Environmental Priorities Act of 1998

Summary: Environmental Priorities Act of 1998 - Makes this Act effective for a consumer sector in any State in the first year after all of a State's regulated and nonregulated electric utilities have established retail electric service choice for customers in such sector, but no earlier than 2001. 
Requires providers of retail electric services to contribute to the fiscal agent for the Environmental Priorities Board (established by this Act) ten percent of the total consumer savings for the consumer sector for that calendar year.  Defines:  (1) "consumer savings" as the amount by which the potential rate for electric energy provided to a consumer sector exceeds the current rate for the sector, multiplied by the sector's total consumption (in kilowatt-hours) during a calendar year; and (2) "potential rate" as the average kilowatt-hour rate paid by the provider's customers in that sector during the 12-month period preceding the date on which retail electric service choice was established, adjusted for inflation. 
Requires the Administrator of the Environmental Protection Agency to establish a National Environmental Priorities Board.  Directs the Board to:  (1) establish regulations governing creation of an Environmental Priorities Program, to include criteria and methods of selecting State projects to receive support; and (2) enter into arrangements with a non-federal fiscal agent to receive and disburse contributions described by this Act. 
Authorizes States in which retail electric service choice has been established for any consumer sector to establish public purpose programs and apply for matching funding to support environmental priorities programs. 
Requires the fiscal agent to distribute contributions to States to carry out such programs.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Environmental Priorities Act of 
1998''.

SEC. 2. RECAPTURE OF SAVINGS FROM RETAIL ELECTRICITY COMPETITION.

    (a) Effective Date.--This Act shall take effect for a consumer 
sector in any State on January 1 of the first year after all State 
regulated electric utilities and all nonregulated electric utilities in 
that State have been determined by the Secretary of Energy to have 
established retail electric service choice for customers in that 
sector, but not earlier than January 1, 2001. The Secretary shall 
annually review the laws and regulations of each State relating to 
retail electric service regulation and make such determinations on 
January 1, 2001, and January 1 of each year thereafter.
    (b) 10 Percent of Consumer Savings.--For each State, on December 31 
of the first full calendar year following the effective date of this 
Act for any consumer sector in the State, and on December 31 of each 
subsequent calendar year, each provider of retail electric services in 
the State shall contribute to the fiscal agent for the Environmental 
Priorities Board established under section 2 an amount equal to 10 
percent of the total consumer savings for that sector for that calendar 
year.
    (c) Definitions.--For purposes of this section:
            (1) Consumer savings.--For any provider of retail electric 
        services in a State, for any consumer sector in the State, the 
        term ``consumer savings'' means, for any calendar year, the 
        amount (if any) by which the potential rate for electric energy 
        provided by that provider to that sector exceeds the current 
        rate for that sector, multiplied by that sector's total 
        consumption (in kilowatt-hours) during that calendar year.
            (2) Current rate.--For any provider of retail electric 
        services in a State, for any consumer sector in the State, the 
        term ``current rate'' means, for the 12 months following the 
        effective date of this Act for that sector in that State, the 
        average kilowatt-hour rate paid by customers of the provider in 
        that consumer sector in that State, as calculated by the 
        provider and recalculated annually.
            (3) Potential rate.--
                    (A) General rule.--For any provider of retail 
                electric services in a State, for any consumer sector 
                in the State, the term ``potential rate'' means, for 
                each calendar year following the effective date of this 
                Act for that sector in that State, the average 
                kilowatt-hour rate paid by the provider's customers in 
                that sector during the 12-month period preceding the 
                date on which retail electric service choice for 
                customers in that sector was established, adjusted for 
                inflation. The adjustment for inflation shall be made 
                using a methodology to be determined by the Secretary 
                of Energy. The Secretary of Energy shall recalculate 
                the potential rate annually to adjust it for inflation.
                    (B) Special rules.--For all sectors not serviced by 
                the provider during any period, the average kilowatt-
                hour rate for that sector shall be estimated or 
                measured by the Secretary of Energy. In any case where 
                retail choice in a State or sector did not all occur on 
                one effective date but was phased-in over time, the 
                Secretary of Energy shall establish regulations to 
                fairly establish the potential rate. In any cases 
                where, for the 12-month period preceding the date on 
                which retail electric service choice for customers in 
                that sector was established, a provider served a sector 
                in the State but did not serve it for the full period, 
                the Secretary of Energy shall establish regulations to 
                fairly establish the potential rate.

SEC. 3. USE OF CONTRIBUTIONS FOR ENVIRONMENTAL PRIORITIES.

    (a) National Environmental Priorities Board.--The Administrator of 
the Environmental Protection Agency (hereinafter in this section 
referred to as the ``Administrator'') shall establish a National 
Environmental Priorities Board to carry out the functions and 
responsibilities specified in this section. The Board shall be composed 
of 3 persons who are officers or employees of the United States, and 4 
State commissioners nominated by the national organization of the State 
commissions and appointed by the Administrator. The Administrator shall 
appoint one member of the Board to serve as Chairman.
    (b) Rules.--Within 180 days after the enactment of this Act, the 
Administrator shall promulgate a final rule containing the rules and 
procedures of the Board, including the rules and procedures for 
selecting a non-Federal fiscal agent under subsection (e). The 
Administrator shall have oversight responsibilities over the Board.
    (c) Environmental Priorities Program.--(1) Within 90 days after the 
promulgation of the Administrator's rules under subsection (b), the 
Board shall institute a proceeding to establish regulations governing 
creation and administration of a Environmental Priorities Program. Such 
regulations shall include criteria and methods of selecting State 
projects to receive support under the Program. Such support may include 
direct loans, loan guarantees, grants, capitalization grants for State 
revolving funds, and other assistance. The State projects may include--
            (A) lowering borrowing costs for municipal and regional 
        governments constructing wastewater treatment plants;
            (B) increasing the use of filter strips and riparian 
        buffers in protecting rivers and streams;
            (C) mitigating the deleterious effect of electricity 
        production on air quality;
            (D) supporting the preservation of open space for resource 
        conservation, wildlife protection, or recreation; and
            (E) such other projects furthering national environmental 
        priorities as may be established by the Board.
    (2) The Board shall enter into arrangements with a non-Federal 
fiscal agent who shall be authorized to receive the contributions made 
under section 2(b) and to disburse such contributions as provided in 
subsection (d).
    (3) Any State in which retail electric service choice has been 
established for any consumer sector may establish one or more public 
purpose programs and apply for matching funding under this section for 
projects to be funded under such program. A participating State may use 
matching funds received under this section only to support one or more 
eligible environmental priorities programs meeting the selection 
criteria established under paragraph (1). The Board shall regularly 
audit the expenditures of matching funds received by a participating 
State under this section.
    (4) At no time shall a State be required, pursuant to this section, 
to participate in the Environmental Priorities Program, nor may a State 
be required by the Board to fund a particular project.
    (d) Fund for Environmental Priorities.--(1) The fiscal agent shall 
distribute contributions received by the fiscal agent under section 
2(b) to States (or entities designated by the States) under this 
subsection in accordance with the criteria established by the Board 
under subsection (c) to carry out eligible projects under environmental 
priorities programs established by the States. For each calendar year 
after the year 2001, the Board shall solicit applications from States 
for matching funds to carry out eligible environmental priorities 
programs. The applications for assistance during any calendar year must 
be received by the Board before the commencement of such year. In its 
application, the State shall certify that the moneys will be used for 
one or more eligible public purpose programs and shall specify the 
amount of State support which is projected for the coming calendar year 
for the programs concerned.
    (2) Upon receipt of all State requests for matching funds submitted 
pursuant to paragraph (1) for any calendar year, the Board shall 
calculate the funds necessary to match the level of projected States 
funds for eligible environmental priorities programs for that calendar 
year.
    (3) Following the calculation of the amount of matching funds 
required under paragraph (2) for all States requesting funds for any 
calendar year, the Board shall communicate that amount to the fiscal 
agent. Expenditures by the fiscal agent for any calendar year may not 
exceed the total balance. To the extent the matching funds requested by 
all such States for a calendar year exceed the total amount received by 
the fiscal agent during the prior calendar year and available to the 
fiscal agent at the commencement of the calendar year concerned, the 
matching funds distributed to each such State shall be reduced pro rata 
so that the percentage of State funds matched by funds provided under 
this section is the same for all States requesting funds.
    (4) The fiscal agent shall distribute matching funds to the States 
(or to an entity or entities designated by the State to receive 
payments) to be used for eligible environmental priorities programs 
designated under subsection (c). All funds received shall be used only 
for the eligible environmental priorities programs designated by the 
State.