[Congressional Record (Bound Edition), Volume 148 (2002), Part 4]
[Senate]
[Pages 5612-5634]
[From the U.S. 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 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

[[Page 5613]]

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.
  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.

[[Page 5614]]

  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.

  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

[[Page 5615]]

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 
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.

[[Page 5616]]

  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 
     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

[[Page 5617]]

     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;
       (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

[[Page 5618]]

     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 resource 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 
     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

[[Page 5619]]

     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.
  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.

[[Page 5620]]

  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 
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

[[Page 5621]]

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:

                      [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

[[Page 5622]]



                                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.
  The PRESIDING OFFICER. Without objection, it is so ordered.

[[Page 5623]]

  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

[[Page 5624]]

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.
  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

[[Page 5625]]

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.
  (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

[[Page 5626]]

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 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.

[[Page 5627]]

  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.
  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

[[Page 5628]]

     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 
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

[[Page 5629]]

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 
     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

[[Page 5630]]

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.
  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--

[[Page 5631]]

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.
  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.

[[Page 5632]]

  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.
  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.

[[Page 5633]]

  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 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

[[Page 5634]]

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 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.

                          ____________________