II

107TH CONGRESS

1ST SESSION S. 1131

To promote economically sound modernization of electric power generation

capacity in the United States, to establish requirements to improve

the combustion heat rate efficiency of fossil fuel-fired electric utility

generating units, to reduce emissions of mercury, carbon dioxide, nitrogen

oxides, and sulfur dioxide, to require that all fossil fuel-fired electric

utility generating units operating in the United States meet new source

review requirements, to promote the use of clean coal technologies, and

to promote alternative energy and clean energy sources such as solar,

wind, biomass, and fuel cells.

IN THE SENATE OF THE UNITED STATES

JUNE 28, 2001

Mr. LEAHY introduced the following bill; which was read twice and referred

to the Committee on Finance

A BILL

To promote economically sound modernization of electric

power generation capacity in the United States, to establish requirements to improve the combustion heat rate

efficiency of fossil fuel-fired electric utility generating

units, to reduce emissions of mercury, carbon dioxide,

nitrogen oxides, and sulfur dioxide, to require that all

fossil fuel-fired electric utility generating units operating

in the United States meet new source review requirements, to promote the use of clean coal technologies,

and to promote alternative energy and clean energy

sources such as solar, wind, biomass, and fuel cells.
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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 Power Plant and Modernization Act of 2001’’.

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. Definitions.

Sec. 4. Combustion heat rate efficiency standards for fossil fuel-fired generating

units.

Sec. 5. Air emission standards for fossil fuel-fired generating units.

Sec. 6. Extension of renewable energy production credit.

Sec. 7. Megawatt hour generation fees.

Sec. 8. Clean Air Trust Fund.

Sec. 9. Accelerated depreciation for investor-owned generating units.

Sec. 10. Grants for publicly owned generating units.

Sec. 11. Recognition of permanent emission reductions in future climate change

implementation programs.

Sec. 12. Renewable and clean power generation technologies.

Sec. 13. Clean coal, advanced gas turbine, and combined heat and power demonstration program.

Sec. 14. Evaluation of implementation of this Act and other statutes.

Sec. 15. Assistance for workers adversely affected by reduced consumption of

coal.

Sec. 16. Community economic development incentives for communities adversely

affected by reduced consumption of coal.

Sec. 17. Carbon sequestration.

Sec. 18. Atmospheric monitoring.

8 SEC. 2. FINDINGS AND PURPOSES.

9 (a) FINDINGS.—Congress finds that—

10 (1) the United States is relying increasingly on

11 old, needlessly inefficient, and highly polluting power

12 plants to provide electricity;
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1 (2) the pollution from those power plants

2 causes a wide range of health and environmental

3 damage, including—

4 (A) fine particulate matter that is associ5 ated with the deaths of approximately 50,000

6 Americans annually;

7 (B) urban ozone, commonly known as

8 ‘‘smog’’, that impairs normal respiratory func9 tions and is of special concern to individuals af10 flicted with asthma, emphysema, and other res11 piratory ailments;

12 (C) rural ozone that obscures visibility and

13 damages forests and wildlife;

14 (D) acid deposition that damages estu15 aries, lakes, rivers, and streams (and the plants

16 and animals that depend on them for survival)

17 and leaches heavy metals from the soil;

18 (E) mercury and heavy metal contamina19 tion that renders fish unsafe to eat, with espe20 cially serious consequences for pregnant women

21 and their fetuses;

22 (F) eutrophication of estuaries, lakes, riv23 ers, and streams; and
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1 (G) global climate change that may fun2 damentally and irreversibly alter human, ani3 mal, and plant life;

4 (3) tax laws and environmental laws—

5 (A) provide a very strong incentive for

6 electric utilities to keep old, dirty, and ineffi7 cient generating units in operation; and

8 (B) provide a strong disincentive to invest9 ing in new, clean, and efficient generating tech10 nologies;

11 (4) fossil fuel-fired power plants, consisting of

12 plants fueled by coal, fuel oil, and natural gas,

13 produce more than two-thirds of the electricity gen14 erated in the United States;

15 (5) since, according to the Department of En16 ergy, the average combustion heat rate efficiency of

17 fossil fuel-fired power plants in the United States is

18 33 percent, 67 percent of the heat generated by

19 burning the fuel is wasted;

20 (6) technology exists to increase the combustion

21 heat rate efficiency of coal combustion from 35 per22 cent to 50 percent above current levels, and techno23 logical advances are possible that would boost the

24 net combustion heat rate efficiency even more;
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1 (7) coal-fired power plants are the leading

2 source of mercury emissions in the United States,

3 releasing more than 43 tons of this potent

4 neurotoxin each year;

5 (8) in 1999, fossil fuel-fired power plants in the

6 United States produced nearly 2,200,000,000 tons

7 of carbon dioxide, the primary greenhouse gas;

8 (9) on average, fossil fuel-fired power plants

9 emit approximately 2,000 pounds of carbon dioxide

10 for every megawatt hour of electricity produced;

11 (10) the average fossil fuel-fired generating unit

12 in the United States commenced operation in 1964,

13 6 years before the Clean Air Act (42 U.S.C. 7401

14 et seq.) was amended to establish requirements for

15 stationary sources;

16 (11)(A) according to the Department of En17 ergy, only 23 percent of the 1,000 largest emitting

18 units are subject to stringent new source perform19 ance standards under section 111 of the Clean Air

20 Act (42 U.S.C. 7411); and

21 (B) the remaining 77 percent, commonly re22 ferred to as ‘‘grandfathered’’ power plants, are sub23 ject to much less stringent requirements;

24 (12) according to available scientific and med25 ical evidence, exposure to mercury and mercury com-
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1 pounds is of concern to human health and the envi2 ronment;

3 (13) according to the report entitled ‘‘Toxi4 cological Effects of Methylmercury’’ and submitted

5 to Congress by the National Academy of Sciences

6 in 2000, and other scientific and medical evidence,

7 pregnant women and their developing fetuses,

8 women of childbearing age, children, and individuals

9 who subsist primarily on fish are most at risk for

10 mercury-related health impacts such as

11 neurotoxicity;

12 (14) although exposure to mercury and mercury

13 compounds occurs most frequently through con14 sumption of mercury-contaminated fish, such expo15 sure can also occur through—

16 (A) ingestion of breast milk;

17 (B) ingestion of drinking water, and foods

18 other than fish, that are contaminated with

19 methylmercury; and

20 (C) dermal uptake through contact with

21 soil and water;

22 (15) the report entitled ‘‘Mercury Study Report

23 to Congress’’ and submitted by the Environmental

24 Protection Agency under section 112(n)(1)(B) of the

25 Clean Air Act (42 U.S.C. 7412(n)(1)(B)), in con-
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1 junction with other scientific knowledge, supports a

2 plausible link between mercury emissions from com3 bustion of coal and other fossil fuels and mercury

4 concentrations in air, soil, water, and sediments;

5 (16)(A) the Environmental Protection Agency

6 report described in paragraph (15) supports a plau7 sible link between mercury emissions from combus8 tion of coal and other fossil fuels and methylmercury

9 concentrations in freshwater fish;

10 (B) in 2000, 41 States issued health advisories

11 that warned the public about consuming mercury12 tainted fish, as compared to 27 States that issued

13 such advisories in 1993; and

14 (C) the number of mercury advisories nation15 wide increased from 899 in 1993 to 2,242 in 2000,

16 an increase of 149 percent;

17 (17) pollution from power plants can be re18 duced through adoption of modern technologies and

19 practices, including—

20 (A) methods of combusting coal that are

21 intrinsically more efficient and less polluting,

22 such as pressurized fluidized bed combustion

23 and an integrated gasification combined cycle

24 system;
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1 (B) methods of combusting cleaner fuels,

2 such as gases from fossil and biological re3 sources and combined cycle turbines;

4 (C) treating flue gases through application

5 of pollution controls;

6 (D) methods of extracting energy from

7 natural, renewable resources of energy, such as

8 solar and wind sources;

9 (E) methods of producing electricity and

10 thermal energy from fuels without conventional

11 combustion, such as fuel cells; and

12 (F) combined heat and power methods of

13 extracting and using heat that would otherwise

14 be wasted, for the purpose of heating or cooling

15 office buildings, providing steam to processing

16 facilities, or otherwise increasing total effi17 ciency;

18 (18) adopting the technologies and practices de19 scribed in paragraph (17) would increase competi20 tiveness and productivity, secure employment, save

21 lives, and preserve the future; and

22 (19) accurate, long-term, nationwide monitoring

23 of atmospheric acid and mercury deposition is essen24 tial for—

25 (A) determining deposition trends;
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1 (B) evaluating the local and regional trans2 port of emissions; and

3 (C) assessing the impact of emission reduc4 tions.

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

6 (1) to protect and preserve the environment

7 while safeguarding health by ensuring that each fos8 sil fuel-fired generating unit minimizes air pollution

9 to levels that are technologically feasible through

10 modernization and application of pollution controls;

11 (2) to greatly reduce the quantities of mercury,

12 carbon dioxide, sulfur dioxide, and nitrogen oxides

13 entering the environment from combustion of fossil

14 fuels;

15 (3) to permanently reduce emissions of those

16 pollutants by increasing the combustion heat rate ef17 ficiency of fossil fuel-fired generating units to levels

18 achievable through—

19 (A) use of commercially available combus20 tion technology, including clean coal tech21 nologies such as pressurized fluidized bed com22 bustion and an integrated gasification combined

23 cycle system;

24 (B) installation of pollution controls;
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1 (C) expanded use of renewable and clean

2 energy sources such as biomass, geothermal,

3 solar, wind, and fuel cells; and

4 (D) promotion of application of combined

5 heat and power technologies;

6 (4)(A) to create financial and regulatory incen7 tives to retire thermally inefficient generating units

8 and replace them with new units that employ high9 thermal-efficiency combustion technology; and

10 (B) to increase use of renewable and clean en11 ergy sources such as biomass, geothermal, solar,

12 wind, and fuel cells;

13 (5) to establish the Clean Air Trust Fund to

14 fund the training, economic development, carbon se15 questration, and research, development, and dem16 onstration programs established under this Act;

17 (6) to eliminate the ‘‘grandfather’’ loophole in

18 the Clean Air Act relating to sources in operation

19 before the promulgation of standards under section

20 111 of that Act (42 U.S.C. 7411);

21 (7) to express the sense of Congress that per22 manent reductions in emissions of greenhouse gases

23 that are accomplished through the retirement of old

24 units and replacement by new units that meet the

25 combustion heat rate efficiency and emission stand-
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1 ards specified in this Act should be credited to the

2 utility sector and the owner or operator in any cli3 mate change implementation program;

4 (8) to promote permanent and safe disposal of

5 mercury recovered through coal cleaning, flue gas

6 control systems, and other methods of mercury pol7 lution control;

8 (9) to increase public knowledge of the sources

9 of mercury exposure and the threat to public health

10 from mercury, particularly the threat to the health

11 of pregnant women and their fetuses, women of

12 childbearing age, and children;

13 (10) to decrease significantly the threat to

14 human health and the environment posed by mer15 cury;

16 (11) to provide worker retraining for workers

17 adversely affected by reduced consumption of coal;

18 (12) to provide economic development incentives

19 for communities adversely affected by reduced con20 sumption of coal;

21 (13) to promote research concerning renewable

22 energy sources, clean power generation technologies,

23 and carbon sequestration; and

24 (14) to promote government accountability for

25 compliance with the Clean Air Act (42 U.S.C. 7401
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1 et seq.) and other emission reduction laws by ensur2 ing accurate, long-term, nationwide monitoring of

3 atmospheric acid and mercury deposition.

4 SEC. 3. DEFINITIONS.

5 In this Act:

6 (1) ADMINISTRATOR.—The term ‘‘Adminis7 trator’’ means the Administrator of the Environ8 mental Protection Agency.

9 (2) GENERATING UNIT.—The term ‘‘generating

10 unit’’ means an electric utility generating unit.

11 SEC. 4. COMBUSTION HEAT RATE EFFICIENCY STANDARDS

12 FOR FOSSIL FUEL-FIRED GENERATING

13 UNITS.

14 (a) STANDARDS.—

15 (1) IN GENERAL.—Not later than the day that

16 is 10 years after the date of enactment of this Act,

17 each fossil fuel-fired generating unit that commences

18 operation on or before that day shall achieve and

19 maintain, at all operating levels, a combustion heat

20 rate efficiency of not less than 45 percent (based on

21 the higher heating value of the fuel).

22 (2) FUTURE GENERATING UNITS.—Each fossil

23 fuel-fired generating unit that commences operation

24 more than 10 years after the date of enactment of

25 this Act shall achieve and maintain, at all operating
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1 levels, a combustion heat rate efficiency of not less

2 than 50 percent (based on the higher heating value

3 of the fuel), unless granted a waiver under sub4 section (d).

5 (b) TEST METHODS.—Not later than 2 years after

6 the date of enactment of this Act, the Administrator, in

7 consultation with the Secretary of Energy, shall promul8 gate methods for determining initial and continuing com9 pliance with this section.

10 (c) PERMIT REQUIREMENT.—Not later than 10 years

11 after the date of enactment of this Act, each generating

12 unit shall have a permit issued under title V of the Clean

13 Air Act (42 U.S.C. 7661 et seq.) that requires compliance

14 with this section.

15 (d) WAIVER OF COMBUSTION HEAT RATE EFFI16 CIENCY STANDARD.—

17 (1) APPLICATION.—The owner or operator of a

18 generating unit that commences operation more than

19 10 years after the date of enactment of this Act may

20 apply to the Administrator for a waiver of the com21 bustion heat rate efficiency standard specified in

22 subsection (a)(2) that is applicable to that type of

23 generating unit.

24 (2) ISSUANCE.—The Administrator may grant

25 the waiver only if—
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1 (A)(i) the owner or operator of the gener2 ating unit demonstrates that the technology to

3 meet the combustion heat rate efficiency stand4 ard is not commercially available; or

5 (ii) the owner or operator of the generating

6 unit demonstrates that, despite best technical

7 efforts and willingness to make the necessary

8 level of financial commitment, the combustion

9 heat rate efficiency standard is not achievable

10 at the generating unit; and

11 (B) the owner or operator of the gener12 ating unit enters into an agreement with the

13 Administrator to offset by a factor of 1.5 to 1,

14 using a method approved by the Administrator,

15 the emission reductions that the generating unit

16 does not achieve because of the failure to

17 achieve the combustion heat rate efficiency

18 standard specified in subsection (a)(2).

19 (3) EFFECT OF WAIVER.—If the Administrator

20 grants a waiver under paragraph (1), the generating

21 unit shall be required to achieve and maintain, at all

22 operating levels, the combustion heat rate efficiency

23 standard specified in subsection (a)(1).
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1 SEC. 5. AIR EMISSION STANDARDS FOR FOSSIL FUEL-FIRED

2 GENERATING UNITS.

3 (a) ALL FOSSIL FUEL-FIRED GENERATING

4 UNITS.—Not later than 10 years after the date of enact5 ment of this Act, each fossil fuel-fired generating unit, re6 gardless of its date of construction or commencement of

7 operation, shall be subject to, and operating in physical

8 and operational compliance with, the new source review

9 requirements under section 111 of the Clean Air Act (42

10 U.S.C. 7411).

11 (b) EMISSION RATES FOR SOURCES REQUIRED TO

12 MAINTAIN 45 PERCENT EFFICIENCY.—Not later than 10

13 years after the date of enactment of this Act, each fossil

14 fuel-fired generating unit subject to section 4(a)(1) shall

15 be in compliance with the following emission limitations:

16 (1) MERCURY.—Each coal-fired or fuel oil-fired

17 generating unit shall be required to remove 90 per18 cent of the mercury contained in the fuel, calculated

19 in accordance with subsection (e).

20 (2) CARBON DIOXIDE.—

21 (A) NATURAL GAS-FIRED GENERATING

22 UNITS.—Each natural gas-fired generating unit

23 shall be required to achieve an emission rate of

24 not more than 0.9 pounds of carbon dioxide per

25 kilowatt hour of net electric power output.
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1 (B) FUEL OIL-FIRED GENERATING

2 UNITS.—Each fuel oil-fired generating unit

3 shall be required to achieve an emission rate of

4 not more than 1.3 pounds of carbon dioxide per

5 kilowatt hour of net electric power output.

6 (C) COAL-FIRED GENERATING UNITS.—

7 Each coal-fired generating unit shall be re8 quired to achieve an emission rate of not more

9 than 1.55 pounds of carbon dioxide per kilowatt

10 hour of net electric power output.

11 (3) SULFUR DIOXIDE.—Each fossil fuel-fired

12 generating unit shall be required—

13 (A) to remove 95 percent of the sulfur di14 oxide that would otherwise be present in the

15 flue gas; and

16 (B) to achieve an emission rate of not

17 more than 0.3 pounds of sulfur dioxide per mil18 lion British thermal units of fuel consumed.

19 (4) NITROGEN OXIDES.—Each fossil fuel-fired

20 generating unit shall be required—

21 (A) to remove 90 percent of nitrogen ox22 ides that would otherwise be present in the flue

23 gas; and
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1 (B) to achieve an emission rate of not

2 more than 0.15 pounds of nitrogen oxides per

3 million British thermal units of fuel consumed.

4 (c) EMISSION RATES FOR SOURCES REQUIRED TO

5 MAINTAIN 50 PERCENT EFFICIENCY.—Each fossil fuel6 fired generating unit subject to section 4(a)(2) shall be

7 in compliance with the following emission limitations:

8 (1) MERCURY.—Each coal-fired or fuel oil-fired

9 generating unit shall be required to remove 90 per10 cent of the mercury contained in the fuel, calculated

11 in accordance with subsection (e).

12 (2) CARBON DIOXIDE.—

13 (A) NATURAL GAS-FIRED GENERATING

14 UNITS.—Each natural gas-fired generating unit

15 shall be required to achieve an emission rate of

16 not more than 0.8 pounds of carbon dioxide per

17 kilowatt hour of net electric power output.

18 (B) FUEL OIL-FIRED GENERATING

19 UNITS.—Each fuel oil-fired generating unit

20 shall be required to achieve an emission rate of

21 not more than 1.2 pounds of carbon dioxide per

22 kilowatt hour of net electric power output.

23 (C) COAL-FIRED GENERATING UNITS.—

24 Each coal-fired generating unit shall be re25 quired to achieve an emission rate of not more
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1 than 1.4 pounds of carbon dioxide per kilowatt

2 hour of net electric power output.

3 (3) SULFUR DIOXIDE.—Each fossil fuel-fired

4 generating unit shall be required—

5 (A) to remove 95 percent of the sulfur di6 oxide that would otherwise be present in the

7 flue gas; and

8 (B) to achieve an emission rate of not

9 more than 0.3 pounds of sulfur dioxide per mil10 lion British thermal units of fuel consumed.

11 (4) NITROGEN OXIDES.—Each fossil fuel-fired

12 generating unit shall be required—

13 (A) to remove 90 percent of nitrogen ox14 ides that would otherwise be present in the flue

15 gas; and

16 (B) to achieve an emission rate of not

17 more than 0.15 pounds of nitrogen oxides per

18 million British thermal units of fuel consumed.

19 (d) PERMIT REQUIREMENT.—Not later than 10

20 years after the date of enactment of this Act, each gener21 ating unit shall have a permit issued under title V of the

22 Clean Air Act (42 U.S.C. 7661 et seq.) that requires com23 pliance with this section.

24 (e) COMPLIANCE DETERMINATION AND MONI25 TORING.—
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1 (1) REGULATIONS.—Not later than 2 years

2 after the date of enactment of this Act, the Adminis3 trator, in consultation with the Secretary of Energy,

4 shall promulgate methods for determining initial and

5 continuing compliance with this section.

6 (2) CALCULATION OF MERCURY EMISSION RE7 DUCTIONS.—Not later than 2 years after the date of

8 enactment of this Act, the Administrator shall pro9 mulgate fuel sampling techniques and emission mon10 itoring techniques for use by generating units in cal11 culating mercury emission reductions for the pur12 poses of this section.

13 (3) REPORTING.—

14 (A) IN GENERAL.—Not less often than

15 quarterly, the owner or operator of a generating

16 unit shall submit a pollutant-specific emission

17 report for each pollutant covered by this sec18 tion.

19 (B) SIGNATURE.—Each report required

20 under subparagraph (A) shall be signed by a re21 sponsible official of the generating unit, who

22 shall certify the accuracy of the report.

23 (C) PUBLIC REPORTING.—The Adminis24 trator shall annually make available to the pub25 lic, through 1 or more published reports and 1
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1 or more forms of electronic media, facility-spe2 cific emission data for each generating unit and

3 pollutant covered by this section.

4 (D) CONSUMER DISCLOSURE.—Not later

5 than 2 years after the date of enactment of this

6 Act, the Administrator shall promulgate regula7 tions requiring each owner or operator of a gen8 erating unit to disclose to residential consumers

9 of electricity generated by the unit, on a regular

10 basis (but not less often than annually) and in

11 a manner convenient to the consumers, data

12 concerning the level of emissions by the gener13 ating unit of each pollutant covered by this sec14 tion and each air pollutant covered by section

15 111 of the Clean Air Act (42 U.S.C. 7411).

16 (f) DISPOSAL OF MERCURY CAPTURED OR RECOV17 ERED THROUGH EMISSION CONTROLS.—

18 (1) CAPTURED OR RECOVERED MERCURY.—Not

19 later than 2 years after the date of enactment of

20 this Act, the Administrator shall promulgate regula21 tions to ensure that mercury that is captured or re22 covered through the use of an emission control, coal

23 cleaning, or another method is disposed of in a man24 ner that ensures that—
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1 (A) the hazards from mercury are not

2 transferred from 1 environmental medium to

3 another; and

4 (B) there is no release of mercury into the

5 environment.

6 (2) MERCURY-CONTAINING SLUDGES AND

7 WASTES.—The regulations promulgated by the Ad8 ministrator under paragraph (1) shall ensure that

9 mercury-containing sludges and wastes are handled

10 and disposed of in accordance with all applicable

11 Federal and State laws (including regulations).

12 (g) PUBLIC REPORTING OF FACILITY-SPECIFIC

13 EMISSION DATA.—

14 (1) IN GENERAL.—The Administrator shall an15 nually make available to the public, through 1 or

16 more published reports and the Internet, facility-spe17 cific emission data for each generating unit and for

18 each pollutant covered by this section.

19 (2) SOURCE OF DATA.—The emission data shall

20 be taken from the emission reports submitted under

21 subsection (e)(3).

22 SEC. 6. EXTENSION OF RENEWABLE ENERGY PRODUCTION

23 CREDIT.

24 Section 45(c) of the Internal Revenue Code of 1986

25 (relating to definitions) is amended—
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1 (1) in paragraph (1)—

2 (A) in subparagraph (B), by striking

3 ‘‘and’’;

4 (B) in subparagraph (C), by striking the

5 period and inserting a comma; and

6 (C) by adding at the end the following:

7 ‘‘(D) solar power, and

8 ‘‘(E) geothermal power.’’;

9 (2) in paragraph (3)—

10 (A) in subparagraph (A), by striking

11 ‘‘2002’’ and inserting ‘‘2016’’;

12 (B) in subparagraph (B), by striking

13 ‘‘2002’’ and inserting ‘‘2016’’;

14 (C) in subparagraph (C), by striking

15 ‘‘2002’’ and inserting ‘‘2016’’; and

16 (D) by adding at the end the following:

17 ‘‘(D) SOLAR POWER FACILITY.—In the

18 case of a facility using solar power to produce

19 electricity, the term ‘qualified facility’ means

20 any facility owned by the taxpayer which is

21 originally placed in service after December 31,

22 2001, and before January 1, 2016.

23 ‘‘(E) GEOTHERMAL POWER FACILITY.—In

24 the case of a facility using geothermal power to

25 produce electricity, the term ‘qualified facility’
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1 means any facility owned by the taxpayer which

2 is originally placed in service after December

3 31, 2001, and before January 1, 2016.’’; and

4 (3) by adding at the end the following:

5 ‘‘(5) SOLAR POWER.—The term ‘solar power’

6 means solar energy harnessed through photovoltaic

7 systems, solar boilers which provide process heat,

8 and any other means.

9 ‘‘(6) GEOTHERMAL POWER.—The term ‘geo10 thermal power’ means thermal energy extracted

11 from the earth for the purposes of producing elec12 tricity.’’.

13 SEC. 7. MEGAWATT HOUR GENERATION FEES.

14 (a) IN GENERAL.—Chapter 38 of the Internal Rev15 enue Code of 1986 (relating to miscellaneous excise taxes)

16 is amended by inserting after subchapter D the following:

17 ‘‘Subchapter E—Megawatt Hour Generation

18 Fees

‘‘Sec. 4691. Imposition of fees.

19 ‘‘SEC. 4691. IMPOSITION OF FEES.

20 ‘‘(a) TAX IMPOSED.—There is hereby imposed on

21 each covered fossil fuel-fired generating unit a tax equal

22 to 30 cents per megawatt hour of electricity produced by

23 the covered fossil fuel-fired generating unit.
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1 ‘‘(b) ADJUSTMENT OF RATES.—Not less often than

2 once every 2 years beginning after 2005, the Secretary,

3 in consultation with the Administrator of the Environ4 mental Protection Agency, shall evaluate the rate of the

5 tax imposed by subsection (a) and increase the rate if nec6 essary for any succeeding calendar year to ensure that the

7 Clean Air Trust Fund established by section 9511 has suf8 ficient amounts to fully fund the activities described in

9 section 9511(c).

10 ‘‘(c) PAYMENT OF TAX.—The tax imposed by this

11 section shall be paid quarterly by the owner or operator

12 of each covered fossil fuel-fired generating unit.

13 ‘‘(d) COVERED FOSSIL FUEL-FIRED GENERATING

14 UNIT.—The term ‘covered fossil fuel-fired generating unit’

15 means an electric utility generating unit which—

16 ‘‘(1) is powered by fossil fuels;

17 ‘‘(2) has a generating capacity of 5 or more

18 megawatts; and

19 ‘‘(3) because of the date on which the gener20 ating unit commenced commercial operation, is not

21 subject to all regulations promulgated under section

22 111 of the Clean Air Act (42 U.S.C. 7411).’’.

23 (b) CONFORMING AMENDMENT.—The table of sub24 chapters for such chapter 38 is amended by inserting after

25 the item relating to subchapter D the following:

‘‘SUBCHAPTER E. Megawatt hour generation fees.’’.
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to electricity produced in calendar

3 years beginning after December 31, 2003.

4 SEC. 8. CLEAN AIR TRUST FUND.

5 (a) IN GENERAL.—Subchapter A of chapter 98 of the

6 Internal Revenue Code of 1986 (relating to trust fund

7 code) is amended by adding at the end the following:

8 ‘‘SEC. 9511. CLEAN AIR TRUST FUND.

9 ‘‘(a) CREATION OF TRUST FUND.—There is estab10 lished in the Treasury of the United States a trust fund

11 to be known as the ‘Clean Air Trust Fund’ (hereafter re12 ferred to in this section as the ‘Trust Fund’), consisting

13 of such amounts as may be appropriated or credited to

14 the Trust Fund as provided in this section or section

15 9602(b).

16 ‘‘(b) TRANSFERS TO TRUST FUND.—There are here17 by appropriated to the Trust Fund amounts equivalent to

18 the taxes received in the Treasury under section 4691.

19 ‘‘(c) EXPENDITURES FROM TRUST FUND.—Amounts

20 in the Trust Fund shall be available, without further Act

21 of appropriation, upon request by the head of the appro22 priate Federal agency in such amounts as the agency head

23 determines are necessary—
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1 ‘‘(1) to provide funding under section 12 of the

2 Clean Power Plant and Modernization Act of 2001,

3 as in effect on the date of enactment of this section;

4 ‘‘(2) to provide funding for the demonstration

5 program under section 13 of such Act, as so in ef6 fect;

7 ‘‘(3) to provide assistance under section 15 of

8 such Act, as so in effect;

9 ‘‘(4) to provide assistance under section 16 of

10 such Act, as so in effect; and

11 ‘‘(5) to provide funding under section 17 of

12 such Act, as so in effect.’’.

13 (b) CONFORMING AMENDMENT.—The table of sec14 tions for such subchapter A is amended by adding at the

15 end the following:

‘‘Sec. 9511. Clean Air Trust Fund.’’.

16 SEC. 9. ACCELERATED DEPRECIATION FOR INVESTOR17 OWNED GENERATING UNITS.

18 (a) IN GENERAL.—Section 168(e)(3) of the Internal

19 Revenue Code of 1986 (relating to classification of certain

20 property) is amended—

21 (1) in subparagraph (E) (relating to 15-year

22 property), by striking ‘‘and’’ at the end of clause

23 (ii), by striking the period at the end of clause (iii)

24 and inserting ‘‘, and’’, and by adding at the end the

25 following:
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1 ‘‘(iv) any 45-percent efficient fossil

2 fuel-fired generating unit.’’; and

3 (2) by adding at the end the following:

4 ‘‘(F) 12-YEAR PROPERTY.—The term ‘12-

5 year property’ includes any 50-percent efficient

6 fossil fuel-fired generating unit.’’.

7 (b) DEFINITIONS.—Section 168(i) of the Internal

8 Revenue Code of 1986 (relating to definitions and special

9 rules) is amended by adding at the end the following:

10 ‘‘(15) FOSSIL FUEL-FIRED GENERATING

11 UNITS.—

12 ‘‘(A) 50-PERCENT EFFICIENT FOSSIL

13 FUEL-FIRED GENERATING UNIT.—The term

14 ‘50-percent efficient fossil fuel-fired generating

15 unit’ means any property used in an investor16 owned fossil fuel-fired generating unit pursuant

17 to a plan approved by the Secretary, in con18 sultation with the Administrator of the Envi19 ronmental Protection Agency, to place into

20 service such a unit which is in compliance with

21 sections 4(a)(2) and 5(c) of the Clean Power

22 Plant and Modernization Act of 2001, as in ef23 fect on the date of enactment of this paragraph.

24 ‘‘(B) 45-PERCENT EFFICIENT FOSSIL

25 FUEL-FIRED GENERATING UNIT.—The term
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1 ‘45-percent efficient fossil fuel-fired generating

2 unit’ means any property used in an investor3 owned fossil fuel-fired generating unit pursuant

4 to a plan so approved to place into service such

5 a unit which is in compliance with sections

6 4(a)(1) and 5(b) of such Act, as so in effect.’’.

7 (c) CONFORMING AMENDMENT.—The table contained

8 in section 168(c) of the Internal Revenue Code of 1986

9 (relating to applicable recovery period) is amended by in10 serting after the item relating to 10-year property the fol11 lowing:

‘‘12-year property .................................................................... 12 years’’.

12 (d) EFFECTIVE DATE.—The amendments made by

13 this section shall apply to property used after the date of

14 enactment of this Act.

15 SEC. 10. GRANTS FOR PUBLICLY OWNED GENERATING

16 UNITS.

17 Any capital expenditure made after the date of enact18 ment of this Act to purchase, install, and bring into com19 mercial operation any new publicly owned generating unit

20 that—

21 (1) is in compliance with sections 4(a)(1) and

22 5(b) shall, for a 15-year period, be eligible for par23 tial reimbursement through annual grants made by

24 the Secretary of the Treasury, in consultation with

25 the Administrator, in an amount equal to the mone-
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1 tary value of the depreciation deduction that would

2 be realized by reason of section 168(c)(3)(E) of the

3 Internal Revenue Code of 1986 by a similarly-situ4 ated investor-owned generating unit over that pe5 riod; and

6 (2) is in compliance with sections 4(a)(2) and

7 5(c) shall, over a 12-year period, be eligible for par8 tial reimbursement through annual grants made by

9 the Secretary of the Treasury, in consultation with

10 the Administrator, in an amount equal to the mone11 tary value of the depreciation deduction that would

12 be realized by reason of section 168(c)(3)(D) of such

13 Code by a similarly-situated investor-owned gener14 ating unit over that period.

15 SEC. 11. RECOGNITION OF PERMANENT EMISSION REDUC16 TIONS IN FUTURE CLIMATE CHANGE IMPLE17 MENTATION PROGRAMS.

18 It is the sense of Congress that—

19 (1) permanent reductions in emissions of car20 bon dioxide and nitrogen oxides that are accom21 plished through the retirement of old generating

22 units and replacement by new generating units that

23 meet the combustion heat rate efficiency and emis24 sion standards specified in this Act, or through re25 placement of old generating units with nonpolluting
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1 renewable power generation technologies, should be

2 credited to the utility sector, and to the owner or op3 erator that retires or replaces the old generating

4 unit, in any climate change implementation program

5 enacted by Congress;

6 (2) the base year for calculating reductions

7 under a program described in paragraph (1) should

8 be the calendar year preceding the calendar year in

9 which this Act is enacted; and

10 (3) a reasonable portion of any monetary value

11 that may accrue from the crediting described in

12 paragraph (1) should be passed on to utility cus13 tomers.

14 SEC. 12. RENEWABLE AND CLEAN POWER GENERATION

15 TECHNOLOGIES.

16 (a) IN GENERAL.—Under the Renewable Energy and

17 Energy Efficiency Technology Act of 1989 (42 U.S.C.

18 12001 et seq.), the Secretary of Energy shall fund re19 search and development programs and commercial dem20 onstration projects and partnerships to demonstrate the

21 commercial viability and environmental benefits of electric

22 power generation from—

23 (1) biomass (excluding unseparated municipal

24 solid waste), geothermal, solar, and wind tech25 nologies; and
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1 (2) fuel cells.

2 (b) TYPES OF PROJECTS.—Demonstration projects

3 may include solar power tower plants, solar dishes and en4 gines, co-firing of biomass with coal, biomass modular sys5 tems, next-generation wind turbines and wind turbine

6 verification projects, geothermal energy conversion, and

7 fuel cells.

8 (c) AUTHORIZATION OF APPROPRIATIONS.—In addi9 tion to amounts made available under any other law, there

10 is authorized to be appropriated to carry out this section

11 $75,000,000 for each of fiscal years 2003 through 2012.

12 SEC. 13. CLEAN COAL, ADVANCED GAS TURBINE, AND COM13 BINED HEAT AND POWER DEMONSTRATION

14 PROGRAM.

15 (a) IN GENERAL.—Under subtitle B of title XXI of

16 the Energy Policy Act of 1992 (42 U.S.C. 13471 et seq.),

17 the Secretary of Energy shall establish a program to fund

18 projects and partnerships designed to demonstrate the ef19 ficiency and environmental benefits of electric power gen20 eration from—

21 (1) clean coal technologies, such as pressurized

22 fluidized bed combustion and an integrated gasifi23 cation combined cycle system;
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1 (2) advanced gas turbine technologies, such as

2 flexible midsized gas turbines and baseload utility

3 scale applications; and

4 (3) combined heat and power technologies.

5 (b) SELECTION CRITERIA.—

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

7 the date of enactment of this Act, the Secretary of

8 Energy shall promulgate criteria and procedures for

9 selection of demonstration projects and partnerships

10 to be funded under subsection (a).

11 (2) REQUIRED CRITERIA.—At a minimum, the

12 selection criteria shall include—

13 (A) the potential of a proposed demonstra14 tion project or partnership to reduce or avoid

15 emissions of pollutants covered by section 5 and

16 air pollutants covered by section 111 of the

17 Clean Air Act (42 U.S.C. 7411); and

18 (B) the potential commercial viability of

19 the proposed demonstration project or partner20 ship.

21 (c) AUTHORIZATION OF APPROPRIATIONS.—

22 (1) IN GENERAL.—In addition to amounts

23 made available under any other law, there is author24 ized to be appropriated to carry out this section
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1 $75,000,000 for each of fiscal years 2003 through

2 2012.

3 (2) DISTRIBUTION.—The Secretary shall make

4 reasonable efforts to ensure that, under the program

5 established under this section, the same amount of

6 funding is provided for demonstration projects and

7 partnerships under each of paragraphs (1), (2), and

8 (3) of subsection (a).

9 SEC. 14. EVALUATION OF IMPLEMENTATION OF THIS ACT

10 AND OTHER STATUTES.

11 (a) IN GENERAL.—Not later than 2 years after the

12 date of enactment of this Act, the Secretary of Energy,

13 in consultation with the Chairman of the Federal Energy

14 Regulatory Commission and the Administrator, shall sub15 mit to Congress a report on the implementation of this

16 Act.

17 (b) IDENTIFICATION OF CONFLICTING LAW.—The

18 report shall identify any provision of the Energy Policy

19 Act of 1992 (Public Law 102–486), the Energy Supply

20 and Environmental Coordination Act of 1974 (15 U.S.C.

21 791 et seq.), the Public Utility Regulatory Policies Act

22 of 1978 (16 U.S.C. 2601 et seq.), or the Powerplant and

23 Industrial Fuel Use Act of 1978 (42 U.S.C. 8301 et seq.),

24 or the amendments made by those Acts, that conflicts with

25 the intent or efficient implementation of this Act.
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1 (c) RECOMMENDATIONS.—The report shall include

2 recommendations from the Secretary of Energy, the

3 Chairman of the Federal Energy Regulatory Commission,

4 and the Administrator for legislative or administrative

5 measures to harmonize and streamline the statutes speci6 fied in subsection (b) and the regulations implementing

7 those statutes.

8 SEC. 15. ASSISTANCE FOR WORKERS ADVERSELY AF9 FECTED BY REDUCED CONSUMPTION OF

10 COAL.

11 In addition to amounts made available under any

12 other law, there is authorized to be appropriated

13 $75,000,000 for each of fiscal years 2003 through 2015

14 to provide assistance, under the economic dislocation and

15 worker adjustment assistance program of the Department

16 of Labor authorized by title III of the Job Training Part17 nership Act (29 U.S.C. 1651 et seq.), to coal industry

18 workers who are terminated from employment as a result

19 of reduced consumption of coal by the electric power gen20 eration industry.
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1 SEC. 16. COMMUNITY ECONOMIC DEVELOPMENT INCEN2 TIVES FOR COMMUNITIES ADVERSELY AF3 FECTED BY REDUCED CONSUMPTION OF

4 COAL.

5 In addition to amounts made available under any

6 other law, there is authorized to be appropriated

7 $75,000,000 for each of fiscal years 2003 through 2012

8 to provide assistance, under the economic adjustment pro9 gram of the Department of Commerce authorized by the

10 Public Works and Economic Development Act of 1965 (42

11 U.S.C. 3121 et seq.), to assist communities adversely af12 fected by reduced consumption of coal by the electric

13 power generation industry.

14 SEC. 17. CARBON SEQUESTRATION.

15 (a) CARBON SEQUESTRATION STRATEGY.—In addi16 tion to amounts made available under any other law, there

17 is authorized to be appropriated to the Environmental

18 Protection Agency and the Department of Energy for each

19 of fiscal years 2003 through 2005 a total of $15,000,000

20 to conduct research and development activities in basic

21 and applied science in support of development by Sep22 tember 30, 2005, of a carbon sequestration strategy that

23 is designed to offset all growth in carbon dioxide emissions

24 in the United States after 2010.

25 (b) METHODS FOR BIOLOGICALLY SEQUESTERING

26 CARBON DIOXIDE.—In addition to amounts made avail-
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1 able under any other law, there is authorized to be appro2 priated to the Environmental Protection Agency and the

3 Department of Agriculture for each of fiscal years 2003

4 through 2012 a total of $30,000,000 to carry out soil res5 toration, tree planting, wetland protection, and other

6 methods of biologically sequestering carbon dioxide.

7 (c) LIMITATION.—A project carried out using funds

8 made available under this section shall not be used to off9 set any emission reduction required under any other provi10 sion of this Act.

11 SEC. 18. ATMOSPHERIC MONITORING.

12 (a) OPERATIONAL SUPPORT.—In addition to

13 amounts made available under any other law, there are

14 authorized to be appropriated for each of fiscal years 2003

15 through 2012—

16 (1) for operational support of the National At17 mospheric Deposition Program National Trends

18 Network—

19 (A) $2,000,000 to the United States Geo20 logical Survey;

21 (B) $600,000 to the Environmental Pro22 tection Agency;

23 (C) $600,000 to the National Park Serv24 ice; and

25 (D) $400,000 to the Forest Service;
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1 (2) for operational support of the National At2 mospheric Deposition Program Mercury Deposition

3 Network—

4 (A) $400,000 to the Environmental Pro5 tection Agency;

6 (B) $400,000 to the United States Geo7 logical Survey;

8 (C) $100,000 to the National Oceanic and

9 Atmospheric Administration; and

10 (D) $100,000 to the National Park Serv11 ice;

12 (3) for the National Atmospheric Deposition

13 Program Atmospheric Integrated Research Moni14 toring Network $1,500,000 to the National Oceanic

15 and Atmospheric Administration;

16 (4) for the Clean Air Status and Trends Net17 work $5,000,000 to the Environmental Protection

18 Agency; and

19 (5) for the Temporally Integrated Monitoring of

20 Ecosystems and Long-Term Monitoring Program

21 $2,500,000 to the Environmental Protection Agency.

22 (b) MODERNIZATION.—In addition to amounts made

23 available under any other law, there are authorized to be

24 appropriated—
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1 (1) for equipment and site modernization of the

2 National Atmospheric Deposition Program National

3 Trends Network $6,000,000 to the Environmental

4 Protection Agency;

5 (2) for equipment and site modernization and

6 network expansion of the National Atmospheric

7 Deposition Program Mercury Deposition Network

8 $2,000,000 to the Environmental Protection Agency;

9 (3) for equipment and site modernization and

10 network expansion of the National Atmospheric

11 Deposition Program Atmospheric Integrated Re12 search Monitoring Network $1,000,000 to the Na13 tional Oceanic and Atmospheric Administration; and

14 (4) for equipment and site modernization and

15 network expansion of the Clean Air Status and

16 Trends Network $4,600,000 to the Environmental

17 Protection Agency.

18 (c) AVAILABILITY OF AMOUNTS.—Each of the

19 amounts appropriated under subsection (b) shall remain

20 available until expended.

Æ