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 devel-
opment of renewable energy resources, and for other
purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE
This Act may be cited as the ‘‘Clean Power Act’’.
SEC. 2. NITROGEN OXIDE AND CARBON DIOXIDE ALLOW-
ANCE TRADING PROGRAM.
(a) DEFINITIONS.—In this section:
(1) ADMINISTRATOR.—The term ‘‘Adminis-
trator’’ means the Administrator of the Environ-
mental Protection Agency.
(2) AFFECTED FACILITY.—The term ‘‘affected
facility’’ means—
(A) a combustion unit in the 48 contiguous
States and the District of Columbia that serves
at least one electric generator with a nameplate
capacity of 25 megawatts or greater to generate
electricity and that combusts any fuel, including
biomass, or
(B) a facility in the 48 contiguous States
and the District of Columbia generating 5 kilo-
watts of electricity or greater using wind, geo-
thermal, solar thermal, or photovoltaic energy.
(3) NOX ALLOWANCE.—The term ‘‘NOX allow-
ance’’ means a limited authorization under sub-
section (b)(3) to emit quantities of nitrogen oxide.
(4) CO2 ALLOWANCE.—The term ‘‘CO2 Allow-
ance’’ means a limited authorization under sub-
section (b)(4) to emit quantities of carbon dioxide.
(5) PROGRAM.—The term ‘‘Program’’ means
the Nitrogen Oxide or a Carbon Dioxide Allowance
Program established under subsection (b).
(6) TOTAL
OUTPUT
PRODUCTION.—The term
‘‘total output production’’ means the sum of elec-
tricity and steam generated by all affected facilities
in the 48 contiguous States and the District of Co-
lumbia.
(b) IN GENERAL.—(1) Not later than 1 year after
the date of enactment of this Act, the Administrator shall
promulgate a final regulation to address interstate trans-
port of nitrogen oxide and carbon dioxide pollution. Under
such program, the Administrator shall establish a program
to issue, record the sale or exchange of, and track NOX
and CO2 allowances and to monitor and track emissions
of nitrogen oxide.
(2) After January 1, 2005, the total number of NOX
allowances distributed each year under such Program shall
not be greater than 2,750,000 and the total number of
CO2 allowances distributed each year shall not be greater
than 1,914,000,000.
(3) Each NOX allowance issued under such Program
shall authorize an affected facility to emit—
(A) 1⁄2 ton of nitrogen oxide during the ozone
period of May 1 through September 30 of any year,
or
(B) 1 ton of nitrogen oxide for any period of
any year not covered in subparagraph (A).
(4) Each CO2 allowance issued under such program
shall authorize an affected facility to emit 1 ton of carbon
dioxide.
(5) The regulations under this section shall require
affected facilities to report electric generation and other
data the Administrator deems necessary to determine allo-
cations and to ensure compliance with the Program. The
owner or operator of an affected facility shall be required
to install and operate continuous emissions monitoring
systems at the facility or an alternative monitoring system
approved by the Administrator.
(6) The regulation under this section shall establish
a tracking system for NOX and CO2 allowances. A NOX
or CO2 allowance allocation or transfer shall, on recorda-
tion by the Administrator, be considered to be a part of
any operating permit requirements of each affected facility
involved in the allocation or transfer, without a require-
ment for any further permit review or revision.
(7) The use of any NOX or CO2 allowance before the
calendar year for which the NOX or CO2 allowance is allo-
cated shall be prohibited.
(c) ALLOCATIONS.—The Administrator shall promul-
gate regulations that shall—
(1) place 5 percent of the total quantity of NOX
allowances and 5 percent of the total quantity of
CO2 allowances available each year into a new
source reserve,
(2) distribute to each affected facility the re-
maining NOX and CO2 allowances for each calendar
year,
(3) distribute the allocations to each affected
facility in proportion to each affected facility’s share
of total output production,
(4) distribute 2 years of allowances to each af-
fected facility every 2 years, at least 6 months prior
to the beginning of the relevant 2-year period,
(5) distribute to each new affected facility from
the new source reserve prior to the relevant control
period, and
(6) redistribute any allowances remaining in the
new source reserve after the relevant control period
to—
(A) affected sources in proportion to each
facility’s share of total output production, or
(B) the following year’s new source re-
serve, if the Administrator determines that the
reserve will be insufficient to meet expected
need.
(d) INSUFFICIENT ALLOWANCES.—If the Adminis-
trator determines that the quantity of allowances in the
new source reserve in subsection (c) is insufficient to ac-
commodate the operations of new facilities, the Adminis-
trator shall promulgate a regulation to set a new percent-
age of the total annual quantity of NOX or CO2 allowances
to place into the new source reserve, no later than 6
months prior to the beginning of the next 2-year allocation
period.
(e) ENFORCEMENT.—(1) An affected facility may not
emit nitrogen oxides and carbon dioxide in excess of the
amount permitted by the quantity of NOX or CO2 allow-
ances held by the designated representative of the affected
facility in the NOX allowance tracking system starting in
the calendar year 2005.
(2) If an affected facility emits nitrogen oxides in ex-
cess of the amount permitted, the Administrator shall cal-
culate the deficit of additional NOX allowances the af-
fected facility would require to authorize the emitted quan-
tity of nitrogen oxides. The affected facility shall—
(A) pay $6,000 for each additional NOX allow-
ance calculated, and
(B) offset in the following calendar year a
quantity of NOX allowances equal to the number of
NOX allowances calculated.
(3) If an affected facility emits carbon dioxide in ex-
cess of the amount permitted, the Administrator shall cal-
culate the deficit of additional CO2 allowances the affected
facility would require to authorize the emitted quantity of
carbon dioxide. The affected facility shall—
(A) pay $100 for each additional CO2 allowance
calculated, and
(B) offset in the following year a quantity of
CO2 allowances equal to the number of CO2 allow-
ances calculated.
(4) For every year after 2005, the Administrator
shall annually adjust the amount of the penalty in para-
graphs (2)(A) and (3)(A) to reflect changes in the Con-
sumer Price Index.
(f) REPEAL OF OTHER NOX LIMITATIONS.—Section
407 of the Clean Air Act (42 U.S.C. 7651f) is repealed
as of the date the provisions of this section related to NOX
are implemented.
(g) CONSTRUCTION.—Neither a NOX allowance nor
a CO2 allowance shall be considered to be a property right.
Notwithstanding any other provision of law, the Adminis-
trator may terminate or limit a NOX or CO2 allowance.
(h) SAVINGS PROVISIONS.—Nothing in this section
affects the application of, or compliance with, the Clean
Air Act for an affected facility, including the provisions
related to applicable national ambient air quality stand-
ards and State implementation plans or requires a change
in, affects, or limits any State law regulating electric util-
ity rates or charges, including prudency review under
State law, affects the application of the Federal Power Act
(16 U.S.C. 791a et seq.) or the authority of the Commis-
sion under that Act, or interferes with or impairs any pro-
gram for competitive bidding for power supply in any
State.
SEC. 3. SULFUR DIOXIDE ALLOWANCE PROGRAM REVI-
SIONS.
Section 402 of the Clean Air Act (42 U.S.C. 7651)
is amended by striking paragraph (3) and inserting the
following:
‘‘(3) 
ALLOWANCE.—The 
term 
‘allowance’
means an authorization, allocated to an affected unit
by the Administrator under this title, to emit, during
or after a specified calendar year—
‘‘(A) in the case of allowances allocated for
calendars years 1997 through 2004, one ton of
sulfur dioxide, and
‘‘(B) in the case of allowances allocated for
calendar year 2005 and each calendar year
thereafter, 1⁄4 ton of sulfur dioxide.’’.
SEC. 4. MERCURY EMISSION CONTROL.
(a) EMISSION CONTROLS.—The Administrator shall
promulgate regulations based on the protection of human
health and the environment controlling electric utility
emissions of mercury in accordance with this section.
(b) 
NATIONWIDE
STANDARD.—The 
nationwide
standard under this section for calendar year 2005 and
each year thereafter for electric utility emissions of mer-
cury shall be not greater than 5 tons.
(c) FACTORS.—The regulations under this section
shall take into account technological feasibility, cost, and
the projected reduction in levels of mercury emissions that
will result from implementation of this Act. Such regula-
tions shall prevent localized adverse effects on public
health and the environment and shall prohibit emission
trading in mercury.
SEC. 5. RENEWABLE PORTFOLIO STANDARD.
(a) STANDARD.—Title II of the Public Utility Regu-
latory Policies Act of 1978 (16 U.S.C. 2601 and following)
is amended by adding after section 214 the following new
section:
‘‘SEC. 215. FEDERAL RENEWABLE PORTFOLIO STANDARD.
‘‘(a) EFFECTIVE DATE.—The Administrator of the
Energy Information Administration in the Department of
Energy shall publish a notice on or before January 1,
2005, specifying the percentage of total electric energy
generation in the United States that the Administrator es-
timates to be supplied by renewable energy during the cal-
‘‘(c) SUBMISSION OF CREDITS.—A retail electric sup-
plier may satisfy the requirements of subsection (a)
through the submission of—
‘‘(1) Renewable Energy Credits issued under
subsection (d) for renewable energy generated by the
retail electric supplier in the calendar year for which
credits are being submitted or any previous calendar
year,
‘‘(2) Renewable Energy Credits issued under
subsection (d) to any renewable energy generator for
renewable energy generated in the calendar year for
which credits are being submitted or a previous cal-
endar year and acquired by the retail electric sup-
plier, or
‘‘(3) any combination of credits under para-
graphs (1) and (2).
‘‘(d) ISSUANCE
OF CREDITS.—(1) The Secretary
shall establish a program to issue, monitor the sale or ex-
change of, and track Renewable Energy Credits.
‘‘(2) Under the program, an entity that generates
electric energy through the use of a renewable energy re-
source may apply to the Secretary for the issuance of Re-
newable Energy Credits. The application shall indicate—
‘‘(A) the type of renewable energy resource used
to produce the electricity,
‘‘(B) the State in which the electric energy was
produced, and
‘‘(C) any other information the Secretary deter-
mines appropriate.
‘‘(3)(A) Except as provided in subparagraph (B), the
Secretary shall issue to an entity 1 Renewable Energy
Credit for each kilowatt-hour of electric energy the entity
generates through the use of a renewable energy resource
in any State in 2005 and any succeeding year.
‘‘(B) To be eligible for a Renewable Energy Credit,
the unit of electricity generated through the use of a re-
newable energy resource may be sold or may be used by
the generator. If both a renewable energy resource and
a nonrenewable energy resource are used to generate the
electric energy, the Secretary shall issue credits based on
the proportion of the renewable energy resource used. The
Secretary shall identify Renewable Energy Credits by type
of generation and by the State in which the generating
facility is located.
‘‘(4) In order to receive a Renewable Energy Credit,
the recipient of a Renewable Energy Credit shall pay a
fee, calculated by the Secretary, in an amount that is
equal to the administrative costs of issuing, recording,
monitoring the sale or exchange of, and tracking the cred-
it, or does not exceed 5 percent of the dollar value of the
credit, whichever is lower. The Secretary shall retain the
fee and use it to pay these administrative costs.
‘‘(5) When a generator sells electric energy generated
through the use of a renewable energy resource to a retail
electric supplier under a contract subject to section 210
of this Act, the retail electric supplier is treated as the
generator of the electric energy for the purposes of this
section for the duration of the contract.
‘‘(6) The Secretary shall disqualify an otherwise eligi-
ble renewable energy generator from receiving a Renew-
able Energy Credit if the generator has elected to partici-
pate in net metering under section 216.
‘‘(e) SALE
OR EXCHANGE.—A Renewable Energy
Credit may be sold or exchanged by the entity to which
it was issued or by any other entity that acquires the cred-
it. A Renewable Energy Credit for any year that is not
used to satisfy the minimum renewable generation require-
ment of subsection (a) for that year may be carried for-
ward for use in another year.
‘‘(f) RENEWABLE ENERGY CREDIT COST CAP.—Be-
ginning on the effective date of this section, the Secretary
shall offer Renewable Energy Credits for sale. The Sec-
retary shall charge 1.5 cents for each Renewable Energy
Credit sold during calendar year 2005, and on January
1 of each following year, the Secretary shall adjust for
inflation, based on the Consumer Price Index, the price
charged per credit for that calendar year.
‘‘(g) RENEWABLE ENERGY
AND ENERGY EFFI-
CIENCY FUND.—The Secretary shall deposit in a separate
account the amount received from a sale under subsection
(f). Amounts in the separate account shall be available,
without further appropriation, to the Secretary to be used
for purposes of providing assistance for research and de-
velopment of cleaner burning fuels, renewable energy, and
energy efficiency.
‘‘(h) ENFORCEMENT.—The Secretary may bring an
action in the appropriate United States district court to
impose a civil penalty on a retail electric supplier that does
not comply with subsection (b). A retail electric supplier
that does not submit the required number of Renewable
Energy Credits under subsection (b) is subject to a civil
penalty of not more than 3 times the value of the Renew-
able Energy Credits not submitted. For purposes of this
subsection, the value of a Renewable Energy Credit is the
price of a credit determined under subsection (f) for the
year the credits were not submitted.
‘‘(i) INFORMATION
COLLECTION.—The Secretary
may collect the information necessary to verify and
audit—
‘‘(1) the annual electric energy generation and
renewable energy generation of any entity applying
for Renewable Energy Credits under this section,
‘‘(2) the validity of Renewable Energy Credits
submitted by a retail electric supplier to the Sec-
retary, and
‘‘(3) the quantity of electricity sales of all retail
electric suppliers.
‘‘(j) SUNSET.—This section expires December 31,
2015.’’.
(b) DEFINITIONS.—Section 3 of the Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2602) is
amended by adding after paragraph (24) the following
new paragraph:
‘‘(25) The term ‘retail electric supplier’ means
a person, State agency, or Federal agency that sells
electric energy to an electric consumer.’’.
(c) TABLE OF CONTENTS.—The table of contents for
title II of the Public Utility Regulatory Policies Act of
1978 (16 U.S.C. 2601 and following) is amended by add-
ing the following at the end thereof:
‘‘Sec. 215. Federal renewable portfolio standard.’’.
SEC. 6. NET METERING.
(a) AMENDMENT OF PURPA.—The Public Utility
Regulatory Policies Act of 1978 (16 U.S.C. 2601 and fol-
lowing) is amended by adding the following new section
after section 215, as added by section 5 of this Act:
‘‘SEC. 216. NET METERING FOR RENEWABLE ENERGY.
‘‘(a) DEFINITIONS.—For purposes of this section—
‘‘(1) The term ‘eligible on-site generating facil-
ity’ means a facility on the site of an electric con-
sumer with a peak generating capacity of 100 kilo-
watts or less that is fueled solely by a renewable en-
ergy resource.
‘‘(2) The term ‘renewable energy resource’
means solar energy, wind, geothermal, or biomass.
‘‘(3) The term ‘net metering service’ means
service to an electric consumer under which elec-
tricity generated by that consumer from an eligible
on-site generating facility and delivered to the dis-
tribution system through the same meter through
which purchased electricity is received may be used
to offset electricity provided by the retail electric
supplier to the electric consumer during the applica-
ble billing period so that an electric consumer is
billed only for the net electricity consumer during
the billing period, but in no event shall the net be
less than zero during the applicable billing period.
‘‘(b) REQUIREMENT TO PROVIDE NET METERING
SERVICE.—Each retail electric supplier shall make avail-
able upon request net metering service to any retail elec-
tric consumer that the supplier currently serves or solicits
for service.
‘‘(c) STATE AUTHORITY.—This section does not pre-
clude a State from imposing additional requirements con-
sistent with the requirements in this section, including the
imposition of a cap limiting the amount of net metering
available in the State. Nothing in this Act or any other
Federal law preempts or otherwise affects authority under
State law to require a retail electric supplier to make avail-
able net metering service to a retail electric consumer
which the supplier serves or offers to serve.’’.
(c) TABLE OF CONTENTS.—The table of contents for
title II of the Public Utility Regulatory Policies Act of
1978 (16 U.S.C. 2601 and following) is amended by add-
ing the following at the end thereof:
‘‘Sec. 216. Net metering for renewable energy.’’.
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