[Congressional Record Volume 148, Number 47 (Wednesday, April 24, 2002)]
[Senate]
[Pages S3273-S3295]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
NATIONAL LABORATORIES PARTNERSHIP IMPROVEMENT ACT OF 2001--Continued
Mr. REID. Mr. President, for the information of all Senators, we hope
to be able to have a vote on the Nickles amendment within the next half
hour. We do not know for sure how long people will speak. We have had a
number of Members indicate they wanted to speak on the Nickles
amendment. We have several of them in the Chamber right now. We will
proceed on that. There should be a vote within the next half hour.
The PRESIDING OFFICER. The Senator from Arizona.
Amendment No. 3256
Mr. KYL. Mr. President, if none of my colleagues are prepared to take
the floor, let me spend a couple of minutes in support of the Nickles
amendment.
As you know, the Nickles amendment, which is the pending business,
would reduce the amount of penalty in effect that a public utility
would bear if it did not produce the required amount of electricity for
retail sales with so-called renewable energy resources. This has to do,
again, with the portfolio that we call the renewable resources that
would be required to account for 10 percent of the retail sales of all
the investor-owned utilities in the country.
Bear in mind that the publicly owned utilities are exempted only
because a point of order would have been effective against the
inclusion of the public utilities in the amendment due to the unfunded
mandate nature of the underlying provision. Ultimately, this probably
will apply both to investor-owned and public utilities, but for the
moment it applies only to the investor-owned utilities.
When I talk about a penalty on the utilities, of course, I am really
talking about a penalty on the utility customers because utilities are
not in the business of losing money--at least not very long. As a
result, their expenses are charged back to their customers.
What we are really talking about in the underlying bill is a
requirement that these utilities produce 10 percent of their retail
power from so-called renewable resources, such as wind, solar, or
biomass energy. Then, if they don't do so, they have to buy that amount
from other available resources or, if they can't do that, pay an amount
equal to 3 cents per kilowatt hour to make up the difference.
Let us say that the requirement when the bill is fully effective is
10 percent and they are able to generate 1
[[Page S3274]]
percent from the renewable resources; let us say they are able to buy
another 1 percent from somewhere else. That means they would have 8
percent that would have to be accounted for by a penalty of 3 cents per
kilowatt hour of that retail sale.
How much would that cost the utility customers around the country?
That is the question. The Nickles amendment would cut the cost in half.
The Nickles amendment would say, instead of 3 cents per kilowatt hour,
it would be 1\1/2\ cents per kilowatt hour.
I am informed by Senator Nickles that is the amount the Clinton
administration had proposed when it had a similar proposal.
We would be talking about cutting in half the penalty that otherwise
would pertain.
I cited earlier in this debate the statistics by utility and by
State. I have these statistics again. I will recite a few of them and
insert in the Record at the appropriate point and make available for
all of my colleagues exactly how the customers in each State would be
required to pay, again just for the penalties of the public utilities;
that is to say, the investor-owned utilities.
Let me cite some examples.
In the State of Alabama, the cost to the customers is $156-plus
million or, under the Nickles amendment, these customers in Alabama
would save $78 million per year.
Since I see my colleague from Vermont in the Chamber, let me look at
Vermont. In Vermont, the utility customers of the investor-owned
utilities would save over $7 million per year under the amendment of
the Senator from Oklahoma.
Let me look at Florida, the State from which the Presiding Officer
comes. Florida is a big State with a lot of utility customers--a mix of
both public and private utilities--but the private utilities annually
would suffer an expense of over $451 million, so that the savings from
the Nickles amendment for the utility customers in Florida, the
investor-owned utilities, would be more than $225 million.
In my own State of Arizona, the cost is almost $100 million. So the
savings per year would be just under $50 million.
Let me pick a couple of other States.
For the State of Nevada, the State of the distinguished majority
whip, the savings would be over $37 million because the expense there
is over $75 million.
Let me pick another couple States at random.
For New York State, the savings would be almost $132 million.
Let me take my neighboring State of California, another large State.
Californians, obviously, are going to get clobbered by this renewable
portfolio requirement. The estimate is, therefore, that for the State
of California, just cutting this penalty in half, reducing it to 1\1/2\
cents per kilowatt hour, would save the customers in California over
$243 million per year.
These savings illustrate that there is a cost to what we are imposing
in the Senate. We come up with a lot of good ideas. In fact, our ideas
are so good we want to impose them on everybody else.
I offered amendments to make this voluntary, but my proposals were
rejected. So this is a mandatory requirement. This is required of all
of the electric customers in this country, so I thought it would be
important to know how much it is going to cost--in other words, by our
action, what costs are we imposing on the electric customers of our
country?--so that we can then make a judgment of whether it is worth
it.
What we are doing here has significant consequences to people. We
pass bills all the time to try to help people in need. People need help
with their housing, so we provide them assistance for housing. People
need help with their heating bills, so we provide them assistance under
a program called LIHEAP. And there are any number of other programs.
So why, then, would we be imposing this kind of a big cost on them?
Of course, the bigger the family, the more your expenses are going to
be; therefore, the more this is going to cost you.
What sense does it make for us to impose this kind of cost on
consumers with this legislation and then turn right around under the
LIHEAP bill and say: Well, we know you are having to pay a lot for your
electric bill, so we are going to help you make up for part of that.
This just does not make any sense. It is incoherent policy, and it
damages real people. That is why I am citing these statistics.
In a relatively small State--let me just take the State of the
honorable chairman of the Energy Committee--the State of New Mexico, by
passing the Nickles amendment, the people of New Mexico would save over
$19 million a year because they are going to have to pay almost $40
million as a penalty because New Mexico cannot generate the requisite
10 percent that we are going to mandate under this bill.
These are not my figures. This comes from the Department of Energy,
from the Energy Information Administration, which is a branch of the
U.S. Department of Energy. These are up-to-date figures. I had figures
in this Chamber before when we were debating this issue. These are even
more updated figures than that.
So it seems to me that we in this body have to think about the
consequences of our mandates. If we are going to make Americans pay
more, we better have a darn good excuse or a good reason for making
them do that.
Doesn't it make sense that we would say to people--let's just take
the State of California, for example--Look, Californians, you are going
to have to pay $243 million under the Nickles amendment, but if the
Nickles amendment does not pass, you are going to have to pay $487
million a year in penalties. You may think it is worth it in order to
encourage the development of wind energy or solar energy. If you do
think it is worth it, would you be willing to pay that cost on an
individual basis?
My guess is, you would have, out of, say, 100 people, probably 5 or
10 who would say: We feel like we are in a contributing mood, and we
would like to pay for our share of what it will really cost us--the
real cost to generate more of this energy from these so-called
renewable resources--so we will pay a higher electric bill.
I have not broken this down per customer, but, obviously, each
customer is going to pay a fairly significant amount. But if you say to
the people of California, Are you willing to pay almost $500 million a
year more--if you put that to a vote--most of them would say: No, we
don't think so. Why don't you figure out another way to make this
happen. This represents a substantial increase in our power bill, and
we don't want to do it.
What we are doing in this body--I am going to call it arrogant
because I think it is a certain degree of arrogance that must affect
our willingness to impose these kinds of financial burdens on the
American people for the sake of, what, to generate more energy with
wind, to do what, save some oil or gas or coal maybe that we would
otherwise use to produce power.
Of course, we are not willing to expand our energy production, but we
are going to require this use of renewable resources. And the incentive
is going to be: If you don't do it, then you all are going to have to
pay a big penalty. I think that is arrogance on our part. The reason I
use that harsh word is because I think if you put that question to your
constituents--I know if I put that question to the constituents that I
represent, I am very certain most of them would say: No, thank you. We
would just as soon you not impose that additional tax on us.
This is a tax on energy. It is a tax on energy use for individual
retail customers. But most of our constituents will not know that is
what we have done. That is why I am going to make it a point to let
them know. We are going to publicize this in every way that I know, in
every State that I know, to make sure that the constituents of all of
my colleagues understand what their Senator imposed upon them in the
way of a new tax and what it is going to cost them.
These figures are going to be in every State in the country so that
there will be no question that it is understood what the costs are, on
our constituents, that we are imposing upon them in the name of good,
to produce more wind energy and more solar energy. I just want the
folks in California to know it is going to cost them almost $500
million a year--$487 million to be exact--and the same thing for every
other State.
[[Page S3275]]
The figures are actually understated because, as I said, this only
represents what the investor-owned utilities will have to pay in
penalties. We know there will be additional penalties, assuming the
publicly owned utilities are also added to this at a later time.
So I think it is important for the American people who buy energy to
understand what we are imposing on them by way of cost. The best way to
do that is by bringing it out, with the amendment of the Senator from
Oklahoma, by demonstrating what we can save them by simply cutting this
penalty in half, from 3 cents per kilowatt hour to 1\1/2\ cents per
kilowatt hour.
It is still a lot of money. I have not added it all up, but it adds
up to an awful lot of money. It is clearly in the multiples of billions
of dollars.
But we have these statistics by State so we will at least be able to
show people what they will save by State as a result of the adoption of
the Nickles amendment. We will have a copy of this at the party desks
at the time that the vote is called on the Nickles amendment.
Any Member wishing to see how much he or she is willing to save his
or her constituents, if you would like to see how much you will save
your constituents by voting for the Nickles amendment, we will have
that here for you. Conversely, if you would like to see how much of a
tax you will impose upon your constituents, we have that column as
well.
I hope my colleagues will take advantage of the information we have.
This is information from the Department of Energy on how much this
electric tax is going to cost the ratepayers all over this country. We
could at least do them a favor by cutting the penalty in half. And if
you want to know how much you will save your constituents by doing
that, by supporting the Nickles amendment, we have all the figures
right here.
I see the Senator from Oklahoma is here. I have been referring to his
amendment. Let me see if the State of Oklahoma would save any money
here. It turns out we are going to tax the utility customers there over
$112 million a year. So at least he is going to save his constituents
over $56 million a year. That ain't peanuts. That is real savings.
Equivalent numbers apply to all of the rest of the States.
I hope my colleagues will support the Nickles amendment and do their
constituents a favor.
The PRESIDING OFFICER. The Senator from Oklahoma.
Mr. REID. Will the Senator yield for a unanimous consent request?
The PRESIDING OFFICER. The Senator from Oklahoma.
Mr. NICKLES. I thank my friend and colleague from Arizona for his
statement, for his homework, for his research and knowledge on the
issue. I hope all Senators will pay attention because we are talking
about an amendment that will have a real impact on utility rates, on
electric rates all across the country. It will cost millions. Actually,
I think my colleague from Arizona will agree, utility companies don't
really pay those rates. They may be assessed, but they will pass them
on to consumers. They will pass them on to ratepayers in Florida, in
Arizona, in Illinois, in Oklahoma, and in Nevada.
I appreciate my colleague's homework and also his very strong
statement.
Mr. KYL. Mr. President, I ask unanimous consent to print in the
Record the table to which I referred.
There being no objection, the table was ordered to be printed in the
Record, as follows:
RETAIL SALES, REVENUE, AND POTENTIAL COST OF PURCHASING CREDITS
--------------------------------------------------------------------------------------------------------------------------------------------------------
Maximum credit Maximum Savings by
Retail sales Retail sales Retail rate purchase cost potential rate Nickles
State Consumers (in millions of (MWh) (cents per kWh) (in millions of increase amendment (per
dollars) dollars) (percent) year)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alaska........................... 25,160 57.418 446,293 12.87 1.339 2.33 $669,500
Alabama.......................... 1,322,172 2,952.707 52,067,783 5.67 156.203 5.29 78,101,500
Arkansas......................... 807,898 1,532.386 25,714,924 5.96 77.145 5.03 38,572,500
Arizona.......................... 1,250,550 2,640.775 33,224,190 7.95 99.673 3.77 49,836,500
California....................... 9,392,462 16,306.188 162,352,407 10.04 487.057 2.99 243,528,500
Colorado......................... 1,310,550 1,512.893 26,072,373 5.80 78.217 5.17 39,108,500
Connecticut...................... 1,439,185 2,712.489 28,094,031 9.66 84.282 3.11 42,141,000
District of Columbia............. 225,522 798.345 10,615,521 7.52 31.847 3.99 15,923,500
Delaware......................... 268,512 481.564 8,409,335 5.73 25.228 5.24 12,614,000
Florida.......................... 6,201,773 10,384.739 150,469,636 6.90 451.409 4.35 225,704,500
Georgia.......................... 2,029,531 4,566.067 78,410,565 5.82 235.232 5.15 117,616,000
Hawaii........................... 427,108 1,359.755 9,690,596 14.03 29.072 2.14 14,536,000
Iowa............................. 1,042,106 1,748.968 29,672,171 5.89 89.017 5.09 44,508,500
Idaho............................ 529,224 828.594 20,190,466 4.10 60.571 7.31 30,285,500
Illinois......................... 4,787,291 8,032.121 115,334,741 6.96 346.004 4.31 173,002,000
Indiana.......................... 2,145,265 4,104.112 81,161,466 5.06 243.484 5.93 121,742,000
Kansas........................... 920,868 1,582.619 26,053,970 6.07 78.162 4.94 39,081,000
Kentucky......................... 1,130,058 1,728.643 42,790,408 4.04 128.371 7.43 64,185,500
Louisiana........................ 1,580,399 4,463.903 69,479,189 6.42 208.438 4.67 104,219,000
Massachusetts.................... 2,500,731 4,028.951 41,828,995 9.63 125.487 3.11 62,743,500
Maryland......................... 2,018,170 3,772.670 56,457,358 6.68 169.372 4.49 84,686,000
Maine............................ 240,605 610.219 6,005,478 10.16 18.016 2.95 9,008,000
Michigan......................... 4,031,301 6,722.444 94,191,371 7.14 282.574 4.20 141,287,000
Minnesota........................ 1,352,070 2,310.741 40,791,277 5.66 122.374 5.30 61,187,000
Missouri......................... 1,774,796 3,084.596 50,364,934 6.12 151.095 4.90 75,547,500
Mississippi...................... 591,022 1,300.929 22,434,100 5.80 67.302 5.17 33,651,000
Montana.......................... 324,989 369.137 6,493,525 5.68 19.481 5.28 9,740,500
North Carolina................... 2,761,911 5,583.562 91,831,679 6.08 275.495 4.93 137,747,500
North Dakota..................... 211,223 266.432 4,661,341 5.72 13.984 5.25 6,992,000
Nebraska......................... (\1\) (\1\) (\1\) (\1\) (\1\) (\1\) ...............
New Hampshire.................... 551,061 1,017.886 9,182,528 11.09 27.548 2.71 13,774,000
New Jersey....................... 3,501,933 5,852.654 61,734,317 9.48 185.203 3.16 92,601,500
New Mexico....................... 595,083 878.927 13,161,860 6.68 39.486 4.49 19,743,000
Nevada........................... 860,471 1,602.964 25,132,075 6.38 75.396 4.70 37,698,000
New York......................... 6,199,843 10,772.137 87,985,541 12.24 263.957 2.45 131,978,500
Ohio............................. 4,563,007 9,456.943 145,679,640 6.49 437.039 4.62 218,519,500
Oklahoma......................... 1,155,222 2,120.652 37,552,508 5.65 112.568 5.31 56,284,000
Oregon........................... 1,237,619 1,825.143 34,579,587 5.28 103.739 5.68 51,869,500
Pennsylvania..................... 4,797,660 7,351.474 94,598,197 7.77 283.795 3.86 141,897,500
Rhode Island..................... 462,946 722.418 7,077,982 10.21 21.234 2.94 10,617,000
South Carolina................... 1,185,320 2,779.379 50,322,355 5.52 150.967 5.43 75,483,500
South Dakota..................... 204,358 297.778 4,581,465 6.50 13.744 4.62 6,872,000
Tennessee........................ 44,781 81.005 1,846,070 4.39 5.538 6.84 2,769,000
Texas............................ 6,420,510 15,872.458 249,502,909 6.36 748.509 4.72 374,254,500
Utah............................. 646,728 865.412 18,858,674 4.59 56.576 6.54 28,288,000
Virginia......................... 2,590,554 4,916.679 84,375,562 5.83 253.127 5.15 126,563,500
Vermont.......................... 250,227 477.304 4,678,429 10.20 14.035 2.94 7,017,500
Washington....................... 1,240,194 1,820.509 30,840,107 5.90 92.520 5.08 46,260,000
Wisconsin........................ 2,161,626 3,139.087 54,767,754 5.73 164.303 5.23 82,151,500
West Virginia.................... 939,290 1,393.543 27,538,329 5.06 82.615 5.93 41,307,500
Wyoming.......................... 173,275 356.151 8,706,113 4.09 26.118 7.33 13,059,000
----------------------------------------------------------------------------------------------------------------------
National total............. 92,424,160 169,444.470 2,437,982,165 6.95 7,313.946 4.32 3,656,973,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Nebraska does not include any privately owned utilities.
Note.--Assumes a 10% Renewable Portfolio Standard (RPS) applied to privately owned utilities with a maximum credit price of 3 cents per kilowatthour.
Does not account for potential fuel cost savings from lower fossil fuel bills as a result of increased renewable generation as required by the RPS.
Since many utilities will likely be renewable credit sellers, the impact on the prices in their states will be much lower than shown.
[[Page S3276]]
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. BINGAMAN. Mr. President, I would give to the Senator from Nevada
the hour that was reserved under postcloture for Senator Akaka of
Hawaii.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Vermont.
Mr. JEFFORDS. Mr. President, I rise in opposition to this amendment.
This is very complicated stuff, all these things trading around and all
that. It is very difficult for people to understand. It sounds good.
I think under the circumstances, even though it is the opposition,
the administration is somewhere we should look, in the form of the
Department of Energy, as to what the facts are. If you do that, you
will find that the facts are quite different from those represented by
the Senator from Arizona and obviously the Senator from Oklahoma. It is
also clear that in different areas of the country, this works
differently. It depends on what your production is, what is available
to you in renewables and all that. I will rely upon the Department of
Energy and expect, with this administration being in control of that
Department, that the facts they give us ought to be fairly accurate.
It seems to me we have brought forth these arguments several times
now. However, I will reiterate that the U.S. Department of Energy, in
its most recent analysis, has found that a 10-percent renewable energy
requirement will, by the year 2020, save the American consumers up to
$3 billion, save consumers up to $3 billion in electricity costs.
Imposing a Federal renewable energy mandate of 10 percent will cost $3
billion less for consumers by the year 2020 as compared to business as
usual. This result is an overall cost savings to consumers from 2002 to
2020 of $13.2 billion. This is what the most recent studies of the U.S.
Department of Energy, Energy Information Administration have found.
It escapes me why we are spending so much time arguing about cost. I
have heard some of my colleagues claim that the cost to consumers will
be off the charts. This is at odds with the repeated findings of the
U.S. Department of Energy of this administration.
A number of my colleagues have referred to Energy Information
Administration statistics to the effect that renewable energy will cost
Americans $88 billion. However, these EIA numbers are referring to the
gross cost of the price of renewable energy, not the increased cost to
consumers of using renewable energy versus using other forms of energy.
The relevant question is not whether, if you bought only renewable
energy, it would add up to a total cost of $88 billion. The question
is, How much more is that amount than what you would be paying anyway
from fossil fuel or other energy sources without a renewable energy
mandate?
As I have stated, the studies completed in February of this year by
the U.S. Energy Information Administration, which are consistent with
the previous studies, say that under a 10-percent renewable energy
mandate, consumer costs will actually go down by close to $3 billion
per year by the year 2020, compared to energy costs if no renewable
energy mandate existed.
I will also point out that although the 1.5-cent cap Senator Nickles
is now proposing was indeed the amount contained in the bill put
forward by the Clinton administration, that bill also would have
imposed a far more aggressive renewable mandate than the one currently
in the Senate bill.
Under the Clinton administration's bill, renewable energy would have
been required to reach 7.5 percent by the year 2010. This is compared
to only a roughly 4-percent requirement by 2010 in the energy bill
currently before us. The renewable energy provision currently in the
bill does not even get to an actual 10-percent renewable energy
standard by the year 2020. By the time all of the various exceptions
and deductions are added in, the amount of mandated renewable energy
required in this bill by the year 2020 is actually closer to 5 percent.
This amount is disappointingly close to what American business is
likely to achieve anyway with no additional support from the Federal
Government.
I must say, I find the continued attempt to weaken this marginal
requirement baffling. I, along with my colleagues, have repeatedly made
the argument on the floor for the many benefits of renewable energy.
These include environmental and health benefits which have not been
taken into consideration. They include making our American businesses
competitive in a booming European market in wind and other renewable
energy. This should be the example at which we are looking. As the EIA
has shown, they include benefits to the American consumer, ultimately
making the costs to consumers actually decrease.
Few of my colleagues dispute these benefits. Even those supporting
this amendment have recognized the great national benefits to promoting
renewable energy. It seems painfully difficult for us to change our old
ways of looking at things and to take steps that will bring these
modern and beneficial energy sources to our door.
These arguments over the price of cost caps are just another attempt
to dismantle the existing renewable energy position. The Senate has
already voted several times against attempts to destroy this position,
and I hope we will recognize the amendment for what it is--another
side-door attempt to do just that.
Different States have different problems. Oil-producing States
naturally want to sell all the oil they can. If we look at the program
as it is, look at the advantages it has, and look at the end results as
reported by the Department of Energy, that it will save money in the
years ahead, I say this bill should stay as it is.
I urge my colleagues to join me in keeping this really modest
provision in the bill.
Mr. NICKLES. Will the Senator yield for a question?
The PRESIDING OFFICER. The Senator from Nevada.
Mr. NICKLES. Will the Senator from Vermont yield?
Mr. JEFFORDS. Yes, I am happy to yield.
Mr. NICKLES. I thank my colleague.
I heard you say this amendment was an attempt to destroy the
renewable section. Are you aware of the fact that we didn't change the
10-percent requirement so the bill still requires that 10 percent of
the electricity generated would have to be in the form of renewables?
And I remind you that the Clinton administration only proposed 7.5
percent. So we didn't change that. And I might say that the penalty,
the cap, is the same amount that was proposed by the Clinton
administration. It was a penny and a half per kilowatt hour. If you
missed the target of 10 percent, that target amount, the penalty
amount, would be the same as required by the Clinton administration. So
I don't think this amendment guts the renewables. I wanted to make sure
you were aware of it. This isn't the same vote we had previously on
renewables.
Mr. JEFFORDS. I think it is 7.5 percent by 2010. Other than that, I
stand by the speech I made and the results I said will be there and our
understanding of the bill, as the U.S. Department of Energy understands
it.
Mr. NICKLES. Further, to clarify, the Senator is aware, then, that
the renewable standard is higher than that proposed by the Clinton
administration because it is 10 percent instead of 7.5 percent. Is the
Senator aware that the penalty in the Bingaman-Daschle proposal is
twice as high as that proposed by the Clinton administration?
Mr. JEFFORDS. I think the times that it went into effect were
different. It depends on how you compare it. I stand by my statement.
The PRESIDING OFFICER. The Senator from Nevada.
Mr. REID. Mr. President, before my friend leaves the Chamber, the
distinguished chairman of the Environment and Public Works Committee, I
express my appreciation for his work on this bill and other matters
that have come before this body, and that he has had the opportunity to
move forward to do something about a renewable portfolio.
On the appropriations bill that I have had the pleasure of working
with Senator Domenici for a number of years, the Senator has always
come there making sure our conscience was clear and that the
Appropriations Subcommittee on Energy and Water did everything it could
for development of renewable energy resources. He has always been there
asking us to do more. I appreciate that. I think one of the big
[[Page S3277]]
problems with this bill is that we haven't done more to increase the
renewables portfolio. The Senator and I tried to increase it to 20
percent. Ten percent is a bare minimum. What I say to my friend from
Oklahoma, through the Chair, is that, sure, the 10% requirement hasn't
changed, but with this amendment that 10% is not directed toward the
development of renewables. The amendment will encourage the use of
credits. So with Senator Nickles amendment you wind up having a program
in this country where you don't really develop renewables.
I say to my friend from Vermont, thank you very much for making us
keep our eye on this. We need to develop more renewables. This is the
fourth attempt of what I believe is the oil companies of this country
trying to get us to back off of the renewables portfolio.
The oil companies love this amendment that is before us. But the
American people don't like it. Why? Because when it is explained to
them, energy has a price other than just the cost at the production
level. What do I mean by that?
Mr. President, a few years ago in Nevada, a company came to Nevada.
They owned a plant near Barstow, CA--the largest solar energy
production facility in America, with 200 megawatts of electricity. They
wanted to build a production facility in the Eldorado Valley between
Las Vegas and Boulder City, in a relatively remote place. They went
before the Nevada Public Service Commission. The company was called the
Luz Company. It was named from the Old Testament, where Jacob's Ladder
was; that is where it came down, Luz. The public service commission
could not allow them to build that facility because all they were
allowed to consider at that time was the cost of production. It had
nothing to do with the smog and junk that the coal-fired and oil-fired
generating plants produced in the Las Vegas Valley. They could not take
that into consideration. That is one of the problems we have had all
over America today.
The fact is, since then, the Nevada Legislature has changed that. It
is tremendous that they have done that. They have now, in Nevada, a 15-
percent renewable portfolio standard. That is excellent. I am proud of
what the State of Nevada has done. That has only been at the time of
the last legislature.
Our Nation needs to diversify its energy policy. The Senate passed a
renewables portfolio standard--we call it the RPS--requiring that 10
percent of the electricity produced comes from clean, renewable energy
resources. What is that? The Sun--the warmth of the Sun, the warmth of
the Earth, geothermal.
Wind used to bother me but I kind of like it now. Wind always got on
my nerves; it would never be there when I wanted it. I now like the
wind. I have come to the realization that it cleans the air. I have
also come to the realization that we in Nevada can use that wind to
produce electricity. In fact, we are doing that at the Nevada Test
Site, where almost a thousand bombs have been detonated.
We are building, with the permission of the DOE, a wind farm there.
Within 3 years, with the work done by the Finance Committee--and I
appreciate the work by Senators Baucus, Grassley, and other members of
that committee on a tax credit for wind--that will allow that
generating facility to go forward. Within 3 years, they will produce
enough electricity to supply electricity to 250,000 homes in Las Vegas.
That is good.
So, Mr. President, the RPS in this bill is too weak. As I have
already said to my friend, the distinguished Senator Jeffords, it is
not as much as I had hoped for, not as much as I wanted. I voted for 20
percent, which Senator Jeffords and I propounded.
One provision in the renewable portfolio standard allows for a system
of tradeable, renewable energy credits. For this system to effectively
work--and we have not talked about it that much today--the cost of
renewable energy credits must encourage the growth of renewable energy.
The Nickles amendment lowers the cost of these renewable energy tax
credits to the point where a utility will choose to buy credits rather
than produce renewable energy. In this country, I want more renewable
energy. We have spent trillions of dollars in the oil business--
utilities are heavily invested in that. Let's change a little and spend
a little money on renewable energy so my friend, my children, and my
children's children can breathe clean air. That is what this is all
about. Ask my children whether they are interested in using the worst-
case scenario. The EIA analysis reflected the worst-case scenario--that
the cost of electricity might increase 0.1 cents per kilowatt-hour.
Every one of my five children--let them vote on it. They will go for
renewable energy because they want clean air for their children, my 12
grandchildren. I want them to have clean air. They are not going to
have it if we keep firing generators with coal, gas, and oil.
We need to do something different--Sun, geothermal, wind. That is
what this amendment is about. This is the fourth time they have tried
to whack this very small amount that we have in this bill, 10 percent
for renewable energy. I am glad, if for no other reason, cloture has
been invoked. Maybe this will be the end of it. Maybe not.
What this amendment attempts to do makes no sense. This is not the
goal of the renewable portfolio standard. This amendment is basically,
in my opinion, interested in damage control.
I am interested in expanding our energy resources through clean
renewable energy. The DOE's Energy Information Administration suggests
that the renewable portfolio standard may raise the price--worst-case
scenario--of electricity consumers by 0.1 cents per kilowatt hour. That
is the estimate. It doesn't include the stimulative effect of section
45, the production tax credit that the Senate adopted yesterday.
This bill isn't perfect. It is far from perfect. But there are some
good things in the bill. One of the good things is what was done
yesterday in adopting the Finance Committee's energy tax provisions.
The chairman of this committee, Senator Bingaman, is a member of that
Finance Committee. That was good work they did, because they had
provisions in there to help production and they also had provisions in
there to help the renewable portfolio. With the production tax credit,
there is likely to be no increase in consumer prices resulting from the
renewable portfolio. After pouring billions of dollars--I say
trillions--into oil and gas, we need to invest in a clean energy
future. Other nations in the world are developing renewable energy
sources much faster than the United States is. America needs to
reestablish leadership in renewable energy.
I oppose this amendment and, contrary to earlier statements, the
renewable portfolio standard provision in this bill, as modified, is as
close to the Texas RPS as possible, while accommodating regional
differences. Why do I say that? Because under the Texas RPS statute,
the amount of new renewables is based on capacity. However, as
implemented by the Texas Public Utility Commission, the regulations
convert the capacity obligation to a generation standard.
I cite Chapter 25.173(h)(1) from the Texas RPS:
The total statewide renewable energy credit requirement for
each compliance period shall be calculated in terms of
megawatt hours and shall be equal to the renewable capacity
target multiplied by 8,760 hours per year, multiplied by the
appropriate capacity conversion factor. . . .
It says it all.
The section goes on to spell out exactly how the capacity standard is
converted to a generation standard. I ask unanimous consent that the
regulations from the State of Texas be printed in the Record.
There being no objection, the materials was ordered to be printed in
the Record, as follows:
Chapter 25. Substantive Rules Applicable to Electric Service Providers
subchapter H. electrical planning
Division 1. Renewable energy resources and use of natural gas
Sec. 25.173. Goal for Renewable Energy
(a) Purpose. The purpose of this section is to ensure that
an additional 2,000 megawatts (MW) of generating capacity
from renewable energy technologies is installed in Texas by
2009 pursuant to the Public Utility Regulatory Act (PURA)
Sec. 39.904, to establish a renewable energy credits trading
program that would ensure that the new renewable energy
capacity is built in the most efficient and economical
manner, to encourage the development, construction, and
operation of new renewable energy resources at those sites in
[[Page S3278]]
this state that have the greatest economic potential for
capture and development of this state's environmentally
beneficial resources, to protect and enhance the quality of
the environment in Texas through increased use of renewable
resources, to respond to customers' expressed preferences for
renewable resources by ensuring that all customers have
access to providers of energy generated by renewable energy
resources pursuant to PURA Sec. 39.101(b)(3), and to ensure
that the cumulative installed renewable capacity in Texas
will be at least 2,880 MW by January 1, 2009.
(b) Application. This section applies to power generation
companies as defined in Sec. 25.5 of this title (relating to
definitions), and competitive retailers as defined in
subsection (c) of this section. This section shall not apply
to an electric utility subject to PURA Sec. 39.102(c) until
the expiration of the utility's rate freeze period.
(c) Definitions.
(1) Competitive retailer--A municipally-owned utility,
generation and transmission cooperative (G&T), or
distribution cooperative that offers customer choice in the
restricted competitive electric power market in Texas or a
retail electric provider (REP) as defined in Sec. 25.5 of
this title.
(2) Compliance period--A calendar year beginning January 1
and ending December 31 of each year in which renewable energy
credits are required of a competitive retailer.
(3) Designated representative--A responsible natural person
authorized by the owners or operators of a renewable resource
to register that resource with the program administrator. The
designated representative must have the authority to
represent and legally bind the owners and operators of the
renewable resource in all matters pertaining to the renewable
energy credits trading program.
(4) Early banking--Awarding renewable energy credits (RECs)
to generators for sale in the trading program prior to the
program's first compliance period.
(5) Existing facilities--Renewable energy generators placed
in service before September 1, 1999.
(6) Generation offset technology--Any renewable technology
that reduces the demand for electricity at a site where a
customer consumers electricity. An example of this technology
is solar water heating.
(7) New facilities--Renewable energy generators placed in
service on or after September 1, 1999. A new facility
includes the incremental capacity and associated energy from
an existing renewable facility achieved through repowering
activities undertaken on or after September 1, 1999.
(8) Off-grid generation--The generation of renewable energy
in an application that is not interconnected to a utility
transmission or distribution system.
(9) Program administrator--The entity approved by the
commission that is responsible for carrying out the
administrative responsibilities related to the renewable
energy credits trading program as set forth in subsection (g)
of this section.
(10) REC offset (offset)--An REC offset represents one MWh
of renewable energy from an existing facility that may be
used in place of an REC to meet a renewable energy
requirement imposed under this section. REC offsets may not
be traded, shall be calculated as set forth in subsection (i)
of this section, and shall be applied as set forth in
subsection (h) of this section.
(11) Renewable energy credit (REC or credit)--An REC
represents one megawatt hour (MWh) of renewable energy that
is physically metered and verified in Texas and meets the
requirements set forth in subsection (e) of this section.
(12) Renewable energy credit account (REC account)--An
account maintained by the renewable energy credits trading
program administrator for the purpose of tracking the
production, sale, transfer, and purchase, and retirement of
RECs by a program participant.
(13) Renewable energy credits trading program (trading
program)--The process of awarding, trading, tracking, and
submitting RECs as a means of meeting the renewable energy
requirements set out in subsection (d) of this section.
(14) Renewable energy resource (renewable resource)--A
resource that produces energy derived from renewable energy
technologies.
(15) Renewable energy technology--Any technology that
exclusively relies on an energy source that is naturally
regenerated over a short time and derived directly from the
sun, indirectly from the sun, or from moving water or other
natural movements and mechanisms of the environment.
Renewable energy technologies include those that rely on
energy derived directly from the sun, on wind, geothermal,
hydroelectric, wave, or tidal energy, or on biomass or
biomass-based waste products, including landfill gas. A
renewable energy technology does not rely on energy resources
derived from fossil fuels, waste products from fossil fuels,
or waste products from inorganic sources.
(16) Repowering--Modernizing or upgrading an existing
facility in order to increase its capacity or efficiency.
(17) Settlement period--The first calendar quarter
following a compliance period in which the settlement process
for that compliance year takes place.
(18) Small producer--A renewable resource that is less than
two megawatts (MW) in size.
(d) Renewable energy credits trading program (trading
program). Renewable energy credits may be generated,
transferred, and retired by renewable energy power
generation, competitive retailers, and other market
participants as set forth in this section.
(1) The program administrator shall apportion a renewable
resource requirement among all competitive retailers as a
percentage of the retail sales of each competitive retailer
as set forth in subsection (h) of this section. Each
competitive retailer shall be responsible for retiring
sufficient RECs as set forth in subsections (h) and (k) of
this section to comply with this section. The requirement to
purchase RECs pursuant to this section becomes effective on
the date each competitive retailer begins serving retail
electric customers in Texas.
(2) A power generating company may participate in the
program and may generate RECs and buy or sell RECs as set
forth in subsection (j) of this section.
(3) RECs shall be credited on an energy basis as set forth
in subsection (j) of this section.
(4) Municipally-owned utilities and distribution
cooperatives that do not offer customer choice are not
obligated to purchase RECs. However, regardless of whether
the municipally-owned utility or distribution cooperative
offers customer choice, a municipally-owned utility or
distribution cooperative possessing renewable resources that
meet the requirements of subsection (e) of this section may
sell RECs generated by such a resource to competitive
retailers as set forth in subsection (j) of this section.
Except where specifically stated, the provisions of this
section shall apply uniformly to all participants in the
trading program.
(e) Facilities eligible for producing RECs in the renewable
energy credits trading program. For a renewable facility to
be eligible to produce RECs in the trading program it must be
either a new facility or a small producer as defined in
subsection (c) of this section and must also meet the
requirements of this subsection:
(1) A renewable energy resource must not be ineligible
under subsection (f) of this section and must register
pursuant to subsection (n) of this section;
(2) The facility's above-market costs must not be included
in the rates of any utility, municipally-owned utility, or
distribution cooperative through base rates, a power cost
recovery factor (PCRF), stranded cost recovery mechanism, or
any other fixed or variable rate element charged to end
users;
(3) For a renewable energy technology that requires fossil
fuel, the facility's use of fossil fuel must not exceed 2.0%
of the total annual fuel input on a British thermal unit
(BTU) or equivalent basis;
(4) The output of the facility must be readily capable of
being physically metered and verified in Texas by the program
administrator. Energy from a renewable facility that is
delivered into a transmission system where it is commingled
with electricity from non-renewable resources can not be
verified as delivered to Texas customers. A facility is not
ineligible by virtue of the fact that the facility is a
generation-offset, off-grid, or on-site distributed renewable
facility if it otherwise meets the requirements of this
section; and
(5) For a municipally owned utility operating a gas
distribution system, any production or acquisition of
landfill gas that is directly supplied to the gas
distribution system is eligible to produce RECs based upon
the conversion of the thermal energy in BTUs to electric
energy in kWh using for the conversion factor the systemwide
average heat rate of the gas-fired units of the combined
utility's electric system as measured in BTUs per kWh.
(6) For industry-standard thermal technologies, the RECs
can be earned only on the renewable portion of energy
production. Furthermore, the contribution toward statewide
renewable capacity megawatt goals from such facilities would
be equal to the fraction of the facility's annual MWh energy
output from renewable fuel multiplied by the facility's
nameplate MV capacity.
(f) Facilities not eligible for producing RECs in the
renewable energy credits trading program. A renewable
facility is not eligible to produce RECs in the trading
program if it is:
(1) A renewable energy capacity addition associated with an
emissions reductions project described in Health and Safety
Code Sec. 382.5193, that is used to satisfy the permit
requirements in Health and Safety Code Sec. 382.0519;
(2) An existing facility that is not a small producer as
defined in subsection (c) of this section; or
(3) An existing fossil plant that is repowered to use a
renewable fuel.
(g) Responsibilities of program administrator. No later
than June 1, 2000, the commission shall approve an
independent entity or serve as the trading program
administrator. At a minimum, the program administrator shall
perform the following functions:
(1) Create accounts that track RECs for each participant in
the trading program;
(2) Award RECs to registered renewable energy facilities on
a quarterly basis based on verified meter reads;
(3) Assign offsets to competitive retailers on an annual
basis based on a nomination submitted by the competitive
retailer pursuant to subsection (n) of this section;
(4) Annually retire RECs that each competitive retailer
submits to meet its renewable energy requirement;
(5) Retire RECs at the end of each REC's three-year life;
[[Page S3279]]
(6) Maintain public information on its website that
provides trading program information to interested buyers and
sellers of RECs;
(7) Create an exchange procedure where persons may purchase
and sell RECs. The exchange shall ensure the anonymity of
persons purchasing or selling RECs. The program administrator
may delegate this function to an independent third party. The
commission shall approve any such delegation;
(8) Make public each month the total energy sales of
competititon retailers in Texas for the previous month;
(9) Perform audits of generators participating in the
trading program to verify accuracy of metered production
data;
(10) Allocate the renewable energy responsibility to each
competitive retailer in accordance with subsection (h) of
this section; and
(11) Submit an annual report to the commission. Beginning
with the program's first compliance period, the program
administrator shall submit a report to the commission on or
before April 15 of each calendar year. The report shall
contain information pertaining to renewable energy power
generators and competitive retailers. At a minimum, the
report shall contain:
(A) the amount of existing and new renewable energy
capacity in MW installed in the state by technology type, the
owner/operator of each facility, the date each facility began
to produce energy, the amount of energy generated in
megawatt-hours (MWh) each quarter for all capacity
participating in the trading program or that was retired from
service; and
(B) a listing of all competitive retailers participating in
the trading program, each competitive retailer's renewable
energy credit requirement, the number of offsets used by each
competitive retailer, the number of credits retired by each
competitive retailer, a listing of all competitive retailers
that were in compliance with the REC requirement, a listing
of all competitive retailers that failed to retire sufficient
REC requirement, and the deficiency of each competitive
retailer that failed to retire sufficient RECs to meet its
REC requirement.
(h) Allocation of REC purchase requirement to competitive
retailers. The program administrator shall allocate REC
requirements among competitive retailers. Any renewable
capacity that is retired before January 1, 2009 or any
capacity shortfalls that arise due to purchases of RECs from
out-of-state facilities shall be replaced and incorporated
into the allocation methodology set forth in this subsection.
Any changes to the allocation methodology to reflect
replacement capacity shall occur two compliance periods after
which the facility was retired or capacity shortfall
occurred. The program administrator shall use the following
methodology to determine the total annual REC requirement for
a given year and the final REC requirement for individual
competitive retailers:
(1) The total statewide REC requirement for each compliance
period shall be calculated in terms of MWh and shall be equal
to the renewable capacity target multiplied by 8,760 hours
per year, multiplied by the appropriate capacity conversion
factor set forth in subsection (j) of this section. The
renewable energy capacity targets for the compliance period
beginning January 1, of the year indicated shall be:
(A) 400 MW of new resources in 2002;
(B) 400 MW of new resources in 2003;
(C) 850 MW of new resources in 2004;
(D) 850 MW of new resources in 2005;
(E) 1,400 MW of new resources in 2006;
(F) 1,400 MW of new resources in 2007;
(G) 2,000 MW of new resources in 2008; and
(H) 2,000 MW of new resources in 2009 through 2019.
(2) The final REC requirement for an individual competitive
retailer for a compliance period shall be calculated as
follows:
(A) Each competitive retailer's preliminary REC requirement
is determined by dividing its total retail energy sales in
Texas by the total retail sales in Texas of all competitive
retailers, and multiplying that percentage by the total
statewide REC requirement for that compliance period.
(B) The adjusted REC requirement for each competitive
retailer that is entitled to an offset is determined by
reducing its preliminary REC requirement by the offsets to
which it qualifies, as determined under subsection (i) of
this section, with the maximum reduction equal to the
competitive retailer's preliminary REC requirement. The total
reductions for all competitive retailers is equal to the
total usable offsets for that compliance period.
(C) Each competitive retailer's final REC requirement for a
compliance period shall be increased to recapture the total
usable offsets calculated under subparagraph (B) of this
paragraph. The additional REC requirement shall be calculated
by dividing the competitive retailer's adjusted REC
requirement by the total adjusted REC requirement of all
competitive retailers. This fraction shall be multiplied by
the total usable offsets for that compliance period and this
amount shall be added to the competitive retailer's adjusted
REC requirement to produce the competitive retailer's final
REC requirement for the compliance period.
(i) Nomination and calculation of REC offsets.
(1) A REP, municipally-owned utility, G&T cooperative,
distribution cooperative, or an affiliate of a REP,
municipally-owned utility, or distribution cooperative, may
apply offsets to meet all or a portion of its renewable
energy purchase requirement, as calculated in subsection (h)
of this section, only if those offsets are nominated in a
filing with the commission by June 1, 2001. A G&T may
nominate the combined offsets for itself and its member
distribution cooperatives upon the presentation of a
resolution by its Board authorizing it to do so.
(2) The Commission shall verify any designations of REC
offsets and notify the program administrator of its
determination by December 31, 2001.
(3) REC offsets shall be equal to the average annual MWh
output of an existing resource for the years 1991-2000 or the
entire life of the existing resource, whichever is less.
(4) REC offsets qualify for use in a compliance period
under subsection (h) of this section only to the extent that:
(A) The resource producing the REC offset has continuously
since September 1, 1999 been owned by or its output has been
committed under contract to a utility, municipally-owned
utility, or cooperative nominating the resource under
paragraph (1) of this subsection or, if the resource has been
committed under a contract that expired after September 1,
1999 and before January 1, 2002, it is owned by or its output
has been committed under contract to a utility, municipally-
owned utility, or cooperative on January 1, 2002; and
(B) The facility producing the REC offsets is operated and
producing energy during the compliance period in a manner
consistent with historic practice.
(5) If the production from a facility producing the REC
offset energy ceases for any reason, the competitive retailer
may no longer claim the REC offset against its REC
requirement.
(j) Calculation of capacity conversion factor. The capacity
conversion factor used by the program administrator to
allocate credits to competitive retailers shall be calculated
as follows:
(1) The capacity conversion factor (CCF) shall be
administratively set at 35% for 2002 and 2003, the first two
compliance periods of the program
(2) During the fourth quarter of the second compliance year
(2003), the CCF shall be readjusted to reflect actual
generator performance data associated with all renewable
resources in the trading program. The program administrator
shall adjust the CCF every two years thereafter and shall:
(A) be based on all renewable energy resources in the
trading program for which at least 12 months of performance
data is available;
(B) represent a weighted average of generator performance;
(C) use all valid performance data that is available for
each renewable resources; and
(D) ensure that the renewable capacity goals are attained.
(k) Production and transfer of REC's. The program
administrator shall administer a trading program for
renewable energy credits in accordance with the requirements
of this subsection.
(1) A REC will be awarded to the owner of a renewable
resource when a MWh is metered at that renewable resource. A
generator producing 0.5 MWh or greater as its last unit
generated should be awarded one REC on a quarterly basis. The
program administrator shall record the amount of metered MWh
and credit the REC account of the renewable resource that
generated the energy on a quarterly basis.
(2) The transfer of RECs between parties shall be effective
only when the transfer is recorded by the program
administrator.
(3) The program administrator shall require that RECs be
adequately identified prior to recording a transfer and shall
issue an acknowledgement of the transaction to parties upon
provision of adequate information. At a minimum, the
following information shall be provided:
(A) identification of the parties;
(B) REC serial number, REC issue date, and the renewable
resource that produced the REC;
(C) the number of RECs to be transferred; and
(D) the transaction date.
(4) A competitive retailer shall surrender RECs to the
program administrator for retirement from the market in order
to meet its REC allocation for a compliance period. The
program administrator will document all REC retirements
annually.
(5) On or after each April 1, the program administrator
will retire RECs that have not been retired by competitive
retailers and have reached the end of their three-year life.
(6) The program administrator may establish a procedure to
ensure that the award, transfer, and retirement of credits
are accurately recorded.
(l) Settlement process. Beginning in January 2003, the
first quarter following the compliance period shall be the
settlement period during which the following actions shall
occur:
(1) By January 31, the program administrator will notify
each competitive retailer of its total REC requirement for
the previous compliance period as determined pursuant to
subsection (h) of this section.
(2) By March 31, each competitive retailer must submit
credits to the program administrator from its account
equivalent to its REC requirement for the previous compliance
period. If the competitive retailer has insufficient credits
in its account to satisfy its obligation, and this shortfall
exceeds the applicable deficit allowance as set forth in
[[Page S3280]]
subsection (m)(2) of this section, the competitive retailer
is subject to the penalty provisions in subsection (o) of
this section.
(m) Trading program compliance cycle.
(1) The first compliance period shall begin on January 1,
2002 and there will be 18 consecutive compliance periods.
Early banking of RECs is permissible and may commence no
earlier than July 1, 2001. The program's first settlement
period shall take place during the first quarter of 2003.
(2) A competitive retailer may incur a deficit allowance
equal to 5.0% of its REC requirement in 2002 and 2003 (the
first two compliance periods of the program). This 5.0%
deficit allowance shall not apply to entities that initiate
customer choice after 2003. During the first settlement
period, each competitive retailer will be subject to a
penalty for any REC shortfall that is greater than 5.0% of
its REC requirement under subsection (h) of this section.
During the second settlement period, each competitive
retailer will be subject to the penalty process for any REC
shortfall greater than 5.0% of the second year REC
allocation. All competitive retailers incurring a 5.0%
deficit pursuant to this subsection must make up the amount
of RECs associated with the deficit in the next compliance
period.
(3) The issue date of RECs created by a renewable energy
resource shall coincide with the beginning of the compliance
year in which the credits are generated. All RECs shall have
a life of three compliance periods, after which the program
administrator will retire them from the trading program.
(4) Each REC that is not used in the year of its creation
may be banked and is valid for the next two compliance years.
(5) A competitive retailer may meet its renewable energy
requirements for a compliance period with RECs issued in or
prior to that compliance period which have not been retired.
(n) Registration and certification of renewable energy
facilities. The commission shall register and certify all
renewable facilities that will produce either REC offsets or
RECs for sale in the trading program. To be awarded RECs or
REC offsets, a power generator must complete the registration
process described in this subsection. The program
administrator shall not award offsets or credits for energy
produced by a power generator before it has been certified by
the commission.
(1) The designated representative of the generating
facility shall file an application with the commission on a
form approved by the commission for each renewable energy
generation facility. At a minimum, the application shall
include the location, owner, technology, and rated capacity
of the facility and shall demonstrate that the facility meets
the resource eligibility criteria in subsection (e) of this
section.
(2) No later than 30 days after the designated
representative files the certification form with the
commission, the commission shall inform both the program
administrator and the designated representative whether the
renewable facility has met the certification requirements. At
that time, the commission shall either certify the renewable
facility as eligible to receive either RECs or offsets, or
describe an insufficiencies to be remedied. If the
application is contested, the time for acting is extended by
30 days.
(3) Upon receiving notice of certification of new
facilities, the program administrator shall create an REC
account for the designated representative of the renewable
resource.
(4) The commission may make on-site visits to any certified
unit of a renewable energy resource and may decertify any
unit if it is not in compliance with the provisions of this
subsection.
(5) A decertified renewable generator may not be awarded
RECs. However, any RECs awarded by the program administrator
and transferred to a competitive retailer prior to the
decertification remain valid.
(o) Penalties and enforcement. If by April 1 of the year
following a compliance year it is determined that a
competitive retailer with an allocated REC purchase
requirement has insufficient credits to satisfy its
allocation, the competitive retailer shall be subject to the
administrative penalty provisions of PURA Sec. 15.023 as
specified in this subsection.
(1) Except as provided in paragraph (4) of this subsection,
a penalty will be assessed for that portion of the deficient
credits.
(2) The penalty shall be the lesser of $50 per MWh or, upon
presentation of suitable evidence of market value by the
competitive retailer, 200% of the average market value of
credits for that compliance period.
(3) There will be no obligation on the competitive retailer
to purchase RECs for deficits, whether or not the deficit was
within or was not within the competitive retailer's
reasonable control, except as set forth in subsection (m)(2)
of this section.
(4) In the event that the commission determines that events
beyond the reasonable control of a competitive retailer
prevented it from meeting its REC requirement there will be
no penalty assessed.
(5) A party is responsible for conducting sufficient
advance planning to acquire its allotment of RECs. Failure of
the spot or short-term market to supply a party with the
allocated number of RECs shall not constitute an event
outside the competitive retailer's reasonable control. Events
or circumstances that are outside of a party's reasonable
control may include weather-related damage, mechanical
failure, lack of transmission capacity or availability,
strikes, lockouts, actions of a governmental authority that
adversely effect the generation, transmission, or
distribution of renewable energy from an eligible resource
under contract to a purchaser.
(p) Renewable resources eligible for sale in the Texas
wholesale and retail markets. Any energy produced by a
renewable resource may be bought and sold in the Texas
wholesale market or to retail customers in Texas and marketed
as renewable energy if it is generated from a resource that
meets the definition in subsection (c)(14) of this section.
(q) Periodic review. The commission shall periodically
assess the effectiveness of the energy-based credits trading
program in this section to maximize the energy output from
the new capacity additions and ensure that the goal for
renewable energy is achieved in the most economically-
efficient manner. If the energy-based trading program is not
effective, performance standards will be designed to ensure
that the cumulative installed renewable capacity in Texas
meets the requirements of PURA Sec. 39.904.
The PRESIDING OFFICER. The Senator from Vermont.
Mr. JEFFORDS. Mr. President, I want to finish. We have had these
battles since I came to Congress in 1975. We recognized at that time we
were so vulnerable with respect to our oil supplies that it was
essential we put ourselves on a course that could make us much more
independent. We have made very little progress in that time.
The PRESIDING OFFICER. Will the Senator suspend? The Chair inquires,
did the Senator from Nevada relinquish the floor?
Mr. REID. I had not finished.
Mr. JEFFORDS. Fine, let me finish quickly.
Mr. REID. I am not finished, though. If I can proceed.
The PRESIDING OFFICER. The Senator from Nevada.
Mr. REID. I will be very quick. I apologize.
Mr. President, the manager of this bill, Senator Bingaman, has noted
that this amendment is opposed by numerous organizations, some of which
are energy coalitions, not just environmental groups, although they
join with us also in opposing this amendment:
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.
It is wrong.
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 an RPS--
primarily wind power at the very best sites. Biomass,
geothermal and solar would be at a significant disadvantage
to meet the portfolio standard if these lower credits are
adopted.
And that affects Western States. Not only would it be geothermal and
solar, but, of course, wind. The wind blows a lot in the West. The
Nickles amendment would reduce benefits to Western States with good
resources about which I have spoken. The Nickles amendment would reduce
the amount of renewable energy developed.
It is from all perspectives undermining what we are trying to
accomplish in this legislation, which is develop renewable energy for
this country and having not only incentives, but there would be a
requirement to do it. Voluntarism simply has not worked.
Do not believe the industry's claim that this will cost too much
money. The Bush administration's EIA found that a 10-percent RPS would
save consumers money.
I hope my colleagues will reject this amendment. I hope this is the
last weakening amendment to the RPS that is in this bill. The bill as
it now stands is good, and I think we should vote like we have the
previous three times and not let this amendment weaken the standards in
this bill relating to renewables.
The PRESIDING OFFICER. The Senator from Vermont.
Mr. JEFFORDS. Mr. President, I have a few more comments. Logic should
make this obvious. If you can provide energy that does not cost you any
money--solar and wind, for example--is it not logical to put it in the
mix? That is all we are saying. The Department of Energy agrees with us
and says it will save money.
I understand those from the oil-producing States do not want this
provision, but common sense tells us it is the best thing we can do.
Therefore, I urge my colleagues to vote against the amendment.
The PRESIDING OFFICER. The Senator from Oklahoma.
[[Page S3281]]
Mr. NICKLES. Mr. President, for the information of my colleagues, we
are going to vote on this amendment shortly. Staff should notify their
Senators.
I wish to make a couple comments.
One, the Department of Energy supports this amendment. It does not
oppose it.
Two, as to colleagues saying this amendment does not cost anything,
they are not talking about the people who know something about the
amendment. The Energy Information Administration talks about the cost
to States in the millions and millions of dollars. The State of Florida
shows about a $450 million increase.
For my colleagues' information, I have a letter from the Public
Service Commission in the State of Florida. The letter says they
support this amendment to lower the amount of the penalty from 3 cents
to 1.5 cents, and that it would reduce the cost of the Federal mandate
on the Florida ratepayers. I happen to think those people know
something about this issue.
I have letters from utility companies. Some people say these are oil
companies. I am talking about utility companies. This is not oil
companies versus other companies. This is about an assault on
ratepayers because we are getting ready to say you have to have 10
percent of your power from renewables. We did not change that. But if
you do not make it--and I will tell my colleagues, it is not easy to
make that.
There was an article in the Wall Street Journal about the city of
Jacksonville. The city of Jacksonville has a renewable standard of 7.5
percent. They have tried a lot of alternative sources of power. Guess
what. They are not there yet. I hope they get there, but they have
found out that some of these alternative sources of power cost a lot of
money, and the ratepayers are objecting.
Nantucket, a very pristine area a lot of us have enjoyed off the
coast, wants to have renewables. They talked about having a wind farm.
Wind farms are subsidized a lot through the Tax Code. There was an
effort to build a wind farm off the coast, but there is a lot of
objection from environmentalists because of what it would do to bird,
migration and to the environment as well.
The point is, yes, there is a desire by many to go to renewables, but
there is also a penalty. This bill has a very high penalty. It has a
penalty twice as high as that proposed by the Clinton administration.
What Senator Breaux, myself, Senator Miller, and Senator Voinovich
have offered is a compromise. It does not eliminate the renewable
standard. It says let's reduce the penalty to the same number the
Clinton administration proposed.
How much is the penalty? It is 1.5 cents a kilowatt hour. How much is
that? The wholesale cost of electricity is 3 cents around the country.
In some areas, it is as low as 2.2 cents, and in other areas it is
closer to 4 cents. The nationwide wholesale cost of electricity is
right around 3 cents.
The penalty under the Bingaman proposal in the underlying bill for
not complying is 3 cents. That is a lot. That is 100 percent of the
cost of electricity. We are telling people you have to pay that kind of
penalty if you do not make the target. That is a heck of a gun at your
head. As a matter of fact, the penalty is so high on some utilities
that produce a lot of electricity--and, yes, maybe electricity is
primarily produced by coal, oil, and gas--it is a heavy hit. It is not
insignificant when the CEO of Southern Company estimates the cumulative
cost of this mandate on Southern Company through the year 2000 will be
from $3 billion to $6.5 billion. That is not insignificant.
For somebody to say they think it will not cost anything is absurd.
Did the CEO of Southern Company put his name on this letter, and is he
factually wrong? I do not think that is the case. It is the reason this
amendment is supported by almost every utility in the country. It is
the reason this amendment is supported by the Chamber of Commerce, the
NFIB, and the National Association of Manufacturers. Somebody is going
to have to pay the bill. Guess what. It is not the utilities that pay
the bill. They are going to pass it on to their ratepayers.
If we do not adopt this amendment, there is going to be a significant
hit on ratepayers. It is going to happen and people should know it.
They should know we are voting on whether we are going to have electric
rates go up significantly. This amendment tries to mitigate it. They
are still going to go up because there is a penalty of 1.5 cents. That
is about 50 percent of the wholesale price of electricity. That is
still pretty significant. If we do 3 cents, it is 100 percent. That is
a big hit, not to mention the fact in addition to the 3 cents, there is
also already in the Tax Code--it has already been agreed upon--a 1.7-
cent tax credit for renewables.
So we give a tax credit. That is great. But to have this heavy a
mandate is a big hit on consumers. It is in the hundreds of millions of
dollars in almost every State, including States in the Northeast.
I am going to correct my colleague on the Texas renewable standard. I
have the greatest respect for my colleague from Nevada. I love him like
a brother. The Texas renewable standard--and maybe we should have the
Senator from Texas present because he argued this before in this
Chamber, and he said the underlying bill--to paraphrase Senator Gramm
of Texas--is so far from being the Texas renewable standard it is
remarkable. What we have in Texas is capacity, not energy-produced, and
what we have in Texas is equal to a 2-percent standard, not a 10-
percent standard. There is a big difference.
I believe I understood the Senator from Nevada to say there was a 15-
percent renewable. My guess is that includes hydro. The underlying bill
does not include hydro. Hydro is pretty clean power. We have Hoover
Dam. That is pretty clean power. It generates a lot of electricity. It
is water. It is great power. It is cheap. It is very good power. It is
not included as renewable under the definition of the underlying bill.
So I urge my colleagues to support this amendment.
I am going to insert in the Record several statements. I want to
insert a letter from the American Corn Growers Association, very big
advocates of renewable sources, but they are also supportive of this
amendment because they believe this is a proper mix. They also know
that their ratepayers, their users, the ones who grow corn, buy a lot
of electricity, think this is the proper blend. They want renewable
sources.
I will read a part of this letter.
ACGA also supports a fair and equitable renewable portfolio
standard 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.
I also wanted to mention a company called Mid-America Energy Company.
This is a company that is based in Omaha, NE. They have analyzed this
proposal and developed estimates on increased costs that will result
from its enactment of RPS.
According to our preliminary calculations, implementing RPS
in S. 517 will begin increasing electricity costs for Mid-
America's regulated and competitive customers in 2007 by
600,000, with costs rising to more than $40 million in the
year 2019.
This is in rural America. This is in Middle America. This is in the
corn-growing areas. This is one of the largest utilities in the area
that said this is going to be a big hit that they are going to pass on
to their consumers.
I am surprised there is any opposition to this amendment because this
amendment does not eliminate the RPS standard, it does not eliminate
the 10-percent standard; all it does is say, let us reduce the penalty
to 1.5 cents per kilowatt hour. It is the same proposal the Clinton
administration supported.
I do not say things lightly on this floor. I want to be as accurate
as possible, and if I am ever inaccurate, I want to be corrected, and I
will stand corrected. This amendment will save billions of dollars. I
had one letter from one company, Southern Company, that said it was
billions of dollars of expense to them and their customers. That is a
[[Page S3282]]
few States. I cannot say that is one State. It is a few States. It is a
big utility. In my State, for one company, it is something like $60
million. They showed it each year: Here is the production. Here is
their cost of compliance. And it increases substantially. By the last
year, it is something like $60 million.
Senator Kyl alluded to the fact that in my entire State it is over
$100 million. The State of Vermont, I believe he said, was $7 million.
This also came from the Energy Information Agency. So maybe people
are able to distort figures and say it does not cost anything. It does
cost something. One cannot say that companies are going to have to pay
3 cents per kilowatt hour if they do not meet a target and say it does
not cost anything. There are significant costs, and ratepayers will pay
for it. I do not think the utilities pay for it, I think the ratepayers
pay for it, and I think it is time we stand up for ratepayers.
So I urge my colleagues to support the amendment I have offered with
Senator Breaux, Senator Miller, and Senator Voinovich.
I yield the floor.
The PRESIDING OFFICER (Ms. Cantwell). The Senator from New Mexico.
Mr. BINGAMAN. Madam President, I will make a few more comments and
then move to table the amendment. I think we have had a lot of debate.
Everyone knows the issues. I think it is clear this is the fourth
amendment we have dealt with on the Senate floor in an attempt to
undermine the renewable portfolio standard we have in the bill. There
are a lot of figures that have been cited, many of which have no basis
in fact, as far as I can tell.
One of the statements we heard was that this was going to cost--if we
go ahead and keep the bill as it is currently--the ratepayers of
California $243 million a year, or some such figure. The reality is, in
our bill we are saying by the year 2005 each State will generate 1
percent of the power they sell--each utility will generate 1 percent of
the power they sell from renewable sources.
In California, 12.19 percent of the power sold today is from
renewable sources.
Mr. NICKLES. Will the Senator yield?
Mr. BINGAMAN. Yes.
Mr. NICKLES. Does that 12 percent include hydro?
Mr. BINGAMAN. Yes, it includes the hydro that is given credit for in
this bill.
Mr. NICKLES. I did not think hydro was included in this bill.
Mr. BINGAMAN. No, hydro is included in this bill, to an extent, and
this includes the hydro that is given credit for.
Mr. NICKLES. If the Senator will yield further, existing hydro is not
included in the bill. Only incremental new hydro is included in the
bill, and I do not know how the Senator can count that for existing
percentages.
Mr. BINGAMAN. As I understand it, the existing hydro is deducted from
the base before the calculation is made. So to that extent, existing
hydro is included in the bill.
Mr. NICKLES. I know the Senator is going to move to table this
amendment, and I think that is fine. I think we are ready to vote. The
Senator has mentioned this is the fourth amendment we have dealt with
in regard to renewables. One of the reasons I think we have had a few
amendments dealing with this is that it costs so much money, and we
have never had a hearing, and we never had a markup.
I happen to be a member of the Energy Committee. I would have loved
to have participated in a hearing and a markup on this section. I would
love to hear from experts on both sides of this aisle how much this
amendment would really cost, but we were denied that opportunity. So it
is one of the reasons we have to legislate on the floor of the Senate,
because we did not have the opportunity to do it in committee.
Mr. BINGAMAN. Reclaiming my time, my colleague has had ample
opportunity to argue his side of the case today and several weeks ago.
We know his view on it. He is not in favor of the renewable portfolio
standard. This amendment would undermine the renewable portfolio
standard we have in the bill because what it would do is make it much
less likely that renewables, other than wind, to be very specific,
would be used to any significant degree. So those States that depend
upon biomass as a renewable, those States that depend upon biothermal
as a renewable, those States that depend upon solar power as a
renewable might find it more difficult.
We do not think the amendment makes sense. We think it will undermine
the renewable portfolio standard. On that basis, I urge my colleagues--
--
Mr. NICKLES. Before the Senator moves to table----
Mr. BINGAMAN. On that basis, I urge my colleagues to--if the Senator
wants further debate, I am not trying to cut off debate, but he has
concluded his debate, as I understand it.
Mr. NICKLES. Will the Senator yield?
Mr. BINGAMAN. I will yield for one additional question, if it is a
question.
Mr. NICKLES. I want to insert something into the Record.
Mr. BINGAMAN. If he wants to insert something into the Record, I am
glad to have him do that.
Mr. NICKLES. I appreciate my colleague yielding for this request. I
know he wants to move to table.
Earlier, I was looking for a letter I could not find. This is a
letter from the Northeast Utilities. I ask unanimous consent that this
letter be printed in the Record.
There being no objection, the letter was ordered to be printed in the
Record, as follows:
I recognize that many of the Senators from New England
supported the federal RPS portfolio. While NU believes that
renewable programs should be developed on the state level, we
support the further development of renewable sources of
energy. We are concerned, however, that our consumers in New
England will be penalized by the program included in the
Senate bill. As you know, the RPS provision in the bill
applies only to shareholder-owned utilities that sell more
than 1 million megawatt-hours per year at the retail level.
Federal agencies, state and municipal utilities and electric
cooperatives are exempt from meeting the RPS requirements
currently included in the bill. It also appears that self-
generators are exempt.
Given these exemptions, PSNH will be the only utility in
New Hampshire that would be required to participate in the
program. It creates a very uneven field for us and will cost
our customers an estimated $22 million a year. This provision
goes directly against the intent of current NH law which
encourages PSNH and other energy companies to find ways to
mitigate the high cost of purchases from renewable sources.
Also, the federal penalty that is set forward in the bill
for not submitting the required number of credits will hit
consumers in Connecticut and Massachusetts with a ``double
whammy,'' as they already have to pay penalties if they do
not achieve the levels set forth in the state programs that
are already in existence. It would in essence, penalize
Connecticut and Massachusetts for having state programs.
Though it would be our preference to see these provisions
changed dramatically in conference, the Senate will likely
have the opportunity to vote for an amendment by Senator
Nickles that reduces the penalty in the bill from 3 cents to
a more reasonable 1.5 cents. Remember, the goal is not only
to increase the number of renewable sources, but to also to
lower costs to consumers. Please support the Nickles RPS
amendment.
Mike Morris
Mr. NICKLES. The key point of this letter says:
PSNH will be the only utility in New Hampshire that would
be required to participate in the program. It creates a very
uneven field for us and will cost our consumers an estimated
$22 million a year.
It talks about the impact on the northeastern part of the country,
including New Hampshire, Vermont, Massachusetts, and Connecticut.
Mr. BINGAMAN. Madam President, I move to table the 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.
3256. The clerk will call the roll.
The legislative clerk called the roll.
Mr. REID. I announce that the Senator from South Dakota (Mr. Daschle)
and the Senator from South Dakota (Mr. Johnson) are necessarily absent.
Mr. NICKLES. I announce that the Senator from North Carolina (Mr.
Helms) is necessarily absent.
The PRESIDING OFFICER. Are there any other Senators in the Chamber
desiring to vote?
The result was announced--yeas 38, nays 59, as follows:
[[Page S3283]]
[Rollcall Vote No. 83 Leg.]
YEAS--38
Baucus
Biden
Bingaman
Boxer
Cantwell
Carnahan
Carper
Chafee
Clinton
Collins
Conrad
Dayton
Dodd
Dorgan
Durbin
Edwards
Feingold
Harkin
Inouye
Jeffords
Kennedy
Kerry
Kohl
Leahy
Levin
Lieberman
Mikulski
Murray
Nelson (NE)
Reed
Reid
Rockefeller
Sarbanes
Snowe
Stabenow
Torricelli
Wellstone
Wyden
NAYS--59
Akaka
Allard
Allen
Bayh
Bennett
Bond
Breaux
Brownback
Bunning
Burns
Byrd
Campbell
Cleland
Cochran
Corzine
Craig
Crapo
DeWine
Domenici
Ensign
Enzi
Feinstein
Fitzgerald
Frist
Graham
Gramm
Grassley
Gregg
Hagel
Hatch
Hollings
Hutchinson
Hutchison
Inhofe
Kyl
Landrieu
Lincoln
Lott
Lugar
McCain
McConnell
Miller
Murkowski
Nelson (FL)
Nickles
Roberts
Santorum
Schumer
Sessions
Shelby
Smith (NH)
Smith (OR)
Specter
Stevens
Thomas
Thompson
Thurmond
Voinovich
Warner
NOT VOTING--3
Daschle
Helms
Johnson
The motion was rejected.
Mr. NICKLES. I move to reconsider the vote.
Mr. MURKOWSKI. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER. The question is on agreeing to the amendment.
Without objection, the amendment is agreed to.
The amendment (No. 3256) was agreed to.
Mr. REID. I move to reconsider the vote.
Mr. NICKLES. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
The PRESIDING OFFICER. The Senator from Louisiana.
Amendment No. 3274 To Amendment No. 2917
Ms. LANDRIEU. Madam President, I call up amendment No. 3274, the
participant funding amendment, for its immediate consideration.
The PRESIDING OFFICER. Without objection, the pending amendments are
set aside, and the clerk will report the amendment.
The legislative clerk read as follows:
The Senator from Louisiana [Ms. Landrieu] proposes an
amendment numbered 3274.
Ms. LANDRIEU. Madam 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 increase the transfer capability of electric energy
transmission systems through participant-funded investment)
At the appropriate place, insert the following:
SEC. . TRANSMISSION EXPANSION.
Section 205 of the Federal Power Act is amended by
inserting after subsection (h) the following:
``(i) Rulemaking.--Within six months of Enactment of this
Act, the Commission shall issue final rules governing the
pricing of transmission services.
``(1) Transmission pricing principles.--Rules for
transmission pricing issued by the Commission under this
subsection shall adhere to the following principles:
``(A) transmission pricing must provide accurate and proper
price signals for the efficient and reliable use and
expansion of the transmission system; and
``(B) new transmission facilities should be funded by those
parties who benefit from such facilities.
``(2) Funding of certain facilities.--The rules established
pursuant to this subsection shall, among other things,
provide that, upon request of a regional transmission
organization or other Commission-approved transmission
organization, certain new transmission facilities that
increase the transfer capability of the transmission system
may be Participant Funded. In such rules, the Commission
shall also provide guidance as to what types of facilities
may be participant funded.
``(3) Participant-funding.--The term `participant-funding'
means an investment in the transmission system controlled by
a RTO, made after the date that the RTO or other transmission
organization is approved by the Commission, that--
``(A) increases the transfer capability of the transmission
system; and
``(B) is funded by the entities that, in return for
payment, receives the tradable transmission rights created by
the investment.
``(4) Tradable transmission right.--The term `tradable
transmission right' means the right of the holder of such
right to avoid payment of, or have rebated, transmission
congestion charges on the transmission system of a regional
transmission organization, the right to use a specified
capacity of such transmission without payment of transmission
congestion charges, or other rights as determined by the
Commission.''.
Ms. LANDRIEU. Madam President, I see my colleague, Senator Durbin, in
the Chamber. I would not mind yielding 1 minute necessary for him to
just lay down an amendment, if that would be in order.
The PRESIDING OFFICER. Is there objection?
The Senator from New Mexico.
Mr. BINGAMAN. Madam President, what is the request?
Ms. LANDRIEU. I say to the Senator, I was recognized to offer an
amendment. The amendment has been called up. We are on amendment No.
3274, which we discussed and is in order. But Senator Durbin has asked
to lay down an amendment that will take 1 minute, and then we will go
back to this amendment, if that would be OK with you and the Senator
from Alaska.
Mr. BINGAMAN. I thank the Senator from Louisiana. I have no
objection.
The PRESIDING OFFICER. Is there objection?
The Senator from Alaska.
Mr. MURKOWSKI. Reserving the right to object--and I may not object--
my concern is we have six pending amendments, I am told. I would like
to try to work through the amendments. I am sure the manager of the
bill feels the same way. I did not hear the request.
Ms. LANDRIEU. It is 2 minutes to Senator Durbin, and then I will get
right on with my amendment, and we will move through with others who
are waiting.
Mr. MURKOWSKI. Madam President, I yield the floor.
The PRESIDING OFFICER. Is there objection?
Mr. HARKIN. Reserving the right to object.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. HARKIN. Madam President, I did not hear the unanimous consent
request. I am standing here, and I have an amendment that I have been
wanting to offer. I would like to know what the unanimous consent
request is, if the Chair could so inform me.
The PRESIDING OFFICER. The Senator from Louisiana sought consent that
she might yield for 2 minutes to the Senator from Illinois in order to
allow the Senator to offer an amendment.
Mr. DURBIN. If the Senator from Iowa will yield.
Mr. HARKIN. I will yield to get a clarification.
Mr. DURBIN. I am asking for 2 minutes to call up an amendment and lay
it aside--no speeches, no debate, no vote.
The PRESIDING OFFICER. Is there objection?
Mr. MURKOWSKI. Reserving the right to object, Senator Fitzgerald has
been waiting quite a while. I am sure he would certainly be willing to
accommodate the two Senators with 2 minutes each, but I would propose
that we go back and forth, if the Senator from Iowa has an amendment.
I remind all Members, we have a limited amount of time. So as we
begin to accept amendments, without disposing of them, we are going to
run into a time constraint.
I yield the floor.
Mr. REID. Reserving the right to object, I say to my friend from
Alaska, we now have pending, 1, 2, 3, 4, 5, 6, 7 amendments.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
The Senator from Illinois.
Mr. DURBIN. Madam President, I thank the Senator from Louisiana--and
this goes to prove that the Good Samaritan never goes unpunished--for
yielding 2 minutes.
Amendment No. 3342 To Amendment No. 2917
Madam President, I ask unanimous consent that the pending business be
set aside so that I can call up amendment No. 3342.
The PRESIDING OFFICER. Without objection, it is so ordered. The clerk
will report.
The legislative clerk read as follows:
The Senator from Illinois [Mr. Durbin] proposes an
amendment numbered 3342.
Mr. DURBIN. Madam President, I ask unanimous consent reading of the
amendment be dispensed with.
[[Page S3284]]
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
(Purpose: To strike the nonbusiness use limitation with respect to the
credit for the installation of certain small wind energy systems)
In Division H, on page 98, line 16, strike ``If'' and
insert ``Except in the case of qualified wind energy property
expenditures, if''.
Mr. DURBIN. Madam President, I am grateful that I have had the chance
to work with Senators Baucus and Grassley to provide a small tax
incentive for installation of small wind systems in America's farms,
ranches, and other places in rural areas that have wind potential.
Specifically, my amendment would give wind power--a limitless and clean
energy source--a level playing field with solar, geothermal energy,
which are in current law, and fuel cell energy, which is included in
the underlying tax title. All of these renewable energies are eligible
for a 10 percent business investment credit under section 48 of the tax
code. And I think we should give people who wish to tap into wind
energy the same credit. With my amendment, farmers, ranchers and other
business owners who wish to install a small wind energy system up to 75
kilowatts can do so, and get a credit on their tax return worth 10
percent of the cost of installing the wind system. I applaud the work
of Senators Baucus and Grassley, as well as the rest of the Finance
Committee, which put together a package of energy tax incentives. I am
hopeful that the small wind system amendment that I have filed will be
accepted as part of the tax incentive package. I know Senators Baucus
and Grassley are working diligently to make this happen in the near
future.
However, in the event that the Finance Committee and bill managers do
not succeed in working something out on this provision, I am calling up
this amendment so that it may be considered by the Senate at the
appropriate time. This amendment makes small changes to the underlying
tax title, so that farmers, ranchers, and small business owners will be
eligible for a tax incentive when they choose to install a wind energy
system on their property. This amendment would have an effect similar
to adding wind to section 48 of the tax code, where solar, geothermal,
and now fuel cell energy already receive a business investment credit.
Madam President, I ask unanimous consent that the amendment be laid
aside.
The PRESIDING OFFICER. Without objection, it is so ordered.
Mr. DURBIN. Madam President, I yield to the Senator from Louisiana
with gratitude.
The PRESIDING OFFICER. The Senator from Louisiana.
Amendment No. 3274
Ms. LANDRIEU. Madam President, I am now prepared, after that slight
detour, to get back on amendment No. 3274, which is a very important
amendment. Many of us have worked on this amendment now for many weeks
in an attempt to try to find and establish a fairer way to fund the new
transmission lines that are necessary to move electricity from one part
of this country to another, to meet the growing demand of our
transmission grid system.
Let me begin by sharing a chart that I have used several times in
this Chamber to show what the problem is and to ask the Senate to
consider, very strongly, this proposed solution to our current dilemma.
We have a great dilemma on our hands. We have, some people might
describe, a crisis on our hands. We have a system that we are moving
to, a deregulated, more market-based system, which I believe
ultimately, with the right safeguards, will be very good for all of us,
for all of our States. Most importantly, our constituents and our
businesses, both large and small--our consumers, our retailers--all of
us will benefit from this new efficient system. Why? Because costs will
be lowered, efficiencies will be increased. And we can make sure that
when people go to turn their light switch on, the light will actually
come on.
It is very important. Part of the problem is that we are not
producing enough energy or electricity in our own country. Part of the
problem is we are not doing our part at conserving what we should. So
there is a mismatch between what we need and what we are producing.
But also, even if we got that balance right, which I hope we are
going to try to do through this bill, the problem is, because we are
producing electricity in some parts of the country and using it in
others, some parts of the country produce more than they use, and some
parts of the country do not produce as much as they need, we have to
move it.
As you can see from this chart I have in the Chamber, the demand for
electricity, represented by this blue line, has been increasing
substantially. But the investment in building these transmission lines
has been decreasing. So this gap right here is a real problem.
It has to be closed or even if we would drill the way the Senator
from Alaska and I would hope we would drill, and produce more oil and
gas and other fuels for electricity, and invest in more nuclear power,
we still need to have more transmission lines built. The reason we are
not is because there is a flaw in the system where the incentives are
not in the right place.
My amendment, in short, will create a participant funding mechanism
so that the Federal Energy Regulatory Commission can issue rules
governing the pricing of these transmission services. I am reminded of
a quote I have become familiar with and actually like that says: All
some folks want is their fair share, and yours.
The problem is, we have to create a system that is very fair and
smart so that we put the incentives in the right places, and when the
cost allocations to build these transmission lines are set by FERC,
that they are set in a way that whomever is using them, pays for them.
If we don't do that, there will be no incentive to build them because
people who don't need them won't build them. The people who need them
won't get charged for them, and they won't get built. And blackouts and
brownouts will become more of the rule as opposed to the exception.
This amendment will provide a platform for true fairness in
electricity pricing, paving the way for much needed transmission
expansion at the national level. Over the past 10 years, as I have
shown, peak demand growth for electricity has increased by 17 percent,
while transmission investment has declined by 45 percent. What is even
more troubling is that current demand for electricity is projected to
increase by 25 percent over the next 10 years with only a modest
increase in transmission capacity. Again, if we don't do something, we
are going to continue to have a situation where power does not reach
the people who need it.
The current transmission pricing mechanism at wholesale levels still
employs an old, what I would call, socialized rate method of pricing.
Its effect is to continuously increase the rates for local customers,
even though most of the beneficiaries may be outside of the region.
This antiquated pricing method has dampened the push to enhance
capacity in energy-producing States such as Louisiana and others--and
this is not just a Louisiana-specific amendment; it affects us all in
many States--as State regulators are reluctant, understandably so, to
pass excessive transmission costs off to local customers when the
beneficiaries will primarily be out-of-State or out-of-region
customers.
Meanwhile, energy-dependent regions--and there are some regions that
are more dependent than others--are denied cheap and reliable
electricity.
Electricity price spikes in the Midwest in the summer of 1998 were
caused in part by transmission constraints, limiting the ability of the
region to import electricity from other regions of the country. You may
remember during the summer of 2000, our dilapidated transmission
infrastructure limited the ability to sell low-cost power from the
Midwest to the South during a period of peak demand, resulting in
higher prices. I could go on and on with examples.
In California, path 15 is a notorious transmission bottleneck. The
east coast has also suffered. So no region of the country has been
spared.
Surely there must be a fairer and smarter way to allocate costs which
would stimulate growth instead of having this decline. It is not fair
to expect customers in energy-generating States such as Louisiana to
pay for transmission expansion when it is primarily being developed for
out-of-State use.
[[Page S3285]]
In addition, the lack of transmission capacity under this archaic
pricing method continues to deny customers in energy-importing States
the benefit of cheaper electricity from other regions of the country.
The best policy for efficient, competitive wholesale pricing is
therefore participant-funded expansion. In this system, market
participants fund expansions to the transmission network in return for
transmission rights created by that investment. This approach gives
proper economic incentives for new generator location and transmission
expansion decisions.
The participant funding concept is not new. This is not something we
have dreamed up in the last few weeks. It is not something with which
the industry itself is not familiar. It has been a concept that has
been successfully implemented in the natural gas industry through
incremental pricing.
As a result of incremental pricing in the natural gas industry,
proposed annual additions in 2002 to natural gas pipeline capacity have
increased by 100 percent relative to 1999. In other words, we are in
the process in this energy bill of building national systems to move
fuel and energy and power from States that produce it to States that
need it. Just as we built an interstate highway system, we are building
an interstate natural gas pipeline system. We also have to build an
interstate electric grid system. And we are moving from something that
was very regulated and very parochial and very State oriented to one
that regional and national.
We have to create that grid. If we do not put this in place, the
incentives simply will not be there, and much of our work will be for
naught.
It is important to note this amendment provides FERC with the option.
There are many people who think this amendment is a mandate. It is an
option to permit participant funding for certain new transmission
facilities upon request of RTOs or other FERC-approved transmission
organizations. The amendment does not make participant funding
mandatory. It is simply a pricing option for FERC.
Initially, I knew there were many different opinions about this
amendment. We tried to build a consensus. But unfortunately, there is a
lot of self-interest and parochialism in this debate. We have struggled
to overcome it.
Electricity policymaking should not be governed by what is popular,
but what is necessary. There is not unanimous consensus in Louisiana
for this amendment. It is not going to win me a popularity contest. But
I know there has to be a better system of pricing for electric
transmission so that we can move power from one part of the country to
the other and get everybody what they need when they need it at a fair
and reasonable price. The growth of our economy depends on it. Jobs
depend on it. Businesses depend on it. This is what we should do.
I realize this amendment has unfortunately been the subject of a
pretty strong campaign of disinformation. I hope what I have shared and
shown, in as simple a way as I can, helps to clear up the fact that it
is not a mandate. The current path has us going in the wrong direction.
We have to come up with something new, something that is flexible,
something that is fair, something that will work. I hope most certainly
that we can get past the inertia.
Therefore, I have consulted with Senator Bingaman of New Mexico and
the Senator from Alaska. I have proposed, instead of calling for a vote
at this particular time, that the Energy Committee take up further
study of transmission pricing; that the committee would hold a hearing
in a short period of time with the Commissioners of the Federal Energy
Regulatory Commission, as well as industry leaders.
I believe this issue has significant merit, and it is the right
approach to solving a real and serious problem for our Nation.
We need to build a stronger, more reliable transmission grid. So I
want to, at this time, ask Senator Bingaman for his comments and thank
him for his cooperation. We must push forward with a good system.
He has indicated that he would be amenable to a hearing, et cetera.
At this time, I ask him if that is his understanding.
Mr. BINGAMAN. Madam President, in response, let me say, first, I
compliment the Senator from Louisiana for raising this very important
issue. It is an important issue and also a very complicated issue. It
is one that we have had the chance to talk about to some extent. But,
clearly, we do need, in the Energy Committee, to look at this issue and
allow witnesses to come in and explain it in more depth. Before we take
action, that would be my preference.
So I would be glad to commit that we will schedule a hearing later
on, once we get back to some kind of opportunity to have hearings in
the Energy Committee on issues such as this. I would be anxious to have
a hearing and hear from the witnesses that the Senator from Louisiana
believes are most informed on this issue.
I do think it is premature--at least for me, and perhaps for many
Senators--to be making a judgment on what to do at this point. But it
is an important issue.
Again, I commend the Senator from Louisiana for raising it, and I
hope, following a hearing in the committee, we will be in a much better
position to craft legislation to deal with it or determine what is the
proper course.
Ms. LANDRIEU. I thank the Senator for his willingness to work with me
and with the coalition of Senators--both Democrats and Republicans--and
believe this is the right step to take to create the kind of
transmission grid necessary. I look forward to working with him at that
hearing to focus more attention on this important subject.
Madam President, at this time, after submitting more material for the
Record, I would like to ask unanimous consent that amendment No. 3274
be laid aside.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Illinois is recognized.
Mr. FITZGERALD. Madam President, I ask for the yeas and nays on my
amendment, No. 3124.
The PRESIDING OFFICER. The amendment must be pending to make that
request.
Amendment No. 3124
Mr. FITZGERALD. Madam President, I call up amendment No. 3124.
If I may have a couple of moments, then I will proceed to put the
question to the body.
The PRESIDING OFFICER. The Senator is recognized.
Mr. FITZGERALD. Madam President, my amendment removes subsidies and
incentives currently in the pending bill for garbage incinerators.
Many of my colleagues may not realize it, but built into this energy
bill is the promotion of more waste incineration around the country by
defining waste incinerators as a form of renewable energy.
Waste incineration is not a form of renewable energy. It is not
really renewable, and it certainly isn't clean and environmentally
friendly in the way of wind or solar power energy. The Daschle
substitute, which is now pending, defines garbage incineration as
renewable energy. Garbage incineration is, therefore, eligible for all
the incentives--or what amounts to subsidies, I would say--as though it
were a clean and renewable source of energy.
My amendment removes the subsidies and incentives for garbage
incineration by excluding solid waste incineration from the bill's
definition of renewable energy. I tell my colleagues that it would be,
in my judgment, a very serious mistake to allow the bill to leave this
Chamber with an incentive for waste incinerators all over the country.
Back in the 1980s, the Illinois Legislature passed an incentive for
waste incineration, and within a matter of a few years waste
incinerators were planned for all parts of Illinois. A couple of them,
in fact, were built. They were spewing harmful, toxic pollutants, and
people were up in arms and demanded that the legislature of Illinois
repeal the incentives and subsidies they had for waste incinerators.
We do not want to make the same mistake nationwide that my State made
at one time. Let's learn from their mistake and let's also stick with
common sense. We don't need subsidies and incentives for waste
incinerators. We don't want to subsidize the pollution of the United
States of America.
With that, I see my good friend and colleague from New Jersey who
should be recognized.
I yield the floor.
[[Page S3286]]
(Mr. Dayton assumed the Chair.)
Mr. REID. Mr. President, he has no right to do that. Mr. President, I
have no problem with the Senator from New Jersey speaking, but today we
have been doing too much yielding and that is not appropriate, unless
you have a question or something like that.
I have spoken to the Senator from Florida, Mr. Graham. He wishes to
speak in opposition to my friend from Illinois for about 15 minutes. It
is my understanding that the Senator from New Jersey is speaking in
favor of the amendment of the Senator from Illinois. I ask the Senator
from New Jersey how long he wishes to speak.
Mr. CORZINE. Roughly a minute.
Mr. REID. Mr. President, the Senator from New Jersey wishes to speak
for up to 5 minutes and the Senator from Florida for up to 15 minutes.
So I ask that we vote on this matter at 6:25. I ask that at that time
Senator Bingaman be recognized to offer a motion to table, with no
second-degree amendments in order.
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
The Senator from New Jersey is recognized.
Mr. CORZINE. Mr. President, I rise to strongly support this amendment
that would recognize what I think is a very commonsense principle--that
solid waste is not considered a renewable in the way that we are
intending with regard to this legislation.
It seems to me that when we are putting dioxins, mercury, lead, and
arsenic into the air, somehow or another we should not be using that as
a basis for alternative energy sources--at least in my commonsense
interpretation. We were trying to get solar and wind--things that are
clean alternatives--to produce energy as substitutes for fossil fuels
and other focuses on production of energy.
So it seems to me that we are taking a step backward in dealing with
our environment at the same time we are defining biomass or alternative
energies as garbage. Certainly, in our State, where air quality issues
are an extraordinary concern to the public, we have a number of these
incinerators, about which the public has great protest.
I believe this amendment is conforming to what the intent, at least,
of how I have felt about alternative energy sources, and I wholly
support pulling back this incentive and subsidization for garbage as an
alternative energy source.
The PRESIDING OFFICER. The Senator from Florida.
Mr. GRAHAM. Mr. President, I rise today in opposition to the
amendment that has been offered by the Senator from Illinois. The fact
that the two proponents have used their own States and their experience
as the reasons for their opposition makes my point. My point is this is
not an issue where one size fits all. It is not an issue where we can
require uniformity of treatment across the entire mass of the United
States of America. I will try to explain, using illustrations from my
own State, why I think that is inappropriate policy.
What this amendment would do is exclude the small amount of municipal
solid waste to energy which is part of the current renewable portfolio
standard. Over my objection, this bill does not allow new waste-to-
energy incineration to count as renewable. We are only talking about
whether you can include in the base amount for your State that which is
already in place.
A few weeks ago, in a statement I submitted for the Record, I pointed
out how difficult it is going to be for many States to reach the 10-
percent standard which this bill requires by the year 2020. I will add
to that statement that I gave previously by saying Senator Fitzgerald's
amendment makes the current renewable standard even more inequitable
and more unfair in its treatment of particular States.
The ability of the investor-owned electrical generators, which is the
only class covered by this renewable portfolio, within a particular
State to be able to meet the 10-percent standard by the year 2020 is
substantially affected by conditions over which those same investor-
owned electrical generators have no control.
As an example, they have no control over the availability of
renewables within their State. They have no control over the
environmental characteristics that are peculiar to their State. They
have no control over the growth patterns. If a State is stagnant or
declining in its population, it is going to be a lot easier to meet
these standards than if a State is required to add substantially to its
generation capacity in order to meet demographic or economic growth.
Let me use my own State of Florida as an example of some of those
peculiarities.
Florida, as many other States, particularly in the southeastern
region, does not have conditions which are appropriate for hydropower.
We are a flat State. We do not have any high, elevated water sources
that can fall over and generate hydropower. Surprisingly, we are not a
State which is very adaptable to wind power. We do not have winds that
are reliable enough or sustainable enough to make wind power a
commercially adaptable renewable source. In fact, the largest investor-
owned utility in America for wind power is Florida Power and Light
Company.
Florida Power and Light Company is the largest wind power electrical
utility in the Nation. It produces zero wind power in the State that
bears its name, not because they are not interested in wind power, not
that they have not had a lot of technical experience, it just does not
work in the environmental conditions of Florida.
Solar, which some think would be the silver bullet for renewables in
Florida--I had a solar panel in my house when I was a boy, and that was
a few years ago. Sixty years later, it still has not developed into a
reliable source of energy at anywhere near economic cost.
These factors are going to make it difficult for my State and others
to meet the 10-percent renewable standard as currently included in the
bill.
In addition, 87 percent of what in the base is defined as renewable
energy in Florida comes from waste to energy. Florida is in the course
of building its 14th waste-to-energy plant, making it second only to
New York State in the number of these plants.
In my judgment, waste to energy is undoubtedly a renewable source of
energy. Our cities and towns will continue to produce solid waste that
must be disposed of in some manner. Waste to energy is a viable means
of dealing with the problem of disposal.
In my State, over 80 percent of our water supply is subsurface. It is
in large aquifers that are just a few feet below the surface. That is
the nature of our geology. One of the reasons that incineration has
become such a popular alternative is not that people love to have
incinerators or are not cognizant of the fact there are some negative
implications, but the alternative of putting on top of our water supply
mass amounts of solid waste is intolerable. So we have been moving away
from that and towards incineration as a means of disposing of our
pollution.
I would describe myself as an environmentalist but an
environmentalist who looks at what the reality is of the options before
me. In my State, the options are we bury it or we burn it. I think the
case is unquestionable that it is environmentally less offensive to
burn it than it is to bury it right over your water supply.
This method has the added benefit of being able to generate not a
great part but approximately 1.6 percent of our electrical supply.
I thought one of the purposes of this was to displace fossil fuels,
and that is 1.6 percent of energy which, but for incineration, would
have been produced through fossil fuel. It is 1.6 percent of energy
that, if it were not being produced through incineration, would be lost
and would be in a large landfill posing a continuous threat to our
water supply.
I believe in the principle of some flexibility in this law. I had a
colloquy with the chairman of the committee a few days ago urging that
when this got into conference committee, one of the areas that would be
looked at would be how to take the differences that exist from State to
State, region to region within our country into greater control,
greater consideration in arriving at what is an appropriate renewable
energy inventory.
Also, our experience in terms of incineration has not been as dire as
that of Illinois and New Jersey apparently. Our facilities are
relatively new, as
[[Page S3287]]
witnessed by the fact we have our 14th currently under construction.
They use the maximum achievable control technology, including
scrubbers, bag houses, selective noncatalytic reduction, and carbon
injection. All of these are designed to reduce the amount of emissions,
including the reduction of greenhouse gases.
Emission data that has been circulated recently, in my judgment, is
grossly out of date in terms of what modern waste to energy and
efficient sources of biomass have been doing in reducing pollution
while contributing substantially to alternatives to fossil fuels for
energy.
This is not just a Florida-specific issue. In 1993, the Los Angeles
District Sanitation Department concluded that the waste-to-energy
facility in Commerce, CA, created less pollution than the trucks used
to haul the trash to a nearby landfill without regard to the
environmental damage once it gets in the ground in the landfill.
According to EPA calculations, if half of the trash produced annually
in the United States were used to generate electricity, 1.4 billion
fewer pounds of pollutants would be discharged into the atmosphere
compared to the energy generation through coal or oil burning.
Waste-to-energy has also been historically treated as a biomass, at
least as far back as the FERC rules of 1978.
I ask unanimous consent to have printed in the Record the number of
States which today have defined for their own State law that waste-to-
energy is a renewable energy source.
There being no objection, the material was ordered to be printed in
the Record, as follows:
State Renewable Portfolio Standards
Currently many states have established renewable portfolio
standards, either through state statute, executive orders or
public utility commission regulations. Of those states eleven
define waste-to-energy as a renewable energy source. They
are: Maine, Connecticut, New Jersey, Massachusetts,
Wisconsin, Iowa, Nevada, Pennsylvania, Hawaii, and Maryland.
Many other sates define waste-to-energy as a renewable
energy source for inclusion in other state incentive
programs. They are California, Florida, Michigan, Montana,
New Hampshire, Ohio, Washington, Oregon, Oklahoma, Utah and
New York.
Mr. GRAHAM. For these reasons--primarily the fact that we need to be
pragmatic--we need to recognize that different States have different
conditions; that the options for disposal of solid waste in many
instances, as in the case of Florida, are limited; and of those
options, incineration represents one that is relatively environmentally
appropriate and is one of the best sources that is available to us to
begin to meet this 10-percent standard of a renewable portfolio.
I urge the defeat of the Fitzgerald amendment, or the adoption of the
motion that I anticipate is about to be made to table the Fitzgerald
amendment.
Mr. LEVIN. Mr. President, I will vote in favor of the Fitzgerald
amendment because the underlying language in the bill would allow even
an incinerator that is out of compliance with federal emissions
regulations to qualify as a ``renewable energy source.'' A facility
which is not in compliance with the applicable state and federal
pollution prevention control and permit requirements for any period of
time should not be considered an eligible facility for purposes of the
renewable portfolio standard.
It is my understanding that this distinction was utilized when it
came to the tax incentives in this bill and it should be utilized in
this area as well.
The PRESIDING OFFICER. The Senator from Illinois.
Mr. FITZGERALD. I ask unanimous consent for an additional minute to
reply to the distinguished Senator from Florida.
The PRESIDING OFFICER. Without objection, it is so ordered.
The Senator from Illinois.
Mr. FITZGERALD. I emphasize this amendment would in no way impair
States that incinerate their waste from continuing to do so. In fact,
Illinois has waste incineration. What we are saying with this amendment
is we should not be promoting, with Federal incentives or subsidies,
waste incineration. It is not a renewable form of energy. It is not a
clean form of energy. In fact, it spews terrible, harmful pollutants
such as dioxins and mercury into the air. The ash produced by waste
incineration is very environmentally harmful.
This amendment simply says we will not have a Federal program to
promote waste incineration, and no State would be prevented from
continuing to burn garbage. We would not be promoting it with a Federal
policy.
I thank my colleagues for their time.
The PRESIDING OFFICER. The Senator from New Mexico.
Mr. BINGAMAN. Mr. President, in reference to the amendment, the
underlying bill does not, as I read it, provide any subsidy or
incentive for use of municipal solid waste. We do say utilities that
now generate waste from that source can deduct that from the base they
begin with, but we do not give them credit for that generation, and we
do not give them credit for any new generation from that source in the
future. So there are no incentives. There are no subsidies, as I read
the bill.
For that reason, I oppose the amendment by the Senator from Illinois.
I move to table the amendment, and I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second?
There appears to be a sufficient second.
Is there objection to having the vote at this time?
Without objection, it is so ordered.
The question is on agreeing to the motion to table amendment No.
3124. 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), the Senator from South Dakota (Mr. Johnson), and the Senator
from Vermont (Mr. Jeffords) 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 50, nays 46, as follows:
[Rollcall Vote No. 84 Leg.]
YEAS--50
Akaka
Allen
Baucus
Bayh
Bingaman
Breaux
Brownback
Bunning
Byrd
Campbell
Carper
Cleland
Clinton
DeWine
Dodd
Dorgan
Enzi
Feinstein
Frist
Graham
Grassley
Hagel
Hatch
Hutchinson
Inhofe
Inouye
Landrieu
Lieberman
Lincoln
Lott
Lugar
Miller
Murkowski
Nelson (FL)
Nelson (NE)
Nickles
Roberts
Rockefeller
Santorum
Sessions
Shelby
Smith (OR)
Stevens
Thomas
Thompson
Thurmond
Torricelli
Voinovich
Warner
Wyden
NAYS--46
Allard
Bennett
Biden
Bond
Boxer
Burns
Cantwell
Carnahan
Chafee
Cochran
Collins
Conrad
Corzine
Craig
Crapo
Dayton
Domenici
Durbin
Edwards
Ensign
Feingold
Fitzgerald
Gramm
Gregg
Harkin
Hollings
Hutchison
Kennedy
Kerry
Kohl
Kyl
Leahy
Levin
McCain
McConnell
Mikulski
Murray
Reed
Reid
Sarbanes
Schumer
Smith (NH)
Snowe
Specter
Stabenow
Wellstone
NOT VOTING--4
Daschle
Helms
Jeffords
Johnson
The motion was agreed to.
Mr. BINGAMAN. Mr. President, I move to reconsider the vote.
Mr. GRAHAM. I move to lay that motion on the table.
The motion to lay on the table was agreed to.
Mr. BINGAMAN. Mr. President, these are a couple of cleared matters on
which I would like to complete action before we do anything else.
Amendments Nos. 3050, 3093, 3097, and 3274, Withdrawn
Mr. BINGAMAN. Mr. President, I ask unanimous consent that amendments
Nos. 3050, 3093, 3097, and 3274 be withdrawn.
The PRESIDING OFFICER. Without objection, it is so ordered.
Amendments Nos. 3187, As Modified, 3243, and 3268, En Bloc
Mr. BINGAMAN. Mr. President, I ask unanimous consent that
notwithstanding rule XXII, it be in order for the Senate to consider en
bloc amendments Nos. 3187, 3243, and 3268; that amendment No. 3187 be
modified with the changes at the desk; that the foregoing amendments be
agreed to en bloc, and that the motions to reconsider be laid upon the
table.
[[Page S3288]]
The PRESIDING OFFICER. Is there objection?
Without objection, it is so ordered.
The amendments (Nos. 3187, as modified, 3243, and 3268), en bloc,
were agreed to, as follows:
AMENDMENT NO. 3187, AS MODIFIED
(Purpose: To provide for increased energy savings and greenhouse gas
reduction benefits through the increased use of recovered material in
federally funded projects involving procurement of cement or concrete)
On page 283, between lines 8 and 9, insert the following:
SEC. 9____. INCREASED USE OF RECOVERED MATERIAL IN FEDERALLY
FUNDED PROJECTS INVOLVING PROCUREMENT OF CEMENT
OR CONCRETE.
(a) Definitions.--In this section:
(1) Administrator.--The term ``Administrator'' means the
Administrator of the Environmental Protection Agency.
(2) Agency head.--The term ``agency head'' means--
(A) the Secretary of Transportation; and
(B) the head of each other Federal agency that on a regular
basis procures, or provides Federal funds to pay or assist in
paying the cost of procuring, material for cement or concrete
projects.
(3) Cement or concrete project.--The term ``cement or
concrete project'' means a project for the construction or
maintenance of a highway or other transportation facility or
a Federal, State, or local government building or other
public facility that--
(A) involves the procurement of cement or concrete; and
(B) is carried out in whole or in part using Federal funds.
(4) Recovered material.--The term ``recovered material''
means--
(A) ground granulated blast furnace slag;
(B) coal combustion fly ash; and
(C) any other waste material or byproduct recovered or
diverted from solid waste that the Administrator, in
consultation with an agency head, determines should be
treated as recovered material under this section for use in
cement or concrete projects paid for, in whole or in part, by
the agency head.
(b) Implementation of Requirements.--
(1) In general.--Not later than 1 year after the date of
enactment of this Act, the Administrator and each agency head
shall take such actions as are necessary to implement fully
all procurement requirements and incentives in effect as of
the date of enactment of this Act (including guidelines under
section 6002 of the Solid Waste Disposal Act (42 U.S.C.
6963)) that provide for the use of cement and concrete
incorporating recovered material in cement or concrete
projects.
(2) Priority.--In carrying out paragraph (1) an agency head
shall give priority to achieving greater use of recovered
material in cement or concrete projects for which recovered
materials historically have not been used or have been used
only minimally.
(c) Full Implementation Study.--
(1) In general.--The Administrator and the Secretary of
Transportation, in cooperation with the Secretary of Energy,
shall conduct a study to determine the extent to which
current procurement requirements, when fully implemented in
accordance with subsection (b), may realize energy savings
and greenhouse gas emission reduction benefits attainable
with substitution of recovered material in cement used in
cement or concrete projects.
(2) Matters to be addressed.--The study shall--
(A) quantify the extent to which recovered materials are
being substituted for Portland cement, particularly as a
result of current procurement requirements, and the energy
savings and greenhouse gas emission reduction benefits
associated with that substitution;
(B) identify all barriers in procurement requirements to
fuller realization of energy savings and greenhouse gas
emission reduction benefits, including barriers resulting
from exceptions from current law; and
(C)(i) identify potential mechanisms to achieve greater
substitution of recovered material in types of cement or
concrete projects for which recovered materials historically
have not been used or have been used only minimally;
(ii) evaluate the feasibility of establishing guidelines or
standards for optimized substitution rates of recovered
material in those cement or concrete projects; and
(iii) identify any potential environmental or economic
effects that may result from greater substitution of
recovered material in those cement or concrete projects.
(3) Report.--Not later than 30 months after the date of
enactment of this Act, the Secretary shall submit to the
Committee on Appropriations and Committee on Environment and
Public Works of the Senate and the Committee on
Appropriations and Committee on Energy and Commerce of the
House of Representatives a report on the study.
(d) Additional Procurement Requirements.--Within 1 year of
the release of the report in accordance with subsection
(c)(3), the Administrator and each agency head shall take
additional actions authorized under the Solid Waste Disposal
Act (42 U.S.C. 6901 et seq.) to establish procurement
requirements and incentives that provide for the use of
cement and concrete with increased substitution of recovered
material in the construction and maintenance of cement or
concrete projects, so as to--
(1) realize more fully the energy savings and greenhouse
gas emission reduction benefits associated with increased
substitution; and
(2) eliminate barriers identified under subsection (c).
(e) Effect of Section.--Nothing in this section affects the
requirements of section 6002 of the Solid Waste Disposal Act
(42 U.S.C. 6962) (including the guidelines and specifications
for implementing those requirements).
____
amendment no. 3243
(Purpose: To strike section 721)
On page 148, strike lines 4 through 22, renumber the
subsequent section accordingly.
____
amendment no. 3268
(Purpose: To direct the Secretary of Energy to establish a program to
provide guarantees of loans by private institutions for the
construction of facilities for the processing and conversion of
municipal solid waste into fuel ethanol and other commercial
byproducts)
On page 205, between lines 8 and 9, insert the following:
SEC. 8____. COMMERCIAL BYPRODUCTS FROM MUNICIPAL SOLID WASTE
LOAN GUARANTEE PROGRAM.
(a) Definition of Municipal Solid Waste.--In this section,
the term ``municipal solid waste'' has the meaning given the
term ``solid waste'' in section 1004 of the Solid Waste
Disposal Act (42 U.S.C. 6903).
(b) Establishment of Program.--The Secretary of Energy
shall establish a program to provide guarantees of loans by
private institutions for the construction of facilities for
the processing and conversion of municipal solid waste into
fuel ethanol and other commercial byproducts.
(c) Requirements.--The Secretary may provide a loan
guarantee under subsection (b) to an applicant if--
(1) without a loan guarantee, credit is not available to
the applicant under reasonable terms or conditions sufficient
to finance the construction of a facility described in
subsection (b);
(2) the prospective earning power of the applicant and the
character and value of the security pledged provide a
reasonable assurance of repayment of the loan to be
guaranteed in accordance with the terms of the loan; and
(3) the loan bears interest at a rate determined by the
Secretary to be reasonable, taking into account the current
average yield on outstanding obligations of the United States
with remaining periods of maturity comparable to the maturity
of the loan.
(d) Criteria.--In selecting recipients of loan guarantees
from among applicants, the Secretary shall give preference to
proposals that--
(1) meet all applicable Federal and State permitting
requirements;
(2) are most likely to be successful; and
(3) are located in local markets that have the greatest
need for the facility because of--
(A) the limited availability of land for waste disposal; or
(B) a high level of demand for fuel ethanol or other
commercial byproducts of the facility.
(e) Maturity.--A loan guaranteed under subsection (b) shall
have a maturity of not more than 20 years.
(f) Terms and Conditions.--The loan agreement for a loan
guaranteed under subsection (b) shall provide that no
provision of the loan agreement may be amended or waived
without the consent of the Secretary.
(g) Assurance of Repayment.--The Secretary shall require
that an applicant for a loan guarantee under subsection (b)
provide an assurance of repayment in the form of a
performance bond, insurance, collateral, or other means
acceptable to the Secretary in an amount equal to not less
than 20 percent of the amount of the loan.
(h) Guarantee Fee.--The recipient of a loan guarantee under
subsection (b) shall pay the Secretary an amount determined
by the Secretary to be sufficient to cover the administrative
costs of the Secretary relating to the loan guarantee.
(i) Full Faith and Credit.--The full faith and credit of
the United States is pledged to the payment of all guarantees
made under this section. Any such guarantee made by the
Secretary shall be conclusive evidence of the eligibility of
the loan for the guarantee with respect to principal and
interest. The validity of the guarantee shall be
incontestable in the hands of a holder of the guaranteed
loan.
(j) Reports.--Until each guaranteed loan under this section
has been repaid in full, the Secretary shall annually submit
to Congress an report on the activities of the Secretary
under this section.
(k) Authorization of Appropriations.--There are authorized
to be appropriated such sums as are necessary to carry out
this section.
(l) Termination of Authority.--The authority of the
Secretary to issue a loan guarantee under subsection (b)
terminates on the date that is 10 years after the date of
enactment of this Act.
Mr. BINGAMAN. Mr. President, I yield the floor.
The PRESIDING OFFICER. The Senator from Iowa.
Mr. HARKIN. Mr. President, I ask unanimous consent that the pending
[[Page S3289]]
amendment be laid aside temporarily and call up amendment No. 3195.
The PRESIDING OFFICER. Is there objection?
Mr. REID. Reserving the right to object.
The PRESIDING OFFICER. The Senator from Nevada.
Mr. REID. Mr. President, I say to my friend from Iowa, we have
several amendments tonight that we are going to try to put in the
queue. But I should say to all my friends on this side of the aisle,
most all of the amendments that have been offered have been Democratic
amendments. I have been advised by the Republican leader and the
manager of the bill for the Republicans that they are going to allow
this to happen on a few more amendments, but that is about the end of
it. So everyone should understand, this isn't going to go on for the
next few hours.
There are actually three amendments that I have gone over with the
manager of the bill for the Republicans. And they have tentatively
agreed that we could set amendments aside to offer those. But I am just
telling everybody that they are not going to allow this to go on until
we get rid of some of these amendments, perhaps tomorrow.
The PRESIDING OFFICER. The Senator from Alaska.
Mr. MURKOWSKI. Mr. President, obviously, we are anxious to cooperate
with the majority, but this is beginning to wind down, and we
anticipate a limited amount of time tomorrow to finish. So we encourage
all Senators to try to proceed with their amendments as soon as
possible so at the end we do not run out of time and are unable to
accommodate Members.
Mr. President, I yield the floor.
The PRESIDING OFFICER. Is there objection?
The Senator from Delaware.
Mr. CARPER. Mr. President, reserving the right to object, I ask
unanimous consent that my amendment No.----
The PRESIDING OFFICER. The Chair informs the Senator, there is a
unanimous consent request pending at this time.
Is there objection?
Mr. CARPER. Reserving the right to object.
The PRESIDING OFFICER. The Senator from Delaware.
Mr. CARPER. Mr. President, I ask unanimous consent that my amendment
No. 3198 be called up after Senator Harkin's amendment is reported and
that my amendment then be immediately laid aside.
The PRESIDING OFFICER. Is there objection to the request, as
modified?
Without objection, it is so ordered. The request, as modified, is
agreed to.
The Senator from Iowa.
Amendment No. 3195 To Amendment No. 2917
Mr. HARKIN. Mr. President, has the clerk reported the amendment?
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:
The Senator from Iowa [Mr. Harkin], for himself, Mr.
Cochran, Mr. Grassley, and Mrs. Lincoln, proposes an
amendment numbered 3195.
Mr. HARKIN. 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 direct the Secretary of Energy to revise the seasonal
energy efficiency ratio standard for central air conditioners and
central air conditioning heat pumps within 60 days)
Beginning on page 293, strike line 5 and all that follows
through page 294 and insert the following:
Section 325(d)(3) of the Energy Policy and Conservation Act
(42 U.S.C. 6295(d)) is amended by adding at the end the
following:
``(C) Revision of standards.--Not later than 60 days after
the date of enactment of this subparagraph, the Secretary
shall amend the standards established under paragraph (1).''.
Mr. HARKIN. I offer this amendment on behalf of Senators Cochran,
Grassley, Lincoln, and myself.
I yield the floor to the Senator from Mississippi for any comments he
may wish to make.
The PRESIDING OFFICER (Ms. Stabenow). The Senator from Mississippi.
Mr. COCHRAN. Madam President, I am pleased to join both of my friends
from Iowa, Senator Harkin and Senator Grassley, along with the
distinguished Senator from Arkansas, Mrs. Lincoln, in sponsoring this
amendment to the energy bill.
This amendment would seek to change a provision that is in the bill,
as reported by the committee, or as it is pending before the Senate,
that relates to seasonal energy efficiency ratios of air-conditioners.
The reason we are offering this amendment is to permit the Department
of Energy to proceed with the rulemaking, which they have the power to
undertake and they are now considering, to make air-conditioners more
energy efficient.
The difficulty with the bill, as reported by the committee, is that
it preempts the rulemaking process and establishes, by law, a new
seasonal energy efficiency ratio, and it establishes it at the level of
13. That is one of the standards of measuring energy efficiency. The
current energy ratio that is established under the regulations is at
10. Almost everybody agrees that this standard ought to be increased
and that the efficiency ought to be improved. The issue is, how much?
This amendment that we are offering suggests the appropriate level is
12 instead of the committee-mandated ratio of 13. Why is that? It is
because, at this level, if it is not amended, you are going to increase
the cost of air-conditioners by about $700 each. In a State such as my
State of Mississippi, that is a huge increase for consumers. We have a
lot of people who do not make enough money to afford an air-conditioner
if it costs that much more than the current air-conditioners will cost.
That is a big problem.
Another problem is, a lot of manufacturing plants that are
manufacturing air-conditioners or components will be put out of
business if the ratio is set at 13, as this committee bill does. There
is one plant in my State, located in Grenada, MS, that will shut down
if this amendment isn't approved, and 2,500 people who work there will
be out of a job. That will not occur if this amendment is adopted.
So this is a serious proposal, and it is undertaken with the notion
that we do need to improve the energy efficiency of these air-
conditioning units. Our amendment will cause that to happen, and we
will save money generally over the life of this new ratio because we
will use less energy. Less electricity will be consumed by the Nation.
And that is good. That is one of the aims of this bill.
So I am hopeful the Senate will look with favor on the amendment. I
appreciate the distinguished Senator from Iowa inviting me to join him
in offering this amendment. I am hopeful on tomorrow, when we get to
the process of voting and approving amendments, the Senate will vote
for this amendment.
The PRESIDING OFFICER. The Senator from Delaware.
Amendment No. 3198 To Amendment No. 2917
Mr. CARPER. Under the previous order, I call up amendment No. 3198.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:
The Senator from Delaware [Mr. Carper], for himself, Mr.
Specter, and Ms. Landrieu, proposes an amendment numbered
3198.
The amendment is as follows:
(Purpose: To decrease the United States dependence on imported oil by
the year 2015)
On page 177, before line 1, insert the following:
SEC. 811. REQUIREMENT FOR REGULATIONS TO REDUCE OIL
CONSUMPTION.
(a) Oil Savings.--
(1) In general.--The new regulations required by section
801 shall include regulations that apply to passenger and
non-passenger automobiles manufactured after model year 2006
and are designed to result in a reduction in the amount of
oil (including oil refined into gasoline) used by automobiles
of at least 1,000,000 barrels per day by 2015.
(2) Calculation of reduction.--To determine the amount of
the reduction in oil used by passenger and non-passenger
automobiles, the Secretary of Transportation shall make
calculations based on the number of barrels of oil projected
by the Energy Information Administration of the Department of
Energy in table A7 of the report entitled ``Annual Energy
Outlook 2002'' (report no. DOE/EIA-0383(2002)) to be consumed
by light-duty vehicles in 2015 without the regulations
required by paragraph (1).
(3) Consideration of alternative fuel technologies.--The
Secretary of Transportation shall consult with the Secretary
of Energy to identify alternative fuel technologies that
could be utilized in the transportation sector to reduce
dependence on crude-oil-derived fuels. The Secretary of
[[Page S3290]]
Transportation shall take those technologies into
consideration in prescribing the regulations under this
section.
(4) Final regulations.--The Secretary of Transportation
shall issue the final regulations required by this subsection
after carrying out the consultation described in paragraph
(3), but not later than 15 months after the date of the
enactment of this Act.
(b) Reports to Congress.--
(1) Requirement.--Beginning in 2007, the Secretary of
Transportation shall, after consulting with the Administrator
of the Environmental Protection Agency, submit to Congress in
January of every odd-numbered year through 2015 a report on
the implementation of the requirements of this section.
(2) Content.--The report required by paragraph (1) shall
explain and assess the progress in reducing oil consumption
by automobiles as required by this section.
The PRESIDING OFFICER. Under the previous order, the amendment is set
aside.
The Senator from Iowa.
Amendment No. 3195
Mr. HARKIN. Madam President, there was a little bit of confusion on
the floor. What is the pending matter now?
The PRESIDING OFFICER. The Senator's amendment.
Mr. HARKIN. Madam President, I thank the Senator from Mississippi. He
said very precisely what this really is all about. I am going to give a
lengthier statement, but as long as he is still on the floor, I want to
thank him. He hit it right on the head.
This is really about, No. 1, the loss of jobs in a number of States.
We will lose many jobs in Iowa, too, I say to the Senator from
Mississippi. Secondly, it is about whether or not a significant number
of low-income people and the elderly will be able to afford to have
air-conditioning.
In some parts of the country it gets hotter than up in my area, but
still, up in my area in the summer, it gets pretty darn hot. And the
elderly need that air-conditioning. It is a health matter for them.
They have to have air-conditioning. It is probably for a shorter period
of time in Iowa than in Mississippi or Florida or Georgia, or places
like that; nonetheless, there are periods of time in the summer when it
is a health matter for the elderly to make sure they have air-
conditioning. And some will not be able to afford the purchase price of
an air-conditioner with this 13 seasonal energy efficiency ratio, SEER,
that is in the bill.
Basically, what this amendment does is strikes the language in the
bill that mandates this. First of all, I don't think we ought to be
mandating appliance standards. This is something that ought to be
within the purview of the Department of Energy to let them review all
the data and then come up with a standard.
If we don't like it, maybe we might want to override it. But for us
to just come in and mandate a standard which, quite frankly, has been
proven not to be workable--I will get into that in a second--is the
wrong way for the Senate to proceed.
Again, for the record, when we talk about the SEER numbers, it is the
measure of energy efficiency. The higher the number, the more energy
efficient the product.
On first blush, people say: We want the most efficient machine
possible. Well, let's take a look at that. The Department of Energy is
required by law to set standards that are ``economically justified and
technologically feasible.'' The current standard is 10. The bill would
raise that to 13. Our language simply requires the Department of Energy
to issue a revised standard which must be higher than the current 10
standard and issue it within 60 days. And basically on the basis of not
only the present administration's analysis but a lot of work done by
staff in the previous administration, they would set that at 12 within
60 days.
Again, there has been some confusion about my amendment. Some have
said this is a rollback. We are going to roll back the 13. That is not
true. There is no 13 right now. It is at 10. So it is not a rollback.
I see my colleague from Iowa is here. He, too, is a strong supporter
of this. I thank him for his strong support in trying to bring some
reason to this. But in the past my colleague and I have worked together
on appliance standards with the DOE back in 1995 and 1996 to establish
a fair and balanced system, one that balances conservation,
competition, and the needs of consumers in an interpretative rule,
really what the law requires. The rule under which we are operating
requires that consumers be looked at, not just as an average, uniform
group, but as subgroups such as those within various income and age
levels. That is what the rule requires.
Again, if you just look at it as a uniform rate, a uniform average
group, perhaps you would come to some different conclusion. The rule
doesn't say that. The rule says you have to look at it as subgroups of
the population.
Under the rule, DOE's responsibilities must look after the consumer
and make sure that these subgroups would be looked at. We need to see
how a change in appliance standards will impact various kinds of
people, such as the elderly, low-income people, and renters.
Unfortunately, the last administration, the Clinton administration,
effectively did not properly look at this important requirement. They
lumped everybody together. And so the different subgroups were not
properly considered under the Clinton administration.
When the professional staff recommended a 12 standard in 2000 under
the Clinton administration, that recommendation by the professional
staff in the Department of Energy was changed in the Office of the
Secretary of Energy. The required analysis of the economic impacts on
these subgroups required by the process was not properly done to reach
that SEER 13 level. I also understand the Department of Justice in the
Clinton Administration had considerable concerns about the negative
impacts on competition of a 13 SEER requirement. That is a very
important question, particularly for those who want to keep the price
to the consumer low and who want competition.
The imposition of this 13 standard would have a serious impact on
both consumers and the industry. The Department of Justice is opposed
to this, the Small Business Administration, the National Association of
Home Builders, and the Manufactured Housing Institute. It is
economically damaging, especially to senior citizens, lower and fixed-
income families and, as we said earlier, employees in the industry.
As the SEER ratings rise, the cost of the machines rise. The Senator
from Mississippi already pointed out that going from a 10 to a 13 will
cost more than $700 per air-conditioner. By comparison, the cost of
going to a 12 is only an estimated $407. So when you go up above that
12, it becomes really expensive. Again, if you make it that expensive,
what would a consumer do if they have an old energy-inefficient air-
conditioner? Would they go out and buy this new one? Will they ever be
able to recoup the cost, especially if they live in Michigan or in Iowa
where we need our air-conditioners for short periods of time. They
would never recoup the money, if they could even afford it.
What many will do is, particularly a lot of modest homeowners, people
who live in manufactured housing who have higher costs still with a
SEER 13 because that machine will not fit in the space provided for in
many manufactured homes? What many will do is they will say: It is
cheaper for me to stay with the old one. That doesn't help the
environment. It means more energy use in those homes. And so we have
accomplished far less than many believe if we go to a 13?
There has to be some reason in this. We can't underestimate the
impact that going to this standard would have on lower income people
and senior citizens. You will hear arguments tomorrow about the average
consumer out there, what this might cost the average consumer. I have
often said to people, if you took me and Bill Gates and you averaged
our income, I would be a billionaire on my salary here. Imagine that.
You can't just look at an average like that. What you have to look at--
and the rule says you have to look at--is those subgroups such as the
elderly and low income, which they haven't done and which this 13
rating doesn't properly take that into account.
Senior citizens rely on air-conditioning for their health as well as
for their comfort. Sometimes it is not a luxury in the summer months.
The elderly need that. Again, if they only use it in the summer, 2 or 3
months in Iowa or Michigan, they would never be able to recover the
higher cost of a 13.
[[Page S3291]]
Furthermore, renters will also be affected by this. It is expected
that the increased cost of a new air-conditioner would be passed on in
the form of higher rents to 34 million renter households where the
median income is $24,400. So, again, if you add that 13 and the
landowners have to replace it, they will pass it on in higher rents to
renters or they simply will decide not to replace it. Then what have we
accomplished?
Recently, the Energy Information Administration conducted an
independent review of the impact of imposing a nationwide standard of
13 for air-conditioners compared to a 12. The EIA review stated that a
12 standard would save the Nation $2.3 billion, while a 13 standard
would cost the Nation $600 million in additional costs. So a 12
standard--this is the Energy Information Administration--would save the
Nation $2.3 billion; a 13 would cost us $600 million. Again, it is
because the impacts of a 13's higher cost.
I haven't gotten into the size. It is quite a bit larger than 12.
Therefore, people who live in manufactured housing, where the space for
the air conditioner is preset, would not be able to get a new air
conditioner without retrofitting their home so those people lose if we
go to a 13. We lose jobs--the Department of Energy said 20,000 jobs by
the year 2006. I see my colleague from Iowa on the floor. I know he
wants to speak on this. I know, at first blush, for people who say they
are environmentalists, I think I have a pretty good environmental
record; but this is not the direction in which to go. This will hurt
the elderly and low-income people because many won't be able to afford
an air conditioner. Plus, it will cost a heck of a lot of jobs in my
State and, I know, in a number of other States.
Madam President, I have more to say on this, but I want to respect my
colleague from Iowa who is here.
I yield the floor.
The PRESIDING OFFICER. The Senator from Iowa, Mr. Grassley, is
recognized.
Mr. GRASSLEY. Madam President, I am glad to be able to work with my
colleague from Iowa on this amendment. He is being transparent, and I
would like to be transparent on it. There are jobs affected in our
State. For the Senator from Michigan, the Presiding Officer, it is my
understanding there is a company in her State called Heat Controller,
Inc., that would not be able to meet these SEER 13 standards, and that
there would be jobs in jeopardy at Heat Controller. You may want to
check that out, but that is what my information tells me. If I am
wrong, I would like to be corrected.
So I compliment the Energy Committee because, generally, in this
legislation they have had suggestions that push industry to do things
that are more energy efficient. In most cases, those initiatives by
this legislation and by the Energy Committee are not only good for
saving energy, but they are also very good for the consumer.
Now, Senator Harkin has touched on this, that if we go to what is
called SEER 13, 75 percent of the country, according to a map I have
here, will not, through the life of the use of SEER 13 appliances, be
able to get a payback. In other words, there is no benefit to the
consumer. So this is one of the rare instances in which the Senate
Energy Committee has a suggestion in their legislation that might save
energy, but is very costly to the consumer. We want to promote things
that are energy efficient, but we also want to promote things that are
good for the consumer.
Most of the time, you buy energy-efficient appliances. Recently--
maybe 3 years ago--I had an opportunity, and a necessity, to buy a new
furnace for my farmhouse in Iowa. In looking at what to buy, they could
very quickly say, well, if you buy our furnace, within 5 or 7--I am not
sure how long, but it was a relatively short period of time--you will
save enough on LP gas to pay for it. Buy one of these thermostats that
is automatically controlled to go up and down with the heat, and in a
certain period of time it is paid for.
In this particular instance, the Senate Energy Committee has offered
us a proposal that will save energy, yes; but for people in 75 percent
of the country, geographically--I don't know how that is population-
wise--there is not a payback.
So that is why I ask this body to look at the wisdom of this
particular provision in this bill. Obviously, I am asking you to look
at the wisdom that is behind the amendment offered by the Senator, my
colleague from Iowa.
The Department of Energy has authority, through the rulemaking
process, to set these standards. The Department of Energy is required
by statute, under the National Appliance Energy Conservation Act, to
set these standards and to do it in a way ``that is economically
justified and technologically feasible.''
So I think the underlying legislation--which we can obviously change
if we want to, and I think it is unwise to change--the underlying
statute calls for it to be economically justified. This is one that is
technologically feasible; it saves energy, but it doesn't appear to be
economically justified by going from 12 to 13. What we are trying to do
is overturn precisely what the bill does in the first place. The
Department of Energy is considering a rule based on information and
based on analysis from several years' worth of submission during the
rulemaking process. Unfortunately, this bill seeks to take action that
would raise the standard--a 30-percent increase in efficiency--and to
do it clearly, without consideration of information collected by the
Department of Energy.
Had the authors of this bill considered the evidence regarding the
economic impact of a 30-percent increase, they would have soon realized
it is contrary to the statutory criterion imposed on the Department of
Energy which requires that it be economically justified.
Economically, a 13 SEER standard just doesn't make sense. For
example, 75 percent of the consumers purchasing 13 SEER units will
incur a net cost. At the end of the lifetime of the product, the
savings in operating costs won't be sufficient to offset the additional
up-front costs of that particular product--besides the fact that some
companies, as I have implied to the Senator from Michigan, are not able
to make SEER 13 and maybe it would really harm those jobs as a result
of that additional complication.
This is particularly true for consumers in the middle and northern
tiers of the United States. Critics claim that the additional cost of
the 13 SEER product is insignificant. However, the Energy Information
Administration conducted an independent review of the economic impact
of imposing either a 30-percent increase in SEER, which this bill
proposes, and a 20-percent increase. The Energy Information
Administration concluded that a 20-percent increase would result in
savings of $2.3 billion in energy costs for consumers while a 30-
percent increase would actually cost consumers $600 million.
So based on that evidence, it is contrary to the best interest of the
consumer. There is not a payback. The difference between the savings of
$2.3 billion compared to a loss of $600 million is certainly
significant and clearly does not justify a 30-percent increase.
The supporters of the 13 SEER standard also disregard the concerns
expressed by the Department of Justice. A number of equipment
manufacturers selling air-conditioners in the United States today don't
offer products at 13 SEER. Which I mentioned to the Senator from
Michigan. For that reason, the Department of Justice opposes a 13 SEER
standard based on anti-competitive implications for the industry.
It is also important for my colleagues to understand exactly what the
amendment offered by Senator Harkin and my colleague, Senator Cochran,
would do. This amendment won't impose a lower standard for air-
conditioners and heat pumps. It simply eliminates the 13 SEER mandate
of the bill and requires the Department of Energy to determine an
appropriate standard and set that standard within 60 days.
In conclusion, I urge my colleagues to oppose the 13 SEER standard in
the bill that is not economically justified as the underlying, present
law requires. I urge my colleagues to support this amendment, which
will allow the Department of Energy to complete the rulemaking process
within a standard that is not only good for saving energy and
technologically feasible, but also good for the consumer.
I yield the floor.
[[Page S3292]]
The PRESIDING OFFICER. The Senator from Iowa.
Mr. HARKIN. Madam President, I thank Senator Grassley for his strong
support not only on this amendment but in previous years, and for
bringing some reason to how we address this SEER standard. He is right
on target.
Again, we have to keep in mind the differences about which we are
talking. If we look the first 15 years after the rule is implemented,
from 2006 to 2020, the difference between the 13 and 12 is four-
hundredths of a percent of the cumulative U.S. generating capacity--
four-hundredths of a percent. I am all for saving energy--we all are--
but what is this going to do to our elderly and low-income people in
between time and the loss of jobs?
I am not saying we should never go to a 13. I am not saying that.
What I am saying that the appliance standards should be staged, looking
at the economic effects and the technology over time. Again, look at
the impact going from a 10 to a 13 would have on jobs, on people of low
income, on our renters, and our elderly. A 13 standard would also have
an impact on competition in small business. It would eliminate 84
percent of all new central air-conditioning models on the market today
and 86 percent of all new heat pumps. Nearly half of the original
equipment manufacturers selling air-conditioners in the United States
today do not offer products at 13. A lot of those, mostly small
manufacturers may be forced out of business.
There is a large company, one of the biggest. They are for the 13?
They are for the 13. Interesting. I can see a scenario whereby a lot of
the smaller manufacturers--they are doing a good job. I can see a
scenario where they simply would be forced out of the business, and I
can see this great big company coming in and buying them up. Then what
happens to the competition? It is a lot less.
It is interesting to note that one, the largest company in this
business, is for the 13 standard. Again, we ought to ask the question
about what we are trying to do? They are trying to acquire market share
from the small companies who will have difficulty retrofitting their
factories to make 13 SEER machines.
To the extent we go to 13 and we force the change, I do not know what
the elderly are going to do and what low-income people are going to do.
They cannot recoup their investment, and it will be an additional $700
for an air-conditioner.
On that issue, I just mentioned the competition. That may be why the
Department of Justice in the last administration had serious concerns
about a SEER 13 standard. And why this administration opposed this on
the basis of competition. That is why the Small Business Administration
opposes it. Again, they are concerned about smaller manufacturers being
able to remain in this line of business.
One last thing I have not talked about--I should have my chart. I do
not this evening. Maybe I will bring it in the morning. The size of the
air-conditioners with a 13 standard is substantially larger than a 12.
Not one-twelfth bigger, but maybe a third again as big. They are huge.
That would create enormous retrofitting problems for many
manufactured homes, especially manufactured homes because these homes
have a precisely set space for central air-conditioners. They could not
likely be replaced without considerable retrofitting. That is why the
American Housing Institute supports a 12 standard where that would fit
in the same place where a 10 fits right now. They expressed their
concern about what would happen to families on limited incomes.
The National Association of Homebuilders opposes the 13 standard, not
because they are opposed to 13, but for each $1,000 added to the cost
of a new home takes out 400,000 buyers. We do want to build more homes.
We do want more people to own their own homes, a key part of the
American dream.
I am all in favor of efficient appliances. Reducing our energy
consumption is important to reducing air pollution, global warming,
reducing price spikes, but it has to be reasonable, and it has to be
something where we do not end up worse than we are.
I suppose sometime down the pike if we go to a 13 standard--I
mentioned over the first 15 years the standard will be in effect, the
difference is four-hundredths of a percent in cumulative energy use in
the United States--four-hundredths of a percent--but at what cost will
that come to the elderly, people of low income, working families, jobs,
and competition in the industry?
I will have more to say about this tomorrow. I hope people who have
not thought much about this and say, gee, 13 is higher than 12, it must
be better, more energy efficient, will stop to think about whether or
not we are going to get the energy savings we want if we go to the 13
standard and people cannot afford it so they stick with the older ones
that use more energy, that they will pollute more.
If we adopt the 12, it can be used, it is reasonable in cost, it fits
into the spaces, and we can move to it in a reasonable fashion.
Certainly 12 is better than 10, and 10 is what the standard is right
now.
I hope when we get to this vote tomorrow people will take a look at
the end result and not just be swayed by the fact that 13 looks better,
looks more energy efficient than a 12. The rule says we have to look at
its economic effect on subgroups. If this body is in the position of
mandating--this amendment says we do not mandate it, we leave it up to
the regulatory body, but the rule under which they have to operate says
they have to look at the impact, not just on the general population but
on certain subgroups--low income, working families, the elderly.
Our amendment will allow the Department of Energy to implement a 12
standard, which I believe is much more reasonable at this time than
going to a 13 right away.
Madam President, I yield the floor.
The PRESIDING OFFICER. The Senator from Nevada.
Mr. REID. Madam President, I ask unanimous consent that the pending
amendment be set aside.
The PRESIDING OFFICER. Without objection, it is so ordered.
Amendment No. 3359 To Amendment No. 2917
Mr. REID. Madam President, I call up amendment No. 3359 offered by
Senator Bingaman.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:
The Senator from Nevada [Mr. Reid], for Mr. Bingaman,
proposes an amendment numbered 3359 to amendment No. 2917.
Mr. REID. Madam President, I ask unanimous consent that the reading
of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
(Purchase: To modify the credit for new energy efficient homes by
treating a manufactured home which meets the energy star standard as a
30 percent home)
In Division H, on page 74, line 16, strike ``Code'' and
insert ``Code, or a qualifying new home which is a
manufactured home which meets the applicable standards of the
Energy Star program managed jointly by the Environmental
Protection Agency and the Department of Energy''.
Mr. REID. Madam President, I ask that the pending amendment be set
aside.
The PRESIDING OFFICER. Without objection, it is so ordered.
Amendment No. 3139 To Amendment No. 2917
Mr. REID. Madam President, I call up amendment No. 3139.
The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:
The Senator from Nevada [Mr. Reid], for Mrs. Boxer, for
herself and Mrs. Feinstein, proposes an amendment numbered
3139 to amendment No. 2917.
Mr. REID. Madam President, I ask unanimous consent that the reading
of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
(Purpose: To provide for equal liability treatment of vehicle fuels and
fuel additives)
Beginning on page 204, strike line 15 and all that follows
through page 205, line 8, and insert the following:
``Notwithstanding any other provision of federal or state
law, a renewable fuel, as defined by this Act, used or
intended to be used as a motor vehicle fuel, or any motor
vehicle fuel containing such renewable fuel, shall be subject
to liability standards no less protective of human health,
welfare and the environment than any other motor vehicle fuel
or fuel additive.''.
Amendment No. 3311 to Amendment No. 3139
Mr. REID. Madam President, I call up a second-degree amendment,
amendment No. 3311.
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The PRESIDING OFFICER. The clerk will report.
The legislative clerk read as follows:
The Senator from Nevada [Mr. Reid], for Mrs. Boxer, for
herself and Mrs. Feinstein, proposes an amendment numbered
3311 to amendment No. 3139.
Mr. REID. Madam President, I ask unanimous consent that the reading
of the amendment be dispensed with.
The PRESIDING OFFICER. Without objection, it is so ordered.
The amendment is as follows:
(Purpose: To provide for equal liability treatment of vehicle fuels and
fuel additives)
In lieu of the matter proposed to be inserted, insert the
following:
``(1) In general.--Notwithstanding any other provision of
federal or state law, a renewable fuel, as defined by this
Act, used or intended to be used as a motor vehicle fuel, or
any motor vehicle fuel containing such renewable fuel, shall
be subject to liability standards no less protective of human
health, welfare and the environment than any other motor
vehicle fuel or fuel additive.
``(2) Effective date.--this subsection shall be effective
one day after the enactment of this Act.''
Mr. REID. 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. REID. Madam President, I ask unanimous consent that the order for
the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
Hybrid vehicle tax credit
Mr. SESSIONS. Madam President, in the Finance Committee energy tax
amendment that has now been included in the energy bill, the consumer
tax credit available for the purchase of a new qualified light duty
hybrid motor vehicle generally ranges from $250 to $3,500 depending
upon the weight of the vehicle and the ``maximum available power'' from
the vehicle's battery system. I note that in the proposed Sec.
30B(c)(2)(D)(iii)(I) the term ``maximum available power'' for a
passenger automobile or light truck hybrid is defined as follows:
For purposes of subparagraph (A)(i), the term ``maximum
available power'' means the maximum power available from the
rechargeable energy storage system, during a standard 10
second pulse power or equivalent test, divided by such
maximum power and the SAE net power of the heat engine.
Because this language originated in his bill, S. 760, I would like to
engage the senior senator from Utah in a brief colloquy to make sure we
have a common understanding of this definition.
I note that the definition allows the use of either a ``standard 10
second pulse power test'' or an equivalent test. Is it the
understanding of the Senator from Utah that this language authorizes a
manufacturer to demonstrate the maximum available power of its
rechargeable energy storage system by using either the standard 10
second pulse power test or some other test that will demonstrate the
extent to which the rechargeable energy storage system is contributing
to the overall power of the hybrid system?
Mr. HATCH. Yes, that is my understanding. Our purpose in authorizing
an ``equivalent test'' is not to push manufacturers to one particular
hybrid design by virtue of our prescribing the standard 10 second pulse
power test. Rather, we want to provide flexibility in the methodology
of measuring the hybrid performance of the vehicle and providing
increased incentives for those vehicles that utilize the optimum
combination of power from the two power sources.
Mr. SESSIONS. Is it the understanding of the Senator from Utah that
the equivalent test described in this definition could include a test
procedure, at the request of the manufacturer, that measures power from
the rechargeable energy storage system using real world driving
conditions?
Mr. HATCH. Yes, that is correct.
Mr. SESSIONS. Is it also the understanding of the Senator from Utah
that there are Federal Test Program (FTP) driving cycles already
formulated by EPA that could provide comparable results to the 10
second pulse power test?
Mr. HATCH. It is my understanding that such test procedures do exist
and could provide an alternative way to measure maximum available
power.
Mr. SESSIONS. I thank the Senator. That conforms to my understanding
as well.
TITLE X
Mr. HAGEL. Mr. President, as I stated in a previous colloguy with my
colleagues, we have reached broad agreement on many of the provisions
within Title X related to the development and coordination of a
national climate change policy.
There remain considerable uncertainties about the causes of climate
change, which has been noted by the National Academy of Sciences. Our
focus should be on addressing these uncertainties, not taking drastic
unwarranted action that could cause severe economic disruption.
The revised provisions of Title X and other provisions will help
reduce these uncertainties and take practical, market oriented steps to
vastly improve our energy efficient technologies.
The agreement appropriately calls for the creation of a national
strategy to address the challenge of climate change. It also creates an
interagency task force to better coordinate climate change policies
with the Executive Branch. This is needed. Climate change policy cris-
crosses the jurisdiction of multiple government agencies. Far too often
questions posed to the previous administration were answered with the
response, ``You'll have to ask someone else. We don't handle that
area.'' There needs to be accountability for climate change within the
Executive Branch.
President Bush has already taken the initiative, and put forth a
forward looking strategy to take action on climate change. His proposal
includes: a reasonable goal for greenhouse gas emission reductions; a
flexible way to achieve this goal, without harming economic growth; a
voluntary emissions registry for industry and individuals to track
their progress on greenhouse gas emissions; increased scientific
research; increased investment in new energy efficient
technologies; and efforts to work with other nations, particularly
developing nations, on mutual efforts to address climate change.
In crafting this strategy, President Bush created an interagency task
force very similar to that proposed in this legislation. The Cabinet
Secretaries and others within the Executive Office of the President
involved in this process spent countless hours reviewing the underlying
climate issues and ranges of policy options. The chairman of the
Council on Environmental Quality (CEQ), James Connaughton, played the
lead role in developing the strategy. This level of engagement and
policy development on climate change is unprecedented. It can, and
should, serve as a model for carrying out provisions of this
legislation as ultimately approved by the House and Senate.
As I stated in the colloquy included with the manager's amendment on
Title X, I have remaining concerns regarding the creation of a National
Office of Climate Change Policy with the Executive Office of the
President (EOP). I do not disagree with the need for dedicated
management within the EOP with regard to the creation and
implementation of climate change policy. I understand the concerns for
congressional oversight and the desire for those focused on climate
change to be in positions subject to Senate confirmation and available
for congressional testimony. However, I fail to see the need to create
new bureaucracy within the EOP for this purpose.
Chairman Connaughton effectively performed this role in the current
administration's policy review and development. I see no reason the
chairman of the Council on Environmental Policy could not continue to
perform this function. Moreover, statutory authority already exists for
a Senate-confirmed deputy director for the Council on Environmental
Policy. This position has never been filled, and could be designated to
focus solely on the area of climate change. There are several options
that could be pursued in the conference committee to address the
legitimate functions called for within Title X without creating a new
office within the EOP.
Title X also includes a Sense of the Congress resolution regarding
participation by the United States in international efforts on climate
change. This language is based on a resolution approved by the Senate
Foreign Relations Committee in August of 2001, but has been
substantially revised. It now reflects the uncertainties recognized by
the scientific community that are inherent with any predictions of
future
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climate change. It acknowledges the commitment by the international
community that actions taken should be appropriate to the economic
development of each nation. The resolution also reflects the principals
unanimously approved by the U.S. Senate through S. Res. 98 in July
1997--that U.S. participation in any international climate change
treaty should be predicated on participation of all nations, including
developing counties, and that such action must not harm the U.S.
economy.
The resolution appropriately calls on the United States to continue
to demonstrate international leadership on climate change within our
commitment to the United Nations Framework Convention on Climate
Change. It does not call on the U.S. to re-engage in efforts to ratify
the flawed Kyoto Protocol. This resolution is forward looking. At the
appropriate time the United States should provide the international
community with a proposal that would address the global challenge and
global commitment of climate change. It is only responsible that we
balance the economic interests of America with our environmental and
energy interests. This resolution insists upon this balance.
I appreciate the work of my colleagues on both sides of the aisle in
reaching the bipartisan agreement made in Title X. It is a significant
accomplishment. I look forward to working with them to address the
remaining issues in conference.
Mr. HARKIN. Mr. President, I strongly support the Renewable Fuels
Standards (RFS) contained in the Senate energy bill, S. 517. This
historic agreement will be a milestone in the efforts to develop
renewable fuels.
This agreement will dramatically increase the Nation's production of
domestic, renewable fuels, including ethanol and biodiesel, from U.S.
agricultural commodities and residues over the next decade. The
renewable fuels standard will create a steady market for American
agriculture, and provide significant economic benefits throughout rural
America. Importantly, it will also increase U.S. fuel supplies, reduce
our dependence on foreign oil, and protect the environment.
Some have questioned whether the renewable fuels standard as
contained in the bill is too aggressive, and whether there is enough
ethanol to meet the requirement. I am here to tell you there is more
than enough ethanol production capacity today to meet the needs of the
program when it goes into effect in 2004!
In fact, the U.S. ethanol industry has undergone significant growth
in recent years in anticipation of the phase out of MTBE, particularly
in California. In the past 2 years alone, since California Governor
Davis' original Executive Order phasing out MTBE use in the State by
December 31, 2002, 16 new plants have opened and several expansions to
existing plans have been completed. As a result, the ethanol industry
has the capacity to produce 2.3 billion gallons of ethanol per year
right now, the amount needed to satisfy the renewable fuels standard in
2004. The 13 plants under construction will bring total capacity to 2.7
billion gallons by the end of this year, more than the volume of
ethanol required under the agreement in 2005.
A survey by the California Energy Commission projects U.S. ethanol
production capacity to double to more than 4 billion gallons by the end
of 2003. Clearly, with the RFS beginning in 2004 at 2.3 billion gallons
per year, there will be more than adequate supplies of ethanol to meet
the requirement while providing additional volume to fuel supplies.
Importantly, the driving force behind the growth in ethanol
production over the past 5 years has been farmers seeking to capitalize
on the value-added benefits of ethanol production directly through
ownership in ethanol plants. Today, farmer-owned ethanol plants make up
more than a third of all U.S. ethanol production, with the capacity to
produce a billion gallons of ethanol. Fourteen of the 16 ethanol plants
opened in the past two years are owned by farmers, and 10 of the 13
under construction today are farmer-owned.
In Iowa today, we have nine operating ethanol plants. In addition,
five new plants are under construction, all of which are farmer-owned.
By the end of this year, half of all U.S. ethanol production facilities
will be farmer-owned.
Ethanol production facilities across America serve as local economic
engines, providing high-paying jobs, capital investment opportunities,
increased local tax revenue and value-added markets for area farmers.
With commodity prices very low, investment in value-added ethanol
processing by America's farmers provides a critical opportunity for
increased farm income and rural economic development. In these
communities, largely untouched by the economic expansion of the last
decade, the increased prices for corn in the radius around a plant
stimulates very real economic development, and the value-added benefits
of ethanol mean a $2 bushel of corn is converted into $5 of fuel and
feed co-products.
Ethanol is the third largest use of corn. Last year, 700 million
bushels of corn were used to produce ethanol and feed co-products,
boosting corn prices and rural income. According to a study by AUS
Consultants, the RFS will increase demand for grain by an average of
1.4 million bushels annually, increasing net farm income by nearly $6
billion per year. It will also create $5.3 billion in new investment,
much of it in rural America.
The Renewable Fuels Standard will create demand for 5 billion gallons
of ethanol and biodiesel by 2012. Importantly, these fuels can be
produced throughout the United States, from grain and agricultural
biomass residues. Iowa alone produces nearly 500 million gallons of
ethanol a year. The Nation will produce nearly 2.2 billion gallons of
ethanol in 2002.
Even as Iowa and other Midwest States stand ready to supply ethanol
to California, the State can also produce much of the ethanol it will
consume. For example, the California Energy Commission recently
concluded the State of California has the potential to produce 100
million gallons of ethanol per year from cellulose such as rice straw
and forestry wastes by 2005 and 400 million gallons per year by 2010.
This later number represents well over half of the estimated supply
that would be needed to satisfy the state's oxygenate requirement.
Opportunities also exist for grain-based ethanol production in
California.
A California based ethanol industry would provide significant
economic and environmental benefits to the State. Ethanol production
would provide rice growers with an alternative to burning or other
costly forms of rice straw disposal. It could also help reduce the
frequency and intensity of forest fires with the removal of forest
debris for ethanol production. It is estimated in-state ethanol
production could provide the State with more than $1 billion in
economic benefits. These same benefits can be achieved in the
southeast, northeast and northwest, establishing new biofuels
industries across the Nation.
As we look to a future of increased production and use of domestic,
renewable biofuels, we should also consider their role in future
transportation applications such as fuel cells.
Extracting hydrogen from renewable sources such as ethanol will
benefit the environment, rural America and energy security.
Demonstrations with ethanol have shown that reforming ethanol into
hydrogen provides higher efficiencies, fewer emissions, and better
performance than other fuel sources, including gasoline. And ethanol
used to power a fuel cell vehicle would count toward the Renewable
Fuels Standard.
Clearly, the Renewable Fuels Standard represents a momentous
opportunity to benefit rural America, improve the environment and
enhance our Nation's energy security. The 5 billion gallons of
renewable fuels that would be required in 2012 would replace gasoline
we currently get from foreign oil. American farmers can be producers as
well as consumers of energy. They are willing and able to supply fuel
as well as our food and fiber. Farmers are on the front lines in the
battle for energy independence, and their efforts will make a bold
statement about our Nation's commitment to reduce oil imports and build
domestic energy supplies that may one day make us truly energy
independent.
Farmers are ready, willing and able to lead the way toward energy
independence. The time is right for a Renewable Fuels Standard that
takes advantage of farmer's ability to produce
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renewable, domestic fuels to increase fuel supplies, reduce our
dependence on foreign oil, and increase the U.S.' ability to control
its own energy security and economic future.
____________________