[Congressional Record Volume 148, Number 47 (Wednesday, April 24, 2002)]
[Senate]
[Pages S3257-S3273]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
NATIONAL LABORATORIES PARTNERSHIP IMPROVEMENT ACT OF 2001--Continued
Mr. CARPER. Mr. President, I ask unanimous consent the pending
amendment be laid aside.
The PRESIDING OFFICER. Without objection, it is so ordered.
Amendment No. 3197 To Amendment No. 2917
Mr. CARPER. Mr. President, amendment No. 3197 is at the desk. I ask
for its immediate consideration.
The PRESIDING OFFICER. The clerk will report.
The assistant legislative clerk read as follows:
The Senator from Delaware [Mr. Carper], for himself, Ms.
Collins, Mr. Levin, Ms. Landrieu, Ms. Stabenow, and Mr.
Jeffords, proposes an amendment numbered 3197 to amendment
No. 2917.
Mr. CARPER. Mr. President, I ask unanimous consent reading of the
amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
(Purpose: To encourage the efficient generation of electricity through
combined heat and power and to modify the provision relating to
termination of mandatory purchase and sale requirements under PURPA)
Beginning on page 47, strike line 23 and all that follows
through page 48, line 20, and insert the following:
``(m) Termination of Mandatory Purchase and Sale
Requirements.--
``(1) Obligation to purchase.-- After the date of enactment
of this subsection, no electric utility shall be required to
enter into a new contract or obligation to purchase electric
energy from a qualifying cogeneration facility or a
qualifying small power production facility under this section
if the Commission finds that the qualifying cogeneration
facility or qualifying small power production facility has
access to independently administered, auction-based day ahead
and real time wholesale markets for the sale of electric
energy.
``(2) Obligation to sell.--After the date of enactment of
this subsection, no electric utility shall be required to
enter into a new contract or obligation to sell electric
energy to a qualifying cogeneration facility or a qualifying
small power production facility under this section if
competing retail electric suppliers are able to provide
electric energy to the qualifying cogeneration facility or
qualifying small power production facility.
``(3) No effect on existing rights and remedies.--Nothing
in this subsection affects the rights or remedies of any
party under any contract or obligation, in effect on the date
of enactment of this subsection, to purchase electric energy
or capacity from or to sell electric energy or capacity to a
facility under this Act (including the right to recover costs
of purchasing electric energy or capacity).
Mr. CARPER. Mr. President, I ask unanimous consent that Senator Snowe
be added as a cosponsor.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. CARPER. Senator Collins of Maine joins me in offering this
amendment.
Mr. President, the issue that is before us involves cogenerating
facilities which create both heat and power. They are highly efficient
and environmentally attractive. They exist in almost all of our States.
Unfortunately, section 244 of the Senate energy bill before us would
eliminate the provisions in current law which support both existing
combined heat and power generating systems and new ones that are being
developed. I believe that until competitive conditions in electricity
markets make these existing requirements unnecessary, the changes that
are incorporated in this bill are premature.
Today, combined heat and power plants, which typically produce
electricity and deliver steam used for manufacturing purposes, produce
about 7 percent of our Nation's electricity. Combined heat and power
facilities are, on average, twice as fuel efficient as conventional
utility plants and thus produce about half the emissions of
conventional utility plants.
The U.S. Department of Energy and our Environmental Protection Agency
have set the goal of doubling the Nation's capacity from combined heat
and power facilities by 2010. Section 244 of the Senate energy bill
runs counter to this goal by repealing, perhaps inadvertently,
statutory support for existing and new combined heat and power
generating facilities.
Under existing law, section 210 of PURPA, the Public Utility
Regulatory Policies Act, has, since 1978, required electric utilities
to purchase electricity generated by so-called qualifying facilities--
which includes cogenerators and renewable energy facilities--at the
utility's ``avoided cost.'' ``Avoided cost'' is the cost the utility
would have paid to generate the same electricity itself or to purchase
it elsewhere. PURPA also requires electric utilities to sell qualifying
facilities backup power at just and reasonable rates and without
discrimination.
So under current law, under PURPA, these qualifying facilities,
cogenerating facilities, are permitted to sell
[[Page S3258]]
the power that they create at a price that is agreed to at the
utility's avoided cost. Also, they have the ability to purchase
electricity power as it is needed at a reasonable rate and without
discrimination. That is current law. They would lose that ability under
the language of the bill that is before us. We do not want them to lose
that ability.
Section 244 of the bill would terminate the obligation of electric
utilities, under PURPA, to enter into new contracts to either purchase
electric energy from these qualifying facilities or to sell electricity
to new qualifying facilities.
Some would argue that these PURPA requirements are no longer needed
because electricity markets are competitive. In many cases, however,
electricity markets are not competitive. I realize in a number of
markets they are. Delaware is among them. But in a number of other
markets, electricity is not competitive, and these qualifying
facilities do not have access to competitive options for buying or
selling electricity.
The existing PURPA protections should not be lifted, in my judgment,
and that of Senator Collins' and our other cosponsors' judgment, until
competitive electricity markets are found to render these protections
no longer necessary.
The amendment that Senator Collins and I offer today would modify
section 244 of the bill before us by conditioning the termination of
the PURPA obligation for utilities to buy electricity from these
qualifying facilities on a finding by the Federal Energy Regulatory
Commission, FERC, that the qualifying facility has access to an
independent, competitive, wholesale market for the sale of electricity.
A FERC finding of a competitive wholesale market assures that there
will be real opportunities for a qualifying facility to sell its
electrical output, including intermittent power, at a competitive
price.
This amendment would also modify section 244 in this bill to clarify
that the termination of a utility's obligation to sell backup power to
a qualifying facility under PURPA is conditioned on the qualifying
facility having the ability to purchase backup power from competing
retail electricity suppliers. Until a cogenerator can shop for backup
power from competing suppliers, it is critical to maintain the current
PURPA obligation for the local utility to sell backup power at just and
reasonable rates and without discrimination.
Let me say, in conclusion, I support reform of PURPA, but I do not
think we should do it in a way that runs contrary to our other goals of
generating efficient electricity and developing competitive markets.
This amendment does just that. I urge my colleagues to join us in
support of the amendment.
I reserve the remainder of my time.
The PRESIDING OFFICER. The Senator from Maine.
Ms. COLLINS. Mr. President, I am pleased to join with my
distinguished colleague from Delaware, Senator Carper, in offering an
amendment to the energy bill that would keep in place, for a limited
time, incentives for the generation of clean, efficient energy using a
technology known as combined heat and power, or cogeneration.
Such cogeneration plants use a variety of fuels, from biomass to
natural gas, to produce both electricity and steam. Combined heat and
power currently produces about 9 percent of our Nation's electricity.
According to the U.S. Energy Information Administration, there are more
than 1,000 facilities operating combined heat and power units in the
United States, including hospitals, universities, and industries. There
are 95 cogeneration facilities in my home State of Maine alone.
By capturing the heat that would be rejected by traditional power
generators, combined heat and power is extremely efficient. While a
typical coal-fired powerplant only achieves about 34 percent
efficiency, cogeneration facilities achieve 70 to 85 percent
efficiency. On average, combined heat and power facilities are twice as
fuel efficient as conventional utility plants.
By keeping in place incentives for using combined heat and power, the
Carper-Collins amendment adds to the competitiveness of our domestic
manufacturing. Because cogeneration is so efficient, it reduces cost.
The President's national energy policy makes clear that combined heat
and power offers energy efficiency and cost savings important to many
manufacturers that compete in the international marketplace.
Our amendment also increases energy security and electric
reliability. Dispersing power generation at manufacturing sites is an
important tool to reduce the risk to the electricity supply. Generating
electricity close to where it will be used reduces the load on existing
transmission infrastructure. It reduces the amount of energy lost in
transmission while eliminating the need to construct expensive power
lines to transmit power from large central station powerplants.
In addition, cogeneration reduces the U.S. dependency on foreign
sources of energy by encouraging energy efficiency and fuel diversity
in electric power generation.
Also, our amendment is good for the environment. Because combined
heat and power facilities are twice as efficient as conventional
plants, they have fewer emissions. They reduce emissions of the
chemicals that cause smog and acid rain and cut greenhouse gas
emissions in half. For this reason, cogeneration is an important
component of any plan to reduce greenhouse gas emissions and is
included in the President's climate initiative.
The U.S. Department of Energy and the EPA have set the goal of
doubling U.S. cogeneration capacity by 2010. At industrial facilities
alone, cogeneration could reduce annual greenhouse gas emissions by 44
million metric tons. They could also reduce emissions of smog-forming
nitrogen oxides by 614,000 tons per year.
Let me now add to the comments made by Senator Carper on why this
amendment is necessary. The Public Utility Regulatory Policy Act, known
as PURPA, requires utilities to sell backup power to qualifying
nonutility power facilities at just and reasonable rates. It also
obligates utilities to purchase excess power from cogeneration
facilities at prices equal to that utility's own cost of production,
known as the avoided cost. The Senate energy bill, however, repeals
PURPA. Repealing PURPA would be a good idea if competitive electricity
markets existed all across this Nation. Unfortunately, the legislation
before us repeals PURPA even if competitive markets are not achieved.
Our amendment would keep certain PURPA provisions in place until
competitive electricity markets were established. For a limited time
our amendment would keep in place the PURPA provisions requiring
utilities to provide backup power and buy electricity from qualifying
cogeneration facilities. As soon as competitive electricity markets
were established, these requirements would be repealed.
Without competition, there is no incentive for utilities to provide
backup power or purchase electricity from combined heat and power
facilities even though that electricity is cleaner and more efficient
than most other electricity generation. Until a combined cogeneration
facility can shop for backup power from competing suppliers and sell
power at a competitive price, PURPA should not be unconditionally
repealed.
The amendment Senator Carper and I are offering today will keep in
place incentives that continue to operate combined heat and power
facilities until true competition exists in electricity markets.
This amendment is good for the economy, good for the environment,
good for our energy policy, and good for the competitiveness of
American manufacturing.
I thank my colleague from Delaware for involving me in this
amendment. I urge our colleagues to support our proposal.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. BINGAMAN. Mr. President, I know the Senator from Alaska is
planning to come to the floor to speak against the amendment. At this
point, unless the proponents of the amendment would like to do initial
debate, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. REID. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
[[Page S3259]]
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Nevada is recognized.
Mr. REID. For Members of the Senate, within the next 15 minutes there
will be a rollcall vote, so everybody who is off the Hill should start
heading back. The vote will occur probably around 1:05.
The PRESIDING OFFICER. The Senator from Alaska is recognized.
Mr. MURKOWSKI. Mr. President, the amendment pending, as I understand
it, would extend PURPA's mandatory purchase obligation until such time
as FERC determined that a PURPA ``qualifying facility'' had access to
``independently administered, auction-based day ahead and real time
wholesale markets for sale of electric energy.''
The amendment would also require purchasing utilities to continue to
sell backup power to qualified facilities unless competing retail
electric suppliers were able to provide electric energy to the
qualified facility.
This basically means that FERC is in charge of certain retail sales
of electricity--preempting State public utility commissioners on backup
retail sales, at least for the foreseeable future. As a consequence,
with all due respect, I believe the amendment is flawed. It would
continue PURPA's mandatory purchase obligation indefinitely into the
future by conditioning repeal on an affirmative FERC finding on a
powerplant-by-powerplant basis that the statutory test is met.
There are no requirements in the amendment regarding the process or
timing for FERC action. Satisfying this test could take virtually
forever, including numerous court challenges. Nor is there any guidance
as to how FERC is to define the existence of an ``independently
administered, auction-based day ahead and real time wholesale market''
for electricity.
I guess the question is, Who knows really what it means? It is not a
term of art in the Federal Power Act. Moreover, many areas of the
country likely do not now meet--and may never meet--this test.
So I suggest that we not be fooled by claims that the only thing the
qualifying facilities want is access to the transmission grid. They
have that now under FERC order No. 888. It is the law of the land, and
it has been upheld by the Supreme Court.
What do the supporters of this amendment really want? In my opinion,
they really want to continue PURPA's mandatory purchases at above-
market rates. Who pays the cost above market rates? Obviously, the
consumer--to have their power purchased at the ``avoided cost'' rate,
even if that rate is far above the market rate.
Well, I think this is wrong policy. The language in the underlying
Daschle-Bingaman bill leaves existing contracts in place; but there
should be no new PURPA contracts. I think most Members agree with that.
Since its enactment--and we have had this debate previously on the
bill--in 1978, PURPA has forced customers to pay lots of money. It is
estimated that they have paid tens of billions of dollars more for
electricity than would have been the case had it not been enacted.
PURPA is incompatible with competitive wholesale markets. It has been
used by the qualifying facilities that are cogenerators--producing both
power and steam for industrial uses--in name only.
Further, the last three administrations have proposed the repeal of
PURPA's mandatory purchase obligation, and almost every comprehensive
electric bill introduced over the past two Congresses has contained
nearly identical language to the bipartisan consensus PURPA language
contained in the Daschle-Bingaman amendment.
Keeping PURPA is contrary to protecting consumers. Thus, in my
opinion, the amendment should be rejected. I propose that we table the
amendment and I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
At this time, there is not a sufficient second.
Mr. MURKOWSKI. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. MURKOWSKI. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. MURKOWSKI. Mr. President, I have no objection if Senator Carper
wants to speak, even though the motion was made. I would certainly
defer to my friend.
The PRESIDING OFFICER (Mr. Kohl). The Senator from Delaware is
recognized.
Mr. CARPER. Mr. President, I thank the Senator.
With the combined heat and power facilities, we have the ability to
generate energy almost twice as efficiently as we generate it from
traditional utilities, traditional generating plants. With combined
heat and power facilities, we see emissions that are roughly half those
of traditional powerplants.
The administration's national energy plan envisions a doubling and
relies on combined heat and power facilities in this country because
they are so energy efficient and also environmentally friendly.
The downside, unfortunately, is that, inadvertently, the language of
this bill before us takes away the ability for FERC to help ensure that
these combined heat and power facilities have the opportunity to sell
power at reasonable prices into the grid and to buy power, if and when
they need to buy it, at reasonable prices.
I think all of us would agree that to have the ability to create more
facilities that are twice as energy efficient as traditional generating
facilities and produce half the emissions is a good thing. That is why
the administration has offered doubling these facilities in their plan.
Unfortunately, if we leave the language as it is in the bill, we are
going to find that the potential that is embodied in the generating
capability of the combined heat and power facilities will not be
realized. Nobody is interested in utilities having to sell electricity
at rates that are above market. We want to simply make sure that a
combined heat and power facility, which is twice as energy efficient,
and twice as environmentally friendly, has the opportunity to expand.
That is what we seek to do here.
With that in mind, I ask our colleagues to oppose the motion to
table.
Again, I express my thanks to the Senator from Maine, Ms. Collins,
for joining me and a number of colleagues in offering this amendment
today.
I yield the floor.
Mr. REID. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The assistant legislative clerk proceeded to call the roll.
Mr. REID. Mr. President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Alaska.
Mr. MURKOWSKI. Mr. President, I move to table the pending amendment,
and I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
The question is on agreeing to the motion to table amendment No.
3197. 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. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 37, nays 60, as follows:
[Rollcall Vote No. 82 Leg.]
YEAS--37
Allard
Allen
Bennett
Bingaman
Bunning
Burns
Cantwell
Cochran
Craig
Crapo
Domenici
Ensign
Enzi
Graham
Gramm
Grassley
Hagel
Hatch
Hutchison
Inhofe
Kyl
Lott
Lugar
McCain
McConnell
Miller
Murkowski
Murray
Nelson (FL)
Nickles
Roberts
[[Page S3260]]
Sessions
Shelby
Stevens
Thomas
Thurmond
Warner
NAYS--60
Akaka
Baucus
Bayh
Biden
Bond
Boxer
Breaux
Brownback
Byrd
Campbell
Carnahan
Carper
Chafee
Cleland
Clinton
Collins
Conrad
Corzine
Dayton
DeWine
Dodd
Dorgan
Durbin
Edwards
Feingold
Feinstein
Fitzgerald
Frist
Gregg
Harkin
Hollings
Hutchinson
Inouye
Jeffords
Kennedy
Kerry
Kohl
Landrieu
Leahy
Levin
Lieberman
Lincoln
Mikulski
Nelson (NE)
Reed
Reid
Rockefeller
Santorum
Sarbanes
Schumer
Smith (NH)
Smith (OR)
Snowe
Specter
Stabenow
Thompson
Torricelli
Voinovich
Wellstone
Wyden
NOT VOTING--3
Daschle
Helms
Johnson
The motion was rejected.
Mr. REID. I move to reconsider the vote, and I move to lay that
motion on the table.
The motion to lay on the table was agreed to.
Mr. REID. Is there further debate on the amendment?
The PRESIDING OFFICER. The question is on agreeing to amendment No.
3197.
The amendment (No. 3197) was agreed to.
Mr. REID. I move to reconsider the vote, and I move to lay that
motion on the table.
The motion to lay on the table was agreed to.
Mr. REID. Mr. President, I ask unanimous consent that the Senator
from Georgia, Mr. Cleland, be recognized for up to 15 minutes to speak
as in morning business, and the time be counted against the postcloture
30 hours.
The PRESIDING OFFICER. Without objection, it is so ordered.
(The remarks of Mr. Cleland are printed in today's Record under
``Morning Business.'')
Mr. BROWNBACK. Mr. President, I have an amendment I would like to
send forward, modify, and set aside.
The PRESIDING OFFICER. The Senator from Kansas.
Modification of Submitted Amendments Nos. 3239 and 3146
Mr. BROWNBACK. I call up amendment No. 3239 and ask for its immediate
consideration, and I ask unanimous consent to modify amendment No.
3239.
Mr. REID. Mr. President, reserving the right to object, I do not
think we have had a chance to see that modification. I have spoken to
the Senator from Kansas in the Chamber this morning. I spoke also with
Senator Hagel. We have to do both at the same time. We cannot do them
separately.
Mr. BROWNBACK. I spoke with Senator Hagel and told him I would send
it forward, then ask for the modification, and then set it aside. If we
want to do those at the same time, that is fine. I just wanted to get
the amendment and its modifications forward. It is not to get ahead of
anybody. If they want to do the modifications at the same time, I will
yield to the distinguished floor leader from Nevada.
Mr. REID. Mr. President, I withdraw my reservation.
The PRESIDING OFFICER. The clerk will report the amendment.
Mr. BROWNBACK. Mr. President, to remove the confusion, I withdraw my
request at this time.
The PRESIDING OFFICER. The request is withdrawn.
Mr. REID. Mr. President, I say to my friend, it is my understanding
what he wants to do is modify his amendment.
Mr. BROWNBACK. That is correct.
Mr. REID. I also want to modify Senator Hagel's amendment.
I ask unanimous consent, notwithstanding rule XXII, that it be in
order to modify amendments Nos. 3239 and 3146. I think that
accomplishes what we want to accomplish.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
Submitted amendments Nos. 3239 and 3146, as modified, are as follows:
Submitted amendment no. 3239, as modified
Strike all after the title heading and insert the
following:
SEC. 1101. PURPOSE.
The purpose of this title is to establish a greenhouse gas
inventory, reductions registry, and information system that--
(1) are complete, consistent, transparent, and accurate;
(2) will create reliable and accurate data that can be used
by public and private entities to design efficient and
effective greenhouse gas emission reduction strategies; and
(3) will acknowledge and encourage greenhouse gas emission
reductions.
SEC. 1102. DEFINITIONS.
In this title:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Environmental Protection Agency.
(2) Baseline.--The term ``baseline'' means the historic
greenhouse gas emission levels of an entity, as adjusted
upward by the designated agency to reflect actual reductions
that are verified in accordance with--
(A) regulations promulgated under section 1104(c)(1); and
(B) relevant standards and methods developed under this
title.
(3) Database.--The term ``database'' means the National
Greenhouse Gas Database established under section 1104.
(4) Designated agency.--The term ``designated agency''
means a department or agency to which responsibility for a
function or program is assigned under the memorandum of
agreement entered into under section 1103(a).
(5) Direct emissions.--The term ``direct emissions'' means
greenhouse gas emissions by an entity from a facility that is
owned or controlled by that entity.
(6) Entity.--The term ``entity'' means--
(A) a person located in the United States; or
(B) a public or private entity, to the extent that the
entity operates in the United States.
(7) Facility.--The term ``facility'' means--
(A) all buildings, structures, or installations located on
any 1 or more contiguous or adjacent properties of an entity
in the United States; and
(B) a fleet of 20 or more motor vehicles under the common
control of an entity.
(8) Greenhouse gas.--The term ``greenhouse gas'' means--
(A) carbon dioxide;
(B) methane;
(C) nitrous oxide;
(D) hydrofluorocarbons;
(E) perfluorocarbons;
(F) sulfur hexafluoride; and
(G) any other anthropogenic climate-forcing emissions with
significant ascertainable global warming potential, as--
(i) recommended by the National Academy of Sciences under
section 1107(b)(3); and
(ii) determined in regulations promulgated under section
1104(c)(1) (or revisions to the regulations) to be
appropriate and practicable for coverage under this title.
(9) Indirect emissions.--The term ``indirect emissions''
means greenhouse gas emissions that--
(A) are a result of the activities of an entity; but
(B)(i) are emitted from a facility owned or controlled by
another entity; and
(ii) are not reported as direct emissions by the entity the
activities of which resulted in the emissions.
(10) Registry.--The term ``registry'' means the registry of
greenhouse gas emission reductions established as a component
of the database under section 1104(b)(2).
(11) Sequestration.--
(A) In general.--The term ``sequestration'' means the
capture, long-term separation, isolation, or removal of
greenhouse gases from the atmosphere.
(B) Inclusions.--The term ``sequestration'' includes--
(i) soil carbon sequestration;
(ii) agricultural and conservation practices;
(iii) reforestation;
(iv) forest preservation;
(v) maintenance of an underground reservoir; and
(vi) any other appropriate biological or geological method
of capture, isolation, or removal of greenhouse gases from
the atmosphere, as determined by the Administrator.
SEC. 1103. ESTABLISHMENT OF MEMORANDUM OF AGREEMENT.
(a) In General.--Not later than 1 year after the date of
enactment of this Act, the President, acting through the
Director of the Office of National Climate Change Policy,
shall direct the Secretary of Energy, the Secretary of
Commerce, the Secretary of Agriculture, the Secretary of
Transportation, and the Administrator to enter into a
memorandum of agreement under which those heads of Federal
agencies will--
(1) recognize and maintain statutory and regulatory
authorities, functions, and programs that--
(A) are established as of the date of enactment of this Act
under other law;
(B) provide for the collection of data relating to
greenhouse gas emissions and effects; and
(C) are necessary for the operation of the database;
(2)(A) distribute additional responsibilities and
activities identified under this title to Federal departments
or agencies in accordance with the missions and expertise of
those departments and agencies; and
(B) maximize the use of available resources of those
departments and agencies; and
(3) provide for the comprehensive collection and analysis
of data on greenhouse gas emissions relating to product use
(including the use of fossil fuels and energy-consuming
appliances and vehicles).
(b) Minimum Requirements.--The memorandum of agreement
entered into under subsection (a) shall, at a minimum, retain
the
[[Page S3261]]
following functions for the designated agencies:
(1) Department of energy.--The Secretary of Energy shall be
primarily responsible for developing, maintaining, and
verifying the registry and the emission reductions reported
under section 1605(b) of the Energy Policy Act of 1992 (42
U.S.C. 13385(b)).
(2) Department of commerce.--The Secretary of Commerce
shall be primarily responsible for the development of--
(A) measurement standards for the monitoring of emissions;
and
(B) verification technologies and methods to ensure the
maintenance of a consistent and technically accurate record
of emissions, emission reductions, and atmospheric
concentrations of greenhouse gases for the database.
(3) Environmental protection agency.--The Administrator
shall be primarily responsible for--
(A) emissions monitoring, measurement, verification, and
data collection under this title and title IV (relating to
acid deposition control) and title VIII of the Clean Air Act
(42 U.S.C. 7651 et seq.), including mobile source emissions
information from implementation of the corporate average fuel
economy program under chapter 329 of title 49, United States
Code; and
(B) responsibilities of the Environmental Protection Agency
relating to completion of the national inventory for
compliance with the United Nations Framework Convention on
Climate Change, done at New York on May 9, 1992.
(4) Department of agriculture.--The Secretary of
Agriculture shall be primarily responsible for--
(A) developing measurement techniques for--
(i) soil carbon sequestration; and
(ii) forest preservation and reforestation activities; and
(B) providing technical advice relating to biological
carbon sequestration measurement and verification standards
for measuring greenhouse gas emission reductions or offsets.
(c) Draft Memorandum of Agreement.--Not later than 15
months after the date of enactment of this Act, the
President, acting through the Director of the Office of
National Climate Change Policy, shall publish in the Federal
Register, and solicit comments on, a draft version of the
memorandum of agreement described in subsection (a).
(d) No Judicial Review.--The final version of the
memorandum of agreement shall not be subject to judicial
review.
SEC. 1104. NATIONAL GREENHOUSE GAS DATABASE.
(a) Establishment.--As soon as practicable after the date
of enactment of this Act, the designated agencies, in
consultation with the private sector and nongovernmental
organizations, shall jointly establish, operate, and maintain
a database, to be known as the ``National Greenhouse Gas
Database'', to collect, verify, and analyze information on
greenhouse gas emissions by entities.
(b) National Greenhouse Gas Database Components.--The
database shall consist of--
(1) an inventory of greenhouse gas emissions; and
(2) a registry of greenhouse gas emission reductions.
(c) Comprehensive System.--
(1) In general.--Not later than 2 years after the date of
enactment of this Act, the designated agencies shall jointly
promulgate regulations to implement a comprehensive system
for greenhouse gas emissions reporting, inventorying, and
reductions registration.
(2) Requirements.--The designated agencies shall ensure, to
the maximum extent practicable, that--
(A) the comprehensive system described in paragraph (1) is
designed to--
(i) maximize completeness, transparency, and accuracy of
information reported; and
(ii) minimize costs incurred by entities in measuring and
reporting greenhouse gas emissions; and
(B) the regulations promulgated under paragraph (1)
establish procedures and protocols necessary--
(i) to prevent the reporting of some or all of the same
greenhouse gas emissions or emission reductions by more than
1 reporting entity;
(ii) to provide for corrections to errors in data submitted
to the database;
(iii) to provide for adjustment to data by reporting
entities that have had a significant organizational change
(including mergers, acquisitions, and divestiture), in order
to maintain comparability among data in the database over
time;
(iv) to provide for adjustments to reflect new technologies
or methods for measuring or calculating greenhouse gas
emissions; and
(v) to account for changes in registration of ownership of
emission reductions resulting from a voluntary private
transaction between reporting entities.
(3) Baseline identification and protection.--Through
regulations promulgated under paragraph (1), the designated
agencies shall develop and implement a system that provides--
(A) for the provision of unique serial numbers to identify
the verified emission reductions made by an entity relative
to the baseline of the entity;
(B) for the tracking of the reductions associated with the
serial numbers; and
(C) that the reductions may be applied, as determined to be
appropriate by any Act of Congress enacted after the date of
enactment of this Act, toward a Federal requirement under
such an Act that is imposed on the entity for the purpose of
reducing greenhouse gas emissions.
SEC. 1105. GREENHOUSE GAS REDUCTION REPORTING.
(a) In General.--An entity that participates in the
registry shall meet the requirements described in subsection
(b).
(b) Requirements.--
(1) In general.--The requirements referred to in subsection
(a) are that an entity (other than an entity described in
paragraph (2)) shall--
(A) establish a baseline (including all of the entity's
greenhouse gas emissions on an entity-wide basis); and
(B) submit the report described in subsection (c)(1).
(2) Requirements applicable to entities entering into
certain agreements.--An entity that enters into an agreement
with a participant in the registry for the purpose of a
carbon sequestration project shall not be required to comply
with the requirements specified in paragraph (1) unless that
entity is required to comply with the requirements by reason
of an activity other than the agreement.
(c) Reports.--
(1) Required report.--Not later than April 1 of the third
calendar year that begins after the date of enactment of this
Act, and not later than April 1 of each calendar year
thereafter, subject to paragraph (3), an entity described in
subsection (a) shall submit to each appropriate designated
agency a report that describes, for the preceding calendar
year, the entity-wide greenhouse gas emissions (as reported
at the facility level), including--
(A) the total quantity of each greenhouse gas emitted,
expressed in terms of mass and in terms of the quantity of
carbon dioxide equivalent;
(B) an estimate of the greenhouse gas emissions from fossil
fuel combusted by products manufactured and sold by the
entity in the previous calendar year, determined over the
average lifetime of those products; and
(C) such other categories of emissions as the designated
agency determines in the regulations promulgated under
section 1104(c)(1) may be practicable and useful for the
purposes of this title, such as--
(i) direct emissions from stationary sources;
(ii) indirect emissions from imported electricity, heat,
and steam;
(iii) process and fugitive emissions; and
(iv) production or importation of greenhouse gases.
(2) Voluntary reporting.--An entity described in subsection
(a) may (along with establishing a baseline and reporting
reductions under this section)--
(A) submit a report described in paragraph (1) before the
date specified in that paragraph for the purposes of
achieving and commoditizing greenhouse gas reductions through
use of the registry; and
(B) submit to any designated agency, for inclusion in the
registry, information that has been verified in accordance
with regulations promulgated under section 1104(c)(1) and
that relates to--
(i) with respect to the calendar year preceding the
calendar year in which the information is submitted, and with
respect to any greenhouse gas emitted by the entity--
(I) project reductions from facilities owned or controlled
by the reporting entity in the United States;
(II) transfers of project reductions to and from any other
entity;
(III) project reductions and transfers of project
reductions outside the United States;
(IV) other indirect emissions that are not required to be
reported under paragraph (1); and
(V) product use phase emissions;
(ii) with respect to greenhouse gas emission reductions
activities of the entity that have been carried out during or
after 1990, verified in accordance with regulations
promulgated under section 1104(c)(1), and submitted to 1 or
more designated agencies before the date that is 4 years
after the date of enactment of this Act, any greenhouse gas
emission reductions that have been reported or submitted by
an entity under--
(I) section 1605(b) of the Energy Policy Act of 1992 (42
U.S.C. 13385(b)); or
(II) any other Federal or State voluntary greenhouse gas
reduction program; and
(iii) any project or activity for the reduction of
greenhouse gas emissions or sequestration of a greenhouse gas
that is carried out by the entity, including a project or
activity relating to--
(I) fuel switching;
(II) energy efficiency improvements;
(III) use of renewable energy;
(IV) use of combined heat and power systems;
(V) management of cropland, grassland, or grazing land;
(VI) a forestry activity that increases forest carbon
stocks or reduces forest carbon emissions;
(VII) carbon capture and storage;
(VIII) methane recovery;
(IX) greenhouse gas offset investment; and
(X) any other practice for achieving greenhouse gas
reductions as recognized by 1 or more designated agencies.
(3) Exemptions from reporting.--
[[Page S3262]]
(A) In general.--If the Director of the Office of National
Climate Change Policy determines under section 1108(b) that
the reporting requirements under paragraph (1) shall apply to
all entities (other than entities exempted by this
paragraph), regardless of participation or nonparticipation
in the registry, an entity shall be required to submit
reports under paragraph (1) only if, in any calendar year
after the date of enactment of this Act--
(i) the total greenhouse gas emissions of at least 1
facility owned by the entity exceeds 10,000 metric tons of
carbon dioxide equivalent (or such greater quantity as may be
established by a designated agency by regulation); or
(ii)(I) the total quantity of greenhouse gases produced,
distributed, or imported by the entity exceeds 10,000 metric
tons of carbon dioxide equivalent (or such greater quantity
as may be established by a designated agency by regulation);
and
(II) the entity is not a feedlot or other farming operation
(as defined in section 101 of title 11, United States Code).
(B) Entities already reporting.--
(i) In general.--An entity that, as of the date of
enactment of this Act, is required to report carbon dioxide
emissions data to a Federal agency shall not be required to
re-report that data for the purposes of this title.
(ii) Review of participation.--For the purpose of section
1108, emissions reported under clause (i) shall be considered
to be reported by the entity to the registry.
(4) Provision of verification information by reporting
entities.--Each entity that submits a report under this
subsection shall provide information sufficient for each
designated agency to which the report is submitted to verify,
in accordance with measurement and verification methods and
standards developed under section 1106, that the greenhouse
gas report of the reporting entity--
(A) has been accurately reported; and
(B) in the case of each voluntary report under paragraph
(2), represents--
(i) actual reductions in direct greenhouse gas emissions--
(I) relative to historic emission levels of the entity; and
(II) net of any increases in--
(aa) direct emissions; and
(bb) indirect emissions described in paragraph (1)(C)(ii);
or
(ii) actual increases in net sequestration.
(5) Failure to submit report.--An entity that participates
or has participated in the registry and that fails to submit
a report required under this subsection shall be prohibited
from including emission reductions reported to the registry
in the calculation of the baseline of the entity in future
years.
(6) Independent third-party verification.--To meet the
requirements of this section and section 1106, a entity that
is required to submit a report under this section may--
(A) obtain independent third-party verification; and
(B) present the results of the third-party verification to
each appropriate designated agency.
(7) Availability of data.--
(A) In general.--The designated agencies shall ensure, to
the maximum extent practicable, that information in the
database is--
(i) published;
(ii) accessible to the public; and
(iii) made available in electronic format on the Internet.
(B) Exception.--Subparagraph (A) shall not apply in any
case in which the designated agencies determine that
publishing or otherwise making available information
described in that subparagraph poses a risk to national
security.
(8) Data infrastructure.--The designated agencies shall
ensure, to the maximum extent practicable, that the database
uses, and is integrated with, Federal, State, and regional
greenhouse gas data collection and reporting systems in
effect as of the date of enactment of this Act.
(9) Additional issues to be considered.--In promulgating
the regulations under section 1104(c)(1) and implementing the
database, the designated agencies shall take into
consideration a broad range of issues involved in
establishing an effective database, including--
(A) the appropriate units for reporting each greenhouse
gas;
(B) the data and information systems and measures necessary
to identify, track, and verify greenhouse gas emission
reductions in a manner that will encourage the development of
private sector trading and exchanges;
(C) the greenhouse gas reduction and sequestration methods
and standards applied in other countries, as applicable or
relevant;
(D) the extent to which available fossil fuels, greenhouse
gas emissions, and greenhouse gas production and importation
data are adequate to implement the database;
(E) the differences in, and potential uniqueness of, the
facilities, operations, and business and other relevant
practices of persons and entities in the private and public
sectors that may be expected to participate in the registry;
and
(F) the need of the registry to maintain valid and reliable
information on baselines of entities so that, in the event of
any future action by Congress to require entities,
individually or collectively, to reduce greenhouse gas
emissions, Congress will be able--
(i) to take into account that information; and
(ii) to avoid enacting legislation that penalizes entities
for achieving and reporting reductions.
(d) Annual Report.--The designated agencies shall jointly
publish an annual report that--
(1) describes the total greenhouse gas emissions and
emission reductions reported to the database during the year
covered by the report;
(2) provides entity-by-entity and sector-by-sector analyses
of the emissions and emission reductions reported;
(3) describes the atmospheric concentrations of greenhouse
gases; and
(4) provides a comparison of current and past atmospheric
concentrations of greenhouse gases.
SEC. 1106. MEASUREMENT AND VERIFICATION.
(a) Standards.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, the designated agencies shall jointly
develop comprehensive measurement and verification methods
and standards to ensure a consistent and technically accurate
record of greenhouse gas emissions, emission reductions,
sequestration, and atmospheric concentrations for use in the
registry.
(2) Requirements.--The methods and standards developed
under paragraph (1) shall address the need for--
(A) standardized measurement and verification practices for
reports made by all entities participating in the registry,
taking into account--
(i) protocols and standards in use by entities desiring to
participate in the registry as of the date of development of
the methods and standards under paragraph (1);
(ii) boundary issues, such as leakage and shifted use;
(iii) avoidance of double counting of greenhouse gas
emissions and emission reductions; and
(iv) such other factors as the designated agencies
determine to be appropriate;
(B) measurement and verification of actions taken to
reduce, avoid, or sequester greenhouse gas emissions;
(C) in coordination with the Secretary of Agriculture,
measurement of the results of the use of carbon sequestration
and carbon recapture technologies, including--
(i) organic soil carbon sequestration practices; and
(ii) forest preservation and reforestation activities that
adequately address the issues of permanence, leakage, and
verification;
(D) such other measurement and verification standards as
the Secretary of Commerce, the Secretary of Agriculture, the
Administrator, and the Secretary of Energy determine to be
appropriate; and
(E) other factors that, as determined by the designated
agencies, will allow entities to adequately establish a fair
and reliable measurement and reporting system.
(b) Review and Revision.--The designated agencies shall
periodically review, and revise as necessary, the methods and
standards developed under subsection (a).
(c) Public Participation.--The Secretary of Commerce
shall--
(1) make available to the public for comment, in draft form
and for a period of at least 90 days, the methods and
standards developed under subsection (a); and
(2) after the 90-day period referred to in paragraph (1),
in coordination with the Secretary of Energy, the Secretary
of Agriculture, and the Administrator, adopt the methods and
standards developed under subsection (a) for use in
implementing the database.
(d) Experts and Consultants.--
(1) In general.--The designated agencies may obtain the
services of experts and consultants in the private and
nonprofit sectors in accordance with section 3109 of title 5,
United States Code, in the areas of greenhouse gas
measurement, certification, and emission trading.
(2) Available arrangements.--In obtaining any service
described in paragraph (1), the designated agencies may use
any available grant, contract, cooperative agreement, or
other arrangement authorized by law.
SEC. 1107. INDEPENDENT REVIEWS.
(a) In General.--Not later than 5 years after the date of
enactment of this Act, and every 3 years thereafter, the
Comptroller General of the United States shall submit to
Congress a report that--
(1) describes the efficacy of the implementation and
operation of the database; and
(2) includes any recommendations for improvements to this
title and programs carried out under this title--
(A) to achieve a consistent and technically accurate record
of greenhouse gas emissions, emission reductions, and
atmospheric concentrations; and
(B) to achieve the purposes of this title.
(b) Review of Scientific Methods.--The designated agencies
shall enter into an agreement with the National Academy of
Sciences under which the National Academy of Sciences shall--
(1) review the scientific methods, assumptions, and
standards used by the designated agencies in implementing
this title;
(2) not later than 4 years after the date of enactment of
this Act, submit to Congress a report that describes any
recommendations for improving--
(A) those methods and standards; and
(B) related elements of the programs, and structure of the
database, established by this title; and
[[Page S3263]]
(3) regularly review and update as appropriate the list of
anthropogenic climate-forcing emissions with significant
global warming potential described in section 1102(8)(G).
SEC. 1108. REVIEW OF PARTICIPATION.
(a) In General.--Not later than 5 years after the date of
enactment of this Act, the Director of the Office of National
Climate Change Policy shall determine whether the reports
submitted to the registry under section 1105(c)(1) represent
less than 60 percent of the national aggregate anthropogenic
greenhouse gas emissions.
(b) Increased Applicability of Requirements.--If the
Director of the Office of National Climate Change Policy
determines under subsection (a) that less than 60 percent of
the aggregate national anthropogenic greenhouse gas emissions
are being reported to the registry--
(1) the reporting requirements under section 1105(c)(1)
shall apply to all entities (except entities exempted under
section 1105(c)(3)), regardless of any participation or
nonparticipation by the entities in the registry; and
(2) each entity shall submit a report described in section
1105(c)(1)--
(A) not later than the earlier of--
(i) April 30 of the calendar year immediately following the
year in which the Director of the Office of National Climate
Change Policy makes the determination under subsection (a);
or
(ii) the date that is 1 year after the date on which the
Director of the Office of National Climate Change Policy
makes the determination under subsection (a); and
(B) annually thereafter.
(c) Resolution of Disapproval.--For the purposes of this
section, the determination of the Director of the Office of
National Climate Change Policy under subsection (a) shall be
considered to be a major rule (as defined in section 804(2)
of title 5, United States Code) subject to the congressional
disapproval procedure under section 802 of title 5, United
States Code.
SEC. 1109. ENFORCEMENT.
If an entity that is required to report greenhouse gas
emissions under section 1105(c)(1) or 1108 fails to comply
with that requirement, the Attorney General may, at the
request of the designated agencies, bring a civil action in
United States district court against the entity to impose on
the entity a civil penalty of not more than $25,000 for each
day for which the entity fails to comply with that
requirement.
SEC. 1110. REPORT ON STATUTORY CHANGES AND HARMONIZATION.
Not later than 3 years after the date of enactment of this
Act, the President shall submit to Congress a report that
describes any modifications to this title or any other
provision of law that are necessary to improve the accuracy
or operation of the database and related programs under this
title.
SEC. 1111. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated such sums as are
necessary to carry out this title.
____
submitted amendment no. 3146
(Purpose: To establish a national registry for accurate and reliable
reports of greenhouse gas emissions, and to further encourage voluntary
reductions in such emissions)
Strike Title XI and insert the following:
TITLE XI--NATIONAL GREENHOUSE GAS REGISTRY
SEC. 1101. SHORT TITLE.
This amendment may be cited as the ``National Climate
Registry Initiative.''
SEC. 1102. PURPOSE.
The purpose of this title is to establish a new national
greenhouse gas registry--
(1) to further encourage voluntary efforts, by persons and
entities conducting business and other operations in the
United States, to implement actions, projects and measures
that reduce greenhouse gas emissions;
(2) to encourage such persons and entities to monitor and
voluntarily report greenhouse gas emissions, direct or
indirect, from their facilities, and to the extent
practicable, from other types of sources;
(3) to adopt a procedure and uniform format for such
persons and entities to establish and report voluntarily
greenhouse gas emission baselines in connection with, and
furtherance of, such reductions;
(4) to provide verification mechanisms to ensure for
participants and the public a high level of confidence in
accuracy and verifiability of reports made to the national
registry;
(5) to encourage persons and entities, through voluntary
agreement with the Secretary, to report annually greenhouse
gas emissions from their facilities;
(6) to provide to persons or entities that engage in such
voluntary agreements and reduce their emissions transferable
credits which, inter alia, shall be available for use by such
persons or entities for any incentive, market-based, or
regulatory programs determined by the Congress in a future
enactment to be necessary and feasible to reduce the risk of
climate change and its impacts; and
(7) to provide for the registration, transfer and tracking
of the ownership or holding of such credits for purposes of
facilitating voluntary trading among persons and entities.
SEC. 1103. DEFINITIONS.
In this title--
(1) ``person'' means an individual, corporation,
association, joint venture, cooperative, or partnership;
(2) ``entity'' means a public person, a Federal,
interstate, State, or local governmental agency, department,
corporation, or other publicly owned organization;
(3) ``facility'' means those buildings, structures,
installations, or plants (including units thereof) that are
on contiguous or adjacent land, are under common control of
the same person or entity and are a source of emissions of
greenhouse gases in excess for emission purposes of a
threshold as recognized by the guidelines issued under this
title;
(4) ``reductions'' means actions, projects or measures
taken, whether in the United States or internationally, by a
person or entity to reduce, avoid or sequester, directly or
indirectly, emissions of one or more greenhouse gases;
(5) ``greenhouse gas'' means--
(A) an anthropogenic gaseous constituent of the atmosphere
(including carbon dioxide, methane, nitrous oxide,
hydrofluorocarbons, perfluorocarbons, and sulfur
hexafluoride) that absorbs and re-emits infrared radiation
and influences climate; and
(B) an anthropogenic aerosol (such as black soot) that
absorbs solar radiation and influences climate;
(6) ``Secretary'' means the Secretary of Energy;
(7) ``Administrator'' means the Administrator of the Energy
Information Administration; and
(8) ``Interagency Task Force'' means the Interagency Task
Force established under title X of this Act.
SEC. 1104. ESTABLISHMENT.
(a) In General.--Not later than 1 year after the enactment
of this title, the President shall, in consultation with the
Interagency Task Force, establish a National Greenhouse Gas
Registry to be administered by the Secretary through the
Administrator in accordance with the applicable provisions of
this title, section 205 of the Department of Energy Act (42
U.S.C. 7135) and other applicable provisions of that Act (42
U.S.C. 7101, et seq.).
(b) Designation.--Upon establishment of the registry and
issuance of the guidelines pursuant to this title, such
registry shall thereafter be the depository for the United
States of data on greenhouse gas emissions and emissions
reductions collected from and reported by persons or entities
with facilities or operations in the United States, pursuant
to the guidelines issued under this title.
(c) Participation.--Any person or entity conducting
business or activities in the United States may, in
accordance with the guidelines established pursuant to this
title, voluntarily report its total emissions levels and
register its certified emissions reductions with such
registry, provided that such reports--
(1) represent a complete and accurate inventory of
emissions from facilities and operations within the United
States and any domestic or international reduction
activities; and
(2) have been verified as accurate by an independent person
certified pursuant to guidelines developed pursuant to this
title, or other means.
SEC. 1105. IMPLEMENTATION.
(a) Guidelines.--Not later than 1 year after the date of
establishment of the registry pursuant to this title, the
Secretary shall, in consultation with the Interagency Task
Force, issue guidelines establishing procedures for the
administration of the national registry. Such guidelines
shall include--
(1) means and methods for persons or entities to determine,
quantify, and report by appropriate and credible means their
baseline emissions levels on an annual basis, taking into
consideration any reports made by such participants under
past Federal programs;
(2) procedures for the use of an independent third-party or
other effective verification process for reports on emissions
levels and emissions reductions, using the authorities
available to the Secretary under this and other provisions of
law and taking into account, to the extent possible, costs,
risks, the voluntary nature of the registry, and other
relevant factors;
(3) a range of reference cases for reporting of project-
based reductions in various sectors, and the inclusion of
benchmark and default methodologies and practices for use as
reference cases for eligible projects;
(4) safeguards to prevent and address reporting,
inadvertently or otherwise, of some or all of the same
greenhouse gas emissions or reductions by more than one
reporting person or entity and to make corrections and
adjustments in data where necessary;
(5) procedures and criteria for the review and registration
of ownership or holding of all or part of any reported and
independently verified emission reduction projects, actions
and measures relative to such reported baseline emissions
level;
(6) measures or a process for providing to such persons or
entities transferable credits with unique serial numbers for
such verified emissions reductions; and
(7) accounting provisions needed to allow for changes in
registration and transfer of ownership of such credits
resulting from a voluntary private transaction between
persons or entities, provided that the Secretary is notified
of any such transfer within 30 days of the transfer having
been effected either by private contract or market mechanism.
(b) Consideration.--In developing such guidelines, the
Secretary shall take into consideration--
[[Page S3264]]
(1) the existing guidelines for voluntary emissions
reporting issued under section 1605(b) of the Energy Policy
Act of 1992 (42 U.S.C. 13385(b)), experience in applying such
guidelines, and any revisions thereof initiated by the
Secretary pursuant to direction of the President issued prior
to the enactment of this title;
(2) protocols and guidelines developed under any Federal,
State, local, or private voluntary greenhouse gas emissions
reporting or reduction programs;
(3) the various differences and potential uniqueness of the
facilities, operations and business and other relevant
practices of persons and entities in the private and public
sectors that may be expected to participate in the registry;
(4) issues, such as comparability, that are associated with
the reporting of both emissions baselines and reductions from
activities and projects; and
(5) the appropriate level or threshold emissions applicable
to a facility or activity of a person or entity that may be
reasonably and cost effectively identified, measured and
reported voluntarily, taking into consideration different
types of facilities and activities and the de minimis nature
of some emissions and their sources; and
(6) any other consideration the Secretary may deem
appropriate.
(c) Experts and Consultants.--The Secretary, and any member
of the Interagency Task Force, may secure the services of
experts and consultants in the private and non-profit sectors
in accordance with the provisions of section 3109 of title 5,
United Sates Code, in the areas of greenhouse gas
measurement, certification, and emissions trading. In
securing such services, any grant, contract, cooperative
agreement, or other arrangement authorized by law and already
available to the Secretary or the member of the Interagency
Task Force securing such services may be used.
(d) Transferability of Prior Reports.--Emissions reports
and reductions that have been made by a person or entity
pursuant to section 1605(b) of the Energy Policy Act of 1992
(42 U.S.C. 13385(b)) or under other Federal or State
voluntary greenhouse gas reduction programs may be
independently verified and registered with the registry using
the same guidelines developed by the Secretary pursuant to
this section.
(e) Public Comment.--The Secretary shall make such
guidelines available in draft form for public notice and
opportunity for comment for a period of at least 90 days, and
thereafter shall adopt them for use in implementation of the
registry established pursuant to this title.
(f) Review and Revision.--The Secretary, through the
Interagency Task Force, shall periodically thereafter review
the guidelines and, as needed, revise them in the same manner
as provided for in this section.
SEC. 1106. VOLUNTARY AGREEMENTS.
(a) In General.--In furtherance of the purposes of this
title, any person or entity, and the Secretary, may
voluntarily enter into an agreement to provide that--
(1) such person or entity (and successors thereto) shall
report annually to the registry on emissions and sources of
greenhouse gases from applicable facilities and operations
which generate net emissions above any de minimis thresholds
specified in the guidelines issued by the Secretary pursuant
to this title;
(2) such person or entity (and successors thereto) shall
commit to report and participate in the registry for a period
of at least 5 calendar years, provided that such agreements
may be renewed by mutual consent;
(3) for purposes of measuring performance under the
agreement, such person or entity (and successors thereto)
shall determine, by mutual agreement with the Secretary--
(A) pursuant to the guidelines issued under this title, a
baseline emissions level for a representative period
preceding the effective date of the agreement; and
(B) emissions reduction goals, taking into consideration
the baseline emissions level determined under subparagraph
(A) and any relevant economic and operational factors that
may affect such baseline emissions level over the duration of
the agreement; and
(4) for certified emissions reductions made relative to the
baseline emissions level, the Secretary shall provide, at the
request of the person or entity, transferable credits (with
unique assigned serial numbers) to the person or entity
which, inter alia--
(A) can be used by such person or entity towards meeting
emissions reductions goals set forth under the agreement;
(B) can be transferred to other parties or entities through
a voluntary private transaction between persons or entities;
or
(C) shall be applicable towards any incentive, market-
based, or regulatory programs determined by the Congress in a
future enactment to be necessary and feasible to reduce the
risk of climate change and its impacts.
(b) Public Notice and Comment.--At least 30 days before any
agreement is final, the Secretary shall give notice thereof
in the Federal Register and provide an opportunity for public
written comment. After reviewing such comments, the Secretary
may withdraw the agreement or the parties thereto may
mutually agree to revise it to finalize it without
substantive change. Such agreement shall be retained in the
national registry and be available to the public.
(c) Emissions in Excess.--In the event that a person or
entity fails to certify that emissions from applicable
facilities are less than the emissions reduction goals
contained in the agreement, such person or entity shall take
actions as necessary to reduce such excess emissions,
including--
(1) redemption of transferable credits acquired in previous
years if owned by the person or entity;
(2) acquisition of transferable credits from other persons
or entities participating in the registry through their own
agreements; or
(3) the undertaking of additional emissions reductions
activities in subsequent years as may be determined by
agreement with the Secretary.
(d) No New Authority.--This section shall not be construed
as providing any regulatory or mandate authority regarding
reporting of such emissions or reductions.
SEC. 1107. MEASUREMENT AND VERIFICATION.
(a) In General.--The Secretary of Commerce, through the
National Institute of Standards and Technology and in
consultation with the Secretary of Energy, shall develop and
propose standards and practices for accurate measurement and
verification of greenhouse gas emissions and emissions
reductions. Such standards and best practices shall address
the need for--
(1) standardized measurement and verification practices for
reports made by all persons or entities participating in the
registry, taking into account--
(A) existing protocols and standards already in use by
persons or entities desiring to participate in the registry;
(B) boundary issues such as leakage and shifted
utilization;
(C) avoidance of double-counting of greenhouse gas
emissions and emissions reductions; and
(D) such other factors as the panel determines to be
appropriate;
(2) measurement and verification of actions taken to
reduce, avoid or sequester greenhouse gas emissions;
(3) in coordination with the Secretary of Agriculture,
measurement of the results of the use of carbon sequestration
and carbon recapture technologies, including--
(A) organic soil carbon sequestration practices;
(B) forest preservation and re-forestration activities
which adequately address the issues of permanence, leakage
and verification; and
(4) such other measurement and verification standards as
the Secretary of Commerce, the Secretary of Agriculture, and
the Secretary of Energy shall determine to be appropriate.
(b) Public Comment.--The Secretary of Commerce shall make
such standards and practices available in draft form for
public notice and opportunity for comment for a period of at
least 90 days, and thereafter shall adopt them, in
coordination with the Secretary of Energy, for use in the
guidelines for implementation of the registry as issued
pursuant to this title.
SEC. 1108. CERTIFIED INDEPENDENT THIRD PARTIES.
(a) Certification.--The Secretary of Commerce shall,
through the Director of the National Institute of Standards
and Technology and the Administrator, develop standards for
certification of independent persons to act as certified
parties to be employed in verifying the accuracy and
reliability of reports made under this title, including
standards that--
(1) prohibit a certified party from themselves
participating in the registry through the ownership or
transaction of transferable credits recorded in the registry;
(2) prohibit the receipt by a certified party of
compensation in the form of a commission where such party
receives payment based on the amount of emissions reductions
verified; and
(3) authorize such certified parties to enter into
agreements with persons engaged in trading of transferable
credits recorded in the registry.
(b) List of Certified Parties.--The Secretary shall
maintain and make available to persons or entities making
reports under this title and to the public upon request a
list of such certified parties and their clients making
reports under this title.
SEC. 1109. REPORT TO CONGRESS.
Not later than 1 year after guidelines are issued for the
registry pursuant to this title, and biennially thereafter,
the President, through the Interagency Task Force, shall
report to the Congress on the status of the registry
established by this title. The report shall include--
(a) an assessment of the level of participation in the
registry (both by sector and in terms of national emissions
represented);
(b) effectiveness of voluntary reporting agreements in
enhancing participation in the registry;
(c) use of the registry for emissions trading and other
purposes;
(d) assessment of progress towards individual and national
emissions reduction goals; and
(e) an inventory of administrative actions taken or planned
to improve the national registry or the guidelines, or both,
and such recommendations for legislative changes to this
title or section 1605 of the Energy Policy Act of 1992 (42
U.S.C. 13385) as the President believes necessary to better
carry out the purposes of this title.
SEC. 1110. REVIEW OF PARTICIPATION.
(a) In General.--Not later than 5 years after the date of
enactment of this title, the Director of the Office of
National Climate Change Policy shall determine whether the
reports submitted to the registry represent less than 60
percent of the national aggregate greenhouse gas emissions as
inventoried
[[Page S3265]]
in the official U.S. Inventory of Greenhouse Gas Emissions
and Sinks published by the Environmental Protection Agency
for the previous calendar year.
(b) Mandatory Reporting.--If the Director of the Office of
National Climate Change Policy determines under subsection
(a) that less than 60 percent of such aggregate greenhouse
gas emissions are being reported to the registry--
(1) all persons or entities, regardless of their
participation in the registry, shall submit to the Secretary
a report that describes, for the preceding calendar year, a
complete inventory of greenhouse gas emissions (as reported
at the facility level), including--
(A) the total quantity of each greenhouse gas emitted by
such person or entity, expressed in terms of mass and in
terms of the quantity of carbon dioxide equivalent;
(B) an estimate of the emissions from products manufactured
and sold by such person or entity in the previous calendar
year, determined over the average lifetime of those products;
and
(C) such other categories of emissions as the Secretary
determines by regulation to be practicable and useful for the
purposes of this title, such as--
(i) direct emissions from stationary sources;
(ii) indirect emissions from imported electricity, heat,
and steam;
(iii) process and fugitive emissions; and
(iv) production or importation of greenhouse gases; and
(2) each person or entity shall submit a report described
in this section--
(A) not later than the earlier of--
(i) April 30 of the calendar year immediately following the
year in which the Director of the Office of National Climate
Change Policy makes the determination under subsection (a);
or
(ii) the date that is 1 year after the date on which the
Director of the Office of National Climate Change Policy
makes the determination under subsection (a); and
(B) annually thereafter.
(c) Exemptions From Reporting.--
(1) In general.--A person or entity shall be required to
submit reports under subsection (b) only if, in any calendar
year after the date of enactment of this title--
(A) the total greenhouse gas emissions of at least 1
facility owned by the person or entity exceeds 10,000 metric
tons of carbon dioxide equivalent greenhouse gas (or such
greater quantity as may be established by a designated agency
by regulation);
(B) the total quantity of greenhouse gas produced,
distributed, or imported by the person or entity exceeds
10,000 metric tons of carbon dioxide equivalent greenhouse
gas (or such greater quantity as may be established by a
designated agency by regulation); or
(C) the person or entity is not a feedlot or other farming
operation (as defined in section 101 of title 11, United
States Code).
(2) Entities already reporting.--A person or entity that,
as of the date of enactment of this title, is required to
report carbon dioxide emissions data to a Federal agency
shall not be required to report that data again for the
purposes of this title. Such emissions data shall be
considered to be reported by the entity to the registry for
the purpose of this title and included in the determination
of the Director of the Office of National Climate Change
Policy made under subsection (a).
(d) Enforcement.--If a person or entity that is required to
report greenhouse gas emissions under this section fails to
comply with that requirement, the Attorney General may, at
the request of the Secretary, bring a civil action in United
States district court against the person or entity to impose
on the person or entity a civil penalty of not more than
$25,000 for each day for which the entity fails to comply
with that requirement.
(e) Resolution of Disapproval.--If made, the determination
of the Director of the Office of National Climate Change
Policy made under subsection (a) shall be considered to be a
major rule (as defined in section 804(2) of title 5, United
States Code) subject to the congressional disapproval
procedure under section 802 of title 5, United States Code.
SEC. 1111. NATIONAL ACADEMY REVIEW.
Not later than 1 year after guidelines are issued for the
registry pursuant to this title, the Secretary, in
consultation with the Interagency Task Force, shall enter
into an agreement with the National Academy of Sciences to
review the scientific and technological methods, assumptions,
and standards used by the Secretary and the Secretary of
Commerce for such guidelines and report to the President and
the Congress on the results of that review, together with
such recommendations as may be appropriate, within 6 months
after the effective date of that agreement.
Mr. REID. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. DAYTON. Mr. President, I ask unanimous consent the order for the
quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DAYTON. Mr. President, I ask unanimous consent that I may be
permitted to speak as in morning business for a period of up to 5
minutes.
The PRESIDING OFFICER. Without objection, it is so ordered.
(The remarks of Mr. Dayton are printed in today's Record under
``Morning Business.'')
Mr. DAYTON. Mr. President, I yield the floor.
The PRESIDING OFFICER. The Senator from Nevada.
Mr. REID. Mr. President, I ask unanimous consent the time that was
used by the Senator from Minnesota be counted against the 30 hours.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. REID. Mr. President, I suggest the absence of a quorum.
The PRESIDING OFFICER. The clerk will call the roll.
The legislative clerk proceeded to call the roll.
Mr. NICKLES. Mr. President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER (Mr. Carper). Without objection, it is so
ordered.
Amendment No. 3256 To Amendment No. 2917
Mr. NICKLES. Mr. President, I ask that amendment No. 3256 be
considered.
The PRESIDING OFFICER. Without objection, the pending amendment is
set aside. The clerk will report.
The legislative clerk read as follows:
The Senator from Oklahoma [Mr. Nickles], for himself, Mr.
Breaux, and Mr. Miller, proposes an amendment numbered 3256.
Mr. NICKLES. Mr. 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:
At the appropriate place in Title II, insert the following:
Sec. . Not withstanding any other provision in this Act,
``3 cents'' shall be considered by law to be ``1.5 cents'' in
any place ``3 cents'' appears in Title II of this Act.
Mr. NICKLES. The amendment I called up, sponsored by Senator Breaux,
Senator Miller, Senator Voinovich, and myself, will reduce the penalty
if a utility doesn't achieve the renewable standard that is set in the
legislation.
The legislation says that 10 percent of the electricity produced has
to be from renewable sources. Renewable sources are defined as wind and
solar, biomass--interestingly enough, not hydro. That is a very
difficult standard to achieve. I am not sure any State can achieve it
now or any State will be able to achieve it in the future. We will have
to see.
Varying States have different renewable standards. I am all in favor
of that, whatever States want to decide. We are getting ready to have a
Federal mandate that says: 10 percent of your power has to be from
renewable sources. Most people think renewables is nonfossil fuel, but
that is not the case here. We are talking about primarily wind, solar,
and biomass. Nuclear fuel is not included. Hydro, or at least old
hydro, is not included. But if you don't achieve that 10 percent
standard, there is a penalty.
How do you get to the 10 percent? Let's say you do everything you
can, but primarily most of the production in your State is fossil fuel.
You run off coal or natural gas generators. And if you are short of the
10 percent, what do you do? Under the bill, you can buy it from other
utilities, if they have surplus credits, or you can pay the Federal
Government. You can pay the Government for the credits. You could call
them credits. You could call them a tax. You could call them a penalty.
But you have to pay, if you don't meet this 10 percent standard.
Actually, the standard starts at 1 percent and it is phased up to 10
percent in the year 2019.
If you don't make the standard, you have to pay something. It is a
tax. Your utility has to write a check to the Federal Government, a
large check. In many cases, it could be hundreds of millions of
dollars. In many cases, the cost to the utilities--and I will enter
into the Record some statements from different utilities--could be
billions of dollars, because they have to pay 3 cents per kilowatt hour
for whatever they are short of this target we are getting ready to
mandate.
How much is 3 cents per kilowatt hour? Most of us don't know. When we
pay our utility bill, we don't know how much utilities really cost. The
wholesale price of electricity right now, nationwide, is about 3 cents.
If you don't meet the target, basically you have to
[[Page S3266]]
pay 100 percent of whatever you are short on renewables in electricity
cost. That is a lot, for 10 percent of your power.
If you produce no electricity from the renewables, this bill is the
equivalent of a 5-percent surcharge because you are paying in effect a
100-percent increase for that last 10 percent. If you average that over
your entire cost, it is about a 5-percent increase in your utility
bill.
I will tell you, few if any utilities will meet this standard in this
bill, even those utilities that are very progressive and aggressive in
trying to meet renewable standards and have renewable energy sources
such as wind, solar, and biomass. Few are able to meet this standard
that is in this bill. So you are going to have to buy these credits and
pay a lot of money.
The essence of this amendment is, let's reduce that 3-cent penalty to
a penny and a half. You might say, where did you get the penny and a
half? It happens to be half of what is in the underlying bill, and it
also happens to be half of what the Clinton administration proposed.
President Clinton, in 1999, proposed that we have a renewable
standard. Incidentally, he didn't go up to 10 percent; he only went to
7.5 percent of your electricity would have to be renewable. He also
said: If you don't meet that objective, the penalty will be a penny and
a half. That is the cost of the credits.
Secretary Bill Richardson--many of us got to know him over the years
and enjoyed working with him in Congress--when he was Secretary of
Energy, that was the penalty, a penny and a half, not 3 cents.
So the amendment Senator Breaux, Senator Miller, Senator Voinovich,
and I have is to reduce the penalty from 3 cents to a penny and a half.
That sounds as if we are talking about pennies. We are talking about
billions of dollars, because we are talking about, 10 percent of all
the electricity that is produced in the United States must come from
renewables, and if you don't make it, you have to pay this 3 cents per
kilowatt hour.
What does that mean? I will cite a couple of letters. I have them
from different companies and different States.
I will start with my State. Oklahoma Gas and Electric said the
penalty under the bill, as written right now--their estimate is it
would cost $794 million through the year 2020. We would cut that in
half. We have almost every utility in the country supporting of this
amendment. This is a rather large utility called Southern Company. I
mentioned the largest one in my State, Oklahoma Gas and Electric.
Southern Company, which is in several Southern States, said it would
cost them from $676 million to $1.014 billion annually by the year
2020.
I hope my colleagues understand this. I have a letter I will also
have printed in the Record from the president of Southern Company, one
of the largest utilities in America that says the total cost across
several states could be over a billion dollars--from $676 million up to
over a billion dollars a year--if the 3-cent penalty stays in the bill.
We would cut that in half under our amendment.
I could go on and on. Is it going to cost the utilities ultimately?
Probably not. They are going to pass it, if they can; and I expect that
they can. Residential consumers and industrial consumers will pay for
it. Frankly, if industrial consumers are paying for it, they are going
to pass that on, too.
If you want to set about an inflationary spiral, we are doing that.
We are increasing utility costs if we allow the Daschle-Bingaman 3-cent
penalty per kilowatt hour to stay in the bill. I think it should be
zero. Senator Kyl had an amendment to strike out the renewable section,
but I am coming up with half a loaf. I am saying cut it in half. I am a
legislator. If we can pass a bill half as damaging, I am willing to do
it. If we can reduce the numbers by half, I think we will have made a
big step in the right direction. Why in the world would we have a cap
or a penalty higher than the Clinton administration proposed?
Incidentally, it didn't pass. Some people said we should not pass it
because it costs too much.
Look at some of the other States that are involved. Kansas City Power
and Light said it would cost over $300 million, and that is the current
cap. We would cut that in half.
Different companies have used different ways of stating the costs.
Pinnacle West in Arizona talks about it costing billions of dollars to
comply. They even said it may have a residential rate increase of 28
percent.
In Pennsylvania, PP&L, which has facilities in Pennsylvania and
Montana, estimates penalties at $178 million per year in 2006, growing
to $260 million by 2020. The reason they start out low is the renewable
section starts out low, at 1 percent, but it grows every year, up to
the very expensive 10 percent by 2019.
Let me mention a couple letters, which I will enter into the Record,
so that this won't just be little excerpts from my floor speech. This
is a note from Allegany Energy. It says:
The rates under the restructuring initiative to lower
consumer costs may restrict Allegany Energy, a conservative--
1 percent requirement would cost $13 million annually, and a
10 percent requirement would cost $135 million annually,
assuming no growth in customer electricity consumption.
I think most people would assume the consumption would go up over
that period of time. That is a very conservative estimate.
Exelon: I will read various segments of this:
Meeting the Bingaman RPS amendment will cost our customers
between $2.3 billion and $4.6 billion more than they would
otherwise pay for electricity between 2005 and 2020.
I hope my colleagues have a chance to absorb some of these numbers.
This is a very large utility, and they are primarily in Illinois and
Pennsylvania. They said it could cost $4.6 billion if we don't change
the Bingaman amendment. Our amendment says we will cut it in half. I
hope the Senators from Pennsylvania, the Senators from Illinois, and
others will stop and say, wait a minute, who pays for that? Are we
really passing something where we know what we are doing? Are we going
to mandate those cost increases on consumers?
Wait a minute, we are giving people a chance to cut it in half. That
is what this amendment does. Listen to this comment made from Bill
Richardson before a House committee in June 17 of 1999:
To hold program costs down, the administration's proposal
would allow electricity sellers to purchase credits from the
Department of Energy at a cost of 1.5 cents per kilowatt
hour. As a result, sellers would not be forced to pay
excessive amounts for credits that are sold by other
electricity providers that exceed the 7.5 percent RPS
requirement.
This bill has a 10-percent requirement, and if you don't meet it, it
says you have to pay 3 cents per kilowatt hour. As I have mentioned by
a few examples, the cost is absolutely enormous.
I want to mention a couple others. This is a the Public Service
Commission for the State of Florida:
However, in order to mitigate the ``tax impact'' of this
poorly conceived national program, we support the Nickles
amendment to lower the amount of penalty from 3 cents to 1.5
cents per KWH. This would reduce the potential cost of this
federal mandate on Florida ratepayers.
That is a copy of a letter to Senator Gramm.
This is a note from American Electric Power. It says:
AEP is joining in this effort with Allegany Energy, Console
Energy, Peabody Energy, and the U.S. Mineworkers of America.
AEP and Allegany are the two largest utilities in West
Virginia and are responsible for all the electricity
distributed in the State.
I will enter into the Record a letter from Southern Company. This is
signed by Allen Franklin, chairman and president and CEO:
The cumulative cost of the RPS mandate to Southern Company
through the year 2020 will be from $3 billion to $6.5
billion. This does not include substantial transmission and
interconnection costs for remote wind turbines located in the
upper Midwest. . . .
I will enter this into the Record. That is a major company, covering
several States, saying this will cost billions of dollars over the next
15 years. I just tell my colleagues that when we talk about a penalty
of a penny and a half and 3 cents per kilowatt, that doesn't sound like
much. When you multiply it times all the electricity and mandate that
10 percent of the electricity meet the standard and, if it doesn't,
they have to pay this 3 cents--basically a 100-percent tax on
electricity, equal to the value of 100 percent of wholesale cost of
electricity--
[[Page S3267]]
you are talking about an enormous utility increase. We have a chance to
mitigate that; we have a chance to reduce it by basically agreeing to
the same standard that was proposed by the Clinton administration in
1999. I urge my colleagues to do so.
I ask unanimous consent to have the letters to which I referred
printed in the Record.
There being no objection, the letters were ordered to be printed in
the Record, as follows:
Southern Company,
Atlanta, Georgia, April 16, 2002.
Hon. Don Nickles,
U.S. Senate, Hart Senate Office Building, Washington, DC.
Dear Senator Nickles: As the Senate continues its
consideration of S. 517, the Daschle/Bingaman energy bill, I
wanted to thank you for your continued efforts to improve the
Renewable Portfolio Standard (RPS) mandate in the bill. This
ill-advised policy will mandate the use of un-economic
generation and is not practical in several regions of the
nation.
In many parts of the country, the RPS mandate can not be
achieved due to the lack of wind resources and the
intermittent nature of solar energy. The requirement to
purchase penalty credits under such circumstances equates to
a tax on consumers in those regions with no resulting benefit
for those same consumers. The cumulative cost of the RPS
mandate to Southern Company through the year 2020 will be
from 3 billion dollars to 6.5 billion dollars. This does NOT
include substantial transmission and interconnection costs
for remote wind turbines located in the upper Midwest, which
is the likely location for such an option. Obviously these
dramatic costs would increase the price of electricity to our
customers and threaten their lifestyles and the economic
health of their communities.
One way to reduce these costs would be to lower the 3-cents
per kilowatt-hour penalty contained in the Bingaman RPS
language. This penalty is double the 1.5-cents per kilowatt-
hour renewable credit cost in a renewable portfolio standard
proposed by the Clinton Administration. I understand you
intend to offer an amendment to lower the RPS penalty to 1.5-
cents per kilowatt-hour, and we will support you in that
regard. This will not remove the negative impacts on our
customers of an ill-advised RPS mandate, but it will at least
lessen those costs significantly.
We appreciate your continued efforts to improve energy
legislation as it moves through Congress.
Sincerely,
Allen Franklin
____
OGE Energy Corp.,
Oklahoma City, OK, April 16, 2002.
Hon. Blanche L. Lincoln,
Dirksen Senate Office Building,
Washington, DC.
Dear Senator Lincoln: On behalf of Oklahoma Gas & Electric
(OG&E) I strongly urge your support of an amendment to be
offered by Senator Don Nickles to reduce by half the cost to
Arkansas consumers of the mandatory Renewable Portfolio
Standard provision in the pending energy bill, S. 517. The
Nickles amendment would reduce the cost of the renewable
energy credit from 3 cents per kilowatt-hour to 1.5 cents per
kw/hour.
Based on the year 2001 actual total retail sales and full
implementation of the 10% RPS requirement, we calculate that
it would cost our customers an additional $73 million per
year, suggesting an increase of 5% in our retail rates. OG&E
opposes such federal mandate on investor-owned utilities
since it will skew the competitive playing field toward
cooperatives and public power that have been unfairly
exempted from the federal RPS mandate. The exemption of the
coops and public power utilities is equivalent to a 5%
penalty for our Company and a 5% windfall for coops and
public power. Although we are opposed to renewable mandates,
OG&E is willing to purchase power generated by renewable
sources if customers desire to purchase it. But thus far, our
customers in Arkansas and Oklahoma have not evidenced a
willingness to purchase higher priced renewable power to
justify our investment in these sources. Instead, our
customers clearly prefer the highly reliable and much less
expensive range of generation options that we currently
offer. The RPS provision in the energy bill will force our
Arkansas customers to pay more for a renewable product they
do not yet want enough to pay for. In so doing, the RPS will
raise costs to residential and business customers without
countervailing benefit either to them or to the Fort Smith
regional economy.
Senator Nickles' amendment would at least reduce the
economic impact of the RPS provision by half. It makes real
sense to me. I hope you will support Senator Nickles' effort.
If you have any questions, please let me know.
Sincerely,
Steven E. Moore,
Chairman, President and Chief
Executive Officer.
____
Progress Energy Service Company, LLC,
Raleigh, NC, April 22, 2002.
Senator Don Nickles,
Senate Hart Building, U.S. Senate, Washington, DC.
Dear Senator Nickles: As the Senate continues debate on the
energy bill (S. 517), I must share with you my company's
strong conviction that this legislation is poor energy policy
for our customers and the country. The bill represents an
enormous policy reversal that gives important state
jurisdiction directly to the federal government.
Progress Energy was formed in 2000 when Carolina Power &
Light merged with Florida Progress. Through two subsidiaries,
the company provides electricity to nearly three [2.8]
million customers in the Carolinas and Florida by employing a
diverse generation portfolio of more than 20,000 megawatts.
Our service territory has enjoyed substantial growth based,
in part, on our ability to produce reliable low-cost energy.
We use the market to select the best fuel mix for energy
production, a process that is grossly jeopardized by the
mandated renewable portfolio standards (RPS).
Under the RPS cap of 3 c/kWh, between 2005 and 2020,
Progress Energy's customers would be forced to absorb $3.5
billion in extra costs. This RPS mandate would eventually
sidetrack economic growth. Additionally, the RPS could limit
the benefits of emissions-free energy our customers currently
enjoy since we use a large percentage of electricity
generated with nuclear and hydropower.
Thank you for your interest and concern regarding the RPS
amendment and please know that we would be very supportive of
any relief you could give on this mandate.
Sincerely,
David G. Roberts,
Director Federal Affairs.
____
State of Florida,
Public Service Commission,
Tallahassee, FL, April 22, 2002.
RE: S. 517, the Energy Bill
Hon. Bob Graham,
U.S. Senator, Hart Senate Office Building, Washington, DC.
Dear Senator Graham: The Florida Public Service Commission
(FPSC) appreciates the opportunity to provide comments on
three areas of amendments to S. 517, the energy bill. These
areas are: (1) The Renewable Portfolio Standards; (2) the
Landrieu amendment on participant-funded transmission
expansion; and (3) the amendments referred to as the consumer
protection package.
(1) nickles amendment to the renewable portfolio standards section
The FPSC continues to oppose the Federal Renewable
Portfolio Standards. Florida utilities will have difficulty
meeting the federal standards. We believe that state
legislatures are best suited to set policies on renewable
standards for their state. In fact, during the current
legislative session, the Florida legislature directed the
FPSC to complete a study on renewables by February 2003. A
strict one-size-fits-all standard could put companies in the
position of having to purchase credits from elsewhere or of
being in noncompliance. The impact will ultimately be on the
retail ratepayer. Again, we oppose the Federal Renewable
Portfolio Standard. However, in order to mitigate the ``tax
impact'' of this poorly-conceived national program, we
support the Nickles amendment to lower the amount of the
penalty from 3 cents to 1.5 cents per KWH. This would reduce
the potential cost of this federal mandate on Florida
ratepayers.
(2) landrieu amendment on ``participant-funded transmission expansion''
We believe this amendment to place the costs of
transmission expansion on the cost causer has merit, but we
do have some concerns about the provisions included in the
amendment. For example, there is a provision on market
monitoring that possibly could be interpreted to view the
Regional Transmission Organization as the primary market
monitor. Surely, that is not the intention of the amendment.
Moreover, the FPSC has initiated its own RTO proceeding to
address a Florida-specific RTO. That proceeding may also
address the entity appropriate to cover market monitoring.
The language within that provision is positive regarding the
RTO publicizing: (1) Projects that increase capacity or
transfer capability of the transmission system, and (2) the
tradeable transmission rights and costs associated with the
project. Thus, perhaps the section could be revised to
address only the ``RTO Publication of Information'' instead
of ``Market Monitoring,'' or the section could be deleted.
Thus, we believe the amendment has merit, but should be
revised.
(3) consumer protection package
In general, the amendments, referred to as ``the Consumer
Protection Package'' look superior to the language in S. 517,
as amended by Senator Thomas. They create a standard on
proposed mergers that they must ``advance the public
interest'' which is a higher standard than ``consistent with
the public interest.'' Also, the package expands the list of
factors to be considered by FERC in reviewing mergers.
In addition, the amendments require public disclosure of
transactions, and establish clear standards on affiliate
transactions. Also, there would be access to utility holding
company books and records. We see benefit to these
provisions, and they are consistent with this Commission's
Bedrock Principles on National Energy Policy.
We do want to raise a concern, however, that States not be
preempted. In particular, there is the provision on market
based rates which directs FERC to remedy market flaws
[[Page S3268]]
and abuses. To the extent that one of those remedies might be
to require divestiture of a utility's assets, we believe the
FERC should be required to consult with those state
commissions that have statutory authority prior to ordering
such a remedy. Thus, in general we commend the ``consumer
protection'' package of amendments, but urge that any
potentially preemptive language be closely scrutinized.
We appreciate your staff staying in close contact with FPSC
staff, and hope this information is useful.
Sincerely,
Lila A. Jaber,
Chairman.
____
Great Plains Energy,
Kansas City, MO, April 17, 2001.
Hon. Don Nickles,
U.S. Senate, Washington, DC.
Dear Senator Nickles: On behalf of the employees of Great
Plains Energy, including our regulated subsidiary Kansas City
Power & Light, I am writing to express my appreciation for
your leadership and support on an issue of great concern.
During the Senate's recent consideration of S. 517, the
energy bill, you spoke about the adverse effect a renewable
portfolio standard (RPS) would have on utilities and cited
information from the Energy Information Administration (EIA)
that the cost of purchasing credits in lieu of complying with
a renewable mandate would cost KCPL $16 million--in your
words, ``a pretty good hit.''
Unfortunately, EIA grossly understated the costs of a 10
percent mandate to KCPL, and ``the hit'' is much worse than
that. We project the total costs of purchasing the credit to
be more than $300 million over the 15-year period between
2005 and 2020, when the RPS would ramp up to the full 10
percent. For a company of our size, these costs are
intolerable.
While we appreciate the need to diversify our energy mix,
doing so by imposing a federal mandate that ignores the
availability and cost-effectiveness of renewable resources is
not sound public policy. In our area, wind energy, for
example, certainly would not be competitive with fuels such
as coal, oil, natural gas, or nuclear. That is why we
strongly support your efforts to amend the RPS by reducing
the credit cost from $0.03 per kWh to $0.015 per kWh. Even
with the credit cut in half, we would still be saddled with
extraordinary costs.
We pride ourselves on providing reliable and affordable
electric service, yet the hidden tax imposed by the RPS may
be felt by many who can ill afford higher electricity prices.
We appreciate your efforts to reduce the burden of the
renewable energy mandate, and offer our assistance to enact a
more reasonable approach.
Sincerely,
Bernie Beaudoin.
____
American Corn Growers Association,
Washington, DC, April 16, 2002.
Hon. John B. Breaux,
U.S. Senate, Washington, DC.
Dear Senator Breaux: I am writing to urge your support for
the amendment that Senator Nickles plans to offer to the
renewable portfolio standard of the energy bill, S. 517. Wind
energy is fast becoming a major new ``crop'' for the farming
and ranching community in many areas of the nation. The
American Corn Growers Association (ACGA), has developed its
Wealth From the Wind Program for farmers, and has strongly
supported wind energy tax credits in the Energy Bill as well
as other favorable legislative initiatives in the Energy
Title of the Farm Bill. ACGA also supports a fair and
equitable renewable portfolio standard (RPS) requiring a
portion of the nation's energy to come from renewable
sources. However, while we want to do everything we can to
promote renewable production by farmers we must oppose undue
mandates that will impose additional fuel costs on all rural
consumers.
Senator Nickles' amendment will significantly reduce the
cost of complying with the standard, and in turn protect
rural America from excessive price increases for electricity,
by cutting the energy credits from 3 cents per kilowatt-hour
to 1.5 cents per kilowatt-hour.
As you know fuel prices have fluctuated wildly over the
last two years and some regions have seen shortages of
electricity. With the price of gasoline and diesel rising
steadily now is not the time to add to these uncertainties.
We urge you to support the amendment offered by Senator
Nickles.
Sincerely,
Larry Mitchell,
Chief Executive Officer.
____
MidAmerican Energy Holdings Company,
Omaha Nebraska, April 11, 2002.
Hon. Don Nickles,
Assistant Republican Leader, The Capitol, Washington, DC.
Dear Senator Nickles: Thank you for your continued support
of the inclusion of electricity modernization provisions in
the Senate energy bill. The bipartisan vote yesterday by the
Senate to maintain the bill's electricity title was a great
step forward.
With regard to your concerns about the renewable portfolio
standard (RPS) in the Daschle/Bingaman energy bill,
MidAmerican Energy Company has analyzed this proposal and
developed estimates of the increase in costs that will result
from enactment of the RPS. According to our preliminary
calculations, implementing the RPS in S. 517 will begin
increasing electricity costs for MidAmerican's regulated and
competitive customers in 2007 by almost $600,000, with costs
rising to more than $40 million in 2019.
Because of the comparatively high availability of
affordable renewables in the region served by MidAmerican, we
based our calculations on an estimated additional cost of 1.5
cents/kilowatt hour for qualifying sources. As a major
developer of renewable electricity through our CE Generation
subsidiary, MidAmerican believes that renewables can and
should play an increasing role in the nation's electric
generation mix, and the Company has expressed its support for
Senator Bingaman's overall efforts to promote increased use
of these resources. At the same time, MidAmerican has long
believed that applying a reasonable cap on the cost of
renewable credits would ensure that consumer costs do not
escalate beyond those anticipated by RPS proponents.
I understand that you are holding ongoing discussions with
Chairman Bingaman about the possibility of adjusting the cost
cap in the underlying legislation to address some of your
concerns about the RPS. We have contacted Chairman Bingaman's
staff to express our hope that a mutually acceptable
compromise can be reached on this issue. Thanks again for
your inquiry and continued support for PUHCA repeal and other
important industry modernizations.
Sincerely,
David L. Sokl,
Chairman and Chief Executive Officer.
____
Electric Consumers' Alliance,
Indianapolis, IN, April 16, 2002.
Re: Consumer support for Sen. Nickles' Amendment to S. 517
regarding Renewable Portfolio Standards
Dear Senator: On behalf of Electric Consumers' Alliance,
its more than 300 member organizations representing all 50
states, and its tens of millions of residential and small
business constituents, I am writing to indicate our strong
support for Senator Nickles' proposed amendment to S. 517,
the pending energy bill. Simply put, Sen. Nickles seeks to
implement the mandatory Renewable Portfolio Standard in a way
that is more equitable and cost effective for consumers
across the nation by reducing the renewable energy credit
from 3 cents to 1.5 cents per kilowatt-hour.
Renewable energy resources can and will play an important
role in America's future energy infrastructure. As such, ECA
supports their development, including the creation of
subsidies to accelerate their deployment. At the same time,
however, we are cognizant that our members will continue to
expect a reliable, affordable supply of electricity over the
next decade, and this will come predominantly from
traditional resources. It is important to encourage the
development of new resources, but this must be tempered
against the more important goals of maintaining service that
is reliable and affordable. There is a danger in transferring
too much of the cost burden for development of these
resources to consumers, rather than encouraging the market to
work.
The mandated RPS requirement will not necessarily lessen
the need for or reliance on traditional generation in the
short-term. This is because of the intermittent nature of
renewable resources. Consumers won't wait for the sun to
shine or wind to blow to turn on appliances or flip the
lights. The renewable credits that are to be paid under S.
517 will likely be an adder to the cost of electricity for
consumers. As a result, these credits--while well-
intentioned--will almost certainly have a direct impact on
raising the price of electricity for many Americas (assuming
reliability is not compromised, which we certainly do not
advocate).
The Nickles proposal is a reasonable attempt to mitigate
the impact of the almost certain consumer price hike that
will be caused by mandated RPS. At a time when energy
affordability is an issue for a growing number of residential
and small business consumers, it is an appropriate balancing
of the interests at stake. If consumers are to shoulder the
burden for development of renewable resources through
credits, which S. 517 requires, then that cost burden should
be mitigated to more reasonable levels. Sen. Nickles'
proposal to reduce this impact by reducing the credit from 3
cents to 1.5 cents per kilowatt hour is a reasonable
compromise. It deserves your support.
Thank you for your kind consideration.
Robert K. Johnson,
Executive Director.
____
April 18, 2002.
Hon. Don Nickles,
Hon. John B. Breaux,
U.S. Senate, Washington, DC.
Dear Senator Nickles and Senator Breaux: The undersigned
associations thank you for your leadership in offering your
amendment to reduce the costs of the renewable portfolio
standard (RPS) contained in the pending Daschle/Bingaman
amendment to the Energy Policy Act of 2002 (S. 517).
Your amendment would make a modest, but economically
critical, change to the cost cap aspect of the RPS program.
The current RPS provisions mandate that an increasing
[[Page S3269]]
percentage of electricity sold be generated from renewable
resources. The RPS program further provides that those
electricity generators that cannot economically achieve the
required level of generation using renewable energy sources
can purchase ``credits'' from the Department of Energy to
meet their shortfall. The bill price for these credits is
three cents per kilowatt hour. This credit price is intended
to act as a cap on the cost increases that will result as
demand for renewable power increases in response to the RPS
requirement.
Unfortunately, this three-cent credit price is simply set
too high. Current wholesale electricity prices are only
slightly above three cents per kilowatt hour in most areas of
the country. With a three-cent credit, the result will be
that in most areas of the country the cost of electricity
mandated by the RPS provision could be almost double the
current wholesale cost of electricity. These higher costs
will be passed on to businesses and homeowners across the
country.
Your amendment would halve the credit price to one and one-
half cents per kilowatt hour. This is the same price set by
the Clinton Administration in its RPS proposals made in 1999.
Consumers will still pay more for electricity, but the cost
to consumers will be only half as much as it would be with a
three cent cost cap. Thus, the Nickles/Breaux amendment would
reduce the overall cost of the RPS provision.
Your amendment will ensure that businesses and homeowners
alike will have more affordable electricity supplies in the
future; reduce the economic costs of the federal renewable
portfolio standard program in the energy bill; and to promote
economic growth and prosperity for all Americans.
Sincerely,
Alliance for Competitive Electricity, American Chemistry
Council, American Gas Association, American Iron and
Steel Institute, American Petroleum Institute.
American Portland Cement Association, Associated
Petroleum Industries of Pennsylvania, Association of
American Railroads, Carpet and Rug Institute, Coalition
for Affordable and Reliable Energy.
Edison Electric Institute, Electric Consumers Alliance,
Electricity Consumers Resource Council, Greater Raleigh
[NC] Chamber of Commerce, Indian River [FL] Chamber of
Commerce.
International Association of Drilling Contractors,
Manhattan [NY] Chamber of Commerce, Massachusetts
Petroleum Council, Metropolitan Evansville [IN] Chamber
of Commerce, Missouri Oil Council.
Naperville [IL] Chamber of Commerce, National Association
of Manufacturers, National Electrical Manufacturers
Association, National Federation of Independent
Business, National Lime Association.
National Mining Association, National Ocean Industries
Association, Natural Gas Supply Association, Nebraska
Restaurant Association, Nevada Hotel & Lodging
Association.
Nevada Restaurant Association, Nuclear Energy Institute,
Oklahoma State Chamber of Commerce & Industry, Stowe
[VT] Area Association, Tacoma-Pierce County [WA]
Chamber of Commerce, U.S. Chamber of Commerce.
The PRESIDING OFFICER. The Senator from Louisiana.
Mr. BREAUX. Mr. President, I did not want to speak if the chairman
wanted to speak at this time, but in the absence of his desire to speak
at this particular moment, I will make a few comments on the Nickles-
Breaux amendment.
I have joined the Senator from Oklahoma in cosponsoring this
amendment. This is a good amendment. It is good for consumers,
certainly, it is good for the renewable energy industry in this
country, and it is also good for the traditional suppliers of energy in
this country.
Let me state at the very beginning that I support the so-called
renewable portfolio standard. If I were in Louisiana, I would try to
explain it by saying it is a requirement of the Federal Government that
power companies have to look for renewable sources of energy in
producing energy in this country.
What do we mean by that? Windmill power, for instance, biomass power,
renewable alternative forms of energy that should be encouraged in this
country. I am for that. I am from a traditional oil-and-gas-producing
State, but I found out that we also have one of the largest
manufacturers of windmills in Louisiana for the production of energy
through wind power. That makes sense. It is not going to solve all of
our problems, but it can contribute to a proper mix of renewable
energy, as well as traditional forms of energy.
We have a substantial number of tax credits in this energy bill
coming from our Finance Committee to encourage these alternative
sources of energy. As an example, there is already in the legislation a
1.7 cent production tax credit to be received by wind and biomass
producers. Mr. President, 1.7 cents per kilowatt is a lot when one
considers that the wholesale price of energy is about 3 cents a
kilowatt. When we are giving people who produce alternative sources of
energy a 1.7 cent per kilowatt subsidy, that is significant. The person
who produces those windmills in Louisiana are going to say: Wow, look,
if I get a 1.7 cent per kilowatt tax credit, this is a good deal.
People are going to want to buy power from windmill producers if it
means 1.7 cents less per kilowatt than the ordinary regular 3 cent per
kilowatt wholesale price of energy in this country. The legislation, as
it is, encourages these alternative sources of energy through the Tax
Code.
This is the second issue we are talking about right now. The
legislation also requires energy producers to reach a certain standard,
a percentage, required by Congress using these alternative sources of
energy by the year 2019. The legislation currently says 10 percent of a
power company's production in the year 2019 shall come from these
alternative sources of energy. Some people wanted it at 20 percent. It
is down to 10 percent. I support that. That is an achievable goal that
power companies can reach, especially if we give them a 1.7 cent per
kilowatt subsidy to encourage them to do it. That is good public
policy.
The concern is there is an additional subsidy that is proposed in the
legislation, and this is what the Nickles-Breaux amendment addresses.
The legislation says, if you do not reach that 10-percent goal of using
alternative sources of renewable energy, we are going to, in essence,
penalize you 3 cents per kilowatt; that you are going to have to make
up that 10-percent goal by purchasing power from other producers that
have met that goal or purchasing power from the Department of Energy
through tax credits, and you are going to have to pay up to 3 cents per
kilowatt for that extra energy you will be required to buy from other
companies that have met that standard.
What does that mean in the real world, to the person in their home
who turns on the light switch every day and is concerned about the cost
of electricity? What it means is if you add the 3 cents plus the 1.7
cent tax credit, you are talking about a huge subsidy which I think is
far more than it needs to be.
The problem is that if they are required to purchase that tax credit
from the Department of Energy at 1.5 cents per kilowatt hour, they
could be looking at doubling the cost of electricity per kilowatt hour.
The concern I have is, who is going to pay for this? It is not going
to be the power companies. If they have to purchase additional electric
tax credits at 3 cents a kilowatt, they are just going to pass the cost
on to the consumer, back to the person in the house who flicks the
switch. That person is going to pay not 3 cents but double that price
per kilowatt for the electricity they use.
Power companies are going to pass it through, and in a deregulated
market they are going to add it to their bill at the end of the month.
In a regulated market, they are going to go to the public service
commission and say: Look, we are having to pay 3 cents more per
kilowatt and we want it to be passed on to our rate base; we are just
going to charge you 3 cents a kilowatt more than you are paying now.
You are already paying 3 cents, so we are going to pay 3 cents more.
That is too much. We do not need more incentives than are necessary.
The tax credit of 1.7 cents per kilowatt hour and the Nickles-Breaux
amendment with a penalty, in essence, of another 1.5 cents is a
substantial incentive to encourage the development of what we call the
renewable portfolio standard on the use of alternative sources of
energy.
It is interesting. I have a letter from the Electric Consumers'
Alliance which says:
On behalf of Electric Consumers' Alliance, its more than
300 member organizations representing all 50 states, and its
tens of millions of residential and small business
constituents, I am writing to indicate our strong support for
Senator Nickles' proposed amendment to S. 517, the pending
energy bill.
The only disagreement now is the Nickles-Breaux amendment. But the
support from consumers is clear. Support from people who provide
electricity is very clear. They support it.
[[Page S3270]]
The simple fact is that, when put together, the credit price of 1.5
cents, coupled with the tax credit of 1.7 cents, means consumers and
taxpayers will be providing a subsidy to wind power and to these
biomass producers at a level of 3.2 cents. That is currently above the
wholesale cost of power. That is a huge subsidy and incentive to
developing sources of power.
With the Nickles-Breaux amendment, we will still have a substantial
subsidy, but it will be at a less cost to taxpayers and consumers of
electric power. Bear in mind, every time we add 1 cent or half a cent,
it is going to be passed on to the consumers of electricity in this
country.
The Nickles-Breaux amendment is a good approach and one that should
be supported.
I ask unanimous consent to have printed in the Record the letter from
the Electric Consumers' Alliance, to which I referred.
There being no objection, the letter was ordered to be printed in the
Record, as follows:
Electric Consumers' Alliance,
Indianapolis, IN, April 16, 2002.
Re Consumer support for Sen. Nickles' Amendment to S. 517
regarding Renewable Portfolio Standards.
Dear Senator: On behalf of Electric Consumers' Alliance,
its more than 300 member organizations representing all 50
states, and its tens of millions of residential and small
business constituents, I am writing to indicate our strong
support for Senator Nickles' proposed amendment to S. 517,
the pending energy bill. Simply put, Sen. Nickles seeks to
implement the mandatory Renewable Portfolio Standard in a way
that is more equitable and cost effective for consumers
across the Nation by reducing the renewable energy credit
from 3 cents to 1.l5 cents per kilowatt-hour.
Renewable energy resources can and will play an important
role in America's future energy infrastructure. As such, ECA
supports their development, including the creation of
subsidies to accelerate their deployment. At the same time,
however, we are cognizant that our members will continue to
expect a reliable, affordable supply of electricity over the
next decade, and this will come predominantly from
traditional resources. It is important to encourage the
development of new resources, but this must be tempered
against the more important goals of maintaining service that
is reliable and affordable. There is a danger in transferring
too much of the cost burden for development of these
resources to consumers, rather than encouraging the market to
work.
The mandated RPS requirement will not necessarily lessen
the need for or reliance on traditional generation in the
short-term. This is because of the intermittent nature of
renewable resources. Consumers won't wait for the sun to
shine or wind to blow to turn on appliances or flip on
lights. The renewable credits that are to be paid under S.
517 will likely be an adder to the cost of electricity for
consumers. As a result, these credits--while well-
intentioned--will almost certainly have a direct impact on
raising the price of electricity for many Americans (assuming
reliability is not compromised, which we certainly do not
advocate).
The Nickles proposal is a reasonable attempt to mitigate
the impact of the almost certain consumer price hike that
will be caused by mandated RPS. At a time when energy
affordability is an issue for a growing number of residential
and small business consumers, it is an appropriate balancing
of the interests at stake. If consumers are to shoulder the
burden for development of renewable resources through
credits, which S. 517 requires, then that cost burden should
be mitigated to more reasonable levels. Sen. Nickles'
proposal to reduce this impact by reducing the credit from 3
cents to 1.5 cents per kilowatt hour is a reasonable
compromise. It deserves your support.
Thank you for your kind consideration.
Robert K. Johnson,
Executive Director.
The PRESIDING OFFICER. The Senator from Alaska.
Mr. MURKOWSKI. I will be very brief. I wish to recognize the effort
by Senator Nickles to remind us all of the obligation we have with
regard to the cost of renewables. We have had an extended debate
previously. This amendment obviously would change the fee and the
renewable portfolio standard from 3 cents to 1.5 cents.
We have already seen the estimate by the Energy Information
Administration, from the Department of Energy, relative to the
calculation of what a 3-cent renewable would cost the economy and the
consequence to the ratepayers, $88 billion over the next 20 years.
Changing the credit from 3 cents to 1.5 cents will save about $44
billion through the year 2020.
I urge my colleagues to support the amendment.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. BINGAMAN. Mr. President, I will take a few minutes to respond to
the comments that have been made and to oppose the amendment that my
colleague from Oklahoma has offered.
First, to put this in perspective for Senators, this is the fourth
amendment we have seen that is designed to either eliminate or
dramatically weaken the renewable portfolio standard we have in the
bill. There were three others we voted on earlier that were not
successful. A majority of Senators did not favor weakening the
standard, and accordingly those amendments were not successful.
I think the structure we have in the bill is important if we are
going to actually accomplish the purpose of bringing renewable
technologies into use in this country, and that is the purpose of the
renewable portfolio standard. What we are saying in the renewable
portfolio standard is each utility is directed to begin, starting in
the year 2005, to produce or obtain some of the power that it sells
from renewable sources. They do not have to produce it from those
sources, but they have to obtain it from those sources.
We are saying you do not have to do anything this year, you do not
have to do anything next year, you do not have to do anything the next
year, but in the year 2005 you have to achieve 1 percent. One percent
of the power you sell must come from renewable sources.
There are obvious ways that one can go about this. First, one can add
some renewable power generation capability to the mix of sources for
generating power. That is one option. That is, of course, what we are
intending to facilitate and to incentivize with this provision.
A second thing that can be done is if one does not want to add it
themselves, they can contract with someone who has that power or who is
willing to provide that power from renewable sources. That is a second
option.
A third option, under the bill, the way we have it drafted, is one
can buy a credit from somebody who does have more than the 1 percent--
and there are a lot of utilities today that are in a position,
beginning in the year 2005, to try to sell their credits. That is good.
We are providing for that. We are saying, OK, if a particular utility
does not want to either produce the power from renewable sources or buy
the power, someone who is producing it from renewable sources can then
go buy a credit.
The provision we have in the bill is patterned after the provision in
the Texas renewable portfolio standard legislation that President Bush
signed into law, and that has been acclaimed by all as a model kind of
a bill. It has had great success in Texas in encouraging more use of
renewables and diversifying the supplies of energy upon which they
depend.
What that Texas provision said was we would not charge 3 cents per
credit. What we charge in Texas is 5 cents per credit. That is what
President Bush signed into law, in Texas, when he was Governor of
Texas. It would either be 5 cents per credit or 200 percent of the
average price of traded credits, whichever is less, so that if one
could not go ahead and buy the credit from someone who is producing
power, who has an extra credit, then as sort of a last option, they
could go to the State of Texas and say, OK, I will pay 5 cents per
credit or I will pay 200 percent of the tradable price of credits at
this time.
What has the tradable price of credits turned out to be in Texas? It
is five-tenths of 1 cent. Half of a cent is the tradable price of
credits today in Texas.
So essentially what the Texas provision says is that one would have
to pay 200 percent of the trading price for credits, which would be a
full cent, so 200 percent of the half cent would be a full cent, and
that would be the price that would have to be paid to the State of
Texas to get a credit; not the 5 cents but the 1 cent. That is under
their provision.
Mr. NICKLES. Will the Senator yield?
Mr. BINGAMAN. Let me finish my comments and then I will be glad to
yield for a question.
We took that provision and we said, let's do the same thing at the
Federal level and try to say we do not need to have a 5-cent credit;
let us have a 3-cent credit, but let us also put that
[[Page S3271]]
provision in 3 cents or 200 percent of the average price of traded
credit, whichever is less.
So if, in fact, the same thing happens nationally that has happened
in Texas, which I think it likely would--credits would be trading for
substantially less than the 3 cents--then it is very likely the credits
that would be purchased from the Government, if a utility decided to go
that step and purchase credits from the Government, would be
substantially cheaper.
All of this, to some extent, is estimating where we think things will
be once this legislation becomes law, if it does become law. I am glad
to join with my colleague from Oklahoma or any other Senator in urging
the Energy Information Agency to update their models, update their
studies, and give us good information about what the right amount of
credit ought to be. I am not certain 3 cents is the right amount, but
it seems like the right amount based on what we know today.
Based on the review of the numbers of different economic analyses, we
have determined that 5 cents is too much. We have also determined that
the 1.5 cents is probably too little. So our estimate is the 3 cents is
about where it ought to be.
The reason we think it ought to be at 3 cents is because we believe
all of the different types of renewable energy ought to be encouraged
to be developed under this proposal.
We have a chart, which I would like to put up, to make the point. The
renewable portfolio standard requirement can be met; renewable energy
can be generated from any of a variety of sources. The main ones we
think about are biomass and biofuels resources, solar insulation
resources, geothermal resources, and wind resources. Those are the four
logical areas.
The concern is that if we lower the cost of this credit too much, the
price of this credit too much, that this will skew away from the use of
several of these and wind up favoring one over the others. In that
regard, let me cite a letter to my colleagues. This is a letter
directed to all Senators, I believe. This was dated April 18 and it is
from a large group of organizations. It is from the Alliance for
Affordable Energy, Louisiana; American Bioenergy Association; Citizen
Action Coalition of Indiana; Citizen Action/Illinois; Dakota Resource
Council; Hoosier Environmental Council, Iowa Citizen Action Network;
Iowa SEED Coalition; I-Renew, Iowa; Michigan Environmental Council;
Minnesotans for an Energy-Efficient Economy; North Dakota SEED. There
are a whole range of organizations that have signed on to this letter.
Their letter says:
The undersigned environmental, consumer, and industry
groups urge you to oppose an amendment that would be offered
by Senator Nickles to further weaken the renewable portfolio
standard contained in Senate bill S. 517. The Nickels
amendment is the latest in a sustained attempt by power
companies to undermine efforts to diversify America's energy
supply with clean renewable energy.
Then they go on to say further down in the letter:
Under a lower priced cap--
And that is what Senator Nickles is recommending here, 1.5 cents--
only the very lowest-cost renewable energy technologies can
benefit from the RPS--primarily wind power at the very best
sites. Biomass, geothermal, and solar would be at a
significant disadvantage to meet this standard.
That is three of the four on this chart.
They say biomass would be a substantial disadvantage; solar,
geothermal. The Nickles amendment would reduce benefits to Western
States with good geothermal resources, to the Midwest, Southeast, and
Northeast that have good biomass resources, and reduce benefits to all
other States with good solar resources.
I ask unanimous consent this letter be printed in the Record.
There being no objection, the letter was ordered to be printed in the
Record, as follows:
April 18, 2002.
Dear Senator: The undersigned environmental, consumer, and
industry groups urge you to oppose an amendment that may be
offered by Senator Don Nickles to further weaken the
renewable portfolio standard (RPS) contained in Senate Energy
Bill (S. 517).
The Nickles amendment is the latest in a sustained attempt
by power companies to undermine efforts to diversify
America's energy supply with clean renewable energy. The
Nickles amendment would reduce the cost cap for procuring
renewable energy credits under the RPS from 3 cents per
kilowatt-hour to 1.5 cents per kilowatt-hour. This provision
would:
Reduce the number of technologies and states that would
benefit from the RPS--states with biomass, geothermal and
solar resources would be especially disadvantaged;
Reduce the amount of renewable energy developed by
encouraging companies to pay a penalty rather than developing
or procuring more renewable energy; and
Undermine the RPS competitive mechanism and potentially
even increase costs to consumers.
The Nickles amendment would reduce diversity of
technologies and states that benefit from the RPS.--Under a
lower price cap, only the very lowest-cost renewable energy
technologies can benefit from the RPS--primarily wind power
at the very best sites. Biomass, geothermal and solar would
be at a significant disadvantage to meet the standard. The
Nickles amendment would therefore reduce benefits to Western
states with good geothermal resources; reduce benefits to the
Midwest, Southeast and Northeast states which have good
biomass resources, and reduce benefits to all other states
with good solar resources.
The Nickles amendment would reduce the amount of renewable
energy developed.--An Energy Information Administration (EIA)
study of a 1.5-cent price cap (in a stronger RPS than the
Bingaman proposal) found that it could reduce the amount of
new renewable energy generated by the RPS by 84%. (AEO 2000)
As Governor of Texas, President Bush signed a RPS law that
included a 5-cent per kWh price cap for renewable energy
credits. That law is working well and is one of the most
successful examples of a state RPS in existence today. The
Bingaman 3-cent price cap represents a reasonable compromise
between the 1.5 cent price cap proposed in the 1999 Clinton
RPS and the 5 cent price cap signed by President Bush as
Governor of Texas.
The Nickles amendment would undermine the RPS competitive
mechanism and potentially even increase costs to consumers.--
The RPS is designed to create competition among many
renewable energy technologies to reduce their costs. EIA also
found that it would create new competition for fossil fuels--
reducing fossil fuel prices for electricity generators and
consumers. According to the most recent EIA analysis, these
reduced prices will save energy consumers over $13 billion
through 2020.
By setting the price cap too low, the Nickles amendment
would reduce competition among many types of renewable
energy. It would reduce the total amount of renewable energy
developed, undermining the potential of renewable energy to
restrain fossil fuel price increases. Electric companies
would have to buy credits from DOE for 1.5 cents, but without
new renewables necessarily being developed. Therefore, the
Nickles amendment could actually increase electricity prices.
Please don't believe the industry's claim that the RPS will
cost too much. The Bush Administration's EIA found that a 10%
RPS would save consumers money. Please reject the Nickles
amendment and any other weakening amendments, and preserve
the diversity, environmental and consumer benefits of the
Daschle/Bingaman RPS.
Sincerely,
Alliance for Affordable Energy, Louisiana.
American Bioenergy Association.
Citizen Action Coalition of Indiana.
Citizen Action/Illinois.
Dakota Resource Council.
Environmental & Energy Study Institute.
Environmental Law & Policy Center of the Midwest.
Hoosier Environmental Council.
Iowa Citizen Action Network.
Iowa SEED Coalition.
I-Renew, Iowa.
Michigan Environmental Council.
Minnesota Project.
Minnesotans for an Energy-Efficient Economy.
National Environmental Trust.
Natural Resources Defense Council.
North Dakota SEED.
Renewable Northwest Project.
Sierra Club.
Solar Energy Industry Association.
Southern Alliance for Clean Energy.
Union of Concerned Scientists.
U.S. Public Interest Research Group.
Mr. NICKLES. Will the Senator yield?
Mr. BINGAMAN. I am happy to yield.
Mr. NICKLES. Did we have a hearing on any proposal to have this
penalty?
Mr. BINGAMAN. I don't believe there was a specific hearing on it, and
that is why I have suggested we request the Energy Information Agency
to update their studies and recommend whether they think this is the
appropriate level or not. We certainly would have time to do that
between now and any conference with the House of Representatives on
this bill. If there is a need to make an adjustment to come in line
with what the Energy Information Agency recommends, I would be glad to
work with my colleagues to try to do that in the conference.
Mr. NICKLES. Will the Senator yield?
[[Page S3272]]
Mr. BINGAMAN. I am happy to yield.
Mr. NICKLES. Did we have a hearing on the renewable portfolio
standards as proposed by the Senator in this bill, period?
Mr. BINGAMAN. Mr. President, we have had a hearing on the subject of
renewable energy and renewable portfolio standards, not on the specific
language in the bill.
Mr. NICKLES. In the last 2 years, did we have a hearing on a mandate
of 10 percent and a cost of 3 cents?
Mr. BINGAMAN. Mr. President, I don't know that we had a hearing on a
specific level of required mandate or specific level of cost of credit.
I don't believe we did.
Mr. NICKLES. I know the House had a hearing in 1999. The Clinton
administration proposed a 1.5-cent credit penalty per kilowatt hour.
Why did the chairman come up with a 3-cent penalty, double what the
Clinton administration proposed a couple of years ago?
Mr. BINGAMAN. What we did, in response to my friend's question, we
modeled our proposal on the successful program legislated into effect
in Texas. That is the basis upon which we came up with our estimate. It
was very different from the Clinton administration recommendation, not
just with the credits but in various other aspects. We did not follow
the Clinton administration proposal with regard to renewable portfolio
standards in fashioning ours.
Mr. NICKLES. Correct me if I am wrong; Texas has a requirement that
has a goal of 2,000 megawatts of new renewable energy by the year 2009.
That represents 2.6 percent of their present generating capacity. Also
correct me if I am wrong, but Texas has their whole basis on capacity,
not on electricity produced. So that Texas mandate is a whole lot less
than the 10 percent mandate as proposed by the Senator from New Mexico.
Mr. BINGAMAN. Mr. President, my understanding is that is inaccurate;
that, in fact, although the Texas language does talk about capacity,
the calculation as put in place by their utility commission was on the
basis of actual power produced. My information is that through the
period that is covered by the Texas law, the percentage requirement for
renewable energy is higher than the one we require.
Mr. NICKLES. If the Senator will require the Texas utility code
section 39.904, goals for renewable energy is 2,000 megawatts of
generating capacity. I mention this because capacity is one thing, to
generate electricity is another. For wind, you need three times the
facilities to actually generate because they don't operate 24 hours a
day. The wind does not always blow. Capacity is less intrusive and less
expensive. And factually, the amount of megawatts produced equals right
now 2.6 percent of the Texas generating capacity and less than
2 percent anticipated by the year 2009.
I heard my colleague say this is modeled after Texas. But it is not
modeled after Texas. It did not follow Texas in any way, shape, or
form. That is an editorial comment.
Mr. BINGAMAN. Mr. President, let me once again try to put this in
perspective for my colleagues. As I indicated, this is an effort,
another effort, to weaken the renewable portfolio standards we have in
the bill. We put the renewable portfolio standards in here because we
believe strongly it is in our national interest that we diversify the
sources from which we obtain energy and that we encourage the
development and improvement of the new technologies which we know can
be sources of energy as we move into the future. That is why we have a
renewable portfolio standard in the bill.
The requirement we have is not that onerous. When we require 1
percent of the power sold by a utility by the year 2005 to be generated
from renewable sources, that is not an unduly onerous requirement. All
of the numbers we have been hearing about how it will cost such
enormous amounts for the utilities to comply, assuming they are going
to do nothing to meet excess demand in the future--the truth is, they
are going to be adding generating capacity in the future to meet
increased consumer demand. That is as it should be.
All we are saying is, as they make those decisions about adding new
generating capacity in the future, they should be encouraged, they
should be incentivized, to look at renewable energy as the source for
some of that power. That is, to my mind, a responsible course to
follow. We are way behind other industrial allies, the countries in
Europe, in beginning to use renewable energy in our country. It is time
we began to use these new technologies, began to improve these
technologies. They have proven themselves to be effective. It would be
extremely unfortunate, in my view, if we further weakened the renewable
portfolio standard at this time.
Mr. NICKLES. Mr. President, I know my colleague from Ohio desires to
speak, but I wish to make a couple of rebuttals to the comments made by
the Senator from New Mexico. Then I am delighted to have my friend from
Ohio speak.
We didn't reduce the renewable portfolio standard. It is still 10
percent. I don't think it should be there, but my decision was to
minimize the damage under the Bingaman proposal, and we decided to cut
the penalty in half, the same amount the Clinton administration
proposed--the only proposal that had a hearing before Congress, and
that happened to be a hearing not before this Congress but the last
Congress in 1999. To think we would even have a proposal that has an
indirect tax on utility users and consumers of billions of dollars,
estimated by the Energy Information Agency of $88 billion, without even
having a hearing, I find ridiculous.
I hear colleagues say it was based on Texas, and it was not; there is
a world of difference between capacity and generated electricity,
especially when you talk about renewables. Texas has a standard that
would equal 2 percent of their generation, and we are talking about a
10 percent mandate. There is a lot of difference. There is a lot of
difference when the cost impact is in the millions and billions of
dollars for utilities all across the country. And I will put in more
estimates.
When I made this speech earlier, trying to strike the provision, I
said something about a chart we got from the Department of Energy that
said Kansas City Power and Light said it would cost $16 million--that
is per year--when fully implemented. I mentioned that was pretty good
for the consumers of Kansas City Power and Light.
They said, in a letter: Unfortunately, EIA grossly understated the
cost of 10 percent mandate to Kansas City Power and Light. The hit is
much worse than that. We project total costs being more than $300
million over the 15-year period between 2005 and 2020 for the full 10
percent. For a company of our size, these costs are intolerable.
So for people to say we don't think it will be very much, Senator
Breaux, Senator Voinovich, Senator Miller, and I are at least trying to
reduce the cost and trying to keep the cost at somewhat more affordable
levels as proposed by the previous administration.
I yield the floor.
The PRESIDING OFFICER. The Senator from Ohio.
Mr. VOINOVICH. Mr. President, I rise to support the Nickles-Breaux
amendment on renewable portfolio standards.
Last month, the Senate debated the renewable portfolio standard
included in the legislation before us today. I want to make it clear
that I applaud the efforts of my colleagues to encourage the use of
renewable electricity generation.
I agree that renewable energy is an important part of the future and
should be developed. I also strongly believe renewable sources are
vital as this country seeks to diversify energy supplies and decrease
our dependence on foreign sources to meet our energy needs.
As my colleagues know, the Bingaman amendment that was accepted last
month stipulates that we must develop a mandatory minimum standard for
renewable energy of 10 percent by the year 2019. At the time, I opposed
the requirement because I believed it mandated an unrealistic level of
renewable usage in a short period of time, at the virtual expense of
other sources of electricity generation.
I think one point that seems to get lost over the use of renewables
in America is that, right now, very little of our power in this Nation
is generated by renewables. As a matter of fact, it is 1.6 of 1
percent. My colleagues should understand when we are talking renewables
in this bill, we are
[[Page S3273]]
talking solar, we are talking wind, we are talking geothermal and we
are talking biomass; that is it.
When I stood to oppose the original mandate, I pointed out that in my
home State of Ohio, our use of renewable energy is much lower than the
national average. Renewables, including hydropower, generate 1 percent
of our electricity.
I also pointed out there are many other States which rely on
renewable sources for electricity generation. According to the 1998
data from the Energy Information Administration--and this is really
important because it gets at the regionalism and how unfair this
mandate is, as it is written, to certain regions of the country--at
least 10 percent of the electricity generated in 16 States comes from
renewable power. Of these 16, 5 States receive more than 50 percent of
their electricity from renewable sources, and the primary source is
hydroelectric power. Four of the five States--Idaho, Oregon, South
Dakota, Washington--rely on hydroelectric power for more than 60
percent of their electricity. Maine is the only State east of the
Mississippi to rely on renewables for more than 50 percent of its
electricity, 30 percent coming from hydro and 30 percent from other
renewables.
Regions and even individual States that currently have a high
percentage of renewable energy sources would be less impacted by the
underlying provisions. However, forcing a mandatory minimum would
unduly burden States such as Ohio.
Let me tell you a little about my State and States in the Midwest. We
rely heavily on coal. Mr. President, 86 percent of our energy comes
from coal. As Members of this Senate know, there are bills that have
been introduced that will increase and require us to reduce
NOX, SOX, mercury, and some are even talking
about carbon. In our State, we are putting our money into clean coal
technology, not into switching to renewables.
What this underlying bill requires is that, in a place such as
Cleveland, OH, my kilowatt--maybe some of my colleagues are not aware
of this--my cost per kilowatt hour in Cleveland is 4.7 cents. This bill
is talking about increasing that by 3 cents per kilowatt hour. That is
a tremendous increase we are going to have to bear in States such as
Ohio.
AEP, which has its home office in Ohio, American Electric Power,
estimates that they would have to install an additional cumulative
total of 2,100 megawatts of renewables by 2011, a total of 4,100
megawatts by 2015, and a total of 7,000 megawatts by 2020 under this
requirement. This should be compared with their total generation, which
is 38,000 megawatts. That is in 11 States. And this calculation does
not include a safety valve or cost cap. The cost impact on AEP alone
would range from $100 million to $400 million net present value.
One of the things that bothers me when we debate these things in the
Senate is, we are talking about the utilities. The utilities are the
ratepayers.
In my State, our manufacturers are taking it in the back of the neck.
We are losing manufacturing jobs in the Midwest. One of the things that
triggered this was a year ago we had a spike in gas prices, which put
most of the small businesses in a negative position. Then, with the
high cost of the dollar, they are in deep trouble, especially if they
export.
So we are talking about adding costs on a specific segment of our
economy, which happens to fall heavily in my State. We use a lot of
electricity. It also puts a negative burden on the people who live in
my inner cities.
People just talk about these things as if it didn't matter. But the
people who make less than $10,000 a year pay about 30 percent of
whatever they have for energy costs. This kind of legislation, as it is
written, is going to drive those costs up. Let's talk about those
people who are going to pay the cost.
What I am saying today, to my colleagues, is give me a break. Give us
a break. Some of you are from regions that do not have the problems we
have. We have 23 percent of the manufacturing jobs in this country in
the Midwest. In my State alone, we have more manufacturing jobs than
they have in the entire northeastern part of the country.
What we are trying to do today is come up with a reasonable number in
terms of this mandate. It may not mean a lot to some people who live in
some of the other States that do not have manufacturing, but it does
mean a great deal in States like my State. I think of Paul's Letter to
the Romans, Chapter 12: We are all part of one body. We have different
functions.
It would be really nice if on the floor of this Senate we would start
to give a little more consideration to some of the specific problems
some of us have in our States so we could continue to survive and
prosper and have reasonable energy costs, continue our manufacturing,
and not drive up the cost for the least of our brethren.
I urge my colleagues to really give serious consideration to this.
This is a reasonable proposal we are making today. It does not
eliminate the mandate. It just says, if we have to comply with it, we
comply with it in a way that is less oppressive than what is contained
in the underlying bill.
Mr. REID. Under the previous order, the Senate is going to stand in
recess so we can all listen to our Secretary of State in room 407. I
ask, however, that the recess be extended until the hour of 4:15. I
cleared this with my colleague, Senator Nickles. I ask that that time
count against the 30 hours.
The PRESIDING OFFICER. Without objection, it is so ordered.
____________________