Federal Legislative
Update
ABA-ACORE Teleconference Series:
Wind Energy Projects in a Stimulated
Economy
May 19, 2009
Robert F. Riley
Williams Mullen
Washington, D.C.
[email protected]
202.293.8121
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The “American Clean Energy and
Security Act of 2009” H.R. 2454
(the ACES bill)
•Last Friday (May 15), House Energy & Commerce
Committee Chairman Waxman and Subcommittee Chairman
Markey introduced the “American Clean Energy and Security
Act”.
•The 950 + page Bill is an updated and revised version of the
discussion draft circulated on March 31, 2009.
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The ACES Bill (cont.)
• “It’s a legislative Susan Boyle. Everyone
underestimated it until it started to sing”
– Congressman Ed Markey (D. Mass)
Chair of the Subcommittee on Energy
and the Environment.
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The ACES Bill (cont.)
• The Committee began the process for mark-up (i.e.,
amendment) of the ACES legislation on Monday, May
18 and will continue throughout the week.
• The mark-up process has already seen a flurry of
activity; however, the Bill is expected to be reported
out of the Committee and begin its move through the
House by the end of this week.
• At least 9 other House Committees have asserted
jurisdiction over any Climate Change Legislation,
meaning it will be a long Summer.
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The ACES Bill (cont.)
• ACES Bill includes the following:
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National Renewable Electricity Standard
Carbon Capture and Sequestration
Smart Grid and Transmission Planning
Building Energy Efficiency Programs
Cap and Trade
Carbon Market Governance and Oversight
Emission Performance Standard
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The ACES bill (cont.)
Renewable Electricity Standard
•
Establishes a national renewable energy standard
• Requires retail electric suppliers to meet a certain percentage of load
with electricity generated from renewable resources and electricity
savings.
• Combined renewable electricity and electricity savings requirement
begins at 6% in 2012 and rises to 20% in 2020.
• Up to ¼ of the 20% requirement may be met with electricity savings
achieved through energy efficiency improvements.
•
Retail electric suppliers required to submit Federal renewable electricity
credits and electricity savings each year to FERC.
• One renewable electricity credit given for each MWh produced from
a renewable resource.
• Distributed generation projects (i.e., small wind, rooftop solar and
CHP) are eligible for 3 credits for each MWh produced.
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The ACES bill (cont.)
Carbon Capture and Sequestration
• Establishes incentive program to distribute allowances to qualifying
facilities to support commercial deployment of carbon capture and
sequestration technologies in both electric power generation and
industrial applications.
Transmission Planning
• Establishes federal policy on electric grid planning that recognizes
need for new transmission capacity to deploy renewable energy as
well as potential for more efficient operation of the current grid
through new technology, demand-side management, and storage
capacity.
• Charges FERC with supporting, coordinating, and integrating
regional planning efforts.
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The ACES bill (cont.)
Cap and Trade (the “Safe Climate Act”)
• Establishes a national cap-and-trade program to reduce
greenhouse gases beginning in 2012, based on 2005 emission
levels. Initial allocation of allowances would represent
approximately 4.77 billion metric tons of carbon dioxide
equivalent.
• Descending cap (for now) remains as follows:
– by 2012, a reduction of 3 percent;
– by 2020, a reduction of 20 percent;
– by 2030, a reduction of 42 percent; and
– by 2050, a reduction of 83 percent.
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The ACES bill (cont.)
Covered Entities
• Electricity generators, liquid fuel refiners and
importers, and fluorinated gas manufacturers are
covered starting with emissions in 2012.
• Industrial sources that emit more than 25,000 tons of
carbon dioxide equivalent per year are covered starting
with emissions in 2014.
• Local distribution companies that deliver natural gas
are covered starting with emissions in 2016.
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The ACES bill (cont.)
Allocation allowances
(Phased-out over a five-year period from 2026 through 2030):
• The ACES bill provided detailed allowances allocation
provisions (for example):
– 30% of allowances provided to local electric distribution
companies.
– 5% of allowances provided for merchant coal generators
and certain generators with long-term power purchase
agreements.
– 9% of allowances provided to local natural gas distribution
companies.
• FERC, EPA, CFTC, SEC and others being considered for carbon
markets oversight roles.
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American Energy Innovation Act
• Rep. Rob Bishop (R-UT) introduced an energy bill
(HR 2300) that does not include a cap-and-trade
regime but establishes CO2 emission standards for
coal-fired generating facilities.
• Republicans are preparing more than 400 amendments
to the “American Clean Energy and Security Act of
2009”
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Senate Energy and Natural Resources
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Senate Leader Harry Reid (D-NY) has indicated preference to take up
comprehensive energy and climate bill after the completion of all House
deliberation.
Senate Energy and Natural Resources Chairman Jeff Bingaman (D-N.M.)
recently released a scaled-back Renewable Electricity Standard.
The new bill requires utilities to provide 15 % of power from renewable
sources by 2021. (Compare: ACES bill includes 20% in 2020)
– Approximately one fourth of the requirement may be achieved
through energy efficiency measures.
– Limits renewables to wind, solar, ocean, geothermal, biomass,
landfill gas and hydropower created after passage of the bill.
• Nuclear power and clean coal technologies are not included.
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Department of Energy Carbon Capture and
Sequestration Program Amendments Act of
2009
• Senator Bingaman, introduced S. 1013 to authorize the Secretary
of Energy to carry out a program to demonstrate the commercial
application of integrated systems for long-term geological storage
of Carbon Dioxide.
• The federal government would assume long-term liability for CO2
injected into a certain underground geological formations.
• The land into which injections would occur would be managed by
Department of Interior and the Agriculture Department.
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Protection of Critical Infrastructure
against Cyber-Threats
• Two separate bills were recently introduced in the United
States House of Representatives designed to protect
critical electric infrastructure against cyber-threats.
• Bulk Power System Protection Act of 2009
• Critical Electric Infrastructure Protection Act
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Bulk Power System Protection Act of 2009
•
•
H.R. 2165 was introduced on April 29 by Congressmen
John Barrow (D-GA), Edward J. Markey (D-MA), and
Henry Waxman (D-CA).
FERC required to establish measures to protect the
reliability of the bulk power system against cyber security
threats resulting from:
(A) vulnerabilities identified in the June 21, 2007,
communication to certain Electricity Sector Owners
and Operators from the North American Electric
Reliability Corporation; and
(B) related remote access issues.
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Critical Electric Infrastructure Protection Act
• H.R. 2195 was introduced on April 30 by Chairman Bennie G.
Thompson (D-MS), U.S. House Committee on Homeland Security.
• Provides FERC with authority to issue emergency rules or orders if a
cyber threat is imminent.
• Such rules or orders may be issued after a finding by the
Secretary of Homeland Security (in consultation with other
national security agencies) that a national security threat exists.
• Requires FERC to assess and establish interim standards necessary to
protect against known cyber threats to critical electric infrastructure.
• Requires DHS to conduct investigation to determine if security of
Federally-owned critical electric infrastructure has been
compromised.
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21st Century Energy Technology
Deployment Act (reintroduced)
• Senate bill S. 949, is sponsored by Senators Jeff Bingaman (DN.M.) and Lisa Murkowski (R-Alaska) and cosponsors Senators
Debbie Stabenow (D-Mich.), Richard Lugar (D-Ind.), Byron
Dorgan (D-N.D.), George Voinovich (R-Ohio) and Jeanne
Shaheen (D-N.H.).
• Companion HR 2212 was introduced by U.S. Rep. Jay Inslee (DWash.) and Rep. Steve Israel (D-N.Y.) and is co-sponsored by
Rep. John Dingell (D-Mich.), Deborah Halverson (D-Ill.), Ron
Klein (D-Fla.), Ellen Tauscher (D-Calif.), and Anthony Weiner (DN.Y.).
• Legislation designed to streamline the DOE loan guarantee
program and provide additional options for commercial
deployment of renewable energy technologies.
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21st Century Energy Technology
Deployment Act (cont.)
Clean Energy Deployment Administration
• Creates the “Clean Energy Deployment Administration” (CEDA)
to finance development and deployment of renewable energy
technologies.
• CEDA’s goal would be to encourage deployment of technologies
perceived as too risky by commercial lenders.
• CEDA may issue direct loans, letters of credit, loan guarantees,
insurance products, or other credit enhancements or debt
instruments (including participation as a co-lender or a member of
a syndication).
• Yesterday (May 19, 2009), the House Energy and Commerce
Committee voted (51-6) to include the clean energy bank
amendment language in the ACES Bill.
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THANK YOU
Robert F. Riley
Williams Mullen
A Professional Corporation
1666 K Street N.W. Suite 1200
Washington, D.C. 20006
Tel: 202.293.8121
E-Mail: [email protected]
Web: http://www.williamsmullen.com
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