sumers, higher quality services, and a more robust
national economy.
(2) The benefits of competition will not be
achieved if some competitors enjoy an advantage re-
sulting from externalization of environmental or
other costs, permitting them to charge prices for
electricity that do not reflect the full economic and
environmental cost of production.
(3) Emissions into the air which endanger pub-
lic health, and threaten the quality of the Nation’s
air, land, and water are classic externalities whose
cost is frequently not reflected in the price charged
for products such as electricity.
(4) Emission control requirements on electric
generating units are substantially different depend-
ing on their age and location, allowing older generat-
ing units to emit pollutants at excessive rates, in-
cluding emissions of nitrogen oxides approaching 10
times that of other generating units per unit of elec-
tricity generated.
(5) The policy of exempting older generating
units from emissions limitations applicable to new
units was based on the expectation that over time
older units would be retired, but that, contrary to
that expectation, such units continue to operate and
emit at excessively high rates.
(6) The disparity in regulatory treatment
among electric generating units provides a signifi-
cant competitive advantage for older generating
units and for those located in attainment areas that
will distort competition in a restructured electricity
industry, preventing the public from enjoying the
full economic benefits of competition.
(7) The disparity of regulatory treatment
among electric generating units is unfair to competi-
tors who achieve higher levels of environmental per-
formance in their operations.
(b) PURPOSES.—The purposes are—
(1) to ensure an economically efficient market
in electricity, in order to assure lower electricity
rates to consumers, higher quality services, and a
more robust national economy;
(2) to assure fair competition among partici-
pants in the free market in electric power that will
result from restructuring of the electric industry;
and
(3) to internalize the values of public health,
air, land, and water quality in the context of a com-
petitive market in electricity.
SEC. 2. ALLOWANCE PROGRAM FOR CERTAIN AIR POLLUT-
ANTS.
Part III of the Federal Power Act is amended by re-
designating sections 320 and 321 as sections 323 and 324
respectively and by inserting the following new sections
after section 319:
‘‘SEC. 320. GENERATION PERFORMANCE STANDARDS AND
TONNAGE CAPS.
‘‘(a) OXIDES OF NITROGEN.—
‘‘(1) GENERATION PERFORMANCE STANDARD.—
For each covered period, the Commission shall cal-
culate a generation performance standard for oxides
of nitrogen from covered electric generating units in
the applicable region. The standard shall be equal to
the statutory tonnage cap for the covered period di-
vided by the Commission’s estimate (under section
322(a)) of total electric generation from such units
in the applicable region, as set forth in paragraph
(2). The Commission shall publish such standard
(expressed in pounds per megawatt hour) at least 30
days prior to the beginning of the covered period
concerned.
‘‘(2) STATUTORY
TONNAGE
CAP.—The statu-
tory tonnage cap (expressed in millions of tons) for
emissions of oxides of nitrogen from covered electric
generating units in the applicable region for each
covered period shall be as follows:
Covered Periods
Applicable Region
Statutory tonnage
cap (million tons)
May 1–September 30, 1999 ........
OTAG Region
1.5
May 1–September 30, 2000 ........
OTAG Region
1.3
May 1–September 30, 2001 ........
OTAG Region
1.0
May 1–Sept 30 after 2001 and
before 2005 .............................
OTAG Region
0.78
Jan. 1–December 31, 2005 and
each year thereafter ................
Continental US
2.0
‘‘(3) OZONE
EPISODES.—During each period
coinciding with exceedances of the National Ambient
Air Quality Standard for ozone, promulgated by the
Administrator of the Environmental Protection
Agency under the Clean Air Act (and during the 8
hours preceding such exceedances), each covered
unit with an actual emission rate greater than the
generation performance standard shall be required
to adjust its reported actual emissions under section
321(b) by a factor of up to 3, depending on the
unit’s distance from the exceedance. Units affected
by this subsection may meet their obligations under
section 321 either by emissions reductions at the af-
fected unit, or by surrendering allowances equal to
the difference between actual emissions and the
emission limitation provided in this subsection.
‘‘(4) DEFAULT.—If the Commission fails to
publish a generation performance standard under
paragraph (1) for any covered period at least 30
days prior to the beginning of the covered period, for
that covered period the generation performance
standard for each covered electric generating unit in
the applicable region shall be 0.9 times the general
performance standard for the previous covered pe-
riod. If no generation performance standard has
been published for the previous covered period, the
generation performance standard for the covered pe-
riod shall be 1.15 pounds of oxides of nitrogen per
megawatt hour.
‘‘(b) FINE PARTICULATE MATTER.—
‘‘(1) GENERATION PERFORMANCE STANDARD.—
In order to reduce concentrations of sulfate fine par-
ticulate matter, for each calendar year in a covered
period, the Commission shall calculate a generation
performance standard for sulfur oxides from covered
electric generating units. The standard shall be
equal to the statutory tonnage cap for the covered
period, as set forth in paragraph (2) divided by the
Commission’s estimate (under section 322(a)) of
total electric generation from such units in the appli-
cable region. The Commission shall publish such
standard (expressed in pounds per megawatt hour)
at least 30 days prior to the beginning of the cov-
ered period concerned.
‘‘(2) STATUTORY
TONNAGE
CAP.—The statu-
tory tonnage cap (expressed in millions of tons) for
fine particulate matter as measured by emissions of
sulfur oxides from covered electric generating units
in the continental United States for a covered period
shall be as follows:
Covered Periods
Statutory tonnage
cap (million tons)
Jan. 1, 2000–Dec. 31, 2004 .........................................
4.45
Jan. 1, 2005 and thereafter .........................................
4.0
‘‘(3) DEFAULT.—If the Commission fails to
publish a generation performance standard under
paragraph (1) for any covered period at least 30
days prior to the beginning of the covered period,
the generation performance standard for each cov-
ered unit for that period shall be 0.9 times the appli-
cable General Performance Standard for the pre-
vious applicable period. If no Generation Perform-
ance Standard has been published for the previous
covered period, the generation performance standard
for the covered period shall be 1.75 pounds of sulfur
oxides per megawatt hour.
‘‘(c) OTHER POLLUTANTS.—
‘‘(1) GENERATION PERFORMANCE STANDARD.—
The Commission is authorized to establish by rule a
generation performance standard for any other air
pollutant released in significant quantities by electric
generating units as needed to limit emissions that
the Administrator of the Environmental Protection
Agency determines can reasonably be anticipated to
present significant risks to human health or the en-
vironment. The standard shall be equal to the ton-
nage cap established pursuant to paragraph (2) di-
vided by the Commission’s estimate (under section
322(a)) of total electric generation from such units
in the continental United States. The Commission
shall publish such standard (expressed in pounds per
megawatt hour) at least 30 days prior to the begin-
ning of the covered period concerned.
‘‘(2) TONNAGE CAP.—The Commission shall, in
consultation with the Administrator, promulgate by
rule a national limit on total annual emissions of
any such other pollutant from covered electric gener-
ating units, expressed in tons. The national limit on
annual emissions of such other pollutant shall be set
to protect human health and the environment.
have jurisdiction to compel (consistent with paragraph (2)
of this subsection) agency action unreasonably delayed. In
any such action for unreasonable delay, notice to the Com-
mission shall be provided 180 days before commencing
such action.
‘‘(3) No action may be commenced—
‘‘(A) under paragraph (1)—
‘‘(i) prior to 60 days after the plain-
tiff has given notice of the violation (I) to
the Commission, (II) to the State in which
the violation occurs, and (III) to any al-
leged violator of the standard, limitation,
or order, or
‘‘(ii) if the Commission or State has
commenced and is diligently prosecuting a
civil action in a court of the United States
or a State to require compliance with the
standard, limitation, or order, but in any
such action in a court of the United States
any person may intervene as a matter of
right.
‘‘(B) under paragraph (2) prior to 60 days
after the plaintiff has given notice of such ac-
tion to the Commission.
‘‘(4) The court in issuing any final order in any
action brought pursuant to paragraph (1), may
award costs of litigation (including reasonable attor-
ney and expert witness fees) to any party, whenever
the court determines such award is appropriate.’’.
SEC. 3. DEFINITIONS.
Section 3 of the Federal Power Act is amended by
adding the following after paragraph (24):
‘‘(25) For oxides of nitrogen, the terms ‘appli-
cable region’ and ‘covered period’ refer to the appli-
cable regions and each of the covered periods speci-
fied in the chart in section 320(a)(2). For fine par-
ticulate matter and any other pollutant for which a
tonnage cap has been established pursuant to section
320(c), the term ‘applicable region’ means the con-
tinental United States. For fine particulate matter,
the term ‘covered period’ means each of the covered
periods specified in the chart in section 320(b)(2).
For any other pollutant for which a tonnage cap has
been established pursuant to section 320(c), the
term ‘covered period’ means each calendar year pe-
riod beginning with the second calendar year follow-
ing the establishment of a tonnage cap for such pol-
lutant.
‘‘(26) The term ‘covered electric generating
unit’ means an electric generating unit in the appli-
cable region with a nameplate capacity of 15 MWe
or greater.
‘‘(27) The term ‘electric generating unit’ means
a boiler and associated turbine or turbines, or other
device for generating electricity using fossil fuels; or
a device for generating electricity from renewable
sources of energy other than hydroelectric power.
‘‘(28) The term ‘electric energy generation’
means the total electric energy buss bar output of an
electric generating unit and cogenerated thermal en-
ergy, including sales of steam, as converted to com-
mon units by the Commission by rule.
‘‘(29) The term ‘OTAG region’ means the 37
States comprising the Ozone Transport Assessment
Group.’’.
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