Senators Ready for Carbon Debate
With only about 13 days remaining before the U.S. Senate’s month-long summer recess is scheduled to begin, concerns are mounting about whether it may be too late to delve into an “energy-only bill,” let alone a “utility-only” carbon-curbing bill.
The New York Times quoted Sen. Tom Carper (D-Del.) as saying that Majority Leader Harry Reid (D-Nev.) on Tuesday told fellow Democratic senators that he is considering an energy bill that doesn’t address utility emissions. Only last week, Reid said he would unveil a four-part utility-only climate bill. The package will likely address the oil spill response, energy efficiency, clean energy production, and efforts to slash greenhouse gases from power plants. The bill was expected as soon as this week, with debate starting next week.
The Times reported this week that a new target for debate has not been set, though Democrats are expected to convene a meeting on Thursday to work out a path to move forward with energy legislation.
Still, Sens. John Kerry (D-Mass.) and Joseph Lieberman (I-Conn.) as well as Sen. Jeff Bingaman (D-N.M.) are reportedly drafting new energy-climate bills that would cap emissions from utilities and potentially some industrial sources.
Modifying the APA
Sens. Kerry and Lieberman are drafting a new version of their energy-climate bill, the American Power Act (APA), which would cap emissions from utilities and a limited group of industrial sources. According to an early draft of the modified bill, utilities would be required to reduce their emissions by 4.75% by 2013; 17% by 2020; 42% by 2030; and 83% by 2050, with reductions measured from 2005 emission levels.
The bill supports commercial deployment of carbon capture and storage (CCS) technologies, and it prevents the Environmental Protection Agency (EPA) from regulating greenhouse gases (GHG) as pollutants. It would also block the EPA from setting New Source Performance Standards for utilities covered under the cap based on their GHG emissions.
But Sen. Kerry remarked on Tuesday after a meeting with power utilities that in the “irony of ironies,” the power industry prefers a draft plan of the APA that he and Lieberman released in May. “They believe the allocations and the structure we created [in the original plan] really meets their needs,” Kerry said. “Whether we can replicate that now in terms of what we’re doing is what we have to go back and try to find out.”
Within the industry, reactions to the modified bill are mixed. Glenn English, chief executive of the National Rural Electric Cooperative Association, said that the legislation could unfairly raise power bills for regions of the country that use coal. Several publicly traded power companies such as Duke Energy are backing the idea of a utility-only bill, saying that such a plan would give them certainty to invest billions of dollars.
Bingaman’s Draft
Sen. Bingaman’s draft bill (a document created in April 2010) proposes to cut utility emissions 17% by 2020 from 2005 levels, and by more than 40% by 2030. Utilities would receive a free allocation of half of the emission allowances they would need to comply with the cap in 2012. The free allocation would decline over time to 35% in 2015, 20% in 2018, 10% in 2020, and 0% in 2022 and thereafter.
The Bingaman draft would also preempt regulation of industrial sources under the Clean Air Act until 2018 and preempt coverage of GHG emissions from regulated entities by state cap-and-trade programs through 2017.
Funding CCS Technologies
Meanwhile last week, Sens. Jay Rockefeller (D-W.V.) and George Voinovich (R-Ohio) introduced new legislation to support CCS projects over 100 MW. The “Carbon Capture and Sequestration Deployment Act of 2010” (S. 3589) would create a 10-year, $20 billion program to accelerate the commercial availability of CCS technologies by funding projects by utilities, universities, research laboratories and agencies, and nonprofits. It would also increase the DOE’s loan guarantee program by $20 billion to support construction or retrofits of commercial scale facilities using CCS technology and construction of CO2 pipelines.
Among other key features, the bill also seeks to provide a number of tax credits to support CCS, amend the Clean Air Act to require retrofit capture and storage of at least 50% of the CO2 emissions at new plants permitted after the bill’s enactment but before 2020 and exempt those sources from New Source Performance Standards for CO2.
Nuclear Spending Bill
House lawmakers made headway on a spending bill Thursday that includes $25 billion in loan guarantees for new nuclear reactors. In addition to those funds approved by a House Appropriations subcommittee, the House included $9 billion for nuclear loan guarantees in a supplemental spending bill that it passed July 1. The Senate must approve both measures.
Sources: POWERnews, The New York Times, The Hill