I

106TH CONGRESS

2D SESSION H. R. 4861

To address the acid rain and greenhouse gas impacts of electric utility

restructuring and to encourage the development of renewable energy

resources, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JULY 13, 2000

Mr. LAZIO (for himself and Mr. BOEHLERT) introduced the following bill;

which was referred to the Committee on Commerce

A BILL

To address the acid rain and greenhouse gas impacts of

electric utility restructuring and to encourage the development of renewable energy resources, and for other

purposes.

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

4 This Act may be cited as the ‘‘Clean Power Act’’.

5 SEC. 2. NITROGEN OXIDE AND CARBON DIOXIDE ALLOW6 ANCE TRADING PROGRAM.

7 (a) DEFINITIONS.—In this section:
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1 (1) ADMINISTRATOR.—The term ‘‘Adminis2 trator’’ means the Administrator of the Environ3 mental Protection Agency.

4 (2) AFFECTED FACILITY.—The term ‘‘affected

5 facility’’ means—

6 (A) a combustion unit in the 48 contiguous

7 States and the District of Columbia that serves

8 at least one electric generator with a nameplate

9 capacity of 25 megawatts or greater to generate

10 electricity and that combusts any fuel, including

11 biomass, or

12 (B) a facility in the 48 contiguous States

13 and the District of Columbia generating 5 kilo14 watts of electricity or greater using wind, geo15 thermal, solar thermal, or photovoltaic energy.

16 (3) NOX ALLOWANCE.—The term ‘‘NOX allow17 ance’’ means a limited authorization under sub18 section (b)(3) to emit quantities of nitrogen oxide.

19 (4) CO2 ALLOWANCE.—The term ‘‘CO2 Allow20 ance’’ means a limited authorization under sub21 section (b)(4) to emit quantities of carbon dioxide.

22 (5) PROGRAM.—The term ‘‘Program’’ means

23 the Nitrogen Oxide or a Carbon Dioxide Allowance

24 Program established under subsection (b).
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1 (6) TOTAL OUTPUT PRODUCTION.—The term

2 ‘‘total output production’’ means the sum of elec3 tricity and steam generated by all affected facilities

4 in the 48 contiguous States and the District of Co5 lumbia.

6 (b) IN GENERAL.—(1) Not later than 1 year after

7 the date of enactment of this Act, the Administrator shall

8 promulgate a final regulation to address interstate trans9 port of nitrogen oxide and carbon dioxide pollution. Under

10 such program, the Administrator shall establish a program

11 to issue, record the sale or exchange of, and track NOX

12 and CO2 allowances and to monitor and track emissions

13 of nitrogen oxide.

14 (2) After January 1, 2005, the total number of NOX

15 allowances distributed each year under such Program shall

16 not be greater than 2,750,000 and the total number of

17 CO2 allowances distributed each year shall not be greater

18 than 1,914,000,000.

19 (3) Each NOX allowance issued under such Program

20 shall authorize an affected facility to emit—

(A) 1 21 ⁄2 ton of nitrogen oxide during the ozone

22 period of May 1 through September 30 of any year,

23 or

24 (B) 1 ton of nitrogen oxide for any period of

25 any year not covered in subparagraph (A).
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1 (4) Each CO2 allowance issued under such program

2 shall authorize an affected facility to emit 1 ton of carbon

3 dioxide.

4 (5) The regulations under this section shall require

5 affected facilities to report electric generation and other

6 data the Administrator deems necessary to determine allo7 cations and to ensure compliance with the Program. The

8 owner or operator of an affected facility shall be required

9 to install and operate continuous emissions monitoring

10 systems at the facility or an alternative monitoring system

11 approved by the Administrator.

12 (6) The regulation under this section shall establish

13 a tracking system for NOX and CO2 allowances. A NOX

14 or CO2 allowance allocation or transfer shall, on recorda15 tion by the Administrator, be considered to be a part of

16 any operating permit requirements of each affected facility

17 involved in the allocation or transfer, without a require18 ment for any further permit review or revision.

19 (7) The use of any NOX or CO2 allowance before the

20 calendar year for which the NOX or CO2 allowance is allo21 cated shall be prohibited.

22 (c) ALLOCATIONS.—The Administrator shall promul23 gate regulations that shall—

24 (1) place 5 percent of the total quantity of NOX

25 allowances and 5 percent of the total quantity of
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1 CO2 allowances available each year into a new

2 source reserve,

3 (2) distribute to each affected facility the re4 maining NOX and CO2 allowances for each calendar

5 year,

6 (3) distribute the allocations to each affected

7 facility in proportion to each affected facility’s share

8 of total output production,

9 (4) distribute 2 years of allowances to each af10 fected facility every 2 years, at least 6 months prior

11 to the beginning of the relevant 2-year period,

12 (5) distribute to each new affected facility from

13 the new source reserve prior to the relevant control

14 period, and

15 (6) redistribute any allowances remaining in the

16 new source reserve after the relevant control period

17 to—

18 (A) affected sources in proportion to each

19 facility’s share of total output production, or

20 (B) the following year’s new source re21 serve, if the Administrator determines that the

22 reserve will be insufficient to meet expected

23 need.

24 (d) INSUFFICIENT ALLOWANCES.—If the Adminis25 trator determines that the quantity of allowances in the
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1 new source reserve in subsection (c) is insufficient to ac2 commodate the operations of new facilities, the Adminis3 trator shall promulgate a regulation to set a new percent4 age of the total annual quantity of NOX or CO2 allowances

5 to place into the new source reserve, no later than 6

6 months prior to the beginning of the next 2-year allocation

7 period.

8 (e) ENFORCEMENT.—(1) An affected facility may not

9 emit nitrogen oxides and carbon dioxide in excess of the

10 amount permitted by the quantity of NOX or CO2 allow11 ances held by the designated representative of the affected

12 facility in the NOX allowance tracking system starting in

13 the calendar year 2005.

14 (2) If an affected facility emits nitrogen oxides in ex15 cess of the amount permitted, the Administrator shall cal16 culate the deficit of additional NOX allowances the af17 fected facility would require to authorize the emitted quan18 tity of nitrogen oxides. The affected facility shall—

19 (A) pay $6,000 for each additional NOX allow20 ance calculated, and

21 (B) offset in the following calendar year a

22 quantity of NOX allowances equal to the number of

23 NOX allowances calculated.

24 (3) If an affected facility emits carbon dioxide in ex25 cess of the amount permitted, the Administrator shall cal-
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1 culate the deficit of additional CO2 allowances the affected

2 facility would require to authorize the emitted quantity of

3 carbon dioxide. The affected facility shall—

4 (A) pay $100 for each additional CO2 allowance

5 calculated, and

6 (B) offset in the following year a quantity of

7 CO2 allowances equal to the number of CO2 allow8 ances calculated.

9 (4) For every year after 2005, the Administrator

10 shall annually adjust the amount of the penalty in para11 graphs (2)(A) and (3)(A) to reflect changes in the Con12 sumer Price Index.

13 (f) REPEAL OF OTHER NOX LIMITATIONS.—Section

14 407 of the Clean Air Act (42 U.S.C. 7651f) is repealed

15 as of the date the provisions of this section related to NOX

16 are implemented.

17 (g) CONSTRUCTION.—Neither a NOX allowance nor

18 a CO2 allowance shall be considered to be a property right.

19 Notwithstanding any other provision of law, the Adminis20 trator may terminate or limit a NOX or CO2 allowance.

21 (h) SAVINGS PROVISIONS.—Nothing in this section

22 affects the application of, or compliance with, the Clean

23 Air Act for an affected facility, including the provisions

24 related to applicable national ambient air quality stand25 ards and State implementation plans or requires a change
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1 in, affects, or limits any State law regulating electric util2 ity rates or charges, including prudency review under

3 State law, affects the application of the Federal Power Act

4 (16 U.S.C. 791a et seq.) or the authority of the Commis5 sion under that Act, or interferes with or impairs any pro6 gram for competitive bidding for power supply in any

7 State.

8 SEC. 3. SULFUR DIOXIDE ALLOWANCE PROGRAM REVI9 SIONS.

10 Section 402 of the Clean Air Act (42 U.S.C. 7651)

11 is amended by striking paragraph (3) and inserting the

12 following:

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

14 means an authorization, allocated to an affected unit

15 by the Administrator under this title, to emit, during

16 or after a specified calendar year—

17 ‘‘(A) in the case of allowances allocated for

18 calendars years 1997 through 2004, one ton of

19 sulfur dioxide, and

20 ‘‘(B) in the case of allowances allocated for

21 calendar year 2005 and each calendar year

thereafter, 1 22 ⁄4 ton of sulfur dioxide.’’.

23 SEC. 4. MERCURY EMISSION CONTROL.

24 (a) EMISSION CONTROLS.—The Administrator shall

25 promulgate regulations based on the protection of human
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1 health and the environment controlling electric utility

2 emissions of mercury in accordance with this section.

3 (b) NATIONWIDE STANDARD.—The nationwide

4 standard under this section for calendar year 2005 and

5 each year thereafter for electric utility emissions of mer6 cury shall be not greater than 5 tons.

7 (c) FACTORS.—The regulations under this section

8 shall take into account technological feasibility, cost, and

9 the projected reduction in levels of mercury emissions that

10 will result from implementation of this Act. Such regula11 tions shall prevent localized adverse effects on public

12 health and the environment and shall prohibit emission

13 trading in mercury.

14 SEC. 5. RENEWABLE PORTFOLIO STANDARD.

15 (a) STANDARD.—Title II of the Public Utility Regu16 latory Policies Act of 1978 (16 U.S.C. 2601 and following)

17 is amended by adding after section 214 the following new

18 section:

19 ‘‘SEC. 215. FEDERAL RENEWABLE PORTFOLIO STANDARD.

20 ‘‘(a) EFFECTIVE DATE.—The Administrator of the

21 Energy Information Administration in the Department of

22 Energy shall publish a notice on or before January 1,

23 2005, specifying the percentage of total electric energy

24 generation in the United States that the Administrator es25 timates to be supplied by renewable energy during the cal-
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1 endar year 2004. If such percentage is less than 3 percent,

2 this section shall take effect on January 1, 2005.

3 ‘‘(b) MINIMUM RENEWABLE GENERATION REQUIRE4 MENT.—(1) For each calendar year beginning after the

5 effective date of this section, and ending January 1, 2010,

6 a retail electric supplier shall submit to the Secretary of

7 Energy (referred to in this section as the ‘Secretary’) Re8 newable Energy Credits in an amount equal to 3 percent

9 of the total electric energy sold by the retail electric sup10 plier to electric consumers in the calendar year. For each

11 calendar year beginning January 1, 2010, a retail electric

12 supplier shall submit to the Secretary Renewable Energy

13 Credits in an amount equal to 6 percent of the total elec14 tric energy sold by the retail electric supplier to electric

15 consumers in the calendar year. The retail electric supplier

16 shall make this submission before April 1 of the following

17 calendar year.

18 ‘‘(2) For purposes of this section, a ‘renewable en19 ergy’ resource means solar energy, wind, geothermal, or

20 biomass.

21 ‘‘(3) This section does not preclude a State from re22 quiring additional renewable energy generation in that

23 State.
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1 ‘‘(c) SUBMISSION OF CREDITS.—A retail electric sup2 plier may satisfy the requirements of subsection (a)

3 through the submission of—

4 ‘‘(1) Renewable Energy Credits issued under

5 subsection (d) for renewable energy generated by the

6 retail electric supplier in the calendar year for which

7 credits are being submitted or any previous calendar

8 year,

9 ‘‘(2) Renewable Energy Credits issued under

10 subsection (d) to any renewable energy generator for

11 renewable energy generated in the calendar year for

12 which credits are being submitted or a previous cal13 endar year and acquired by the retail electric sup14 plier, or

15 ‘‘(3) any combination of credits under para16 graphs (1) and (2).

17 ‘‘(d) ISSUANCE OF CREDITS.—(1) The Secretary

18 shall establish a program to issue, monitor the sale or ex19 change of, and track Renewable Energy Credits.

20 ‘‘(2) Under the program, an entity that generates

21 electric energy through the use of a renewable energy re22 source may apply to the Secretary for the issuance of Re23 newable Energy Credits. The application shall indicate—

24 ‘‘(A) the type of renewable energy resource used

25 to produce the electricity,
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1 ‘‘(B) the State in which the electric energy was

2 produced, and

3 ‘‘(C) any other information the Secretary deter4 mines appropriate.

5 ‘‘(3)(A) Except as provided in subparagraph (B), the

6 Secretary shall issue to an entity 1 Renewable Energy

7 Credit for each kilowatt-hour of electric energy the entity

8 generates through the use of a renewable energy resource

9 in any State in 2005 and any succeeding year.

10 ‘‘(B) To be eligible for a Renewable Energy Credit,

11 the unit of electricity generated through the use of a re12 newable energy resource may be sold or may be used by

13 the generator. If both a renewable energy resource and

14 a nonrenewable energy resource are used to generate the

15 electric energy, the Secretary shall issue credits based on

16 the proportion of the renewable energy resource used. The

17 Secretary shall identify Renewable Energy Credits by type

18 of generation and by the State in which the generating

19 facility is located.

20 ‘‘(4) In order to receive a Renewable Energy Credit,

21 the recipient of a Renewable Energy Credit shall pay a

22 fee, calculated by the Secretary, in an amount that is

23 equal to the administrative costs of issuing, recording,

24 monitoring the sale or exchange of, and tracking the cred25 it, or does not exceed 5 percent of the dollar value of the
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1 credit, whichever is lower. The Secretary shall retain the

2 fee and use it to pay these administrative costs.

3 ‘‘(5) When a generator sells electric energy generated

4 through the use of a renewable energy resource to a retail

5 electric supplier under a contract subject to section 210

6 of this Act, the retail electric supplier is treated as the

7 generator of the electric energy for the purposes of this

8 section for the duration of the contract.

9 ‘‘(6) The Secretary shall disqualify an otherwise eligi10 ble renewable energy generator from receiving a Renew11 able Energy Credit if the generator has elected to partici12 pate in net metering under section 216.

13 ‘‘(e) SALE OR EXCHANGE.—A Renewable Energy

14 Credit may be sold or exchanged by the entity to which

15 it was issued or by any other entity that acquires the cred16 it. A Renewable Energy Credit for any year that is not

17 used to satisfy the minimum renewable generation require18 ment of subsection (a) for that year may be carried for19 ward for use in another year.

20 ‘‘(f) RENEWABLE ENERGY CREDIT COST CAP.—Be21 ginning on the effective date of this section, the Secretary

22 shall offer Renewable Energy Credits for sale. The Sec23 retary shall charge 1.5 cents for each Renewable Energy

24 Credit sold during calendar year 2005, and on January

25 1 of each following year, the Secretary shall adjust for
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1 inflation, based on the Consumer Price Index, the price

2 charged per credit for that calendar year.

3 ‘‘(g) RENEWABLE ENERGY AND ENERGY EFFI4 CIENCY FUND.—The Secretary shall deposit in a separate

5 account the amount received from a sale under subsection

6 (f). Amounts in the separate account shall be available,

7 without further appropriation, to the Secretary to be used

8 for purposes of providing assistance for research and de9 velopment of cleaner burning fuels, renewable energy, and

10 energy efficiency.

11 ‘‘(h) ENFORCEMENT.—The Secretary may bring an

12 action in the appropriate United States district court to

13 impose a civil penalty on a retail electric supplier that does

14 not comply with subsection (b). A retail electric supplier

15 that does not submit the required number of Renewable

16 Energy Credits under subsection (b) is subject to a civil

17 penalty of not more than 3 times the value of the Renew18 able Energy Credits not submitted. For purposes of this

19 subsection, the value of a Renewable Energy Credit is the

20 price of a credit determined under subsection (f) for the

21 year the credits were not submitted.

22 ‘‘(i) INFORMATION COLLECTION.—The Secretary

23 may collect the information necessary to verify and

24 audit—
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1 ‘‘(1) the annual electric energy generation and

2 renewable energy generation of any entity applying

3 for Renewable Energy Credits under this section,

4 ‘‘(2) the validity of Renewable Energy Credits

5 submitted by a retail electric supplier to the Sec6 retary, and

7 ‘‘(3) the quantity of electricity sales of all retail

8 electric suppliers.

9 ‘‘(j) SUNSET.—This section expires December 31,

10 2015.’’.

11 (b) DEFINITIONS.—Section 3 of the Public Utility

12 Regulatory Policies Act of 1978 (16 U.S.C. 2602) is

13 amended by adding after paragraph (24) the following

14 new paragraph:

15 ‘‘(25) The term ‘retail electric supplier’ means

16 a person, State agency, or Federal agency that sells

17 electric energy to an electric consumer.’’.

18 (c) TABLE OF CONTENTS.—The table of contents for

19 title II of the Public Utility Regulatory Policies Act of

20 1978 (16 U.S.C. 2601 and following) is amended by add21 ing the following at the end thereof:

‘‘Sec. 215. Federal renewable portfolio standard.’’.

22 SEC. 6. NET METERING.

23 (a) AMENDMENT OF PURPA.—The Public Utility

24 Regulatory Policies Act of 1978 (16 U.S.C. 2601 and fol-
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1 lowing) is amended by adding the following new section

2 after section 215, as added by section 5 of this Act:

3 ‘‘SEC. 216. NET METERING FOR RENEWABLE ENERGY.

4 ‘‘(a) DEFINITIONS.—For purposes of this section—

5 ‘‘(1) The term ‘eligible on-site generating facil6 ity’ means a facility on the site of an electric con7 sumer with a peak generating capacity of 100 kilo8 watts or less that is fueled solely by a renewable en9 ergy resource.

10 ‘‘(2) The term ‘renewable energy resource’

11 means solar energy, wind, geothermal, or biomass.

12 ‘‘(3) The term ‘net metering service’ means

13 service to an electric consumer under which elec14 tricity generated by that consumer from an eligible

15 on-site generating facility and delivered to the dis16 tribution system through the same meter through

17 which purchased electricity is received may be used

18 to offset electricity provided by the retail electric

19 supplier to the electric consumer during the applica20 ble billing period so that an electric consumer is

21 billed only for the net electricity consumer during

22 the billing period, but in no event shall the net be

23 less than zero during the applicable billing period.

24 ‘‘(b) REQUIREMENT TO PROVIDE NET METERING

25 SERVICE.—Each retail electric supplier shall make avail-
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1 able upon request net metering service to any retail elec2 tric consumer that the supplier currently serves or solicits

3 for service.

4 ‘‘(c) STATE AUTHORITY.—This section does not pre5 clude a State from imposing additional requirements con6 sistent with the requirements in this section, including the

7 imposition of a cap limiting the amount of net metering

8 available in the State. Nothing in this Act or any other

9 Federal law preempts or otherwise affects authority under

10 State law to require a retail electric supplier to make avail11 able net metering service to a retail electric consumer

12 which the supplier serves or offers to serve.’’.

13 (c) TABLE OF CONTENTS.—The table of contents for

14 title II of the Public Utility Regulatory Policies Act of

15 1978 (16 U.S.C. 2601 and following) is amended by add16 ing the following at the end thereof:

‘‘Sec. 216. Net metering for renewable energy.’’.

Æ