II 

109TH CONGRESS 

2D SESSION S. 2724 

To amend the Clean Air Act to establish a national uniform multiple air 

pollutant regulatory program for the electric generating sector. 

IN THE SENATE OF THE UNITED STATES 

MAY 4, 2006 

Mr. CARPER (for himself, Mr. ALEXANDER, Mr. CHAFEE, Mr. GREGG, Mr. 

DODD, Mrs. FEINSTEIN, and Mr. GRAHAM) introduced the following bill; 

which was read twice and referred to the Committee on Environment and 

Public Works 

A BILL 

To amend the Clean Air Act to establish a national uniform 

multiple air pollutant regulatory program for the electric 

generating sector. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Clean Air Planning Act of 2006’’. 

6 (b) TABLE OF CONTENTS.—The table of contents of 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Findings and purposes. 

Sec. 3. Integrated air quality planning for the electric generating sector. 


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Sec. 4. New source review program. 

Sec. 5. Revisions to sulfur dioxide allowance program. 

Sec. 6. Air quality forecasts and warnings. 

Sec. 7. Relationship to other law. 

1 SEC. 2. FINDINGS AND PURPOSES. 

2 (a) FINDINGS.—Congress finds that— 

3 (1) fossil fuel-fired electric generating facilities, 

4 consisting of facilities fueled by coal, fuel oil, and 

natural gas, produce nearly 2 5 ⁄3 of the electricity gen6 erated in the United States; 

7 (2) fossil fuel-fired electric generating facilities 

produce approximately 2 8 ⁄3 of the total sulfur dioxide 

emissions, 1 9 ⁄3 of the total nitrogen oxides emissions, 

1⁄3 of the total carbon dioxide emissions, and 1 10 ⁄3 of 

11 the total mercury emissions, in the United States; 

12 (3) the Clean Air Act (42 U.S.C. 7401 et seq.) 

13 regulates substances (including carbon dioxide) 

14 that— 

15 (A) are emitted into the ambient air; and 

16 (B) affect the weather and the climate; 

17 (4)(A) many electric generating facilities have 

18 been exempt from the emission limitations applicable 

19 to new units based on the expectation that over time 

20 the units would be retired or updated with new pol21 lution control equipment; but 

22 (B) many of the exempted units continue to op23 erate and emit pollutants at relatively high rates; 


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1 (5) pollution from existing electric generating 

2 facilities can be reduced through adoption of modern 

3 technologies and practices; 

4 (6) the full benefits of competition will not be 

5 realized if the environmental impacts of generation 

6 of electricity are not uniformly internalized; 

7 (7) the ability of owners of electric generating 

8 facilities to effectively plan for the future is impeded 

9 by the uncertainties surrounding future environ10 mental regulatory requirements that are imposed in11 efficiently on a piecemeal basis; and 

12 (8) States and regions have increasingly adopt13 ed programs to address carbon dioxide emissions 

14 from electric generating facilities, and Federal regu15 lations relating to carbon dioxide emissions should 

16 take those programs into consideration. 

17 (b) PURPOSES.—The purposes of this Act are— 

18 (1) to protect and preserve the environment and 

19 safeguard public health by ensuring that substantial 

20 emission reductions are achieved at fossil fuel-fired 

21 electric generating facilities; 

22 (2) to significantly reduce the quantities of 

23 mercury, carbon dioxide, sulfur dioxide, and nitrogen 

24 oxides that enter the environment as a result of the 

25 combustion of fossil fuels; 


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1 (3) to encourage the development and use of re2 newable energy; 

3 (4) to internalize the cost of protecting the val4 ues of public health, air, land, and water quality in 

5 the context of a competitive market in electricity; 

6 (5) to provide a period of environmental regu7 latory stability for owners and operators of electric 

8 generating facilities so as to promote improved man9 agement of existing assets and new capital invest10 ments; and 

11 (6) to achieve emission reductions from electric 

12 generating facilities in a cost-effective manner. 

13 SEC. 3. INTEGRATED AIR QUALITY PLANNING FOR THE 

14 ELECTRIC GENERATING SECTOR. 

15 The Clean Air Act (42 U.S.C. 7401 et seq.) is amend16 ed by adding at the end the following: 

17 ‘‘TITLE VII—INTEGRATED AIR 

18 QUALITY PLANNING FOR THE 

19 ELECTRIC GENERATING SEC20 TOR 

‘‘Sec. 701. Definitions. 

‘‘Sec. 702. National pollutant tonnage limitations. 

‘‘Sec. 703. Nitrogen oxide trading program. 

‘‘Sec. 704. Inlet mercury program. 

‘‘Sec. 705. Carbon dioxide allowance trading program. 

21 ‘‘SEC. 701. DEFINITIONS. 

22 ‘‘In this title: 

23 ‘‘(1) AFFECTED UNIT.— 


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1 ‘‘(A) MERCURY.—The term ‘affected unit’, 

2 with respect to mercury, means a coal-fired 

3 electric generating facility (including a cogen4 eration facility) that— 

5 ‘‘(i) has a nameplate capacity greater 

6 than 25 megawatts; and 

7 ‘‘(ii) generates electricity for sale. 

8 ‘‘(B) NITROGEN OXIDES AND CARBON DI9 OXIDE.—The term ‘affected unit’, with respect 

10 to nitrogen oxides and carbon dioxide, means a 

11 fossil fuel-fired electric generating facility (in12 cluding a cogeneration facility) that— 

13 ‘‘(i) has a nameplate capacity greater 

14 than 25 megawatts; and 

15 ‘‘(ii) generates electricity for sale. 

16 ‘‘(C) SULFUR DIOXIDE.—The term ‘af17 fected unit’, with respect to sulfur dioxide, has 

18 the meaning given the term in section 402. 

19 ‘‘(2) CARBON DIOXIDE ALLOWANCE.—The term 

20 ‘carbon dioxide allowance’ means an authorization 

21 allocated by the Administrator under this title to 

22 emit 1 ton of carbon dioxide during or after a speci23 fied calendar year. 

24 ‘‘(3) CLEAN COAL TECHNOLOGY.—The term 

25 ‘clean coal technology’ means— 


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1 ‘‘(A) an advanced pulverized coal tech2 nology; 

3 ‘‘(B) an atmospheric fluidized bed combus4 tion technology; 

5 ‘‘(C) a pressurized fluidized bed combus6 tion technology; 

7 ‘‘(D) a integrated gasification combined 

8 cycle technology; and 

9 ‘‘(E) any other highly efficient and low10 emitting technology for the production of elec11 tricity using coal or coal-based fuels. 

12 ‘‘(4) COGENERATION FACILITY.—The term ‘co13 generation facility’ means a facility that— 

14 ‘‘(A) cogenerates— 

15 ‘‘(i) steam; and 

16 ‘‘(ii) electricity; and 

17 ‘‘(B) supplies, on a net annual basis, to 

18 any utility power distribution system for sale— 

‘‘(i) more than 1 19 ⁄3 of the potential 

20 electric output capacity of the facility; and 

21 ‘‘(ii) more than 25 megawatts of elec22 trical output of the facility. 

23 ‘‘(5) COVERED UNIT.—The term ‘covered unit’ 

24 means— 

25 ‘‘(A) an affected unit; 


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1 ‘‘(B) a nuclear generating unit with re2 spect to incremental nuclear generation; and 

3 ‘‘(C) a renewable energy unit. 

4 ‘‘(6) GREENHOUSE GAS.—The term ‘greenhouse 

5 gas’ means— 

6 ‘‘(A) carbon dioxide; 

7 ‘‘(B) methane; 

8 ‘‘(C) nitrous oxide; 

9 ‘‘(D) hydrofluorocarbons; 

10 ‘‘(E) perfluorocarbons; and 

11 ‘‘(F) sulfur hexafluoride. 

12 ‘‘(7) INCREMENTAL NUCLEAR GENERATION.— 

13 The term ‘incremental nuclear generation’ means, as 

14 determined by the Administrator and measured in 

15 megawatt hours, the difference between— 

16 ‘‘(A) the quantity of electricity generated 

17 by a nuclear generating unit in a calendar year; 

18 and 

19 ‘‘(B) the quantity of electricity generated 

20 by the nuclear generating unit in calendar year 

21 1990. 

22 ‘‘(8) NEW RENEWABLE ENERGY UNIT.—The 

23 term ‘new renewable energy unit’ means a renewable 

24 energy unit that has operated for a period of not 

25 more than 3 years. 


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1 ‘‘(9) NEW UNIT.—The term ‘new unit’ means 

2 an affected unit that has operated for not more than 

3 3 years and is not eligible to receive— 

4 ‘‘(A) sulfur dioxide allowances under sec5 tion 417(b); 

6 ‘‘(B) nitrogen oxide allowances under sec7 tion 703(c)(2); or 

8 ‘‘(C) carbon dioxide allowances under sec9 tion 705(e). 

10 ‘‘(10) NITROGEN OXIDE ALLOWANCE.—The 

11 term ‘nitrogen oxide allowance’ means an authoriza12 tion allocated by the Administrator under this title 

13 to emit 1 ton of nitrogen oxides during or after a 

14 specified calendar year. 

15 ‘‘(11) NUCLEAR GENERATING UNIT.—The term 

16 ‘nuclear generating unit’ means an electric gener17 ating facility that— 

18 ‘‘(A) uses nuclear energy to supply elec19 tricity to the electric power grid; and 

20 ‘‘(B) commenced operation in calendar 

21 year 1990 or earlier. 

22 ‘‘(12) RENEWABLE ENERGY.—The term ‘renew23 able energy’ means electricity generated from— 

24 ‘‘(A) wind; 


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1 ‘‘(B) organic waste (excluding incinerated 

2 municipal solid waste); 

3 ‘‘(C) biomass (including anaerobic diges4 tion from farm systems and landfill gas recov5 ery); 

6 ‘‘(D) fuel cells; or 

7 ‘‘(E) a hydroelectric, geothermal, solar 

8 thermal, photovoltaic, or other nonfossil fuel, 

9 nonnuclear source. 

10 ‘‘(13) RENEWABLE ENERGY UNIT.—The term 

11 ‘renewable energy unit’ means an electric generating 

12 facility that uses exclusively renewable energy to 

13 supply electricity to the electric power grid. 

14 ‘‘(14) SEQUESTRATION.—The term ‘sequestra15 tion’ means the action of sequestering carbon by— 

16 ‘‘(A) enhancing a natural carbon sink 

17 (such as through afforestation); or 

18 ‘‘(B)(i) capturing the carbon dioxide emit19 ted from a fossil fuel-based energy system; and 

20 ‘‘(ii)(I) storing the carbon in a geologic 

21 formation; or 

22 ‘‘(II) converting the carbon to a benign 

23 solid material through a biological or chemical 

24 process. 


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1 ‘‘(15) SULFUR DIOXIDE ALLOWANCE.—The 

2 term ‘sulfur dioxide allowance’ has the meaning 

3 given the term ‘allowance’ in section 402. 

4 ‘‘SEC. 702. NATIONAL POLLUTANT TONNAGE LIMITATIONS. 

5 ‘‘(a) SULFUR DIOXIDE.—The annual tonnage limita6 tion for emissions of sulfur dioxide from affected units in 

7 the United States shall be equal to— 

8 ‘‘(1) for each of calendar years 2010 through 

9 2014, 4,500,000 tons; and 

10 ‘‘(2) for calendar year 2015 and each calendar 

11 year thereafter, 2,000,000 tons. 

12 ‘‘(b) NITROGEN OXIDES.— 

13 ‘‘(1) DEFINITIONS.—In this subsection: 

14 ‘‘(A) ZONE 1 STATE.—The term ‘Zone 1 

15 State’ means the District of Columbia or any of 

16 the States of Alabama, Arkansas, Connecticut, 

17 Delaware, Florida, Georgia, Illinois, Indiana, 

18 Iowa, Kentucky, Louisiana, Maine, Maryland, 

19 Massachusetts, Michigan, Minnesota, Mis20 sissippi, Missouri, New Hampshire, New Jer21 sey, New York, North Carolina, Ohio, Pennsyl22 vania, Rhode Island, South Carolina, Ten23 nessee, Texas, Vermont, Virginia, West Vir24 ginia, and Wisconsin. 


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1 ‘‘(B) ZONE 2 STATE.—The term ‘Zone 2 

2 State’ means any State within the 48 contig3 uous States that is not a Zone 1 State. 

4 ‘‘(2) APPLICABILITY.— 

5 ‘‘(A) ZONE 1 PROHIBITION.— 

6 ‘‘(i) IN GENERAL.—Beginning on Jan7 uary 1, 2009, it shall be unlawful for an 

8 affected unit in a Zone 1 State to emit a 

9 total amount of nitrogen oxides during a 

10 year in excess of the number of nitrogen 

11 oxide allowances held for the affected unit 

12 for that year by the owner or operator of 

13 the affected unit. 

14 ‘‘(ii) LIMITATION.—Only nitrogen 

15 oxide allowances under paragraph (3)(A) 

16 shall be held in order to meet the require17 ments of clause (i). 

18 ‘‘(B) ZONE 2 PROHIBITION.— 

19 ‘‘(i) IN GENERAL.—Beginning on Jan20 uary 1, 2010, it shall be unlawful for an 

21 affected unit in a Zone 2 State to emit a 

22 total amount of nitrogen oxides during a 

23 year in excess of the number of nitrogen 

24 oxide allowances held for the affected unit 


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1 for that year by the owner or operator of 

2 the affected unit. 

3 ‘‘(ii) LIMITATION.—Only nitrogen 

4 oxide allowances under paragraph (3)(B) 

5 shall be held in order to meet the require6 ments of clause (i). 

7 ‘‘(3) LIMITATIONS ON TOTAL EMISSIONS.— 

8 ‘‘(A) ZONE 1 LIMITATIONS.—The Adminis9 trator shall allocate an annual tonnage limita10 tion for emissions of nitrogen oxides from af11 fected units in the Zone 1 States in an amount 

12 equal to— 

13 ‘‘(i) for each of calendar years 2009 

14 through 2014, 1,450,000 tons; and 

15 ‘‘(ii) for calendar year 2015 and each 

16 calendar year thereafter, 1,300,000 tons. 

17 ‘‘(B) ZONE 2 LIMITATIONS.—The Adminis18 trator shall allocate an annual tonnage limita19 tion for emissions of nitrogen oxides from af20 fected units in the Zone 2 States in an amount 

21 equal to— 

22 ‘‘(i) for each of calendar years 2010 

23 through 2014, 450,000 tons; and 

24 ‘‘(ii) for calendar year 2015 and each 

25 calendar year thereafter, 320,000 tons. 


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1 ‘‘(c) MERCURY.—The emission of mercury from af2 fected units shall be limited in accordance with section 

3 704. 

4 ‘‘(d) CARBON DIOXIDE.—Subject to section 705(c), 

5 the annual tonnage limitation for emissions of carbon di6 oxide from covered units in the United States shall be 

7 equal to, as determined by the Administrator based on cer8 tified and quality-assured continuous emissions moni9 toring data for carbon dioxide reported to the Adminis10 trator by affected units in accordance with this Act— 

11 ‘‘(1) for each of calendar years 2010 through 

12 2014, the quantity of emissions projected to be emit13 ted from affected units in calendar year 2006; and 

14 ‘‘(2) for calendar year 2015 and each calendar 

15 year thereafter, the quantity of emissions emitted 

16 from affected units in calendar year 2001. 

17 ‘‘(e) REVIEW OF ANNUAL TONNAGE LIMITATIONS

18 AND MERCURY EMISSIONS REQUIREMENTS.— 

19 ‘‘(1) DETERMINATION BY ADMINISTRATOR.— 

20 Not later than 10 years after the date of enactment 

21 of this title, the Administrator shall determine— 

22 ‘‘(A) after considering impacts on human 

23 health, the environment, the economy, and 

24 costs, whether 1 or more of the annual tonnage 

25 limitations should be revised; and 


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1 ‘‘(B) whether the mercury emission re2 quirements under section 704 should be revised 

3 in accordance with the risk standards described 

4 in section 112(f)(2). 

5 ‘‘(2) DETERMINATION NOT TO REVISE.—If the 

6 Administrator determines under paragraph (1) that 

7 none of the annual tonnage limitations or mercury 

8 emissions requirements should be revised, the Ad9 ministrator shall publish in the Federal Register a 

10 notice of the determination and the reasons for the 

11 determination. 

12 ‘‘(3) DETERMINATION TO REVISE.—If the Ad13 ministrator determines under paragraph (1) that 1 

14 or more of the annual tonnage limitations or mer15 cury emissions requirements should be revised, the 

16 Administrator shall publish in the Federal Reg17 ister— 

18 ‘‘(A) not later than 10 years and 180 days 

19 after the date of enactment of this title, pro20 posed regulations implementing the revisions; 

21 and 

22 ‘‘(B) not later than 11 years and 180 days 

23 after the date of enactment of this title, final 

24 regulations implementing the revisions. 


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1 ‘‘(4) ADMINISTRATION.—The duty of the Ad2 ministrator to make a determination under para3 graph (1) shall be— 

4 ‘‘(A) considered to be a nondiscretionary 

5 duty; 

6 ‘‘(B) enforceable through a citizen suit 

7 under section 304; and 

8 ‘‘(C) subject to rulemaking procedures and 

9 judicial review under section 307. 

10 ‘‘(f) REDUCTION OF EMISSIONS FROM SPECIFIED

11 AFFECTED UNITS.—Notwithstanding the annual tonnage 

12 limitations and mercury emissions requirements estab13 lished under this section, the Federal Government or a 

14 State government may require that emissions from a spec15 ified affected unit be reduced. 

16 ‘‘SEC. 703. NITROGEN OXIDE TRADING PROGRAM. 

17 ‘‘(a) REGULATIONS.— 

18 ‘‘(1) PROMULGATION.— 

19 ‘‘(A) IN GENERAL.—Not later than Janu20 ary 1, 2007, the Administrator shall promul21 gate regulations to establish for affected units 

22 in the United States a nitrogen oxide allowance 

23 trading program. 

24 ‘‘(B) REQUIREMENTS.—Regulations pro25 mulgated under subparagraph (A) shall estabVerDate Aug 31 2005 21:02 May 06, 2006 Jkt 049200 PO 00000 Frm 00015 Fmt 6652 Sfmt 6201 E:\BILLS\S2724.IS S2724

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1 lish requirements for the allowance trading pro2 gram under this section, including requirements 

3 concerning— 

4 ‘‘(i)(I) the generation, allocation, 

5 issuance, recording, tracking, transfer, and 

6 use of nitrogen oxide allowances; and 

7 ‘‘(II) the public availability of all in8 formation concerning the activities de9 scribed in subclause (I) that is not con10 fidential; 

11 ‘‘(ii) compliance with subsection 

12 (e)(1); 

13 ‘‘(iii) the monitoring and reporting of 

14 emissions under paragraphs (2) and (3) of 

15 subsection (e); and 

16 ‘‘(iv) excess emission penalties under 

17 subsection (e)(4). 

18 ‘‘(2) MIXED FUEL, CO-GENERATION FACILITIES

19 AND COMBINED HEAT AND POWER FACILITIES.— 

20 The Administrator shall promulgate such regulations 

21 as are necessary to ensure the equitable issuance of 

22 allowances to— 

23 ‘‘(A) facilities that use more than 1 energy 

24 source to produce electricity; and 


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1 ‘‘(B) facilities that produce electricity in 

2 addition to another service or product. 

3 ‘‘(b) NEW UNIT RESERVES.— 

4 ‘‘(1) ESTABLISHMENT.—For each calendar 

5 year, based on projections of electricity output from 

6 new units, the Administrator, in consultation with 

7 the Secretary of Energy, shall establish by regula8 tion a reserve of nitrogen oxide allowances to be set 

9 aside for use by new units that is not less than 5 

10 percent of the total allowances allocated to affected 

11 units for the calendar year. 

12 ‘‘(2) UNUSED ALLOWANCES.—For each cal13 endar year, the Administrator shall reallocate, to all 

14 affected units, any unused nitrogen oxide allowances 

15 from the new unit reserve established under para16 graph (1) in the proportion that— 

17 ‘‘(A) the number of allowances allocated to 

18 each affected unit for the calendar year; bears 

19 to 

20 ‘‘(B) the number of allowances allocated to 

21 all affected units for the calendar year. 

22 ‘‘(c) NITROGEN OXIDE ALLOCATIONS.— 

23 ‘‘(1) TIMING OF ALLOCATIONS.—The Adminis24 trator shall allocate nitrogen oxide allowances to af25 fected units— 


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1 ‘‘(A)(i) not later than December 31, 2007, 

2 for calendar year 2009 for all Zone 1 States; 

3 and 

4 ‘‘(ii) not later than December 31, 2007, 

5 for calendar year 2010 for all Zone 2 States; 

6 and 

7 ‘‘(B) not later than December 31 of cal8 endar year 2008 and each calendar year there9 after, for the fourth calendar year that begins 

10 after that December 31. 

11 ‘‘(2) ALLOCATIONS TO AFFECTED UNITS THAT

12 ARE NOT NEW UNITS.— 

13 ‘‘(A) QUANTITY OF ALLOWANCES.— 

14 ‘‘(i) ZONE 1 STATES.—The Adminis15 trator shall allocate to each affected unit 

16 in a Zone 1 State that is not a new unit 

17 a quantity of nitrogen oxide allowances in 

18 the proportion that— 

19 ‘‘(I) the number of megawatt 

20 hours of electric power generated by 

21 the affected unit in the Zone 1 State; 

22 bears to 

23 ‘‘(II) the number of megawatt 

24 hours of electric power generated by 

25 all affected units in all Zone 1 States. 


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1 ‘‘(ii) ZONE 2 STATES.—The Adminis2 trator shall allocate to each affected unit 

3 in a Zone 2 State that is not a new unit 

4 a quantity of nitrogen oxide allowances in 

5 the proportion that— 

6 ‘‘(I) the number of megawatt 

7 hours of electric power generated by 

8 the affected unit in the Zone 2 State; 

9 bears to 

10 ‘‘(II) the number of megawatt 

11 hours of electric power generated by 

12 all affected units in all Zone 2 States. 

13 ‘‘(iii) FACTORS FOR CONSIDER14 ATION.—In allocating allowances under 

15 clauses (i) and (ii), the Administrator shall 

16 take into consideration the average mega17 watt hours of an affected unit, calculated 

18 for the most recent 3-calendar year period 

19 for which data are available and updated 

20 each calendar year. 

21 ‘‘(B) ADJUSTMENT OF ALLOCATIONS.— 

22 ‘‘(i) IN GENERAL.—If, for any cal23 endar year, the total quantity of allowances 

24 allocated under subparagraph (A) is not 

25 equal to the applicable quantity determined 


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1 under clause (ii), the Administrator shall 

2 adjust the quantity of allowances allocated 

3 to affected units that are not new units on 

4 a pro-rata basis so that the quantity is 

5 equal to the applicable quantity determined 

6 under clause (ii). 

7 ‘‘(ii) APPLICABLE QUANTITY.—The 

8 applicable quantity referred to in clause (i) 

9 is the difference between— 

10 ‘‘(I) the applicable annual ton11 nage limitation for emissions from af12 fected units specified in section 

13 702(b) for the calendar year; and 

14 ‘‘(II) the quantity of nitrogen 

15 oxide allowances placed in the applica16 ble new unit reserve established under 

17 subsection (b) for the calendar year. 

18 ‘‘(3) ALLOCATION TO NEW UNITS.— 

19 ‘‘(A) METHODOLOGY.—The Administrator 

20 shall promulgate regulations to establish a 

21 methodology for allocating nitrogen oxide allow22 ances to new units. 

23 ‘‘(B) QUANTITY OF NITROGEN OXIDE AL24 LOWANCES ALLOCATED.—The Administrator 

25 shall determine the quantity of nitrogen oxide 


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1 allowances to be allocated to each new unit 

2 based on the projected emissions from the new 

3 unit. 

4 ‘‘(4) ALLOWANCE NOT A PROPERTY RIGHT.—A 

5 nitrogen oxide allowance— 

6 ‘‘(A) is not a property right; and 

7 ‘‘(B) may be terminated or limited by the 

8 Administrator. 

9 ‘‘(5) NO JUDICIAL REVIEW.—An allocation of 

10 nitrogen allowances by the Administrator under this 

11 subsection shall not be subject to judicial review. 

12 ‘‘(d) NITROGEN OXIDE ALLOWANCE TRANSFER SYS13 TEM.— 

14 ‘‘(1) USE OF ALLOWANCES.—The regulations 

15 promulgated under subsection (a)(1)(A) shall— 

16 ‘‘(A) prohibit the use (but not the transfer 

17 in accordance with paragraph (3)) of any nitro18 gen oxide allowance before the calendar year for 

19 which the allowance is allocated; 

20 ‘‘(B) provide that unused nitrogen oxide 

21 allowances may be carried forward and added 

22 to nitrogen oxide allowances allocated for subse23 quent years; and 

24 ‘‘(C) provide that unused nitrogen oxide al25 lowances may be transferred by— 


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1 ‘‘(i) the person to which the allow2 ances are allocated; or 

3 ‘‘(ii) any person to which the allow4 ances are transferred. 

5 ‘‘(2) USE BY PERSONS TO WHICH ALLOWANCES

6 ARE TRANSFERRED.—Any person to which nitrogen 

7 oxide allowances are transferred under paragraph 

8 (1)(C)— 

9 ‘‘(A) may use the nitrogen oxide allow10 ances in the calendar year for which the nitro11 gen oxide allowances were allocated, or in a 

12 subsequent calendar year, to demonstrate com13 pliance with subsection (e)(1); or 

14 ‘‘(B) may transfer the nitrogen oxide al15 lowances to any other person for the purpose of 

16 demonstration of that compliance. 

17 ‘‘(3) CERTIFICATION OF TRANSFER.—A trans18 fer of a nitrogen oxide allowance shall not take ef19 fect until a written certification of the transfer, au20 thorized by a responsible official of the person mak21 ing the transfer, is received and recorded by the Ad22 ministrator. 

23 ‘‘(4) PERMIT REQUIREMENTS.—An allocation 

24 or transfer of nitrogen oxide allowances to an af25 fected unit shall, after recording by the AdminisVerDate Aug 31 2005 21:02 May 06, 2006 Jkt 049200 PO 00000 Frm 00022 Fmt 6652 Sfmt 6201 E:\BILLS\S2724.IS S2724

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1 trator, be considered to be part of the federally en2 forceable permit of the affected unit under this Act, 

3 without a requirement for any further review or revi4 sion of the permit. 

5 ‘‘(e) COMPLIANCE AND ENFORCEMENT.— 

6 ‘‘(1) IN GENERAL.—For calendar year 2009 

7 and each calendar year thereafter for Zone 1 States, 

8 and for calendar year 2010 and each calendar year 

9 thereafter for Zone 2 States, the operator of each 

10 affected unit shall surrender to the Administrator a 

11 quantity of nitrogen oxide allowances that is equal 

12 to the total tons of nitrogen oxides emitted by the 

13 affected unit during the calendar year. 

14 ‘‘(2) MONITORING SYSTEM.—The Administrator 

15 shall promulgate regulations requiring the accurate 

16 monitoring of the quantities of nitrogen oxides that 

17 are emitted from each affected unit. 

18 ‘‘(3) REPORTING.— 

19 ‘‘(A) IN GENERAL.—Not less often than 

20 quarterly, the owner or operator of an affected 

21 unit shall submit to the Administrator a report 

22 on the monitoring of emissions of nitrogen ox23 ides carried out by the owner or operator in ac24 cordance with the regulations promulgated 

25 under paragraph (2). 


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1 ‘‘(B) AUTHORIZATION.—Each report sub2 mitted under subparagraph (A) shall be author3 ized by a responsible official of the affected 

4 unit, who shall certify the accuracy of the re5 port. 

6 ‘‘(C) PUBLIC REPORTING.—The Adminis7 trator shall make available to the public, 

8 through 1 or more published reports and 1 or 

9 more forms of electronic media, data concerning 

10 the emissions of nitrogen oxides from each af11 fected unit. 

12 ‘‘(4) EXCESS EMISSIONS.— 

13 ‘‘(A) IN GENERAL.—The owner or operator 

14 of an affected unit that emits nitrogen oxides in 

15 excess of the nitrogen oxide allowances that the 

16 owner or operator holds for use for the affected 

17 unit for the calendar year shall— 

18 ‘‘(i) pay an excess emissions penalty 

19 determined under subparagraph (B); and 

20 ‘‘(ii) offset the excess emissions by an 

21 equal quantity in the following calendar 

22 year or such other period as the Adminis23 trator shall prescribe. 

24 ‘‘(B) DETERMINATION OF EXCESS EMIS25 SIONS PENALTY.—The excess emissions penalty 


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1 for nitrogen oxides shall be equal to the product 

2 obtained by multiplying— 

3 ‘‘(i) the number of tons of nitrogen 

4 oxides emitted in excess of the total quan5 tity of nitrogen oxide allowances held; and 

6 ‘‘(ii) 2 times the average price of a ni7 trogen oxides allowance for the Zone and 

8 calendar year in which the excess emissions 

9 occurred, as determined by the Adminis10 trator. 

11 ‘‘(f) TREATMENT OF EXISTING PROGRAMS.— 

12 ‘‘(1) SEASONAL CAP AND TRADING PROGRAM.— 

13 The provisions of the rule of the Administrator enti14 tled the ‘Clean Air Interstate Rule’ (70 Fed. Reg. 

15 25,162) (May 12, 2005) providing for the establish16 ment of a seasonal emissions cap and ozone trading 

17 program for oxides of nitrogen shall remain in full 

18 force and effect. 

19 ‘‘(2) ANNUAL CAP AND TRADING PROGRAM.— 

20 The provisions of the rule referred to in paragraph 

21 (1) providing for the establishment of an annual 

22 emissions cap and trading program for oxides of ni23 trogen shall terminate on the later of— 

24 ‘‘(A) the effective date of the regulations 

25 promulgated under this section; and 


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1 ‘‘(B) January 1, 2009. 

2 ‘‘SEC. 704. MERCURY PROGRAM. 

3 ‘‘(a) DEFINITION OF INLET MERCURY.—In this sec4 tion, the term ‘inlet mercury’ means the quantity of mer5 cury found— 

6 ‘‘(1) in the as-fired coal of an affected unit; or 

7 ‘‘(2) for an affected unit using coal that is sub8 jected to an advanced coal cleaning technology, in 

9 the as-mined coal of the affected unit. 

10 ‘‘(b) ANNUAL LIMITATION FOR NEW UNITS.—An af11 fected unit that commences operation during the 1-year 

12 period beginning on the date of enactment of this title 

13 shall be subject to the less stringent of the following emis14 sions limitations on an annual calendar year basis with 

15 respect to inlet mercury: 

16 ‘‘(1) 90 percent capture of inlet mercury. 

17 ‘‘(2) An emission rate of 0.0060 lbs/GWh. 

18 ‘‘(c) ANNUAL LIMITATION FOR EXISTING UNITS.— 

19 An affected unit in operation on the date of enactment 

20 of this title shall be subject to the following emissions limi21 tations on an annual calendar year basis with respect to 

22 inlet mercury: 

23 ‘‘(1) CALENDAR YEARS 2010 THROUGH 2014.— 

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1 ing December 31, 2014, the less stringent limitation 

2 of— 

3 ‘‘(A) 60 percent capture of inlet mercury; 

4 and 

5 ‘‘(B) an emission rate of 0.02 lbs/GWh. 

6 ‘‘(2) CALENDAR YEAR 2015 AND THERE7 AFTER.—Beginning January 1, 2015, the less strin8 gent limitation of— 

9 ‘‘(A) 90 percent capture of inlet mercury; 

10 and 

11 ‘‘(B) an emission rate of 0.0060 lbs/GWh. 

12 ‘‘(d) AVERAGING ACROSS UNITS.—An owner or oper13 ator of an affected unit may demonstrate compliance with 

14 the annual limitations under subsections (b) and (c) by 

15 averaging emissions from all affected units at a single fa16 cility in operation on the date of enactment of this title. 

17 ‘‘(e) MONITORING SYSTEM.—The Administrator shall 

18 promulgate regulations requiring— 

19 ‘‘(1) operation, reporting, and certification of 

20 continuous emissions monitoring systems to accu21 rately measure the quantity of mercury that is emit22 ted from each affected unit; and 

23 ‘‘(2) verification and reporting of inlet mercury 

24 at each affected unit. 

25 ‘‘(f) REPORTING.— 


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1 ‘‘(1) IN GENERAL.—Not less often than quar2 terly, the owner or operator of an affected unit shall 

3 submit to the Administrator a report on the moni4 toring of emissions of inlet mercury carried out by 

5 the owner or operator in accordance with the regula6 tions promulgated under subsection (e). 

7 ‘‘(2) AUTHORIZATION.—Each report submitted 

8 under paragraph (1) shall be authorized by a re9 sponsible official of the affected unit, who shall cer10 tify the accuracy of the report. 

11 ‘‘(3) PUBLIC REPORTING.—The Administrator 

12 shall make available to the public, through 1 or 

13 more published reports and 1 or more forms of elec14 tronic media, data concerning the emission of inlet 

15 mercury from each affected unit. 

16 ‘‘(g) EXCESS EMISSIONS.— 

17 ‘‘(1) IN GENERAL.—The owner or operator of 

18 an affected unit that emits inlet mercury in excess 

19 of the emission limitation described in subsection (b) 

20 shall pay an excess emissions penalty determined 

21 under paragraph (2). 

22 ‘‘(2) DETERMINATION OF EXCESS EMISSIONS

23 PENALTY.—The excess emissions penalty for inlet 

24 mercury shall be an amount equal to $50,000 per 

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1 cess of the emission limitations for inlet mercury de2 scribed in subsections (b) and (c). 

3 ‘‘(h) PREVIOUSLY REQUIRED REDUCTIONS.—For 

4 calendar year 2015 and each calendar year thereafter, in 

5 evaluating the quantity of inlet mercury emitted from an 

6 affected unit and determining whether to impose a penalty 

7 under subsection (g), the Administrator shall— 

8 ‘‘(1) take into consideration any reduction in 

9 inlet mercury emissions at the affected unit during 

10 the preceding calendar year pursuant to any other 

11 Federal regulation or any State regulation; and 

12 ‘‘(2) adjust each applicable penalty accordingly. 

13 ‘‘SEC. 705. CARBON DIOXIDE ALLOWANCE TRADING PRO14 GRAM. 

15 ‘‘(a) DEFINITIONS.—In this section: 

16 ‘‘(1) ALLOWANCE.—The term ‘allowance’ 

17 means— 

18 ‘‘(A) a carbon dioxide allowance; 

19 ‘‘(B) an offset allowance; or 

20 ‘‘(C) an early reduction allowance. 

21 ‘‘(2) EARLY REDUCTION ALLOWANCE.—The 

22 term ‘early reduction allowance’ means a carbon di23 oxide allowance issued under subsection (h) for a 

24 project in the United States to reduce emissions of 

25 greenhouse gases or to sequester greenhouse gases 


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1 that is carried out in calendar years 2000 through 

2 2010. 

3 ‘‘(3) OFFSET ALLOWANCE.—The term ‘offset 

4 allowance’ means a carbon dioxide allowance issued 

5 under subsection (g) for a project to reduce emis6 sions of greenhouse gases or to sequester greenhouse 

7 gases. 

8 ‘‘(b) REGULATIONS.— 

9 ‘‘(1) IN GENERAL.—Not later than January 1, 

10 2008, the Administrator shall promulgate regula11 tions to establish an allowance trading program for 

12 covered units in the United States. 

13 ‘‘(2) REQUIRED ELEMENTS.—Regulations pro14 mulgated under paragraph (1) shall establish re15 quirements for the carbon dioxide allowance trading 

16 program under this section, including requirements 

17 concerning— 

18 ‘‘(A) the allocation, issuance, and use of 

19 carbon dioxide allowances; 

20 ‘‘(B) the issuance, certification, and use of 

21 offset allowances; 

22 ‘‘(C) the issuance, certification, and use of 

23 early reduction allowances; 

24 ‘‘(D) the transfer of allowances; 


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1 ‘‘(E) the monitoring, tracking, and report2 ing of carbon dioxide emissions; 

3 ‘‘(F) the public availability of carbon diox4 ide emissions information; 

5 ‘‘(G) compliance and enforcement; and 

6 ‘‘(H) the reserve and allocation of carbon 

7 dioxide allowances for new units and new re8 newable energy units. 

9 ‘‘(3) INTERACTION WITH DEPARTMENT OF AG10 RICULTURE.— 

11 ‘‘(A) IN GENERAL.—Except as provided in 

12 subparagraph (B), the Administrator shall pro13 mulgate all regulations relating to offsets under 

14 this title. 

15 ‘‘(B) OFFSETS.—The Administrator, in 

16 consultation with the Secretary of Agriculture, 

17 shall promulgate regulations relating to offsets 

18 produced by agricultural sequestration prac19 tices. 

20 ‘‘(c) CARBON DIOXIDE TONNAGE LIMITATION.—The 

21 annual tonnage limitation for emissions of carbon dioxide 

22 from affected units in the United States shall be equal 

23 to— 

24 ‘‘(1) for each of calendar years 2010 through 

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1 ted from affected units in calendar year 2006, as de2 termined by the Administrator based on certified 

3 and quality-assured continuous emissions monitoring 

4 data for carbon dioxide or based on data that the 

5 Administrator determines to be of similar reliability 

6 for units without continuous monitoring systems, re7 ported to the Administrator by affected units in ac8 cordance with this Act; and 

9 ‘‘(2) for calendar year 2015 and each calendar 

10 year thereafter, the quantity of emissions emitted 

11 from affected units in calendar year 2001, as deter12 mined by the Administrator based on certified and 

13 quality-assured continuous emissions monitoring 

14 data for carbon dioxide or based on data that the 

15 Administrator determines to be of similar reliability 

16 for units without continuous monitoring systems, re17 ported to the Administrator by affected units in ac18 cordance with this Act. 

19 ‘‘(d) NEW UNIT RESERVE.— 

20 ‘‘(1) ESTABLISHMENT.—For each calendar 

21 year, based on projections of electricity output from 

22 new units, the Administrator, in consultation with 

23 the Secretary of Energy, shall establish by regula24 tion a reserve of carbon dioxide allowances to be al25 located— 


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1 ‘‘(A) to new affected units for the calendar 

2 year; and 

3 ‘‘(B) to the clean coal technology reserve 

4 under subsection (e). 

5 ‘‘(2) LIMITATION.—The number of allowances 

6 allocated under paragraph (1) during a calendar 

7 year shall be not more than 7 percent of the total 

8 number of allowances allocated to affected units for 

9 the calendar year. 

10 ‘‘(3) UNUSED ALLOWANCES.—For each cal11 endar year, the Administrator shall reallocate, to all 

12 affected units, any unused carbon dioxide allowances 

13 from the new unit reserve established under para14 graph (1) in the proportion that— 

15 ‘‘(A) the number of allowances allocated to 

16 each affected unit for the calendar year; bears 

17 to 

18 ‘‘(B) the number of allowances allocated to 

19 all affected units for the calendar year. 

20 ‘‘(e) INCENTIVES FOR CLEAN COAL TECHNOLOGY.— 

21 ‘‘(1) ESTABLISHMENT.—The Administrator 

22 shall establish by regulation a reserve of carbon di23 oxide allowances to be set aside during a calendar 

24 year to encourage the deployment of clean coal tech25 nologies. 


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1 ‘‘(2) DEFINING QUALIFYING ADVANCED CLEAN

2 COAL TECHNOLOGIES.— 

3 ‘‘(A) IN GENERAL.—Not later than July 1, 

4 2008, the Administrator, by regulation, shall 

5 establish criteria and standards to define the 

6 term ‘qualifying advanced clean coal tech7 nologies’ with respect to electric power genera8 tion. 

9 ‘‘(B) REQUIREMENT.—In establishing cri10 teria and standards under subparagraph (A), 

11 the Administrator shall ensure that the quali12 fying advanced clean coal technologies represent 

13 an advance in available technology, taking into 

14 consideration— 

15 ‘‘(i) net thermal efficiency; 

16 ‘‘(ii) measures to capture and seques17 ter carbon dioxide; and 

18 ‘‘(iii) output-based emission rates 

19 for— 

20 ‘‘(I) carbon dioxide; 

21 ‘‘(II) sulfur dioxide; 

22 ‘‘(III) oxides of nitrogen; 

23 ‘‘(IV) filterable and condensable 

24 particulate matter; and 

25 ‘‘(V) mercury. 


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1 ‘‘(C) REVIEW AND REVISION.— 

2 ‘‘(i) IN GENERAL.—Not later than 

3 July 1, 2009, and each July 1 thereafter 

4 through July 1, 2014, the Administrator 

5 shall review and, if appropriate, revise the 

6 criteria and standards under subparagraph 

7 (A) based on technological advances during 

8 the preceding calendar year. 

9 ‘‘(ii) NOTICE AND COMMENT NOT RE10 QUIRED.—Subject to clause (iii), after the 

11 initial criteria and standards are estab12 lished under subparagraph (A), no subse13 quent review or revision under this sub14 paragraph shall be subject to the notice 

15 and comment provisions of section 553 of 

16 title 5, United States Code. 

17 ‘‘(iii) EFFECT.—Nothing in clause (ii) 

18 precludes the application of the notice and 

19 comment provisions of section 553 of title 

20 5, United States Code, as the Adminis21 trator determines to be practicable. 

22 ‘‘(3) TREATMENT OF CORRESPONDENCE.—The 

23 correspondence of the Office of Air Quality Planning 

24 and Standards addressing best available control 

25 technology requirements for proposed coal-fired 


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1 power plant projects and dated December 13, 

2 2005— 

3 ‘‘(A) shall be considered to be inconsistent 

4 with section 169(3); and 

5 ‘‘(B) shall be treated as void and of no ef6 fect as of the date of issuance of the cor7 respondence. 

8 ‘‘(f) CARBON DIOXIDE ALLOWANCE ALLOCATION TO

9 COVERED UNITS THAT ARE NOT NEW UNITS OR NEW

10 RENEWABLE ENERGY UNITS.— 

11 ‘‘(1) TIMING OF ALLOCATIONS.—The Adminis12 trator shall allocate carbon dioxide allowances to 

13 covered units that are not new units or new renew14 able energy units— 

15 ‘‘(A) not later than December 31, 2007, 

16 for calendar year 2010; and 

17 ‘‘(B) not later than December 31 of cal18 endar year 2008 and each calendar year there19 after, for the fourth calendar year that begins 

20 after that December 31. 

21 ‘‘(2) ALLOCATIONS.— 

22 ‘‘(A) IN GENERAL.—The Administrator 

23 shall allocate to each covered unit that is not a 

24 new unit or a new renewable energy unit, a 


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1 quantity of carbon dioxide allowances that is 

2 equal to the product obtained by multiplying— 

3 ‘‘(i) the quantity of carbon dioxide al4 lowances available for allocation under sub5 paragraph (B); and 

6 ‘‘(ii) the quotient obtained by divid7 ing— 

8 ‘‘(I) the annual average quantity 

9 of electricity generated by the unit 

10 during the most recent 3-calendar 

11 year period for which data are avail12 able, updated each calendar year and 

13 measured in megawatt hours; and 

14 ‘‘(II) the total of the average 

15 quantities described in subclause (I) 

16 with respect to all such units. 

17 ‘‘(B) QUANTITY TO BE ALLOCATED.—For 

18 each calendar year, the quantity of carbon diox19 ide allowances allocated under subparagraph 

20 (A) to covered units that are not new units or 

21 new renewable energy units shall be equal to 

22 the difference between— 

23 ‘‘(i) the annual tonnage limitation for 

24 emissions of carbon dioxide from covered 


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1 units specified in section 702(d) for the 

2 calendar year; and 

3 ‘‘(ii) the sum of— 

4 ‘‘(I) the quantity of carbon diox5 ide allowances placed in the new unit 

6 reserve established under subsection 

7 (d) for the calendar year; and 

8 ‘‘(II) the quantity of carbon diox9 ide allowances reserved to provide in10 centives for advanced clean coal tech11 nologies under subsection (e) for the 

12 calendar year. 

13 ‘‘(g) OFFSET ALLOWANCES.— 

14 ‘‘(1) IN GENERAL.—Not later than January 1, 

15 2008, the Administrator shall promulgate regula16 tions that provide for the issuance, certification, and 

17 use of offset allowances for greenhouse gas reduction 

18 or sequestration projects carried out in the United 

19 States or any other country. 

20 ‘‘(2) REQUIRED ELEMENTS.—Regulations pro21 mulgated under paragraph (1) shall establish re22 quirements for the issuance, certification, and use of 

23 offset allowances for greenhouse gas reduction or se24 questration projects, including requirements— 


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1 ‘‘(A) that projects not cause or contribute 

2 to adverse effects on human health or the envi3 ronment; 

4 ‘‘(B) that projects result in greenhouse gas 

5 reductions that are real, surplus, enforceable, 

6 verifiable, permanent, and not used more than 

7 once, as determined by the Administrator; 

8 ‘‘(C) for methodology for calculating the 

9 carbon dioxide equivalent reductions attrib10 utable to projects; 

11 ‘‘(D) for the monitoring, reporting, and 

12 verification of the greenhouse gas reductions 

13 from projects; 

14 ‘‘(E) for accounting principles used to 

15 quantify the greenhouse gas reductions of 

16 projects that require— 

17 ‘‘(i) the consideration of all green18 house gas impacts of a project; 

19 ‘‘(ii) the consistent application of ac20 counting principles; 

21 ‘‘(iii) transparency; 

22 ‘‘(iv) to the maximum extent prac23 ticable, accuracy; and 


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1 ‘‘(v) the use of conservative assump2 tions in cases in which uncertainties re3 quire the use of assumptions; and 

4 ‘‘(F) for conditions under which allowances 

5 traded under any other United States or inter6 nationally recognized carbon dioxide reduction 

7 program may be used. 

8 ‘‘(3) STATE OFFSET ALLOWANCES.—In promul9 gating regulations under paragraph (1), the Admin10 istrator shall take into consideration offset allow11 ances issued by California or any other State pursu12 ant to the Regional Greenhouse Gas Initiative or a 

13 similar regulatory program with a comparable offset 

14 provision. 

15 ‘‘(h) EARLY REDUCTION ALLOWANCES.— 

16 ‘‘(1) IN GENERAL.—Not later than January 1, 

17 2008, the Administrator shall promulgate regula18 tions that provide for the issuance, certification, and 

19 use of early reduction allowances for greenhouse gas 

20 reduction or sequestration projects carried out dur21 ing calendar years 2000 through 2010. 

22 ‘‘(2) ELIGIBLE PROJECTS.—A greenhouse gas 

23 reduction or sequestration project shall be eligible 

24 for early reduction allowances if the project— 

25 ‘‘(A) is carried out in the United States; 


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1 ‘‘(B) meets the regulations promulgated by 

2 the Administrator under paragraph (1) that the 

3 Administrator determines to be applicable to 

4 the project; and 

5 ‘‘(C) was reported— 

6 ‘‘(i) under section 1605(b) of the En7 ergy Policy Act of 1992 (42 U.S.C. 

8 13385(b)); or 

9 ‘‘(ii) to a State or regional greenhouse 

10 gas registry. 

11 ‘‘(3) LIMITATION.—The quantity of early re12 duction allowances available for greenhouse gas re13 duction or sequestration projects in calendar years 

14 2000 through 2010 shall not exceed 10 percent of 

15 the tonnage limitation for calendar year 2011 for 

16 emissions of carbon dioxide from affected units 

17 under subsection (c). 

18 ‘‘(i) USE AND TRANSFER OF ALLOWANCES.— 

19 ‘‘(1) USE IN OTHER CARBON DIOXIDE ALLOW20 ANCE TRADING PROGRAMS.—Allowances may be 

21 used in any other carbon dioxide allowance trading 

22 program that is approved by the Administrator for 

23 use of the allowances. 


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1 ‘‘(2) USE BEFORE APPLICABLE CALENDAR

2 YEAR.—Allowances may not be used before the cal3 endar year for which the allowance was allocated. 

4 ‘‘(3) TRANSFER.— 

5 ‘‘(A) IN GENERAL.—Notwithstanding para6 graph (2), allowances may be transferred before 

7 the calendar year for which the allowances were 

8 allocated. 

9 ‘‘(B) LIMITATION.—The transfer of an al10 lowance shall not take effect until receipt and 

11 recording by the Administrator of a written cer12 tification of the transfer, which is executed by 

13 an authorized official of the person making the 

14 transfer. 

15 ‘‘(4) USE BY PERSONS TO WHICH CARBON DI16 OXIDE ALLOWANCES ARE TRANSFERRED.—Any per17 son to which carbon dioxide allowances are trans18 ferred under paragraph (3)(A) may use the carbon 

19 dioxide allowances in the calendar year for which the 

20 carbon dioxide allowances were allocated, or in a 

21 subsequent calendar year, to demonstrate compli22 ance with subsection (j)(1). 

23 ‘‘(5) PERMIT REQUIREMENTS.—An allocation 

24 or transfer of allowances to an affected unit shall be 

25 considered to be part of the federally enforceable 


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1 permit of the affected unit under this Act, without 

2 a requirement for further review or revision of the 

3 permit. 

4 ‘‘(j) COMPLIANCE AND ENFORCEMENT.— 

5 ‘‘(1) IN GENERAL.—For calendar year 2011 

6 and each calendar year thereafter, the owner of each 

7 affected unit shall surrender to the Administrator a 

8 quantity of allowances that is equal to the total tons 

9 of carbon dioxide emitted by the affected unit during 

10 the calendar year. 

11 ‘‘(2) PENALTY.—The owner of an affected unit 

12 that emits carbon dioxide in excess of the allowances 

13 that the owner holds for use for the affected unit for 

14 the calendar year shall pay an excess emissions pen15 alty equal to the product obtained by multiplying— 

16 ‘‘(A) the number of tons of carbon dioxide 

17 emitted in excess of the total quantity of allow18 ances held; and 

19 ‘‘(B) $100, adjusted for changes in the 

20 Consumer Price Index for All-Urban Consumers 

21 published by the Department of Labor. 

22 ‘‘(k) ALLOWANCE NOT A PROPERTY RIGHT.—An al23 lowance— 

24 ‘‘(1) is not a property right; and 


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1 ‘‘(2) may be terminated or limited by the Ad2 ministrator. 

3 ‘‘(l) NO JUDICIAL REVIEW.—An allocation or 

4 issuance of an allowance by the Administrator shall not 

5 be subject to judicial review.’’. 

6 SEC. 4. NEW SOURCE REVIEW PROGRAM. 

7 Section 165 of the Clean Air Act (42 U.S.C. 7475) 

8 is amended by adding at the end the following: 

9 ‘‘(f) REVISIONS TO NEW SOURCE REVIEW PRO10 GRAM.— 

11 ‘‘(1) DEFINITIONS.—In this subsection: 

12 ‘‘(A) AFFECTED UNIT; COVERED UNIT.— 

13 The terms ‘affected unit’ and ‘covered unit’ 

14 have the meanings given the terms in section 

15 701. 

16 ‘‘(B) NEW SOURCE REVIEW PROGRAM.— 

17 The term ‘new source review program’ means 

18 the program to carry out this part and part D. 

19 ‘‘(2) PERFORMANCE STANDARDS.— 

20 ‘‘(A) IN GENERAL.—Except as provided in 

21 subparagraph (B), beginning January 1, 2020, 

22 and on each January 1 thereafter, each affected 

23 unit that has been in operation 50 or more 

24 years as of that January 1 shall meet perform25 ance standards of— 


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1 ‘‘(i) 2 lbs/MWh for sulfur dioxide; and 

2 ‘‘(ii) 1 lbs/MWh for nitrogen oxides. 

3 ‘‘(B) EXCEPTION.— 

4 ‘‘(i) IN GENERAL.—Notwithstanding 

5 subparagraph (A), an affected unit that, as 

6 of January 1, 2020, is required to meet a 

7 more stringent performance standard than 

8 the applicable standard under subpara9 graph (A) shall continue to meet the more 

10 stringent standard. 

11 ‘‘(ii) MODIFICATION OF AFFECTED

12 UNITS.—The requirements of this section 

13 shall not affect in any way any require14 ment under section 111(a)(4), this part, or 

15 part D governing modifications of major 

16 stationary sources. 

17 ‘‘(3) NO EFFECT ON OTHER REQUIREMENTS

18 AND RETENTION OF STATE AUTHORITY.—Nothing in 

19 this subsection affects— 

20 ‘‘(A) any State authority under section 

21 116; or 

22 ‘‘(B) the obligation of any State or local 

23 government or any major emitting facility to 

24 comply with the requirements of this section.’’. 


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1 SEC. 5. REVISIONS TO SULFUR DIOXIDE ALLOWANCE PRO2 GRAM. 

3 (a) IN GENERAL.—Title IV of the Clean Air Act (re4 lating to acid deposition control) (42 U.S.C. 7651 et seq.) 

5 is amended by adding at the end the following: 

6 ‘‘SEC. 417. REVISIONS TO SULFUR DIOXIDE ALLOWANCE 

7 PROGRAM. 

8 ‘‘(a) DEFINITIONS.—In this section, the terms ‘af9 fected unit’ and ‘new unit’ have the meanings given the 

10 terms in section 701. 

11 ‘‘(b) REGULATIONS.—Not later than January 1, 

12 2007, the Administrator shall promulgate such revisions 

13 to the regulations to implement this title as the Adminis14 trator determines to be necessary to implement section 

15 702(a). 

16 ‘‘(c) NEW UNIT RESERVE.— 

17 ‘‘(1) ESTABLISHMENT.—Subject to the annual 

18 tonnage limitation for emissions of sulfur dioxide 

19 from affected units specified in section 702(a), the 

20 Administrator shall establish by regulation a reserve 

21 of allowances to be set aside for use by new units. 

22 ‘‘(2) DETERMINATION OF QUANTITY.—The Ad23 ministrator, in consultation with the Secretary of 

24 Energy, shall determine, based on projections of 

25 electricity output for new units— 


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1 ‘‘(A) not later than June 30, 2007, the 

2 quantity of allowances required to be held in re3 serve for new units for each of calendar years 

4 2011 through 2015; and 

5 ‘‘(B) not later than June 30 of each fifth 

6 calendar year thereafter, the quantity of allow7 ances required to be held in reserve for new 

8 units for the following 5-calendar year period. 

9 ‘‘(3) ALLOCATION.— 

10 ‘‘(A) REGULATIONS.—The Administrator 

11 shall promulgate regulations to establish a 

12 methodology for allocating allowances to new 

13 units. 

14 ‘‘(B) NO JUDICIAL REVIEW.—An allocation 

15 of allowances by the Administrator under this 

16 subsection shall not be subject to judicial re17 view. 

18 ‘‘(d) EXISTING UNITS.— 

19 ‘‘(1) ALLOCATION.— 

20 ‘‘(A) REGULATIONS.—Subject to the an21 nual tonnage limitation for emissions of sulfur 

22 dioxide from affected units specified in section 

23 702(a), and subject to the reserve of allowances 

24 for new units under subsection (c), the Admin25 istrator shall promulgate regulations to govern 


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1 the allocation of allowances to affected units 

2 that are not new units. 

3 ‘‘(B) REQUIRED ELEMENTS.—The regula4 tions shall provide for— 

5 ‘‘(i) the allocation of allowances on a 

6 fair and equitable basis between affected 

7 units that received allowances under sec8 tion 405 and affected units that are not 

9 new units and that did not receive allow10 ances under that section, using for both 

11 categories of units the same or similar allo12 cation methodology as was used under sec13 tion 405; and 

14 ‘‘(ii) the pro-rata distribution of allow15 ances to all units described in clause (i), 

16 subject to the annual tonnage limitation 

17 for emissions of sulfur dioxide from af18 fected units specified in section 702(a). 

19 ‘‘(2) TIMING OF ALLOCATIONS.—The Adminis20 trator shall allocate allowances to affected units— 

21 ‘‘(A) not later than December 31, 2007, 

22 for calendar year 2011; and 

23 ‘‘(B) not later than December 31 of cal24 endar year 2008 and each calendar year thereVerDate Aug 31 2005 21:02 May 06, 2006 Jkt 049200 PO 00000 Frm 00048 Fmt 6652 Sfmt 6201 E:\BILLS\S2724.IS S2724

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1 after, for the fourth calendar year that begins 

2 after that December 31. 

3 ‘‘(3) NO JUDICIAL REVIEW.—An allocation of 

4 allowances by the Administrator under this sub5 section shall not be subject to judicial review.’’. 

6 (b) DEFINITION OF ALLOWANCE.—Section 402 of 

7 the Clean Air Act (relating to acid deposition control) (42 

8 U.S.C. 7651a) is amended by striking paragraph (3) and 

9 inserting the following: 

10 ‘‘(3) ALLOWANCE.—The term ‘allowance’ 

11 means an authorization, allocated by the Adminis12 trator to an affected unit under this title, to emit, 

13 during or after a specified calendar year, a quantity 

14 of sulfur dioxide determined by the Administrator 

15 and specified in the regulations promulgated under 

16 section 417(b).’’. 

17 (c) TECHNICAL AMENDMENTS.— 

18 (1) Title IV of the Clean Air Act (relating to 

19 noise pollution) (42 U.S.C. 7641 et seq.)— 

20 (A) is amended by redesignating sections 

21 401 through 403 as sections 801 through 803, 

22 respectively; and 

23 (B) is redesignated as title VIII and moved 

24 to appear at the end of that Act. 


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1 (2) The table of contents for title IV of the 

2 Clean Air Act (relating to acid deposition control) 

3 (42 U.S.C. prec. 7651) is amended by adding at the 

4 end the following: 

‘‘Sec. 417. Revisions to sulfur dioxide allowance program.’’. 

5 SEC. 6. AIR QUALITY FORECASTS AND WARNINGS. 

6 (a) REQUIREMENT FOR FORECASTS AND WARN7 INGS.—The Secretary of Commerce, acting through the 

8 Administrator of the National Oceanic and Atmospheric 

9 Administration, in cooperation with the Administrator of 

10 the Environmental Protection Agency, shall issue air qual11 ity forecasts and air quality warnings as part of the mis12 sion of the Department of Commerce. 

13 (b) REGIONAL WARNINGS.—In carrying out sub14 section (a), the Secretary of Commerce shall establish 

15 within the National Oceanic and Atmospheric Administra16 tion a program to provide region-oriented forecasts and 

17 warnings regarding air quality for each of the following 

18 regions of the United States: 

19 (1) The Northeast, composed of Connecticut, 

20 Maine, Massachusetts, New Hampshire, New York, 

21 Rhode Island, and Vermont. 

22 (2) The Mid-Atlantic, composed of Delaware, 

23 the District of Columbia, Maryland, New Jersey, 

24 Pennsylvania, Virginia, and West Virginia. 


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1 (3) The Southeast, composed of Alabama, Flor2 ida, Georgia, North Carolina, and South Carolina. 

3 (4) The South, composed of Arkansas, Lou4 isiana, Mississippi, Oklahoma, Tennessee, and 

5 Texas. 

6 (5) The Midwest, composed of Illinois, Indiana, 

7 Iowa, Kentucky, Michigan, Minnesota, Missouri, 

8 Ohio, and Wisconsin. 

9 (6) The High Plains, composed of Kansas, Ne10 braska, North Dakota, and South Dakota. 

11 (7) The Northwest, composed of Idaho, Mon12 tana, Oregon, Washington, and Wyoming. 

13 (8) The Southwest, composed of Arizona, Cali14 fornia, Colorado, New Mexico, Nevada, and Utah. 

15 (9) Alaska. 

16 (10) Hawaii. 

17 (c) PRIORITY AREA.—In establishing the program 

18 described in subsection (a), the Secretary of Commerce 

19 and the Administrator shall identify and expand, to the 

20 maximum extent practicable, Federal air quality forecast 

21 and warning programs in effect as of the date of establish22 ment of the program. 

23 (d) AUTHORIZATION OF APPROPRIATIONS.—There 

24 are authorized to be appropriated such sums as are nec25 essary to carry out this section. 


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1 SEC. 7. RELATIONSHIP TO OTHER LAW. 

2 (a) REGULATION OF HAZARDOUS AIR POLLUT3 ANTS.—Section 112(n)(1) of the Clean Air Act (42 U.S.C. 

4 7412(n)(1)) is amended by striking subparagraph (A) and 

5 inserting the following: 

6 ‘‘(A) REGULATIONS.— 

7 ‘‘(i) IN GENERAL.—Not later than 18 

8 months after the date of enactment of the 

9 Clean Air Planning Act of 2006, the Ad10 ministrator shall promulgate regulations 

11 under this section limiting the emission 

12 from electric utility steam generating units 

13 of hazardous air pollutants, other than 

14 mercury, as the Administrator determines 

15 to be appropriate and necessary in accord16 ance with the standards under subsection 

17 (b)(2). 

18 ‘‘(ii) REQUIREMENTS.—The regula19 tions under clause (i) shall— 

20 ‘‘(I) require compliance with ap21 plicable standards as expeditiously as 

22 practicable, but not later than 3 years 

23 after the effective date of the regula24 tions; and 


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1 ‘‘(II) be in accordance with other 

2 applicable requirements under this 

3 section. 

4 ‘‘(iii) EFFECTIVE DATE.—The regula5 tions under clause (i) shall be effective on 

6 the date of promulgation of the regula7 tions.’’. 

8 (b) NO EFFECT ON OTHER FEDERAL AND STATE

9 REQUIREMENTS.—Except as otherwise specifically pro10 vided in this Act, nothing in this Act or an amendment 

11 made by this Act— 

12 (1) affects any permitting, monitoring, or en13 forcement obligation of the Administrator of the En14 vironmental Protection Agency under the Clean Air 

15 Act (42 U.S.C. 7401 et seq.) or any remedy pro16 vided under that Act; 

17 (2) affects any requirement applicable to, or li18 ability of, an electric generating facility under that 

19 Act; 

20 (3) requires a change in, affects, or limits any 

21 State law that regulates electric utility rates or 

22 charges, including prudence review under State law; 

23 or 

24 (4) precludes a State or political subdivision of 

25 a State from adopting and enforcing any requireVerDate Aug 31 2005 21:02 May 06, 2006 Jkt 049200 PO 00000 Frm 00053 Fmt 6652 Sfmt 6201 E:\BILLS\S2724.IS S2724

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1 ment for the control or abatement of air pollution, 

2 except that a State or political subdivision may not 

3 adopt or enforce any emission standard or limitation 

4 that is less stringent than the requirements imposed 

5 under that Act. 

Æ 


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