opening
and expanding energy markets and transferring clean energy
technology to the developing countries, countries in
transition, and other partner countries that are expected to
experience, over the next 20 years, the most significant
growth in energy production and associated greenhouse gas
emissions, including through technology transfer programs
under the Framework Convention on Climate Change, other
international agreements, and relevant Federal efforts.
(2) Membership.--The interagency working group shall be
jointly chaired by representatives appointed by the agency
heads under paragraph (1) and shall also include
representatives from the Department of State, the Department
of Treasury, the Environmental Protection Agency, the Export-
Import Bank, the Overseas Private Investment Corporation, the
Trade and Development Agency, and other Federal agencies as
deemed appropriate by all three agency heads under paragraph
(1).
(3) Duties.--The interagency working group shall--
(A) analyze technology, policy, and market opportunities
for international development, demonstration, and development
of clean energy technology;
(B) investigate issues associated with building capacity to
deploy clean energy technology in developing countries,
countries in transition, and other partner countries,
including--
(i) energy-sector reform;
(ii) creation of open, transparent, and competitive markets
for energy technologies,
(iii) availability of trained personnel to deploy and
maintain the technology; and
(iv) demonstration and cost-buydown mechanisms to promote
first adoption of the technology;
(C) examine relevant trade, tax, international, and other
policy issues to asses what policies would help open markets
and improve U.S. clean energy technology exports in support
of the following areas--
(i) enhancing energy innovation and cooperation, including
energy sector and market reform, capacity building, and
financing measures;
(ii) improving energy end-use efficiency technologies,
including buildings and facilities, vehicle, industrial, and
co-generation technology initiatives; and
(iii) promoting energy supply technologies, including
fossil, nuclear, and renewable technology initiatives;
(D) establish an advisory committee involving the private
sector and other interested groups on the export and
deployment of clean energy technology;
(E) monitor each agency's progress towards meeting goals in
the 5-year strategic plan submitted to Congress pursuant to
the Energy and Water Development Appropriations Act, 2001,
and the Energy and Water Development Appropriations Act,
2002;
(F) make recommendations to heads of appropriate Federal
agencies on ways to streamline Federal programs and policies
to improve each agency's role in the international
development, demonstration, and deployment of clean energy
technology;
(G) make assessments and recommendations regarding the
distinct technological, market, regional, and stakeholder
challenges necessary to carry out the program; and

[[Page S3236]]

(H) recommend conditions and criteria that will help ensure
that United States funds promote sound energy policies in
participating countries while simultaneously opening their
markets and exporting United States energy technology.
(c) Federal Support for Clean Energy Technology Transfer.--
Notwithstanding any other provision of law, each Federal
agency or Government corporation carrying out an assistance
program in support of the activities of United States persons
in the environment or energy sector of a developing country,
country in transition, or other partner country shall
support, to the maximum extent practicable, the transfer of
United States clear energy technology as part of that
program.
(d) Annual Report.--Not later than 90 days after the date
of the enactment of this Act, and on the April 1st of each
year thereafter, 2002, and each year thereafter, the
Interagency Working Group shall submit a report to Congress
on its activities during the preceding calendar year. The
report shall include a description of the technology, policy,
and market opportunities for international development,
demonstration, and deployment of clean energy technology
investigated by the Interagency Working Group in that year,
as well as any policy recommendations to improve the
expansion of clean energy markets and U.S. clean energy
technology exports.
(e) Report on Use of Funds.--Not later than October 1,
2002, and each year thereafter, the Secretary of State, in
consultation with other Federal agencies, shall submit a
report to Congress indicating how United States funds
appropriated for clean energy technology exports and other
relevant Federal programs are being directed in a manner that
promotes sound energy policy commitments in developing
countries, countries in transition, and other partner
countries, including efforts pursuant to multilateral
environmental agreements.
(f) Authorization of Appropriations.--There are authorized
to be appropriated to the departments, agencies, and entities
of the United States described in subsection (b) such sums as
may be necessary to support the transfer of clean energy
technology, consistent with the subsidy codes of the World
Trade Organization, as part of assistance programs carried
out by those departments, agencies, and entities in support
of activities of United States persons in the energy sector
of a developing country, country in transition, or other
partner country.

SEC. 1322. INTERNATIONAL ENERGY TECHNOLOGY DEPLOYMENT
PROGRAM.

Section 1608 of the Energy Policy Act of 1992 (42 U.S.C.
13387) is amended by striking subsection (1) and inserting
the following:
``(l) International Energy Technology Deployment Program.--
``(1) Definitions.--In this subsection:
``(A) International energy deployment project.--The term
`international energy deployment project' means a project to
construct an energy production facility outside the United
States--
``(i) the output of which will be consumed outside the
United States; and
``(ii) the deployment of which will result in a greenhouse
gas reduction per unit of energy produced when compared to
the technology that would otherwise be implemented--
``(I) 10 percentage points or more, in the case of a unit
placed in service before January 1, 2010;
``(II) 20 percentage points or more, in the case of a unit
placed in service after December 31, 2009, and before January
1, 2020; or
``(III) 30 percentage points or more, in the case of a unit
placed in service after December 31, 2019, and before January
1, 2030.
``(B) Qualifying international energy deployment project.--
The term `qualifying international energy deployment project'
means an international energy deployment project that--
``(i) is submitted by a United States firm to the Secretary
in accordance with procedures established by the Secretary by
regulation;
``(ii) uses technology that has been successfully developed
or deployed in the United States;
``(iii) meets the criteria of subsection (k);
``(iv) is approved by the Secretary, with notice of the
approval being published in the Federal Register; and
``(v) complies with such terms and conditions as the
Secretary establishes by regulation.
``(C) United states.--For purposes of this paragraph, the
term `United States', when used in a geographical sense,
means the 50 States, the District of Columbia, Puerto Rico,
Guam, the Virgin Islands, American Samoa, and the
Commonwealth of the Northern Mariana Islands.
``(2) Pilot program for financial assistance.--
``(A) In general.--Not later than 180 days after the date
of enactment of this subsection, the Secretary shall, by
regulation, provide for a pilot program for financial
assistance for qualifying international energy deployment
projects.
``(B) Selection criteria.--After consultation with the
Secretary of State, the Secretary of Commerce, and the United
States Trade Representative, the Secretary shall select
projects for participation in the program based solely on the
criteria under this title and without regard to the country
in which the project is located.
``(C) Financial assistance.--
``(i) In general.--A United States firm that undertakes a
qualifying international energy deployment project that is
selected to participate in the pilot program shall be
eligible to receive a loan or a loan guarantee from the
Secretary.
``(ii) Rate of interest.--The rate of interest of any loan
made under clause (i) shall be equal to the rate for Treasury
obligations then issued for periods of comparable maturities.
``(iii) Amount.--The amount of a loan or loan guarantee
under clause (i) shall not exceed 50 percent of the total
cost of the qualified international energy deployment
project.
``(iv) Developed countries.--Loans or loan guarantees made
for projects to be located in a developed country, as listed
in Annex I of the United Nations Framework Convention on
Climate Change, shall require at least a 50 percent
contribution towards the total cost of the loan or loan
guarantee by the host country.
``(v) Developing countries.--Loans or loan guarantees made
for projects to be located in a developing country (those
countries not listed in Annex I of the United Nations
Framework Convention on Climate Change) shall require at
least a 50 percent contribution towards the total cost of the
loan or loan guarantee by the host country.
``(vi) Capacity building research.--Proposals made for
projects to be located in a developing country may include a
research component intended to build technological capacity
within the host country. Such research must be related to the
technologies being deployed and must involve both an
institution in the host country and an industry, university
or national laboratory participant from the United States.
The host institution shall contribute at least 50 percent of
funds provided for the capacity building research.
``(D) Coordination with other programs.--A qualifying
international energy deployment project funded under this
section shall not be eligible as a qualifying clean coal
technology under section 415 of the Clean Air Act (42 U.S.C.
7651n).
``(E) Report.--Not later than 5 years after the date of
enactment of this subsection, the Secretary shall submit to
the President a report on the results of the pilot projects.
``(F) Recommendation.--Not later than 60 days after
receiving the report under subparagraph (E), the President
shall submit to Congress a recommendation, based on the
results of the pilot projects as reported by the Secretary of
Energy, concerning whether the financial assistance program
under this section should be continued, expanded, reduced, or
eliminated.
``(3) Authorization of appropriations.--There are
authorized to be appropriated to the Secretary to carry out
this section $100,000,000 for each of fiscal years 2003
through 2011, to remain available until expended.''.

Subtitle D--Climate Change Science and Information

PART I--AMENDMENTS TO THE GLOBAL CHANGE RESEARCH ACT OF 1990

SEC. 1331. AMENDMENT OF GLOBAL CHANGE RESEARCH ACT OF 1990.

Except as otherwise expressly provided, whenever in this
subtitle an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the
reference shall be considered to be made to a section or
other provision of the Global Change Research Act of 1990 (15
U.S.C. 2921 et seq.).

SEC. 1332. CHANGES IN DEFINITIONS.

Paragraph (1) of section 2 (15 U.S.C. 2921) is amended by
striking ``Earth and Environmental Sciences'' inserting
``Global Change Research''.

SEC. 1333. CHANGE IN COMMITTEE NAME AND STRUCTURE.

Section 102 (15 U.S.C. 2932) is amended--
(1) by striking ``EARTH AND ENVIRONMENT SCIENCES'' in
section heading and inserting ``GLOBAL CHANGE RESEARCH'';
(2) by striking ``Earth and Environmental Sciences'' in
subsection (a) and inserting ``Global Change Research'';
(3) by striking the last sentence of subsection (b) and
inserting ``The representatives shall be the Deputy Secretary
or the Deputy Secretary's designee (or, in the case of an
agency other than a department, the deputy head of that
agency or the deputy's designee).'';
(4) by striking ``Chairman of the Council,'' in subsection
(c) and inserting ``Director of the Office of National
Climate Change Policy with advice from the Chairman of the
Council, and'';
(5) by redesignating subsection (d) and (e) as subsections
(e) and (f), respectively; and
(6) by inserting after subsection (c) the following:
``(d) Subcommittees and Working Groups.--
``(1) In general.--There shall be a Subcommittee on Global
Change Research, which shall carry out such functions of the
Committee as the Committee may assign to it.
``(2) Membership.--The membership of the Subcommittee shall
consist of--
``(A) the membership of the Subcommittee on Global Change
Research of the Committee on Environment and Natural
Resources (the functions of which are transferred to the
Subcommittee established by this subsection) established by
the National Science and Technology Council; and
``(B) such additional members as the Chair of the Committee
may, from time to time, appoint.

[[Page S3237]]

``(3) Chair.--A high ranking official of one of departments
or agencies described in subsection (b), appointed by the
Chair of the Committee with advice from the Chairman of the
Council, shall chair the subcommittee. The Chairperson shall
be knowledgeable and experienced with regard to the
administration of the scientific research programs, and shall
be a representative of an agency that contributes
substantially, in terms of scientific research capability and
budget, to the Program.''.
``(4) Other subcommittees and working groups.--The
Committee may establish such additional subcommittees and
working groups as it sees fit.''.

SEC. 1334. CHANGE IN NATIONAL GLOBAL CHANGE RESEARCH PLAN.

Section 104 (15 U.S.C. 2934) is amended--
(1) by inserting ``short-term and long-term'' before
``goals'' in subsection (b)(1);
(2) by striking ``usable information on which to base
policy decisions related to'' in subsection (b)(1) and
inserting ``information relevant and readily usable by local,
State, and Federal decision-makers, as well as other end-
users, for the formulation of effective decisions and
strategies for measuring, predicting, preventing, mitigation,
and adapting to'';
(3) by adding at the end of subsection (c) the following:
``(6) Methods for integration information to provide
predictive and other tools for planning and decision making
by governments, communities and the private sector.'';
(4) by striking subsection (d)(3) and inserting the
following:
``(3) combine and interpret data from various sources to
produce information readily usable by local, State, and
Federal policy makers, and other end-users, attempting to
formulate effective decisions and strategies for preventing,
mitigating, and adapting to the effects of global change.'';
(5) by striking ``and'' in subsection (d)(2);
(6) by striking ``change.'' in subsection (d)(3) and
inserting ``change; and'';
(7) by adding at the end of subsection (d) the following:
``(4) establish a common assessment and modeling framework
that may be used in both research and operations to predict
and assess the vulnerability of natural and managed
ecosystems and of human society in the context of other
environmental and social changes.''; and
(8) by adding at the end the following:
``(g) Strategic Plan; Revised Implementation Plan.--The
Chairman of the Council, through the Committee, shall develop
a strategic plan for the United States Global Climate Change
Research Program for the 10-year period beginning in 2002 and
submit the plan to the Congress within 180 days after the
date of enactment of the Global Climate Change Act of 2002.
The Chairman, through the Committee, shall also submit
revised implementation plans as required under subsection
(a).''.

SEC. 1335. INTEGRATED PROGRAM OFFICE.

Section 105 (15 U.S.C. 2935) is amended--
(1) by redesignating subsections (a), (b), and (c) as
subsections (b), (c), and (d), respectively; and
(2) inserting before subsection (b), as redesignated, the
following:
``(a) Integrated Program Office.--
``(1) Establishment.--There is established in the Office of
Science and Technology Policy an integrated program office
for the global change research program.
``(2) Organization.--The integrated program office
established under paragraph (1) shall be headed by the
associate director with responsibility for climate change
science and technology and shall include, to the maximum
extent feasible, a representative from each Federal agency
participating in the global change research program.
``(3) Function.--The integrated program office shall--
``(A) manage, working in conjunction with the Committee,
interagency coordination and program integration of global
change research activities and budget requests;
``(B) ensure that the activities and programs of each
Federal agency or department participating in the program
address the goals and objectives identified in the strategic
research plan and interagency implementation plans;
``(C) ensure program and budget recommendations of the
Committee are communicated to the President and are
integrated into the climate change action strategy;
``(D) review, solicit, and identify, and allocate funds
for, partnership projects that address critical research
objectives or operational goals of the program, including
projects that would fill research gaps identified by the
program, and for which project resources are shared among at
least two agencies participating in the program; and
``(E) review and provide recommendations on, in conjunction
with the Committee, all annual appropriations requests from
Federal agencies or departments participating in the
program.'';
(3) by striking ``Committee.'' in paragraph (2) of
subsection (c), as redesignated, and inserting ``Committee
and the Integrated Program Office.''; and
(4) by inserting ``and the Integrated Program Office''
after ``Committee'' in paragraph (1) of subsection (d), as
redesignated.

SEC. 1336. RESEARCH GRANTS.

Section 105 (15 U.S.C. 2935) is amended--
(1) by redesignating subsection (c) as (d); and
(2) by inserting after subsection (b) the following:
``(c) Research Grants.--
``(1) Committee to develop list of priority research
areas.--The Committee shall develop a list of priority areas
for research and development on climate change that are not
being addressed by Federal agencies.
``(2) Director of ostp to transmit list to nsf.--The
Director of the Office of Science and Technology Policy shall
transmit the list to the National Science Foundation.
``(3) Funding through nsf.--
``(A) Budget request.--The National Science Foundation
shall include, as part of the annual request for
appropriations for the Science and Technology Policy
Institute, a request for appropriations to fund research in
the priority areas on the list developed under paragraph (1).
``(B) Authorization.--For fiscal year 2003 and each fiscal
year thereafter, there are authorized to be appropriated to
the National Science Foundation not less than $17,000,000, to
be made available through the Science and Technology Policy
Institute, for research in those priority areas.''.

SEC. 1337. EVALUATION OF INFORMATION.

Section 106 (15 U.S.C. 2936) is amended--
(1) by striking ``Scientific'' in the section heading;
(2) by striking ``and'' after the semicolon in paragraph
(2); and
(3) by striking ``years.'' in paragraph (3) and inserting
``years; and''; and
(4) by adding at the end the following:
``(4) evaluates the information being developed under this
title, considering in particular its usefulness to local,
State, and national decisionmakers, as well as to other
stakeholders such as the private sector, after providing a
meaningful opportunity for the consideration of the views of
such stakeholders on the effectiveness of the Program and the
usefulness of the information.''.

PART II--NATIONAL CLIMATE SERVICES AND MONITORING

SEC. 1341. AMENDMENT OF NATIONAL CLIMATE PROGRAM ACT.

Except as otherwise expressly provided, whenever in this
subtitle an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the
reference shall be considered to be made to a section or
other provision of the National Climate Program Act (15
U.S.C. 2901 et seq.).

SEC. 1342. CHANGES IN FINDINGS.

Section 2 (15 U.S.C. 2901) is amended--
(1) by striking ``Weather and climate change affect'' in
paragraph (1) and inserting ``Weather, climate change, and
climate variability affect public safety, environmental
security, human health,'';
(2) by striking ``climate'' in paragraph (2) and inserting
``climate, including seasonal and decadal fluctuations,'';
(3) by striking ``changes.'' in paragraph (5) and inserting
``changes and providing free exchange of meteorological
data.''; and
(4) by adding at the end the following:
``(7) The present rate of advance in research and
development and application of such advances is inadequate
and new developments must be incorporated rapidly into
services for the benefit of the public.
``(8) The United States lacks adequate infrastructure and
research to meet national climate monitoring and prediction
needs.''.

SEC. 1343. TOOLS FOR REGIONAL PLANNING.

Section 5(d) (15 U.S.C. 2904(d)) is amended--
(1) by redesignating paragraphs (4) through (9) as
paragraphs (5) through (10), respectively;
(2) by inserting after paragraph (3) the following:
``(4) methods for improving modeling and predictive
capabilities and developing assessment methods to guide
national, regional, and local planning and decision-making on
land use, water hazards, and related issues;'';
(3) by inserting ``sharing,'' after ``collection,'' in
paragraph (5), as redesignated;
(4) by striking ``experimental'' each place it appears in
paragraph (9), as redesignated;
(5) by striking ``preliminary'' in paragraph (10), as
redesignated;
(6) by striking ``this Act,'' the first place it appears in
paragraph (10), as redesignated, and inserting ``the Global
Climate Change Act of 2002,''; and
(7) by striking ``this Act,'' the second place it appears
in paragraph (10), as redesignated, and inserting ``that
Act,''.

SEC. 1344. AUTHORIZATION OF APPROPRIATIONS.

Section 9 (15 U.S.C. 2908) is amended--
(1) by striking ``1979,'' and inserting ``2002,'';
(2) by striking ``1980,'' and inserting ``2003,'';
(3) by striking ``1981,'' and inserting ``2004,''; and
(4) by striking ``$25,500,000'' and inserting
``$75,500,000''.

SEC. 1345. NATIONAL CLIMATE SERVICE PLAN.

The Act (15 U.S.C. 2901 et seq.) is amended by inserting
after section 5 the following:

SEC. 6. NATIONAL CLIMATE SERVICE PLAN.

``Within 1 year after the date of enactment of the Global
Climate Change Act of 2002, the Secretary of Commerce shall
submit to the Senate Committee on Commerce, Science, and
Transportation and the House Science Committee a plan of
action for a National Climate Service under the National
Climate Program. The plan shall set forth recommendations and
funding estimates for--
``(1) a national center for operational climate monitoring
and predicting with the

[[Page S3238]]

functional capacity to monitor and adjust observing systems
as necessary to reduce bias;
``(2) the design, deployment, and operation of an adequate
national climate observing system that builds upon existing
environmental monitoring systems and closes gaps in coverage
by existing systems;
``(3) the establishment of a national coordinated modeling
strategy, including a national climate modeling center to
provide a dedicated capability for climate modeling and a
regular schedule of projections on a long and short term time
schedule and at a range of spatial scales;
``(4) improvements in modeling and assessment capabilities
needed to integrate information to predict regional and local
climate changes and impacts;
``(5) in coordination with the private sector, improving
the capacity to assess the impacts of predicted and projected
climate changes and variations;
``(6) a program for long term stewardship, quality control,
development of relevant climate products, and efficient
access to all relevant climate data, products, and critical
model simulations; and
``(7) mechanisms to coordinate among Federal agencies,
State, and local government entities and the academic
community to ensure timely and full sharing and dissemination
of climate information and services, both domestically and
internationally.''.

SEC. 1346. INTERNATIONAL PACIFIC RESEARCH AND COOPERATION.

The Secretary of Commerce, in cooperation with the
Administrator of the National Aeronautics and Space
Administration, shall conduct international research in the
Pacific region that will increase understanding of the nature
and predictability of climate variability in the Asia-Pacific
sector, including regional aspects of global environmental
change. Such research activities shall be conducted in
cooperation with other nations of the region. There are
authorized to be appropriated for purposes of this section
$1,500,000 to the National Oceanic and Atmospheric
Administration, $1,500,000 to the National Aeronautics and
Space Administration, and $500,000 for the Pacific ENSO
Applications Center.

SEC. 1347. REPORTING ON TRENDS.

(a) Atmospheric Monitoring and Verification Program.--The
Secretary of Commerce, in coordination with relevant Federal
agencies, shall, as part of the National Climate Service,
establish an atmospheric monitoring and verification program
utilizing aircraft, satellite, ground sensors, and modeling
capabilities to monitor, measure, and verify atmospheric
greenhouse gas levels, dates, and emissions. Where feasible,
the program shall measure emissions from identified sources
participating in the reporting system for verification
purposes. The program shall use measurements and standards
that are consistent with those utilized in the greenhouse gas
measurement and reporting system established under subsection
(a) and the registry established under section 1102.
(b) Annual Reporting.--The Secretary of Commerce shall
issue an annual report that identifies greenhouse emissions
and trends on a local, regional, and national level. The
report shall also identify emissions or reductions
attributable to individual or multiple sources covered by the
greenhouse gas measurement and reporting system established
under section 1102.

SEC. 1348. ARCTIC RESEARCH AND POLICY.

(a) Arctic Research Commission.--Section 103(d) of the
Arctic Research and Policy Act of 1984 (15 U.S.C. 4102(d)) is
amended--
(1) by striking ``exceed 90 days'' in the second sentence
of paragraph (1) and inserting ``exceed, in the case of the
chairperson of the Commission, 120 days, and, in the case of
any other member of the Commission, 90 days,'';
(2) by striking ``Chairman'' in paragraph (2) and inserting
``chairperson''.
(b) Grants.--Section 104 of the Arctic Research and Policy
Act of 1984 (15 U.S.C. 4103) is amended by adding at the end
the following:
``(c) Funding for Arctic Research.--
``(1) In general.--With the prior approval of the
commission, or under authority delegated by the Commission,
and subject to such conditions as the Commission may specify,
the Executive Director appointed under section 106(a) may--
``(A) make grants to persons to conduct research concerning
the Arctic; and
``(B) make funds available to the National Science
Foundation or to Federal agencies for the conduct of research
concerning the Arctic.
``(2) Effect of action by executive director.--An action
taken by the executive director under paragraph (1) shall be
final and binding on the Commission.
``(3) Authorization of appropriations.--There are
authorized to be appropriated to the Commission such sums as
are necessary to carry out this section.''.

SEC. 1349. ABRUPT CLIMATE CHANGE RESEARCH.

(a) In General.--The Secretary of Commerce, through the
National Oceanic and Atmospheric Administration, shall carry
out a program of scientific research on potential abrupt
climate change designed--
(1) to develop a global array of terrestrial and
oceanographic indicators of paleoclimate in order
sufficiently to identify and describe past instances of
abrupt climate change;
(2) to improve understanding of thresholds and
nonlinearities in geophysical systems related to the
mechanisms of abrupt climate change;
(3) to incorporate these mechanisms into advanced
geophysical models of climate change; and
(4) to test the output of these models against an improved
global array of records of past abrupt climate changes.
(b) Abrupt Climate Change Defined.--In this section, the
term ``abrupt climate change'' means a change in climate that
occurs so rapidly or unexpectedly that human or natural
systems may have difficulty adapting to it.
(c) Authorization of Appropriations.--There are authorized
to be appropriated to the Secretary of Commerce $10,000,000
for each of the fiscal years 2003 through 2008, and such sums
as may be necessary for fiscal years after fiscal year 2008,
to carry out subsection (a).

PART III--OCEAN AND COASTAL OBSERVING SYSTEM

SEC. 1351. OCEAN AND COASTAL OBSERVING SYSTEM.

(a) Establishment.--The President, through the National
Ocean Research Leadership Council, established by section
7902(a) of title 10, United States Code, shall establish and
maintain an integrated ocean and coastal observing system
that provides for long-term, continuous, and real-time
observations of the oceans and coasts for the purposes of--
(1) understanding, assessing and responding to human-
induced and natural processes of global change;
(2) improving weather forecasts and public warnings;
(3) strengthening national security and military
preparedness;
(4) enhancing the safety and efficiency of marine
operations;
(5) supporting efforts to restore the health of and manage
coastal and marine ecosystems and living resources;
(6) monitoring and evaluating the effectiveness of ocean
and coastal environmental policies;
(7) reducing and mitigating ocean and coastal pollution;
and
(8) providing information that contributes to public
awareness of the Sate and importance of the oceans.
(b) Council Functions.--In addition to its responsibilities
under section 7902(a) of such title, the Council shall be
responsible for planning and coordinating the observing
system and in carrying out this responsibility shall--
(1) develop and submit to the Congress, within 6 months
after the date of enactment of this Act, a plan for
implementing a national ocean and coastal observing system
that--
(A) uses an end-to-end engineering and development approach
to develop a system design and schedule for operational
implementation;
(B) determines how current and planned observing activities
can be integrated in a cost-effective manner;
(C) provides for regional and concept demonstration
projects;
(D) describes the role and estimated budget of each Federal
agency in implementing the plan;
(E) contributes, to the extent practicable, to the National
Global Change Research Plan under section 104 of the Global
Change Research Act of 1990 (15 U.S.C. 2934); and
(F) makes recommendations for coordination of ocean
observing activities of the United States with those of other
nations and international organizations;
(2) serve as the mechanism for coordinating Federal ocean
observing requirements and activities;
(3) work with academic, State, industry and other actual
and potential users of the observing system to make effective
use of existing capabilities and incorporate new
technologies;
(4) approve standards and protocols for the administration
of the system, including--
(A) a common set of measurements to be collected and
distributed routinely and by uniform methods;
(B) standards for quality control and assessment of data;
(C) design, testing and employment of forecast models for
ocean conditions;
(D) data management, including data transfer protocols and
archiving; and
(E) designation of coastal ocean observing regions; and
(5) in consultation with the Secretary of State, provide
representation at international meetings on ocean observing
programs and coordinate relevant Federal activities with
those of other nations.
(c) System Elements.--The integrated ocean and coastal
observing system shall include the following elements:
(1) A nationally coordinated network of regional coastal
ocean observing systems that measure and disseminate a common
set of ocean observations and related products in a uniform
manner and according to sound scientific practice, but that
are adapted to local and regional needs.
(2) Ocean sensors for climate observations, including the
Arctic Ocean and sub-polar seas.
(3) Coastal, relocatable, and cabled sea floor
observatories.
(4) Broad bandwidth communications that are capable of
transmitting high volumes of data from open ocean locations
at low cost and in real time.
(5) Ocean data management and assimilation systems that
ensure full use of new sources of data from space-borne and
in situ sensors.

[[Page S3239]]

(6) Focused research programs.
(7) Technology development program to develop new observing
technologies and techniques, including data management and
dissemination.
(8) Public outreach and education.

SEC. 1352. AUTHORIZATION OF APPROPRIATIONS.

For development and implementation of an integrated ocean
and coastal observation system under this title, including
financial assistance to regional coastal ocean observing
systems, there are authorized to be appropriated $235,000,000
in fiscal year 2003, $315,000,000 in fiscal year 2004,
$390,000,000 in fiscal year 2005, and $445,000,000 in fiscal
year 2006.

Subtitle E--Climate Change Technology

SEC. 1361. NIST GREENHOUSE GAS FUNCTIONS.

Section 2(c) of the National Institute of Standards and
Technology Act (15 U.S.C. 272(c)) is amended--
(1) striking ``and'' after the semicolon in paragraph (21);
(2) by redesignating paragraph (22) as paragraph (23); and
(3) by inserting after paragraph (21) the following:
``(22) perform research to develop enhanced measurements,
calibrations, standards, and technologies which will enable
the reduced production in the United States of greenhouse
gases associated with global warming, including carbon
dioxide, methane, nitrous oxide, ozone, perfluorocarbons,
hydrofluorocarbons, and sulfur hexafluoride; and''.

SEC. 1362. DEVELOPMENT OF NEW MEASUREMENT TECHNOLOGIES.

(a) In General.--The Secretary of Commerce shall initiate a
program to develop, with technical assistance from
appropriate Federal agencies, innovative standards and
measurement technologies (including technologies to measure
carbon changes due to changes in land use cover) to
calculate--
(1) greenhouse gas emissions and reductions from
agriculture, forestry, and other land use practices;
(2) non-carbon dioxide greenhouse gas emissions from
transportation;
(3) greenhouse gas emissions from facilities or sources
using remote sensing technology; and
(4) any other greenhouse gas emission or reductions for
which no accurate or reliable measurement technology exists.

SEC. 1363. ENHANCED ENVIRONMENTAL MEASUREMENTS AND STANDARDS

The National Institute of Standards and Technology Act (15
U.S.C. 271 et seq.) is amended--
(1) by redesignating sections 17 through 32 as sections 18
through 33, respectively; and
(2) by inserting after section 16 the following:

``SEC. 17. CLIMATE CHANGE STANDARDS AND PROCESSES.

``(a) In General.--The Director shall establish within the
Institute a program to perform and support research on global
climate change standards and processes, with the goal of
providing scientific and technical knowledge applicable to
the reduction of greenhouse gases (as defined in section 4 of
the Global Climate Change Act of 2002).
``(b) Research Program.--
``(1) In general.--The Director is authorized to conduct,
directly or through contracts or grants, a global climate
change standards and processes research program.
``(2) Research projects.--The specific contents and
priorities of the research program shall be determined in
consultation with appropriate Federal agencies, including the
Environmental Protection Agency, the National Oceanic and
Atmospheric Administration, and the National Aeronautics and
Space Administration. The program generally shall include
basic and applied research--
``(A) to develop and provide the enhanced measurements,
calibrations, data, models, and reference material standards
which will enable the monitoring of greenhouse gases;
``(B) to assist in establishing of a baseline reference
point for future trading in greenhouse gases and the
measurement of progress in emissions reduction;
``(C) that will be exchanged internationally as scientific
or technical information which has the stated purpose of
developing mutually recognized measurements, standards, and
procedures for reducing greenhouses gases; and
``(D) to assist in developing improved industrial processes
designed to reduce or eliminate greenhouse gases.
``(c) National Measurement Laboratories.--
``(1) In general.--In carrying out this section, the
Director shall utilize the collective skills of the National
Measurement Laboratories of the National Institute of
Standards and Technology to improve the accuracy of
measurements that will permit better understanding and
control of these industrial chemical processes and result in
the reduction or elimination of greenhouse gases.
``(2) Material, process, and building research.--The
National Measurement Laboratories shall conduct research
under this subsection that includes--
``(A) developing material and manufacturing processes which
are designed for energy efficiency and reduced greenhouse gas
emissions into the environment;
``(B) developing environmentally-friendly, `green' chemical
processes to be used by industry; and
``(C) enhancing building performance with a focus in
developing standards or tools which will help incorporate low
or no-emission technologies into building designs.
``(3) Standards and tools.--The National Measurement
Laboratories shall develop standards and tools under this
subsection that include software to assist designers in
selecting alternate building materials, performance data on
materials, artificial intelligence-aided design procedures
for building sub-systems and `smart buildings', and improve
test methods and rating procedures for evaluating the energy
performance of residential and commercial appliances and
products.
``(d) National Voluntary Laboratory Accreditation
Program.--The Director shall utilize the National Voluntary
Laboratory Accreditation Program under this section to
establish a program to include specific calibration or test
standards and related methods and protocols assembled to
satisfy the unique needs for accreditation in measuring the
production of greenhouse gases. In carrying out this
subsection the Director may cooperate with other departments
and agencies of the Federal Government, State and local
governments, and private organizations.''.

SEC. 1364. TECHNOLOGY DEVELOPMENT AND DIFFUSION.

The Director of the National Institute of Standards and
Technology, through the Manufacturing Extension Partnership
Program, may develop a program to support the implementation
of new ``green'' manufacturing technologies and techniques by
the more than 380,000 small manufacturers.

SEC. 1365. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated to the Director to
carry out functions pursuant to sections 1345, 1351, and 1361
through 1363, $10,000,000 for fiscal years 2002 through 2006.

Subtitle F--Climate Adaptation and Hazards Prevention

Part I--Assessment and Adaptation

SEC. 1371. REGIONAL CLIMATE ASSESSMENT AND ADAPTATION
PROGRAM.

(a) In General.--The President shall establish within the
Department of Commerce a National Climate Change
Vulnerability and Adaptation Program for regional impacts
related to increasing concentrations of greenhouse gases in
the atmosphere and climate variability.
(b) Coordination.--In designing such program the Secretary
shall consult with the Federal Emergency Management Agency,
the environmental Protection Agency, the Army Corps of
Engineers, the Department of Transportation, and other
appropriate Federal, State, and local government entities.
(c) Vulnerability Assessments.--The program shall--
(1) evaluate, based on predictions and other information
developed under this Act and the National Climate Program Act
(15 U.S.C. 2901 et seq.), regional vulnerability to phenomena
associated with climate change and climate variability,
including--
(A) increases in severe weather events;
(B) sea level rise and shifts in the hydrological cycle;
(C) natural hazards, including tsunami, drought, flood and
fire; and
(D) alteration of ecological communities including at the
ecosystem or watershed levels; and
(2) build upon predictions and other information developed
in the National Assessments prepared under the Global Change
Research Act of 1990 (15 U.S.C. 2921 et seq.).
(d) Preparedness Recommendations.--The program shall submit
a report to Congress within 2 years after the date of
enactment of this Act that identifies and recommends
implementation and funding strategies for short- and long-
term actions that may be taken at the national, regional,
State, and local level--
(1) to reduce vulnerability of human life and property;
(2) to improve resilience to hazards;
(3) to minimize economic impacts; and
(4) to reduce threats to critical biological ecological
processes.
(e) Information and Technology.--The Secretary shall make
available appropriate information and other technologies and
products that will assist national, regional, State, and
local efforts, as well as efforts by other end-users, to
reduce loss of life and property, and coordinate
dissemination of such technologies and products.
(f) Authorization of Appropriations.--There are authorized
to be appropriated to the Secretary of Commerce $4,500,000 to
implement the requirements of this section.

SEC. 1372. COASTAL VULNERABILITY AND ADAPTATION.

(a) Coastal Vulnerability.--Within 2 years after the date
of enactment of this Act, the Secretary shall, in
consultation with the appropriate Federal, State, and local
governmental entities, conduct regional assessments of the
vulnerability of coastal areas to hazards associated with
climate change, climate variability, sea level rise, and
fluctuation of Great Lakes water levels. The Secretary may
also establish, as warranted, longer term regional assessment
programs. The Secretary may also consult with the governments
of Canada and Mexico as appropriate in developing such
regional assessments. In preparing the regional assessments,
the Secretary shall collect and compile current information
on climate change, sea level rise, natural hazards, and
coastal erosion and mapping, and specifically address impacts
on Arctic regions and

[[Page S3240]]

the Central, Western, and South Pacific regions. The regional
assessments shall include an evaluation of--
(1) social impacts associated with threats to and potential
losses of housing, communities, and infrastructure;
(2) physical impacts such as coastal erosion, flooding and
loss of estuarine habitat, saltwater intrusion of aquifers
and saltwater encroachment, and species migration; and
(3) economic impact on local, State, and regional
economics, including the impact on abundance or distribution
of economically important living marine resources.
(b) Coastal Adaptation Plan.--The Secretary shall, within 3
years after the date of enactment of this Act, submit to the
Congress a national coastal adaptation plan, composed of
individual regional adaption plans that recommend targets and
strategies to address coastal impacts. associated with
climate change, sea level rise, or climate variability. The
plan shall be developed with the participation of other
Federal, State, and local government agencies that will be
critical in the implementation of the plan at the State and
local levels. The regional plans that will make up the
national coastal adaptation plan shall be based on the
information contained in the regional assessments and shall
identify special needs associated with Arctic areas and the
Central, Western, and South Pacific regions. The Plan shall
recommend both short- and long-term adaptation strategies and
shall include recommendations regarding--
(1) Federal flood insurance program modifications;
(2) areas that have been identified as high risk through
mapping and assessment;
(3) mitigation incentives such as rolling easements,
strategic retreat, State or Federal acquisition in fee simple
or other interest in land, construction standards, and
zoning;
(4) land and property owner education;
(5) economic planning for small communities dependent upon
affected coastal resources, including fisheries; and
(6) funding requirements and mechanisms.
(c) Technical Planning Assistance.--The Secretary, through
the National Ocean Service, shall establish a coordinated
program to provide technical planning assistance and products
to coastal States and local governments as they develop and
implement adaptation or mitigation strategies and plans.
Products, information, tools and technical expertise
generated from the development of the regional assessments
and the regional adaptation plans will be made available to
coastal States for the purposes of developing their own State
and local plans.
(d) Coastal Adaptation Grants.--The Secretary shall provide
grants of financial assistance to coastal States with
federally approved coastal zone management programs to
develop and begin implementing coastal adaptation programs if
the State provides a Federal-to-State match of 4 to 1 in the
first fiscal year, 2.3 to 1 in the second fiscal year, 2 to 1
in the third fiscal year, and 1 to 1 thereafter. Distribution
of these funds to coastal States shall be based upon the
formula established under section 306(c) of the Coastal Zone
Management Act of 1972 (16 U.S.C. 1455(c)), adjusted in
consultation with the States as necessary to provide
assistance to particularly vulnerable coastlines.
(e) Coastal Response Pilot Program.--
(1) In general.--The Secretary shall establish a 4-year
pilot program to provide financial assistance to coastal
communities most adversely affected by the impact of climate
change or climate variability that are located in States with
federally approved coastal zone management programs.
(2) Eligible projects.--A project is eligible for financial
assistance under the pilot program if it--
(A) will restore or strengthen coastal resources,
facilities, or infrastructure that have been damaged by such
an impact, as determined by the Secretary;
(B) meets the requirements of the Coastal Zone Management
Act (16 U.S.C. 1451 et seq.) and is consistent with the
coastal zone management plan of the State in which it is
located; and
(C) will not cost more than $100,000.
(3) Funding share.--The Federal funding share of any
project under this subsection may not exceed 75 percent of
the total cost of the project. In the administration of this
paragraph--
(A) the Secretary may take into account in-kind
contributions and other non-cash support or any project to
determine the Federal funding share for that project; and
(B) the Secretary may waive the requirements of this
paragraph for a project in a community if--
(i) the Secretary determines that the project is important;
and
(ii) the economy and available resources of the community
in which the project is to be conducted are insufficient to
meet the non-Federal share of the project's costs.
(f) Definitions.--Any term used in this section that is
defined in section 304 of the Coastal Zone Management Act of
1972 (16 U.S.C. 1453) has the meaning given it by that
section.
(g) Authorization of Appropriations.--There are authorized
to be appropriated $3,000,000 annually for regional
assessments under subsection (a), and $3,000,000 annually for
coastal adaptation grants under subsection (d).

SEC. 1373. ARCTIC RESEARCH CENTER.

(a) Establishment.--The Secretary of Commerce, in
consultation with the Secretaries of Energy and the Interior,
the Director of the National Science Foundation, and the
Administrator of the Environmental Protection Agency, shall
establish a joint research facility, to be known as the
Barrow Arctic Research Center, to support climate change and
other scientific research activities in the Arctic.
(b) Authorization of Appropriations.--There are authorized
to be appropriated to the Secretaries of Commerce, Energy,
and the Interior, the Director of the National Science
Foundation, and the Administrator of the Environmental
Protection Agency, $35,000,000 for the planning, design,
construction, and support of the Barrow Arctic Research
Center.

Part II--Forecasting and Planning Pilot Programs

SEC. 1381. REMOTE SENSING PILOT PROJECTS.

(a) In General.--The Administrator of the National
Aeronautics and Space Administration may establish, through
the National Oceanic and Atmospheric Administration's Coastal
Services Center, a program of grants for competitively
awarded pilot projects to explore the integrated use of
sources of remote sensing and other geospatial information to
address State, local, regional, and tribal agency needs to
forecast a plan for adaptation to coastal zone and land use
changes that may result as a consequence of global climate
change or climate variability.
(B) Preferred Projects.--In awarding grants under this
section, the Center shall give preference to projects that--
(1) focus on areas that are most sensitive to the
consequences of global climate change or climate variability;
(2) make use of existing public or commercial data sets;
(3) integrate multiple sources of geospatial information,
such as geographic information system data, satellite-
provided positioning data, and remotely sensed data, in
innovative ways;
(4) offer diverse, innovative approaches that may serve as
models for establishing a future coordinated framework for
planning strategies for adaptation to coastal zone and land
use changes related to global climate change or climate
variability;
(5) include funds or in-kind contributions from non-Federal
sources;
(6) involve the participation of commercial entities that
process raw or lightly processed data, often merging that
data with other geospatial information, to create data
products that have significant value added to the original
data; and
(7) taken together demonstrate as diverse a set of public
sector applications as possible.
(c) Opportunities.--In carrying out this section, the
Center shall seek opportunities to assist--
(1) in the development of commercial applications
potentially available from the remote sensing industry; and
(2) State, local, regional, and tribal agencies in applying
remote sensing and other geospatial information technologies
for management and adaption to coastal and land use
consequences of global climate change or climate variability.
(d) Duration.--Assistance for a pilot project under
subsection (a) shall be provided for a period of not more
than 3 years.
(e) Responsibilities of Grantees.--Within 180 days after
completion of a grant project, each recipient of a grant
under subsection (a) shall transmit a report to the Center on
the results of the pilot project and conduct at least one
workshop for potential users to disseminate the lessons
learned from the pilot project as widely as feasible.
(f) Regulations.--The Center shall issue regulations
establishing application, selection, and implementation
procedures for pilot projects, and guidelines for reports and
workshops require by this section.

SEC. 1382. DATABASE ESTABLISHMENT.

The Center shall establish and maintain an electronic,
Internet-accessible database of the results of each pilot
project completed under section 1381.

SEC. 1383. DEFINITIONS.

In this subtitle:
(1) Center.--The term ``Center'' means the Coastal Services
Center of the National Oceanic and Atmospheric
Administration.
(2) Geospatial information.--The term ``geospatial
information'' means knowledge of the nature and distribution
of physical and cultural features on the landscape based on
analysis of data from airborne or spaceborne platforms or
other types and sources of data.
(3) Institution of higher education.--The term
``institution of higher education'' has the meaning given
that term in section 101(a) of the Higher Education Act of
1965 (20 U.S.C. 1001(a)).

SEC. 1384. AUTHORIZATION OF APPROPRIATIONS.

There are authorized to be appropriated to the
Administrator to carry out the provisions of this subtitle--
(1) $17,500,000 for fiscal year 2003;
(2) $20,000,000 for fiscal year 2004;
(3) $22,500,000 for fiscal year 2005; and
(4) $25,000,000 for fiscal year 2006.

SEC. 1385. AIR QUALITY RESEARCH, FORECASTS AND WARNINGS.

(a) Regional Studies.--The Secretary of Commerce, through
the Administration of the National Oceanographic and
Atmospheric Administration, shall, in order of priority as
listed in section (c), conduct regional studies of the air
quality within specific regions of the United States. Such
studies should assess the effect of in-situ emissions of air
pollutants and their precursors, transport of such emissions
and precursors from outside the region, and production of

[[Page S3241]]

air pollutants with region via chemical reactions.
(b) Forecasts and Warnings.--The Secretary of Commerce,
through the Administrator of the National Oceanographic and
Atmospheric Administration, shall, in order of priority as
listed in section (c), establish a program to provide
operational air quality forecasts and warnings for specific
regions of the United States.
(c) Definition.--For the purposes of this section, the term
``specific regions of the United States'' means the following
geographical areas:
(1) the Northeast, composed of Main, New Hampshire,
Vermont, Massachusetts, Rhode Island, Connecticut, New York,
New Jersey, Pennsylvania, Maryland, Delaware, the District of
Columbia, and West Virginia;
(2) the Southeast, composed of Virginia, North Carolina,
South Carolina, Georgia, Alabama, and Florida;
(3) the Midwest, composed of Minnesota, Wisconsin, Iowa,
Missouri, Illinois, Kentucky, Indiana, Ohio, and Michigan;
(4) the South, composed of Tennessee, Mississippi,
Louisiana, Arkansas, Oklahoma, and Texas;
(5) the High Plains, composed of North Dakota, South
Dakota, Nebraska, and Kansas;
(6) the Northwest, composed of Washington, Oregon, Idaho,
Montana, and Wyoming;
(7) the Southwest, composed of California, Nevada, Utah,
Colorado, Arizona, and New Mexico;
(8) Alaska; and
(9) Hawaii.
(d) Authorization of Appropriations.--There are authorized
to be appropriated to the Secretary of Commerce $3,000,000
for each of fiscal years 2003 through 2006 for studies
pursuant to subsection (b) of this section, and $5,000,000
for fiscal year 2003 and such sums as may be necessary for
subsequent fiscal years for the forecast and warning program
pursuant to subsection (c) of this section.

The text of submitted amendment No. 3274, as modified, which was to
have been printed in yesterday's Record, is as follows:

(Purpose: To increase the transfer capability of electric energy
transmission systems through participant-funded investment)

At the appropriate place, insert the following:

SEC. . TRANSMISSION EXPANSION.

Section 205 of the Federal Power Act is amended by
inserting after subsection (h) the following:
``(i) Rulemaking.--Within six months of Enactment of this
Act, the Commission shall issue final rules governing the
pricing of transmission services.
``(1) Transmission pricing principles.--Rules for
transmission pricing issued by the Commission under this
subsection shall adhere to the following principles:
``(A) transmission pricing must provide accurate and proper
price signals for the efficient and reliable use and
expansion of the transmission system; and
``(B) new transmission facilities should be funded by those
parties who benefit from such facilities.
``(2) Funding of certain facilities.--The rules established
pursuant to this subsection shall, among other things,
provide that, upon request of a regional transmission
organization or other Commission-approved transmission
organization, certain new transmission facilities that
increase the transfer capability of the transmission system
may be Participant Funded. In such rules, the Commission
shall also provide guidance as to what types of facilities
may be participant funded.
``(3) Participant-funding.--The term `participant-funding'
means an investment in the transmission system controlled by
a RTO, made after the date that the RTO or other transmission
organization is approved by the Commission, that--
``(A) increases the transfer capability of the transmission
system; and
``(B) is funded by the entities that, in return for
payment, receives the tradable transmission rights created by
the investment.
``(4) Tradable transmission right.--The term `tradable
transmission right' means the right of the holder of such
right to avoid payment of, or have rebated, transmission
congestion charges on the transmission system of a regional
transmission organization, the right to use a specified
capacity of such transmission system without payment of
transmission congestion charges, or other rights as
determined by the Commission.''.

The ACTING PRESIDENT pro tempore. The Senator from Nevada.
Mr. REID. Mr. President, as the Chair has announced, we have resumed
consideration of the energy reform bill. Members know there are 18
hours remaining postcloture, after the cloture vote that took place
yesterday. There will be rollcall votes in relation to amendments to
the bill throughout the day. First-degree amendments to the Baucus
language in the energy reform bill must be filed prior to 1 p.m. today.
Mr. President, the Senator from Washington was next in order. Her
amendment is pending.
I ask, with the consent of the managers, that that amendment be set
aside and that we proceed to the Nelson-Craig amendment dealing with
hydro.
The ACTING PRESIDENT pro tempore. Without objection, it is so
ordered.
The Senator from Nebraska.
Mr. NELSON of Nebraska. Mr. President, I rise today in support of my
amendment to title III dealing with hydroelectric license improvement.
This is an issue of vital importance to the electricity consumers of
Nebraska and I ask unanimous consent to call up amendment No. 3140.
The ACTING PRESIDENT pro tempore. The clerk will report the
amendment.
Mr. REID. Mr. President, that requires unanimous consent, does it
not?
The ACTING PRESIDENT pro tempore. It does require that we set aside
the current amendment. Does the Senator request we temporarily set
aside the current amendment?
Mr. NELSON of Nebraska. I request that we set aside the pending
amendment.
Mr. REID. Mr. President, reserving right to object, I suggest the
absence of a quorum.
The ACTING PRESIDENT pro tempore. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. REID. Mr. President, I ask unanimous consent the order for the
quorum call be rescinded.
The PRESIDING OFFICER (Mr. Edwards). Without objection, it is so
ordered.
Mr. REID. Mr. President, I ask unanimous consent that the Senate now
return to the consideration of the Cantwell amendment which is the
matter that was pending when we started this morning.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Washington.

Amendment No. 3234

Ms. CANTWELL. Mr. President, I rise today to speak about my
electricity consumer protection amendment to improve what I believe is
a flawed deregulation provision in the underlying energy bill.
It is not widely known that the electricity title of this bill
includes a new provision to further deregulate our energy markets.
Indeed, many of these provisions were included, I believe, without
adequate consideration and review by this body.
For the first time this bill gives the Federal Energy Regulatory
Commission the statutory authority to allow market-based rates, a key
component of deregulation. It also lowers the standard by which mergers
of utilities can take place, and it repeals a current law that has been
the cornerstone of consumer protection.
Given the sweeping changes in this bill, I think it is important that
we proceed cautiously on this path, and that we put safeguards in
place, which my amendment does, to protect consumers as FERC is given
this new responsibility.
After last year's energy crisis, we should be asking ourselves, how
do we better protect consumers, not how do we loosen the rules for
utility companies so that they can have better controls in the
marketplace.
My amendment is written to protect consumers basically across the
country from the same mishaps that happened in the western markets that
have caused consumers in the West so much harm. After all we learned
from the energy crisis and the collapse of Enron, it is plain that we
need to move forward and set a clear set of rules to ensure that, in
deregulated markets, consumers are protected. The fact is that
consumers deserve efficient electricity markets with adequate
protections and efficient oversight.
As the bill now stands, we are giving the Enrons of the world more
power to manipulate markets. In fact, without this consumer protection
amendment this bill sends some of those people the opportunity, I
believe, to actually end up overcharging consumers.
These are commonsense ideas and that is why this amendment has gained
support from a wide range of consumer, industry, local government and
environmental groups. They are united behind the idea that consumers
should be protected as this bill moves towards deregulation.
I am pleased to be joined by Senators Dayton, Wellstone, Feingold,
Boxer,

[[Page S3242]]

Wyden, Murray, and Stabenow in this effort.
Groups ranging from AARP to the American Public Power Association, to
the Consumers Union and the Sierra Club, to the U.S. Conference of
Mayors stand behind the consumer protection measures in this amendment.
I ask unanimous consent that a full list of the organizations which
support this legislation be printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Support the Consumer Protection Package

Amendment No. 3097, offered by Senators Dayton, Wellstone,
Feingold, Cantwell, Boxer and Wyden, would add crucial
consumer protections to the electricity title of the Senate
energy bill, incorporating lessons learned from the Western
electricity crisis and Enron's collapse.
Air Conditioning Contractors of America.
American Association of Retired Persons.
American Public Power Association.
Consumer Federation of America.
Consumers for Fair Competition.
Consumers Union.
Electricity Consumers Resource Council.
National Association of State Utility Consumer Advocates.
National Environmental Trust.
National League of Cities.
National Rural Electric Cooperatives Association.
Natural Resources Defense Council.
Physicians for Social Responsibility.
Public Citizen.
Sierra Club.
Transmission Access Policy Study Group.
U.S. Conference of Mayors.
Union of Concerned Scientists.
U.S. Public Interest Research Group.
Vote ``yes'' on the Consumer Protection Package.

Ms. CANTWELL. Mr. President, their voice is loud and clear. After
last year's energy crisis, it is unacceptable to launch a new round of
deregulation without first putting in place adequate consumer
protections.
I would like to read from a letter signed by the Consumers Union,
Sierra Club, NRDC, Consumer Federation of America, and others. It
reads:

This amendment would add important and much-needed
protections to legislation that actually repeals already weak
consumer protections in current law. S. 517 repeals most of
the Public Utility Holding Company Act (PUHCA), including
provisions that have been in place for over six decades, and
does almost nothing to ensure that consumer protections will
be maintained. Now, with the exposure of Enron's questionable
trading deals, we need these protections more than ever to
prevent energy companies from manipulating prices and supply.
We need to strengthen consumer protections, not weaken them.

Consumers for Fair Competition wrote:

In the wake of the West Coast electricity crisis and Enron
collapse, Congress should only pass electricity legislation
if it takes needed steps to protect consumers and prevent a
repetition of these crises.

I ask unanimous consent to have printed in the Record letters of
support that I have received from these organizations.
There being no objection, the letters were ordered to be printed in
the Record, as follows:

April 15, 2002.

Defend Electricity Consumers' Rights--Support the Consumer Protection
Package: S.A. 3097 to S. 517

Dear Senator: We are writing to urge you to support S.A.
3097, the consumer protection amendment to the Senate energy
bill (S. 517), offered by Senators Dayton, Wellstone,
Feingold, Cantwell, Boxer, and Wyden. This amendment would
add important and much-needed protections to legislation that
actually repeals already weak consumer protections in current
law. S. 517 repeals most of the Public Utility Holding
Company Act (PUHCA), including provisions that have been in
place for over six decades, and does almost nothing to ensure
that consumer protections will be maintained. Now, with the
exposure of Enron's questionable trading deals, we need these
protections more than ever to prevent energy companies from
manipulating prices and supply. We need to strengthen
consumer protections, not weaken them.
This consumer protection package would:
Ensure that mergers in the energy sector ``advance the
public interest,'' based on objective criteria that would be
evaluated by the Federal Energy Regulatory Commission (FERC).
In repealing the higher merger standards of PUHCA, S. 517
would simply require a determination for a merger approval
that the merger is ``consistent with the public interest.''
Given the wave of mergers sweeping through the electric
industry and the collapse of meaningful competition in
California and other states, we believe that a more
protective standard is necessary to adequately protect
consumers from abuse. FERC must hold the public interest
paramount in evaluating any potential energy company mergers.
The amendment would: establish criteria for FERC to consider
in order to determine that a merger would ``advance the
public interest,'' including efficiency gains, impact on
competition, and its ability to effectively regulate the
industry; clarify that these provisions would apply to all
potential financial arrangements (not just stock
acquisitions) which could lead to exertion of control over
the entity, including partnerships; and clarify that FERC
review applies to all electric and gas combinations.
Direct FERC to precisely define a competitive market and
establish rules for when market-based rates will be
permitted. In addition, it would put in place market
monitoring procedures so that FERC can better detect problems
before they lead to a complete breakdown in the market, and
give FERC more authority to take action to protect consumers
when the market is failing. This change is necessary to
ensure that electricity suppliers do not continue to
manipulate the market to the detriment of consumers, as they
did in the western electricity market in 2000-2001.
Require that transactions between utilities and their
affiliates be transparent, and it would shield consumers from
the costs and risks of these transactions. It provides for
FERC review of utility diversification efforts so that
consumers are not victims of abusive affiliate transactions.
Require that state and federal regulators have enhanced
access to books and records. It would require FERC, in
consultation with state commissions, to conduct triennial
audits of the books and records of holding companies.
Regulators could initiate proceedings based upon their
reviews and violations could be corrected earlier, minimizing
the damage done to consumers. Since holding companies would
be responsible for paying the cost of the audits, regulators
would have adequate resources to do their job. Enhanced
access to books and records is critical to avoid further
Enron-like collapses.
Help ensure fair and functional markets, increasing the
likelihood that energy companies will invest in new,
innovative, and clean technologies such as solar and wind
power.
Consumers have been grossly and unacceptably short-changed
in the Senate energy bill. S.A. 3097 will begin to rectify
the problems this bill creates for consumers. Federal energy
legislation should increase, not decrease, consumers'
economic and energy security. Please adopt this basic
consumer protection package to address these serious consumer
concerns.
Sincerely,
Adam J. Goldberg, Policy Analyst, Consumers Union.
Mark N. Cooper, Director of Research, Consumer Federation
of America.
Alyssondra Campaigne, Legislative Director, Natural
Resources Defense Council.
Kevin S. Curtis, Vice President, Government Affairs,
National Environmental Trust.
Susan West Marmagas, Director, Environment and Health
Programs, Physicians for Social Responsibility.
Debbie Boger, Senior Washington Representative, Sierra
Club.
Anna Aurilio, Legislative Director, U.S. Public Interest
Research Group.
Alden Meyer, Director of Government Relations, Union of
Concerned Scientists.
Wenonah Hauter, Director, Public Citizen's Critical Mass
Energy and Environment Program.
____

National Alliance

for Fair Competition,

Washington, DC, April 12, 2002.
Dear Senator: The National Alliance for Fair Competition
(NAFC), a coalition of national trade associations
representing over 25,000 individual firms, mostly family
owned and operated small businesses, is deeply concerned
about the present direction of energy legislation, S. 517, in
light of recent West Coast power problems and the collapse of
Enron. As it now stands, the electricity portion (Title II)
of this bill fails to adequately address issues of market
power and abusive affiliate transactions.
NAFC is also concerned about lack of opportunity to
thoroughly explore the implications and consequences of Title
II through the full committee process. Had the committee
process not been circumvented, there would have been ample
opportunity to craft language to protect consumers and
preserve true competition. Regrettably, Title II of S. 517
increases the potential for abuses in these areas--by, among
other things, repealing the Public Utility Holding Company
Act (PUHCA)--without providing needed offsetting protections.
Senators Cantwell, Wellstone, Dayton, Feingold and Boxer
will offer a package of provisions to protect electricity
consumers and ensure fair and effective oversight of
electricity markets. The package will:
Require that proposed utility mergers promote the public
interest in order to be approved;
Establish clear rules--and enforcement--for when market
rates can be charged to prevent a repeat of soaring
electricity rates when markets are not truly competitive;
Protect consumers from assuming the cost and risks of
utility diversifications into non-utility businesses;
Prevent utilities from subsidizing affiliate ventures and
competing unfairly with independent businesses;
Provide effective review of utility books and records.
Amendment #3097, the Dayton-Wellstone-Feingold amendment,
and the second degree

[[Page S3243]]

offered by Sen. Cantwell and others would add crucial
protections to the electricity title of the Senate energy
bill, incorporating lessons learned from the Western
electricity crisis and Enron's collapse.
We urge you to support these amendments when they are
offered.
Respectfully,
Tony Ponticelli,
Executive Director.
____

Washington Public Utility

Districts Association,

Seattle, WA, April 15, 2002.
Hon. Maria Cantwell,
U.S. Senate,
Washington, DC.
Dear Senator Cantwell: On behalf of the Washington Public
Utility Districts Association (WPUDA), I would like to
express our strong support for the amendment you are
cosponsoring, the Consumer Protection Package (#3097). This
amendment adds crucial consumer protections to the
electricity title of the Senate energy bill, incorporating
lessons learned from the Western electricity crisis and
Enron's collapse.
As you correctly stated on the Senate floor on April 10th,
the electricity title in S. 517 is of primary significance to
the citizens of Washington, and the Northwest region--we have
already suffered huge rate increases and cannot bear the
consequences of another ``failed experiment.'' Because the
underlying bill repeals the Public Utility Holding Company
Act (PUHCA) without including adequate consumer protections,
your package of amendments is essential to ensure that the
consumer is not overlooked and adversely affected. For
example, your amendment requires clear, upfront rules on
market-based rates. In doing so, it reduces the instances in
which corrective actions will be needed by the Federal Energy
Regulatory Commission (FERC).
Once again, WPUDA thanks you for your leadership and
supports this critical amendment that seeks to protect the
public interest.
Sincerely,
Steve Johnson,
Executive Director.

Ms. CANTWELL. Mr. President, my constituents and the constituents of
my colleagues from the West, particularly California, Oregon, and
Idaho, have seen first hand the devastation caused by the Western
energy crisis: wholesales rate spikes of more than 1,000 percent;
aluminum workers put of out of work because electricity costs were too
high for their companies to operate; and an economic slump in
California, Oregon, and Washington directly related to last year's high
energy prices.
In my home state of Washington we are still paying the price for the
lack of consumer protections during the energy crisis. Ratepayers in my
home of Edmonds, WA are paying almost 60 percent more than they did
before the crisis, with no relief in sight.
Nowhere do consumers know the importance of proper safeguards more
acutely than in the West. In the wake of what happened there, why would
we even consider reducing consumer protections and lowering legal
standards? Why would we promote further deregulation and at the same
time abandon consumer protections?
Ask anyone from California whether they want more deregulation
without consumer protection. They will all tell you the same answer:
After Enron and the western energy crisis we should strengthen consumer
protection laws, not weaken them. They know that without adequate
consumer protections, electricity markets may not work to protect
consumers.
One need look no further than a February 2001 poll in which
California residents were asked if they supported the legislature's
decision to deregulate the electricity market. By nearly 40 percent,
Californians opposed the deregulation plan.
There are many other public opinion polls across this country that
show consumers are very concerned about any move toward more
deregulation without sufficient consumer protection. A July 2001 survey
by the Mellman Group revealed that North Carolinians opposed
deregulation by a 14 percent margin and by a 40 percent margin thought
that deregulation would cause rate increases. In March of this year, a
different Mellman survey showed that 60 percent of Montanans thought
that deregulation had caused higher electricity rates.
The public voice is clear.
I think it is important to review how we got to this point, beginning
with the first major piece of legislation to protect ratepayers, passed
during the first term of Franklin Delano Roosevelt's Presidency.
In the 1920s our system of utility regulation began to fail
consumers. Complex corporate structures made it impossible to offer
adequate consumers protections. By 1932, 45 percent of all electricity
was controlled by three groups. Because of their market power and
complex and misleading corporate structure, the utilities owned by
these holding companies were able to charge excessive rates, which were
passed directly to consumers.
In response to this situation, this body passed into law the Public
Utilities Act of 1935 to help bring the system under control and offer
consumers adequate safeguards. The two key titles of the Public
Utilities Act--PUHCA and the Federal Power Act--put in place important
consumer protection regulations. PUHCA required utilities to either
largely operate within a single state, or be subject to strict federal
regulation by the SEC. The Federal Power Act created a consumer
protection framework for the transmission of electricity in interstate
commerce and wholesale rates for electricity.
Today, we are faced with an energy bill that repeals key consumer
protections from these pieces of legislation.
Albeit, I know the chairman of our committee wants those laws to be
more effective, and to be more effective under FERC, while I agree
there can be authorities new at FERC, I want to make sure that, while
we change from the SEC to FERC, we don't repeal the legal standards or
the framework for consumer protection.
Just think about the energy crises of the past. In the 1920s, when
corporate structures got out of control and retail consumers suffered
the consequences, we responded with the Public Utilities Act. During
the 1970s energy crisis, we responded with the Public Utility
Regulatory Policies Act.
But today we are faced with the prospect of responding to the Western
energy crisis of 2001 with more of the same that helped cause the
crisis in the first place. I believe the Western energy crisis was
really precipitated by two factors: obviously, California adopted a
restructuring plan without adequate thought and deliberation, and the
fact that FERC, the Federal Energy Regulatory Commission, signed off on
it. That is right, they signed off on the California plan. Then FERC
allowed generators in the West to charge market-based rates without
first ensuring that those markets were sufficient in their competition
and that they were adequately monitoring those markets over time.
The definition of insanity is watching something fail and then doing
it again. And that is what we are headed towards doing. It would be
insane for us to enact further flawed deregulation without at least
addressing the importance of providing consumer protections.
Consumers know that they are ultimately the ones who will get stuck
holding the check. And they are right. It is wrong policy to deregulate
without protecting consumers. And ultimately, it hurts them where it
hurts most: in their pocketbooks.
This amendment addresses the need for consumer protection from
deregulation by creating safeguards from potential market failures and
abuses.
The amendment would prevent a repeat of soaring electricity rates in
deregulated markets by directing FERC to establish rules and
enforcement procedures for market monitoring to protect electricity
consumers.
The market rate provisions of this amendment are actually quite
simple in concept.
As I said earlier, for the first time in this legislation, the
underlying authority is given to FERC instead of to the SEC. While
giving this new power to FERC, we need to make sure consumers are
protected by making sure they do not lower the standard.
I believe it is critical that within this legislation we not lower
the legal standard by which these mergers were held in the past. FERC
can have new responsibility, but we must make sure we are not lowering
the legal standard by which we allow these companies to merge. FERC
needs statutory guidance on just what factors it should consider before
it allows market-based rates to be charged. That is, before FERC opens
up the energy market, it should have to ensure that those markets are
going to operate efficiently and not gouge consumers.

[[Page S3244]]

The bill currently does not adequately offer consumer protection,
especially in view of the House of Representatives' electricity bill,
which I think goes too far in giving a wish list to the big energy
companies. The electricity provisions of this bill right now actually
lower the overall merger standard.
This amendment would maintain current law with regard to that merger
standard. It is a very important point--that current law be the
standard for FERC.
In fact, there have been something like 30 major utility mergers and
acquisitions over the past few years alone. That is a testament to the
need for laws to protect consumers from consolidation which is
happening in the utility sector.
It is also a powerful reminder that current law is in no way too
prescriptive. Maintaining the legal merger standard currently on the
books--I think it is important to do this--is a critical part of the
amendment.
The electricity provisions in this bill also fall short, in my view,
on the issue of insulating consumers from the economically devastating
effects of the energy markets which have gone horribly awry.
The primary difference between the Senate energy bill as it is
currently written and what we are trying to accomplish with this
amendment is simple. It is the difference between preventing
dysfunctional markets from happening in the first place, and post hoc
investigations that are unlikely to provide better relief for consumers
harmed by skyrocketing energy prices.
What I mean by that is, without these specific requirements in place,
and new mergers and market-based rates happening, and without the
oversight, it is very hard, once consumers are gouged, to then come
back and ask for records and information that show what kind of
protections should have been on the books.
I do not think many of my colleagues realize that, for the very first
time, this legislation, the underlying bill, gives FERC explicit
statutory authority to allow companies to charge market-based rates. So
nowhere had FERC ever been given that statutory authority. They had
always been cost-based rates. But this legislation will, for the first
time, give FERC statutory authority to allow companies to charge
market-based rates that they decided administratively to start allowing
in the mid-1980s.
While the Energy Policy Act of 1992 affirmed the direction FERC was
moving in regard to opening of the Nation's transmission system, it did
not contain this explicit authority for FERC to grant market-based
rates.
I believe this is a very important point because if we are going to
move forward in saying that market-based rates should be there, then we
must make sure those consumer protections are in place as well.
In sifting through the ashes of the California experiment, it is now
obvious that FERC did not pause to consider the constraints--whether
real or manipulated--on natural gas transportation into the State,
which, in turn, drove up the price of electrical generation. FERC
approved a system without assessing the market power of what became
known as the big five energy companies in the California crisis,
including Enron, and the impact they had.
It is also clear that FERC approved the California proposal without
assurances that the State's independent system operator could
effectively monitor market conditions. I have heard from numerous
utilities involved in the California market that the ISO began
declaring emergencies purely subjectively because its mechanisms for
assessing where physical megawatts actually existed--and whether these
shortages were real or imagined--were so incredibly flawed.
In addition, it has been repeatedly alleged that the ISO declared
these emergencies for political reasons because utilities, as such in
those States, were obligated to sell into the California market, first
under a Department of Energy order, and later under an order from FERC
itself, when emergencies were declared. FERC did not have the market
monitoring practices in place that would have been the protections the
consumers needed.
So why give them more authority now to do market-based rates without
making sure the legal standards are in place and making sure that
consumer protections are in place?
In summary, I want it to be clear to my colleagues that this
amendment today should do its job to prevent a flawed deregulation bill
and to help protect consumers.
This legislation specifically does several things: It helps maintain
the competitive markets, it effectively monitors markets, it prevents
the abuse of market power and manipulation, and it ensures the
maintenance of just and reasonable rates.

The amendment would also require utility mergers to serve the public
interest and for utility books to be fully open. It would protect
consumers from absorbing the costs of utility diversifications and
prevent them from being basically subject to the various tactics in
which consumers are held to higher costs when the markets are
consolidated or market-based rates are charged and things can actually
go awry.
This amendment does not take away any of FERC's authority to allow
market-based rates. It does not stop the move toward deregulation. In
fact, it is consistent with the concept of deregulation. It simply says
we need a roadmap for consumers. We need protections for this new
market-oriented approach.
I am reminded by something that FERC Chairman Pat Wood said on March
11:

I'm probably the world's biggest believer in markets.

But Mr. Wood also said:

But I'm also the world's biggest believer that people will
take advantage of it if they don't have a cop walking down
the street.
This amendment provides the ``cop walking down the street'' for our
electricity markets in protecting consumers. With all that we have read
and seen of what happened during the Western energy crisis and the role
that Enron and other power companies played in it, how can we even
consider further deregulation without putting in place real consumer
protections? It is practically malpractice for us to think about these
new deregulations without thinking about how to protect consumers.
That is why we are offering this amendment today. We need to say to
the people of this country, we are going to protect you from the crisis
that has happened in California and in Washington and in Oregon. And we
are going to make sure the markets operate in a way in which consumers
are protected.
This is a critical amendment and should be adopted as a part of this
bill. We need to say to the consumers that we are thinking about their
needs, their protections, and the high price of electricity throughout
the country.
I yield back the floor.
The PRESIDING OFFICER. The Senator from Minnesota.
Mr. DAYTON. Mr. President, I rise to say that I welcome the amendment
by Senator Cantwell and others that greatly strengthens the amendment
that I previously brought to the floor. I compliment the Senator from
Washington, who has done an extraordinary amount of work on this
measure, for her leadership in bringing together Senators, consumer
groups, and others who would be affected by this legislation.
I think her work has been extraordinary. I know from my own
observation that her work behind the scenes over the last days and
weeks has been phenomenal. She has put countless hours into bringing
this coalition together, bringing these amendments together, and
bringing them to the floor for our consideration today.
Again, I want the Record to show that the Senator from Washington has
been extraordinary in her efforts to bring this to the floor.
I yield the floor.
The PRESIDING OFFICER (Mrs. Clinton). The Senator from New Mexico.
Mr. BINGAMAN. Madam President, I rise to speak against the amendment
that my colleague from Washington and the Senator from Minnesota have
offered. This is an issue on which I think we need to refresh people's
memory because it has been a few weeks since we had votes on this
portion of the energy bill.
But let me recall for Senators and their staffs exactly with what we
are dealing. This is the electricity title of

[[Page S3245]]

the energy bill. We have worked hard on that title, those of us who
have been involved on the issue for a long time. Senator Thomas, in
particular, and myself have worked hard to come up with language which
we believe ensures that consumers are protected and which ensures that
mergers and acquisitions are properly reviewed before they are
permitted to go forward or are turned down if they do not meet strict
criteria. We have put together language we believe is very favorable to
consumers.
Part of what we are proposing is that the Public Utility Holding
Company Act be repealed. That is an issue that continues to be the
subject of controversy. I understand that. And I understand the
amendment, of course, that we are now presented with would try to
eliminate the repeal of the Public Utility Holding Company Act and keep
that current law.
This is a legitimate issue. In the Energy Committee, in the most
recent hearing we had on energy-related issues, we had a hearing on
this issue. I am trying to get the whole list of witnesses so that I
can inform people about that. But we had one of the Commissioners from
the Securities and Exchange Commission, the SEC, which currently has
authority and responsibility to enforce the Public Utility Holding
Company Act. The testimony of that Commissioner was very clear. Their
testimony was that they do not support keeping that authority at the
SEC. They do not support keeping the Public Utility Holding Company Act
on the books. They have taken that position for the last 20 years. They
continue to take that position. That was the position under the Clinton
administration and that was the position under the Bush administration.
And there was unanimous testimony to our committee that, in fact, we
should shift this responsibility over to the Federal Energy Regulatory
Commission, as we are proposing to do in this legislation.
Let me clarify that the problems the Senator from Washington refers
to are very genuine problems.
I am sympathetic to those problems. I do think there were some
shortcomings on the part of the Federal regulators as well as others in
the way the crisis on the west coast was dealt with, but I point out
that all of that happened under current law. All of that happened with
PUHCA in force--with the Public Utility Holding Company Act in force--
and we are proposing the repeal of that and a change in the authority
so that it can be done much more effectively.
Our bill does nothing to deregulate electricity markets. It
recognizes that the market depends on competition. It gives the Federal
Energy Regulatory Commission the tools to be sure that competition does
in fact work for consumers. We have enhanced FERC's authority over
mergers and market-based rates. We have required new disclosure rules.
We have required the Federal Trade Commission to issue rules to protect
consumers.
We take authority away from the SEC, as I mentioned, because the SEC
has never enforced this law. We take the authority away from them and
give it to FERC, which does understand the industry. It is the agency
with the appropriate expertise to actually look out for consumers in
this regard.
The bill we have brought to the Senate floor and on which Senator
Thomas and I have worked very hard requires four things before any
disposition or consolidation or acquisition of utility assets is
possible.
It requires, first, that the Federal Energy Regulatory Commission
determine that the proposed disposition or acquisition be consistent
with the public interest. That is a pretty good indication.
A second would be that they make a determination it will not
adversely affect the interests of consumers of the electricity utility.
That again is an important safeguard.
Third, it requires that any acquisition, any consolidation that is
approved by FERC be determined by FERC not to impair the ability of
regulators to regulate the utility.
The final thing we have required FERC to determine is that any
acquisition that might be approved would not lead to cross-
subsidization of associated companies. We believe that is also
important. If in fact we are going to permit companies to purchase
utilities, to acquire utilities, to acquire utility assets, we do not
want to see the ratepayers of the utility having their rates go to
cross-subsidize other companies. We require that FERC make that
determination.
We believe the provisions we have in the bill are not only adequate
but strengthening provisions. There are requirements in the amendment
proposed here that go substantially further. There is a requirement
that there be a determination that the transaction enhanced competition
in wholesale markets. We do not believe it is an appropriate role for
us to be blocking an acquisition unless it can be proven that it
enhances competition. We believe a ``do no harm'' standard is the right
standard for a regulatory agency. Clearly, that is where we come out.
The one other provision which is in their amendment which we believe
goes too far is it requires that the transaction produce significant
gains in operational and economic efficiency. I hope very much that any
time there is an acquisition of a utility asset or a merger or a
consolidation of any kind, it does produce significant gains in
operational and economic efficiency. That would be a wonderful thing. I
don't think it is reasonable to say all acquisitions, consolidations,
and mergers should be blocked unless they can demonstrate that they
will in fact demonstrate or produce significant gains in operational
and economic efficiency.
We believe the provisions we have in the bill are the appropriate
ones. For that reason, I will have to resist the amendment and hope
Senators will oppose it.
I know Senator Thomas has worked very hard on this issue as well. I
know he is anxious to speak about it at some point.
I yield the floor.
The PRESIDING OFFICER. The Senator from Wyoming.
Mr. THOMAS. Madam President, I rise to speak on the amendment now
before the Senate. As the Senator from New Mexico mentioned, he and I
and others have worked very long and hard on this electricity portion
of the energy bill. When the Daschle-Bingaman bill was brought to the
floor, we went into it and tried to work at it to make it more workable
and, indeed, more simple, to give the States more authority but
continue to have the protection, of course, for consumers. So that is
what we sought to do.
I believe this amendment is not necessary. Certainly it does not add
to but, in fact, detracts from that goal of protecting consumers and
making the system more simple.
It seems we have heard an awful lot about the California problem, and
it was a difficult one. It affected the rest of the west coast States,
of course. Senator Bingaman held two hearings to examine the California
collapse and the Enron collapse and its impact on the energy markets.
The result of these hearings was a clear consensus that Enron had
little, if any, impact on wholesale or retail electric markets. So this
continued effort to do something with FERC because of that simply
doesn't connect. I hope we can deal with it as it is in reality.
I rise in strong opposition to the pending amendment. The amendment
proposes a major change in the standard FERC would use to review asset
sales, mergers, and acquisitions. Under the proposed standard, in order
to approve an asset sale, merger, or acquisition, FERC would have to
affirmatively find that the action would, at a minimum, enhance
competition in the wholesale markets, produce significant gains in
operational and economic efficiency, and result in a corporate and
capital structure that facilitates effective regulatory oversight.
This proposed change in the review standard, when coupled with an
earlier amendment adopted by the Senate, expands the type of actions
FERC must review and puts industry restructuring into gridlock. We are
always talking about the overamount of regulation and so on, and we
have sought a balance here between States and FERC. This adds back to
the problem that we sought to resolve. It will take FERC forever to go
through the procedural steps necessary to allow even the most mundane
asset sale.
Slowing restructuring and competition would be bad for both
competition and consumers. The amendment also

[[Page S3246]]

establishes a full new set of rules and procedures for FERC to follow
in regulating the wholesale power market. It gives FERC sweeping
authority to do just about anything it wants to do--the very provisions
that the bipartisan Thomas amendments adopted by the Senate struck from
the underlying Daschle-Bingaman bill. That is what we voted on before.
Now we are seeking to go back to what we tried to eliminate and did
eliminate.
The amendment also modifies the Banking Committee PUHCA repeal
provisions. For example, the pending amendment takes away the
provisions dealing with State access to utility books and records. That
is a part of the Banking-reported bill. The amendment also imposes a
host of new transaction approval requirements under the guise of so-
called transaction transparency. The transaction transparency
provisions of the amendment do not just require the disclosure of
information, they require FERC preapproval of all interaffiliated
purchases, sales, leases, or transfer of assets, goods or services, and
financial transactions.
Talk about creating a regulatory nightmare--Federal bureaucratic
redtape--this is it.
Madam President, it is not clear what problems this amendment is
intended to address that are not already addressed by other provisions
or existing law.
It cannot be aimed at curbing market power since it makes it more
difficult for utilities to sell assets, such as generation and
transmission.
It cannot be aimed at protecting consumers from undue price increases
because, under existing law, FERC has jurisdiction over wholesale rates
and the State public utility commissions have jurisdiction over retail
rates.
With or without this amendment, the retail/wholesale electric rates
have been and will continue to be subject to State and Federal review.
Moreover, this issue is already addressed in the bipartisan electricity
amendments adopted by the Senate on March 13.
For the benefit of the Senate, let me read some of the language from
the amendment adopted by the Senate.
Section 203 of the Federal Power Act, as amended by the bipartisan
amendment, will read:

No public utility shall, without first having secured an
order of the Commission authorizing it to do so . . . merge
or consolidate, directly or indirectly . . . by any means
whatsoever.
The Commission shall approve the proposed disposition,
consolidation, acquisition or control, if it finds that the
proposed transaction--
(A) will be consistent with the public interest;
(B) will not adversely affect the interest of consumers;
and
(C) will not impair the ability of FERC or any State
commission . . . to protect the interests of consumers or the
public.

Exactly. It is already there. Frankly, we are wasting our time with
this.
In addition, there are other consumer protection provisions already
in the underlying bill.
For example, in the PUHCA title there are provisions which
specifically give FERC and State public utility commission access to
books and records so that they can do their job to protect consumers.
In the PUHCA title there is a Federal task force to review the status
of competition. In the PUHCA title there is a provision requiring a GAO
study and report on competition. And in another amendment, the Senate
has already adopted an office of Consumer Advocacy in the Department of
Justice.
Mr. President, in today's rapidly changing electric marketplace,
utilities need to be able to buy and sell generation and other assets
in order to be able to respond quickly to market conditions. This
amendment will tie FERC and industry restructuring up in red tape.
I ask: How does slowing industry restructuring and handicapping
competition benefit consumers?
We know the answer. It doesn't.
Requiring utilities to wait months--possibly years--for FERC to
review and approve even relatively routine transactions simply does not
make sense. It satisfies no public purpose, and it threatens to bury an
already overburdened FERC staff in a blizzard of needless paper
shuffling.
In sum, the proposed amendment appears to be a heavy-handed solution
in search of a non-existent problem to solve. It is an extreme
amendment that is intended to overturn a bipartisan, Senate-adopted
amendment. It appears to be a thinly-disguised attempt to throw sand in
the gears of competition, not to improve the legislation.
The amendment should be rejected.
The PRESIDING OFFICER. The Senator from Michigan is recognized.
Ms. STABENOW. Madam President, I rise today to proudly support the
Cantwell amendment which I am very pleased to be cosponsoring.
I thank the Senator from New Mexico for all of his leadership,
overall, on this important energy package. He has had a thankless job.
There has been a tremendous amount of work. While I respectfully
disagree with his position on this amendment, I commend him for his
incredible leadership in this effort.
I am very pleased to support this amendment which would add important
and much-needed consumer protection to the Senate energy bill. The
Senate energy bill repeals most of what is called PUHCA. Many people
are not aware of what that is and how important it is in terms of
protecting consumer prices as it relates to electricity. It is the
Public Utility Holding Company Act. This would repeal it without
putting in place any protections to ensure that consumers are in fact
protected.
Now, in light of what happened with Enron, what happened on the west
coast with the electricity crisis, we need to be strengthening consumer
protections, not weakening them. Last spring, when the Senate Banking
Committee took up PUHCA repeal, I in fact was the only member of the
committee who voted against that because I believed we should not be
doing that independently of a larger focus to guarantee that if the
bill were repealed--the statute--we in fact would keep the consumer
protections in the act which are so critical. So I voted against that
bill.
I believe we should be including this in the context of a broad bill,
such as the Senate energy plan, that would include consumer and
competitive protections. I believe this amendment puts into place those
important consumer protections and competition protections.
This amendment would ensure that utility company mergers ``advance
the public interest'' in order to be approved by FERC. That is a very
important principle. FERC would assess the impact on the public
interest by examining such criteria as the merger's effects on
competition, economic efficiency, and regulatory oversight. We need to
ensure that utility mergers promote, and not undermine, competition.
That is what this amendment would do.
This amendment would also establish clear rules and enforcement
procedures to prevent a repeat of soaring electricity rates in
deregulated markets that are not really competitive. This amendment
would also protect consumers from unjustified rate hikes and help
ensure fair and competitive markets.
The amendment also would provide more transparency in the utility
market to protect consumers from situations like Enron. The amendment
would require public disclosure of financial transactions between
holding companies, utilities, and their affiliates, as well as FERC
preapproval of transactions that are not publicly disclosed.
This has been a real issue for small businesses in Michigan. The
amendment would protect consumers from the costs and risks of utility
diversification and prevent utilities from unfairly subsidizing their
affiliates that compete with small businesses, with independent
businesses--those that sell the furnaces, air-conditioners, and so on.
This has been an important issue in Michigan where many of my small
businesses have been concerned about competing against utility
companies that are able to have their prices subsidized.
Finally, the amendment would give State and Federal regulators
enhanced access to books and records. If we are going to move to a
truly competitive utility market, we need to reshape FERC's role in the
market. We need to increase the market transparency and make certain
that consumer protections are maintained.
I strongly urge my colleagues to support this amendment. I believe it
is absolutely necessary as we move into this deregulated marketplace to
make sure

[[Page S3247]]

there really is competition to lower prices, there is accountability,
transparency, and in fact in the end all of our consumers, the citizens
of the country, are protected.
I thank the Chair.
Mr. FEINGOLD. Madam President, I rise in support of amendment 3234
offered by my colleague from Washington, Ms. Cantwell, and I am pleased
to be a cosponsor.
I support and have been actively involved in the drafting of this
amendment, which includes provisions from the sponsors of amendment
3097, Mr. Wellstone and Mr. Dayton, on mergers as well as provisions
from the Senator from California, Mrs. Boxer, and the Senator from
Oregon, Mr. Wyden.
These amendments would improve on the bill by making clear the
actions that the Federal Energy Regulatory Commission, or FERC, must
take in determining that proposed mergers in the electric power sector
advance the public interest in order to secure Federal regulatory
approval. Those of us who have worked on this package are deeply
concerned about the effects of deregulation of the electric power
sector.
The underlying bill says that FERC would have to determine that
mergers be ``consistent with'' the public interest, a more typical
standard used by other agencies reviewing other mergers, like the
Federal Trade Commission.
My concern is that electricity is not just like other commodities.
Electricity is essential to public well-being. When this bill is
enacted and the Public Utility Holding Company Act is repealed, a
strong incentive will exist for large utilities with the financial
resources and the potential to exercise market power to get larger.
Already, the electric utility industry is undergoing rapid
consolidation. As my colleague from Minnesota, Mr. Wellstone, noted
earlier in the debate on this bill, in the last past 3 years alone,
there have been more than 30 major utility mergers and acquisitions,
including several in my own home State and with utilities in Minnesota
that serve Wisconsin. Many merchant generating companies have seen
their stock prices plunge and credit ratings downgraded, and these
companies are now prime buy-out targets.
I acknowledge that utility mergers are not inherently bad and should
not be prevented. Such mergers can produce efficiencies, economies of
scale and cost savings for electrical consumers. A merger can, however,
also reduce competition, increase costs, and frustrate effective
regulatory oversight.
In Wisconsin, we have been concerned about efforts to aggressively
push electricity deregulation, because we are served in my state by a
diverse number of local utilities: municipal utilities, electric
cooperatives and investor-owned utilities. This diversity of electrical
suppliers, about which my colleagues from Minnesota have eloquently
spoken, are absolutely critical parts of our small rural communities.
In many cases, Wisconsin's rural coops and rural municipal utilities
are the only entities interested in serving the electrical needs of the
rural parts of my State. If we deregulate, we shouldn't create an
environment that leaves these communities behind.

Federal electricity merger review policy should distinguish between
those mergers that promote the public interest and protect our local
sources of electrical power and those that don't. In proposing to amend
the Federal Power Act to change FERC's merger review standard we are
seeking to require merger applicants to show that the merger, which
eliminates a competitor in a marketplace, provides affirmative benefits
to the public that are not achievable without merger. Thus, the utility
seeking the merger approval would need to show that the merger provides
tangible public benefits by increasing competition or lowering prices
through increased efficiency.
The amendment would improve on the language in the underlying energy
bill in several ways. First, the language requires that proposed
mergers promote the public interest in order to secure Federal
regulatory approval. Second, the amendment spells out specific
standards for assessing the impact on the public interest, including
effects on competition, operational and economic efficiency, and
regulatory oversight. Finally, this amendment prevents utilities from
skirting Federal review by using partnerships or other corporate forms
to avoid classification as a ``merger.''
I want to address concerns that some of my colleagues may have about
the scope of this amendment. This amendment does not impose new
regulatory requirements on proposed utility mergers. Rather, the
standards contained in the amendment mirror those contained in the
Public Utility Holding Company Act, or PUHCA, which the bill before us
would repeal. While the standards are comparable, the amendment
provides greater flexibility than exists under PUHCA. PUHCA requires
that utilities be physically integrated in order to merge; the
amendment waives that requirement. PUHCA also prevents the merger of
multi-State electric and gas utilities; the amendment waives that
requirement while providing for FERC review of such mergers.
I also want to speak in favor of language that my colleague from
Oregon, Mr. Wyden, and I developed on transactions between utility
company affiliates. This amendment protects consumers from assuming the
costs and risks of utility diversification into non-utility businesses
and prevents utilities from subsidizing affiliate ventures and
competing unfairly with independent businesses.
The language that the Senator from Oregon, Mr. Wyden, and I worked to
include in this package does three things. First, it extends to
electricity suppliers the requirements we placed upon
telecommunications companies when we repealed PUHCA in the
telecommunications sector in 1996 in the Telecommunications Act.
Second, it requires utilities to disclose all transactions with
affiliates, including those that are off the books or with overseas
affiliates. Finally, it establishes safeguards regarding the purchase
of goods and services between the utility and their affiliates.
These provisions are needed, because we are already experiencing
concerns about utilities expanding into electricity related services
and out competing small businesses in my State. Small contractors can't
compete against big utilities in areas like energy efficiency upgrades
to private homes, when big utilities can use existing assets like
personnel, equipment, and vehicles to perform those services. When
PUHCA is repealed, utilities will be able to expand into other business
areas, and we should make certain that we protect small businesses.
This amendment is good public policy, and it will strengthen the
Senate's position in conference with the House of Representatives. I
urge my colleagues concerned about ensuring a diversity of energy
supply and fairness in a deregulated system to support this amendment.
Mrs. MURRAY. Madam President, I want to speak for a moment about the
Consumer Protection Amendments being offered by Senator Dayton and a
number of co-sponsors, including myself. I want to thank all of my
colleagues who have been working hard to improve this bill,
particularly, my colleague from Washington, Senator Cantwell, who has
pushed to bring this amendment to a vote today.
This consumer protection amendment improves this bill by providing a
number of much needed consumer protections for electricity customers. I
have spoken a number of times expressing my concern regarding enacting
broad, far-reaching electricity de-regulation in these turbulent times.
California's attempts to deregulate electricity markets were
disastrous. We are all still trying to figure out what happened to
Enron and thousands of retirement and saving accounts. Consumers in the
Pacific Northwest are still paying for some of the aftereffects of
these events.
Repealing the Public Utility Holding Company Act, which was enacted
in 1935, without adding strong consumer protections would be
irresponsible. In this energy bill, we are also contemplating major
changes to the Publicly Utility Regulatory Policies Act and the Federal
Power Act.
When making these changes, it is essential that we make sure
consumers do not suffer. A number of people have indicated that
appropriate consumer protections are already in place in the underlying
bill.

[[Page S3248]]

I disagree. I think that additional consumer protections are
necessary.
This amendment strengthens the consumer protections by: ensuring
electric holding company mergers advance the public interest; requiring
FERC monitor and prevent market power abuses; ensuring market abuses
are remedied; ensuring open access to utility holding company records
by State Regulatory Commissions; and, requiring transparency in market
transactions.
These provisions will greatly improve the electricity title of this
bill and I am proud to be a co-sponsor. I encourage my colleagues to
also lend their support.
Energy is very important to our quality of life, particularly in the
Pacific Northwest. The electricity title of this bill continues to
concern me and many in the Northwest. However, it is important that we
all work together to develop an energy bill that will benefit the
entire country.
The PRESIDING OFFICER. The Senator from Washington is recognized.
Ms. CANTWELL. Madam President, I want to take an opportunity to
respond to a few points my colleagues made about this amendment, which
I think is necessary in protecting consumers.
It does repeal PUHCA and takes that measure off the books. What is
important about that is, while we can say our current law didn't
protect us from the mishaps in the California market and the Western
energy crisis, it certainly means we should not be lowering the
standard and taking away more consumer protections.
I applaud the chairman of the committee for trying to focus more
attention in a particular area of energy expertise, to say let's look
at these problems. But what we are doing by also saying let's have the
energy expertise within FERC look at these problems, we are also
saying, look at these problems within a framework that is less onerous
on the energy companies; let's lower the legal standard by which they
have to come before the Commission. And, basically, instead of saying
they have to serve the public interest, they go for a lower standard by
which those mergers can be completed.
It gives FERC the ability, with market-based rates, something they
have never statutorily had. So instead of the consumers being able to
have cost-based rates on electricity, we are saying, for the first time
in statutory authority, they can charge market-based rates.
But we are saying charge market based-rates, and we are saying you
don't have to consider some of the same things that ought to be
considered, given that we are repealing PUHCA; and that is: What is in
the public interest, and how is it advancing the public interest, how
is it preventing unjust and unreasonable rates?
If we have learned anything from the California experience, it is
that there has not been enough clout within a singular agency in the
Federal Government to adequately protect consumers from unjust and
unreasonable rates. They have not had enough protection.
That is why the AARP, the American Public Power Association, the
Consumers Union, the Sierra Club, the U.S. Conference of Mayors, the
Air Condition Contractors of America, the Consumer Federation of
America, the Consumers for Fair Competition--all these organizations
support this amendment, including the Electricity Consumers Resource
Council, the National Association of State Utility Consumer Advocates,
the National Environmental Trust, the National League of Cities, the
National Rural Electric Co-op Association, the National Resources
Defense Council, the Transmission Access Policy Study Group, the Union
of Concerned Scientists, and U.S. Public Interest Research Group.
All these organizations are warning us, telling us, there are not
enough consumer protections as this bill moves from having the PUHCA
law on the books and having the SEC involved to FERC authority, which
albeit could play a more responsible role and one with larger
oversight, but we are not giving them the direction to do so in this
bill. We are repealing those statutes that would give them specific
standards by which to measure both these issues of market-based rates
and mergers. We are giving new responsibility to an organization and
taking away the consumer protections.
It does not make sense, in this time and era of an energy crisis in
the West, where consumers have been gouged, where FERC has not been
able to protect consumers before the incident in reviewing statistics
and after the incident, to now say, Let's lessen the standard by which
FERC should be involved, let's give them more authority to allow the
energy companies to move more quickly, to move more aggressively
without oversight on increasing electricity rates.
We cannot say to the consumers of America that we learned nothing
from the Western energy crisis. We cannot say that to them. We have to
adopt this amendment and say we know that, while we are repealing some
laws and putting more responsibility on FERC, we are going to make sure
consumers are protected.
I urge my colleagues to adopt this very needed consumer protection
amendment.
The PRESIDING OFFICER. The Senator from California.
Mr. REID. Madam President, will the Senator yield for a brief
announcement?
Mrs. BOXER. Yes, I will be glad to yield.
Mr. REID. Madam President, we expect a vote on this matter within the
next 15 or 20 minutes. All Senators should be aware there will be an
effort to vote in the near future. All Senators should be aware of
that.
The PRESIDING OFFICER. The Senator from California.
Mrs. BOXER. I thank the Chair.
Madam President, I thank my friend and colleague, Senator Maria
Cantwell, and Senator Dayton for bringing this amendment to the floor.
I am a strong cosponsor of it.
Senator Cantwell made a point that we need to learn what happened to
those of us on the west coast who went through a terrible crisis in
electricity and runaway price hikes. We all know if we do not look at
history and the mistakes that were made, we are going to repeat those
mistakes.
What the Senator from Washington is trying to do--and some of us are
strongly behind her--is to tell the rest of our colleagues that we hope
they prepare against what happened to us and make sure consumers are
not forgotten.
I am stunned that there would even be objection to this amendment.
All we are doing is ensuring that since PUHCA was repealed, we want to
make sure the standard is not lowered. We want to make sure consumers
are protected.
I can guarantee that those who vote for this bill, if this amendment
goes down, are going to be back here complaining that they really did
not understand what we were doing when we did not protect consumers.
How do I know this? Because it is clear. What did we learn from Enron?
Remember Enron? We learned that they did everything in secret. They did
everything in secret. They sold the same electricity 15 times over.
This is according to testimony from the people in California who
suffered the consequences.
I guess, I say to my colleague, if the rest of this Senate wants to
see an energy crisis happen in their States, all we can do is offer up
this amendment as a way to stop it. But in the underlying bill, there
is very little transparency. We need to make sure the books and records
of these companies are open and they are clear so that my colleagues in
their States can see why their prices are going up 100 percent, 200
percent, 300 percent. In our case, it was over a 500-percent increase
in the price of electricity. By the way, demand was going down.
It is extraordinary. One year ago, April 2001, wholesale electricity
was selling for $201 per megawatt. A year earlier before the crisis
began, it was $32 per megawatt. It went up $32 to $201. That is a 528-
percent increase.
Why did it happen? Because of deregulation. The problem is, there was
no transparency. Everyone was paying more. We had rolling blackouts. We
had horrible problems. Believe me when I tell you, Madam President--you
know this because you have visited California often--this is a State
that, if it was a nation, according to our gross domestic product,
would be the fifth largest nation in the world. When I started in
politics, we were ninth. It shows you how long I have been in politics,
but it also shows the incredible growth of our agricultural sector and

[[Page S3249]]

Silicon Valley and their need to have electricity.
Mind you, it is not wasted. California now is the No. 1 State in
energy efficiency per capita. During the crisis, our demand went down.
No one can tell us our prices went up because demand went up, which is
what the Vice President said. Our demand went down. We have been
amazing at saving.
Someone has to look out for the consumer, and that is why I support
what Senator Cantwell is doing.
I, frankly, believed repealing PUHCA in the underlying bill was not
the way to go. That was my opinion. But since we have taken the matter
of PUHCA and transferred those responsibilities to FERC, let's at least
make sure FERC has the same opportunity to learn the facts as the SEC
did under PUHCA. That is why this amendment is so important.

This is what Loretta Lynch, the president of the California Public
Utilities Commission, testified last week before the Commerce Committee
about FERC and the weakening of its reporting requirements. Ms. Lynch
testified:

FERC has over the past few years at the urging of Enron and
others diluted the reporting requirements, loosened the
accounting rules and exempted large classes of energy sellers
from making required disclosures.

This is not from me. This is from someone on the ground, the head of
our public utilities commission. Then she goes on to say:

FERC does not even require the same data to be filed in its
quarterly reports, allowing companies like Enron to hide the
true nature and extent of activities through skeletal public
reporting and not be called to account by FERC.

The bottom line is, with this amendment, we are trying to restore
some transparency. We need to see what these companies are doing.
As I say, it is stunning to me that we do not have support for this
amendment, which is very modest in what it tries to do. The Senator
from Washington has taken the critiques of this amendment and has
answered one point at a time. The critiques we have heard in this
debate simply are not right.
One of the claims is that we keep PUHCA on the books. How ridiculous.
PUHCA is repealed. We do not bring it back. All we are saying is now
that the underlying bill gives the responsibility of PUHCA to FERC,
there ought to be some rules that show we care about the consumer and
that the consumer will not be forgotten.
In closing, I think the Senator from Washington knows her stuff on
this. She is on the Energy Committee. She gets it. She is taking the
lessons of the west coast, what happened to our consumers, which was
devastating, and saying to everyone: Please listen to us. We want to
avoid this in the rest of the country. That is why she has the support
of the AARP. Older Americans are the ones who get caught. They live on
fixed incomes. When those electricity prices go up, it is not fun and
games. This is real people suffering. They suffered in Oregon, they
suffered in Washington, and they suffered in California.
So what are we doing in this bill? Nothing to really help them. We
are ensuring this cannot happen elsewhere, and that is why we have so
many others supporting this amendment, such as the Consumer Federation
of America, the Consumers for Fair Competition, the Consumers Union,
the Electricity Consumers Resource Council, the National Alliance for
Fair Competition, the National Association of State Utility Consumer
Advocates, the National Environmental Trust, the National League of
Cities, the National Rural Electric Cooperatives Association, the
Natural Resources Defense Council, the Physicians for Social
Responsibility.
This is a health issue when people cannot turn on the air-
conditioning. If we do not protect the consumers, we have problems.
Public Citizens supports this amendment, the Sierra Club, the U.S.
Conference of Mayors, the Union of Concerned Scientists, and the U.S.
Public Interest Research Group. This is the consumer protection
package.
My colleague from Washington did a good job. She took amendments from
those of us who were looking at different areas where we thought the
bill did not reach the level of consumer protection it should and put
them into an omnibus amendment. I congratulate her.
I yield the floor.
The PRESIDING OFFICER. The Senator from Washington.
Ms. CANTWELL. Madam President, I appreciate the comments of the
Senator from California on the amendment. I also appreciate her support
for it and her articulation of the problem.
I ask the Senator from California--obviously, both of our States are
being greatly impacted from this crisis. I think we have had numerous,
thousands, of constituents who ask us how we got into this situation
and ask us exactly how this situation occurred to this degree and why
there were not more Federal protections in place.
Given the impact to both Washington and California, consumers want to
know how is it this kind of deregulation went through at the State
level and then certain protections were not in place at the Federal
level.
Before the Senator from California leaves the Chamber, I ask if she
would answer this question about her constituents' desires to see a
safeguard at the Federal level to make sure that further deregulation,
and the incurring investigation of high energy prices, are adequately
dealt with and whether consumers believe these protections have been
adequately up to date, because in my State people have said repeatedly,
where is the Federal role and responsibility in making sure these
consumers were not gouged?
In California, a new system was put in place. The Federal Energy
Regulatory Commission was supposed to oversee that and to judge whether
it was going to work as far as market-based rates, and clearly it did
not work. Not only did FERC approve it, it did not monitor it after it
went into place. It did not stop and say that unjust and unreasonable
rates are gouging consumers in California, until the lights went out.
So why would we now say--and I am curious as to the Senator's
experience in hearing from constituents about this Federal role--to
them, we are going to consolidate and make it even easier; put
authority under FERC and weaken the standard? Not only are we going to
give them direction, but we are going to say we are going to give them
less tools to play that role; we are going to give them a lower legal
standard by which to review these; we are going to allow them to make
market-based decisions without the criteria of respecting the consumers
and protecting and advancing their interests as they look at mergers.
I am curious as to the California experience. I know the experience
has been clear in my State. They wanted unjust and unreasonable rates
to be looked at when they were being charged 85 percent more. They
thought it was very clear that was unjust and unreasonable. In my
State, these people have to live with 8- and 9-year Enron contracts.
As my California colleague said, they sold power 15 times to
different people. They are literally buying power at a cheap rate and
within my State selling it at an increase, double, triple the increase,
to other consumers in my State. They are getting away with it, and FERC
is doing nothing to make sure those rates are being investigated as
unjust and unreasonable, and they are not letting my constituents out
of those long-term contracts in the next maybe 8 or 9 years of 85-
percent increases in energy prices.
So why would States that have been impacted want to give FERC the
direction but say, here are the legal standards, they are less than
they were before, so go at this business? So if my colleague from
California could comment on her experience in that Federal role and
what it is that safeguards constituents who have been harmed in
personal situations and in economic businesses.

States' economies have been ruined over this situation, and now we
are saying to them that our colleagues are going to provide less
protections for them.
Mrs. BOXER. That is the key. The fact is, in our States--I will just
talk to my State--the only agency we had to protect us was FERC. FERC,
under the Clinton administration, found that the prices were unjust and
unreasonable. Then there was a switch in administrations and they never
repealed that. They admitted they were unjust

[[Page S3250]]

and unreasonable, but they did absolutely nothing to help us--for 1
year. We were talking about billions of dollars of costs. The long-term
contracts were signed under duress by our Governor because the spot
market was so impossible he tried to get some of the demand away from
the spot market, went into these long-term contracts. Fortunately, he
has begun to renegotiate those.
We have asked FERC to help us renegotiate most of them. It is
stunning to me that this underlying bill gives so much more power to
FERC when under the law as it existed they did nothing to help our
people for 1 year. They finally put in place the market-based pricing
and, by the way, it cured our problem.
After this administration saying for a year that it would not cure
our problem, it cured our problem. Those market-based prices are set to
expire in September, and already the new Chairman of FERC has hinted
that he is not going to reimpose those price caps.
So I say to my colleague, the only agency--because we had deregulated
in our State, and believe me there was enough blame to go around. It
was a bipartisan deregulation recommended by Pete Wilson, our then-
Governor, and it went through. Enron and others had absolutely no one
looking over their shoulder, and the only agency that could have done
anything to help us against unjust and unreasonable prices was FERC.
The bottom line is: They did nothing for a year. It was a disaster.
In this underlying bill, we are giving FERC even more work by
repealing PUHCA, which was administered by the SEC, and giving it over
to FERC, and having very few requirements on the open books and
records.
So a company such as Enron--Enron is gone. They said California would
sink, but they sank. We are OK. They sank. But there is going to be
Enron II and Enron III and Enron IV because, unfortunately, they showed
how it could be dealt with, at least in the short term. When that
happens under the underlying bill, there is very little that FERC will
be able to get at in terms of the transparency of the records.
The one thing we learned was there was a lot of secrecy going on. The
sale of electricity--Enron was a broker, in between the generators and
the consumers, so Enron would go buy electricity from a generator at a
pretty good price for the generator but then they would sell it to
themselves, 14 times to subsidiaries. Each time they showed a profit on
the books to make Enron look more successful, more profitable, and each
time they jacked up the rates until it got to the final sale at 520
percent--sometimes higher--than it was the year before, and that became
the benchmark price. All this was secret.

We have an opportunity in an energy bill to make sure this experience
does not happen again. What do we do? We step back. That is why the
consumer groups in this country are absolutely upset about this bill
and why they have come together in an unprecedented number. I ask
unanimous consent to have the list of organizations supporting this
amendment printed in the Record.
There being no objection, the material was ordered to be printed in
the Record, as follows:

Support the Consumer Protection Package

Amendment #3097, offered by Senators Dayton, Wellstone,
Feingold, Cantwell, Boxer and Wyden, would add crucial
consumer protections to the electricity title of the Senate
energy bill, incorporating lessons learned from the Western
electricity crisis and Enron's collapse.
AARP.
Air Conditioning Contractors of America.
Alliance for Affordable Energy.
American Public Power Association.
Consumers Federation of America.
Consumers for Fair Competition.
Consumers Union.
Electricity Consumers Resource Council.
National Alliance for Fair Competition.
National Association of State Utility Consumer Advocates.
National Environmental Trust.
National League of Cities.
National Rural Electric Cooperatives Association.
Natural Resources Defense Council.
Physicians for Social Responsibility.
Public Citizen.
Sierra Club.
Transmission Access Policy Study Group.
U.S. Conference of Mayors.
Union of Concerned Scientists.
US Public Interest Research Group.
Vote ``Yes'' on the Consumer Protection Package.

Mrs. BOXER. They have come together behind Senators Cantwell and
Dayton to say: Please, fix this bill. Do not do what California did.
Just because something is changing does not mean it is changing in a
right way. We have to be very careful. Did we learn anything in
California, Washington, and Oregon? The word ``deregulation'' is a
beautiful word. I love it. I wish we didn't need regulations, and I
wish everyone did everything right. However, in a society where you
must have your heat and you must have your air because you must run a
business, you must make sure an elderly person in summer does not
suffer from the dangers of heat exhaustion, you have to have a way to
make sure this important need is not forgone.
I thank my friend. The California experience is forever seared in my
mind and heart. I don't want other States to go through the same thing.
This amendment will help in that regard. I hope the Senator wins this
amendment. The way things are going, we may not make it. But we are on
the right side. We are not going to give up. Just as we learned in
California, we can vote a lot of things in, but when the people say,
What are you doing, we come back here pretty darn quick. From my
experience in California, this is not the way to go. This underlying
bill is not the way to go. My friend has pinpointed the need for
consumer protections.
I thank the Senator.
Ms. CANTWELL. I thank my colleague from California for her articulate
rendering of what has happened in the California market and the
complexity of this issue. She is right, the consumers have asked, Where
have the Federal role and responsibility been? People in our States did
not think FERC responded quickly enough and do not believe FERC has all
the tools now necessary to protect other States from this same thing
happening again or to conduct the investigation that needs to take
place to make sure consumers are not gouged after September when the
expiration of this current FERC order occurs.
We are saying: If you are going to give FERC the responsibilities and
repeal PUHCA, and also change from SEC to FERC authority, we are giving
FERC real responsibility with no statutory guidance. But then we are
essentially saying--wink, wink--we are not giving you any of the tools
to enforce these authorities; we want you to just be part of the
equation but not have any statutory authority to make the
investigations. Let's say instead: You can proceed with market-based
rates instead of cost-based rates. But if you are going to proceed with
market-based rates, you must make sure there are competitive markets.
You must make sure you effectively monitor those markets. You must make
sure you prevent the abuse of those market powers. You must make sure
you are protecting the consumer interests, and you must ensure that
there are just and reasonable rates. That seems to me to be very fair,
that these consumer issues are protected in legislation. That is all we
are asking.
If we are going to give responsibility to FERC, let's make sure we
tell them to protect the consumer interests, not the big business
interests that have caused so much economic devastation in the West.
I yield the floor.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. BINGAMAN. I will speak briefly in response to some of the
comments made, and then I will move to table the amendment.
We have had a good debate about it. I will speak about three aspects:
First, the argument, the allegation, that we are, in the underlying
bill before the Senate, agreed to on a bipartisan basis, lowering the
legal standard. That is one of the arguments that has been made. It is
simply wrong. We are not lowering the legal standard. The legal
standard is, and always has been, that determinations be consistent
with the public interest; that acquisitions, mergers, consolidations,
be consistent with the public interest.
What we are doing is saying that, for mergers, we have enhanced the
authority and responsibility of the Federal Energy Regulatory
Commission by saying that not only must they determine

[[Page S3251]]

it is consistent with the public interest, which has been the standard
in the past, we are requiring them to determine that consumers will not
be harmed--that is, consumers, ratepayers of existing utilities, will
not be harmed. We are requiring them to make a determination that
regulation, either Federal or State regulation, will not in any way be
impaired. And we are requiring FERC to make a determination that there
will be no cross-subsidy to any other company than the company being
acquired or merged.
What we are doing is increasing the responsibilities we are imposing
on FERC. A lot of criticism has been leveled against FERC in the way
they responded on the west coast. I agree with much of that. I think
they were very slow to respond to the spike in prices in California and
the Northwest. I was critical at the time, and I continue to be
critical that they were slow to respond. We are putting an affirmative
duty on FERC to step in anytime there is evidence that a market-based
rate is not just and reasonable. It is FERC's responsibility under the
language we have to withdraw those market-based rates and to require
just and reasonable rates.
That is a new responsibility we are imposing. It is an appropriate
responsibility. The argument that, because they did not move quickly
enough under current law, we should now go ahead and change the law to
give them this new responsibility does not make sense to me.
With regard to the provisions the Senator from California was raising
about the transparency of books and records, I agree entirely that the
books and records of any and all of these companies that are subject to
regulation should be open for inspection. The provisions we have in the
bill require each of these companies to maintain and make available to
FERC the books, accounts, the memoranda, the records, that the
Commission deems relevant to the costs that are incurred by that public
utility. Each affiliate company is also required to do the same.
There is a provision saying that the right of States to request
books, records, accounts, memoranda, and other records they identify in
writing as needed by the State commissioner--that right for them to
obtain those is also protected.
We have in this underlying bill the protections that are required for
consumers. I am persuaded that the enactment of this legislation, this
title 2, this electricity provision, will cure many of the problems the
Senators from Washington and California have been concerned with--and
very rightly concerned with this last year.
I think the argument that we are not dealing with these issues is
wrong. I urge my colleagues to join us in tabling this amendment which
would undermine the bipartisan agreement we made on this provision some
weeks ago.
I move to table the amendment, and I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There is a sufficient second.
The question is on agreeing to the motion to table the amendment No.
3234. The clerk will call the roll.
The assistant legislative clerk called the roll.
Mr. REID. I announce that the Senator from South Dakota (Mr. Daschle)
and the Senator from South Dakota (Mr. Johnson) are necessarily absent.
Mr. NICKLES. I announce that the Senator from North Carolina (Mr.
Helms) is necessarily absent.
The PRESIDING OFFICER (Mrs. Murray). Are there any other Senators in
the Chamber desiring to vote?
The result was announced--yeas 58, nays 39, as follows:

[Rollcall Vote No. 80 Leg.]

YEAS--58

Akaka
Allard
Allen
Bayh
Bennett
Biden
Bingaman
Bond
Breaux
Brownback
Bunning
Burns
Campbell
Carper
Cleland
Cochran
Craig
Crapo
DeWine
Domenici
Ensign
Enzi
Fitzgerald
Frist
Gramm
Grassley
Gregg
Hagel
Hatch
Hutchinson
Hutchison
Inhofe
Kyl
Landrieu
Lincoln
Lott
Lugar
McCain
McConnell
Mikulski
Miller
Murkowski
Nelson (NE)
Nickles
Roberts
Rockefeller
Santorum
Sessions
Shelby
Smith (NH)
Specter
Stevens
Thomas
Thompson
Thurmond
Torricelli
Voinovich
Warner

NAYS--39

Baucus
Boxer
Byrd
Cantwell
Carnahan
Chafee
Clinton
Collins
Conrad
Corzine
Dayton
Dodd
Dorgan
Durbin
Edwards
Feingold
Feinstein
Graham
Harkin
Hollings
Inouye
Jeffords
Kennedy
Kerry
Kohl
Leahy
Levin
Lieberman
Murray
Nelson (FL)
Reed
Reid
Sarbanes
Schumer
Smith (OR)
Snowe
Stabenow
Wellstone
Wyden

NOT VOTING--3

Daschle
Helms
Johnson
The motion was agreed to.
Mr. BINGAMAN. Madam President, I move to reconsider the vote.
Mr. REID. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. BINGAMAN. Madam President, I believe the clerk was going to
report the amendment by the Senator from Nebraska.

Amendment No. 3140 To Amendment No. 2917

The PRESIDING OFFICER. The clerk will report.
The bill clerk read as follows:

The Senator from Nebraska [Mr. Nelson], for himself, Mr.
Smith of Oregon, and Mr. Craig, proposes an amendment
numbered 3140 to amendment No. 2917.

Mr. NELSON of Nebraska. Madam President, I ask unanimous consent that
reading of the amendment be dispensed with.
Mr. BINGAMAN. Mr. President, I call up amendment No. 3316 and ask for
its immediate consideration.
The PRESIDING OFFICER. Is the Senator objecting to terminating the
reading?
Mr. BINGAMAN. I do not object to terminating the reading. I do call
up amendment No. 3316 and ask for its immediate consideration.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

Strike Title III and insert the following:

SEC. 301. ALTERNATIVE CONDITIONS AND FISHWAYS.

(a) Alternative Mandatory Conditions.--Section 4 of the
Federal Power Act (16 U.S.C. 797) is amended by adding at the
end the following:
``(h)(1) Whenever any person applies for a license for any
project works within any reservation of the United States
under subsection (e), and the Secretary of the department
under whose supervision such reservation falls (in this
subsection referred to as the Secretary) shall deem a
condition to such license to be necessary under the first
proviso of such section, the license applicant may propose an
alternative condition.
``(2) Notwithstanding the first proviso of subsection (e),
the Secretary of the department under whose supervision the
reservation falls shall accept the proposed alternative
condition referred to in paragraph (1), and the Commission
shall include in the license such alternative condition, if
the Secretary of the appropriate department determines, based
on substantial evidence provided by the license applicant,
that the alternative condition--
``(A) provides for the adequate protection and utilization
of the reservation, and
``(B) will either--
``(i) cost less to implement or
``(ii) result in improved operation of the project works
for electricity production as compared to the condition
initially deemed necessary by the Secretary.
``(3) The Secretary shall submit into the public record of
the Commission proceeding with any condition under subsection
(e) or alternative condition it accepts under this subsection
a written statement explaining the basis for such condition,
and reason for not accepting any alternative condition under
this subsection, including the efforts of the condition
accepted and alternative not accepted on energy supply,
distribution, cost, and use, air quality, flood control,
navigation and drinking, irrigation, and recreation water
supply, based on such information as may be available to the
Secretary, including information voluntarily provided in a
timely manner by the applicant and others.
``(4) Nothing in this subsection shall prohibit other
interested parties from proposing alternative conditions.
``(b) Alternative Fishways.--Section 18 of the Federal
Power Act (16 U.S.C. 811) is amended by--
``(1) inserting ``(a)'' before the first sentence; and
``(2) adding at the end the following:
``(b)(1) Whenever the Secretary of the Interior or the
Secretary of Commerce prescribes a fishway under this
section, the license applicant or the licensee may propose an
alternative to such prescription to construct, maintain, or
operate a fishway.
``(2) Notwithstanding subsection (a), the Secretary of the
Interior or the Secretary of

[[Page S3252]]

Commerce, as appropriate, shall accept and prescribe, and the
Commission shall require the proposed alternative referred to
in paragraph (1), if the Secretary of the appropriate
department determines, based on substantial evidence provided
by the license, that the alternative--
``(A) will be no less protective of the fishery than the
fishway initially prescribed by the Secretary; and.
``(B) will either--
``(i) cost less to implement, or
``(ii) result in improved operation of the project works
for electricity production as compared to the fishway
initially prescribed by the Secretary.
``(3) The Secretary shall submit into the public record of
the Commission proceeding with any prescription under
subsection (a) or alternative prescription it accepts under
this subsection a written statement explaining the basis for
such prescription, and reason for not accepting any
alternative prescription under this subsection, including the
effects of the prescription accepted or alternative not
accepted on energy supply, distribution, cost, and use, air
quality, flood control, navigation, and drinking, irrigation,
and recreation water supply, based on such information as may
be available to the Secretary, including information
voluntarily provided in a timely manner by the applicant and
others.
``(4) Nothing in this subsection shall prohibit other
interested parties from proposing alternative prescriptions.
''

Amendment No. 3316 To Amendment No. 3140

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

The Senator from New Mexico [Mr. Bingaman] proposes an
amendment numbered 3316 to amendment No. 3140.

Mr. BINGAMAN. Madam President, I ask unanimous consent that reading
of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

In lieu of the matter proposed to be inserted, insert the
following:

TITLE III--HYDROELECTRIC ENERGY

SEC. 301. ALTERNATIVE MANDATORY CONDITIONS.

(a) Review of Alternative Mandatory Conditions.--The
Federal Energy Regulatory Commission, the Secretary of the
Interior, the Secretary of Commerce, and the Secretary of
Agriculture, in consultation with the affected states and
tribes, shall undertake a review of: (1) options for a
process whereby license applicants and third parties to a
relicensing proceeding being undertaken pursuant to Part I of
the Federal Power Act could propose alternative mandatory
conditions and alternative mandatory fishway prescriptions to
be included in the license in lieu of conditions and
prescriptions initially deemed necessary or required pursuant
to section 4(e) and section 18, respectively, of the Federal
Power Act; (2) the standards which should be applicable in
evaluating and accepting such conditions and prescriptions;
(3) the nature of participation of parties other than the
license applicants in such a process; (4) the advantages and
disadvantages of providing for such a process, including the
impact of such a process on the length of time needed to
complete the relicensing proceedings and the potential
economic and operational improvement benefits of providing
for such a process; and (5) the level of interest among
parties to relicensing proceedings in proposing such
alternative conditions and prescriptions and participating in
such a process.
(b) Report.--Within twelve months after the date of
enactment of this Act, the Federal Energy Regulatory
Commission and the Secretaries of the Interior, Commerce, and
Agriculture, shall jointly submit a report to the Committee
on Energy and Natural Resources of the Senate and the
appropriate committees of the House of Representatives
addressing the issues specified in subsection (a) of this
section. The report shall contain any legislative or
administrative recommendations relating to implementation of
the process described in subsection (a).

SEC. 302. STREAMLINING HYDROELECTRIC RELICENSING PROCEDURES.

(a) Review of Licensing Process.--The Federal Energy
Regulatory Commission, the Secretary of the Interior, the
Secretary of Commerce, and the Secretary of Agriculture, in
consultation with the affected states and tribes, shall
undertake a review of the process for issuance of a license
under Part I of the Federal Power Act in order to: (1)
improve coordination of their respective responsibilities;
(2) coordinate the schedule for all major actions by the
applicant, the Commission, affected Federal and State
agencies, Indian Tribes, and other affected parties; (3)
ensure resolution at an early stage of the process of the
scope and type of reasonable and necessary information,
studies, data, and analysis to be provided by the license
applicant; (4) facilitate coordination between the Commission
and the resource agencies of analysis under the National
Environmental Policy Act; and (5) provide for streamlined
procedures.
(b) Report.--Within twelve months after the date of
enactment of this Act, the Federal Energy Regulatory
Commission and the Secretaries of the Interior, Commerce, and
Agriculture, shall jointly submit a report to the Committee
on Energy and Natural Resources of the Senate and the
appropriate committees of the House of Representatives
addressing the issues specified in subsection (a) of this
section and reviewing the responsibilities and procedures of
each agency involved in the licensing process. The report
shall contain any legislative or administrative
recommendations relating to improve coordination and
streamline procedures for the issuance of licenses under Part
I of the Federal Power Act. The Commission and each Secretary
shall set forth a plan and schedule to implement any
administrative recommendations contained in the report, which
shall also be contained in the report.

The PRESIDING OFFICER. The Senator from Idaho.
Mr. CRAIG. Madam President, was the amendment offered by the Senator
from New Mexico in the spirit of a second degree to the Nelson
amendment?
The PRESIDING OFFICER. The amendment is drafted as a substitute for
the first-degree amendment.
Mr. CRAIG. I thank the Chair.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. BINGAMAN. Madam President, this issue, of course, relates to
hydroelectric power. This is a subject on which we have been working
for several months with interested Members, with the Senator from
Idaho, the Senator from Oregon, the Senator from Nebraska, and their
staffs, in an effort to achieve consensus on a very difficult issue. I
very much thank them for all the work they have put into this effort
and their efforts to come to agreement as to how we should proceed.
Unfortunately, we have not been able to resolve the issues.
I know hydropower plays a very significant role in providing needed
energy to the entire Nation and particularly to the Northwest. It is a
very important energy source in other parts of the country as well,
particularly New England.
There are now five first-degree amendments and three second-degree
amendments that have been filed to this bill with regard to the topic
of hydroelectric relicensing. So the proliferation of amendments
reflects the fact that, in spite of a lot of good work that has been
done, there is no consensus about how to proceed. Unfortunately, I
cannot support the amendment the Senators from Nebraska and Idaho are
offering today. In my view, it does not reflect a consensus.
At this juncture, given the procedural posture of the bill, I believe
the best course is to adopt the amendment I have offered which provides
that there be a review undertaken by the relevant agencies with respect
to two aspects of the hydroelectric relicensing process. Let me recount
what those are.
First, whether provisions for alternative mandatory conditions such
as those included in the Nelson-Craig amendment would work to improve
the process and, secondly, methods that should be adopted to streamline
the process.
The hydroelectric relicensing process has come under criticism. Much
of that criticism is justified due to its complexity and the length of
time it takes to issue a renewal license. These delays are not good for
government, and they are of great concern to my colleagues and to me as
well.
There are interagency efforts in place to try to improve that
process. We need to encourage those efforts. We need to try to let
those efforts play out.
My amendment would do this by requiring all the involved agencies--
that includes the Secretary of the Interior, Federal Energy Regulatory
Commission, the Secretary of Commerce, Secretary of Agriculture--to
report on whether the alternative would require all the agencies to
work together to make recommendations to the Congress on how we can
improve the process.
The second thing the amendment does is require the agencies to report
on whether the alternative mandatory conditioning authority provisions
included in the underlying amendment would work. My amendment would
require recommendations as to what standard should apply with respect
to alternative mandatory conditions and the nature of participation of
interested parties.
In addition, the amendment I have offered would require an assessment
of whether this new authority would delay an already complex and slow
process, which is a very real concern I have.

[[Page S3253]]

The Nelson-Craig amendment would adopt alternative mandatory
conditioning authority while doing nothing to streamline the process. I
am concerned that the amendment, rather than improving the process,
will inadvertently add complexity and delay to an already overly
complex and slow relicensing process.
I am also concerned that the Craig amendment undermines protections
for Federal lands and resources provided for in the Federal Power Act.
Under that act, mandatory conditions and prescriptions are developed by
the Federal land management or resource agency for inclusion in the
license to protect wildlife refuges, national parks, other Federal
lands, and Indian reservations. This conditioning authority and these
standards have been in place for over 80 years.
The Senate energy bill provides new flexibility relating to this
conditioning authority by including alternative mandatory conditioning
authority. But the bill does this in a way that we believe is
environmentally protective in an appropriate way.
The amendment by the Senators from Nebraska and Idaho would change
this alternative mandatory conditioning authority to make it less
protective of Federal lands and resources by modifying the standard for
alternative mandatory conditions from that included in the bill.
Finally, the Craig amendment would give greater weight to the views
of the license applicants over the views of States and tribes and the
public. This is another change we believe is inappropriate and causes
me to propose the amendment I have called up for consideration.
I acknowledge these are difficult issues. Consensus has been
difficult to achieve. Rather than proceeding with either the Craig
amendment or the language in the Senate bill, the one before the Senate
now, I believe the sound approach is to learn more about the
implications of these provisions and seek expert input from the
agencies involved, and that is what the amendment I have called up
would do.
I urge my colleagues to support the amendment I offer as an
alternative to the Nelson-Craig amendment.
The PRESIDING OFFICER. The Senator from Nebraska.
Mr. NELSON of Nebraska. Madam President, I commend my colleague from
New Mexico for his very able work on bringing forth an energy bill. It
is with some sadness I find myself opposing his substitute amendment.
The substitute amendment is essentially requesting a study in an area
where we already know the results. I support studies when we don't know
what the study will tell us and we don't know the results and we need
to find out what the situation is. But in this case, we know what the
situation is.
We have a system that suffers from dispersed decisionmaking authority
and an inability to balance competing values and a system that is
certainly jeopardizing the relicensing of many of our hydropower
facilities across the Nation.
Nearly every State will have one or more and as much as 99.9 percent
of its hydroelectric power facilities come up for the licensing review
within the next 15 years. If they have the experience I have had in
Nebraska, they won't have to have a study. They can simply look to see
what has happened in Nebraska to tell them what the future holds for
them.
The future of Nebraska is dimmed because of the past experience we
have had with the relicensing process.
We spent $40 million for one hydroelectric powerplant in 14 years to
realize this project--a project built in the 1930s. That experience can
tell you that the system is lengthy, expensive, and it doesn't require
any of that $40 million that was spent to go into the environment,
habitat, wildlife retainment, or anything of that sort. It was money
spent on application fees, filing of papers, lawyer's fees--$40 million
to realize this one project in the State of Nebraska, taking 14 years.
That was when we had both Senators from Nebraska, the congressional
Representatives, and I, as Governor, supporting the effort to get it
done in an expeditious fashion. That is expedition in reverse.
The truth is, this system is not expedited; it is expensive, costly,
and slow. We even had in our situation, nearly at the end of the
process, after we had gone through the process with as many alphabet
agencies in the Federal Government that I thought we would ever find,
another agency that came in and said: All the work you have done is for
naught, and we have a requirement we would like to impose at the tail
end of the process.
They could have done it at the beginning of the process. This will
help alleviate and obviate that need. In the State of Washington alone,
you are going to be facing the relicensing of 80 percent of your
hydroelectric power in the next 15 years--21 projects. If you multiply
that times $40 million, you can see what the cost really is. Multiply
that times the number of staff years, in terms of what it is going to
take, and you will see what the internal cost truly is to your power
authorities.
I would ordinarily support a study. But in this case, we don't need
one. We have had the study, and the study is experience which tells us
that we need to make this kind of correction, and we need to make it
now, not wait until the study tells us what we already know.
I yield the floor.
The PRESIDING OFFICER. The Senator from Oregon is recognized.
Mr. SMITH of Oregon. Madam President, I rise in opposition to the
second-degree amendment being offered by Senator Bingaman. Truly,
another study of this issue will do nothing more than run out the clock
on license holders who must get 53 percent of the nonfederal hydropower
capacity in this Nation relicensed within the next 15 years.
To give you an example of just how grave a situation this is, there
are 307 projects under the category, including 49 projects in
California, 21 projects in Washington, 23 projects in Wisconsin, 30
projects in New York, 23 projects in Maine, 14 projects in Oregon, and
14 projects in Michigan. This amounts to over 29,000 megawatts of
capacity. To put this into context, it takes 1,000 megawatts daily to
run the City of Seattle. So when you figure that 29,000 megawatts are
at stake, and you figure what it takes to run Seattle, you can imagine
how much economic difficulty will ensue if we do not figure out a more
reasonable way to bring on hydropower relicensing.
There have been extensive hearings already during the last two
Congresses, in the Senate Energy Committee, on the need for hydro
relicensing reform. I have attended them all, and there has been a
committee that was chartered under the Federal Advisory Committee Act.
That committee has concluded that legislative reforms are absolutely
critical if we are to make progress and meet the deadlines that are
looming over the energy capacity of this country.
There have been administrative attempts to reform the process
already. Having the same agencies that have, so far, been able to
institute meaningful reforms further study this issue will provide us
with no benefit at all. I urge my colleagues from all parts of this
country, who have hydroelectric power, to please support the Nelson
amendment. It provides modest reforms of a narrow portion of the
relicensing process.
The time for study is done. The time to ensure that hydropower
remains an important part of our electricity mix is now. Madam
President, no one knows better than you and I, from the Pacific
Northwest, how critical an issue this is for our neck of the woods. I
also say that, while all energy production has an environmental
tradeoff, truly, hydropower puts out no global warming and provides our
people with the most renewable, inexpensive, and reliable sources of
electricity there are, frankly, on the Earth.
I believe if we are serious about reemploying our people, getting our
economy moving, we have to be serious about hydro relicensing reform.
Madam President, I know a number of environmental groups have opposed
the Nelson amendment. I want to also say we have, for those who are
concerned about the environmental issue, as we all are, that there is a
second degree that I will be offering that does enjoy the support of
many environmental groups, such as Trout Unlimited. I quote their news
release today:

Senator Smith's amendment improves the Craig-Nelson
amendment by reducing the loss in fishery protection from SA
3140.

[[Page S3254]]

While we support Senator Smith's amendment, we still urge
opposing an amended SA 3140.

The point I am trying to make is we have improved the underlying
amendment, and we have given the environmental community something that
will significantly help them in their advocacy. To demonstrate what we
are trying to do with the second degree, should the Bingaman study be
defeated, this amendment does two important things. While it
substantially, like Senator Nelson's, makes the changes I think provide
value to all of the stakeholders who follow the relicensing process,
the first would substitute the words ``fish resources'' for ``fishery''
in the underlying text. We want to make it clear that we are trying to
protect all fish resources, not just those fish species that are
harvested either commercially already or with sport fishery.

Secondly, the amendment would begin this process in 2008. It would
require license applicants to file their applications for a new license
with the Federal Energy Regulatory Commission 3 years before the
current license has expired. During the hearings before the Energy
Committee, it was clear to me that there was frustration with the
current statutory requirement to file only 2 years before the
expiration of the current licenses. In most instances, this is
insufficient time for FERC to review the adequacy of the application
and to determine any additional studies that might be needed. The
result is a string of annual licenses which do not provide certainty
for consumers or the utility and results in delays in environmental
mitigation and enhancement.
Licensed applicants are reluctant to spend such funds until they know
what will, in fact, be required of them under any new license. So I say
to those who care about the environment, the Nelson-Craig amendment
will be improved with the second degree that will follow. Truly, what
we need, last of all, is another study on a problem that we know only
too well through experience.
If you want a study, the study is Senator Nelson, who was Governor
Nelson. His experience is all the study we need that we have a broken
system and we need to repair it. I remind my colleagues that none of us
has a job in any industry unless electricity is produced first.
Hydropower is crucial in the mix of America's energy. It is absolutely
the backbone of the Pacific Northwest. This is needed, and then we have
a way to protect the environment and a way to improve this process.
I yield the floor.
Ms. CANTWELL. Mr. President, over the last 6 weeks, while we have
debated essential elements of the energy bill, from ANWR and CAFE to
electricity deregulation and ethanol, I have joined the sponsors of
this amendment, the chairman and ranking member of the Energy Committee
and others in trying to forge a consensus on how best to reform the
hydroelectric relicensing process.
Let me state at the outset, that I share the sponsor's deep sense of
frustration and concern with how the existing hydro relicensing process
works for all participants.
With more than 9,300 megawatts of nonfederal hydropower capacity,
Washington State is the single most hydro dependent state in the
Nation. The power of the great rivers of the Pacific Northwest has
contributed to our economy, created industries and even helped to win
the Second World War. There is no area of the country where hydropower
generation has greater importance.
At the same time, Washington State also relies on the natural
abundance of these spectacular rivers. Washington's rivers provide
year-round recreation opportunities, including fishing and boating,
these features contribute enormously to our economy as well as our
environment. Our rivers are also home to salmon and steelhead runs, the
cultural soul of the Pacific Northwest.
The rivers serve as an important economic and cultural resource to
several Northwest Indian tribes that entered into treaties with the
U.S. based on the promise to protect and honor their rights and
resources.
Our reliance on hydropower and on the recreational and environmental
benefits of our rivers requires us to employ a balanced approach to
their use. Utility operators have shared with me horror stories about
how the rising costs, loss of operational flexibility, and lost
generation due to new operating constraints imposed during relicensing
are impacting their ability to bring power to Washington's consumers.
At the same time, 12 runs of Washington State salmon are now included
on the endangered species list.
We can and must find the right balance to ensure continued survival
of these species while maintaining hydropower production.
Many hydropower projects, including some in the Northwest, were built
without adequate consideration of impacts on the environment. Most were
built prior to the enactment of essential environmental laws like the
Clean Water Act and Endangered Species Act. Relicensing offers a unique
opportunity to reassess the licenses of these hydropower dams, bring
them up to modern standards, and ensure the long-term health of our
rivers.
The current process for licensing hydropower projects has had mixed
results. On the one hand, we have examples of great successes. The
Cowlitz was once home to some of the most bountiful salmon and
steelhead runs in the Pacific Northwest. In August 2000, a landmark
relicensing settlement was signed that will open up more than 200 miles
of renewed habitat. The settlement is supported by Federal and State
agencies, conservation groups, and the hydro utility. On the other
hand, the Cushman project has been operating under annual licenses due
to disputes over appropriate environmental measures. While Tacoma Power
has continued operating the project for over 20 years, there remain a
number of serious environmental challenges.
And on all sides we have parties pointing the finger at one another
claiming that the other is always to blame. I do not believe that any
of the parties to relicensing, Federal resources agencies, FERC,
tribes, States, the industry or advocacy groups, are to blame for
problems in relicensing. In fact, I believe most parties are good
actors caught up in an outdated, bureaucratic process desperately in
need of reform.
There is no question that the existing licensing process can be
improved. We can make it faster and cheaper without sacrificing
environmental quality. Quicker licensing would improve the efficiency
of these projects and improve the environment. This is a goal that I
would strongly support, if we were debating such measures today.
Unfortunately, that is not what the amendment before us today
accomplishes. Instead, the amendment creates a new appeals process,
another step, to this flawed process without requiring FERC and the
resource agencies to address the fundamental problems contributing to
the delays and skyrocketing costs.
I agree with the supporters of this amendment that one part of the
solution is to allow participants to propose creative solutions in
balancing energy and environmental priorities. While I can't fully
agree with the approach taken in this amendment, I do agree that
parties should be rewarded for coming together and proposing innovative
new solutions. But more importantly, there will be no real improvement
until Congress requires or FERC and the resource agencies agree to
significant structural reform. This amendment falls far short.
Section 306 of the underlying bill provides an opportunity to
streamline the licensing process by requiring agencies to work together
with FERC in a more cooperative manner. It also requires the
coordination of environmental reviews and places a number of
requirements on FERC to maintain a better, more transparent schedule
for relicensing proceedings.
But the amendment before us today deletes section 306, the only hope
for real fundamental reform of an obviously flawed process.
It is important for the people of Washington State to get this right,
and soon. We will have to relicense 19 hydropower projects over the
next several years. The resulting licenses will set the terms for hydro
projects to operate on our rivers for another 30 years. We need a
process that will issue licenses promptly, with full environmental
protection, bringing these projects into compliance with modern laws.
It is disappointing that this amendment will not do the job.

[[Page S3255]]

I reluctantly oppose the Craig amendment because I believe we are
missing an opportunity to accomplish real reform. But regardless where
the votes are on this amendment, this is not the end of the discussion
about hydropower licensing reform, but rather a beginning. I look
forward to working with my colleagues in the Senate and those in
industry, the environmental community, tribes, States, and other
interests in order to maintain the tremendous hydropower assets of our
State while protecting and restoring our environmental future.
The PRESIDING OFFICER. The Senator from Nebraska is recognized.
Mr. NELSON of Nebraska. Madam President, I want to say that a study
should ordinarily tell us something we don't know, bring us to
conclusions that we have not yet reached, or provide facts that are not
otherwise evidence.
But there are no facts that are absent here. There are no conclusions
that we cannot draw on the basis of what we know, and there certainly
isn't an experience yet to be determined. So a study is unnecessary. It
is very clear, though, action is necessary.
Respectfully, I move to table the substitute second-degree amendment
offered by the Senator from New Mexico.
The PRESIDING OFFICER. The question is on agreeing to the motion.
The PRESIDING OFFICER. The Senator from Nevada.
Mr. REID. Madam President, I thought the Senator from Nebraska asked
for the yeas and nays.
The PRESIDING OFFICER. The motion to table has been made.
Mr. NELSON of Nebraska. I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The Chair reminds Senators that the motion to table is not debatable.
It will take unanimous consent at this time for further debate.
The question is on agreeing to the motion to table amendment No.
3316. The clerk will call the roll.
The legislative clerk called the roll.
Mr. REID. I announce that the Senator from South Dakota (Mr. Daschle)
and the Senator from South Dakota (Mr. Johnson) are necessarily absent.
Mr. NICKLES. I announce that the Senator from North Carolina (Mr.
Helms) is necessarily absent.
The PRESIDING OFFICER (Mr. Cleland). Are there any other Senators in
the Chamber desiring to vote?
The result was announced--yeas 54, nays 43, as follows:

[Rollcall Vote No. 81 Leg.]

YEAS--54

Allard
Allen
Bennett
Bond
Breaux
Brownback
Bunning
Burns
Campbell
Carper
Cleland
Cochran
Collins
Conrad
Craig
Crapo
DeWine
Dodd
Domenici
Ensign
Enzi
Fitzgerald
Frist
Gramm
Grassley
Hagel
Hatch
Hollings
Hutchinson
Hutchison
Inhofe
Kyl
Landrieu
Lincoln
Lott
Lugar
McCain
McConnell
Miller
Murkowski
Nelson (NE)
Nickles
Roberts
Santorum
Sessions
Shelby
Smith (NH)
Smith (OR)
Stevens
Thomas
Thompson
Thurmond
Voinovich
Warner

NAYS--43

Akaka
Baucus
Bayh
Biden
Bingaman
Boxer
Byrd
Cantwell
Carnahan
Chafee
Clinton
Corzine
Dayton
Dorgan
Durbin
Edwards
Feingold
Feinstein
Graham
Gregg
Harkin
Inouye
Jeffords
Kennedy
Kerry
Kohl
Leahy
Levin
Lieberman
Mikulski
Murray
Nelson (FL)
Reed
Reid
Rockefeller
Sarbanes
Schumer
Snowe
Specter
Stabenow
Torricelli
Wellstone
Wyden

NOT VOTING--3

Daschle
Helms
Johnson
The motion was agreed to.
Mr. CRAIG. Mr. President, I move to reconsider the vote.
Mr. REID. I move to lay that motion on the table.
The motion to lay on the table was agreed to.

Order For Recess

Mr. REID. Mr. President, for the information of all Members, I have
checked with the minority, and I ask unanimous consent that between the
hours of 3 and 4 o'clock this afternoon, the Senate be in recess to
listen to Secretary Powell in S-407. I ask that that time count against
the postcloture hours under this measure now before the Senate.
The PRESIDING OFFICER. Without objection, it is so ordered.

Amendment No. 3306 To Amendment No. 3140

Mr. SMITH of Oregon. Mr. President, I call up amendment No. 3306, the
Smith second-degree amendment to the Nelson of Nebraska amendment No.
3140, and ask for its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The senior assistant bill clerk read as follows:

The Senator from Oregon [Mr. Smith] proposes an amendment
numbered 3306 to amendment No. 3140.

Mr. SMITH of Oregon. I ask unanimous consent the reading of the
amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:

(Purpose: To clarify the definition of renewable energy)

Strike Title III and insert the following:

``SEC. 301. ALTERNATIVE CONDITIONS AND FISHWAYS.

``(a) Alternative Mandatory Conditions.--Section 4 of the
Federal Power Act (16 U.S.C. 797) is amended by adding at the
end the following:
`(h)(1) Whenever any person applied for a license for any
project works within any reservation of the United States
under subsection (e), and the Secretary of the department
under whose supervision such reservation falls (in this
subsection referred to as the `Secretary') shall deem a
condition to such license to be necessary under the first
proviso of such section, the license applicant may propose an
alternative condition.
`(2) Notwithstanding the first proviso of subsection (e),
the Secretary of the department under whose supervision the
reservation falls shall accept the proposed alternative
condition referred to in paragraph (1), and the Commission
shall include in the license such alternative condition, if
the Secretary of the appropriate department determines, based
on substantial evidence provided by the license applicant,
that the alternative condition--
`(A) provides for the adequate protection and utilization
of the reservation; and
`(B) will either--
`(i) cost less to implement, or
``(ii) result in improved operation of the project works
for electricity production as compared to the condition
initially deemed necessary by the Secretary.
`(3) The Secretary shall submit into the public record of
the Commission proceeding with any condition under subsection
(e) or alternative condition it accepts under this subsection
a written statement explaining the basis for such condition,
and reason for not accepting any alternative condition under
this subsection, including the effects of the condition
accepted and alternatives not accepted on energy supply,
distribution, cost, and use, air quality, flood control,
navigation, and drinking, irrigation, and recreation water
supply, based on such information as may be available to the
Secretary, including information voluntarily provided in a
timely manner by the applicant and others.
`(4) Nothing in this subsection shall prohibit other
interested parties from proposing alternative conditions.'
``(b) Alternative Fishways.--Section 18 of the Federal
Power Act (16 U.S.C. 811) is amended by--
``(1) inserting ``(a)'' before the first sentence; and
``(2) adding at the end the following:
`(b)(1) Whenever the Secretary of the Interior or the
Secretary of Commerce prescribes a fishway under this
section, the license applicant or the licensee may propose an
alternative to such prescription to construct, maintain, or
operate a fishway.
`(2) Notwithstanding subsection (a), the Secretary of the
Interior or the Secretary of Commerce, as appropriate, shall
accept and prescribe, and the Commission shall require, the
proposed alternative referred to in paragraph (1), if the
Secretary of the appropriate department determines, based on
substantial evidence provided by the licensee, that the
alternative--
`(A) will be no less protective of the fish resources than
the fishway initially prescribed by the Secretary; and
`(B) will either--
`(i) cost less to implement, or
`(ii) result in improved operation of the project works for
electricity production as compared to the fishway initially
prescribed by the Secretary.
(3) The Secretary shall submit into the public record of
the Commission proceeding with any prescription under
subsection (a) or alternative prescription it accepts under
this subsection a written statement explaining the basis for
such prescription, and reason for not accepting any
alternative prescription under this subsection, including the
effects of the prescription accepted or alternative not
accepted on energy supply, distribution, cost, and use, air
quality, flood control, navigation, and drinking, irrigation,
and recreation water supply, based on such

[[Page S3256]]

information as may be available to the Secretary, including
information voluntarily provided in a timely manner by the
applicant and others.
`(4) Nothing in this subsection shall prohibit other
interested parties from proposing alternative prescriptions.'
''
``(c) Time of Filing Application.--Section 15(c)(1) of the
Federal Power Act (16 U.S.C. 808(c)(1)) is amended by
striking the first sentence and inserting the following:
`(1) Each application for a new license pursuant to this
section shall be filed with the Commission--
`(A) at least 24 months before the expiration of the term
of the existing license in the case of licenses that expire
prior to 2008; and
`(B) at least 36 months before the expiration of the term
of the existing license in the case of licenses that expire
in 2008 or any year thereafter.' ''

Mr. SMITH of Oregon. Mr. President, I yield my time for commentary to
the Senator from Idaho.
The PRESIDING OFFICER. The Senator has no such right. The Senator
from Idaho can seek recognition at any time.
Mr. CRAIG addressed the Chair.
The PRESIDING OFFICER. The Senator from Idaho.
Mr. CRAIG. Mr. President, we just took a very critical and, I
believe, important vote in the Senate pertaining to the Nelson-Craig
amendment, and now second-degreed by the Senator from Oregon. While I
know the Senator from New Mexico and I have worked long and hard on the
issue of hydro relicensing, I think the will of the Senate has spoken
as it relates to moving this issue to the forefront and making a
legislative determination on what the public policy ought to be as it
relates to the relicensing of hydro facilities around this country.
We have now for well over a decade and a half spent a great deal of
time looking at the hydro relicensing process. Many of the licensees
have spent millions and millions of dollars trying to shape it and
determine it. Study after study--and here are about 7 of them, some
1,400 pages of studies over the last decade--have said there is a
problem that can only be determined by a legislative fix. That is
exactly what the Nelson-Craig amendment, now second-degreed by the
Senator from Oregon, does. It maintains the amendment, and the second
degree maintains the current standard in section 4(e).
The Secretary of the Interior can determine whether an alternative
condition offered by the licensee ensures the adequate protection and
utilization of the ``Federal reservation.''
``Federal reservation'' is a term of art in the Federal licensing of
projects as it relates to protecting the resources, protecting the
land.
The reason this amendment is important is when we go to conference
with this bill, the House has said something very different. The House
said, in their version of the hydroelectric relicense reform, that they
would change the standard in 4(e), requiring the Secretary of the
Interior to ensure an alternative condition provides no less protection
for the reservation than provided by the conditions deemed initially
necessary by a midlevel staff person at the Interior. That is a higher
threshold than is currently required under licensing.
What is so important is that we take the right language to the
conference to make sure if we advance or change the relicensing
projects of hydro--and the Senator from Nebraska has spoken eloquently
about the problems of Nebraska, the Senator from Oregon has talked
about the multitude of projects to be relicensed over the next decade;
we know that hydro is about 19 to 20 percent of the electrical base of
this country--while we want to modernize these facilities, bring them
into compliance under better environmental standards, what we cannot
have is a multi-multimillion-dollar process that doesn't get us
anywhere and, in the end, actually reduces the ability of these
facilities to produce power.
The Senator from Nebraska spoke of a process in his State that cost
$40 million to relicense a hydro project. My guess is that the project,
when it was initially built some 30 years prior, cost a fourth of that
amount--$8 million, $10 million. And now just to relicense it, just to
go through the legal hoops and hurdles and timelines involved it costs
$40 million? That doesn't talk about the retrofits. That doesn't talk
about new concrete poured or concrete taken away or fish ladders
or rescheduling and reprogramming the flows of waters to accommodate
fish and habitat downstream. None of that was spoken to--nor the loss
of generating capacity. Just the process costs that amount of money.

That is why these studies have shown, time and time again, this is a
problem that has to get fixed legislatively. Yes, we have had working
groups inside the departments of our Federal Government over the last
number of years.
When I first began to examine the hydro relicensing problem 5 years
ago, to the Clinton administration's credit, they began to get all
their agencies together to try to streamline the process. That is in
the eye of the beholder, and they did work. But there was nothing in
the law that required it. What we were hoping to do is to do that.
What we have done instead as an alternative is provide, when the
licensee comes up with an approach, and a stakeholder comes up with an
different approach, that the licensee can say: We can arrive at the
standards and meet the needs of the stakeholder for less money in a
different approach, and the Secretary of the Interior, in this
instance, can arbitrate that and make those determinations they can now
not make.
It ensures a balance and accountability to Federal resource agencies
that I think is critically important. Isn't it fascinating that a third
level bureaucrat can make a demand that even the Secretary cannot act
on, that may cost millions and millions of dollars? It may even take
down a hydro facility because it can no longer operate in an
economically effective way and the licensee would simply walk away and
the facility would come down and it would be no longer productive
because someone downline in an agency determined they needed something
that could not in any way be arbitrated, that could not in any way be
accommodated by different approaches, or an alternative review.
That is what we offer in the Nelson amendment. That is why it is
critical. The Smith amendment, then, gives a little flexibility in time
that we think is important. Trout Unlimited has said it is important.
We are certainly willing to accommodate this. This in no way is an
anti-environmental vote. The process itself is still intact. All of the
players get to the table. All of the players' viewpoints are heard.
We said, when the licensee comes forward and says I can meet those
new standards for less money in a different way, that is a
consideration which becomes part of the process that does not now
exist. We think that is right. We think it is reasonable. That is the
way government ought to work.
If we lose our hydro base in this country--and we could--how do we
replace it? Coal-fired plants? A new nuclear plant? It can never be
made up by wind and solar because it can never produce that amount of
power. It would have to be replaced. It is replaced, at least in
volume, by the current alternatives I have mentioned. In most
instances, and in most States, those alternatives today are somewhat
unacceptable.
That is why it is so critically important that the Nelson-Craig-Smith
amendment move forward as a part of this energy bill and into the
conference where we can work out our differences and hopefully resolve
a problem that has plagued this process now since it was created nearly
two decades ago.
I thank my colleagues and yield the floor.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. BINGAMAN. Mr. President, what is the pending business?
The PRESIDING OFFICER. The pending question is the Smith of Oregon
substitute to the Nelson first-degree amendment.
Mr. BINGAMAN. Mr. President, I do not object to going a ahead with
the vote. I don't believe a rollcall is required at this point.
The PRESIDING OFFICER. If there is no further debate, the question is
on agreeing to the substitute.
The amendment (No. 3306) was agreed to.
The PRESIDING OFFICER. The Senator from Idaho.
Mr. CRAIG. Mr. President, that vote was on the Nelson-Craig amendment
in the second degree by the Senator from Oregon?

[[Page S3257]]

The PRESIDING OFFICER. The Nelson-Craig amendment is now pending, as
amended.
Is there further debate on that amendment? If not, the question is on
agreeing to the amendment.
The amendment (No. 3140), as amended, is agreed to.
Mr. BINGAMAN. Mr. President, I move to reconsider the vote.
Mr. SMITH of Oregon. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER. The Senator from Nevada.
Mr. REID. Mr. President, I ask unanimous consent that the leader time
which I am going to take be counted against the 30 hours on this bill.
The PRESIDING OFFICER. Without objection, it is so ordered.

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