For other versions of this document, see http://wikileaks.org/wiki/CRS-RL33006 ------------------------------------------------------------------------------ Order Code RL33006 CRS Report for Congress Received through the CRS Web Omnibus Energy Legislation, 109th Congress: Side-by-Side Assessment of House and Senate Versions of H.R. 6 July 25, 2005 Mark Holt and Carol Glover Coordinators Resources, Science, and Industry Division Congressional Research Service ~ The Library of Congress Omnibus Energy Legislation, 109th Congress: Side-by-Side Assessment of House and Senate Versions of H.R. 6 Summary The House approved an omnibus energy bill (H.R. 6) on April 21, 2005, that would open the Arctic National Wildlife Refuge (ANWR) to oil and gas leasing, substantially change oversight of electric utilities, increase the use of alternative motor fuels, provide $8.1 billion in energy tax incentives, and authorize numerous energy R&D programs. The Senate passed its version of H.R. 6 on June 28 without ANWR provisions but with $14.1 billion in tax incentives -- including a nuclear energy production credit -- and provisions on global climate change. Highlights of the bills include: Electricity. Both the House and the Senate versions of the bill would repeal the Public Utility Holding Company Act (PUHCA), but the Senate bill has provisions for more stringent oversight of utility mergers than the House version. Standard market design (SMD) would be remanded to the Federal Energy Regulatory Commission (FERC) by the House bill, while the Senate version would terminate the rulemaking altogether. Renewable Energy. An increase in renewable fuel and ethanol consumption to 5 billion gallons annually by 2012 would be mandated by the House bill, as opposed to 8 billion gallons in the Senate bill. The Senate bill includes a "renewable portfolio standard" (RPS) -- rejected in the House -- requiring utilities to generate at least 10% of their electricity from renewable energy sources by 2020. MTBE. Methyl tertiary butyl ether (MTBE), a gasoline additive widely used to meet Clean Air Act requirements, has caused water contamination. The House and Senate bills would phase out the use of MTBE with some possible exceptions and provide funds for MTBE cleanup, with some differences. The House version would provide protection for fuel producers and blenders of renewable fuels and MTBE from defective product lawsuits, while the Senate bill would cover renewable fuels but not MTBE. Energy Taxes. The House bill would reduce energy taxes by about $8.1 billion over 11 years, as compared with $14.1 billion in the Senate version. A nuclear energy production tax credit is included among the Senate incentives. ANWR. The House-passed bill would authorize oil and gas exploration, development, and production in ANWR, with a 2,000-acre limit on production and support facilities. No ANWR provisions are included in the Senate version. Energy Production on Federal Lands. Both bills include numerous provisions to increase energy production on federal lands. The Senate version of H.R. 6 would require an inventory of oil and natural gas resources on the Outer Continental Shelf (OCS), while the House version would not. This report will not be updated. Contents Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Major Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Electricity Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Renewable Fuel Standard and MTBE . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Energy Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Nuclear Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Renewable Portfolio Standard and Energy Efficiency . . . . . . . . . . . . . . 5 Arctic National Wildlife Refuge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Domestic Energy Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Hydrogen and Fuel Cells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Overview of House and Senate Versions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Organization of Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Energy Efficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Federal Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Energy Assistance and State Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Energy-Efficient Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Public Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Hydroelectric . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Oil and Gas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Petroleum Reserve and Home Heating Oil . . . . . . . . . . . . . . . . . . . . . . . . . 31 Production Incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Access to Federal Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Refining Revitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Coal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Clean Coal Power Initiative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Clean Power Projects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Coal and Related Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Indian Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Nuclear Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Price-Anderson Act Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 General Nuclear Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Advanced Reactor Project . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Nuclear Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Vehicles and Fuels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 Existing Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 Hybrid Vehicles, Advanced Vehicles, and Fuel Cell Buses . . . . . . . . . . . . 63 Clean School Buses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 Automobile Efficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 Hydrogen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 Research and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 Science Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76 Research Administration and Operations . . . . . . . . . . . . . . . . . . . . . . . . . . 82 Energy Efficiency -- Vehicles, Buildings, and Industries . . . . . . . . . . . . . . 88 Energy Efficiency -- Distributed Energy and Electric Energy Systems . . . 92 Renewable Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 Nuclear Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 Fossil Energy -- Research Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105 Fossil Energy -- Ultra-Deepwater and Unconventional Natural Gas and Other Petroleum Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109 Department of Energy Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 Electricity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113 Reliability Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113 Transmission Infrastructure Modernization . . . . . . . . . . . . . . . . . . . . . . . . 114 Transmission Operation Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . 119 Transmission Rate Reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 Amendments to PURPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124 Repeal of PUHCA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127 Market Transparency, Enforcement, and Consumer Protection . . . . . . . . 132 Merger Reform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140 Economic Dispatch and Other Electricity . . . . . . . . . . . . . . . . . . . . . . . . . 140 Energy Tax Incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 Energy Infrastructure Tax Incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143 Conservation and Energy Efficiency Provisions . . . . . . . . . . . . . . . . . . . . 148 Alternative Minimum Tax Relief . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157 Other Fossil Fuels Incentives -- Oil and Gas . . . . . . . . . . . . . . . . . . . . . . 158 Other Fossil Fuels Incentives -- Coal . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161 Renewable Energy Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 162 General Tax Incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 163 Tax Increases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164 Non-Tax Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 167 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168 Other Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168 Ethanol and Motor Fuels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173 General Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173 Underground Storage Tank Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . 182 Boutique Fuels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185 Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185 Renewable Energy -- Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193 Geothermal Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194 Hydropower -- Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199 Oil and Gas -- Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200 Production Incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200 Access to Federal Lands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207 Naval Petroleum Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211 Miscellaneous Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212 Coal -- Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214 Energy Development in Arctic Refuge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216 Set America Free (SAFE) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227 Grand Canyon Hydrogen-Powered Transportation Demonstration . . . . . . . . . . 228 Additional Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 228 Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 229 Incentives for Innovative Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 232 Climate Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 236 National Climate Change Technology Deployment . . . . . . . . . . . . . . . . . 236 Climate Change Technology Deployment in Developing Countries . . . . . 238 Index of Senate Sections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240 Appendix A: Hydraulic Fracturing (Sec. 327 House Bill) . . . . . . . . . . . . . . . 244 Appendix B: Oil and Gas Exploration and Production Defined (Sec. 328, House Bill) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245 Appendix C: Clean Air Coal Program (Sec. 441 House, Sec. 956 Senate) . . . . 246 Appendix D: Price-Anderson Nuclear Liability Coverage (Secs. 601-612) . . . 247 Appendix E: Electric Reliability Standards (Sec. 1211) . . . . . . . . . . . . . . . . . . 248 Appendix F: Standard Market Design (House Sec. 1235, Senate Sec. 1234) . . 250 Appendix G: Cogeneration and Small Power Production Purchase and Sale Requirements (Sec. 1253) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252 Appendix H: Repeal of the Public Utility Holding Company Act of 1935 (House Sec. 1263, Senate Sec. 1273) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253 Appendix I: Continuation of Transmission Security Order (Sec. 1441) . . . . . . 255 Appendix J: Deadline for Decision on Appeals under the Coastal Zone Management Act (Sec. 2013) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256 Appendix K: Domestic Offshore Energy Reinvestment (Sec. 2053) . . . . . . . . 257 Omnibus Energy Legislation, 109th Congress: Side-by-Side Assessment of House and Senate Versions of H.R. 6 Introduction Since the Arab oil embargo in 1973-1974, Congress has periodically taken up energy policy legislation with a comprehensive scope -- often spurred by the price of oil and U.S. dependence upon imported oil. The price of crude oil began to rise in 2003 -- exceeding $60/barrel (bbl) in early July 2005 -- setting much of the context for renewed debate over omnibus energy legislation in the 109th Congress. National and world demand for oil continues to grow. However, domestic oil production in the United States continues to decline. As a consequence, the gap between U.S. production and consumption has had to be covered by increased oil imports. These imports, roughly 6 million barrels per day (mbd) after the Arab oil embargo, now exceed 10 mbd to satisfy total U.S. oil consumption of nearly 21 mbd.1 Addressing dependence on imported oil raises a number of issues touching on both demand and consumption of fossil fuels. Chief among these are the production of additional fossil fuels, development of alternative energy sources, and conservation and energy efficiency. Energy infrastructure has also been a growing issue, including the oil refining and distribution sector, and electricity transmission, reliability, and regulation. Increased use of domestic coal and reassessment of many issues associated with nuclear energy have drawn attention as well. Developing a comprehensive approach to energy policy that balances economic, security, and environmental issues -- as well as competing regional priorities in the United States -- is an enormous challenge for policymakers. Keeping a clear eye on distinguishing between short- and long-term policies is also difficult but important in keeping expectations realistic for what comprehensive legislation can achieve. In the 109th Congress, the House approved an omnibus energy bill (H.R. 6) on April 21, 2005, that would open the Arctic National Wildlife Refuge (ANWR) to oil and gas leasing, substantially change oversight of electric utilities, increase the use of alternative motor fuels, provide $8.1 billion in energy tax incentives, extend the nuclear accident liability system, and authorize numerous energy R&D programs. The Senate passed its version of H.R. 6 on June 28 without ANWR provisions but including $14.1 billion in tax incentives and provisions on global climate change. 1 U.S. Department of Energy, Energy Information Administration, at [http://www.eia.doe. gov/pub/oil_gas/petroleum/data_publications/weekly_petroleum_status_report/current/pdf/ tableh1.pdf]. CRS-2 The two versions of the bill contain many provisions from the conference report on an omnibus energy bill (also numbered H.R. 6) in the 108th Congress that was blocked by a Senate filibuster. The House- and Senate-passed bills in the 109th Congress would mandate increasing levels of ethanol production through 2012 but allow regions to opt out under certain conditions. Use of methyl tertiary butyl ether (MTBE) as a domestic gasoline additive would be phased out, but states could authorize continued use and under the House bill the President could void the ban. Producers of MTBE and renewable fuels would be granted protection (a "safe harbor") from product liability lawsuits under the House bill, while only renewable fuels would be covered in the Senate bill. MTBE liability protection proved highly contentious in the Senate in the 108th Congress. The Senate bill includes a "renewable portfolio standard" (RPS) -- rejected by the House Energy and Commerce Committee -- requiring utilities to generate at least 10% of their electricity from renewable energy sources by 2020. Also, the Senate bill would establish a credit-based deployment program to encourage technologies to reduce greenhouse gas intensity and establish programs to deploy technologies in developing countries. Neither of those provisions is in the House bill. Provisions are also included in both bills to increase access by energy developers to federal lands. Several new statutory efficiency standards would be established for consumer and commercial products and appliances, and other standards would be set by the Department of Energy (DOE). Major Provisions Electricity Regulation. Title XII in the House- and Senate-passed bills would create an electric reliability organization (ERO) that would enforce mandatory reliability standards for the bulk-power system. All ERO standards would be approved by the Federal Energy Regulatory Commission (FERC). Under this title, the ERO could impose penalties on a user, owner, or operator of the bulk-power system that violates any FERC-approved reliability standard. This title also addresses transmission infrastructure issues. The Secretary of Energy would be able to certify congestion on the transmission lines and issue permits to transmission owners. Permit holders would be able to petition in U.S. District Court to acquire rights-of-way for the construction of transmission lines through the exercise of the right of eminent domain. In the Senate bill, FERC could approve participant funding for transmission line construction. A provision that would have required FERC to approve participant funding for new transmission lines was removed in markup by the House Committee on Energy and Commerce. Under the House bill, FERC's Standard Market Design notice of proposed rulemaking would be remanded. The Senate bill would terminate FERC's Standard Market Design notice of proposed rulemaking. Under both Senate- and House- passed bills, native load service obligations would be clarified, and federal utilities would be allowed to participate in regional transmission organizations. CRS-3 Under both bills, the electricity title would repeal the mandatory purchase requirements under the Public Utility Regulatory Policies Act (PURPA). The Public Utility Holding Company Act of 1935 (PUHCA) would be repealed. The Federal Energy Regulatory Commission and state regulatory bodies would be given access to utility books and records. FERC would be required to issue rules to establish an electronic system that provides information about the availability and price of wholesale electric energy and transmission services under the House version, and could issue such rules under the Senate version. Under both versions, for electric rates that the Federal Energy Regulatory Commission finds to be unjust, unreasonable, or unduly discriminatory, the effective date for refunds would begin at the time of the filing of a complaint with FERC but not later than five months after filing of a complaint. Criminal and civil penalties would be increased. Under the House version, the Federal Power Act would be amended to give FERC review authority for transfer of assets valued in excess of $10 million. The Senate version would also apply to the purchase, lease, or acquisition of an existing generating facility that has a value in excess of $10 million and is used to generate electricity for FERC jurisdictional interstate wholesale sales. In addition to the House requirements, the Senate version would require FERC to determine that the proposed transaction would not result in harmful cross- subsidization with a non-utility associate company. (For additional discussion on these issues, see CRS Report RL32728, Electric Utility Regulatory Reform: Issues for the 109th Congress; and CRS Report RL32133, Federal Merger Review Authority.) Renewable Fuel Standard and MTBE. The House and Senate versions of H.R. 6 would amend the Clean Air Act to eliminate the requirement that reformulated gasoline (RFG) contain 2% oxygen to reduce automotive emissions, a requirement which prompted the widespread use of MTBE and, to a lesser degree, ethanol. Instead, the bills would establish a new requirement that an increasing amount of gasoline contain renewable fuels such as ethanol. The House bill would require that 3.1 billion gallons of renewable fuel be used in 2005, increasing to 5.0 billion gallons by 2012, and the Senate bill would require 8.0 billion gallons by 2012 (compared with 3.4 billion gallons used in 2004). However, concerns have been raised that this requirement could significantly increase the pump price for gasoline in some areas. Because of concerns over drinking water contamination by MTBE (a major competitor with ethanol), both bills would ban the use of MTBE in motor vehicle fuel, except in states that specifically authorize its use, not later than December 31, 2014, under the House version and four years after enactment in the Senate version. The ban has two possible exceptions. First, the Environmental Protection Agency (EPA) may allow MTBE in motor fuel up to 0.5 percent by volume, in cases that the Administrator determines to be appropriate; and second, under the House version, the President may make a determination, not later than June 30, 2014, that the restrictions on the use of MTBE shall not take place. The House bill would authorize $2.0 billion and the Senate bill $1.0 billion to assist the conversion of merchant MTBE production facilities to the production of other fuel additives. Further, the bills would preserve the reductions in emissions of toxic substances CRS-4 achieved by the RFG program (although they use different baselines for determining required reductions). One of the most controversial provisions in the House version of H.R. 6 is the establishment of a "safe harbor" from product liability lawsuits for producers of MTBE and renewable fuels (such as ethanol). The safe harbor provision would protect anyone in the product chain, from manufacturers down to retailers, from liability for cleanup of MTBE and renewable fuels or for personal injury or property damage based on the product being deemed defective. (That legal approach has been used in California to require refiners to shoulder liability for MTBE cleanup.) The safe harbor would be retroactive to September 5, 2003. Prior to that date, five lawsuits had been filed. After that date, at least 150 suits were filed, on behalf of 210 communities in 15 different states. The Senate bill includes the safe harbor provision for renewable fuels but not MTBE; the Senate safe harbor would not be retroactive. (For additional information, see CRS Report RL32865, Renewable Fuels and MTBE: A Comparison of Selected Legislative Initiatives; CRS Report RL30369, Fuel Ethanol: Background and Public Policy Issues; and CRS Report RL32787, MTBE in Gasoline: Clean Air and Drinking Water Issues.) Energy Taxes. After the conference report on H.R. 6 in the 108th Congress was blocked in the Senate, several of the measure's energy tax provisions -- estimated at $1.3 billion over 10 years -- were included in the Working Families Tax Relief Act of 2004 (P.L. 108-311), enacted on October 4, 2004. About $5 billion in additional energy tax incentives over 10 years were part of the American Jobs Creation Act of 2004 (P.L. 108-357) enacted on October 22, 2004. Many of the energy tax incentives in H.R. 6 from the 108th Congress that were not enacted in 2004 have been repackaged into the H.R. 6 in the 109th Congress, with significant differences between the House and Senate versions. First, the Senate bill would provide net tax reductions of $14.1 billion over 11 years compared with $8.1 billion in the House-passed version. Second, most of this difference is accounted for by tax cuts for the electricity industry, energy efficiency, and renewable and alternative fuels. The Senate bill provides absolutely and relatively more tax cuts for energy efficiency and alternative fuels. The differences in tax cuts for alternative fuels are particularly striking: $12 billion in the Senate bill vs. $0.6 billion in the House bill. The Senate bill also provides more tax incentives for energy efficiency investments than the House bill. The House bill provides much larger tax cuts for the electricity industry, particularly for electricity infrastructure. Thus, in a relative sense, the House bill is tilted more toward fossil fuel production, while the Senate bill's tax cuts are tilted more to the production of alternative and renewable fuels and energy conservation. However, the absolute dollar tax cuts for oil, gas, and coal are also somewhat larger in the Senate bill than in the House bill ($5.8 billion vs. $4.7 billion). (For more background, see CRS Issue Brief IB10054, Energy Tax Policy.) Nuclear Energy. Strong incentives for building new commercial nuclear power plants are included in the Senate version of H.R. 6, and both the House and CRS-5 Senate bills would reauthorize the Price-Anderson Act nuclear liability system for 20 years and authorize DOE to build an advanced reactor in Idaho. The strongest nuclear incentive is the Senate bill's 1.8-cents/kilowatt-hour tax credit for electricity produced by nuclear reactors. The credit would be available for up to 6,000 megawatts of new capacity -- the equivalent of about five or six new reactors -- for the first eight years of operation. The nuclear production tax credit was also included in the energy bill conference report in the 108th Congress, and the Energy Information Administration concluded then that the credit would provide sufficient incentives for new commercial reactors to be built.2 The Senate bill would also authorize loan guarantees for new reactors. Neither of those incentives is included in the House version. Reauthorization of the Price-Anderson Act is generally considered to be a prerequisite for new reactors. Under Price-Anderson, commercial reactor accident damages are paid through a combination of private-sector insurance and a nuclear industry self-insurance system. Liability is capped at the maximum coverage available under the system, currently about $10.7 billion. Even without reauthorization, existing reactors continue to be covered, but any new ones would not. Price-Anderson also authorizes the Department of Energy to indemnify its nuclear contractors. The limit on DOE contractor liability is the same as for commercial reactors, except when the limit for commercial reactors drops because of a decline in the number of covered reactors. Both versions of H.R. 6 would provide a 20-year extension of Price-Anderson to the end of 2025. The nuclear industry contends that the system has worked well and should be continued, but opponents charge that Price-Anderson's liability limits provide an unwarranted subsidy to nuclear power. The House version of the bill would also require the Nuclear Regulatory Commission (NRC) to assess nuclear power plant security and require additional security measures. (For more information, see CRS Issue Brief IB88090, Nuclear Energy Policy.) Renewable Portfolio Standard and Energy Efficiency. The Senate version of H.R. 6 would require retail electricity suppliers (electric utilities, except for those in Hawaii and that sold less than 4 billion kwh) to obtain a minimum percentage of their power from a portfolio of new renewable energy resources. The minimum renewable energy target, or Renewable Portfolio Standard (RPS), would start at 2.5% in 2008, rise in steps of 2.5% every four years, and level off at 10% from 2020 to 2030. The House version of H.R. 6 does not have an RPS provision. Eligible resources for the RPS in the Senate bill would include "new renewable energy" produced from solar, wind, ocean, and geothermal energy, most forms of biomass, landfill gas, and incremental hydropower. Also, additional energy above the average generation in the three preceding years from "existing" (already placed in service) facilities using solar, wind, ocean, biomass, landfill gas, incremental 2 U.S. Department of Energy, Energy Information Administration, Analysis of Five Selected Tax Provision of the Conference Energy Bill of 2003, SR/OIAF/2004-01, February 2004. CRS-6 hydropower, or incremental geothermal energy would be eligible to satisfy the RPS target. The base for calculating the target production level would exclude power from existing hydropower and municipal solid waste generation. Thus, states with a large amount of existing hydropower or municipal solid waste generation would have a proportionately lower target for new generation. However, there may be a debate in conference about whether existing nuclear and hydro generation, or some portion of it, would be eligible to satisfy the RPS target. Tradable credits would be created, which could be purchased in place of alternative power sources. The credits would function like those in the Clean Air Act emission allowance trading system, which has lowered compliance costs for air pollution regulations. Electricity suppliers could "carry forward" surplus credits for up to three years. Double credits would be provided for facilities on Indian land and triple credits would go to distributed generators under 1 megawatt in size. A cost cap for the credits is set as the lesser of 1.5 cents/kilowatt-hour (kwh) or 200% of the average market value of the credits. DOE collections from credit sales and penalties would fund grants to states to promote renewables. Both versions of H.R. 6 would legislate new energy efficiency standards for several consumer and commercial products and appliances. For certain other products and appliances, DOE would be empowered to set new standards. Also, the bill would provide increased funding authorizations for the DOE weatherization program and establish a voluntary program to promote energy efficiency in industry. (For additional information, see CRS Issue Brief IB10020, Energy Efficiency: Budget, Oil Conservation and Electricity Conservation Issues, and CRS Issue Brief IB10041, Renewable Energy: Tax Credit, Budget, and Electricity Production Issues.) Arctic National Wildlife Refuge. The congressional debate over whether to open ANWR to development has continued for more than 40 years. H.R. 6 as passed by the House would authorize oil and gas exploration, development, and production in a portion of ANWR, with a 2,000-acre limit on certain production and support facilities. The Senate version contains no ANWR provisions. Development advocates argue that ANWR oil would reduce U.S. energy markets' exposure to crises in the Middle East; boost North Slope oil production; lower oil prices; extend the economic life of the Trans Alaska Pipeline System; and create many jobs in Alaska and elsewhere in the United States. They maintain that ANWR oil could be developed with minimal environmental harm, and that the footprint of development could be limited to a total of 2,000 acres. Opponents of development in ANWR argue that intrusion on this ecosystem cannot be justified on any terms; that economically recoverable oil found (if any) would provide little energy security and could be replaced by cost-effective alternatives, including conservation; and that job claims are overstated. They also maintain that the footprint of oil development, despite a provision in the measure to limit certain facilities to 2,000 acres, would still be scattered in many parcels across the landscape, and would have a greater impact than is implied by any limit on total acreage. They also argue that past proposals to limit any footprint have not been CRS-7 worded so as to apply clearly to the extensive Native lands in the Refuge, which could be developed if the Arctic Refuge were opened. (For additional information, see CRS Issue Brief IB10136, The Arctic National Wildlife Refuge: Controversies for the 109th Congress; and CRS Report RL31115, Legal Issues Related to Proposed Drilling for Oil and Gas in the Arctic National Wildlife Refuge and CRS Report RS22143, Oil and Gas Leasing in the Arctic National Wildlife Refuge (ANWR): the 2,000-Acre Limit.) Domestic Energy Production. The Department of the Interior (DOI) has estimated that roughly a quarter of oil resources and less than one-fifth of gas resources on Indian lands have been developed. Both versions of H.R. 6 would encourage production on federal lands through royalty reductions for marginal oil and gas wells on public lands and the outer continental shelf. Provisions are also included to increase access to federal lands by energy projects -- such as drilling activities, electric transmission lines, and gas pipelines. In addition, the House bill would prohibit EPA from regulating hydraulic fracturing to protect drinking water sources. (For additional information, see CRS Reports RL32873, Environment and Energy: Selected Issues in H.R. 6, 109th Congress, and RL32262, Selected Legal and Policy Issues Related to Coalbed Methane Development.) Hydrogen and Fuel Cells. The House version of H.R. 6 would authorize $4 billion for FY2006-2010 for hydrogen and fuel cell R&D; the Senate version would authorize $3.3 billion over the same time frame. The bill would also establish a goal of producing commercial fuel cell vehicles and developing hydrogen infrastructure by 2020. Critics of the Administration suggest that the hydrogen program is intended to forestall any attempts to significantly raise vehicle Corporate Average Fuel Economy (CAFE) standards, and that it relieves the automotive industry of assuming more initiative in pursuing technological innovations. On the other hand, some contend that it is appropriate for government to become involved in the development of technologies that could address national environmental and energy goals but are too risky to draw private-sector investment. (For additional information, see CRS Report RS21442, Hydrogen and Fuel Cell R&D: FreedomCAR and the President's Hydrogen Fuel Initiative; and CRS Report RL32196, A Hydrogen Economy and Fuel Cells: An Overview.) Overview of House and Senate Versions The House and Senate versions of H.R. 6 generally address similar areas of energy policy, although there are major differences. For example, only the House bill would open ANWR to oil and gas activities, and only the Senate version includes extensive provisions explicitly addressing global climate change. Table 1 provides a brief comparison. CRS-8 Table 1. Major Provisions of House and Senate Energy Bills Provision House Senate Electricity restructuring Changes regulatory Changes regulatory requirements to emphasize requirements to emphasize competitive market competitive market formation. formation. Additional FERC oversight of mergers and acquisitions required. Arctic National Wildlife Opens ANWR to oil and No provision. Refuge (ANWR) gas leasing. MTBE and renewable Protects MTBE and Protects ethanol producers fuels liability protection ethanol producers from from liability lawsuits. ("safe harbor") product liability lawsuits. Global climate change No specific provisions. Establishes a credit-based deployment program to encourage technologies to reduce greenhouse gas intensity and establishes programs to deploy technologies in developing countries. Equipment and appliance Legislates new standards Legislates new standards efficiency standards for 7 products, calls for for 15 products, calls for DOE standards by DOE standards by rulemaking for 3 products. rulemaking for 4 products. Nuclear energy Extends Price-Anderson Provides tax credits and coverage for new loan guarantees for new commercial reactors and nuclear power plants. DOE contracts. Includes Extends Price-Anderson nuclear security provisions. coverage for new commercial reactors and DOE contracts. Renewable energy content Requires motor vehicle Requires motor vehicle in motor vehicle fuel fuel sold in the United fuel sold in the United States to contain 5 billion States to contain 8 billion gallons of ethanol or other gallons of ethanol or other renewable fuel by 2012. renewable fuel by 2012. Renewable Portfolio No provision. Requires electric utilities Standard to provide minimum percentages of power from new renewable sources. CRS-9 Organization of Report The remainder of this report provides a section-by-section summary comparison of the provisions of H.R. 6 as passed by the House and Senate. The sections are listed in numerical order as they appear in the House-passed version. Some of the most controversial sections are discussed in greater detail in a number of appendicies. Funding authorizations are shown in Tables 2 and 3 at the end of the report. The following analysts in the CRS Resources, Science, and Industry Division contributed to this report: ! Amy Abel, electric utilities; ! Anthony Andrews, nuclear security, DOE management; ! Robert Bamberger, energy security; ! Carl Behrens, nuclear nonproliferation; ! Claudia Copeland, Federal Water Pollution Control Act; ! Lynne Corn, ANWR; ! Bernard Gelb, gasoline industry; ! Carol Glover, Native American energy, general authorizations; ! Mark Holt, nuclear energy; ! Marc Humphries, federal energy leasing, coal; ! Larry Kumins, oil and gas; ! Salvatore Lazzari, taxes; ! Jim McCarthy, Clean Air Act, MTBE; ! Dan Morgan, science programs; ! Kyna Powers, hydropower; ! Fred Sissine, conservation and renewable energy; ! Mary Tiemann, underground storage tanks, drinking water; ! Brent Yacobucci, motor fuels, vehicles, hydrogen; ! Jeff Zinn, Coastal Zone Management Act. CRS-10 Energy Efficiency Federal Programs Provision House Senate Comments Energy and Water Saving Sec. 101. The Architect of the Capitol Sec. 101. The Architect of the Capitol Measures in Congressional would be required to plan and implement would be required to plan and implement Buildings an energy and water conservation an energy and water conservation strategy for congressional buildings that strategy for congressional buildings that would be consistent with that required of would be consistent with that required of other federal buildings. An annual report other federal buildings. An annual would be required. Up to $2 million report would be required. would be authorized. Section 310 of the Legislative Branch Appropriations Act of 1999 called for the Architect of the Capitol (AOC) to develop an energy efficiency plan for congressional buildings. Energy Management Sec. 102. The baseline for federal energy Sec. 102. The baseline for federal energy Section 202 of Executive Order 13123 uses Requirements savings would be updated from FY1985 savings would be updated from FY1985 FY1985 as the baseline for measuring federal to FY2003 and a new goal of 20% to FY2004 and a new goal of 20% building energy efficiency improvements and calls reduction would be set for FY2015. At reduction would be set for FY2015. By for a 35% reduction in energy use per gross square that time, DOE would be directed to the end of 2013, DOE would be directed foot by FY2010. assess progress and set a new goal for to assess progress and set a new goal for FY2025. Most of the other provisions FY2015 through FY2024. Standards for for federal agencies in this Subtitle are exclusion are set, which empower DOE administrative measures that would help to exempt, under certain conditions, agencies achieve the above-described buildings for which serve a national goal. security function or for which achieving the target would be impracticable. Further, agencies are allowed to retain appropriations for energy expenses that CRS-11 Provision House Senate Comments are saved by the energy efficiency measures. Energy Use Measurement and Sec. 103. Federal buildings would be Sec. 103. Federal buildings would be Accountability required to be metered or sub-metered by required to be metered or sub-metered by late 2010, to help reduce energy costs late 2012, to help reduce energy costs and promote energy savings. and promote energy savings. Further, the Secretary of Energy is required to prepare guidelines for agency energy managers to facilitate implementation of metering. Procurement of Energy- Sec. 104. Federal agencies would be Sec. 104. Same provision. Currently, Section 403 of Executive Order 13123 Efficient Products required to purchase products certified as directs federal agencies to purchase life-cycle energy-efficient under the Energy Star cost-effective Energy Star products. program or energy-efficient products designated by the Federal Energy Management Program (FEMP) -- provided the products are found to be "cost-effective" and "reasonably- available." Energy Savings Performance Sec. 105. Would amend the National Sec. 105. Would extend authority to enter Contracts Energy Conservation Policy Act (42 into energy savings performance U.S.C. 8287) by limiting all federal contracts from 2006 to 2016, and would agencies combined to a total of 100 consider any energy savings performance energy savings performance contracts contract entered into under this section and payments of no more than a total of after October 1, 2003, and before the date $500,000,000. Under such contracts, of enactment of this Act, as extended by energy saving measures are installed at this amendment. government facilities by private-sector firms in return for a share of the resulting energy cost reductions. The Sunset and CRS-12 Provision House Senate Comments Reporting Provisions of section 801(c) of the Act would be repealed October 1, 2006, and any new contract after that date would be included in the contract limits. Voluntary Commitments to Sec. 107. DOE would be authorized to Sec. 106. DOE would be authorized to While there is no current statutory authority, Reduce Industrial Energy form voluntary agreements with industry form voluntary agreements with industry industry energy efficiency programs have been in Intensity sectors or companies to reduce energy sectors or companies to reduce energy place, such as the former Climate Wise program at use per unit of production by an use per unit of production by 2.5% the Environmental Protection Agency (EPA). unspecified amount. annually from 2007 through 2016. Participants would be eligible for technical assistance and grants. An evaluation of energy-savings impacts would be required by mid-2012. Advanced Building Efficiency Sec. 108. DOE would be required to No similar provision. Testbed create a program to develop, test, and demonstrate advanced federal and private building efficiency technologies. Federal Building Performance Sec. 109. DOE would be directed to set Sec. 107. Same provision. Federal Mandatory energy efficiency performance Standards revised energy efficiency standards for agency budget requests would be standards for federal buildings are currently set in new federal buildings at a level 30% required to include an inventory of new Section 305(a) of P.L. 94-385 and implemented stricter than industry or international buildings and to indicate whether they through 10 CFR Part 435. standards -- provided the standards meet the standards. would be "life-cycle cost-effective." Increased Use of Recovered No similar provision. Sec. 108. DOT and other agencies that Mineral Component in Federal regularly procure or provide federal Cement and Concrete Projects funds to procure material for cement or concrete projects would be directed to fully implement all procurement CRS-13 Provision House Senate Comments requirements and incentives that provide for incorporating recovered mineral components, such as blast furnace slag and coal combustion fly ash. Daylight Savings Sec. 111. Daylight saving time would No similar provision. Under current law (Uniform Time Act, P.L. 89- begin one month earlier (in March) and 387, §3a), states can choose whether to end one month later (in November). This participate. However, if a state chooses to is expected to reduce energy used for participate, the duration of daylight savings is set night-time electric lighting. by federal law. Enhancing Energy Efficiency in Sec. 112. National parks, forests, and No similar provision. Management of Federal Lands wildlife refuges would be required to employ energy efficiency measures in buildings and energy-efficient vehicles (including biodiesel and hybrid engines) "to the extent practicable." Energy Assistance and State Programs Provision House Senate Comments Low Income Home Energy Sec. 121. Increased funding would be No similar provision. Assistance Program (LIHEAP) authorized for the LIHEAP grant program for FY2005 through FY2007. Department of Health and Human Services funding for LIHEAP was authorized through FY2003 in the Human Services Authorization Act of 1998. Also, states and their designees would be allowed to use renewable fuels CRS-14 Provision House Senate Comments (including biomass) to carry out the purposes of this section. Weatherization Assistance Sec. 122. Increased funding would be Sec. 121. Same provision. Funding for the program was authorized through authorized for the DOE weatherization FY2003 under 42 U.S.C. 6872. grant program for FY2006 through FY2008. State Energy Programs Sec. 123. New requirements would be Sec. 122. Same provision. set for state energy conservation goals and plans, including a 25% energy efficiency improvement in 2012 compared to 1990. Also, increased funding would be authorized for FY2006 through FY2008 for DOE state energy grant programs. Energy-Efficient Appliance Sec. 124. DOE would be authorized to Sec. 123. Same provision. Rebate Programs fund rebate programs in eligible states to support residential end-user purchases of Energy Star products. Energy-Efficient Public Sec. 125. A grant program would be Sec. 124. Same provision. Buildings created for energy-efficient renovation and construction of local government buildings that reduce energy use by 30% relative to standards (new buildings) or baseline (renovoations). Low Income Community Sec. 126. A pilot energy-efficiency and Sec. 125. Same provision. Funding Energy Efficiency Pilot Program renewable energy grant program would would be authorized from 2006 through be created for local governments, private 2010. companies, community development CRS-15 Provision House Senate Comments corporations, and Native American economic development entities. Funding would be authorized from 2006 through 2008. Low Income and Rural Similar to section 126 (above). Sec. 233. Similar intent as House bill, but Community Energy Efficiency focused on "remote and rural Pilot Program communities." The Senate bill would establish a grant program for "increasing energy efficiency, siting or upgrading transmission and distribution lines serving rural areas; or providing or modernizing electric generation facilities that serve rural areas." Grant applications for development of renewable energy sources will be extended "preference." Would provide $20 million annually for FY2006-FY2012. State Technologies No similar provision. Sec. 126. A cooperative program would Advancement Collaborative be created that links DOE with the states. It would be focused on research, development, demonstration, and deployment of technologies in which there is a common federal and state energy efficiency, renewable energy, and fossil energy interest. State Building Energy No similar provision. Sec. 127. A grant program would be Efficiency Codes Incentives created for states that DOE determines have achieved a least a 90% rate of compliance with the most recent model building energy codes. Funds may be CRS-16 Provision House Senate Comments used to implement building energy codes and practices that exceed efficiency requirements of the most recent model building codes. Energy-Efficient Products Provision House Senate Comments Energy Star Program Sec. 131. DOE and EPA would be given Sec. 131. Same provision. Also, DOE statutory authority to carry out the would be directed to establish new Energy Star program, which identifies qualifying energy efficiency levels for and promotes energy-efficient products clothes washers and dish washers. and buildings. HVAC Maintenance Consumer Sec. 132. DOE would be required to Sec. 132. Similar provision. Education Program implement a public education program for homeowners and small businesses that explained the energy-saving benefits of improved maintenance of heating, ventilating, and air conditioning equipment. Also, the Small Business Administration would be directed to assist small businesses in becoming more energy-efficient. Public Energy Education No similar provision. Sec. 133. DOE would be required to Program convene a conference with representatives from industry, education, professional societies, trade associations, and government agencies to design and CRS-17 Provision House Senate Comments establish an ongoing national public education program focused on energy efficiency and other topics. DOE would be required to provide guidance and technical assistance. Energy Efficiency Public No similar provision. Sec. 134. DOE would be required to Information Initiative conduct an advertising and public outreach program about the need to reduce energy use, the consumer benefits of reduced use, the relationship to jobs and economic growth, and cost-effective consumer measures to reduce energy use. Energy Conservation Standards Sec. 133. DOE would be directed to Sec. 135. Energy efficiency standards for Additional Products issue a rule that determined whether would be set by statute for all of the efficiency standards should be set for standards set by statute in the House bill standby mode in battery chargers and plus dehumidifiers, pre-rinse spray external power supplies. Also, energy valves, and mercury vapor (streetlight) efficiency standards would be set by lamp ballasts. Further, DOE would be statute for exit signs, traffic signals, directed to issue a rule that prescribed torchieres (floor lamps), distribution efficiency standards for ceiling fans, transformers (electric utility equipment), vending machines, and the standby unit heaters (fan-type heaters, usually power mode of battery chargers and portable), and medium base compact external power supplies. Also, DOE fluorescent lamps (CFLs). Further, DOE would be authorized to set standards by would be directed to issue a rule that rule for residential furnace fans. prescribed efficiency standards for ceiling fans, vending machines, commercial refrigerators and freezers and refrigerator-freezers, and residential fans. CRS-18 Provision House Senate Comments Energy Conservation Standards No similar provision. Sec. 136. Energy efficiency standards for Commercial Equipment would be set by statute for commercial air conditioning and heat pumps, commercial refrigerators and freezers, commercial clothes dryers, and commercial ice makers. Expedited Rulemaking No similar provision. Sec. 137. The Energy Policy and Conservation Act would be amended to make conforming changes related to the expedited rulemaking in Section 135. Energy Labeling Sec. 134. The Federal Trade Commission Sec. 138. Similar to House provision. FTC is currently required by Section 324(a) of the (FTC) would be required to consider Requirements would apply to equipment Energy Policy and Conservation Act (P.L. 94-163) improvements in the effectiveness of listed in Senate section 135, except to issue rules for energy efficiency labels on energy labels for consumer products. certain types of dehumidifiers would be consumer products (42 U.S.C. 6294). Also, DOE or FTC would be directed to exempt from labeling requirements. consider prescribing labeling requirements for many of the products listed in section 133. Preemption Sec. 135. As of January 1, 2006, the No similar provision. energy efficiency standard for ceiling fans set out in Section 133 shall supersede all state and local standards for ceiling fans. State Consumer Product Energy Sec. 136. If the product efficiency Sec. 135. Existing state and local Efficiency Standards standards set forth in Section 133 are not standards for products listed elsewhere implemented within three years of this under Section 135 would not be law's enactment, the federal preemption preempted until the federal standards go of state standards will expire. into effect. CRS-19 Provision House Senate Comments Intermittent Escalators Sec. 137. With certain exceptions, all No similar provision. new escalators acquired for federal buildings will operate on an intermittent (on-demand) basis. Energy Efficient Electric and No similar provision. Sec. 139. DOE would be required to Natural Gas Utilities Study conduct a study of state and regional policies that promote cost-effective programs to reduce energy use (including energy efficiency programs) that are conducted by utilities subject to state regulation and non-regulated utilities. A report to Congress would be required. Energy Efficiency Pilot Program No similar provision. Sec. 140. DOE would be required to establish a pilot program that provides financial assistance to at least three, but not more than seven, states to encourage energy efficiency and energy use reductions. Energy Efficiency Resource No similar provision. Sec. 141. State regulatory agencies Program would be required to consider implementing energy efficiency or other demand reduction programs. Fuel Efficient Engine No similar provision. Sec. 142. DOE and the National Technology Program for Aeronautics and Space Administration Aircraft (NASA) would be required to form a cooperative agreement for a multi-year program to develop 10% more fuel efficient turbine-based propulsion and CRS-20 Provision House Senate Comments power systems for aeronautical and industrial applications. Motor Vehicle Tires Supporting No similar provision. Sec. 143. DOE would be required to Maximum Fuel Efficiency conduct a national tire fuel efficiency program for passenger cars and light trucks. The program would include establishing fuel economy standards for tires, and the testing, labeling, and promotion of purchases of energy- efficient replacement tires. Public Housing Provision House Senate Comments Capacity Building for Energy- Sec. 141. Activities would be required No similar provision. Efficient, Affordable Housing that would provide energy-efficient, affordable housing and other residential measures under the HUD Demonstration Act. Increase of CDBG Public Sec. 142. The amount of community No similar provision. The current limit is 15% under Sec. 105(a)(8) of Services Cap for Energy development block grant (CDBG) public the Housing and Community Development Act of Conservation and Efficiency services funding that could be used for 1974. Activities energy efficiency would be increased to 25%. CRS-21 Provision House Senate Comments FHA Mortgage Insurance Sec. 143. Solar energy equipment can be No similar provision. The current limit is 20% under Section 203(b)(2) Incentives for Energy-Efficient eligible for up to 30% of the total amount of the National Housing Act. Housing of property value that can be covered by Federal Housing Administration mortgage insurance. Public Housing Capital Fund Sec. 144. The Public Housing Capital Sec. 161. Same provision. Under Section 9 of the United States Housing Act, Fund would be modified to include the Capital Fund is available to public housing certain energy- and water-use efficiency agencies to develop, finance, and modernize improvements. public housing developments and to make management improvements to these housing facilities. There is currently no provision for energy conservation projects that involve water- conserving plumbing fixtures and fittings. Grants for Energy-Conserving Sec. 145. The Department of Housing No similar provision. Section 2(a)(2) of the National Housing Act, as Improvements for Assisted and Urban Development (HUD) would amended by Section 251(b)(1) of the National Housing be directed to provide grants for certain Energy Conservation Policy Act, empowers HUD energy and water efficiency to make grants for energy conservation projects in improvements to multifamily housing public housing, but it has no provision for energy- projects. and water-conserving plumbing fixtures and fittings. Energy-Efficient Appliances Sec. 147. Public housing agencies would Sec. 162. Same provision. be required to purchase cost-effective Energy Star and FEMP-designated appliances and products. CRS-22 Provision House Senate Comments Energy-Efficient Standards Sec. 148. The energy efficiency Sec. 163. Same provision. standards and codes that the federal government encourages states to use would be changed from the codes set by the Council of American Building Officials to the 2003 International Energy Conservation Code. Energy Strategy for HUD Sec. 149. The Secretary of Housing and Sec. 164. Same provision. Urban Development would be required to implement an energy conservation strategy to reduce utility expenses through cost-effective energy-efficient design and construction of public and assisted housing. Renewable Energy General Provisions Provision House Senate Comments Assessment of Renewable Sec. 201. DOE would be required to Sec. 201. Same provision. Energy Resources report annually on the resource development potential of solar, wind, biomass, ocean (tidal, wave, current, and thermal), geothermal, and hydroelectric energy resources. DOE would be required to review available assessments and undertake new assessments as necessary, accounting for changes in market conditions, available technologies, and other relevant factors. CRS-23 Provision House Senate Comments Renewable Energy Production Sec. 202. Eligibility for the existing Sec. 202. Same provision. Federal law currently provides a 1.5 cent/kwh Incentive incentive would be extended through incentive for power produced from wind and 2025 and expanded to include electric biomass by state and local governments and non- cooperatives and tribal governments. profit electrical cooperatives (Energy Policy Act, Qualifying resources would be expanded Sec. 1212 [42 U.S.C. 13317]). The incentive is to include landfill gas, livestock methane, funded by appropriations to DOE and was created and ocean (tidal, wave, current, and to encourage public agencies, which are not thermal) energy. eligible for tax incentives, in a fashion parallel to the renewable energy production tax credit for private sector businesses. Federal Purchase Requirement Sec. 203. Federal agencies would be Sec. 203. Same provision. required, to the extent "economically feasible and technically practicable," to purchase power produced from renewable sources. The collective total percentage of renewables use, as a share of total federal electric energy use, would start at 3% in FY2007, rise to 5% in FY2010, and then reach 7.5% in 2013 and all subsequent years. Renewable energy produced at a federal site, on federal lands, or on Indian lands would be eligible for double credit toward the purchase requirement. A report to Congress would be required every two years. Insular Areas Energy Security Sec. 204. This section includes Sec. 241 through Sec. 245. Would Federal law currently requires comprehensive congressional findings that electric power require the Secretary of the Energy, in energy plans for insular areas that describe the transmission and distribution lines in consultation with the Secretary of Interior potential for renewable energy resources. insular areas are not adequate to to assess and report to Congress on withstand hurricane and typhoon projects with the greatest potential for damage, and that an assessment is needed reducing dependence on fossil fuels used CRS-24 Provision House Senate Comments of energy production, consumption, to generate electricity, and to promote infrastructure, reliance on imported distributed energy, in the insular areas. energy, and indigenous sources of energy DOE would be authorized to provide in insular areas. Would require the technical and financial assistance, on a Secretary of the Interior, in consultation matching basis with local utilities, for with the Secretary of Energy and the feasibility studies and the implementation head of government of each insular area, of those projects the Secretary of Energy to update insular area plans by 2007 to determines are feasible and appropriate reflect these findings, and to seek to for implementation. No local match reduce energy imports by increasing required for assistance. energy conservation and energy efficiency and by attempting to maximize the use of indigenous resources. Annual appropriations would be authorized that would, in part, be used for matching grants (federal share maximum is 75%) for projects designed to protect electric power transmission distribution lines in one or more of the territories of the United States from damage caused by hurricanes and typhoons. RFG Opt-In No comparable provision. Sec. 227. Would allow Governors of 12 Northeastern states (the Ozone Transport Region) to petition EPA to require RFG use in attainment areas in their states. The Administrator would be required to do so unless he determines that there is insufficient capacity to produce RFG, in which case the commencement date of the requirement shall be delayed. Federal Enforcement of State No comparable provision. Sec. 228. At the request of a state, would Standards allow federal enforcement of state controls on fuels and fuel additives. CRS-25 Provision House Senate Comments Use of Photovoltaic Energy in Sec. 205. The General Services No similar provision. Public Buildings Administration (GSA) would be authorized to encourage use of solar photovoltaic energy systems in new and existing buildings. Federal Procurement of Sec. 206. This provision amends the No similar provision, but there are other 7 U.S.C. 8201(c)(1) gives preference to Biobased Products existing requirement that federal agencies provisions on biobased products and procurement of items made with the highest give procurement preference to items biofuels in House section 939, and Senate percentage of biobased products. 42 U.S.C. composed of the highest percentage of sections 938-944. 6914b-1 provides for use of naturally degradable biobased products practicable by adding material in plastic ring carriers to help reduce litter a specific reference to degradable six- and to protect fish and wildlife. pack rings. Biomass Energy Findings Sec. 1701(a). This provision would note No similar provision. that many communities near federal lands are at risk to wildfire and to insect infestation and disease. Biomass Energy Definitions Sec. 1701(b). This provision would Sec. 251. This section is nearly identical provide definitions of biomass and other to section 1701(b) except that it would terms that would be employed in the add definitions of " eligible operation" establishment of programs described in and "green ton." Sections 1701(c) and 1701(d). Biomass Commercial Utilization Sec. 1701(c). This provision would Sec. 252. This section is nearly the same Grant Program create a grant program to subsidize as 1701(c), except that it also gives biomass purchases for use in an energy priority to facilities in the highest risk production facility. The purpose would areas. be to encourage the removal of slash, brush, pre-commercial thinning material and other non-merchantable forest biomass from federal lands and Indian reservations for biomass energy production. CRS-26 Provision House Senate Comments Improved Biomass Utilization Sec. 1701(d). This provision would Sec. 253. This section is nearly the same Program create a grant program to support as 1701(d), except that it adds to the list proposal development for a project to be of priority conditions efficiency pursued under Section 1701(c). A list of improvement, cleaner technology priority conditions would also be set. development, and reduction of hazardous fuel in the highest risk areas. Biomass Energy Authorizations Sec. 1701(e). For the grant programs in Sec. 252 (d). For the proposal both 1701(c) and 1701(d), this provision development grant program, this would authorize annual appropriations subsection would authorize annual for FY2006 through FY2016. appropriations for FY2006 through FY2010. - Sec. 252 (e). For the production subsidy grant program, this subsection would authorize annual appropriations for FY2006 through FY2010. Biomass Energy Report Sec. 1701(f). This provision would Sec. 254. This section would require a require that the Secretary of Agriculture report that describes the interim results of and Secretary of Interior jointly submit a the programs in sections 252 and 253. report to Congress on the results of the two grant programs in Section 1701(c) and 1701(d). It would require that the report identify biomass type, estimate the hauling distance, and project economic impacts. Renewable Energy Security Sec. 207. For the DOE Weatherization No similar provision. grant program, Section 207(a) increases the limit on support for renewable energy equipment from $2,500 to $3,000 per dwelling unit. Also, Section 207(d) creates a consumer rebate for renewable energy equipment installed in a dwelling CRS-27 Provision House Senate Comments or small business. The maximum rebate is the lesser of 25% of equipment cost or $3,000. Installation of Photovoltaic Sec. 208. Would authorize $20 million No similar provision. System for the Administrator of GSA to proceed with the Sun Wall Design Project, the winning entry in a national design competition sponsored jointly by DOE and the National Renewable Energy Laboratory, to install a photovoltaic solar electric system on the headquarters building of DOE. Sugar Cane Ethanol Pilot Sec. 209. This provision authorizes a Sec. 231. Would establish a program to Program three-year demonstration program for the study the production of ethanol from production of ethanol in Hawaii to cane sugar, sugarcane, and sugarcane parallel the existing program for corn to byproducts. The program would be show that the process can be applicable limited to projects in Florida, Louisiana, to cane sugar and can be replicated on a Texas, and Hawaii. A total of $36 larger scale once the sugar cane industry million would be authorized. has located a site and constructed ethanol production facilities. Renewable Portfolio Standard No similar provision. Sec. 291. This provision would require electric utilities that have service at the retail level to obtain a percentage of base generation from new or existing renewable energy sources. Specifically, it would require utilities to obtain 10% of their generation from renewable energy by 2020. Utilities would be able to meet this renewable energy portfolio (RPS) standard by self generating, purchasing renewable energy from another utility, or CRS-28 Provision House Senate Comments by purchasing tradable renewable credits from DOE. Hydroelectric Provision House Senate Comments Alternative Conditions and Sec. 231. This provision in H.R. 6 would Sec. 281. This provision in H.R. 6 would Under the Federal Power Act (FPA, 16 U.S.C. 797 Fishways allow interested parties to propose allow license applicants and parties to the et. seq.) the Federal Energy Regulatory alternative license conditions, and would license proceeding to propose alternative Commission has primary responsibility for require federal agencies to consider license conditions, and would require balancing multiple water uses and evaluating alternatives proposed by license federal agencies to consider these hydropower relicensing applications. However, applicants. It would also require an alternatives. It would also require an the FPA also creates a role in the licensing process agency to accept an applicant's proposed agency to accept a proposed alternative if for federal agencies that are responsible for alternative if the agency found that the the agency (1) found that the alternative managing fisheries or federal reservations (e.g. alternative (1) provides for the adequate provides for the adequate protection and national forests, etc.). Specifically, sections 4(e) protection and utilization of the federal utilization of the federal reservation, or is and 18 of the FPA give certain federal agencies reservation, or is no less protective of the no less protective of the fish resource the authority to attach conditions to FERC fish resource than the fishway initially than the fishway initially prescribed, and licenses. For example, federal agencies may prescribed, and (2) costs less to (2) concurs with the license applicant's require applicants to build passageways through implement, and/or will improve operation judgement that the alternative costs less which fish can travel around the dam, schedule of the project for electricity production. to implement, and/or will improve periodic water releases for recreation, ensure operation of the project for electricity minimum flows of water for fish migration, production. control water release rates to reduce erosion, or limit reservoir fluctuations to protect the reservoir's shoreline habitat. Once an agency issues such conditions, FERC must include them in its license. While these conditions often generate environmental or recreational benefits, they may also require construction expenditures and may increase costs by reducing operational flexibility. CRS-29 Provision House Senate Comments When issuing conditions, H.R. 6 would Same as House bill. This equal consideration clause is a topic of require agencies to provide FERC with a disagreement. Opponents of the provision are written statement demonstrating that the concerned that it would hamper agencies' ability relevant Secretary gave "equal to protect the resources under their jurisdiction; consideration" to the effects of the proponents argue that conditioning agencies, like conditions on factors such as energy FERC, should be required to balance competing supply, flood control, navigation, water water uses. supply, and air quality. H.R. 6 would require FERC's Dispute Same as House bill. FERC's Dispute Resolution Service is a Resolution Service to issue non-binding facilitative entity that is not currently established advisories. to make recommendations. Hydroelectric Production Sec. 241. The Secretary of Energy would No similar provision. Incentives make incentive payments to non-federal owners or operators of hydroelectric facilities for power that is first produced within 10 years of the date of enactment by generating equipment added to existing facilities. Payments of 1.8 cents per kilowatt-hour (kWh), up to a total of $750,000/year, may be made for up to 10 years from the first year after the facility begins operating. Hydroelectric Efficiency Sec. 242. The Secretary of Energy would No similar provision. Improvement make incentive payments to the owners or operators of hydroelectric facilities who make capital improvements on existing facilities that improve efficiency by at least 3%. Payments would not exceed 10% of the improvement cost and would not exceed $750,000 at any single CRS-30 Provision House Senate Comments facility. Small Hydroelectric Power Sec. 243. This provision would amend No similar provision. Projects the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2078), to change the date on or before which a dam must be constructed to qualify as an existing dam, from April 20, 1977, to March 4, 2003. Alaska State jurisdiction over No similar provision. Sec. 282. Under this provision the State 16 U.S.C. §823c allows the State of Alaska to small hydroelectric projects of Alaska could decide not to issue regulate Alaska's small hydroelectric projects -- conditions recommended by certain state in lieu of the Federal Energy Regulatory and federal resource agencies under 16 Commission -- if it meets certain conditions. For U.S.C. §823c (a)(3)(c). example, §(a)(3)(c) requires that the State of Alaska establish "conditions for the protection, mitigation, and enhancement of fish and wildlife" based on recommendations received from certain federal agencies. Flint Creek hydroelectric project No similar provision. Sec. 283. This provision would allow the Federal Energy Regulatory Commission to extend, by 3 years, a preliminary licensing permit for Flint Creek Hydroelectric Project. CRS-31 Oil and Gas Petroleum Reserve and Home Heating Oil Provision House Senate Comments Permanent Authority to Operate Sec. 301. The House bill would Sec. 301. The language in the Senate bill Congress authorized the Strategic Petroleum the Strategic Petroleum Reserve permanently authorize the Strategic is identical in most respects. However, Reserve (SPR) in the Energy Policy and Petroleum Reserve (SPR) program. The the Senate bill would require the Conservation Act (EPCA, P.L. 94-163). In 2000, authorization also permits U.S. Secretary to issue for public comment a Congress also authorized establishment of a participation in emergency activities of set of procedures for acquiring oil for the Northeast Heating Oil Reserve (NHOR). The the International Energy Agency (IEA) SPR that would take into account the authorities governing the SPR and NHOR are without risking violation of antitrust law current future price and supply of crude currently authorized through FY2008 by P.L. 108- and regulation. The bill would encourage and petroleum products, balanced with 7. the Secretary of Energy to fill the SPR to national security considerations. The its authorized size of 1 billion barrels procedures would also establish a process without "incurring excessive cost" or for review of requests to delay scheduled putting upward price pressure on deliveries of oil to the SPR. These petroleum products such as gasoline and procedures would be required to be in diesel fuel, or home heating oil. place 180 days after enactment. National Oilheat Research Sec. 302. Extends authorization of the Sec. 302. Identical to the House Alliance National Oilheat Research Alliance provision. (NORA) to 2010. NORA was established by the Energy Policy Act of 2000 (P.L. 106-469), and assesses a fee of $.002 per gallon on home heating oil sold by retail distributors. The proceeds are dedicated among other purposes to research on improving the efficiency of furnaces and boilers. Site Selection Sec. 303. Tthe Secretary of Energy No comparable provision. would be required, within one year of the CRS-32 Provision House Senate Comments enactment of the legislation, to select sites -- from among those that have been previously studied -- for expansion of the SPR to its fully authorized volume of one billion barrels. Suspension of Strategic Sec. 304. Would permit accepting No explicitly comparable provision. Producers of offshore leases in the Gulf of Mexico Petroleum Reserve Deliveries deliveries of royalty-in-kind (RIK) oil to However, see Senate Sec. 301 above for pay a royalty to the U.S. Treasury based upon the SPR only when crude oil prices were procedures governing additional fill of production at their sites. Since 1999, most new below $40/barrel. the SPR consistent with oil price and fill of the SPR has been accomplished by the supply. acceptance of royalty-in-kind (RIK) oil from these producers in lieu of cash paid to the Treasury. It is not known whether the Administration plans to continue RIK fill after current contracts end during the summer of 2005. Small Business and Agricultural No comparable provision. Sec. 303. Would establish a loan program Producer Energy Emergency to provide relief to qualifying small Disaster Loan Program. businesses that have been jeopardized by price increases since January 1, 2005 in the cost of petroleum fuels. Loans may not exceed $1.5 million unless the business is a major regional employer or if the limit is otherwise waived. Loans would be extended for the purpose of displacing petroleum consumption through the use of alternative or renewable fuels. Would also amend the Consolidated Farm and Rural Development Act (7 U.S.C. 1961(a)) to include agricultural producers under the program. CRS-33 Production Incentives Provision House Senate Comments Liquefied Natural Gas Sec. 320. This would expand the scope Sec. 381. This would amend section 3 of of the Natural Gas Act (15 U.S.C. 717b) the Natural Gas Act, granting FERC to include importing and exporting exclusive authority to approve the siting, natural gas as well as the construction of construction, and operation of import or liquefaction and re-gasification facilities. export facilities. FERC would be Building and operating such facilities prohibited from denying such a project would require authorization by the because it is for the benefit of the project Federal Energy Regulatory Commission. sponsor. Nor would it be permitted to FERC would be designated as lead condition authorization on allowing use agency for the purpose of coordinating by another party, regulation of rates or all applicable federal authorizations, and other conditions of service, or the for coordinating compliance with the requirement that rates or tariffs be filed National Environmental Policy Act of with FERC. 1969 (42 U.S.C.4312). FERC would set a - schedule ensuring expeditious This provision specifies that it would not administrative proceedings, and compile affect the rights of states under the the consolidated record of all state and Coastal Zone Management Act of 1972 federal proceedings. (1 4 U.S.C. 1451), the Clean Water Act (42 U.S.C. 7401), or the Federal Water Pollution Control Act (33 U.S.C.1251). - Measures adding customers which have the effect of degrading service for existing customers or causing subsidization of new customers rates by old customers would be prohibited. CRS-34 Provision House Senate Comments Hydraulic Fracturing Sec. 327. Would amend the Safe Drinking No similar provision. The SDWA required EPA to promulgate Water Act (SDWA), Section 1421(d), to regulations for state underground injection control specify that the definition of "underground (UIC) programs that included minimum injection" excludes the injection of fluids requirements for programs to prevent underground or propping agents used in hydraulic injection that endangers sources of drinking water. fracturing operations related to oil or gas (§1421(b)(2)). Before 1997, EPA had not production activities. Would remove considered regulating hydraulic fracturing for oil EPA's current authority to regulate the and gas development, because it did not view this underground injection of fluids used in well-production process as an activity subject to hydraulic fracturing, as needed to protect regulation under SDWA's UIC program. The drinking water. House provision responds to a 1997 court ruling that directed EPA to regulate hydraulic fracturing of coalbed methane (CBM) wells as underground injection. (See Appendix A for more information) Oil and Gas Exploration and Sec. 328. Would amend Section 502 of the No similar provision. Currently under the CWA, the operation of Production Defined Clean Water Act (CWA) (the definitions facilities involved in oil and gas exploration, provision) to give a permanent exemption production, processing, transmission, or treatment from CWA stormwater runoff rules for the generally is exempt from stormwater runoff construction of exploration and production regulations, but the construction of these facilities facilities by oil and gas companies and the is not. The House amendment would modify the roads that service those sites. Act to specifically include construction activities in the types of oil and gas facilities that are covered by the law's statutory exemption from stormwater rules. (See Appendix B for more information) Outer Continental Shelf Sec. 329. For applications to build No similar provision Provisions deepwater ports, the Secretary of Transportation could use environmental impact statements or other studies prepared by other federal agencies CRS-35 Provision House Senate Comments instead of conducting separate studies. Information from state and local governments and private-sector sources could also be used. Appeals Relating to Pipeline Sec. 330. Appeals of decisions under the No similar provision. Construction or Offshore Coastal Zone Management Act on natural Mineral Development Projects gas pipelines and offshore energy projects would be based exclusively on the record compiled by FERC or the relevant permitting agency. It would be the sense of Congress that appeals relating to natural gas pipeline construction would be coordinated within FERC's established timeframes under sections 3 and 7 of the Natural Gas Act (15 U.S.C. 717 b 717 (f). New Natural Gas Storage No comparable provision. Sec. 382. Would authorize FERC to Facilities allow provision of gas storage facilities at market based rates for facilities place in service after date of enactment. Process Coordination; Hearings; No comparable provision. Sec. 383. Strikes Sec. 15 of the Natural Rules of Procedure Gas Act and inserts a new Sec. 15, which defines Federal authorization as any required under federal law, including certificates of convenience and necessity. - FERC would be designated lead agency for NEPA compliance, preparing a single environmental review document and setting a schedule for other Federal CRS-36 Provision House Senate Comments authorizations. In situations where an applicant or a state takes issue with this process, an appeal to the President would be provided for. The President would be required to issue or deny an authorization within 90 days. Natural Gas Market Reform Sec. 332. Would modify the Commodity Sec. 384. Penalties. Modifies Natural Exchange Act (CEA, 7 U.S.C. 13), Gas Act and Natural Gas Policy Act banning "knowingly false or knowingly penalties for violating FERC Orders. misleading or knowingly inaccurate Would raise the prison term limit from 2 reports." It also would increase the to 5 years, and the fine ceiling from penalties for false reporting. $500 per violation to $50,000 for each day the violation takes place. Violations of emergency orders would be subject to fines up to $1 million per day. - Civil penalties for violating an order under the NGA would be subject to a new $1 million cap. Sec. 385. Market Manipulation. Would amend the NGA to prohibit using deceptive practices to influence price determination or reporting in contravention of FERC regulations protecting consumers. Sec. 389. Prohibition of Trading and Serving By Certain Individuals. Would amend the NGA to facilitate banning of individuals convicting of violating FERC orders from being officers of natural gas companies and prohibiting them from trading natural gas. CRS-37 Provision House Senate Comments Natural Gas Market Sec. 333. Would direct FERC to issue Sec. 386. Market Transparency. Transparency rules calling for the timely reporting of Anticipates that FERC could establish an natural gas prices and availability and to electronic bulletin board for making evaluate the data for accuracy. The market information available to the language specifies that FERC not public. Would provide for cooperation impinge on the role of commercial with the Commodity Futures Trading publishers of natural gas prices. Commission. FERC would be prohibited from competing with private market information providers. Federal State Liquified Natural No comparable provision. Sec. 388. Within one year of enactment, Gas Forums. the Secretary of Energy -- in conjunction with FERC, the Secretaries of Homeland Security, Transportation and coastal state Governors -- would be tasked with convening a series of 3 public forums to take place in locations where LNG facilities might be sited. Oil, Gas, and Mineral Industry Sec. 334. Within a year after enactment, Workers the secretaries of Energy, Labor, and the Interior must submit a report to Congress with recommendations on meeting future labor requirements for the domestic oil, gas, and mining industries. No Oil Producing and Exporting No comparable provision. Sec. 328. Would make it a violation of Cartels. the Sherman Act for foreign states or their agents, by cartel or cooperative action, to limit the production or distribution of fossil fuels, act collectively to set or maintain prices, or restrain trade in markets for these fuels. CRS-38 Provision House Senate Comments The doctrine of sovereign immunity from U.S. jurisprudence would no longer apply in the event of action being brought against violators. Access to Federal Land Provision House Senate Comments Leasing and Permitting Sec. 344. The Secretaries of the Interior No similar provision The federal oil and gas leasing program is governed Processes and Agriculture would be required to under the Mineral Leasing Act of 1920, as amended sign a memorandum of understanding (30 U.S.C. 181 et. seq.). Bureau of Land (MOU) on the "timely processing" of oil Management (BLM) procedures for an application and gas lease applications, surface use for a permit to drill (APD) are contained in 43 CFR plans and drilling applications, the 3162.3-1. The APD is posted for 30 days. Within 5 elimination of duplication, and ensuring working days after the 30-day period, the BLM consistency in applying lease consults with surface-managing agencies whose stipulations. consent is also required, then notifies the applicant of the results. The BLM is also required to process Sec. 346. Compliance with Executive No similar provision the application within the 35-day period. Order No. 13211 (42 U.S.C. 12301 note), requiring energy impact studies, would be required before taking action on regulations having an effect on domestic energy supply. Encouraging Prohibition of Sec. 355. Congress would urge that no No similar provision Drilling in the Great Lakes federal or state permits be issued for oil and gas drilling in or under the Great Lakes. CRS-39 Provision House Senate Comments Federal Coalbed Methane Sec. 358. States on the list of "affected Sec. 391. Same provision. The list of "affected states" established under the Regulation states" under section 1339(b) of the Energy Energy Policy Act of 1992 (42 U.S.C. 13368 (b)) Policy Act of 1992 (42 U.S.C. 13368(b)) includes: West Virginia, Pennsylvania, Kentucky, would be removed if they took specified Ohio, Tennessee, Indiana, and Illinois. These actions within three years after enactment states are on the list as a result of coalbed methane of H.R. 6 or had previously taken action (CBM) ownership disputes, impediments to under section 1339(b). development, lack of a regulatory framework to encourage CBM development in the state, and no current extensive development of CBM. A state may be removed from the list through a petitioning process initiated by the governor of that state. Refining Revitalization Provision House Senate Comments Short Title Sec. 371. This subtitle is designated as No provision. Closure of refineries since 1981 has resulted in the the "United States Refinery shuttering of nearly 500,000 barrels per day of Revitalization Act of 2005." capacity. While the number of operating facilities has fallen from 324 to 149, the total amount of capacity has risen, the result of expansion of existing plants. But the investment climate for expansion of old plants and construction of new remains clouded, in part due to regulatory uncertainty at the federal, state, and local levels. The findings in the House bill make note of the planned Yuma, AZ, refinery, which just received its federal air quality permit after five years under the current regulatory process. CRS-40 Provision House Senate Comments Findings Sec. 372. Based on the finding that fuel No provision. demand exceeds the production capacity of domestic refineries, it would be in the national interest to increase capacity to refine fuels within the United States. The findings in this section also note that no new refinery has been built in the country since 1976, and there has been a reduction in the number of operating facilities. It also notes that gasoline demand is expected to increase 45% between 2005 and 2025. Purpose Sec. 373. The Act's purpose would be to No provision. provide an accelerated review and approval process for idled refineries, and to lend legal and technical support to states needing help to meet such permit demands. Refinery Revitalization Zones Sec. 374. Refinery Revitalization Zones No provision. would be designated, and the Secretary of Energy would identify areas (within 90 days after enactment) that have experienced mass layoffs in manufacturing, contain an idle refinery, and have an unemployment rate that exceeds the national average by 10%. CRS-41 Provision House Senate Comments Memorandum of Understanding Sec. 375. This section calls for a No provision. memorandum of understanding between the Secretary of Energy and the EPA Administrator that would designate appropriate agency officials and staff to implement the purposes of the Act and administer any regulations issued thereunder. State Governors and Indian Tribe representatives could enter into this MOU. State Environmental Permitting Sec. 376. Once a qualifying state enters No provision. Assistance into the MOU, this section calls on the Secretary of Energy to delegate agency staff to provide assistance to the state. The EPA Administrator would be similarly charged, and specifically directed to provide expertise regarding the laws the agency administers as they relate to refineries. Coordination and Expeditious Sec. 377. DOE would be designated lead No provision. Review of Permitting Process agency. Upon written request of an applicant, the Department would coordinate all applicable authorizations and environmental reviews, including those at the state and local level. It would be required to set a prompt and binding schedule for federal reviews and authorizations, such that the whole federal process would be completed within six months. The Department would maintain a complete consolidated CRS-42 Provision House Senate Comments record of the proceedings, and act as the arbiter in the case of appeals. Decisions on appeals would be required within 60 days. The Secretary would establish a 60-day pre-application process to help establish likelihood of approval and identify potential issues. In its lead agency role, the Department would coordinate all federal actions for NEPA compliance, as well as consolidation of the impact statement into one document covering all environmental impacts. Compliance With All Sec. 378. This section calls for the No provision. Environmental Regulations compliance with all applicable laws and Required regulations. Definitions Sec. 379. This section includes No provision. definitions for a number of significant items, including: (1) Federal authorizations means those required under the Clean Air Act, the Federal Water Pollution Control Act, the Safe Drinking Water Act, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, the Solid Waste Disposal Act, the National Historic Preservation Act, and the National Environmental Policy Act of 1969. (2) An idle refinery is real property used as a refinery since December 31, 1979, and not operational before April 1, 2005. (3) A refinery CRS-43 Provision House Senate Comments means any facility designed and operated to store or ship oil, as well as to operate as a refinery or a refinery component. This includes places where fuel blending took place. (4) A qualifying state is a state or Indian tribe which has entered into a MOU with the Secretary of Energy, and has a refining infrastructure coordination office. Coal Clean Coal Power Initiative Provision House Senate Comments Authorization of Appropriations Sec. 401. Funding for the Clean Coal Sec. 401. Funding for CCPI would be Power Initiative (CCPI) would be authorized for $200 million for each year authorized for $200 million for each year from FY2006-FY2012. Specific from FY2006-FY2014. reductions in mercury would be established. Project Criteria Sec. 402. The technical criteria would be Sec. 402. Similar provision, except established for coal-based gasification slightly different technical criteria by the and other projects. The federal share of year 2020 for coal gasification projects. financing for each clean coal project would not exceed 50%. CRS-44 Provision House Senate Comments Report Sec. 403. A report on the projects' status Sec. 403. Same provision, except a report and technical milestones would be will be filed every two years through submitted after the first year and every 2012. two years (through 2014) by the Secretary of Energy to various congressional committees. Clean Coal Centers of Sec. 404. Would include grants to Sec. 404. Same provision Excellence universities to establish Centers of Excellence for energy systems of the future. Integrated Coal/Renewable No similar provision. Sec. 405. Integrated Coal/ Renewable Energy System Energy System. The Secretary would provide loan guarantees for an integrated gasification combined cycle facility of at least 200 MW that would be combined with renewable energy sources, sequester carbon dioxide emissions, and be a source of hydrogen for near-site fuel cell demonstrations. The federal share would not exceed 50%. Clean Power Projects Provision House Senate Comments Clean Coal Technology Loan Sec. 411. The Secretary of Energy would Sec. 406. Similar provision, except the be authorized to provide a $125 million maximum loan amount would be $80 loan to an experimental clean coal power million. plant in Healy, Alaska. CRS-45 Provision House Senate Comments Coal Gasification Sec. 412. Loan guarantees would be Sec. 407. Similar provision except that it authorized for a power plant of at least specifies the coal would come from the 400 MW capacity using integrated western United States, the facility would combined-cycle (IGCC) technology in a be located in a western state and would deregulated market and receiving no not be eligible for loan guarantees. ratepayer subsidy. Petroleum Coke Gasification Sec. 414. Loan guarantees would be No similar provision available for at least five petro-coke gasification polygeneration projects, involving co-production of electricity and fuels. Electron Scrubbing Sec. 416. The Secretary of Energy would No similar provision Demonstration be directed to use $5 million of appropriated funds to begin a project managed by the DOE Chicago Operations Office to demonstrate high- energy electron scrubbing technology for high-sulfur coal emissions. Coal and Related Programs Provision House Senate Comments Clean Air Coal Program/ Coal Sec. 441. This section would amend the Sec. 956. Similar provision. and Related Technologies Energy Policy Act of 1992 with the addition of a clean air coal program to promote increased use of coal, acceptance of new clean coal technologies, and advance deployment of CRS-46 Provision House Senate Comments pollution control equipment to meet the Clean Air Act (42 U.S.C. 7402 et seq.) (See Appendix C for more information.) Indian Energy Provision House Senate Comments Short Title Sec. 501. This title would be cited as the Sec. 501. Similar provision. "Indian Tribal Energy Development and Self-Determination Act of 2005." Office of Indian Energy Policy Sec. 502. Title II of the Department of Sec. 502. Similar provision. and Programs Energy Organization Act (42 U.S.C. 7131 et. seq.) would be amended to create the Office of Indian Energy Policy and Programs at the Department of Energy. Indian Energy Sec. 503. Title 26 the Energy Policy Act Sec. 503. Similar provision. Assistance for tribal energy development would of 1992 (25 U.S.C. 3501) would be be provided through DOI by grants and low- replaced by this section, which outlines interest loans and through DOE by grants and loan procedures whereby Indian tribes would guarantees. Federal agencies could give be able to develop and manage the preference to Indian energy when purchasing energy resources located on, and rights- energy products and byproducts. DOI would be of-way through, tribal land. Within a required to undertake a review and make year of enactment of the bill, the recommendations regarding tribal opportunities Department of the Interior (DOI) would under the Indian Mineral Development Act of issue regulations on the requirements for 1982 (25 U.S.C. 2101 et. seq.). The Bonneville approval of tribal energy resource Power Administration and Western Area Power CRS-47 Provision House Senate Comments agreements. Under their own tribal Administration would be authorized to assist in energy resource agreements as approved developing distribution systems that provide by DOI, Indian tribes would be able to power to Indian tribes using the federal enter into leases or business agreements transmission system. for energy development and grant rights- of-way over tribal land for pipelines or electric lines. Consultation with Indian Tribes Sec. 504. The Secretaries of Energy and Sec. 506. Similar provision. of the Interior would be required to consult with Indian tribes in carrying out this title. Four Corners Transmission Line Sec. 505. The Dine Power Authority, an Sec. 504. Similar provision. Project enterprise of the Navajo nation, would be eligible to receive grants and other assistance to develop a transmission line from the Four Corners Area to southern Nevada, including related generation facilities. Energy Efficiency in Federally No provision. Sec. 505. Would amend the Native Assisted Housing. American Housing and Self- Determination Act of 1996 to include as a goal "greater energy efficiency." CRS-48 Nuclear Matters Price-Anderson Act Amendments Provision House Senate Comments Short Title Sec. 601. "Price-Anderson Amendments Sec. 601. Same. The Price-Anderson Act, which addresses liability Act of 2005." for damages to the general public from nuclear incidents, would be extended through 2025 by both bills. The Price-Anderson liability system was up for reauthorization on August 1, 2002, and was extended for commercial nuclear reactors Extension of Indemnification Sec. 602. Price-Anderson liability Sec. 602. Same. through December 31, 2003, by the FY2003 Authority coverage for commercial reactors, DOE consolidated appropriations resolution (P.L. 108- contractors, and non-profit educational 7). Even without further extension, existing institutions would be extended through reactors will continue to operate under the current December 31, 2025. Price-Anderson liability system, but any new reactors would not be covered. Price-Anderson Maximum Assessment Sec. 603. The total retrospective Sec. 603. Same. coverage for DOE nuclear contractors was premium for each reactor would be set at extended through December 31, 2004, by the the current level of $95.8 million and the National Defense Authorization Act for FY2003 limit on per-reactor annual payments (P.L. 107-314). A further two-year extension for raised to $15 million. Both levels would DOE contractors was approved by Congress on be adjusted for inflation every five years, October 9, 2004, as part of the Ronald W. Reagan beginning August 20, 2003. National Defense Authorization Act for Fiscal Department of Energy Liability Sec. 604. The liability limit for DOE Sec. 604. Same. Year 2005 (P.L. 108-375). Limit contractors would be set at $10 billion (See Appendix D for more information.) per incident, to be adjusted for inflation every five years under Sec. 607. Incidents Outside the United Sec. 605. The liability limit and Sec. 605. Same. States maximum indemnification for DOE contractors for nuclear incidents outside CRS-49 Provision House Senate Comments the United States would be raised from $100 million to $500 million. Reports Sec. 606. NRC and DOE would have to Sec. 606. Same. report to Congress by the end of 2021 on the need for further Price-Anderson extensions and modifications. Inflation Adjustment Sec. 607. The liability limit for DOE Sec. 607. Same. nuclear contractors would be adjusted for inflation every five years after July 1, 2003. Treatment of Modular Reactors Sec. 608. For the purpose of applying the Sec. 608. Same. For example, a power plant with six 120- limits on retrospective premiums after a megawatt modular reactors would be liable for nuclear incident, a nuclear plant retrospective premiums of up to $95.8 million, consisting of multiple small reactors rather than $574.8 million. (100-300 megawatts per reactor, up to a total of 1,300 megawatts at the plant site) would be considered a single reactor. Applicability Sec. 609. None of the increased liability Sec. 609. Same. limits would apply to nuclear incidents taking place before the amendments are enacted. Prohibition on U.S. Liability for Sec. 610. Price-Anderson No provision. Certain Foreign Incidents indemnification would be prohibited for contracts related to nuclear facilities in countries found to sponsor terrorism. The prohibition would not apply to missions necessary for nuclear safety or nonproliferation. CRS-50 Provision House Senate Comments Civil Penalties Sec. 611. For future contracts, the bill Sec. 610. Substantially the same. would eliminate the civil penalty exemption for nuclear safety violations by the seven non-profit contractors listed in current law. DOE's authority to automatically remit penalties imposed on all non-profit educational institutions serving as contractors would also be repealed. However, the bill would limit the civil penalties against a non-profit contractor to the amount of management fees received under that contract within a one-year period. Financial Accountability Sec. 612. The federal government could No provision. sue DOE contractors to recover at least some of the compensation that the government had paid for any accident caused by intentional DOE contractor management misconduct. Such cost recovery would be limited to the amount of the contractor's profit under the contract involved, and no recovery would be allowed from nonprofit contractors. General Nuclear Matters Provision House Senate Comments Commercial Reactor License Sec. 621. The initial 40-year period for a No provision. Currently, under Atomic Energy Act Section 185 Period commercial nuclear reactor license would b. (added by the Energy Policy Act of 1992, P.L. begin when NRC authorized the reactor 102-486), the 40-year initial license period may CRS-51 Provision House Senate Comments to commence operation after construction begin when a "combined construction and had been completed. operating license" is issued several years before the reactor is to start operating. Before Section 185 was added in 1992, reactor operating licenses had been issued only after construction was complete, but any future licenses are expected to use the combined license option. NRC Training and Fellowship Sec. 622. Funding of $1 million per year No provision. Program would be authorized from FY2005- FY2009 for NRC to conduct a training and fellowship program to develop critical nuclear safety regulatory skills. Cost Recovery From Sec. 623. NRC would be authorized to No provision. Such authority is limited under current law Government Agencies charge cost-based fees for all services (Atomic Energy Act, Section 161 w.). rendered to other federal agencies. Elimination of Pension Offset Sec. 624. When NRC has a critical need No provision. for Key NRC Personnel for the skills of a retired employee, NRC could hire the retiree as a contractor and exempt him or her from the annuity reductions that would otherwise apply. Antitrust Review Suspension Sec. 625. NRC would no longer have to No provision. submit nuclear reactor license applications to the Attorney General for antitrust reviews, as currently required by Atomic Energy Act Section 105 c. CRS-52 Provision House Senate Comments Decommissioning Fund Sec. 626. NRC would be explicitly No provision. This provision is particularly aimed at cases in Protection authorized to issue regulations ensuring which an original nuclear power plant owner has that funds collected to decommission sold the plant but retained control over nuclear power plants would not be used decommissioning funds collected before the for other purposes. ownership transfer. Limitation on DOE Legal Fee Sec. 627. Except as required by existing No provision. Reimbursement contracts, DOE would be prohibited from reimbursing its contractors for legal expenses incurred in defending against "whistleblower" complaints that are ultimately upheld. Feasibility Study for Sec. 629. The Secretary of Energy would No provision. Commercial Reactors at DOE be required to submit a study to Congress Sites on the feasibility of developing commercial nuclear power plants at existing DOE sites. Government Uranium Sales Sec. 630. With certain exceptions, DOE No provision. uranium sales would be restricted to 3 million pounds per year from FY2005- FY2009, 5 million pounds per year in FY2010-FY2011, 7 million pounds per year in FY2012, and 10 million pounds per year thereafter. DOE must report to Congress within three years on the impact of such sales on the domestic uranium industry. CRS-53 Provision House Senate Comments Uranium Mining Research and Sec. 631. Funding of $10 million per No provision. Development year would be authorized during FY2006-FY2008 for a cost-shared research and development program by DOE and domestic uranium producers on in-situ leaching mining technologies and related environmental restoration technologies, except that "no activities funded under this section may be carried out in the State of New Mexico." Whistleblower Protection Sec. 632. Existing whistleblower Sec. 625. Whistleblower protections protections for employees of nuclear would be extended to employees of DOE power plants and other NRC licensees and all DOE contractors and and employees of DOE contractors subcontractors. An employee could take would be extended to employees of NRC a whistleblower complaint to federal contractors. An employee whose court if the Secretary of Labor had not whistleblower retaliation complaint did made a final decision within 180 days. not receive a final decision by the Secretary of Labor within 540 days could take the case to federal court. Uranium Exports for Medical Sec. 633. Highly enriched uranium Sec. 621. NAS would study the The current HEU export restrictions are intended Isotope Production (HEU) could be exported to Canada, effectiveness of the current HEU export to spur foreign cooperation with U.S. efforts to Belgium, France, Germany, and the restrictions, the progress that medical convert all HEU reactors to LEU, but supporters Netherlands for production of medical isotope producers are making in of the exemption contend that the restrictions isotopes in nuclear reactors. Those converting to LEU, whether the supply of could disrupt the supply of medical isotopes countries would be exempt from existing medical isotopes could be affected by the produced in foreign HEU reactors. requirements (under Section 134 of the HEU restrictions, and other aspects of the Atomic Energy Act) that they agree to issue. switch to low-enriched uranium (LEU) as soon as possible and that LEU fuel for their reactors be under active CRS-54 Provision House Senate Comments development. Instead, those countries would have to agree to convert to suitable LEU fuel when it became available. NRC would have to review current security requirements for HEU used for medical isotope production and impose additional requirements if necessary. The National Academy of Sciences (NAS) would study the potential availability and cost of medical isotopes produced in LEU reactors; that study would be used by DOE to help determine whether U.S. medical isotope demand could be reliably and economically met with production facilities that do not use HEU. If the Secretary of Energy certifies that such demand can be met, the export exemption in the House bill would terminate. Fernald Byproduct Material Sec. 634. DOE-managed material in the No provision. concrete silos at the Fernald (OH) uranium processing facility would be considered byproduct material (as defined by section 11 e.(2) of the Atomic Energy Act of 1954 (42 U.S.C. 2014(e)(2)). DOE would dispose of the material in an NRC- or state-regulated facility. CRS-55 Provision House Senate Comments Safe Disposal of Greater-than- Sec. 635. DOE would designate an office Sec. 622. Similar to House provision, Class-C Radioactive Waste with the responsibility for developing a with the additional requirement that comprehensive plan for permanent within 180 days after enactment DOE disposal of all low-level radioactive would give Congress a plan for continued waste with concentrations of recovery and storage of radioactive radionuclides that exceed the limits sealed sources that pose a security threat. established by the NRC for Class C radioactive waste. The plan would include developing a new facility or use of an existing facility for disposal. Prohibition on Nuclear Exports Sec. 636. Exports of nuclear materials, Sec. 623. Same. This provision is intended to block to Terrorism Sponsors equipment, and sensitive technology implementation of a 1994 agreement under which would be prohibited to any country North Korea was to receive a U.S.-designed identified by the Secretary of State as a nuclear power plant in return for abandoning its sponsor of terrorism. The President could nuclear weapons program. The agreement has waive the export restriction under certain been suspended in light of North Korea's conditions. continuing weapons activities. National Uranium Stockpile Sec. 638. The Secretary of Energy would No provision. be authorized to create a national low- enriched uranium stockpile. Nuclear Regulatory Commission Sec. 639. Whenever a quorum of the No provision. Meetings Nuclear Regulatory Commission gathers to discuss official business, other than at formal Commission meetings, the discussions would have to be recorded and the public notified within 15 days. A transcript of the recording would be available to the public upon request except for information that is exempted or prohibited from disclosure by law. CRS-56 Provision House Senate Comments Employee Benefits Sec. 640. Subject to the availability of No provision. funds, workers at DOE's uranium enrichment plants at Portsmouth, Ohio, and Paducah, Kentucky, who were eligible for certain pension and health care benefits on April 1, 2005, shall continue such eligibility. Decommissioning Pilot Program No provision. Sec. 624. DOE would be required to establish a program to decommission and decontaminate the site of the Southwest Experimental Fast Oxide Reactor (SEFOR) in Arkansas. Funding of $16 million would be authorized. Advanced Reactor Project Provision House Senate Comments Advanced Reactor Project Sec. 651. DOE would be authorized to Secs. 631-635. Similar to House develop, design, construct, and operate provision. The project would be called an advanced nuclear reactor to produce the Next Generation Nuclear Plant hydrogen and electricity, called the Project and could produce electricity, Advanced Reactor Hydrogen hydrogen, or both. Program plans for Cogeneration Project. The project would the project would be reviewed by DOE's be managed by the DOE Office of Nuclear Energy Research Advisory Nuclear Energy, Science, and Committee. DOE would be required by Technology, and the reactor would be the end of FY2011 to select the located at the Idaho National Laboratory. technology to be used for high- The project could be combined with temperature hydrogen production or DOE's existing Generation IV Nuclear notify Congress of an alternative date. A CRS-57 Provision House Senate Comments Energy Systems Initiative, which focuses design competition would then by held, on development of advanced nuclear and the target date to complete power technology. Among other construction would be the end of requirements, the project should begin FY2021. Funding of $1.25 billion would producing hydrogen or electricity by be authorized through FY2015, plus such 2011 unless the Secretary of Energy finds sums as necessary from FY2016 through that goal infeasible. The reactor would FY2021. be licensed and regulated by NRC. Five projects to demonstrate hydrogen production at existing nuclear power plants would also be authorized. Funding for the program would be authorized at $1.3 billion through FY2015. Definitions Sec. 652. "Advanced nuclear reactor No provision. technologies" and other terms are defined. Nuclear Security Provision House Senate Comments Nuclear Facility Threats Sec. 661. In consultation with NRC and No provision. NRC has been reviewing security requirements at other appropriate agencies, the President nuclear facilities since the 9/11 terrorist attacks. would be required to identify types of The "design basis threat" that nuclear plant security threats at nuclear facilities. The security forces must defend against has been President would have to issue reports on revised, and all reactor sites must now conduct the identified threats and on actions taken force-on-force security exercises every three or to be taken to address the threats. years. NRC contends that legislation in this area NRC would be authorized to revise its is therefore unnecessary, but others contend that regulations based on the President's NRC's security requirements are inadequate. CRS-58 Provision House Senate Comments threat-identification report. NRC would be required to conduct periodic force-on- force exercises to test nuclear facility security. NRC would be authorized to issue regulations to protect information about nuclear facility security, and would be required to assign a security coordinator to each NRC region. Fingerprinting for Criminal Sec. 662. The existing requirement that No provision. Background Checks individuals be fingerprinted for criminal background checks before receiving unescorted access to nuclear power plants (Atomic Energy Act, Section 149) would be extended to individuals with unescorted access to any radioactive material or property that could pose a health or security threat. Other biometric methods could be used instead of fingerprinting. Use of Firearms by Nuclear Sec. 663. NRC would be authorized to No provision. Federal law currently authorizes NRC employees Licensees allow the use of firearms by security and contractors to use firearms, but not employees personnel at nuclear power plants and or contractors of nuclear licensees (Atomic other facilities licensed or regulated by Energy Act, Section 161 k.). This provision would NRC. counter some state laws that preclude private guard forces from utilizing some weapons. Unauthorized Introduction of Sec. 664. Existing NRC controls on the No provision. Dangerous Weapons entry of dangerous weapons or materials into Commission facilities (Atomic Energy Act, Section 229a) would be CRS-59 Provision House Senate Comments extended to commercial nuclear power plants and other NRC-regulated facilities. Sabotage of Nuclear Facilities or Sec. 665. Maximum penalties for No provision. Fuel sabotage of licensed nuclear facilities or materials (Atomic Energy Act, Section 236 a.) would be increased from $10,000 and 10 years in prison to $1 million and life imprisonment without parole. The language would clarify that the penalties could apply to facilities "certified" as well as "licensed" by NRC, and also to sabotage of facilities under construction. Secure Transfer of Nuclear Sec. 666. Nuclear materials transferred No provision. Materials or received in the United States pursuant to an import or export license would have to be accompanied by a detailed manifest. Every worker involved in such shipments would have to undergo a federal security background check. Department of Homeland Sec. 667. Before issuing a license for a No provision. Security Consultation nuclear power plant, NRC would have to consult with the Department of Homeland Security about the vulnerability of the proposed plant location to terrorist attack. Authorization of Appropriations Sec. 668. Appropriation of such sums as No provision. The current fee requirement, imposed by the necessary to carry out this subtitle would Omnibus Budget Reconciliation Act of 1990 (42 be authorized. A statutory requirement U.S.C. 2214), is set to expire September 20, 2005. that the Nuclear Regulatory Commission CRS-60 Provision House Senate Comments recover 90% of its costs (minus certain exceptions) through licensee fees would be made permanent. NRC's costs in regulating residual defense radioactive waste under Section 3116 of the Ronald W. Reagan National Defense Authorization Act for Fiscal Year 2005 (50 U.S.C. 2601 note) would be excluded from costs subject to the 90% cost recovery requirement. Vehicles and Fuels Existing Programs Provision House Senate Comments Use of Alternative Fuels by Sec. 701. Section 400AA of EPCA would Sec. 701. Similar provision. The sections of this subtitle refer to alternative Dual-Fueled Vehicles be amended to require that all federal fuel and vehicle purchase requirements under the agencies operate dual-fueled vehicles on Energy Policy and Conservation Act (EPCA) alternative fuels or petition the Secretary (P.L. 94-163) and the Energy Policy Act of 1992 of Energy for a waiver from the (EPAct, P.L. 102-486). Under current law, requirement. agencies are not required to file a petition to be exempted from the requirement. Fuel Use Credits No comparable provision. Sec. 702. Would allow agencies to Under current law, for covered fleets a set consume alternative fuels in lieu of percentage (depending on the type of fleet) of new making required alternative fuel vehicle light-duty vehicle purchases must be alternative purchases under the Energy Policy Act of fuel vehicles. For every 450 gallons of biodiesel 1992. (but not other alternative fuels) consumed by a CRS-61 Provision House Senate Comments covered fleet, that fleet may purchase one fewer alternative fuel vehicle. Incremental Cost Allocation Sec. 704. Section 303(c) of EPAct allows Sec. 703. Identical provision. federal agencies to allocate the incremental cost of required alternative- fuel vehicles across the whole vehicle fleet. H.R. 6 would require agencies to do so. Alternative Compliance and No comparable provision. Sec. 704. Would require the Secretary of Flexibility Energy to allocate vehicle purchase credits for: the acquisition of hybrid vehicles; the installation of alternative fuel refueling infrastructure; or other actions that will reduce petroleum consumption. Lease Condensates Sec. 705. Would amend the definition of No comparable provision. alternative fuel to include lease condensate (liquids recovered from natural gas separation) and fuels derived from lease condensate. Fleets could generate one vehicle purchase credit for the use of a certain volume (to be determined by the Secretary of Energy) of lease condensate fuel in medium- and heavy-duty vehicles. This provision is similar to the existing credit structure for the use of biodiesel. Review of Energy Policy Act of Sec. 706. The Secretary of Energy would Sec. 1308. Similar provision. 1992 Programs be required to conduct a study on the CRS-62 Provision House Senate Comments effectiveness of the alternative fuel vehicle programs under EPAct. Specifically, the Secretary would be required to assess the effects on vehicle technology, availability, and cost. Report Concerning Compliance Sec. 707. Would extend through 2020 Sec. 705. Identical provision. with Alternative Fuel Vehicle the requirement that each federal agency Purchasing Requirements report annually (currently required through 2012) to Congress on its compliance with EPAct vehicle purchase requirements. Procurement of Alternative No comparable provision. Sec. 723. Federal fleets not otherwise In general, the above EPAct requirements apply to Fueled Passenger Automobiles covered by the EPAct alternative fuel fleets of 50 vehicles or more, of which at least 20 vehicle requirements would be mandated operate primarily in metropolitan areas. to purchase solely alternative fuel passenger automobiles unless there is insufficient supply of alternative fuel. Procurement of Hybrid Light No comparable provision. Sec. 724. Federal agencies with fleets Duty Trucks not otherwise covered by the EPAct alternative fuel vehicle requirements would be mandated to purchase solely hybrid light-duty trucks, unless: those vehicles cannot meet the fleets' requirements for capabilities; the vehicles are not commercially available; or the incremental cost of the hybrid vehicle is significant. This section would exclude the Department of Defense from the requirement. CRS-63 Provision House Senate Comments Definitions No comparable provision. Sec. 725. Alternative fueled vehicle and other terms would be defined. Hybrid Vehicles, Advanced Vehicles, and Fuel Cell Buses Provision House Senate Comments Hybrid Vehicles Sec. 711. Would require the Secretary of Sec. 721. Similar provision, except that Energy to accelerate research on $50 million annually would be technologies for hybrid vehicles. No authorized for FY2006 through FY2008. funding authorization is included. Hybrid Retrofit and Electric Sec. 712. The Administrator of the No comparable provision. Conversion Program Environmental Protection Agency (EPA) would be required to establish a grant program for the installation of technologies to retrofit existing combustion engines with electric or hybrid systems. Retrofitted vehicles must achieve federal Low Emission Vehicle standards. Would authorize a total of $100 million between FY2005 and FY2007 for the program. Efficient Hybrid and Advanced Sec. 713. The EPA Administrator would No comparable provision. Diesel Vehicles be required to establish a program to encourage the domestic production and sale of efficient hybrid and advanced diesel vehicles. The program must include grants to domestic vehicle manufacturers to encourage production CRS-64 Provision House Senate Comments and provide consumer purchase incentives. A total of $3 billion is authorized between FY2006 and FY2015. Advanced Vehicles Secs. 721-724. The Secretary of Energy No comparable provision. would be authorized to provide grants to state governments, local governments, and metropolitan transit authorities for the purchase of alternative fuel, hybrid, fuel cell, and ultra-low sulfur diesel vehicles (defined in Sec. 721) and the infrastructure to support them. The program would be administered through the Clean Cities Program. Sec. 722. Grants would be capped at $20 No comparable provision. million per applicant. Between 20% and 25% of all grant funds would be used for ultra-low sulfur diesel vehicles. Sec. 723. The Secretary would be No comparable provision. required to submit reports to Congress identifying grant recipients and evaluating the program's effectiveness. Sec. 724. $200 million total would be No comparable provision. authorized for the grant program. Fuel Cell Transit Bus Sec. 731. The Secretary of Energy would No comparable provision. Demonstration be required to establish a program to demonstrate up to 25 fuel cell transit buses in various localities. $10 million CRS-65 Provision House Senate Comments annually would be authorized for FY2006 through FY2010. Joint Flexible Fuel/Hybrid No comparable provision. Sec. 706. The Secretary of Energy would Vehicle Commercialization be required to establish a grant program Initiative for applied research on flexible fuel hybrid vehicles. A total of $40 million would be authorized between FY2005 and FY2008. Clean School Buses Provision House Senate Comments Definitions Secs. 741-744. Definitions of "alternative No comparable provision. fuel school bus" and other terms are provided. Program for Replacement of Sec. 742. A pilot program administered No comparable provision. Certain School Buses With by the Environmental Protection Agency Clean School Buses would be established to provide grants to local governments and contractors that provide school bus service for public school systems. Grants would be provided to aid in the purchase of alternative fuel and advanced diesel buses, and the infrastructure necessary to support them. A total of $200 million would be authorized for FY2005 through FY2007, and a maximum of 30% of the CRS-66 Provision House Senate Comments grant funds could be used to purchase advanced diesel buses. Diesel Retrofit Program Sec. 743. A pilot program would also be No comparable provision. established to provide grants for the development and application of retrofit technologies for diesel school buses. A total of $100 million would be authorized for FY2005 through FY2007. Fuel Cell School Buses Sec. 744. In addition, a pilot program No comparable provision. would be established for the development and demonstration of fuel cell school buses. A total of $25 million would be authorized for FY2005 through FY2007. Diesel Truck Retrofit and Fleet Sec. 743A. The EPA Administrator Secs. 751-757. The EPA Administrator Modernization Program would be required to establish a program would be required to establish a program to provide grants (administered by state to provide grants and loans for diesel or local governments) to modernize engine retrofits. Would require EPA to cargo truck operations. Grants would be provide grants and loans for retrofits of used to retrofit pre-1999 vehicles with various types of engines including buses, advanced emissions control devices. A heavy-duty trucks, locomotives, and total of $100 million would be authorized marine engines. Would require EPA to between FY2005 and FY2007. support grant and loan programs administered by the states. Would require a report to Congress evaluating the implementation of the programs. $200 million would be authorized annually for FY2006 through FY2010. CRS-67 Miscellaneous Provision House Senate Comments Railroad Efficiency Sec. 751. A public-private research Sec. 731. Similar provision. partnership would be established for the development and demonstration of locomotive engines that increase fuel economy, reduce emissions, and lower costs. A total of $110 million would be authorized for FY2006 through FY2008. Mobile Emission Reductions Sec. 752. Within 180 days of enactment, No provision. Trading the EPA Administrator would be required to submit a report to Congress on EPA's experience with the trading of mobile source emission reduction credits to stationary sources to meet emission offset requirements within Clean Air Act nonattainment areas. Aviation Fuel Conservation and Sec. 753. This section would require the No provision. Emissions Federal Aviation Administration and EPA to initiate a joint study of the impact of aircraft emissions on air quality in Clean Air Act nonattainment areas, ways to promote fuel conservation measures and reduce emissions, and opportunities to reduce air traffic inefficiencies that increase fuel burn and emissions within 60 days of the date of enactment, and to report the results to Congress within one year of initiating the study. CRS-68 Provision House Senate Comments Diesel Fueled Vehicles Sec. 754. The Secretary of Energy would Sec. 722. Similar provision, except that The Tier 2 light-duty vehicle emissions standards be required to accelerate research on $75 million would be authorized will be phased in between model years 2004 and emissions control technologies for diesel annually for FY2006 through FY2008. 2009. The heavy-duty diesel engine standards motor vehicles. The objective of the will be phased in beginning in 2007. research would be to enable diesel technology to meet, not later than 2010: Tier 2 light-duty vehicle emission standards; and model year 2007 heavy- duty vehicles. No new funding would be authorized. Conserve by Bicycling Program Sec. 755. The Department of Sec. 732. Similar provision, except that Transportation (DOT) would be directed the cost-sharing requirement could be to conduct up to 10 pilot bicycling met by any "non-federal sources." projects to conserve energy. A minimum of 20% of each project's costs would have to be provided by state or local sources. Also, DOT would be directed to engage the National Academy of Sciences to conduct a research study on the feasibility of converting motor vehicle trips to bicycle trips. Reduction of Engine Idling of Sec. 756. EPA would be required to Sec. 733. Similar provision. Heavy-Duty Vehicles study whether existing air emission models accurately reflect emissions from idling vehicles. Further, EPA would be required to establish a program to support the deployment of idle-reduction technologies. A total of $95 million would be authorized for FY2006 through FY2008 for the deployment program. CRS-69 Provision House Senate Comments Biodiesel Engine Testing Sec. 757. The Secretary of Energy would Sec. 734. Similar provision. Program be required to study the effects of biodiesel and biodiesel blends on current and future emissions control technologies. $5 million would be authorized annually for FY2006 through FY2010. High Occupancy Vehicle Sec. 758. The Transportation Equity Act No comparable provision. Through September 30, 2003, states had the Exception for the 21st Century (TEA-21, P.L. 105- authority to exempt certain types of alternative 178) would be amended to allow states to fuel vehicles from the restrictions. However, exempt hybrid and dedicated alternative hybrid vehicles and some alternative fuel vehicles fuel vehicles from high occupancy did not qualify. As the existing authorization has vehicle (HOV) restrictions. expired, states do not currently have the authority to exempt any type of alternative fuel vehicle from HOV restrictions. Ultra-Efficient Engine Sec. 759. The Secretary of Energy, in No comparable provision. Technology for Aircraft cooperation with the National Aeronautics and Space Administration, would be required to develop new engine technology for aircraft with a goal of a 10% increase in fuel efficiency and a 70% decrease in nitrogen oxide emissions during takeoff and landing. A total of $225 million would be authorized between FY2006 and FY2010. CRS-70 Automobile Efficiency Provision House Senate Comments Fuel Economy Standards Sec. 771. Would authorize $2 million Sec. 712. Same, except $5 million annually during FY2006-FY2010 for the annually. National Highway Traffic Safety Administration (NHTSA) to carry out fuel economy rulemakings. Increased fuel economy No comparable provision. Sec. 712. This would require the standards Secretary of Transportation to issue new CAFE standards for light-duty trucks by April 1, 2006. These would apply beginning with MY2007. Final regulations for increasing passenger automobile fuel economy would be required not later than 30 months after enactment of the legislation. Criteria to be taken into account Sec. 772. Would expand the criteria that Sec. 711. Would add more criteria than in setting maximum feasible fuel the agency would be required to take into the House bill, including the extent to economy standards. account in setting maximum feasible fuel which advanced technologies might economy for cars and light trucks, achieve significant reductions in fuel including the effects of prospective consumption and the extent to which standards on vehicle safety and automotive meeting higher CAFE standards might industry employment. divert resources from developing these advanced technologies. Expedited procedures for No comparable provision. Sec. 713. In the event that the Secretary Congressional increase in fuel of Transportation does not promulgate economy standards. new standards (as specified in Sec. 712), the Senate bill would provide expedited procedures for passage of legislation by Congress to set new CAFE standards. CRS-71 Provision House Senate Comments Extension of maximum fuel Sec. 773. Would also extend corporate Sec. 714. Would also extend corporate economy increase for alternative average fuel economy (CAFE) credits that average fuel economy (CAFE) credits fueled vehicles. accrue to manufacturers of dual-fueled that accrue to manufacturers of dual- vehicles. The cap to the credit of 1.2 miles fueled vehicles. The cap to the credit of per gallon (mpg) earned by any individual 1.2 miles per gallon (mpg) earned by any manufacturer would be extended to model individual manufacturer would be year (MY) 2010. It was otherwise extended to MY2008. The bill would scheduled to drop to a cap of 0.9 mpg postpone institution of the 0.9 cap until beginning in MY2005. The bill would MY2009 and authorize it through postpone institution of the 0.9 cap until MY2012. MY2011 and authorize it through MY2014. Study about significantly Sec. 774. Would require the National Sec. 1309. Similar to the House bill, but reducing gasoline consumption Highway Traffic Safety Administration to goal is achieving the "significant by model year (MY) 2012. explore the feasibility and effects of reduction" by 2012. reducing automobile fuel consumption "a significant percentage" by MY2014. Adjustment to estimated in-use Sec. 775. Would require adjustment of No comparable provision. fuel economy posted on new tested fuel economy levels so that vehicles. estimates posted on new vehicles would be closer to experience. Adjustments would include use of air conditioning, higher speed limits, and faster acceleration rates. Study of link between energy No comparable provision Sec. 1336. Requires study by the security and increases in vehicle National Academy of Sciences with a miles traveled. similar objective to the study specified in Sec. 1309, but would examine links between and development patterns and vehicle miles traveled (VMT), and whether VMT and the number of vehicle CRS-72 Provision House Senate Comments trips can be reduced by better planning, design, development and infrastructure decisions by state and local officials Hydrogen Provision House Senate Comments Definitions Sec. 801. Definitions of "fuel cell" and Sec. 801. Would amend and reauthorize Spark M. Matsunaga Hydrogen Research, other terms are provided. the Spark M. Matsunaga Hydrogen Development, and Demonstration Act of 1990 (42 Research, Development, and U.S.C. 12401 et seq.) authorizes hydrogen and Demonstration Act of 1990 (42 U.S.C. fuel cell research at the Department of Energy. 12401 et seq.). Funding levels were authorized through FY2001, although research is ongoing. Plan Sec. 802. Would require the Secretary of No comparable provision. Energy to develop a plan for the development of hydrogen fuel and fuel cells. Interagency Task Force and Secs. 804 and 805. Would establish an Sec. 102 (of the amended Matsunaga Current law established a Hydrogen Technical Advisory Committee Interagency Task Force to coordinate Act). Would establish an Interagency Advisory Panel to advise the Secretary on federal research (Sec. 804), and would Hydrogen and Fuel Cell Technical Task programs under the Act. Further, the Act gives establish a Hydrogen Technical and Fuel Force to advise the Secretary on the the Secretary the authority to consult with other Cell Advisory Committee to advise the implementation of the act. Would also agencies, but does not require the Secretary to do Secretary and review the development establish a Technical Advisory so. plan (Sec.805). Committee to provide technical assistance to the Secretary and the task force. CRS-73 Provision House Senate Comments External Review Sec. 806. DOE's plans for the hydrogen No comparable provision. program would be reviewed by the National Academy of Sciences. Miscellaneous Provision Sec. 807. The Secretary of Energy would No comparable provision. be authorized to represent U.S. interests related to hydrogen programs domestically and internationally in coordination with relevant federal agencies. Savings Clause Sec. 808. Specified authorities of the No comparable provision. Secretary of Transportation would not be affected. Authorization of Appropriations Sec. 809. A total of $4 billion would be Sec. 801. A total of $3.3 billion would authorized for FY2006 through FY2010 be authorized for FY2006 through for all hydrogen and fuel cell research, FY2010 in the following areas: $1.06 development, and demonstration billion for hydrogen supply research and activities. development (Sec. 104 of the amended Act); $0.86 billion for fuel cell research and development (Sec. 104); $1.31 billion for demonstration programs (Sec. 202); $0.04 billion for codes and standards. Solar and Wind Technologies Sec. 810. Would create program of five No comparable provision. pilot projects to demonstrate the use of solar energy to produce hydrogen. Further, would create a program of five pilot projects to demonstrate the use of wind energy to produce hydrogen. DOE would be directed to support research CRS-74 Provision House Senate Comments programs at universities that study the use of solar and wind energy technologies to produce hydrogen. Hydrogen Fuel Cell Buses Sec. 811. The Secretary of Energy, No comparable provision. through the Advanced Vehicle Technologies Program, would be required to establish four fuel cell bus demonstration sites. Definitions No comparable provision. Sec. 741. Provides definitions for Sections 742 and 743. Federal and State Procurement No comparable provision. Sec. 742. All federal agencies that use of Fuel Cell Vehicles and light- or heavy-duty vehicles would be Hydrogen Energy Systems required to lease or purchase fuel cell vehicles and hydrogen energy systems. The Secretary of Energy would be required to pay federal agencies the incremental cost of the new systems. The Secretary of Energy would be permitted to establish cooperative program with state agencies to encourage the purchase of fuel cell vehicles. A total of $105 million would be authorized between FY2006 and FY2008. Federal Procurement of No comparable provision. Sec. 743. All federal agencies that use Stationary, Portable, and Micro electrical power from stationary, Fuel Cells portable, or microportable devices would be required to lease or purchase stationary, portable, or micro fuel cells. The Secretary of Energy would be CRS-75 Provision House Senate Comments required to pay or share the cost of the new systems. The Secretary of Energy would be permitted to establish cooperative program with state agencies to encourage the purchase of fuel cell vehicles. A total of $345 million would be authorized between FY2006 and FY2010. Research and Development Provision House Senate Comments Short Title; Definitions Sec. 900. This title would be referred to Secs. 901-903. Same short title as House as the "Energy Research, Development, bill. Defines departmental mission, Demonstration, and Commercial Hispanic-serving institution, nonmilitary Application Act of 2005." Defines, for energy laboratory, part B institution, and the purposes of this title, the terms single-purpose research facility. DOE applied programs, biomass, Department, would be required to publish "measurable departmental mission, institution of cost and performance-based goals" for higher education, National Laboratory, each major energy R&D area. renewable energy, Secretary, State, university, and user facility. Support for Science and Energy No comparable provision. Sec. 963. DOE would be required to Facilities and Infrastructure develop a strategy for science and energy R&D infrastructure and describe the strategy in the FY2007 budget request. CRS-76 Science Programs Provision House Senate Comments Office of Science Programs Sec. 901. The programs of the Office of No similar provision. Science would be authorized in general, and DOE would be directed to commence construction of the Rare Isotope Accelerator no later than September 30, 2008. Expenditures on the Rare Isotope Accelerator prior to operation would be limited to $1.1 billion. Systems Biology Program Sec. 902. DOE would be directed to Sec. 968. DOE would be directed to (House) / Genomes to Life establish a program of research, carry out a program of research, Program (Senate) development, and demonstration in development, demonstration, and genetics, protein science, and commercial application in microbial and computational biology, with specified plant systems biology, protein science, goals. DOE would have to submit a and computational biology, with research plan for this program to specified goals, to be known as the Congress within one year and contract "Genomes to Life Program." DOE with the National Academy of Sciences would have to prepare a program plan to review the plan within an additional 18 and update its short-term goals each year months. Biomedical research and together with the annual budget research related to humans would not be submission. permitted as part of the program. Catalysis Research and Sec. 903. DOE would be directed to Sec. 964. Similar to the House provision. Development Program conduct a program of R&D in catalysis Program content would be specified in science. more detail. In addition, a triennial assessment of the program by the National Academy of Sciences would be required. CRS-77 Provision House Senate Comments Hydrogen Sec. 904. DOE would be directed to Sec. 965. In addition to the House conduct a program of fundamental R&D language, the hydrogen program would in support of the hydrogen programs be required to include support for authorized in Title VIII. generating hydrogen without the use of natural gas. Solid State Lighting No similar provision. Sec. 966. DOE would be directed to conduct a program of research on advanced solid state lighting in support of the initiative established by Sec. 912. Advanced Scientific Computing Sec. 905. DOE would be directed to Sec. 967. Similar to the House provision, Research conduct a program of R&D in advanced with the addition of advanced scientific computing, including applied visualization techniques as one of the mathematics and the activities authorized goals of the program. In addition, Sec. by the Department of Energy High-End 203 of the High-Performance Computing Computing Revitalization Act of 2004 Act of 1991 (15 U.S.C. 5523) would be (P.L. 108-423). amended as follows: DOE's general responsibilities as part of the interagency National High-Performance Computing Program would be modified; DOE would no longer be required, as part of that program, to establish consortia, engage in technology transfer, or submit an annual report (but these activities would not be prohibited); and the authorization of appropriations for the program for fiscal years already completed would be replaced by a general authorization of "such sums as are necessary." CRS-78 Provision House Senate Comments Fusion Energy Sciences Sec. 906. Research, development, Sec. 962. Similar to the House provision. The United States withdrew from the design phase Program demonstration, and commercial In addition, DOE would be directed to of ITER in 1998 at congressional direction, application directed at competitiveness in include in the fusion policy plan, to the largely because of concerns about cost and scope. fusion energy, including a demonstration extent possible, the recommendations on The project has since been restructured, and in of the utilization of fusion energy to workforce planning that were made in January 2003, the Administration announced its produce electric power or hydrogen, March 2004 by DOE's Fusion Energy intention to reenter the project. Other international would be declared to be U.S. policy. Sciences Advisory Committee. partners include the European Union, Japan, DOE would be directed to submit a plan Russia, China, and South Korea. A site in France to carry out that policy. Authority would was officially selected on June 28, 2005. be given for the United States to participate in the international fusion energy experiment known as ITER (International Thermonuclear Experimental Reactor). DOE would be directed to develop a plan for ITER participation and have it reviewed by the National Academy of Sciences. Funds could not be expended for ITER construction until the plan and other reports were provided to Congress. If construction of ITER appeared unlikely, DOE would be directed to submit a plan for a domestic burning plasma experiment. Fission and Fusion Energy No similar provision. Sec. 969. DOE would be directed to Materials Research Program establish a program of R&D on materials science for advanced fission reactors and DOE's fusion energy program. CRS-79 Provision House Senate Comments Energy-Water Supply No similar provision. Sec. 970. A program would be Technologies Program established, within the Biological and Environmental Research program of the DOE Office of Science, to study energy- related issues associated with water supply and water supply issues related to energy production. Arsenic removal, desalination, and water resource sustainability would be among the areas to be investigated. Research projects under this section would not require cost- sharing, despite Sec. 1002 (see below), but demonstration projects would. Spallation Neutron Source No similar provision. Sec. 971. DOE would be directed to Construction of the Spallation Neutron Source, a submit to Congress an annual progress research facility at Oak Ridge National report on the Spallation Neutron Source Laboratory, is expected to be completed during and develop an operational plan for the FY2006. facility that meets specified requirements. Appropriations would be authorized for the lifetime of the project overall and for certain related items in FY2006, FY2007, and FY2008. Science and Technology Sec. 907. DOE would be authorized to No similar provision. Scholarship Program establish a scholarship program to help recruit and prepare students for careers in DOE. Scholarship recipients would be required to work for DOE for 24 months per academic year of scholarship received. CRS-80 Provision House Senate Comments Workforce Trends and No comparable section. Sec. 1101. Would require Secretary Traineeship Grants report to Congress, within 1 year, on current trends under trends in the workforce in skilled technical personnel that support energy technology industries; and electric power and transmission engineers; and establish grant programs to enhance training for any workforce category for which a shortage is identified or predicted. Energy Research Fellowships No comparable section. Sec. 1102. Would establish a Postdoctoral Fellowship Program to encourage outstanding young scientists and engineers to pursue postdoctoral research appointments in energy research and development at institutions of higher education of their choice. Educational Programs in No comparable section. Sec. 1103. Would amend the Department Science and Mathematics of Energy Science Education Enhancement Act (42 U.S.C. 7381a) by requiring the Energy Secretary to use not less than 0.2 percent of the amount made available to DOE for fiscal year 2006 and each fiscal year thereafter to carry out authorized activities. The section would also amend 42 U.S.C. 7381b by adding provisions for competitive events for students, competitively-awarded, peer- reviewed programs to promote professional development for math and science teachers, summer internships for CRS-81 Provision House Senate Comments teachers. The Energy Secretary would enter into an arrangement with the National Academy of Public Administration to conduct a study of the priorities, quality, local and regional flexibility, and plans for educational programs at Department research and development facilities. Improved Access to Energy- No comparable section. Sec. 1106. Would amend the Department related Scientific and Technical of Energy Science Education Careers. Enhancement Act (42 U.S.C. 7381a) by adding at the end the following: Programs for Students from Under- represented Groups; and Partnerships with Historically Black Colleges and Universities, Hispanic- Serving Institutions, and Tribal Colleges. Office of Scientific and Sec. 908. DOE would be directed to No similar provision. Technical Information maintain the Office of Scientific and Technical Information. Science and Engineering Pilot Sec. 909. DOE would be directed to No similar provision. Program award a grant to Oak Ridge Associated Universities to establish a regional pilot program to enhance scientific, technological, engineering, and mathematical literacy, creativity, and decisionmaking. The program would involve research universities, universities CRS-82 Provision House Senate Comments that train elementary and secondary school teachers, and DOE national laboratories. A report would be required on lessons learned from the pilot program, including a plan for expanding the program nationwide. Authorization of Appropriations Sec. 910. Appropriations would be Sec. 961. Appropriations would be See also Senate Secs. 967 and 971 above authorized for the Office of Science for authorized for the Office of Science for regarding authorization of appropriations for the FY2006 through FY2010, with increases FY2006 through FY2008, at levels Advanced Scientific Computing Research of 10%-15% per year. Within these somewhat higher than in the House bill. program and the Spallation Neutron Source totals, appropriations would be Within these totals, appropriations would facility, both of which are in the Office of authorized for the individual programs be authorized for the individual programs Science. described in Secs. 902, 905, 906 (except described in Secs. 962, 964, 968, and ITER), 907, 908, and 909. 970. Appropriations for construction of ITER would be authorized separately, as would appropriations for integrated bioenergy R&D for FY2005 through FY2009. Research Administration and Operations Provision House Senate Comments Cost Sharing Sec. 911. Cost sharing would be required Sec. 1002. Cost sharing would be for programs carried out under this title. required activities under this title. Not The minimum non-federal share would less than 20 % of the cost R&D activity be 20% for R&D programs and 50% for would provided by a non-Federal source, demonstration and commercial and 50% for demonstration or application programs, but DOE could commercial application activity. DOE lower or waive these requirements in could reduce the non-Federal share in CRS-83 Provision House Senate Comments certain circumstances. consideration of any technological risk. This section would not apply to a cooperative R&D agreement under the Stevenson-Wydler Technology Innovation Act. Reprogramming Sec. 912. Within 60 days after any No comparable section. appropriation authorized under this title, DOE would be required to report to Congress on how the appropriated amounts would be distributed. Subsequent reprogramming would be limited to the lesser of 2% or $2 million unless reported to Congress with at least 30 days' notice. Merit-Based Competition Sec. 913. Awards of funds authorized Sec. 1003. Awards of funds authorized under this title would be permitted only under this title would be made only after through open competitions following an an impartial review of the scientific and impartial review of scientific and technical merit. technical merit. External Technical Review of Sec. 914. Advisory committees would be Sec. 1004. Advisory boards would be Departmental Programs established for DOE programs in energy established to review DOE research, efficiency, renewable energy, nuclear development, demonstration, and energy, and fossil energy. The commercial application programs. The requirement could be met by existing scientific program advisory committees DOE committees. Existing advisory chartered under the Federal Advisory committees would continue for the Committee Act would continue to used programs of the Office of Science, and by the Office of Science to oversee the chairs of the Office of Science research and development programs committees would constitute a Science under that Office. DOE would also enter Advisory Committee for the Director of into arrangements with the National CRS-84 Provision House Senate Comments the Office. DOE would be directed to Academy of Sciences to conduct periodic arrange with the National Academy of reviews and assessments of the Sciences to review and assess the authorized programs. The Secretary of programs authorized by this title, and Energy would report to Congress reports on the results of these reviews describing the results of all the reviews and assessments would be due to and assessments. Congress within two years of enactment. Competitive Award of Sec. 915. Management and operating No comparable section. In the past, management contracts at most DOE Management Contracts contracts for DOE national laboratories laboratories have been extended without (except Livermore, Los Alamos, Sandia, competition. In some cases, laboratories have been and Savannah River) would have to be managed by the same contractor for 60 years or awarded competitively unless the more. In November 2003, DOE released the report Secretary of Energy granted a waiver on of a blue-ribbon commission that it established to a case-by-case basis. The Secretary examine this issue. The commission's report is would not be permitted to delegate his available online at [http://www.seab.doe.gov/ waiver authority and would have to publications/brcDraftRpt.pdf]. It states that "the notify Congress at least 60 days before issue of whether competition should be routinely awarding a non-competitive contract. used for research and development laboratories is subject to wide and varied opinions." National Laboratory Sec. 916. DOE would be prohibited from No comparable section. Designation designating additional facilities as national laboratories, beyond those defined in Sec. 900. Report on Equal Employment Sec. 917. DOE would be required to No comparable section. Opportunity Practices report to Congress with one year and every two years thereafter on equal employment opportunity practices at the national laboratories. CRS-85 Provision House Senate Comments User Facility Best Practices Plan Sec. 918. No DOE facility would be No comparable section. DOE user facilities are available to outside permitted to begin operating as a user researchers. facility unless DOE had developed and transmitted to Congress a plan for staffing the facility, allocating time fairly to its users, and operating it in a safe and fiscally prudent manner. Support for Science and Energy Sec. 919. DOE would be directed to No comparable section. Infrastructure and Facilities develop and implement a strategy for maintaining existing facilities and infrastructure, closing unnecessary facilities, modifying facilities, and building new facilities. A report to Congress would be required by June 1, 2007, summarizing the strategy. Coordination Plan Sec. 920. DOE would be directed to No comparable section. develop a plan to improve coordination and collaboration in research, development, demonstration, and commercial application activities across DOE organizational boundaries. A conference of program managers from the Office of Science and the applied programs would be convened as part of the process of developing this plan. DOE would be required to transmit the plan to Congress within nine months and transmit a revised version every two years thereafter. CRS-86 Provision House Senate Comments Improved Technology Transfer No comparable section. Sec. 1005. A Technology Transfer of Energy Technologies Coordinator would be appointed as principal advisor on all matters relating to technology transfer and commercialization. A Technology Transfer Working Group, would be established consisting of representatives of the National Laboratories and research facilities. An Energy Technology Commercialization Fund, using 0.5% of the amount made available to DOE for each fiscal year, would be used to provide matching funds with private partners to promote promising technologies for commercial purposes. Not later than 180 days after enactment of this title, the Energy Secretary would report to Congress on a technology transfer execution plan, with updates yearly. Technology infrastructure No comparable section. Sec. 1006. DOE would establish a new program program to improve the ability of National Laboratories and research facilities to support the Energy Department's missions by stimulating the development of technology clusters; improving National Laboratories/facilities abilities to benefit from commercial research, technology, products, processes, and services; and encourage the exchange between National Laboratories/facilities and non- CRS-87 Provision House Senate Comments federal entities. The Secretary would report on the program by July 1, 2008. Improved coordination and No comparable section. Sec. 1010. Would add an Under management of civilian science Secretary for Energy and Science who and technology programs would monitor the research and development programs of the Department, reconfigure the position of Director of the Office of Science to an Assistant Secretary level, and an additional Assistant Secretary position to enable improved management of nuclear energy issues. Availability of Funds Sec. 921. Funds authorized under this Sec. 1001. Funds authorized would title would remain available for three remain available until expended. years. Relationship to Other Laws. No comparable section. Sec. 1009. The research, development, demonstration, and commercial application programs, projects, and activities authorized by this Act would be conducted according to applicable provisions of the Atomic Energy Act; the Federal Nonnuclear Energy Research and Development Act; the Energy Policy Act; the Stevenson-Wydler Technology Innovation Act,and the "Bayh-Dole Act." Prizes for Achievement in No comparable section. Sec. 1012. Would authorize a program to Grand Challenges of Science award cash prizes in recognition of and Technology. breakthrough achievements in research, development, demonstration, and CRS-88 Provision House Senate Comments commercial application that have the potential for application to the performance of the mission of the Department. Technical Corrections. No comparable section. Sec. 1013. Would amend language in the Coal Research and Development Act of 1960, and the Federal Nonnuclear Energy Research and Development Act of 1974 to reflect update terms and titles. Energy Efficiency -- Vehicles, Buildings, and Industries Provision House Senate Comments Programs Sec. 922. General objectives would be No similar provision. set for DOE energy efficiency programs in terms of energy security, reduced costs, and environmental impacts. A report would be required to provide cost and performance baselines and set quantitative targets for energy and cost savings over five fiscal years. Energy Efficiency Science No similar provision. Sec. 915. DOE would be required to Initiative establish an energy efficiency research program, with grants to be competitively awarded and subject to peer review. A report to Congress would be required that is included in the President's annual CRS-89 Provision House Senate Comments budget request and describes the process used to award funds. Vehicles Sec. 923. DOE would be directed to No similar provision. conduct a research, development, demonstration, and commercial application (RDD&C) program for hybrid and electric vehicles, advanced engines, advanced materials, and advanced drivetrains. Also, a hydrogen propulsion and infrastructure RDD&C program would be established. Buildings Sec. 924 (a) and (b). This provision No similar provision. would direct DOE to conduct an RDD&C program to improve the energy efficiency and environmental performance of commercial, industrial, institutional, and residential buildings. This program is to include advanced controls, building envelope, building components (e.g. lighting, appliances), and onsite renewable energy use. Also, a pilot grant program would be created to help businesses and organizations demonstrate energy efficiency technologies for buildings. It would provide up to 50% of design and energy modeling costs, with a maximum of $50,000. High Performance Building Sec. 924 (c). DOE would be directed to Sec. 916. Same provision, except that the Standards work with the National Institute of technical assistance and grants program Building Sciences to prepare a report that would be required to comply with the CRS-90 Provision House Senate Comments assesses the effectiveness of voluntary National Technology Transfer and building energy performance standards. Advancement Act of 1995 and After receiving the report, DOE would be amendments thereto. required to establish a program of technical assistance and grants to support revisions of existing standards. National Building Performance No similar provision. Sec. 913. Would direct the Department Initiative of Commerce, in coordination with DOE, to establish an interagency task group that would create a plan to integrate work among federal, state, and voluntary organizations to improve the energy efficiency performance of buildings. A report to Congress on the findings of the plan would be required. National Center for Energy No similar provision. Sec. 1105. Would direct DOE to support Management and Building ongoing activities of the Center in Technologies research, education, and training focused on energy efficiency for buildings. Industries Sec. 925. Would direct DOE to conduct No similar provision. an RDD&C program to improve the energy efficiency, environmental performance, and process efficiency of energy-intensive and waste-intensive industries. This program would include RDD&C on advanced control devices to improve the efficiency of electric motors, including those used in industrial settings. CRS-91 Provision House Senate Comments Demonstration and Commercial Sec. 926. DOE would be directed to No similar provision. Application consider applying more efficient technologies to improve the energy efficiency of equipment and test procedures used to measure appliance energy efficiency. Further, DOE would be required to coordinate with public and private organizations to study means of updating building energy codes. Also, a DOE grant program (50% federal match) would be established to support state and local governments, universities, and nonprofit organizations to create a network of Advanced Energy Technology Transfer Centers. Additionally, this section would require that a periodic report to Congress be prepared on activities generated by the foregoing provisions. Secondary Electric Vehicle Sec. 927. A program would be Sec. 914. Same provision, except that Battery Use Program established at DOE for RDD&C on project proposers would be required to applications for worn out electric vehicle satisfy a 20% cost share set by Section batteries for utility and commercial 1002, which also allows the Secretary of power storage and power quality. A 50% DOE to waive the requirement under cost share by the project proposer (e.g. certain conditions. state or local government, manufacturer) would be required. Next Generation Lighting Sec. 928. A DOE program would be Sec. 912. Same provision. Initiative created that aims to develop advanced white light-emitting diodes (LEDs) for high efficiency lighting. These LEDs are CRS-92 Provision House Senate Comments expected to be more efficient than incandescent and fluorescent lights. Also, DOE would be directed to arrange for the National Academy of Sciences to conduct periodic reviews of the initiative. Definitions Sec. 929. Would define the phrase "cost- No similar provision. effective" in terms of simple payback within 10 years and define "whole- buildings approach" in terms of a life- cycle basis for energy use and costs. Authorization of Appropriations Sec. 930. For the preceding sections of Sec. 911 (a), (b), (c). For the other Subtitle C, this provision would set out sections of Subtitle A, this provision authorization figures for FY2006 through would set out authorization figures for FY2010. FY2006 through FY2008. Limitation on Use of Funds Sec. 931. This section would prohibit the Sec. 911(d). This section would prohibit use of funds authorized by Sec. 930 for the use of funds authorized by Sec. 911 energy efficiency regulations and for (a), (b), (c) for energy efficiency DOE's Weatherization, State Energy, and regulations and for DOE's Federal Energy Management Programs. Weatherization, State Energy, and Federal Energy Management Programs. Energy Efficiency -- Distributed Energy and Electric Energy Systems Provision House Senate Comments Distributed Energy Sec. 932(a), (c). Would authorize a DOE No similar provision. RDD&C program for a variety of technologies that include the integration CRS-93 Provision House Senate Comments of renewable energy, fuel cells, combined heat and power (CHP), microturbines, and other equipment. Also, DOE would be directed to report to Congress on outcome measures that cover five-year cost and energy-saving performance baselines. Distributed Energy Technology No similar provision. Sec. 924. Would require DOE to provide Demonstration Program financial assistance to consortia for demonstrations to accelerate the use of distributed energy technologies. Micro-Cogeneration Sec. 932(b). Would direct DOE to Sec. 923. Same provision. establish competitive, merit-based grants to consortia to develop micro- cogeneration technology, including systems that could be used for residential heating. Electricity Transmission and Sec. 933. Would authorize a DOE Sec. 925. Would authorize a DOE Distribution and Energy RDD&C program addressing energy RDD&C program addressing efficiency, Assurance efficiency, reliability, and security of the reliability, and environmental integrity. nation's electric transmission and A technology development program distribution system. A technology would have the same features as that in development program would focus on the House bill. DOE would be directed delivery and storage, grid reliability, load to devise a five-year plan and consider reduction, high temperature supercon- using a consortium with industry, ductivity, and others. Further, a report university, and national laboratory to Congress would be required, which members to implement the program. A covers outcome measures with five-year report to Congress would be required that cost and energy-saving performance describes progress and identifies needs baselines. A university grant program for additional resources. Also, the CRS-94 Provision House Senate Comments would be created that works with the provision would establish a Power Tennessee Valley Authority on a Delivery Research Initiative focused on program to improve power flow through superconductivity and a Transmission high voltage transmission lines. and Distribution Grid Planning Initiative focused on software tools to expand T&D in a competitive market setting. Advanced Portable Power Sec. 933A. DOE would be directed to No similar provision. Devices establish an RDD&C program for small- scale mechanical and electromechanical devices that can be used for communications, mobility enhancement, medical needs, and other purposes. Further, the provision would direct DOE to utilize the resources of universities that have demonstrated capability to develop these devices for civilian or military use. High Power Density Industry No similar provision. Sec. 922. This provision would direct Program DOE to establish an RDD&C program to improve the energy efficiency of data centers, computer server farms, and telecommunications facilities. Authorization of Appropriations Sec. 934. For the programs in Sections Sec. 921. Would authorize 932, 933, and 933A, would authorize appropriations for distributed energy, appropriations for FY2006 through 2006 through 2008; for power delivery FY2010. research, 2006 through 2008; and for micro-cogeneration, 2006 through 2007. CRS-95 Renewable Energy Provision House Senate Comments Findings Sec. 935. One finding would be that No similar provision. renewable energy is a growth industry in which the United States is losing market share. Two other key findings would be that the United States is increasingly dependent on imported energy and that the high cost of fossil fuels hurts the economy. Further findings would include that renewable energy can reduce demand for imported energy and small reductions in demand can yield large reductions in price. Definitions Sec. 936. "Biobased product" would be No similar provision. defined as a commercial or industrial product (other than food or feed) that is composed mainly of agricultural or forestry materials. "Cellulosic biomass" would be defined as a crop grown to produce lignocellulose or hemicellulose as a feedstock. This could include barley grain, rice matter, soybean matter, bagasse, forest thinnings, or other materials. Programs Sec. 937. DOE would be directed to No similar provision. conduct a renewable energy RDD&C program with goals that include improving energy security, reducing costs, decreasing environmental impacts, and increasing equipment exports. CRS-96 Provision House Senate Comments Further, a report to Congress would be required, which covers outcome measures with five-year cost and energy- saving performance baselines. Solar Sec. 938. DOE would be required to Sec. 934. DOE would be authorized to conduct an RDD&C program for solar conduct a research program on energy, including photovoltaics, solar hot concentrating solar power to establish the water, solar space heating, and technology and economics of both concentrating solar power. Also, DOE electricity and hydrogen production. A would be required to include efforts to report to Congress would be required, develop products that could be easily which recommends future research. integrated into new and existing Sec. 935. DOE would be authorized to buildings and manufacturing techniques conduct research on novel lighting that could produce low-cost, high quality systems that integrate sunlight and equipment. electrical lighting in common lighting fixtures to increase energy efficiency. A report by the National Academy of Sciences would be required. Bioenergy Programs Sec. 939. DOE would be directed to Sec. 932. DOE would be directed to conduct programs on cellulosic biomass, conduct a broad program of RDD&C in biofuels, bio-based products, integrated biopower, biofuels and bioproducts, biorefineries, and university biodiesel including technologies using cellulosic fuel use for electric power. Also, grants feedstocks or enzyme-based processing. would be established to support these programs at Historically Black Colleges and Universities, Tribal Colleges, and Hispanic-Serving Institutions. Production Incentives for No similar provision. Sec. 938. Would have goals to accelerate Cellulosic Biofuels deployment and commercialization of biofuels, produce the first one billion CRS-97 Provision House Senate Comments gallons of cellulosic biofuels by 2015, and ensure that biofuels become cost competitive by 2015. The primary strategy would be for DOE to conduct a "reverse auction," wherein bidders submit a desired level of incentive and estimated annual production and then DOE makes awards to the entities submitting the lowest level of production incentive. No single project would receive more than 25% of the funds committed to each auction. Procurement of Biobased No similar provision. Sec. 939. Would amend the Farm Products Security Act of 2002 (P..L. 107-171) to add the Capitol Complex to the list of federal entities required to purchase biobased products. Small Business Bioproduct No similar provision. Sec. 940. Would require the Secretary of Marketing and Certification Agriculture to create a competitive grant Grants. program to support certification and marketing of biobased products by small firms. The grants would require a 50% match and would not exceed $100,000. Regional Bioeconomy No similar provision. Sec. 941. Would require the Secretary of Development Grants Agriculture to create competitive grants to a regional bioeconomy development association, agricultural or energy trade association, or Land Grant institution to support coordination, education, and/or outreach to promote development of a CRS-98 Provision House Senate Comments regional bioeconomy for biobased products. The grants would require a 50% match and would not exceed $500,000. Preprocessing and Harvesting No similar provision. Sec. 942. This provision would require Demonstration Grants. the Secretary of Agriculture to create a competitive grant program to support agricultural producers in demonstrating cellulosic biomass innovations that produce ethanol, heat, electricity or other useful forms of energy. The grants would require a 20% match and the number of demonstration projects would limited to five per year. Education and Outreach No similar provision. Sec. 943. Would require the Secretary of Agriculture to establish a program of education and outreach on biobased fuels and biobased products that includes training and technical assistance for feedstock producers and public education and outreach for consumers. Reports No similar provision. Sec. 944. Would require the Secretary of Agriculture to report to Congress on the economic potential for widespread production of biobased products through 2025. Further, an analysis of economic indicators of the biobased economy would also be required. CRS-99 Provision House Senate Comments Wind Sec. 940. Would authorize the wind No similar provision. energy RDD&C program at DOE. Covered activities would include low- speed wind, offshore wind, testing and verification, and distributed wind energy generation. Geothermal Sec. 941. Would authorize the No similar provision. geothermal energy RDD&C program at DOE. The program would focus on resource detection, decreasing drilling and maintenance costs, mineral production, and reservoir management. Photovoltaic Demonstration Sec. 942. DOE would be required to No similar provision. Program make grants to states to support solar photovoltaic demonstration projects, providing up to 40% of a project's costs (maximum $1 million). Also, DOE would be required to report to Congress on program costs and the amount of capacity installed. Additional Programs Sec. 943. DOE would be empowered to Sec. 936. DOE would be authorized to conduct programs on ocean and wave conduct programs on ocean energy energy, and combinations of renewable (including wave energy), on energy technologies with one another and combinations of renewable energy with other energy technologies. Also, technologies with one another and with DOE would be required to arrange with other energy technologies, and on the National Academy of Sciences to renewable energy technologies for conduct a study on renewable energy cogeneration of hydrogen and electricity. generation from the ocean, including energy from waves, tides, and currents, CRS-100 Provision House Senate Comments and from the variation in water temperature with ocean depth (ocean thermal energy). Additionally, DOE would be required to conduct an innovative program to put renewable energy equipment in state and local buildings, providing up to 40% of a project's incremental costs. Analysis and Evaluation Sec. 944. DOE would be required to No similar provision. conduct analysis and evaluation in support of the programs under this subtitle. Up to 1% of the funds for this subtitle could be designated for these activities, including economic and technical analysis of renewable energy resources and potential and analysis of past performance in terms of technical advances and market penetration. Authorization of Appropriations Sec. 945. Funding for DOE renewable Sec. 931. Funding for DOE renewable energy programs would be authorized for energy, bioenergy, and concentrating five fiscal years. Also, specific solar power programs would be authorizations would be provided for authorized for three fiscal years. bioenergy, concentrating solar power, and public buildings. Funding for Renewable Support and Implementation would be excluded. Hydrogen Intermediate Fuels No comparable provision. Sec. 933. The Secretary of Energy, in Program coordination with the Secretary of Agriculture, would be required to demonstrate the conversion of ethanol or CRS-101 Provision House Senate Comments other renewable fuels into hydrogen for transportation applications. A total of $5 million would be authorized for the program. Nuclear Energy Provision House Senate Comments Definition of Junior Faculty Sec. 946. For the purpose of receiving No provision. grants under Section 949, junior faculty members would be defined as having held doctorates less than 10 years. Nuclear Energy Programs Sec. 947. DOE would be required to Sec. 946. DOE would be required to conduct nuclear energy research, carry out existing nuclear R&D programs development, demonstration, and on advanced nuclear concepts, commercial application programs, improvements in existing reactors, including DOE nuclear R&D deployment of advanced versions of infrastructure support. Annual today's commercial reactors ("Nuclear performance reports on the programs Power 2010"), advanced reactor must be submitted to Congress. technologies ("Generation IV"), and nuclear hydrogen production. A strategy for managing nuclear research facilities and infrastructure would also be mandated. Advanced Fuel Recycling Sec. 948. DOE would be required to Sec. 947. Similar provisions. DOE is currently implementing the Advanced Program conduct a program on advanced Fuel Cycle Initiative without a specific funding technologies for the reprocessing of spent authorization. Spent fuel recycling or reprocessing nuclear fuel. The technologies should be involves the extraction of plutonium and uranium CRS-102 Provision House Senate Comments resistant to nuclear weapons proliferation from spent nuclear fuel for use in new fuel. and support alternative spent fuel Supporters contend that it could extend domestic disposal strategies and advanced reactor energy supplies and reduce the hazard posed by concepts. nuclear waste, while opponents are concerned that the extracted plutonium could be used for weapons. University Nuclear Science and Sec. 949. DOE would be required to Sec. 948. Similar provisions, plus a This section would add new statutory Engineering Support support human resources and infrastructure fellowship and visiting scientist program requirements to the existing DOE University in nuclear science and engineering and similar to House Sec. 950. Reactor Fuel Assistance and Support Program. related fields. The program would include fellowship and faculty assistance programs and support for fundamental and collaborative research. The program would also be authorized to help convert research reactors to low-enriched fuels, support training in reactor relicensing and upgrading, and provide funding for research reactor improvements. DOE funding for research projects could be used for some of the operating costs of research reactors used in those projects. University-National Laboratory Sec. 950. DOE would be required to Included in Sec. 948. Interactions conduct a nuclear science and technology fellowship program for university professors to spend sabbaticals at National Laboratories and a visiting scientist program to allow National Laboratory staff to spend time in university nuclear departments. CRS-103 Provision House Senate Comments Nuclear Power 2010 Program Sec. 951. DOE would be required to Included in Sec. 946. carry out the existing Nuclear Power 2010 Program to encourage deployment of new commercial reactors as soon as feasible. Generation IV Nuclear Energy Sec. 952. DOE would be required to Included in Sec. 946. Systems Initiative carry out the existing Generation IV Nuclear Energy Systems Initiative, which supports development of advanced concepts that could replace existing commercial reactor technology. The program would have to include proliferation-resistant advanced reactor designs that, in comparison with existing reactors, would have higher efficiency, lower cost, improved safety, and lower rates of high-level waste production. Infrastructure and Facilities Sec. 953. DOE would be required to Included in Sec. 946. operate and maintain infrastructure and facilities for nuclear energy programs. Nuclear Energy Research and Sec. 954. DOE would have to develop an No inventory requirement, but Sec. 946 Development Infrastructure Plan inventory of nuclear energy infrastructure requires a strategy for "making facility and a priority list of needed upgrades and modifications." improvements. Idaho National Laboratory Sec. 955. A comprehensive plan would No specific mention of Idaho National Facilities Plan be required for the facilities at Idaho Laboratory, but Sec. 946 mandates a National Laboratory, which DOE has strategy for facilities of the Office of designated as its lead laboratory for Nuclear Energy, Science, and nuclear energy programs. Technology, which operates the lab. CRS-104 Provision House Senate Comments Authorization of Appropriations Sec. 956. Funding for DOE nuclear Sec. 945. Funding for DOE nuclear energy programs in Sections 948-955 are research programs would be authorized authorized for FY2006-2010. for FY2006-FY2008. None of the funds could be used for decommissioning the Fast Flux Test Facility at Hanford, Washington. Next Generation Nuclear Plant Sec. 957-961. DOE would be required to No provision in the R&D title (see This project is similar to the hydrogen production design, build, and operate an advanced comment). reactor authorized for construction at Idaho technology nuclear reactor by 2015. For National Laboratory by Secs. 651-652 of the development and design of the reactor, House bill and Secs. 631-635 of the Senate bill. $150 million per year would be (The project authorized in the Senate bill is also authorized for FY2006-FY2010. For called the "Next Generation Nuclear Plant.") construction, $500 million would be However, the project authorized by these sections authorized, and such sums as necessary of the House bill would not have to produce would be authorized for operation. hydrogen or be built at Idaho National Laboratory. Security of Nuclear Facilities No provision. Sec. 949. DOE would be required to conduct research on technologies for increasing nuclear plant security and protecting nuclear facilities from natural disasters. Alternatives to Industrial No provision. Sec. 950. DOE would be required to Radioactive sources have been widely cited as a Radioactive Sources study industrial applications of large potential source of "dirty bomb" material, so radioactive sources and establish a development of alternative technologies could research program to develop alternatives. provide security benefits. CRS-105 Fossil Energy -- Research Programs Provision House Senate Comments Enhanced Fossil Energy Sec. 962. Specified priority programs No similar provision. Research and Development would be spelled out to improve the Programs efficiency, effectiveness and environmental performance of fossil energy production, upgrading, conversion, and consumption. Fossil Research and Sec. 963. The objective of the Fossil No similar provision. Development R&D program would be to reduce emissions from fossil fuel use such as mercury, fine particles, smog, and carbon dioxide using technologies including pre-combustion technologies. Oil and Gas Research and Sec. 964. Research programs would be Sec. 952. Similar provision except a Development focused on assisting small domestic report on natural gas and oil deposits in producers of oil and gas, the extraction of federal and state waters would be methane hydrates, improving other conducted by the Secretary of the Interior extraction technologies, and reducing the and submitted to Congress every 2 years. costs of acquiring unconventional fuels. Also, an national center of excellence in clean energy and power generation would be established. Transportation Fuels Sec. 965. The Secretary would conduct No similar provision. R&D projects on the commercialization of coal and natural gas to transportation fuel and indirect liquefaction of coal and biomass. CRS-106 Provision House Senate Comments Fuel Cells Sec. 966. The Secretary would conduct No similar provision. R&D on fuel cell commercialization including fuel cell proton exchange membrane technology. Carbon Dioxide Capture Sec. 967. The Secretary would support a Sec. 957. Similar provision. Research and Development 10-year R&D program aimed at developing carbon dioxide capture technologies for pulverized coal combustion units. The program would focus on developing add-on carbon dioxide capture technologies, combustion technologies and increasing the efficiency of the overall combustion system. In addition, the Secretary would support a carbon sequestration program with the private sector through regional partnerships. Authorization of Appropriations Sec. 968. Funds are authorized in Sec. 951. Funds would be authorized in general and for programs described in general for years FY2006-FY2008 and Sec. 967 for years FY2006- FY2010. specifically for programs described in Sections 954, 955, and 956. Western Michigan Sec. 968A. The EPA in consultation with No similar provision. Demonstration Project the State of Michigan would conduct demonstration projects to assess the effect of transported ozone and ozone precursors in southwest Michigan. CRS-107 Provision House Senate Comments Western Hemisphere Energy Sec. 968B. The Secretary would carry Sec. 981. Same provision, except slightly Cooperation out a program to promote cooperation on higher appropriations during FY2006- energy issues among Western FY2008. Hemisphere countries including, to the extent practicable, universities. Authorized funding would be for years FY2006-FY2010. Arctic Engineering Research Sec. 968C. The Secretary of Energy in No similar provision. Center consultation with the Secretary of Transportation would establish the Arctic Engineering Research Center in Fairbanks, AK, to conduct R&D on improving the infrastructure in the Arctic region. A sum of $3 million would authorized and made available in a grant to a specified university each year for years FY2006-FY2011. Barrow Geophysical Research Sec. 968D. The Secretary of Commerce No similar provision. Facility in consultation with the Secretaries of Energy and the Interior and Director of the National Science Foundation and the Administrator of the EPA would establish the "Barrow Geophysical Research Facility in Barrow, Alaska. A sum of $61 million would be authorized to be appropriated. CRS-108 Provision House Senate Comments Methane Hydrate Reseaerch No similar provision. Sec. 953. A methane hydrate research and development program would be established. A methane hydrate advisory panal would be set up and a study would be conducted by the National Research Council that would assess the R&D program. Funds would be authorized for years FY2006 - FY2010. Low-volume gas reservoir No similar provision. Sec. 954. A program would be research program established by the Secretary to maximize the productive capacity of marginal wells and reservoirs. Funds would be authorized for FY2006-FY2008. Research and development for No similar provision. Sec 955. A program on coal mining coal mining technologies technologies would be established. Coal and related technologies Similar provision. (See Sec. 441 of Sec. 956. In addition to the programs House bill.) authorized under title IV, DOE would be required to conduct a program of technology research, development, and demonstration and commercial application for coal and power systems. Complex well technology No similar provision. Sec. 958. A Complex Well Technology testing facility Testing Facility would be established at the Rocky Mountain Oilfield Testing Center to increase range of extended drilling technologies. CRS-109 Provision House Senate Comments Coalbed Methane Study No similar provision. Sec. 1305. The Secretary, along with the National Academy of Science, and the Administrator of EPA would conduct a study on the effect of CBM production on surface and ground water resources including groundwater aquifers in several western states. Fossil Energy -- Ultra-Deepwater and Unconventional Natural Gas and Other Petroleum Resources Provision House Senate Comments Program Authority Sec. 969. R&D would be directed toward No similar provision. the demonstration and commercial application of technology for ultra-deepwater oil and gas production, including unconventional oil and gas resources. The R&D program would be designed to benefit "small producers" and address environmental concerns. Complementary research would be carried out through DOE's National Energy Technology Laboratory. Ultra-Deepwater and Sec. 970. The Secretary of Energy could No similar provision. Unconventional Onshore contract with a consortium to recommend Natural Gas and Other ultra-deepwater research projects and Petroleum Research manage funding awarded under this program. The Secretary would make competitive awards to research consortia for conducting R&D on advanced CRS-110 Provision House Senate Comments technologies for recovering coalbed methane and other unconventional resources. Additional Requirements for Sec. 971. The Secretary could reduce or No similar provision. Awards eliminate the non-federal cost-share requirement for awards under this program, 2.5% of each award would be designated for technology transfer, and various additional award requirements would be stipulated. Advisory Committees Sec. 972. An Ultra-Deepwater Advisory No similar provision. Committee and an Unconventional Resources Technology Advisory Committee would be established. Limits on Participation Sec. 973. This section would establish No similar provision. criteria for foreign participation. Sunset Sec. 974. The authority in this part No similar provision. would terminate at the end of FY2014. Definitions Sec. 975. The terms deepwater, No similar provision. ultra-deepwater, unconventional oil and gas, independent producers of oil and gas, and others would be defined. Funding Sec. 976. The Ultra-Deepwater and No similar provision. Unconventional Natural Gas and Other Petroleum Research Fund would be established. Revenues derived from federal oil and gas leases, after all previously mandated distributions of CRS-111 Provision House Senate Comments those revenues had been made, would be deposited in the fund, up to $200 million annually during FY2005-FY2014. The Secretary of Energy could obligate money from the fund for programs in this part without an overall annual limit, although annual percentage allocations among the programs would be spelled out. Department of Energy Management Provision House Senate Comments Other Transactions Authority Sec. 1002. This would amend Section Sec. 1011. This would amend Section 646 of the DOE Organization Act (42 646 of the DOE Organization Act (42 U.S.C. 7256) to allow the Energy U.S.C. 7256 to allow the Energy Secretary to enter into additional Secretary to enter into other transactions transactions furthering research, in furtherance of research, development, development, or demonstration without or demonstration functions not subject to requiring that title to inventions be vested Section 9 of the Federal Nonnuclear in the federal government as currently Energy Research and Development Act specified by Section 9 of the Federal of 1974 (42 U.S.C. 5908) that does not Nonnuclear Energy Research and duplicate research, development, Development Act of 1974 (42 U.S.C. or demonstration being conducted under 5908) or section 152 of the Atomic existing projects carried out by the Energy Act of 1954 (42 U.S.C. 2182). Department. CRS-112 Provision House Senate Comments University Collaboration Sec. 1003. The Secretary of Energy Sec. 1327. The Energy Secretary would would report on the feasibility of report on the feasibility of promoting promoting collaboration between collaborations between large institutions Doctoral Research Extensive Universities of higher education and small institutions in grants, contracts, and cooperative of higher education through grants, agreements made by the Secretary for contracts, and cooperative agreements energy projects. made by the Secretary for energy projects. Small Business Advocacy and No comparable section. Sec. 1007. This section would require Assistance appointment of a small business advocate at each National Laboratory and research facility to increase the participation of small business concerns, including socially and economically disadvantaged small business concerns. Outreach No comparable section. Sec. 1008. DOE would ensure that each program authorized by this Act includes an outreach component to provide information to manufacturers, consumers, engineers, architects, builders, energy service companies, institutions of higher education, facility planners and managers, state and local governments, and other entities. Sense of Congress Sec. 1004. This section would establish a No comparable provision. sense of Congress that the Secretary of Energy should apply more stringent procurement and inventory controls to prevent waste of taxpayer funds, and the Department's Inspector General should CRS-113 Provision House Senate Comments continue to closely review the use of purchase cards. Electricity Provision House Senate Comments Short Title Sec. 1201. This title may be cited as the Sec. 1201. This title may be cited as the "Electric Reliability Act of 2005." "Electricity Modernization Act of 2005." Reliability Standards Provision House Senate Comments Electric Reliability Standards Sec. 1211. This section would require Sec. 1211. Similar to House version. The North American Electric Reliability Council the Federal Energy Regulatory Definition of `reliability standard' does (NERC) currently has responsibility for reliability Commission to promulgate rules within not include cybersecurity protection. of the bulk power system. NERC has established 180 days of enactment to create a FERC- Includes definition of `regional entity.' reliability guidelines but has no enforcement certified electric reliability organization Would not limit the amount of dues, fees, authority. The Federal Power Act currently gives (ERO). Under this section, the ERO and other charges the ERO could collect. FERC jurisdiction over unbundled transmission would develop and enforce reliability Would not specifically allow New York and authority to regulate wholesale rates; standards for the bulk-power system, to establish reliability rules that would however, no authority was provided to regulate including cybersecurity protection. New result in greater reliability within the state reliability. (See Appendix E for more York would be allowed to establish of New York. information.) reliability rules that would result in greater reliability within the state of New York. All ERO standards would be CRS-114 Provision House Senate Comments approved by FERC. Under this title, the ERO could impose penalties on a user, owner, or operator of the bulk-power system that violates any FERC-approved reliability standard. In addition, FERC could order compliance with a reliability standard and could impose a penalty if FERC finds that a user, owner, or operator of the bulk-power system has engaged in or is about to engage in a violation of a reliability standard. This provision would not give an ERO or FERC authorization to order construction of additional generation or transmission capacity. Transmission Infrastructure Modernization Provision House Senate Comments Siting of Interstate Electric Sec. 1221. The Secretary of Energy Sec. 1221. Similar to House-passed H.R. Transmission Facilities would be required to conduct a study of 6. Would not exempt the Electric electric transmission congestion every Reliability Council of Texas (ERCOT) three years. Based on the findings, the from this section. Secretary of Energy could designate a geographic area as being congested. Under certain conditions, FERC would be authorized to issue construction permits. Under proposed Federal Power Act (FPA) section 216(d), affected states, federal agencies, Indian tribes, property CRS-115 Provision House Senate Comments owners, and other interested parties would have an opportunity to present their views and recommendations with respect to the need for and impact of a proposed construction permit. However, there is no requirement for a specific comment period. New FPA section 216(e) would allow permit holders to petition in U.S. District Court to acquire rights-of-way through the exercise of the right of eminent domain. Any exercise of eminent domain authority would be considered to be takings of private property for which just compensation is due. New FPA section 216(g) does not state whether property owners would be required to reimburse compensation if the rights-of-way were transferred back to the owner. The Electric Reliability Council of Texas (ERCOT) would be exempted from this section. - An applicant for federal authorization to site transmission facilities on federal lands could request that the Department of Energy be the lead agency to coordinate environmental review and other federal authorization. Once a completed application is submitted, all related environmental reviews would be required to be completed within one year unless another federal law makes that impossible. FPA section 216(h) would CRS-116 Provision House Senate Comments give the Department of Energy new authority to prepare environmental documents and appears to give DOE additional decision-making authority for rights-of-way and siting on federal lands. This would appear to give DOE input into the decision process for creating rights-of-way. Review under section 503 of the Federal Land Policy and Management Act could be streamlined by relying on prior analyses. If a federal agency has denied an authorization required by a transmission or distributions facility, the denial could be appealed by the applicant or relevant state to the Secretary of Energy. The Secretary of Energy would be required to issue a decision within 90 days of the appeal's filing. States could enter into interstate compacts for the purposes of siting transmission facilities and the Secretary of Energy could provide technical assistance. The House-passed version of this section would not apply to the Electric Reliability Council of Texas (ERCOT). Third-Party Finance Sec. 1222. The Western Area Power Sec. 1222. Similar provision. Under current law the enabling statutes for power Administration (WAPA) and the marketing administrations may restrict third-party Southwestern Power Administration financing, construction, operation, and (SWPA) would be able to either continue maintenance of transmission facilities. to design, develop, construct, operate, maintain, or own transmission facilities CRS-117 Provision House Senate Comments within their regions or participate with other entities for the same purposes if: the Secretary of Energy designates the area as a National Interest Electric Transmission Corridor and the project would reduce congestion, or the project is needed to accommodate projected increases in demand for transmission capacity. The project would be required to be consistent with the needs identified by the appropriate Regional Transmission Organization or Independent System Operator. No more than $100 million from third-party financing may be used during fiscal years 2006 through 2015. Transmission System Sec. 1223. Within six months of Sec. 1314. Similar provision. Monitoring enactment, the Secretary of Energy and the Federal Energy Regulatory Commission would be required to complete a study and report to Congress on what would be required to create and implement a transmission monitoring system for the Eastern and Western interconnections. The monitoring system would provide all transmission system owners and Regional Transmission Organizations real-time information on the operating status of all transmission lines. CRS-118 Provision House Senate Comments Advanced Transmission Sec. 1224. FERC would be directed to Sec. 1223. Similar provision. Technologies encourage deployment of advanced transmission technologies. Electric Transmission and Sec. 1225. The Secretary of Energy, No similar provision. Distribution Programs acting through the Director of the Office of Electric Transmission and Distribution, would be required to implement a program to promote reliability and efficiency of the electric transmission system. Within one year of enactment, the Secretary of Energy would be required to submit to Congress a report detailing the program's five-year plan. Within two years of enactment, the Secretary of Energy would be required to submit to Congress a report detailing the progress of the program. The Secretary of Energy would be directed to establish a research, development, demonstration, and commercial application initiative that would focus on high-temperature superconductivity. For this project, appropriations would be authorized for FY2006 through FY2010. Advanced Power System Sec. 1226. A program would be Sec. 1224. Similar provision. Technology Incentive Program established to provide incentive payments to owners or operators of advanced power generation systems. Eligible systems would include advanced fuel cells, turbines, or hybrid power systems. For FY2006 through FY2012 CRS-119 Provision House Senate Comments an annual appropriation of $10 million would be authorized. Office of Electric Transmission Sec. 1227. This would amend Title II of No provision. and Distribution the Department of Energy Organization Act (42 U.S.C. 7131 et seq) to establish an Office of Electric Transmission and Distribution. The Director of the office would, in part, coordinate and develop a strategy to improve electric transmission distribution, implement recommendations from the Department of Energy's National Transmission Grid Study, oversee research, development, and demonstration to support federal energy policy related to electricity transmission and distribution, and develop programs for workforce training and power transmission engineering. Transmission Operation Improvements Provision House Senate Comments Open Nondiscriminatory Access Sec. 1231. FERC would be authorized to Sec. 1231. Similar provision. Currently under the Federal Power Act (Section require, by rule or order, unregulated 201(f)), federal power marketing administrations, transmitting utilities (power marketing state entities, and rural electric cooperatives are administrations, state entities, and rural not subject to FERC's ratemaking. In §1231, electric cooperatives) to charge rates exemptions are established for utilities selling less comparable to what they charge than 4 million megawatt-hours of electricity per themselves and require that the terms and year, for distribution utilities, and for utilities that CRS-120 Provision House Senate Comments conditions of the sales be comparable to own or operate transmission facilities that are not those required of other utilities. This necessary to facilitate a nationwide interconnected exemption could be revoked to maintain transmission system. This section is often referred transmission system reliability. FERC to as "FERC-lite." would not be authorized to order states or municipalities to take action under this section if such action would constitute a private use under section 141 of the Internal Revenue Code of 1986. FERC may remand transmission rates to an unregulated transmitting utility if the rates do not comply with this section. FERC is not authorized to order an unregulated transmitting utility to join a Regional Transmission Organization or other FERC-approved independent transmission organization. Regional Transmission Sec. 1232. This would establish a sense Sec. 1232. FERC could encourage and Currently, section 202(a) of the Federal Power Act Organizations (RTO) of Congress that utilities should approve the voluntary formation of directs FERC to promote and encourage regional voluntarily become members of regional RTOs, Independent System Operators districts for the voluntary interconnection and transmission organizations. (ISOs), or similar organizations. Each coordination of transmission facilities by public transmission organization would be utilities and non-public utilities for the purpose of required to report to FERC on a assuring an abundant supply of electric energy scheduled basis to ensure that the throughout the United States with the greatest transmission organization's operations possible economy. are cost effective and consistent with the FERC-approved tariffs and agreements. FERC would be required to perform an annual audit of each transmission organization. CRS-121 Provision House Senate Comments Regional Transmission Sec. 1233. FERC would be required to No provision. Organization Applications report to Congress within 120 days of Progress Report enactment the status of all regional transmission organization applications. Federal Utility Participation in Sec. 1234. Federal utilities (power Sec. 1233. Similar provision. Regional Transmission marketing administrations or the Organizations Tennessee Valley Authority) would be authorized to participate in regional transmission organizations. A law allowing federal utilities to study formation and operation of a regional transmission organization would be repealed (16 U.S.C. 824n). Standard Market Design Sec. 1235. FERC's proposed rulemaking Sec. 1234. FERC's proposed rulemaking On July 31, 2002, FERC issued a Notice of on standard market design (Docket No. on standard market design (Docket No. Proposed Rulemaking (NOPR) on standard market RM01-12-000) would be remanded to RM01-12-000 would be terminated and design (SMD). FERC's stated goal of establishing FERC for reconsideration. No final FERC would not be allowed to reissue SMD requirements in conjunction with a rulemaking, including any rule or order the proposal. standardized transmission service is to create of general applicability to the standard "seamless" wholesale power markets that allow market design proposed rulemaking, sellers to transact easily across transmission grid could be issued before October 31, 2006, boundaries. The proposed rulemaking would or could take effect before December 31, create a new tariff under which each transmission 2006. This section would retain FERC's owner would be required to turn over operation of ability to issue rules or orders and act on its transmission system to an unaffiliated regional transmission organization or independent transmission provider (ITP). The ITP, independent system operator filings. which could be an RTO, would provide service to all customers and run energy markets. Under the NOPR, congestion would be managed with locational marginal pricing. The NOPR comment period originally was 75 days (ending November 15, 2002), but the comment period was extended CRS-122 Provision House Senate Comments to January 10, 2003, for the following issues: (1) market design for the Western Interconnection; (2) transmission pricing plan, including participant funding; (3) Regional State Advisory Committees and state participation; (4) resource adequacy; and (5) congestion revenue rights and transition issues. (See Appendix F for more information.) Native Load Service Obligation Sec. 1236. This section would amend the Sec. 1235. Similar provision. Currently Section 201 of the Federal Power Act Federal Power Act to clarify that a load- gives FERC jurisdiction over "the transmission of serving entity is entitled to use its electric energy in interstate commerce and the sale transmission facilities or firm of such energy at wholesale in interstate transmission rights to serve its existing commerce." Section 205 of the Federal Power Act customers before it is obligated to make prohibits utilities from granting "undue preference its transmission capacity available for or advantage to any person or subject any person other users. FERC would not be able to to any undue prejudice or disadvantage" (16 change any approved allocation of U.S.C. 824). The new language of this section is transmission rights by an RTO or ISO intended to clarify that reserving transmission for approved prior to January 1, 2005. This existing customers (native load) is not considered section contains language to allow public unduly discriminatory. power utilities to enter into long-term contracts to serve their native load as well as giving them access to the transmission system. CRS-123 Provision House Senate Comments Study on the Benefits of Sec. 1237. The Secretary of Energy, in Sec. 1316. Similar provision. Economic Dispatch consultation with the states, would be required to issue an annual report to Congress and the states on the current status of economic dispatch. Economic dispatch would be defined as "the operation of generation facilities to produce energy at the lowest cost to reliably serve consumers, recognizing any operational limits of generation and transmission facilities." Protection of Transmission No provision. Sec. 1236. FERC could not require The area of the Pacific Northwest is the region Contracts in the Pacific electric utilities in the Pacific Northwest defined in section 3 of the Pacific Northwest Northwest to convert firm transmission rights to Electric Power Planning and Conservation Act (16 tradable or financial rights. U.S.C.839a) or a portion of a state included in the geographic area proposed for a Regional Transmission Organization in FERC Docket No. RT01-35. Transmission Rate Reform Provision House Senate Comments Transmission Infrastructure Sec. 1241. FERC would be required to Sec. 1241. FERC would be required to Investment establish a rule to create incentive-based establish a rule to create incentive-based transmission rates. FERC would be transmission rates. FERC would be authorized to revise the rule. The rule authorized to revise the rule. The rule would promote reliable and economically would promote reliable and economically efficient electric transmission and efficient electric transmission and generation, provide for a return on equity generation, provide for a return on equity that would attract new investment in that would attract new investment in CRS-124 Provision House Senate Comments transmission, encourage use of transmission, encourage use of technologies that increased the transfer technologies that increased the transfer capacity of existing transmission capacity of existing transmission facilities, and would allow for the facilities, and would allow for the recovery of all prudently incurred costs recovery of all prudently incurred costs that are necessary to comply with that are necessary to comply with mandatory reliability standards. In mandatory reliability standards and those addition, FERC would be directed to that would result from transmission siting implement incentive rate-making for and construction on a National Interest utilities that join a Regional Transmission Electric Transmission Corridor. Organization or Independent System Operator. Funding New Interconnection No provision. Sec. 1242. FERC could approve a and Transmission Upgrades. participant funding plan to allocate costs related to transmission construction or new generator interconnection as long as the resulting rates would be just and reasonable, not unduly discriminatory or preferential, and are otherwise consistent with sections 205 and 206 of the Federal Power Act. Amendments to PURPA Provision House Senate Comments Net Metering and Additional Sec. 1251. For states that have not Sec. 1251. Similar Provision. Standards considered implementation and adoption of net metering standards, within three years of enactment, state regulatory CRS-125 Provision House Senate Comments authorities would be required to consider whether to implement net metering. Net metering service is defined as service to an electric consumer under which electric energy generated by that electric consumer from an eligible on-site generating facility (e.g., solar or small generator) and delivered to local distribution facilities may be used to offset electric energy provided by the electric utility to the electric consumer during the applicable billing period. Smart Metering Sec. 1252. For states that have not Sec. 1252. Similar provision. considered implementation and adoption of a smart metering standard, state regulatory authorities would be required to initiate an investigation within one year of enactment, and issue a decision within two years of enactment, whether to implement a standard for time-based meters and communications devices for all electric utility customers. These devices would allow customers to participate in time-based pricing rate schedules. This section would amend the Public Utility Regulatory Policies Act of 1978 (PURPA) and would require the Secretary of Energy to provide consumer education on advanced metering and communications technologies, to identify and address barriers to adoption of demand response programs, and issue a CRS-126 Provision House Senate Comments report to Congress that identifies and quantifies the benefits of demand response. The Secretary of Energy would provide technical assistance to regional organizations to identify demand response potential and to develop demand response programs to respond to peak demand or emergency needs. FERC would be directed to issue an annual report, by region, to assess demand response resources. Cogeneration and Small Power Sec. 1253. Currently, §210 of PURPA Sec. 1253. Similar Provision. The oil embargoes of the 1970s created concerns Production Purchase and Sale requires utilities to purchase power from about the security of the nation's electricity supply Requirements qualifying facilities and small power and led to enactment of the Public Utility producers at a rate based on the utilities' Regulatory Policies Act of 1978 (PURPA). For avoided cost. This section would repeal the first time, utilities were required to purchase the mandatory purchase requirement power from outside sources. The purchase price under §210 of PURPA for new contracts was set at the utilities' "avoided cost," the cost if FERC finds that a competitive they would have incurred to generate the electricity market exists and a qualifying additional power themselves, as determined by facility has access to independently utility regulators. PURPA was established in part administered, auction-based day-ahead to augment electric utility generation with more and real-time wholesale markets and efficiently produced electricity and to provide long-term wholesale markets. Qualifying equitable rates to electric consumers. facilities would also need to have access (See Appendix G for more information.) to transmission and interconnection services provided by a FERC-approved regional transmission entity that provides non-discriminatory treatment for all customers. Ownership limitations under PURPA would be repealed. CRS-127 Provision House Senate Comments Interconnection Sec. 1254. Each state regulatory Sec. 1254. Similar provision. authority and each nonregulated utility would consider establishing an interconnection standard for on-site generating facilities wishing to be connected to the local distribution facilities, if it has not already done so. Consideration of the standard would be commenced not later than one year after enactment and completed not later than two years after the date of enactment. Repeal of PUHCA Provision House Senate Comments Short Title Sec. 1261. This subtitle may be cited as Sec. 1271. Same. the "Public Utility Holding Company Act of 2005." Definitions Sec. 1262. This section would provide Sec. 1272. Similar provision. definitions for: affiliate, associate company, commission, company, electric utility company, exempt wholesale generator and foreign utility company, gas utility company, holding company, holding company system, jurisdictional rates, natural gas company, person, public utility, public-utility company, state commission, subsidiary company, and voting security. CRS-128 Provision House Senate Comments Repeal of the Public Utility Sec. 1263. The Public Utility Holding Sec. 1273. Similar provision. In general, the Public Utility Holding Company Holding Company Act of 1935 Company Act of 1935 (PUHCA) would Act of 1935 currently prohibits all holding be repealed. companies that are more than twice removed from the operating subsidiaries. It also federally regulates holding companies of investor-owned utilities, and provides for Securities and Exchange Commission (SEC) regulation of mergers and diversification proposals. Registered holding companies of subsidiaries are required to have SEC approval prior to issuing securities; all loans and intercompany financial transactions are regulated by the SEC. A holding company can be exempt from PUHCA if its business operations and those of its subsidiaries occur within one state or within contiguous states. (See Appendix H for more information.) Federal Access to Books and Sec. 1264. Federal access to books and Sec. 1274. Similar provision. Currently, registered holding companies and Records records of holding companies and their subsidiary companies are required to preserve affiliates would be provided. Affiliate accounts, cost-accounting procedures, companies would have to make available correspondence, memoranda, papers, and books to FERC books and records of affiliate that the SEC deems necessary or appropriate in transactions. Federal officials would the public interest or for the protection of have to maintain confidentiality of such investors and consumers (15 U.S.C. 79o.). books and records. State Access to Books and Sec. 1265. A jurisdictional state Sec. 1275. Similar provision. Currently under the Federal Power Act, state Records commission would be able to make a commissions may examine the books, accounts, reasonably detailed written request to a memoranda, contracts, and records of a holding company or any associate jurisdictional electric utility company, an exempt company for access to specific books and wholesale generator that sells to such electric records, which would be kept utility, and an electric utility company or holding confidential. This section would not company that is an associate company or affiliate CRS-129 Provision House Senate Comments apply to an entity that is considered to be of an exempt wholesale generator. In issuing such a holding company solely by reason of an order, a state commission currently is not ownership of one or more qualifying required to specify which books, accounts, facilities. Response to such a request memoranda, contracts, and records it is would be mandatory. Compliance with requesting. this section would be enforceable in U.S. District Court. Exemption Authority Sec. 1266. FERC would be directed to Sec. 1276. Similar provision. promulgate rules to exempt qualifying facilities, exempt wholesale generators, and foreign utilities, from the federal access to books and records provision (Section 1264). Affiliate Transactions Sec. 1267. FERC would retain the Sec. 1277. Similar provision. Currently, the Federal Power Act requires that authority to prevent cross-subsidization jurisdictional rates are just and reasonable and and to assure that jurisdictional rates are prohibits cross-subsidization (16 U.S.C. 791a et just and reasonable. FERC and state seq.). commissions would retain jurisdiction to determine whether associate company activities could be recovered in rates. Applicability Sec. 1268. Except as specifically noted, Sec. 1278. Similar provision. this subtitle would not apply to the U.S. government, a state or any political subdivision of the state, or foreign governmental authority operating outside the United States. CRS-130 Provision House Senate Comments Effect on Other Regulations Sec. 1269. FERC or state commissions Sec. 1279. Similar provision. would not be precluded from exercising their jurisdiction under otherwise applicable laws to protect utility customers. Enforcement Sec. 1270. FERC would have authority Sec. 1280. Similar provision. Currently, the Securities and Exchange to enforce these provisions under sections Commission has authority to investigate and 306-317 of the Federal Power Act. enforce provisions of the Public Utility Holding Company Act of 1935 (15 U.S.C. 79r). Savings Provisions Sec. 1271. Persons would be able to Sec. 1281. Similar provision. continue to engage in legal activities in which they have been engaged or are authorized to engage in on the effective date of this Act. This subtitle would not limit the authority of FERC under the Federal Power Act or the Natural Gas Act. Implementation Sec. 1272. Not later than 12 months after Sec 1282. Similar Provision, but not later enactment, FERC would be required to than four months after enactment. promulgate regulations necessary to implement this subtitle and submit to Congress recommendations for technical or conforming amendments to federal law that would be necessary to carry out this subtitle. CRS-131 Provision House Senate Comments Transfer of Resources Sec. 1273. The Securities and Exchange Sec. 1283. Similar Provision. Commission would be required to transfer all applicable books and records to FERC. However, no time frame for transfer of books and records is provided. Currently, the Securities and Exchange Commission maintains books and records and regulates security transactions (15 U.S.C. 79 et seq.). Effective Date Sec. 1274. Twelve months after Sec. 1284. Six months after enactment, enactment, this subtitle would take effect. this subtitle would take effect. This This effective date would not apply to effective date would not apply to §1282 §1269 (effect on other regulations), (implementation). §1270 (enforcement), §1271 (savings provisions), and §1272 (implementation). Service Allocation Sec. 1275. FERC would be required to Sec. 1285. Similar provision. review and authorize cost allocations for non-power goods or administrative or management services provided by an associate company that was organized specifically for the purpose of providing such goods or services. This section would not preclude FERC or state commissions from exercising their jurisdiction under other applicable laws with respect to review or authorization of any costs. FERC would be required to issue rules within six months of enactment to exempt from the section any company and holding company CRS-132 Provision House Senate Comments system if operations are confined substantially to a single state. Authorization of Appropriations Sec. 1276. Necessary funds to carry out Sec. 1286. Similar provision. this subtitle would be authorized to be appropriated. Conforming Amendments to the Sec. 1277. The Federal Power Act would Sec. 1287. Similar provision. Federal Power Act be amended to reflect the changes to the Public Utility Holding Company Act of 1935. (Current jurisdiction of the Securities and Exchange Commission under the Public Utility Holding Company Act of 1935 is referenced by 16 U.S.C. 825q; 16 U.S.C. 824(g)(5), and 16 U.S.C. 824m.) Market Transparency, Enforcement, and Consumer Protection Provision House Senate Comments Market Transparency Rules Sec. 1281. Within 180 days after Sec. 1261. FERC could issue rules to enactment, FERC would be required to establish an electronic system that issue rules to establish an electronic provides information about the system that provides information about availability and price of wholesale the availability and price of wholesale electric energy and transmission services. electric energy and transmission services. Any rule would exempt from disclosure FERC would exempt from disclosure any any information that, if disclosed, could information that, if disclosed, could be be detrimental to the operation of the CRS-133 Provision House Senate Comments detrimental to the operation of the effective market or jeopardize system effective market or jeopardize system security. FERC would be required to security. FERC would be required to assure that consumers in competitive assure that consumers in competitive markets are protected from adverse markets are protected from adverse effects of potential collusion or other effects of potential collusion or other anti-competitive behaviors that could anti-competitive behaviors that could occur as a result of untimely public occur as a result of untimely public disclosure of transaction-specific disclosure of transaction-specific information. Any rule could not affect information. This section would not the exclusive jurisdiction of the affect the exclusive jurisdiction of the Commodity Futures Trading Commission Commodity Futures Trading Commission (CFTC) with respect to accounts, with respect to accounts, agreement, agreement, contracts, or transactions in contracts, or transactions in commodities commodities under the Commodity under the Commodity Exchange Act. Exchange Act. Under a rule, if FERC FERC would not be allowed to compete requests information from a designated with, or displace, any price publisher or contract market, registered derivatives regulated price publishers or impose any transaction execution facility, board of requirements on the publication of trade, exchange, or market involving a information. commodity which is under the jurisdiction of the CFTC, then FERC's request would be directed to the CFTC. FERC would not be allowed to compete with, or displace, any price publisher or regulated price publishers or impose any requirements on the publication of information. This section would not apply to the area of the Electric Reliability Council of Texas. Market Manipulation Sec. 1282. It would be unlawful to Sec. 1262. Would prohibit entities from Currently, mail fraud laws in part apply to use of willfully and knowingly file a false report fraudulently reporting to a federal agency the mail for the purpose of executing, or on any information relating to the price information relating to the price of attempting to execute, a scheme or artifice to CRS-134 Provision House Senate Comments of electricity sold at wholesale or the electricity sold at wholesale or the defraud or for obtaining money or property by availability of transmission capacity, with availability of transmission capacity. false or fraudulent pretenses, representations, or the intent to fraudulently affect data - promises. Wire fraud statutes cover use of wire, being compiled by a federal agency. It Sec. 1263. Would prohibit any entity, in radio, or television communication in interstate or would be unlawful for any individual, connection with the purchase or sale of foreign commerce to transmit or to cause to be corporation, or government entity FERC jurisdictional electric energy or transmitted any writings, signs, signals, pictures, (municipality, state, power marketing transmission services, from directly or or sounds for the purpose of executing a scheme administration) to engage in round-trip indirectly using any manipulative or or artifice to defraud or for obtaining money or electricity trading. Round-trip trading is deceptive device or contrivance. property by means of false or fraudulent pretenses, defined to include contracts in which representations, or promises. purchase and sale transactions have no specific financial gain or loss and are entered into with the intent to distort reported revenues, trading volumes, or prices. Enforcement Sec. 1283. The Federal Power Act would Sec. 1264. Similar provision. Currently, criminal penalties may not exceed be amended to allow electric utilities to $5,000 and/or two years' imprisonment. An file complaints with FERC and to allow additional fine of $500 can be imposed. A civil complaints to be filed against penalty not exceeding $10,000 per day per transmitting utilities. Criminal and civil violation may be assessed for violations of penalties under the Federal Power Act sections 211, 212, 213, or 214 of the Federal would be increased. Criminal penalties Power Act. would not exceed $1 million and/or five years' imprisonment. In addition, a fine of $25,000 could be imposed. A civil penalty not exceeding $1 million per day per violation could be assessed for violations of sections 211, 212, 213, or 214 of the Federal Power Act. CRS-135 Provision House Senate Comments Refund Effective Date Sec. 1284. Section 206(b) of the Federal Sec. 1265. Similar provision. Currently, refunds for rates that FERC finds to be Power Act would be amended to allow unjust, unreasonable, unduly discriminatory, or the effective date for refunds to begin at preferential begin a minimum of 60 days after a the time of the filing of a complaint with complaint is filed (16 U.S.C. 824e(b)). FERC but not later than five months after such a filing. If FERC does not make its decision within the time-frame provided, FERC would be required to state its reasons for not acting in the provided time-frame for the decision. Refund Authority Sec. 1285. Any entity that is not a public Sec. 1266. Any entity referred to under § Currently, Section 201(f) of the Federal Power utility (including an entity referred to 201(f) of the Federal Power Act which Act exempts government entities from FERC rate under § 201(f) of the Federal Power Act) enters into a short-term sale of electricity regulation. and enters into a short-term sale of through an organized FERC electricity would be subject to the FERC jurisdictional market would be subject to refund authority. A short-term sale FERC refund authority. A short-term sale would include any agreement to the sale would include any agreement to the sale of electric energy at wholesale that is for of electric energy at wholesale that is for a period of 31 days or less. This section a period of 48-hours or less. Like the would not apply to electric cooperatives, House version, this provision would not or any entity that sells less than 8 million apply to electric cooperatives, or any megawatt hours of electricity per year. entity that sells less than 8 million FERC would have refund authority over megawatt hours of electricity per year. voluntary short-term sales of electricity FERC would have refund authority over by Bonneville Power Administration if voluntary short-term sales of electricity the rates charged are unjust and by Bonneville Power Administration if unreasonable. FERC would have the rates charged are unjust and authority over all power marketing unreasonable. The Senate provision administrations and the Tennessee Valley specifies such a refund to be at rates that Authority to order refunds to achieve just are higher than the highest just and and reasonable rates. reasonable rate for a short-term sale of electric energy charged by any other CRS-136 Provision House Senate Comments entity located in the same geographic market. FERC would have authority over all power marketing administrations and the Tennessee Valley Authority to order refunds to achieve just and reasonable rates. Sanctity of Contract Sec. 1286. Upon determining that failure Sec. 1266. Similar Provision, but less to take action would be contrary to explicit than House version. protection of the public interest, FERC would be authorized to modify or abrogate any contract entered into after enactment of this section. FERC would not be able to abrogate or modify contracts that expressly provide for a standard of review other than the public interest standard. Consumer Privacy and Unfair Sec. 1287. The Federal Trade Sec. 1267. Similar Provision. Trade Practices Commission would be authorized to issue rules to prohibit slamming and cramming. Slamming occurs when an electric utility switches a customer's electric provider without the consumer's knowledge. Cramming occurs when an electric utility adds additional services and charges to a customer's account without permission of the customer. If the Federal Trade Commission determines that a state's regulations provide equivalent or greater protection, then the state regulations would apply in CRS-137 Provision House Senate Comments lieu of regulations issued by the Federal Trade Commission. Office of Consumer Advocacy. No provision. Sec. 1268. Would create an Office of Consumer Advocacy within the Department of Energy. The Office of Consumer Advocacy would represent residential and small commercial customers, who receive products or services from FERC jurisdictional public utilities or natural gas companies, at FERC hearings, in civil actions brought in connection with FERC actions, and at proceedings at other federal regulatory agencies and commissions. Authority of Court to Prohibit No provision. Sec. 1269. The court would be allowed Persons from Serving as to prohibit any person who is found to Officers, Directors, and Energy have violated Section 222 of the Federal Traders Power Act (Prohibition on Filing False Information) from acting as an officer or director of an electric utility or engaging in the business of purchasing or selling FERC jurisdictional electric energy or transmission services. Relief for Extraordinary No similar provision. Sec. 1270. FERC would be given Violations exclusive jurisdiction under the Federal Power Act to determine whether a requirement to make payments for power not delivered is not permitted or is otherwise unjust and unreasonable or CRS-138 Provision House Senate Comments contrary to the public interest. This section would apply to any contract that was entered into in the Western Interconnection prior to June 20, 2001. In addition, this section would apply only to proceedings in which there have been no final orders or determinations. Final Action on Refunds for No provision. Sec. 1333. FERC would be required to Excessive Charges conclude its investigation into the unjust or unreasonable charges incurred by California during the 2000-2001 electricity crisis as soon as possible and would be directed to ensure that refunds FERC determines are owed to the State of California are paid to the state of California. FERC would be required to submit to Congress a report by December 31, 2005 describing the actions taken by FERC and timetables for further actions. Merger Reform Provision House Senate Comments Merger Review Reform and Sec. 1291. Within 180 days of No similar provision Accountability enactment, the Secretary of Energy would be required to transmit to Congress a study on whether FERC's merger review authority is duplicative with other agencies' authority and that CRS-139 Provision House Senate Comments would include recommendations for eliminating any unnecessary duplication. FERC would be required to issue an annual report to Congress describing all conditions placed on mergers under section 203(b) of the Federal Power Act. FERC would also be required to include in its report whether such a condition could have been imposed under any other provision of the Federal Power Act. Electric Utility Mergers Sec. 1292. The Federal Power Act would Sec. 1288. Similar to House version but Currently, under Section 203(a) of the Federal be amended to give FERC review would also apply to the purchase, lease, Power Act, FERC review of asset transfers applies authority for transfer of assets valued in or acquisition of an existing generating to transactions valued at $50,000 or more (16 excess of $10 million. FERC would be facility that has a value in excess of $10 U.S.C. 824b). required to give state public utility million and is used to generate electricity commissions and governors reasonable for FERC jurisdictional interstate notice in writing. FERC would be wholesale sales. In addition to the House required to establish rules to comply with requirements, the Senate version would this section. This section would take require FERC to determine that the effect 12 months after enactment. proposed transaction would not result in harmful cross-subsidization with a non- utility associate company. This section would take effect 6 months after enactment. CRS-140 Definitions Provision House Senate Comments Definitions Sec. 1295. The definitions for "electric Sec. 1291. Similar provision except that utility" and "transmitting utility" under the term `commission' is not defined in the Federal Power Act would be this section. amended. Definitions for the following terms would be added to the Federal Power Act: electric cooperative, regional transmission organization, independent system operator, and commission. Conforming Amendments Sec. 1297. The Federal Power Act would Sec. 1295. Similar provision. be amended to conform with this title. Energy Policy and Conservation No provision. Sec. 1292. Section 609(c)(4) of the Technical Correction. Public Utility Regulatory Policies Act of 1978 would be amended to conform with this title. Economic Dispatch and Other Electricity Provision House Senate Comments Economic Dispatch Sec. 1298. FERC would be directed to Sec. 1316. The Secretary of Energy convene regional boards to study would be directed, in coordination and "security constrained economic consultation with the states, to conduct a dispatch." A member of FERC will study of economic dispatch. This section chair each regional joint board that is to would define economic dispatch to mean be composed of a representative from the operation of a generation facility to CRS-141 Provision House Senate Comments each state. Within one year of produce energy at the lowest cost in order enactment, FERC would be required to to reliably serve consumers, taking into submit a report to Congress on the consideration any operational limit of a recommendations of the joint regional generation or transmission facility. Not boards. This section does not define later than 90 days after enactment, and "security constrained economic dispatch" annually thereafter, the Secretary of but it generally means a dispatch system Energy must submit the results of the that ensures that all normal and study to Congress. contingency limits of the system are simultaneously met under a base case with one contingency (i.e, the loss of a critical network element, N-1 security analysis). Training Guidelines for Electric No similar provision. Sec. 1104. The Secretary of Labor, in Energy Industry Personnel consultation with the Secretary of Energy and in conjunction with industry personnel, would be required to develop electric industry personnel training guidelines. National Power Plant Operations No similar provision. Sec. 1107. The Secretary of Energy Technology and Educational would be required to support the Center establishment of a National Power Plant Operations Technology and Educational Center at an institution of higher education to train and educate operators and technicians for the electric power industry. CRS-142 Provision House Senate Comments Interagency Review of No similar provision. Sec. 1315. An interagency task force Competition in the Wholesale would be created to study wholesale and and Retail Markets for Electric retail competition in the electric industry. Energy The task force would be required to report its findings to Congress within one year of enactment. Study of Rapid Electrical Grid No similar provision. Sec. 1317. The Secretary of Energy Restoration would be required to conduct a study of the benefits of using mobile transformers and mobile substations to rapidly restore electrical service to areas subjected to blackouts. A Report to Congress on the results of the study would be required to be submitted within one year of enactment. Study of Distributed Generation No similar provision. Sec. 1318. The Secretary of Energy, in consultation with Federal Energy Regulatory Commission, would be required to conduct a study of the potential benefits of cogeneration and small power production. Within 18 months of enactment, the Secretary of Energy would be required to submit the results of the study to the President and to Congress. CRS-143 Provision House Senate Comments Effect of Electrical No similar provision. Sec. 1331. Not later than 180 days after Electronic circuitry manufacturing has switched Contaminants on Reliability of the date of enactment of this Act, the from using a lead-tin compound for coatings and Energy Production Systems Secretary of Energy would be required to soldering to coatings of pure tin. Pure tin is enter into a contract with the National capable of forming small, needle-like formations Academy of Sciences under which the (called tin whiskers) on the surface of the tin National Academy of Sciences would coatings. Short-circuits could be created between determine the effect that electrical the tin whiskers in tightly spaced electronic contaminants (such as tin whiskers) could circuitry. have on the reliability of energy production systems, including nuclear energy. Energy Tax Incentives Provision House Senate Comments Short Title Sec. 1300. This title may be cited as the Sec. 1500. This title may be cited as the "Enhanced Energy Infrastructure and "Energy Policy Tax Incentives Act of Technology Tax Act of 2005." 2005." Energy Infrastructure Tax Incentives Provision House Senate Comments Natural Gas Gathering Lines Sec. 1301. The House bill would assign No provision. Under IRC§168(e)(3) and IRS regulations, the Treated As 7-Year Property natural gas gathering lines a 7-year recovery period for natural gas gathering lines recovery period. could be either 7 or 15 years, depending upon whether they are classified as production or CRS-144 Provision House Senate Comments transportation equipment. Recent court cases reflect the ambiguous tax treatment. Natural gas pipelines have a recovery period of 15 years, while natural gas distribution lines have a recovery period of 20 years. Natural Gas Distribution Lines Sec. 1302. As noted above, natural gas Sec. 1515. The proposal establishes a Natural gas distribution pipelines are currently Treated As 15-Year Property distribution lines currently are assigned a statutory 15-year recovery period and a assigned a 20-year recovery period and a class life 20-year recovery period. The House bill statutory class life of 35 years for natural of 35 years. would reduce this to 15 years. gas distribution lines placed in service before January 1, 2008. Underground Natural Gas No provision. Sec. 1541. Senate H.R. 6 provides for a Current law provides for a 15 year recovery Storage Property 10-year recovery period for underground period. natural gas storage facilities. Electric Transmission Property Sec. 1303. This section would shorten No provision. The current law recovery period for transmission Treated As 15-Year Property the recovery period for transmission property is generally 20 years. The House property from 20 to 15 years. provision is intended to create incentives to increase investment in transmission assets. Net-Operating Losses No provision. Sec. 1546. Transmission companies Under current law, net-operating losses may be would be allowed to carry-backward any carried back 2 years or forward 20 years. operating losses if the added profits therefrom would be used either to add transmission or pollution control equipment. Sale or Disposition of No provision. Sec. 1506. This section would extend the Gain from the sale or disposition of transmission Transmission Assets to deferral provision to sales or dispositions assets before December 31, 2006, is recognized Implement Federal Energy to an independent transmission company over 8 years rather than in the year of the capital CRS-145 Provision House Senate Comments Regulatory Commission (FERC) prior to January 1, 2008. gain is realized (thus allowing the tax liability to Restructuring Policy be spread over 8 years) as long as new utility property is purchased withing 4 years. Expansion of Amortization of Sec. 1304. This section would repeal the Sec. 1547. Investment in pollution Under current law, pollution control equipment Certain Atmospheric Pollution condition that only pollution control control equipment would qualify for a can also qualify for a type of accelerated Control Facilities in Connection equipment installed on pre-1976 plants 15% investment tax credit. Small ethanol depreciation if it is installed in connection with With Plants First Placed-in- qualifies for 60-month amortization. plants -- those that produce less than 1 older facilities (essentially a plant or equipment Service After 1975 million gallons of ethanol annually -- placed into service before January 1, 1976). Such would be excluded. equipment can be amortized over five years instead of the standard 15- or 20-year period applicable to conventional generating equipment and instead of the same 15- or 20-year period applicable to pollution control equipment installed in connection with newer plants. Amortization is a method of depreciation that recovers the total cost basis evenly over the recovery period. More specifically, the amortization period is five years and if the pollution control equipment has a useful life of 15 years or less, 100% of the cost can be amortized over five years. (If the equipment has a useful life greater than 15 years, then the proportion of the costs that can be amortized is less than 100%.) Pollution control equipment added to "newer" plants (those placed in service after 1975) is depreciated using the same General Depreciation System (GDS) methods that apply to other electric generating equipment on the date they are placed in service (15- or 20-year recovery period using the 150% declining balance method). CRS-146 Provision House Senate Comments Modification of Credit for Sec. 1305. H.R. 6 would make the §29 No provision. Current IRC §29 provides a $3 tax credit (in 1979 Producing Fuel From a tax credit part of the general business tax dollars) for each barrel (or equivalent) of fuels Nonconventional Source credit under IRC§38. produced or mined from unconventional sources, and sold to independent parties in an arms-length transaction. For most fuels, the credit ended in 2002 for facilities and mines placed in service by the end of 1992; for biogases and synfuels, the credit ends in 2007 for facilities placed in service by June 30, 1998. No credit is available for facilities placed in service after these cut-off dates (which apply to different fuels). The credit is phased out when oil prices exceed certain limits (currently $49.75/barrel). The credit in 2004 was $6.56/barrel of oil equivalent, which is equivalent to $1.16/mcf of gas. Most of the benefits from this tax credit have accrued to coalbed methane and to other unconventional fossil gases, and more recently to coal, due to the way synfuels are treated (see CRS Report 97-679 E). The §29 tax credit is limited to the excess of the regular tax over the tentative minimum tax, and it may not be carried forward or back to other taxable years. Modifications to Special Rules Sec. 1306. The House provision would No provision. Contributions into a nuclear decommissioning for Nuclear Decommissioning repeal the requirement that a utility has to fund are tax deductible in the year made and as Costs be regulated under cost-of-service rate long as the utility is regulated. Deductions are regulations in order to qualify for this limited to the lesser of the amounts relating to the deduction. Thus, unregulated utilities cost of service regulations or the IRS's ruling would also qualify. The bill also would amount. Moneys withdrawn from the fund are repeal the current limitations regarding taxable as income, and expenditures for the magnitude of the decommissioning decommissioning are deductible as costs on an fund accumulations -- a utility could accrual basis. Decommissioning funds may be make contributions into the fund in transferred tax-free in connection with a change in CRS-147 Provision House Senate Comments excess of the maximum amount ownership of the nuclear facility to which they established by the Internal Revenue relate, but the transferee generally has to be a Service in certain circumstances. regulated utility eligible to maintain such a fund. In a deregulated and restructured industry, ambiguity regarding the tax treatment of decommissioning fund transfers may make such transactions taxable [IRC§468A]. Credit for Electricity Produced No provision. Sec. 1507. The Senate version of H.R 6 No such credit is provided under current law. from Advanced Nuclear Power permits a taxpayer producing electricity Facilities at a qualifying advanced nuclear power facility to claim a credit equal to 1.8¢ per kilowatt-hour of electricity produced for the eight-year period starting when the facility is placed in service. Up to 6,000 megawatts of new nuclear capacity could qualify for the credit. Treatment of Income of Electric No provision. Sec.1505. Several special rules create In general, cooperatives are exempt from tax Cooperatives favorable tax treatment for rural electric although patrons must pay tax on any distributed cooperatives, but this favorable tax profits as "patronage dividends." Rural electric treatment ends on December 31, 2006. cooperatives are also exempt from tax and patrons The Senate bill would permanently do not have to report dividends, provided that no extend favorable tax treatment from (1) more than 15% of the cooperative's income is open access electric energy transmission from services to nonmembers (at least 85% of the or distribution services, (2) any nuclear coop's income must come from the sale of decommissioning transaction, (3) any electricity to members). asset exchange or conversion transaction for purposes of the 85% test under section 501(c)(12), and (4) load loss transactions, which would be treated as member income in determining whether a CRS-148 Provision House Senate Comments rural electric cooperative satisfies the 85% test. Arbitrage Rules Not to Apply to Sec. 1307. Under the House bill, state No provision. State and local governments currently cannot use Prepayment of Natural Gas and local governments would be exempt the proceeds of tax-exempt bond issues to profit from the arbitrage restrictions of the tax- from arbitrage (by pre-payment) on natural gas exempt bond rules, thus allowing (with purchases (IRC §148) -- bond proceeds must be some restrictions) such proceeds to used to finance qualifying public-purpose projects. purchase a supply of natural gas for customers of a public utility. Determination of Small Refiner Sec. 1308. Under H.R. 6, the 50,000 No provision. The percentage depletion allowance for oil and Exception to Oil Depletion barrel daily limit would be raised to gas is 15% of revenues and is available only to Allowance 75,000, and it would apply to the average independent producers and royalty owners. over an entire taxable year, rather than on Independent producers can claim a higher any day during the taxable year. depletion rate (up to 25%, rather than the normal 15%) for up to 15 barrels per day (bpd) of oil (or the equivalent amount of gas) from marginal wells ("stripper" oil/gas and heavy oil). For purposes of percentage depletion, an independent oil producer is a) one that, on any given day, does not refine more than 50,000 barrels of oil, and b) does not have a retail operation grossing more than $5 million/year [IRC§613A(d)]. Conservation and Energy Efficiency Provisions Provision House Senate Comments Credit for Residential Energy Sec. 1311. Under the House bill, a 15% Sec. 1527. The Senate bill provides a There are no tax subsidies, under current law, for Efficiency Property tax credit (up to $2,000) would be 30% personal tax credit for the purchase residential applications of solar, wind, or other provided for residential applications of of qualified photovoltaic property, solar renewable energy technologies. The 1978 energy CRS-149 Provision House Senate Comments solar technologies to heat water, rooftop water heating property, and fuel cell tax credits for solar and wind established under photovoltaics to generate electricity, and power plants that are used exclusively for President Carter's National Energy Act expired in fuel cell property. The credit for fuel cell purposes other than heating swimming 1985. property would be limited to pools and hot tubs. The maximum credit $1,000/kilowatt (KW) of capacity. for each solar-based system would be $2,000. The credit for any fuel cell may not exceed $500 for each 0.5 KW of capacity. Credit for Business Installation Sec. 1312. Under H.R. 6, a 15% tax Sec. 1528. The proposal provides a 30% Various business tax subsidies are available to of Qualified Fuel Cells credit would be provided for business business energy credit for the purchase of renewable energy technologies under current law investments in stationary fuel cells, qualified fuel cell power plants for [IRC §45,46,48, 613(e)]. A 10% tax credit is subject to a maximum credit of businesses (not to exceed $500 for each provided for investment in solar equipment 1) to $1,000/KW of capacity. 0.5 KW of capacity), and a 10% credit generate electricity (including photovoltaic for the purchase of qualifying stationary systems), 2) to heat or cool a structure, and 3) for microturbine power plants (not to exceed process heat. Geothermal energy reservoirs 10% of the basis of the property or $200 qualify for a 15% depletion allowance. Electricity for each KW). A qualified fuel cell from wind technologies receives the §45 tax power plant is an integrated system credit. The recovery period for renewable comprising a fuel cell stack assembly and technologies used to generate electricity is five associated balance of plant components years. Fuel cells do not qualify for tax subsidies. that converts a fuel into electricity using electrochemical means, and which has an electricity-only generation efficiency of greater than 30% and generates at least 0.5 KW of electricity. A qualified stationary microturbine power plant is an integrated system comprised of a gas turbine engine, a recuperator or regenerator, a generator or alternator, and associated balance of plant components which converts a fuel into electricity and thermal energy. CRS-150 Provision House Senate Comments Business Solar Investment Tax No provision. Sec. 1529. The tax title would increase Current law provides a 10% tax credit for Credit the investment tax credit for solar investment in solar equipment used to 1) generate property used in a business from 10% to electricity (including photovoltaic systems), 2) 30% for 2006 through 2011. used to heat or cool a structure, and 3) used for process heat. Geothermal energy equipment also qualifies for the 10% investment tax credit, and geothermal reservoirs qualify for a 15% depletion allowance. Deduction for Energy Efficient No provision. Sec. 1521.Expenditures on energy No special deduction is currently provided for Commercial Buildings efficiency property made with respect to expenses incurred for energy-efficient commercial a commercial building are tax deductible building property. Energy efficiency property that (rather than depreciable), subject to a is installed as part of a structure is depreciable limit of $2.25 per square foot. The over 39 years -- it has the same recovery period property must reduce the building's as the structure. annual energy costs by at least 50% as compared to the standards for a reference building established by a professional engineering body. Commercial buildings include residential rental property. The Senate bill allows designers of commercial buildings to claim this deduction if the energy efficiency items are installed in the buildings of nontaxable entities. Deduction for More Energy- No provision. Sec. 1523. The proposal provides (1) a No special deduction is currently provided for Efficient Heating and Cooling $150 deduction for each advanced main expenses incurred for energy-efficient commercial Equipment Used in Business air circulating fan or a Tier 1 natural gas, building property. Energy efficiency property that propane, or oil water heater, and (2) a is installed as part of a structure is depreciable $900 deduction for more energy efficient over 39 years -- it has the same recovery period electric heat pump water heaters or as the structure. geothermal heat pump. The proposal also CRS-151 Provision House Senate Comments provides a deduction of as high as $6,000 for energy efficient residential rental building property, depending on the percent reduction in energy costs relative to the original condition of the building. No deduction is allowed in the case of energy cost savings of less than 20%. Credit for More Energy- No provision. Sec. 1524. The proposal provides (1) a This incentive is the residential equivalent to the Efficiency Heating and Cooling $50 tax credit for each advanced main air one under Sec. 1523 that applies to businesses. Equipment Used in Homes circulating fan or a Tier 1 natural gas, No special tax credit is currently provided for propane, or oil water heater, and (2) a expenses incurred for energy-efficient residential $300 credit for more energy efficient building property. Any subsidies provided by electric heat pump water heaters or utilities, however, may be excluded from gross geothermal heat pump. The proposal also income under IRC §136. provides a credit of as high as $2,000 for energy efficient residential rental building property, depending on the percent reduction in energy costs relative to the original condition of the building. No deduction is allowed in the case of energy cost savings of less than 20%. Credit for Energy Efficiency Sec. 1317. Under H.R. 6, a tax credit of No provision. No special tax treatment is accorded homeowners Improvements to Existing 20% would be provided for expenditures for purchases of materials and property that Homes on energy efficient envelope components enhances the energy efficiency of a personal -- more energy-efficient insulation, residence. Subsidies provided by utilities can be windows/doors, roofs, and structural excluded from gross income (IRC§136). The envelope components -- retrofitted to 1978 Energy Tax Act -- part of President Carter's existing homes that reduce heat loss (in National Energy Act -- provided conservation tax winter) or heat gain (in summer) for a credits for certain types of energy efficiency dwelling unit. The maximum lifetime retrofits (insulation, storm windows and doors, CRS-152 Provision House Senate Comments credit per dwelling unit would be $2,000. weatherstripping), but these expired in 1985. Qualifying units and materials must meet energy efficiency guidelines for such components established by the International Energy Conservation Code. Credit for Construction of No provision. Sec. 1522. The proposal would provide a Under current law, a taxpayer may exclude from Energy-Efficient New Homes credit to an eligible contractor of an income the value of any subsidy provided by a amount equal to the aggregate adjusted public utility for the purchase or installation of an bases of all energy-efficient property energy conservation measure. An energy installed in a qualified new conservation measure means any installation or energy-efficient home during modification primarily designed to reduce construction. The credit cannot exceed consumption of electricity or natural gas or to $1,000 for a new home that has a improve the management of energy demand with projected level of annual heating and respect to a dwelling unit (IRC § 136). cooling costs that is 30% less (or $2,000 for costs of 50% less) than a comparable dwelling constructed in accordance with the standards of chapter 4 of the 2003 International Energy Conservation Code as in effect (including supplements) on the date of enactment, and any applicable federal minimum efficiency standards for equipment. Credit for Energy Efficient No provision. Sec. 1526. Increased production of more Under current law, a taxpayer may exclude from Appliances energy-efficient dishwashers, clothes income the value of any subsidy provided by a washers and refrigerators (above a base public utility for the purchase or installation of an production level) would qualify for tax energy conservation measure. An energy credits ranging from $50 to $100 conservation measure means any installation or depending upon type of appliance, year modification primarily designed to reduce of production, and its energy-efficiency. consumption of electricity or natural gas or to CRS-153 Provision House Senate Comments The total credit for any manufacturer is improve the management of energy demand with subject to certain limits, including a respect to a dwelling unit (IRC § 136). cumulative lifetime credit limit per manufacturer. Combined Heat and Power No provision. Sec. 1525. Combined heat and power No special tax subsidies are provided to combined Systems ("CHIPS") systems of at least 15 MW, and that meet heat and power (cogeneration) systems; the certain efficiency standards, would be recovery period for purposes of depreciation is treated as business energy property, thus generally 15 years. qualifying for the 10% investment tax credit. Additionally, the proposal provides that systems whose fuel source is at least 90% bagasse and that would qualify for the credit but for the failure to meet the efficiency standard are eligible for a credit that is reduced in proportion to the degree to which the system fails to meet the efficiency standard. Advanced Technology Vehicle Sec. 1316. The House bill would provide Sec. 1531. The proposal would provide a Under current law (IRC§179A), the incremental Credit a tax credit for advanced lean-burn credit for the purchase of a new qualified costs of an alternative-fuel vehicle are tax technology vehicles ranging from a base fuel cell motor vehicle, a new qualified deductible, up to $2,000 for a car, and up to of $500 to $3,000 depending on fuel hybrid motor vehicle, and a new $50,000 for a truck or van (depending on weight efficiency, and an additional tax credit of qualified alternative fuel motor vehicle. class). This applies to vehicles powered by LPG, $250-$550 depending on estimated The fuel cell vehicle credit ranges from LNG, CNG, hydrogen, E85 and M85. The credit lifetime fuel savings. $8,000 to $40,000 depending upon the is reduced by 25% in 2006, and is not available weight class of the vehicle. In the case of for purchases after December 31, 2006. No credit automobiles or light trucks, an additional is currently available for advanced lean burn credit amount that depends upon the vehicles, which are advanced technology vehicles rated fuel economy of the vehicle that are highly fuel efficient and generate lower compared to a base fuel economy. The emissions than standard internal combustion credit for the purchase of a hybrid engines. vehicle is the sum of two components: a CRS-154 Provision House Senate Comments fuel economy credit amount (which ranges from $400 to $2,400 and varies with the rated fuel economy of the vehicle compared to a 2002 model year standard) and a conservation credit based on the estimated lifetime fuel savings of a qualifying vehicle compared to a comparable 2002 model year vehicle. The credit for the purchase of a new alternative fuel vehicle would be 50% of the incremental cost of such vehicle, plus an additional 30% if the vehicle meets certain emissions standards, but not more than between $4,000 and $32,000 depending upon the weight of the vehicle. Credit for Electric Vehicles No provision. Sec. 1532. The proposal would repeal the Current law provides a 10% tax credit for the cost phase-out of the credit under present law. of a qualified electric vehicle, up to a maximum The proposal also modifies present law to credit of $4,000. The full amount of the credit is provide for a credit equal to the lesser of available for purchases prior to 2006. The credit is $1,500 or 10% of the manufacturer's reduced to 25% of the otherwise allowable suggested retail price of certain vehicles amount for purchases in 2006 and is unavailable that conform to the Motor Vehicle Safety for purchases after December 31, 2006. A Standard 500. For all other electric qualified electric vehicle generally is a motor vehicles, a new tax credit would be vehicle that is powered primarily by an electric provided, which ranges from $4,000 to motor drawing current from rechargeable $40,000. batteries, fuel cells, or other portable sources of electrical current. Credit for Installation of No provision. Sec. 1533. The Senate bill would provide Current tax law allows a maximum lifetime tax Alternative Fuels Fueling a 50% tax credit, through 2009 (2014 for deduction, up to $100,000, for the costs of Stations hydrogen fuels), for the costs of clean- alternative fuel refueling property (excluding CRS-155 Provision House Senate Comments fuel refueling equipment (subject to a installation costs). This deduction expires on maximum tax credit of $30,000). It adds January 1, 2007. "residential clean-refueling property" to qualifying property, subject to a maximum credit of $1,000. The definition of alternative fuel would include fuel that is at least 20% biodiesel. Excise Tax Credits for No provision. Sec.1534. The proposal would create two The Senate bill would apply the same tax Alternative Fuels new excise tax credits, the alternative treatment -- an excise tax credit, rather than an fuel credit and the alternative fuel excise tax exemption -- to alternative special mixture credit. The credits would be motor fuels as is currently applied to ethanol fuel allowed against section 4041 liability. blends. (See: Alcohol Fuels Tax Incentives. CRS The alternative fuel credit would be 50¢ Report RL32979.) per gallon of alternative fuel or gasoline gallon equivalents of non-liquid alternative fuel sold by the taxpayer for use as a motor fuel in a highway vehicle. The alternative fuel mixture credit would be 50¢ per gallon of alternative fuel used in producing an alternative fuel mixture for sale or use in a trade or business of the taxpayer. Income Tax Credits for No provision. Sec. 1535. The proposal would extend The current tax code provides an income tax credit Biodiesel the income tax credit, excise tax credit, for pure biodiesel and biodiesel mixtures. The and payment provisions through pure biodiesel credit is 50¢ for each gallon of December 31, 2010. biodiesel not in a mixture with diesel fuel (100% biodiesel or B-100) and which during the taxable year is (1) used by the taxpayer as a fuel in a trade or business or (2) sold by the taxpayer at retail to a person and placed in the fuel tank of such person's vehicle. For agri-biodiesel, the credit is $1.00 per CRS-156 Provision House Senate Comments gallon. The biodiesel mixture credit is 50¢ for each gallon of biodiesel used by the taxpayer in the production of a qualified biodiesel mixture. For agri-biodiesel, the credit is $1.00 per gallon. The Code also provides an excise tax credit for biodiesel mixtures. Each of these credits expires on January 1, 2007. Tax Credit for Small Producers No provision. Sec. 1544. This provision would double Present law provides small fuel ethanol producers of Fuel Ethanol the capacity limit for a small fuel ethanol (ones that produce less than 15 million producer from 30 million gallons to 60 gallons/year, and have less than 30 mil. gal. in million gallons. production capacity) with 10¢/gal. tax credit. The American Job Creation Act of 2004 (P.L. 108- 357) allowed cooperatives to pass the producer credit through to their patrons. Tax Credit for Small Producers No provision. Sec. 1543. A 10¢ per gallon tax credit This is the biodiesel equivalent of the small of Biodiesel would be provided for small producers of ethanol producer tax credit, discussed in the bio-diesel. Cooperative producers would previous section. be allowed to pass the credit through to their patrons, just as in the small ethanol producer tax credit. Energy Management Devices No provision. Sec. 1553. The Senate bill would allow taxpayers to depreciate qualified energy management devices over three years. An energy management device is a meter used to measure and record electricity data on a time-differentiated basis. The proposal is effective for 2006 and 2007. CRS-157 Provision House Senate Comments Rural Commuter Fringe Benefits No provision. Sec. 1552. This would allow an Under present law, certain fringe benefits employee who lives in a rural area to provided by employers (such as parking space, exclude from income up to $50 per and metro passes) are excluded (up to certain month for the cost of fuel related to limits) from income for tax purposes. commuting as part of a carpool arrangement. The proposal would be effective from the date of enactment through Dec. 31, 2006. District Heating and Cooling No provision. Sec. 1554. An exception would be Facilities provided from the volume cap restrictions for private activity bonds issued to finance local district heating and cooling facilities designed to access deep water cooling sources for building air conditioning. The aggregate financing could not exceed $75 million for each facility. Alternative Minimum Tax Relief Provision House Senate Comments New Non-refundable Personal Sec. 1321. The alternative minimum tax No provision. Under current tax law, most non-refundable Credit Allowed Against Regular limitation would not apply to the new personal income tax credits are available only to and Alternative Minimum Tax energy-efficiency tax credits proposed the extent of the difference between the personal under sections 1311 and 1317. and the tentative minimum tax liability -- this means that the alternative minimum tax could limit the amount of the tax credit claimed. Such limitation, if triggered, would reduce the incentive effect of the credits, which in the case of any new CRS-158 Provision House Senate Comments energy-efficiency credits that may be enacted would reduce the incentives to invest in the qualifying materials and property. Certain Business Energy Credits Sec. 1322. H.R. 6 would expand the list No provision. Under current tax law, businesses have access to a Allowed Against Regular and of business energy tax credits for which variety of energy tax incentives, both for energy Minimum Taxes the tentative minimum tax is removed as conservation, renewable fuels (such as the §45 tax a limitation on the amount of tax credit credit), and for energy production (such as the otherwise claimed. marginal oil and gas production tax credit, and the enhanced oil recovery tax credit). For some of these tax credits, the alternative minimum tax also acts to limit the amount of a tax credit otherwise available under the income tax laws. This might reduce the incentive effects of energy tax credits. Other Fossil Fuels Incentives -- Oil and Gas Provision House Senate Comments Expensing of Refinery Property, No provision. Sec. 1512. The proposal would provide a Under present tax law, petroleum refining assets Generally temporary election to expense qualified are depreciated for regular tax purposes over a refinery property -- assets used in the 10-year recovery period using the double refining of liquid fuels: (1) with respect declining balance method. Petroleum refining to the construction of which there is a assets are assets used for distillation, fractionation, binding contract before January 1, 2008; and catalytic cracking of crude petroleum into (2) which is placed in service before gasoline and its other components. Present law January 1, 2012; (3) which increases the also provides a special expensing rule for small capacity of an existing refinery by at least refiners for capital costs incurred in complying 5% or increases throughput of qualified with Environmental Protection Agency sulfur fuels (as defined in §29(c)) by at least regulations. 25%; and (4) which meets all applicable CRS-159 Provision House Senate Comments environmental laws in effect when the property is placed in service. The proposal also allows cooperatives to pass through to patrons the deduction permitted for qualified refinery property. To the extent the deduction for qualified refinery property is passed through to patrons, the cooperative is denied the deduction for such property or any depreciation deductions under §167 or §168 with respect to such property. Expensing of Refinery Property No provision. Sec. 1513. The proposal would allow Taxpayers generally may recover the costs of to Meet EPA's Sulfur cooperatives to pass through to patrons investments in refinery property through annual Regulations for Diesel Fuel the deduction permitted under §179B for depreciation deductions. In addition, the Code costs paid or incurred for the purpose of permits small business refiners to immediately complying with the Highway Diesel Fuel deduct as an expense up to 75% of the costs paid Sulfur Control Requirements (HDFSCR) or incurred for the purpose of complying with the of the Environmental Protection Agency. HDFSCR of the EPA. The Code also provides that To the extent the deduction is passed a small business refiner may claim credit equal to through to patrons, the cooperative is 5¢ for each gallon of low sulfur diesel fuel denied the deduction it would otherwise produced during the taxable year that is in be entitled under §179B or for compliance with the HDFSCR. The total depreciation deductions under §167 or production credit claimed by the taxpayer is §168 with respect to costs attributable to limited to 25% of the capital costs incurred to calculation of the patrons' allowable come into compliance with the EPA diesel fuel §179B deduction. requirements. Enhanced Oil Recovery (EOR) No provision. Sec. 1514. This would increase the Current IRC§43 provides a 15% tax credit Credit existing EOR credit to 20% with respect provided for the costs of recovering oil by one of to any new EOR project or substantial several selected tertiary recovery techniques. The expansion of an existing EOR project credit is part of the general business credit and is that occurs after the effective date and limited by the minimum tax. No tax credits are CRS-160 Provision House Senate Comments that uses carbon dioxide flooding or allowed against the minimum liability. Further, injection as an oil recovery method. The the law states that the sum of allowable credits increased credit is available only for must be less than the difference between the qualified EOR projects that use carbon regular tax and the minimum liability (it cannot be dioxide that is (1) from a man-made, larger than the difference between the two). industrial source or (2) separated from natural gas and natural gas liquids at a natural gas processing plant. Reduced Motor Fuels Excise Sec. 1313. Under the House bill, the No provision. Diesel fuel used in highway vehicles is generally Tax on Certain Mixtures of 24.3¢ Highway Trust Fund (HTF) taxed at 24.4¢/gal., comprising the 24.3¢ HTF rate Diesel Fuel component of the tax on emulsified and the 0.1¢ leaking underground storage tank blends of diesel and water fuels would be (LUST) trust fund rate. Gasoline is taxed at reduced to 19.7¢, reflecting the lower Btu 18.4¢/gal., comprising a 18.3¢ HTF rate and the value of such blended fuel. .01¢ LUST tax (IRC§4081). Other motor fuels are taxed at various rates per gallon, with the rates set so as to equate the tax on a Btu basis. Amortization of Delay Rentals Sec. 1314. Under the House bill, delay No provision. Under the uniform capitalization rules, delay rental payments would be deducted rental payments must be capitalized (via evenly (amortizable) over two years. The depletion). All costs of abandoned properties are same rule would apply to abandoned deductible (IRC§263,263A). properties. Amortization of Geological and Sec. 1315. G&G costs for retained No provision. Under current law, geological and geophysical Geophysical Expenditures properties would be amortizable (G&G) costs for retained properties must be (deducted evenly) over two years. The capitalized via depletion (IRC§263). Dry hole same rule would apply to abandoned costs are expensed (deducted in the year incurred). properties. CRS-161 Other Fossil Fuels Incentives -- Coal Provision House Senate Comments Credit for Investment in Clean No provision. Sec. 1508. Two new tax credits would be A maximum of 6,500 megawatts of capacity Coal Facilities created: 1) a 20% tax credit for would qualify for the first credit; and a limit of $4 investments in selected types of billion of projects could qualify for the second tax advanced clean coal technologies, such credit. as integrated gasification combined cycle, and 2) a 20% tax credit for electricity generated from certain types of gasification projects that convert coal, biomass, petroleum residue, and other material into a synthetic gas. The projects would also have to meet certification procedures. Clean-coal Bonds No provision. Sec. 1509. The proposal would create a Current law provides for a similar tax credit for new category of tax credit bonds, "Clean "qualified zone academy bonds." Energy Coal Bonds," which would give the investor a tax credit (rather than interest-free income) determined by multiplying the bond's credit rate by the face amount on the holder's bond. These are bonds, the proceeds of which are used to finance capital expenditures for "certified coal property," defined as any property that is part of a qualifying advanced coal project certified by the Secretary of Energy. CRS-162 Provision House Senate Comments Credit for Investment in Clean No provision. Sec. 1511. The proposal would provide a Present law does not provide a credit for Coke/Cogeneration 20% investment tax credit for qualified investment in clean coke/cogeneration Manufacturing Facilities investments in clean coke/cogeneration manufacturing facilities property. depreciable property and tangible personal property located in the United States. Qualifying property would have to meet certain emission limitations and be used for the manufacture of metallurgical coke or for the production of steam or electricity from waste heat generated during the production of metallurgical coke. Credit for Coal Produced on No provision. Sec. 1548. This would provide a tax No special credits for coal production on Indian Indian Lands credit of $1.50/ton of coal produced on lands is provided under current law. The §45 lands owned by "Indian Tribes." The renewable electricity tax credit law provides a credit would rise to $2.00/ton beginning $4.37/ton tax credit for refined coal. Also, coal on January 1, 2010. production is assessed a federal Black Lung Excise tax and an Abandoned Mine Land Reclamation fee. (See: The Black Lung Excise Tax on Coal. CRS Report 21935.) Renewable Energy Supply Provision House Senate Comments Renewable Electricity No provision. Secs. 1501, 1502,1503. The credit would Present law provides a tax credit for the Production Tax Credit be expanded to include electricity production of electricity from wind, biomass, produced from free-flowing ocean water geothermal, and other sources. The credit may not derived from ocean currents or waves, be allocated from the producer to another party. ocean thermal energy, or other free- CRS-163 Provision House Senate Comments flowing water. In the case of an agricultural cooperative, the provision would allow the §45 tax credit to be passed through the cooperative to its patrons. Clean Renewable Energy Bonds No provision. Sec.1504. The proposal would create a Present law allows interest on state and local new category of tax-exempt bonds: those bonds to be excluded from gross income if the whose proceeds are used to finance proceeds are used for governmental purposes or capital expenditures for facilities that the bonds are repaid with tax revenues. qualify for the §45 renewable electricity tax credit. This proposal would also exempt from state private activity bond volume caps funding for certain facilities used to cool buildings using ocean water. Credit for Environmentally No provision. Sec. 1549. The Senate bill would provide No tax credit, or other special tax preference, has Clean Wood Stoves a $500 tax credit for each existing ever been provided to wood burning stoves of any conventional wood stove, used in non- type. There were efforts to have such stoves attainment areas, that is replaced by one qualify for a residential energy tax credit under the that complies with EPA's particulate Energy Tax Act of 1978 (P.L. 95-618), but these matter standards. were unsuccessful. General Tax Incentives Provision House Senate Comments Recycling Tax Credit No provision. Sec.1545. This would provide a 15% Recycling equipment qualified for a similar tax investment tax credit for recycling credit under the Energy Tax Act of 1978, enacted equipment. Qualifying equipment as part of President Carter's National Energy Plan. includes equipment used to recycle But these expired at the end of 1982. electronic waste. CRS-164 Provision House Senate Comments Expansion of Research Credit No provision. Sec. 1542. Amounts paid for energy Currently, research -- this applies to energy research would qualify for a 20% tax research as well -- qualifies for an incremental credit. credit over a base level of expenditures. Exemption from the 12% Retail No provision. Sec. 1550. Bulk beds under 26 feet in This retail excise tax is one of the six taxes (and Excise Tax on Tractors/Trailers length that are affixed on farm trucks one of three non-fuel taxes) that fund the Highway would be exempt from the 12% retail Trust Fund. However, most of the HTF revenue excise tax on truck trailers, truck bodies, (over 90%) comes from the fuel taxes, mostly and truck chassis. from the gasoline tax. Tax Increases Provision House Senate Comments Treatment of Aviation-Grade No provision. Sec. 1561. The bill would eliminate Kerosene used in commercial aviation is taxed at Kerosene reduced-tax or tax-free removals of 4.4¢/gallon; non-commercial aviation kerosene is aviation-grade kerosene in commercial taxed at 21.9¢/gallon. This provision further and noncommercial aviation. restricts the rules regarding tax-free removals from refineries and terminals and exemptions for aviation fuel that began under the American Jobs Creation Act of 2004 (P.L. 108-357). Repeal of the Ultimate Vendor No provision. Sec. 1562. This would repeal the law that Refund on Diesel Used in states that refunds of overpaid excise Farming taxes on diesel (and kerosene) used in farming go to the ultimate vendor of the fuel. CRS-165 Provision House Senate Comments Refunds of Fuel Excise Taxes No provision. Sec. 1563. In the case of refunds of fuel This provision was in the American Jobs Creation on Exempt Sales of Fuel by excise taxes where the tax-exempt fuel Tax Act of 2004, but dropped in conference. Credit Card was purchased by credit card, the person extending the credit card to the ultimate purchaser would be treated as the ultimate vendor for purposes of the refund. Additional Requirements for No provision. Sec. 1564. Volunteer fire departments Exempt Fuel Purchases would be added to the list of tax-exempt uses of fuel, but the types of non-profit educational institutions qualified to purchase fuel tax-free would be restricted. Registration in the Event of a No provision. Sec. 1565. In the event of a change in Change in Ownership ownership in the company that is responsible for registering with the Internal Revenue Service because it handles and owns fuel on which excise taxes are assessed, the original registrant/owner (who sells his ownership interest) has to reregister. Excise Tax Treatment of Deep- No provision. Sec. 1566. Deep-draft ocean going Ocean-going, deep draft vessels are exempt from Draft Vessels vessels that use taxable fuel would have the inland waterways excise tax, the 20.1¢/gallon to be registered. Also, this section would rate of tax on fuel used in barges and which funds clarify that the operator of deep-draft the Inland Waterways Trust Fund (the 0.1¢ vessels that ship fuel in bulk to terminals component helps fund the Leaking Underground or refineries would not have to be Storage Tank Trust Fund). registered. CRS-166 Provision House Senate Comments Reconciliation of Loaded Fuel No provision. Sec. 1567. The bill would require the Cargo to Entered Fuel Cargo Secretary of the U.S. Department of Homeland Security to establish a system by which data on shipments of taxable gasoline, diesel, and other fuels, is shared between the U.S. Customs and Border Protection Service and the Internal Revenue Service. Taxation of Gasoline No provision. Sec. 1568. Senate H.R. 6 would impose Blendstocks and Kerosene tax on the non-bulk transfer or importation of gasoline blend-stocks. Also the definition of kerosene for purposes of the 24.4¢/gallon excise tax would include mineral spirits. Taxation of Fuel on Vehicles No provision. Sec. 1569. The bill would clarify that the Driven Out of the United States current excise tax exemption on fuel exported out of the United States does not include fuel inside the fuel tank of a vehicle that is shipped or driven out of the United States. Penalties for Adulterated Diesel No provision. Sec. 1570. The bill would impose Fuels penalties on any person that knowingly sells or transfers any diesel fuel that does not meet EPA regulations. Excise Tax on Oil to Fund the No provision. Sec. 1571. The Senate bill would A 5¢ per barrel excise tax financed the Oil Spill Oil Spill Liability Trust Fund reinstate the 5¢ tax on imported and Liability Trust Fund prior to its expiration. The domestic oil and petroleum products to tax lapsed temporarily because revenues in the fund the Oil Spill Liability Trust Fund. Trust Fund had exceeded $1 billion, the threshold CRS-167 Provision House Senate Comments for the tax, but was reimposed on July 1, 1994. The tax expired on December 31, 1994. Excise Tax on Fuels to Fund the No provision. Sec. 1572. The Senate bill would All motor fuels with the exception of propane and Leaking Underground Storage reinstate the 0.1¢/gallon LUST Fund dyed diesel fuel are assessed a 0.1¢/gallon LUST Tank Trust Fund excise tax on fuels through March 31, fund component, in addition to other components 2011, and extend it to dyed diesel fuel. such as the Highway Trust Fund (or other trust fund components) excise taxes. The LUST component expired on April 1, 2005. Excise Tax on Highway Tires No provision. Sec. 1573. The excise tax on super single For highway tires with a rated load capacity tires would be raised to 8¢/10 lbs of exceeding 3,500 lbs., the IRC imposes an excise excess load capacity over 3,500 lbs. A tax of 9.45¢/10lbs of excess over 3,500 lbs. But "super single tire" is redefined to be a super single tires are currently taxed at the rate of single tire greater than 17.5 inches in 4.725¢/10 lbs of excess load capacity exceeding cross section width designed to replace 3,500 lbs. two tires in a dual fitment. Non-Tax Provisions Provision House Senate Comments National Academy of Sciences No provision. Sec. 1551. Within 60 days after Externalities (either positive or, in the case of Study enactment of H.R. 6, the National energy, negative externalities) are non-market Academy of Sciences shall conduct a costs that spillover from private agents study of the external costs (and benefits) (consumers and producers) to a market transaction -- health, environmental, energy onto third parties. Without some type of security, etc. -- that may result form the government intervention (typically taxes or consumption and production of energy. subsidies), the presence of externalities is one source of market failure (in the case of energy, this is a major source of market failure), i.e., the CRS-168 Provision House Senate Comments failure to achieve efficiency in resource allocation and use. (See: Energy Tax Policy: An Economic Analysis. CRS Report 30406.) Miscellaneous Other Provisions Provision House Senate Comments Continuation of Transmission Sec. 1441. This provision would require No similar provision. On August 28, 2003, the Secretary of Energy Security Order the order to remain in effect unless issued Order No. 202-03-2, allowing the Cross rescinded by federal statute. Sound Cable between Connecticut and Long Island to begin transmitting electric power. (See Appendix I for more information) Review of Agency Sec. 1442. This section would amend the No similar provision. This fast-tracking measure would limit the amount Determinations on Gas Projects Natural Gas Act, giving the D.C. Circuit of time taken by other agencies after FERC had Court of Appeals exclusive jurisdiction issued a certificate for a pipeline project. over disputes involving "unreasonable delay" of a natural gas pipeline project certificated by FERC. Unreasonable delay would mean the failure of a permitting agency to take action within a year after the date of filing for the permit in question, or within 60 days after the issuance of a FERC certificate. There is no explicit time-line in existing law for issuance of ancillary permits and licenses, or requirement to consolidate authority in one court. CRS-169 Provision House Senate Comments Attainment Dates for Downwind Sec. 1443. This section would extend No similar provision. Under the 1990 Clean Air Act Amendments (P.L. Ozone Nonattainment Areas Clean Air Act deadlines for areas that 101-549), ozone nonattainment areas were have not attained ozone air quality classified in one of five categories: Marginal, standards if upwind areas "significantly Moderate, Serious, Severe, or Extreme. Areas contribute" to their nonattainment. with higher concentrations of the pollutant were - given more time to reach attainment. In return for Section 1443 would roll back the additional time, they were required to reclassifications that occurred after April implement more stringent controls on emissions. 1, 2003, and would extend attainment Failure to reach attainment by the specified deadlines in areas affected by upwind deadline was to result in reclassification of an area pollution to the date on which the last to the next higher category and the imposition of reductions in pollution necessary for more stringent controls. Areas such as Dallas-Fort attainment in the downwind area are Worth, for example, classified as Serious, were required to be achieved in the upwind required to reach attainment by 1999. If they did area. not do so, the law required that they be reclassified (or "bumped up") to the Severe category, with a new deadline of 2005, and more stringent controls. The specific deadline date is open for interpretation. Under EPA's overturned policy, areas were given extensions no longer than the attainment or compliance deadline in the upwind area (generally 2004, 2005, or 2007). The language of Section 1443 appears to give EPA flexibility to extend the deadlines beyond those dates, however. It also would apply to the agency's new eight-hour ozone standard implemented last year, making many additional areas eligible for extensions. Energy Production Incentives Sec. 1444. States would be allowed to No similar provision. provide taxpayers that generate electricity from selected types of energy, or produce ethanol fuel, credits against CRS-170 Provision House Senate Comments any state taxes or fees owed to the state either under a state law or federal law without violating the commerce clause of the U.S. Constitution. The provision would apply to production in the state of 1) electricity from coal mined in the state and used in a facility, if such production meets all applicable federal and state laws and if such facility uses scrubbers or other forms of clean coal technology, 2) electricity from a renewable source such as wind, solar, or biomass, or 3) ethanol. Any action taken by a state in accordance with this section with respect to a tax or fee payable, or incentive applicable, for any period beginning after the date of the enactment of this Act would be considered to be a reasonable regulation of commerce, and not be considered to impose an undue burden on interstate commerce or to otherwise impair, restrain, or discriminate against interstate commerce. Regulation of Certain Oil Used Sec. 1446. Under this section, utilities No similar provision. in Transformers would not be required to develop a "Spill Prevention, Control, and Countermeasure Plan" for soy bean oil use in transformers as regulated by the Environmental Protection Agency under 40 CFR Part 112.12-15. CRS-171 Provision House Senate Comments Risk Assessments Sec. 1447. The Energy Policy Act of No similar provision. 1992 would be amended to require that federal agencies conducting risk assessments of energy-related technologies use sound and objective scientific practices that consider the best available science. Oxygen-fuel Sec. 1448. DOE would be directed to No similar provision. create a program for oxygen-fuel systems, in which pure oxygen is substituted for air in high-temperature boilers of industrial and electric utility steam generators. If feasible, the program would include two small (10 to 50 megawatt) units, one retrofit and one new; and two large (100 megawatts or larger) units, one retrofit and one new. Petrochemical and Oil Refinery Sec. 1449. The Secretary of Energy No similar provision. Facility Health Assessment would be charged to study the health impacts of living near petrochemical and oil refining plants. In designing the study, the Secretary would consult with the National Cancer Institute and other governmental bodies having expertise. The Secretary would have to transmit the report to Congress within six months of enactment. Such sums as necessary would be authorized for this study. CRS-172 Provision House Senate Comments United States-Israel Cooperation Sec. 1450. This provision would require Sec. 982. Similar provision. The United States and Israel have an agreement the Secretary of Energy to submit reports "to establish a framework for collaboration" to the relevant House and Senate between the two nations for collaboration on Committees on past, current, and future energy research and development activities. The activities and projects that are attributable agreement, which went into effect in February to the U.S.-Israel energy R&D 2000, was automatically extended (pursuant to agreement. terms of the original agreement) in early 2005 for an additional five years. Carbon-Based Fuel Cell Sec. 1451. The Secretary of Energy No comparable provision. Development would be authorized to make a single grant for the design and fabrication of a 5-kilowatt prototype direct coal fuel cell. National Priority Project Sec. 1452. This section, added as a floor Sec. 232. The Senate provision is Designation amendment (H.Amdt. 91), would identical in many respects. However, it establish a presidential National Priority differs somewhat in the definitions of Project designation for organizations categories of projects, allows fuel cells with projects certified by the Secretary of and photovoltaic projects to be as small Energy as advancing renewable energy as 3 megawatts, identifies a role for technology. agency personnel, and authorizes appropriations. Denali Commission No provision. Sec. 325. Funding would be authorized The Denali Commission Act of 1998 (42 USC for the Denali Commission to carry out 3121) established the commission to ensure cost- energy programs in Alaska, including effective delivery of federal services and support development of alternative energy, economic development in Alaska. construction of electricity transmission infrastructure, replacement and cleanup of fuel tanks, and coal gasification. CRS-173 Ethanol and Motor Fuels General Provisions Provision House Senate Comments Renewable Content of Motor Sec. 1501. A new §211(o) would be Sec. 211. Significant differences from The Clean Air Act Amendments of 1990 Vehicle Fuel added to the Clean Air Act. Beginning in the House version: It would require 4.0 established the Reformulated Gasoline (RFG) 2005, motor vehicle fuel must contain a billion gallons of renewable fuel to be program. Among its provisions is a requirement certain amount of renewable fuel. In used in 2006, increasing to 8.0 billion that RFG contain oxygen. The two main ways to 2005, 3.1 billion gallons of renewable gallons in 2012. After 2012, the meet the requirement are the use of MTBE and fuel would be required to be sold minimum requirement would be the ratio ethanol. However, MTBE (methyl tertiary butyl annually, increasing to 5.0 billion gallons of renewable fuel to gasoline in 2012, but ether) has been found to contaminate in 2012. After 2012, the percentage of EPA would have the authority to groundwater, and there is interest in banning the renewable fuel required in the motor fuel establish a higher requirement. A gallon substance (see Sec. 1504 of the House bill). pool would be required to remain the of cellulosic ethanol would count as 2.5 Because some states have acted to limit the use of same as the percentage required in 2012. gallons of renewable fuel (1.5 gallons in MTBE, and because of the potential federal ban, This standard would largely be met by the House version). Further, after 2012, there is interest in eliminating the oxygen standard ethanol, but other renewable fuels, such a minimum of 250 million gallons of as well (see Sec. 1506). as biodiesel, would be eligible. Ethanol cellulosic ethanol would be required in - from cellulosic biomass (including from fuel annually (and would not be subject The ethanol industry has benefitted significantly wood and agricultural residue, animal to the increased credit for cellulosic from the oxygen requirement, and some are waste, and municipal solid waste) would ethanol). concerned about the future of ethanol in the be granted extra credits toward fulfilling absence of the requirement. Further, proponents the program's requirements (1 gallon of of the fuel see ethanol use as a way to limit cellulosic ethanol would count as 1.5 petroleum consumption and dependence on gallons of renewable fuel). Further, the foreign oil. Thus, the interest in establishing a bill would establish a credit trading renewable fuels standard. However, opponents of program to provide flexibility to refiners ethanol have raised concerns that the fuel is too and blenders. costly, that the energy efficiency of the ethanol fuel cycle is questionable, and that the potential for groundwater contamination by ethanol- blended fuels has not been fully studied. CRS-174 Provision House Senate Comments Fuels Safe Harbor Sec. 1502(a). Renewable fuels, MTBE, Sec. 211(a). Renewable fuels used or The House bill sets an effective date of September or fuels blended with renewable fuels or intended to be used as a motor vehicle 5, 2003, for the safe harbor, rather than the date of MTBE could not be deemed a "defective fuel and any motor vehicle fuel enactment. This effective date would protect oil product." Applicability of this "safe containing renewable fuel could not be and chemical industry defendants from defective harbor" would be conditioned upon a deemed defective in design or product claims in about 150 lawsuits that were party's compliance with EPA regulations manufacture. The term "renewable filed in 15 states after that date. (Source: issued under §211 of the Clean Air Act fuels" would be defined by a Environmental Working Group. "Communities and any applicable requests for corresponding amendment to § 211 of the That Have Filed MTBE Lawsuits Against Oil information. Assuming these Clean Air Act. Further, ethers, including Companies.") qualifications were met, any entity within MTBE, would not be covered by the [http://www.ewg.org/reports/oilandwater/lawsuits. the product chain, from manufacturers to "safe harbor." Applicability of the php] retailers, would be shielded from provision would also be conditioned products liability-based lawsuits, the upon a party's compliance with EPA approach that has been taken in most of regulations issued under §211 of the the suits filed. Liability based on other Clean Air Act and any applicable grounds, such as negligence or breach of requests for information. Unlike the contract, to the extent it applies, would House bill, this provision would not not be affected. apply retroactively and pertains only to - claims filed on or after the date of the Sec. 1502(b). The provision would apply provision's enactment. retroactively to claims filed on or after September 5, 2003, thereby nullifying numerous pending lawsuits. MTBE Transition Assistance Sec. 1503. Would amend §211(c) of the Sec. 223(c). Similar provision, except Clean Air Act to authorize $2 billion that $1 billion in grants would be ($250 million in each of authorized ($250 million in each of FY2005-FY2012) for grants to assist FY2005-FY2008). Eligible facilities are merchant U.S. producers of MTBE in those that produced MTBE for converting to the production of consumption in air quality nonattainment iso-octane, iso-octene, alkylates, areas after the date of enactment. renewable fuels, and other fuel additives. Eligible facilities would be those that CRS-175 Provision House Senate Comments produced MTBE before April 2003 and ceased production after the date of enactment. The Secretary of Energy could make grants available unless EPA determined that such additives may reasonably be anticipated to endanger public health or the environment. Ban on the Use of MTBE Sec. 1504. Not later than December 31, Sec. 223(c). Similar provision, except 2014, the use of MTBE in motor vehicle that the prohibition amends Section fuel would be prohibited except in states 211(c) of the Clean Air Act and would that specifically authorize it. EPA may take effect not later than 4 years after the allow MTBE in motor vehicle fuel in date of enactment. quantities up to 0.5% in cases the Administrator determines to be appropriate. Presidential Determination Sec. 1505(b). Would allow the President No comparable provision. to make a determination, not later than June 30, 2014, that the restrictions on the use of MTBE shall not take place. National Academy of Sciences Sec. 1505(a). Separately, this would No comparable provision. Review require the National Academy of Sciences to conduct a review of MTBE's beneficial and detrimental effects on environmental quality or public health or welfare, including costs and benefits. The review would be required to be completed by May 31, 2014. CRS-176 Provision House Senate Comments Protection of Water Quality No comparable provision. Sec. 223(c). This would amend section Currently, the Clean Air Act grants EPA the 211(c) of the Clean Air Act to authorize authority to regulate fuels only if they contribute the EPA Administrator to regulate, to air pollution. control, or prohibit the manufacture, introduction into commerce, offering for sale, or sale of any fuel or fuel additive for use in a motor vehicle or engine if it causes or contributes to water pollution. Oxygen Content Sec. 1506(a). Would amend §211(k) of Sec. 224(a). Same as House provision. the Clean Air Act to eliminate the requirement that reformulated gasoline contain at least 2% oxygen. The provision would take effect 270 days after enactment, except in California, where it would take effect immediately upon enactment. Toxic Air Pollutants Sec. 1506(b). Would amend §211(k)(1) Sec. 224(b). Similar anti-backsliding This provision is intended to prevent backsliding, of the Clean Air Act to require that each provision, except that the base years for since the toxic emission reductions actually refinery or importer of gasoline maintain determining allowable emissions are achieved in those years exceeded the regulatory the average annual reductions in 2001 and 2002. Also would provide an requirements. emissions of toxic air pollutants achieved exception for California, which has more by the reformulated gasoline it produced stringent state requirements. or distributed in 1999 and 2000. Would establish a credit trading program for emissions of toxic air pollutants. Mobile Source Air Toxics Sec. 1506(b). Would require EPA to Sec. 224(b). Similar provision, but the promulgate final regulations to control deadline for promulgation would be July hazardous air pollutants from motor 1, 2007. Also would provide that if the vehicles and their fuels by July 1, 2005. promulgated regulations achieve and maintain greater overall reductions in CRS-177 Provision House Senate Comments emissions of air toxics from RFG than what would be achieved under the anti-backsliding requirements described above, the anti-backsliding requirements would be null and void. Consolidation of RFG Sec. 1506(c). Would eliminate the less Sec. 224(d). Identical provision. Requirements stringent requirements for volatility applicable to reformulated gasoline sold in volatile organic compound (VOC) Control Region 2 (northern states) by applying the more stringent standards of VOC Control Region 1(southern states). Public Health and No comparable provision. Sec. 225. Would amend §211(b) of the Environmental Impacts of Fuels Clean Air Act to require manufacturers and Fuel Additives of fuels and fuel additives to conduct tests of their health and environmental impacts (currently, these tests are at EPA's discretion and do not include environmental effects). Also would requires EPA, within 2 years, to conduct a study of the health and environmental effects of MTBE substitutes, including ethanol-blended RFG. Analyses of Fuel Changes Sec. 1507. A new §211(p) would be Sec. 226. Similar to the House provision, added to the Clean Air Act. Within four except that the Senate version would also years of enactment, the Administrator of require EPA to publish, within one year the Environmental Protection Agency of enactment, a study on the effects of would be required to publish a draft ethanol content on fuel permeation analysis of the effects of the fuels through vehicle fuel systems. provisions in the Act on air pollutant CRS-178 Provision House Senate Comments emissions and air quality. Within five years of enactment, the Administrator would be required to publish a final version of the analysis. Renewable Fuels Surveys Sec. 1508. Would require DOE to collect Sec. 213. Similar to House provision, and publish monthly survey data on the except that DOE must also collect and production, blending, importing, demand, publish data on production costs. and price of renewable fuels, both on a national and regional basis. Sec. 1501(c). Not later than December 1, Sec. 212(b). Substantially similar to 2006, and annually thereafter, the EPA House version. Administrator would be required to conduct a survey to determine the market shares of conventional gasoline and RFG containing ethanol and other renewable fuels in conventional and RFG areas in each state. Reducing the Proliferation of Sec. 1509. A new provision would be No comparable provision. State Fuel Blends added to §211(c)(4) of the Clean Air Act. The EPA Administrator could not approve a control or prohibition respecting the use of a fuel or fuel additive unless he found that it would not cause fuel supply or distribution interruptions or have a significant adverse impact on fuel producibility in the affected area or contiguous areas. Within 18 months of enactment, the Administrator would be required to submit a report to Congress on the effects CRS-179 Provision House Senate Comments of providing a preference for RFG or either of two low volatility (7.0 and 7.8 Reid Vapor Pressure) gasolines. Fuel System Requirements Sec. 1510. The EPA Administrator and Sec. 229. Substantially similar to the Harmonization Study the Secretary of Energy would be House version, except that the report required to conduct a study of federal, would be required to include the effects state, and local motor fuels requirements, on sensitive populations, and the report analyzing the effects of various standards would be required to be submitted to on consumer prices, fuel availability, Congress by June 1, 2008. domestic suppliers, air quality, and emissions. Further, they would be required to study the feasibility of developing national or regional fuel standards, and to provide recommendations on legislative and administrative actions to improve air quality, increase supply liquidity, and reduce costs to consumers and producers. A report would be required to be submitted to Congress by December 31, 2009. Commercial Byproducts From Sec. 1511. The Secretary of Energy Sec. 212(c). The Secretary of Energy Municipal Solid Waste and would be required to establish a loan would be required to establish loan Cellulosic Biomass Loan guarantee program for the construction of guarantees for no more than four projects Guarantee Program facilities to produce fuel ethanol and to commercially demonstrate the other commercial byproducts from feasibility and viability of converting municipal solid waste and cellulosic cellulosic biomass or sucrose into biomass. Applicants for loan guarantees ethanol. Loan guarantees could cover a would be required to provide assurance maximum amount of $250 million per of repayment (at least 20%) in the form project, but in no case for more than 80% of a performance bond, insurance of a project's estimated cost, as well as CRS-180 Provision House Senate Comments collateral, or other means. The section up to 80% of project costs in excess of would authorize such sums as may be the estimate. No new funding would be necessary for the program. authorized. Conversion Assistance for Sec. 1512. DOE would be allowed to Sec. 212(f). Similar to the House Cellulosic Biomass, Waste- provide grants to help build production version, except that only facilities that Derived Ethanol, Approved facilities. To qualify, the ethanol must be produce ethanol (and not other renewable Renewable Fuels produced from cellulosic biomass, fuels) from municipal waste or municipal solid waste, wood residues, agricultural residue may qualify. A total agricultural waste, or agricultural of $650 million would be authorized byproducts. A total of $750 million between FY2005 and FY2006. would be authorized to be appropriated between FY2005 and FY2007. Resource Center No comparable provision. Sec. 212(d). Would authorize $4 million for the Mississippi State University and Oklahoma State University for each of FY2005-FY2007 for a resource center to further develop bioconversion technology using low-cost biomass for the production of ethanol. Renewable Fuel Production No comparable provision. Sec. 212(d). Would authorize $25 Research and Development million in each of FY2006-FY2010 for Grants research, development, and implementation of renewable fuel production technologies in RFG states with low rates of ethanol production. Blending of Compliant Sec. 1513. This provision would allow Sec. 224(c). Retailers would be Currently, retailers must drain their tanks before Reformulated Gasolines reformulated gasoline (RFG) retailers to permitted to blend batches of switching from ethanol-blended RFG to non- blend batches with and without ethanol reformulated gasoline with and without ethanol RFG (or vice versa). as long as both batches were compliant ethanol as long as the resulting fuel is CRS-181 Provision House Senate Comments with the Clean Air Act. In a given year, compliant with the Clean Air Act. There retailers would be permitted to blend would be no limitation on the number of batches over any two 10-day periods in batches or duration of blending. the summer months. Advanced Biofuels Technology No comparable provision. Sec. 230. Would authorize $110 million Program in each of FY2005 through FY2009 for projects to demonstrate new technologies for the production of biofuels. The program would fund at least 4 different technologies for producing cellulosic biomass ethanol and at least 5 technologies for the production of value-added biodiesel fuel coproducts. Preference would be given to projects that enhance geographical diversity of alternative fuel production and to projects with feedstocks used in 10 percent or less of annual ethanol and biodiesel production. Waste-Derived Biodiesel No comparable provision. Sec. 234. Would amend the definition of Current law defines biodiesel as a "diesel fuel "biodiesel" under the Energy Policy Act substitute produced from nonpetroleum renewable of 1992 (42 U.S.C. 13220) to explicitly resources." Agricultural and municipal wastes are include biodiesel derived from animal generally considered to be renewable resources for wastes, municipal solid waste, and fuel production. wastewater. CRS-182 Underground Storage Tank Compliance Provision House Senate Comments Short Title Sec. 1521. This subtitle may be cited as No similar provision. the "Underground Storage Tank Compliance Act of 2005." Leaking Underground Storage Sec. 1522. This would amend Subtitle I No similar provision. Subtitle I of the Solid Waste Disposal Act Tanks of the Solid Waste Disposal Act to (Regulation of Underground Storage Tanks) require EPA to distribute to the states at establishes requirements to prevent, detect and least 80% of the funds appropriated from respond to tank leaks. the Leaking Underground Storage Tank (LUST) Trust Fund for the LUST cleanup program. When determining the portion of cleanup costs to recover from a tank owner or operator, EPA or a state would be required to consider an owner or operator's ability to pay for cleanup and still maintain basic business operations. Inspection of Underground Sec. 1523. EPA or states would be No similar provision. Storage Tanks required to conduct compliance inspections of underground storage tanks (USTs) every three years. Operator Training Sec. 1524. States would be required to No similar provision. develop training requirements, based on EPA guidance, for UST operators and those responsible for tank maintenance and spill response. CRS-183 Provision House Senate Comments MTBE Cleanup: Authorizing Sec. 1525. EPA and states would be Sec. 222(a). Similar, except that EPA Under current law, LUST funds can be used to Use of the LUST Trust Fund authorized to use LUST Trust Fund and states could use LUST money for clean up contaminated drinking water supplies if money to respond to tank leaks involving responding to MTBE and other ether the contamination can be tied to a federally oxygenated fuel additives (e.g., MTBE fuels additives, but not ethanol; also, regulated UST. However, because no federal and ethanol). contamination need not be from an UST drinking water standard has been established for to be eligible for cleanup funding. MTBE (and drinking water standards are often used to guide corrective actions), some states do not require testing for MTBE at LUST sites, and fewer than half the states are taking steps to ensure that MTBE and other oxygenates are not migrating beyond the standard monitoring boundaries for LUST cleanup. Use of LUST Funds to Enforce Sec. 1526. EPA and states would be Sec. 222(b). Similar provision. The law allows LUST funds to be used to enforce UST Leak Prevention and authorized to use LUST funds to enforce the LUST cleanup program, but not the leak Detection Regulations UST release prevention requirements. prevention program. Delivery Prohibition Sec. 1527. Fuel delivery to ineligible No similar provision. tanks would be prohibited. Federal Facilities Sec. 1528. UST compliance No similar provision. requirements for federal facilities would be clarified and expanded. Tanks on Tribal Lands Sec. 1529. EPA would be required to No similar provision. develop and implement a strategy to address releases on tribal lands. Additional Measures to Protect Sec. 1530. States would be required to No similar provision. Groundwater establish additional groundwater protection requirements for tank owners or installers and manufacturers. CRS-184 Provision House Senate Comments LUST Trust Fund Sec. 1531. There would be authorized to Sec. 222(b). There would be authorized Authorizations of be appropriated from the Trust Fund: to be appropriated from the Trust Fund: Appropriations 1. $200 million annually for FY2005- 1. No similar provision. 1. Current law does not contain a specific FY2009 for the LUST cleanup program authorization of appropriations. 2. $200 million annually for FY2005- 2. $200 million for FY2005, to remain UST leaks involving MTBE are more costly to FY2009 for responding to tank leaks available, for responding to tank leaks remediate than conventional gasoline leaks. involving MTBE or other oxygenated involving MTBE or other ether fuel MTBE is very soluble and more likely to reach fuel additives (e.g., other ethers and additives (not ethanol). This is similar, water supplies. The bills authorize funding ethanol). Expenditures would be subject except that contamination need not be specifically for MTBE cleanup. to LUST program requirements. from an UST to eligible for cleanup funding. 3. $155 million annually for FY2005- 3. $50 million for FY2005 and $30 FY2009 for EPA and states to carry out million annually for FY2006-FY2010, and enforce the UST leak prevention and for EPA and states to enforce UST (leak detection requirements added by this bill prevention and detection regulations) and and the LUST cleanup program. the LUST (cleanup) regulations. Authorization of Appropriations 1. This section would authorize $50 1. No similar provision. from General Revenues million, for each of FY2005-FY2009, for EPA and states to carry out the UST program. Conforming and Technical Sec. 1532. Conforming amendments. No similar provisions. Amendments Sec. 1533. Technical amendments. CRS-185 Boutique Fuels Provision House Senate Comments Reducing the Proliferation of Sec. 1541. The EPA Administrator No comparable provision. Boutique Fuels would be permitted to temporarily waive fuel requirements, including state fuel requirements and RFG standards, in the case of a natural disaster, Act of God, pipeline or refinery equipment malfunction, or other unforeseeable event. In addition, the Administrator could not approve a fuel standard under a State Implementation Plan if that standard would increase the number of unique state formulations above the number as of September 1, 2004. Studies Provision House Senate Comments Study on Inventory of Sec. 1601. The Secretary of Energy Sec. 1319. Within one year of Storage capacity for natural gas and petroleum Petroleum and Natural Gas would have to report to Congress within enactment, the Secretary of Energy plays an important role in buffering the impacts of Storage a year of enactment on the amount of would be directed to conduct a study of seasonal or unanticipated increases in demand, storage capacity for petroleum and crude oil, refined petroleum products, providing supply when needed and mitigating natural gas. While the oil and gas and natural gas inventories, analyzing price spikes. industry is subject to broad reporting inventory levels and storage capacity requirements under a variety of laws, this trends. The study would also identify language would call for a comprehensive factors leading to shortages, and contain study of the nation's storage capability recommendations for their avoidance. and the role it plays in the marketplace CRS-186 Provision House Senate Comments and the hydrocarbon industries' ability to meet demand. Study of Energy Efficiency Sec. 1605. DOE would be directed to Sec. 1323. Nearly identical provision. This refers to Executive Order 13123. DOE's Standards have the National Academy of Sciences Federal Energy Management Program (FEMP) study whether the goals of energy discusses this issue in its Guidance for Providing efficiency standards are best served by Credit Toward Energy Efficiency Goals for focusing measurement at the site (energy Cost-Effective Projects Where Source Energy Use end-use) or at the source (the full fuel Declines But Site Energy Use Increases, April 26, cycle). This provision relates to a 2000, 4 pp. previous Executive Order, which found that federal agencies should get credit toward meeting energy efficiency goals even where "source energy use declines but site energy use increases." Telecommuting Study Sec. 1606. DOE would be directed to Sec. 1324. Nearly identical provision. study and report on the energy conservation potential of widespread adoption of telecommuting by federal employees. In this effort, DOE would be required to consult with the Office of Personnel Management, General Services Administration, and National Telecommunications and Information Administration. LIHEAP Report Sec. 1607. The Department of Health No similar provision. and Human Services (HHS) would be directed to report on how the Low- Income Home Energy Assistance Program could be used more effectively CRS-187 Provision House Senate Comments to prevent loss of life from extreme temperatures. Oil Bypass Filtration Sec. 1608. DOE and EPA would be Sec. 1325. Nearly identical provision. Technology required to jointly study the benefits of oil bypass filtration technology in reducing demand for oil and protecting the environment. This study would include consideration of its use in federal motor vehicle fleets and an evaluation of products and manufacturers. Total Integrated Thermal Sec. 1609. DOE would be directed to Sec. 1326. Nearly identical provision. Systems study the potential for integrated thermal systems to reduce oil demand and to protect the environment. Also, DOE would study the feasibility of using this technology in Department of Defense and other federal motor vehicle fleets. University Collaboration Sec. 1610. DOE would be directed to Sec. 1327. Nearly identical provision. report on the feasibility of promoting collaboration between large and small colleges through grants, contracts, and cooperative agreements for energy projects. DOE would also be directed to consider providing incentives for the inclusion of small colleges in grants, contracts, and cooperative agreements. CRS-188 Provision House Senate Comments Reliability and Consumer Sec. 1611. Within five years of No comparable provision. Protection Assessment enactment, and every five years thereafter, FERC would be required to assess the effects of electric cooperative and government-owned utilities' exemption from FERC ratemaking regulation under section 201(f) of the Federal Power Act. If FERC found that the exemption resulted in adverse effects on consumers or electric reliability, FERC would be required to make recommendations to Congress. Report on Energy Integration Sec. 1612. The Secretary of Energy No similar provision. with Latin America would be called on to submit a report to the House Committee on Energy and Commerce and the Senate Energy and Natural Resources Committee about energy export development in Latin America. With special focus on Mexico, it would detail Latin America and regional energy integration, and describe U.S. efforts to promote constructive relationships. In particular, it would focus on efforts made with regard to U.S.- Mexico cross-border energy projects. Low-Volume Gas Reservoir Sec. 1613. The Secretary of Energy No similar provision. Study would be required to make a grant to an organization of gas producing states formed to deal with marginal oil and natural gas wells. The grant would be used for an annual study of these CRS-189 Provision House Senate Comments reservoirs, to determine their location and production characteristics, and recommend incentives for production enhancement. Extensive data collection is envisioned, and this analysis would have to be performed by an institution of higher education with GIS (geographic information system) technology capabilities. Consolidation of Gasoline Sec. 1614. Would require the Sec. 735. Would require the Federal A study on the effects of mergers and market Industry Comptroller General of the United States Trade Commission to undertake a study concentration in the oil industry was published in to conduct a study of the consolidation of to determine whether any form of market May 2004 by the General Accounting Office (now the refiners, importers, producers, and manipulation can account for high called the General Accountability Office) (GAO, wholesalers of gasoline with the sellers of gasoline prices. A study by the National Energy Markets, Effects of Mergers and Market such gasoline at retail. The study would Petroleum Council would analyze the Concentration in the U.S. Petroleum Industry, analyze the impact of such consolidation extent to which environmental and other GAO-04-96, May 2004). This year, a study on the retail price of gasoline and small regulations may be affecting refinery analyzing the factors affecting gasoline prices was business ownership, corollary effects on construction and expansion. issued by the Federal Trade Commission (FTC, the market economy of fuel distribution Gasoline Price Changes: The Dynamic of Supply, and local communities, and other market Demand, and Competition, June 2005). impacts of such consolidation. Study of Fuel Savings From Sec. 1615. The Secretary of Energy, in No comparable provision. Information Technology for consultation with the Secretary of Transportation Transportation, would be required to report to Congress on the potential fuel savings from the use of information technologies to help businesses and consumers plan their trips and avoid delays. CRS-190 Provision House Senate Comments Feasibility Study for Mustard Sec. 1616. The Secretary of Energy No comparable provision. Seed Biodiesel would be required to contract with the National Academy of Sciences for a study to determine the feasibility of using mustard seed as a feedstock for biodiesel production. Reduction of Dependence on No comparable provision. Sec. 151. The President would be Imported Petroleum required to submit a report to Congress by February 2006, and annually thereafter, on U.S. progress toward reducing petroleum consumption in 2015 by 1,000,000 barrels daily from the baseline projected in the Department of Energy's Annual Energy Outlook, 2005. Within one year of enactment, the President would develop and implement measures to achieve this objective without compromising the supply and affordability of energy to consumers. Assessment of Dependence of No comparable provision. Sec. 324. The Secretary of Energy would State of Hawaii on Oil be required to evaluate the vulnerability of Hawaii to oil disruptions, and to assess, island-by-island, the technical and economic feasibility of displacing oil consumption with other sources of energy, including renewables, liquefied natural gas, and hydrogen. Appropriations for completion of the analysis are authorized, but not specified. CRS-191 Provision House Senate Comments Energy and Water Saving No similar provision. Sec. 1301. The Architect of the Capitol Measures in Congressional would be required to study ways to Buildings improve the energy efficiency and energy security of the Capitol Complex through green building, green roof, computer- based building management, onsite renewable energy, and other measures. Renewable Energy on Federal No similar provision. Sec. 1304. The Secretary of the Interior Land would be required to have the National Academy of Sciences (NAS) study the potential for wind, solar, and ocean energy resources on federal land and the outer Continental Shelf. Hybrid Distributed Power No similar provision. Sec. 1310. The Secretary of Energy Systems would be required to study and report on hybrid distributed power systems that combine one or more renewable electric power technologies with one or more nonintermittent electric power technologies. Hydrogen Participation Study No similar provision. Sec. 1328. The Secretary of Energy would be required to report to Congress on ways to ensure broad participation, including international participants, in setting goals for the DOE Hydrogen program. Overall Employment in a No similar provision. Sec. 1329. The Secretary of Energy Hydrogen Economy would be required to study and report to Congress on the likely effects of a CRS-192 Provision House Senate Comments transition to a hydrogen economy on national employment. Study of Best Management No similar provision. Sec. 1330. The Secretary of Energy Practices for Energy Research would be required to have the National and Development Programs Academy of Public Administration study and report to Congress on management practices for DOE R&D programs. This is to include practices that could improve linkage between the Office of Science and mission-oriented offices and practices used by the Department of Defense Advanced Research Projects Agency. Alternative Fuels Reports No comparable provision. Sec. 1332. The Secretary of Energy Hythane is a registered trademark for compressed would be required to report on the natural gas mixed with a small percentage of potential for biodiesel and hythane to be hydrogen. "major, sustainable, alternative fuels." Fuel Cell and Hydrogen No similar provision. Sec. 1334. In order to address concern Technology Study about climate change and foster the reduction of carbon emissions, the Secretary of Energy would be required to have NAS study and report on a budget roadmap for developing a transition to hydrogen fuel cell vehicles by 2020. The roadmap would specify the amount of federal funding required and identify advantages and disadvantages of such a transition. CRS-193 Provision House Senate Comments Passive Solar Technologies No similar provision. Sec. 1335. The Secretary of Energy would be required to study and report to Congress on the levelized cost of avoided electricity for passive solar technologies and on the potential energy savings if these technologies were to be eligible for incentives comparable to those provided for electricity generation technologies. Science Study on Cumulative No similar provision. Sec. 1338. The Secretary of Energy, in "Open-rack" vaporization of LNG uses a Impacts of Multiple Offshore consultation with other federal agencies continuous flow of seawater to reheat cryogenic LNG Facilities and non-government stakeholders, would LNG to a gaseous state. This study is prompted by be required to study the potential marine concerns that multiple open-rack systems may kill environmental impacts of multiple a significant portion of commercial and offshore liquefied natural gas (LNG) non-commercial marine species, especially import facilities using "open-rack" non-migratory species (e.g. redfish), in the waters vaporization in the Gulf of Mexico. near new offshore LNG terminals employing such systems. Renewable Energy -- Resources Provision House Senate Comments Grants to Improve the Sec. 1701. This section is described Commercial Value of Forest immediately after section 206 above. Biomass for Electric Energy, Useful Heat, Transportation Fuels, Petroleum-Based Product Substitutes, and Other Commercial Purposes CRS-194 Provision House Senate Comments Environmental Review for Sec. 1702. This provision would limit No similar provision. For all development projects proposed for federal Renewable Energy Projects the number of alternative site analyses lands (or other federally controlled areas), NEPA that a federal agency must perform when requires an environmental assessment or National Environmental Policy Act environmental impact statement (EIS). (NEPA) requirements are triggered by a proposed renewable energy project. Sense of Congress Regarding Sec. 1703. For the Secretary of the No similar provision. Generation Capacity of Interior, this provision would set a goal Electricity From Renewable of having 10,000 megawatts of non- Energy Resources on Public hydropower renewable energy generation Lands capacity installed on public lands within 10 years from the date of enactment. Geothermal Energy Provision House Senate Comments Short Title Sec. 1801. The John Rishel Geothermal No similar provision Much of the nation's geothermal energy potential Steam Act Amendments of 2005. is located on federal lands. Reducing delays in the federal geothermal leasing process and reducing royalties could increase geothermal energy production, although the environmental impact of greater geothermal development is also an issue. Competitive Lease Sale Sec. 1802. Amendments to the Sec. 261. Similar, except administrative Competitive geothermal lease sales are based on Requirements Geothermal Steam Act would change action would be taken to ensure timely whether lands are within a known geothermal lease procedures for competitive and processing of applications for geothermal resource area (Geothermal Steam Act of 1970, non-competitive lease sales. Competitive leasing pending on May 19, 2005. U.S.C. 1003). Geothermal production on federal lease sales would be held every two lands is charged a royalty of 10%-15% under CRS-195 Provision House Senate Comments years. If there were no competitive bid, Section 5 of the Geothermal Steam Act. The then lands would be made available for royalty is imposed on the amount or value of two years under a non-competitive steam or other form of heat derived from process. production under a geothermal lease. Direct Use Sec. 1803. A fee schedule in lieu of any Sec. 262. Similar, except different basis The Secretary of the Interior can withdraw public royalty or rental payments would be for schedule of fees. lands from leasing or other public use and modify, established for low-temperature extend, or revoke withdrawals under provisions in geothermal resources. Existing the Federal Land Policy and Management Act of geothermal leases may be converted to 1976 (FLPMA, 43 U.S.C. 1714). At certain leases for direct utilization of intervals the Secretary may readjust terms and low-temperature geothermal resources. conditions of a geothermal lease, including rental and royalty rates. Annual rental fees of not less Royalties and Near-Term Sec. 1804. Royalties on electricity Sec. 263. Royalty calculations would be than $1 per acre on geothermal leases are paid in Production Incentives produced from geothermal resources simplified not later than one year after advance. The primary lease term is 10 years and would be not less than 1% and not more enactment of this act. continues as long as geothermal steam is produced than 2.5% of the gross proceeds from or used in commercial quantities. Rents are $1 per geothermal electricity sales in the first 10 acre or fraction thereof for each year of a years of production and not less than 2% geothermal lease. and more than 5% of the gross proceeds from geothermal electricity sales each year after the 10-year period. Expediting Administrative Sec. 1805. With respect to National No similar provision. Action Forest lands, the Secretary of Agriculture and the Secretary of the Interior would ensure timely actions for processing applications pending as of January 1, 2005. Coordination of Leasing and Sec. 1806. A memorandum of Sec. 264. Same. Permitting understanding between the Secretaries of CRS-196 Provision House Senate Comments the Interior and Agriculture should include provisions that would identify known geothermal areas on public lands within the National Forest system and establish an administrative procedure that would include time frames for processing lease applications. Review and Report to Congress Sec. 1807. The Secretary of the Interior No similar provision. would review all areas under moratoria or withdrawals and report to Congress on whether the reasons for withdrawal still applied. Reimbursement of NEPA Costs Sec. 1808. The Secretary of the Interior No similar provision. could reimburse lessees for the costs of environmental analyses required by NEPA through royalty credits under certain circumstances. Assessment of Geothermal Sec. 1809. The U.S. Geological Survey Sec. 265. Same. Energy Potential (USGS) would provide Congress with an assessment of current geothermal resources. Cooperative or Unit Plans Sec. 1810. Cooperative or unit plans for Sec. 266. Same. geothermal development would be promoted. Royalty on Byproducts Sec. 1811. Leasable minerals produced Sec. 267. Same. as a byproduct of a geothermal lease would be subject to royalties under the Mineral Leasing Act (30 U.S.C. 181). CRS-197 Provision House Senate Comments Repeal of Authorities to Sec. 1812. Sections 8(a) and (b) of the No similar provision. This provision would preserve the initial Readjust Lease Terms Geothermal Steam Act would be conditions of a geothermal lease by prohibiting repealed, which would eliminate the future adjustments imposed by the Secretary of Secretary's authority to readjust the Interior. geothermal rental and royalty rates at "not less than 20 year intervals beginning 35 years after the date geothermal steam is produced." Crediting of Rental Toward Sec. 1813. Annual rentals would be No similar provision. Royalty credited towards the royalty under the same lease. Lease Duration and Work Sec. 1814. The primary lease term would Sec. 268. The Secretary of the Interior Commitment Requirements be 10 years and could be extended for shall establish payments to ensure two additional five-year terms if work diligent development of the lease. commitments were met. Advanced Royalties Required Sec. 1815. If production from a Sec. 270. Similar but the lease would for Suspension of Production geothermal lease were suspended during remain in full force an aggregate of 10 a period in which a royalty was required, years from the date production ceases. royalties would be paid in advance until production resumed. Annual Rental Sec. 1816. The bill would establish Sec. 269. Similar. The annual rental rental rates for competitive and non- schedule would be amended to encourage competitive lease sales. diligent development of the lease. Deposit and Use of Geothermal Sec. 1817. For the first five years after No similar provision. Lease Revenues the enactment of this act, a separate account would be established for revenue receipts from leases under the Geothermal Steam Act of 1970, CRS-198 Provision House Senate Comments excluding money necessary for payments to states and county governments. Repeal of Acreage Limitations Sec. 1818. Section 7 of the Geothermal No similar provision. Steam Act on acreage limitations would berepealed. Technical Amendments Sec. 1819. About two dozen technical Sec 272. Similar. amendments are included in this section. Intermountain West Geothermal Sec. 1820. The Intermountain West No similar provision Consortium Geothermal Consortium would be established to focus on expanded use of geothermal energy. The consortium would involve the participation of the Secretary of Energy, universities in the region, and state agencies. Geothermal Leasing on Land No similar provision. Sec. 271. Not later than 2 years after Withdrawn for Military enactment, the Secretary of the Interior Purposes and the Secretary of Defense, in consultation with states and other agencies, would be required to submit to the appropriate committees of Congress a joint report on leasing and permitting activities for geothermal energy on federal land withdrawn for military purposes. CRS-199 Hydropower -- Resources Provision House Senate Comments Increased Hydroelectric Sec. 1901. Within 18 months of Sec. 1302. Same provision. Generation at Existing Federal enactment, the Secretaries of the Interior, Facilities Energy, and the Army would submit a study of the potential for increasing electric power production capability at federally owned or operated water regulation, storage, and conveyance facilities. Shift of Project Loads to Off- Sec. 1902. The Secretary of the Interior No similar provision. Peak Periods would review electric power consumption by the Bureau of Reclamation facilities for water pumping, and, with the consent of affected irrigation customers, adjust water pumping schedules to reduce power consumption during periods of peak electric power demand. This section would not affect Interior's existing obligations to provide electric power, water, or other benefits. Report Identifying and Sec. 1903. Within 90 days of enactment, No similar provision. Describing the Status of the Secretary of the Interior would Potential Hydropower Facilities submit a report identifying and describing the status and characteristics of potential hydropower facilities included in water surface storage studies undertaken for projects that have not CRS-200 Provision House Senate Comments been completed or authorized for construction. Oil and Gas -- Resources Production Incentives Provision House Senate Comments Definition of Secretary Sec. 2001. In this subtitle, "Secretary" Sec. 311. Same. means Secretary of the Interior. Program on Oil and Gas Sec. 2002. The federal government Sec. 312. Same except the report to Royalties-In-Kind would be allowed to continue to receive Congress would be in each year from physical quantities of oil and gas as FY2006- FY2015. royalty-in-kind payments if it can receive market value for the product and revenues greater than or equal to the revenues it would have received under a comparable cash-payment royalty. The royalty product would have to be placed in marketable condition (as defined in H.R. 6) at no cost to the United States. Small refineries would receive preferential treatment if supplies on the market were insufficient. A report to Congress in each year from FY2005- FY2014 would explain, among other things, how the Secretary determined whether the amount received was at least CRS-201 Provision House Senate Comments the amount that would have been taken in cash and how a lease was evaluated as to whether royalties-in-kind were taken. Marginal Property Production Sec. 2003. The Secretary of the Interior Sec. 313. Same. Incentives would have the authority to reduce or terminate royalties for independent producers under certain conditions. The Secretary would be authorized to prescribe different standards for marginal properties in lieu of those in this section. Incentives for Natural Gas Sec. 2004. Royalty reductions would be Sec. 314. Similar. Defines "lease issued These reductions would be provided for Production From Deep Wells in provided for shallow water production at in shallow waters" and a sidetrack well. production in less than 400 meters of water in the the Shallow Waters of the Gulf certain depths not later than180 days House bill but not more than 200 meters in the of Mexico after enactment. An "ultra-deep" well Senate. The Senate definition of shallow water is would also be defined in this section. less than 200 meters deep. Royalty Reductions for Deep Sec. 2005. Royalty reductions would be Sec 315. Similar. The reductions are limited to 12 million barrels of Water Production provided for deepwater areas at fixed oil equivalent at depths greater than 1,600 meters. production levels at certain depths. Alaska Offshore Royalty Sec. 2006. Planning areas in offshore Sec. 316. Same. This section of OCSLA currently provides a Suspension Alaska would be included under section mechanism for the Secretary of the Interior to 8(a)(3)(B) of the Outer Continental Shelf reduce or eliminate royalty or net profit share Lands Act (OCSLA, 43 U.S.C. established in leases for oil and gas production in 1337(a)(3)(B)). Gulf of Mexico planning areas. Oil and Gas Leasing in the Sec. 2007. The competitive leasing Sec. 317. Similar provision. National Petroleum Reserve in system for oil and gas in the National Alaska Petroleum Reserve in Alaska would be modified. Leases would be issued for successive 10-year terms if leases met CRS-202 Provision House Senate Comments specific criteria. Active participation would be sought by the State of Alaska and Regional Corporations as defined under the Alaska Native Claims Settlement Act (43 U.S.C. 1602). The Secretary of the Interior could grant royalty reductions if they were found to be in the public interest. North Slope Science Initiative No comparable provision. Sec. 318. Would establish in the Interior Department a long-term initiative to coordinate collection of scientific data that will provide a better understanding of the terrestrial, aquatic, and marine ecosystems of the North Slope of Alaska. The Interior Secretary would enter into cooperative agreements with the State of Alaska, the North Slope Borough, the Arctic Slope Regional Corporation, and other Federal agencies to coordinate efforts, share resources, and fund projects. Not less than 3 years after the date of enactment of this section and each year thereafter, the Secretary shall publish a report that describes the studies and findings of the initiative. Orphaned, Abandoned, or Idled Sec. 2008. Within a year after Sec. 319. Similar except Senate bill does Wells on Federal Land enactment, the Secretary would establish not contain federal reimbursement for a technical assistance program to help orphaned well reclamation. states remediate and close abandoned or idled wells. Technical and financial assistance would be made available over CRS-203 Provision House Senate Comments a 10-year period to quantify and mitigate environmental dangers. A program would be established for reimbursing the private sector with credits against federal royalties for reclaiming, remediating, and closing orphaned wells. Combined Hydrocarbon Leasing Sec. 2009. The Mineral Leasing Act Sec. 320. Similar except the Senate would be amended to allow separate version does not contain a House leases for tar sands and for oil and gas in provision to waive or suspend a the same area. Tar sands would be leased requirement to exercise due diligence to under the same system as for oil and gas promote a resource under a combined and would require a minimum acceptable hydrocarbon lease. bid of $2 per acre. Alternate Related Uses on the Sec. 2010. The Secretary would be Sec. 321. This would amend the Outer Although specific types of energy resources are Outer Continental Shelf authorized to grant rights-of-way or Continental Shelf Lands Act to provide not specifically mentioned, this provision would easements on the OCS for energy-related authority to the Secretary of the Interior presumably cover ocean energy, wind energy, and activity on a competitive or to grant leases, easements, or geothermal energy. noncompetitive basis and would charge rights-of-way for energy and related fees for such access. A surety bond or purposes on the OCS. The section would other financial guarantee would be not allow the grant of easements or required. rights-of-way for activities that support the exploration, development, or production of oil and gas in areas where oil and gas preleasing, leasing, and related activities are prohibited by a congressional moratorium or a withdrawal pursuant to section 12 of the Outer Continental Shelf Lands Act. The authority would not apply to any area within the exterior boundaries of any unit of the National Park System, National CRS-204 Provision House Senate Comments Wildlife Refuge System, or National Marine Sanctuary System, or any National Monument. The section would require the Secretary to undertake a coordinated OCS mapping initiative to assist in decision-making relating to the siting of facilities under the section. Preservation of Geological and Sec. 2011. The U.S. Geological Survey Sec. 322. The Secretary of the Interior Geophysical Data would establish a program to archive would carry out a National Geological geologic, geophysical, and engineering and Geophysical Data Preservation data, maps, well logs, and samples; Program that would archive geologic, provide a national catalog of archival geophysical, and engineering data, maps, material; and provide technical and well logs, and samples; provide a financial assistance related to the archival national catalog of such archival material. State agencies that elect to be material; provide technical and financial part of the data archive system that stores assistance related to the archival material; and preserves geologic samples would and establish a data archive system receive 50% financial assistance, subject comprised of State agencies and Interior to the availability of appropriations. Department agencies for federal land data Private contributions would be applied to in a national catalog. the non-federal share. Appropriations of $30 million per year from FY2006 through FY2010 would be authorized. Oil and Gas Lease Acreage Sec. 2012. Lease acreage limits would be Sec. 323. Same Limitations altered so that additional federal lands would not fall under the Mineral Leasing Act's single-state ownership limitations. Deadline for Decision on Sec. 2013. Current Section 319 of the Sec. 387. Generally similar in intent to This section would replace language in Section Appeals Under the Coastal Zone CZMA would be replaced with a new set provisions in House bill, limiting the 319 of CZMA, as amended (16 U.S.C. 1465). Management Act (CZMA) of provisions that would stipulate three appeals process to 270 days, but this Section 319 had been added as an amendment in CRS-205 Provision House Senate Comments sequential deadlines, and thereby limit section would allow a total of 270 days 1996. It established a time line for appeals to the the overall length of this appeals process rather than create three sequential Secretary of Commerce on consistency to a total of 270 days from the date when deadlines that total 270 days. In addition, determinations when a state and federal agency an appeal is filed. The first deadline it would allow a 60 day extension for are unable to reach agreement. The consistency would be for the Secretary of Commerce keeping the administrative record open provisions, set forth in Section 307 of the CZMA, to publish an initial notice of an appeal in under specified circumstances, and would require federal activities in or affecting the coastal the Federal Register within 30 days of allow an extension of up to 45 days for zone to be consistent with the policies of a the appeal's filing. The second deadline the Secretary to issue a decision. The federally approved and state-administered coastal would be that the administrative record Senate bill would not "grandfather" zone management plan. (Federal activities include would be open for no more than 120 pending appeals. activities and development projects performed by days. During that time period, the a federal agency or by a contractor on behalf of a Secretary could receive filings related to federal agency, and federal financial assistance.) the appeal. The final deadline would A proposal to modify the appeals time line with give the Secretary up to 120 days to issue deadlines very similar to this legislation was a decision after the administrative record included in a proposed rule on federal consistency, had been closed. The second and third published in the June 11, 2003, Federal Register. deadlines would also apply to all pending A final rule has not been issued. appeals not resolved prior to the date of (For more information see Appendix J.) enactment. Also, any appeals in which the record is open on the date of enactment would have to be closed within 120 days of that date. Reimbursement for Costs of Sec. 2014. The Mineral Leasing Act No similar provision. NEPA Analysis, would be amended to provide Documentation, and Studies reimbursement for costs of NEPA-related studies under certain circumstances. CRS-206 Provision House Senate Comments Gas Hydrate Production Sec. 2015. Royalties would be No similar provision. Incentive suspended for the first 50 billion cubic feet of natural gas produced from gas hydrate resources per 9 square miles of leased tract, in addition to any other applicable royalty relief. Onshore Deep Gas Production Sec. 2016. Royalties for onshore deep- No similar provision. Incentive well natural gas would be suspended for up to 50 billion cubic feet per natural gas lease. Enhanced Oil and Natural Gas Sec. 2017. Royalty relief would be Sec. 327. The Secretary of Energy would Production available for the purposes of enhancing be required to establish a competitive oil and natural gas recovery from grant program for projects to inject specified leases. carbon dioxide to enhance recovery of oil or natural gas while increasing the sequestration of carbon dioxide. Oil Shale Sec. 2018. The Secretary of the Interior Sec 346. Similar except its leasing would develop an oil shale leasing program would be for oil shale and oil program as soon as practicable and sands. The leasing program would be for publish a final regulation to implement conducting research and development the program by December 31, 2006. activities related to the production of oil shale and oil sands. An environmental impact statement would be conducted, and an oil shale and oil sands task force would be set up to develop a program to coordinate and accelerate the commercial development of oil shale and tar sands. CRS-207 Provision House Senate Comments Use of Information about Oil Sec. 2019. The Secretary of the Interior No similar provision. and Gas Public Challenges and the Secretary of Agriculture would collect information on challenges by the public to agency decisions and use the information to manage oil and gas programs within their departments. Comprehensive Inventory of No similar provision. Sec. 326. The Secretary of the Interior OCS Oil and Natural Gas would conduct an inventory and analysis Resources of oil and natural gas beneath all waters of the United States OCS. Also, the Secretary would issue a report to Congress within 6 months of enactment of the legislation that would include a discussion of restrictions, impediments, and recommendations. Access to Federal Lands Provision House Senate Comments Leasing and Permitting Sec. 2021. An Office of Federal Energy No similar provision Processes Project Coordination (FEPC) would be established to review and report on accomplishments that are considered more efficient and effective for federal permitting. CRS-208 Provision House Senate Comments Review of Leasing Practices Sec. 2022. The Secretary of the Interior Sec. 341. Similar except that the National would perform an internal review of the Academy of Public Administration federal onshore oil and gas leasing and would perform a review of federal permitting process with particular focus onshore oil and gas leasing practices on lease stipulations affecting the while the Department of the Interior environment and conflicts over resource would separately perform an internal use. review. Management of Leasing Sec. 2023. The Secretary of the Interior Sec. 342. Similar except funds would be Programs would be required to ensure expeditious authorized from FY2006-FY2010. completion of environmental and other reviews and implement "best management practices" that would lead to timely action on oil and gas leases and drilling permits. Funds would be authorized for FY2006-FY2009. Consultation on Lease Sec. 2024. The Secretary of the Interior Sec. 343. Same Applications and the Secretary of Agriculture would enter into a memorandum of understanding to ensure timely processing of oil and gas lease applications. Estimates of Oil and Gas Sec. 2025. The U.S. Geological Survey No similar provision. Resources would be required to estimate onshore oil and gas resources and identify impediments and restrictions that might delay permits. The Department of Energy would be required to make regular assessments of economic reserves. CRS-209 Provision House Senate Comments Pilot Project on Federal Permit Sec. 2026. A pilot program would be Sec. 344. Same, except funds would be Coordination established to demonstrate energy authorized for FY2006-FY2010. development on federal land in accordance with the multiple-use mandate; Wyoming, Montana, Colorado, Utah, and New Mexico would be asked to participate. Deadline for Consideration of Sec. 2027. The Secretary of the Interior No similar provision. Permit Applications would have 10 days after receiving an application for a permit to drill (APD) to notify the applicant whether the APD was complete. The Secretary would have 30 days after a complete APD was submitted to issue or defer a permit with correcting measures. If deferred, the applicant would have a two-year window to complete the application, as specified by the Secretary. If the applicant met the requirements, then the Secretary would issue a permit within 10 days. The Secretary would deny the permit if the criteria were not met within the two-year period. Fair Market Rental Value Sec. 2028. The Secretaries of the Interior No similar provision. Determinations for Public Land and Agriculture would annually revise and Forest Service Rights-of- and update rental fees for land Way encumbered by linear rights-of-way to reflect fair market value. Energy Facility Rights-of-Way Sec. 2029. Not later than one year after Sec. 345. Similar, but would not include and Corridors on Federal Lands enactment, the Secretaries of the Interior a report to Congress. and Agriculture, in consultation with the Secretaries of Defense, Commerce, and CRS-210 Provision House Senate Comments Energy and FERC, would submit to Congress a report addressing the location of existing rights-of-way on federal land for oil and gas pipelines and electric transmission and distribution facilities. Consultation Regarding Energy Sec. 2030. Within six months after No similar provision. Rights-of-Way on Public Land enactment, the Secretaries of the Interior and Agriculture would be required to enter into an MOU to coordinate environmental compliance and processing of rights-of-way applications. Electricity Transmission Line Sec. 2031. The Bureau of Land No similar provision. Right-of-Way in Cleveland Management would become the lead National Forest and Adjacent federal agency for environmental and Public Land other necessary reviews for a high- voltage electricity transmission line right- of-way through the Trabuco Ranger District of the Cleveland National Forest in California. Sense of Congress Regarding Sec. 2032. In recognition of the split No similar provision. Development of Minerals Under estate on Padre Island National Seashore, Padre Island National Seashore it would be the sense of Congress that the federal government owns the surface rights while the mineral rights are held privately and also by the state of Texas. Livingston Parish Mineral Sec. 2033. Section 102 of P.L. 102-562 No similar provision. Rights Transfer is amended by striking the "Conveyance of Lands" provision, which maintains the reservation of mineral rights held by the United States in specific areas of Livingston Parish, Louisiana. CRS-211 Provision House Senate Comments Fingerlakes Withdrawal No similar provision. Sec. 347. All federal land within the boundary of Fingerlakes National Forest, New York, is withdrawn from entry, disposal, appropriation, and disposition under mineral leasing laws. Reinstatement of Leases No similar provision. Sec. 348. This section would establish conditions for which an oil and gas lease is reinstated if it was terminated between September 1, 2001, and June 30, 2004. Naval Petroleum Reserves Provision House Senate Comments Naval Petroleum Reserves Secs. 2041-2044. This provision would No provision. The National Defense Authorization Act for transfer administration of virtually all the FY1996 (P.L. 104-106) authorized sale of the government-held tracts of the Naval federal interest in the oil field at Elk Hills, CA Petroleum Reserves to the Department of (Naval Petroleum Reserve-1 (NPR-1)). Transfers the Interior. Surface rights, title, and of other NPR sites have followed in subsequent interest of a roughly 167-acre parcel years. This leaves in the Naval Petroleum would be transferred to the city of Taft, Reserves program two small oil fields in CA. The federal government would California and Wyoming, which will generate retain rights to all fossil fuel and mineral estimated revenue to the government of roughly resources for itself or its lessees, but $7.2 million during FY2005. The Kern County would yield all surface rights and site (NPR-2) comprises a "checkerboard" pattern responsibilities for care of the surface. of government and privately owned tracts adjacent The Executive Order of December 13, to the Elk Hills field. Of the 50 tracts owned by 1912, establishing NPR-2 would be the government, nearly 90% are leased by private revoked. oil companies with royalty payments deposited in the U.S. Treasury. CRS-212 Miscellaneous Provisions Provision House Senate Comments Split-Estate Federal Oil and Gas Sec. 2051. The Secretary of the Interior Sec. 1321. Same except it would include Leasing and Development would conduct a review of how an analysis of state laws that address Practices management practices by federal split-estates. subsurface oil and gas development activities affect privately owned surface users. The review would detail the rights and responsibilities of surface and subsurface owners, compare consent provisions under the Surface Mining Control and Reclamation Act of 1977 with provisions for oil and gas development, and make recommendations that would address surface owner concerns. Royalty Payments Under Sec. 2052. The lessee of a "covered lease No similar provision. Certain Leases tract" off the coast of Louisiana would be allowed to withhold royalties due to the United States if it paid the state of Louisiana 44 cents for every dollar of the federal royalty withheld. This royalty relief would end when certain drainage claims were satisfied. Domestic Offshore Energy Sec. 2053. This would add a new Section Sec. 371. Similar, but would amend Representatives of states with offshore energy Reinvestment 32 at the end of the Outer Continental Section 31 of the OCSLA (43 U.S.C. development have been seeking to return a Shelf Lands Act (43 U.S.C. 1331 et. seq.) 1356a). The Secretary would annually significant portion of the federal revenues to return a portion of the federal revenues disburse to producing states and political generated to these states, and particularly the from offshore energy activities to subdivisions $25 million for FY2007- coastal areas within these states that may be more affected coastal states to fund specified FY2010. Allocations for each producing affected by onshore and near-shore activities that activities. This section would create a state and political subdivision as well as support that development. Proponents of these new Domestic Offshore Energy authorized uses would be established. proposals look to the rates at which funds are CRS-213 Provision House Senate Comments Reinvestment Program, funded by a new given to jurisdictions where energy development Secure Energy Reinvestment Fund. occurs on federal lands, and seek revenues that Revenues for the fund, subject to will help coastal states respond to adverse onshore appropriation, would include $35 million effects of offshore energy development. Coastal in royalty income each year, plus all destruction has received more attention in royalty income above a specified amount Louisiana, where many square miles of wetlands that would generally increase annually, are being lost to the ocean each year. A federal bonus bid income above $880 million program to address the impacts of coastal energy each year, and interest income earned by development was enacted during the energy crisis the fund. Each year beyond FY2015 the of the late 1970s. Called the Coastal Energy Secretary of the Treasury would deposit Impact Assistance Program, it operated briefly, 25% of all qualified revenues of the providing loans and grants to states through the preceding year into the fund plus federal Coastal Zone Management Program. There investment interest earned. Coastal states is no comparable program operating under in where energy activities occur offshore current law. (For more information see and coastal political subdivisions in those Appendix K.) states would be eligible to receive money from the fund. Allocations among eligible states would be determined by a formula that accounts for energy revenues generated offshore in federal waters that lie between outward extensions of the state's lateral boundaries over the past 10 years. Repurchase of Leases That Are Sec. 2054. Under certain circumstances No similar provision. Not Allowed To Be Explored or any federal lease (oil, gas, coal, tar sands, Developed etc.) if not allowed to be explored or developed would be authorized for repurchase and cancellation by the Secretary of the Interior. CRS-214 Provision House Senate Comments Limitation on Required Review Sec. 2055. Certain activities would not No similar provision. Under NEPA be subject to NEPA if the activity is conducted for the purpose of exploration or development of a domestic federal energy resource. Coal -- Resources Provision House Senate Comments Short Title Sec. 2101. Coal Leasing Amendments No similar provision. These sections would modify federal coal leasing Act of 2005 procedures to encourage greater coal production on federal lands. Issues raised by these provisions include their impact on regional competition and returns to the U.S. Treasury. - Under the Mineral Leasing Act of 1920 (30 U.S.C. 203), modifications to an existing coal Lease Modifications Sec. 2102. The House-passed bill would Sec. 411. Similar provision. lease would not exceed 160 acres or add acreage repeal the 160-acre limitation on coal larger than that in the original lease. Coal leases lease modifications. The total area added are subject to diligent development requirements, to an existing coal lease through a but the Secretary of the Interior may suspend the modification could not exceed 1,280 condition upon payment of advance royalties. acres or add acreage larger than the Advance royalties are computed on a fixed original lease. production reserve ratio, and the aggregate number of years advance royalties may be Approval of Logical Mining Sec. 2103. Criteria would be established Sec. 412. Same. accepted in lieu of production is 10. An operation Units for extending the mine-out period of a and reclamation plan must be submitted within coal lease beyond 40 years. three years after a lease is issued under the Leasing Act (30 U.S.C. 207). Financial assurance is required to guarantee payment of bonus bid installments (30 U.S.C. 201 (a)). CRS-215 Provision House Senate Comments Payment of Advance Royalties Sec. 2104. The Secretary of the Interior Sec. 413. Similar provision. could upon payment of an advance royalty, suspend a coal lessee's requirement for continuous operation. Advance royalties would be based on the average price of coal sold on the spot market from the same region, and the aggregate number of years advance royalties could be accepted in lieu of production would not exceed 20. Elimination of Deadline Sec. 2105. The current three-year Sec. 414. Same. deadline for submission of a coal lease operation and reclamation plan would be repealed. Financial Assurances on Bonus Sec. 2106. The financial surety bond or No similar provision. Bids other financial guarantee for a bonus bid would no longer be required. Inventory Requirement Sec. 2107. The Secretary of the Interior, No similar provision. in consultation with the Secretaries of Agriculture and Energy, would be required to assess coal on public lands, including low-sulfur coal and various impediments to developing such resources. Application of Amendments Sec. 2108. Amendments made under this Sec. 416. Similar but would specify how provision would apply to any coal lease amendments would affect coal leases issued before, on, or after the date of issued before the date of enactment of enactment. this act. CRS-216 Provision House Senate Comments Resolution of Resource Sec. 2109. The Secretary of the Interior Sec. 1322. Same Development Conflicts in the would report to Congress on plans to Powder River Basin resolve conflicts between development of coal and coalbed methane in the Powder River Basin. Transportation Fuels from No similar provision. Sec. 415. A program would be Illinois Basin Coal established to evaluate the commercial and technical viability of producing Fischer-Tropsch fuels for transportation from Illinois basin coal. A gasification test center would be constructed and $85 million would be authorized for years FY2006-FY2010. Energy Development in Arctic Refuge Provision House Senate Comments Short Title Sec. 2201. The short title is the "Arctic No similar provision. Section 1003 of the Alaska National Interest Coastal Plain Domestic Energy Security Lands Conservation Act of 1980 (ANILCA, P.L. Act of 2005." 96-487, 94 Stat. 2371) prohibited oil and gas development in the entire Arctic National Wildlife Refuge (ANWR), or "leasing or other development leading to production of oil and gas from the range" unless authorized by an act of Congress. Section 1002 required a legislative environmental impact statement on proposed development and its potential effects. The Final Legislative Environmental Impact Statement CRS-217 Provision House Senate Comments (FLEIS) and a recommendation to proceed to full development was issued in 1987. Under current law for the management of national wildlife refuges (16 U.S.C. §668dd), and under 43 C.F.R. §3101.5-3 for Alaskan refuges specifically, an activity may be allowed in a refuge only if it is compatible with the purposes of the particular refuge and with those of the Refuge System as a whole. In the 25 years since the passage of ANILCA, various unsuccessful attempts have been made to pass ANWR development legislation. Definitions Sec. 2202. The ANWR Coastal Plain No similar provision. The Appendix refers to the legal boundaries of the would be defined as approximately 1.5 Coastal Plain that were administratively drawn to million acres as identified under exclude the three townships selected by the ANILCA, and described in Appendix I to Kaktovik Inupiat Corporation (KIC, an Alaska Part 37 of Title 50 C.F.R. "Secretary" Native Village Corporation) from the defined would be defined as the Secretary of the Coastal Plain. However, the lands are within the Interior. geographical limits of the "coastal plain." Also under ANILCA, KIC was entitled to select a fourth township, for a total of approximately 92,000 acres. In addition, there are over 10,000 acres of Native-owned allotments in the Refuge. These are basically surface ownerships, with the federal government reserving the oil, gas, and coal rights. Although allotments were originally restricted titles, under P.L. 108-337, allotments may now be subdivided and dedicated as if the surface estate were held in unrestricted, fee-simple title -- a fact that could facilitate development on them if the Refuge is opened. CRS-218 Provision House Senate Comments Leasing Program Sec. 2203. This section would direct the No similar provision. Secretary to establish the leasing program subject to various conditions, described below. Establishment of Leasing Sec. 2203(a) and (b). Acting through the No similar provision. Program and Repeal of Leasing Bureau of Land Management and in Prohibition consultation with the Fish and Wildlife Service, the Secretary would be required to establish a competitive oil and gas leasing program under the Mineral Leasing Act (30 U.S.C. §181 et seq.) for the Coastal Plain; the program is to result in "no significant adverse effect" on specified environmental and subsistence resources, and leasing is to be conducted in "a manner that ensures the receipt of fair market value by the public for the mineral resources to be leased." Section 1003 of ANILCA would be repealed. Compatibility with Purposes of Sec. 2203(c) and (d). Subsection 2203(c) No similar provision. The language of subsection (c) appears to answer Refuge; NEPA Requirements; states that the oil and gas leasing program the compatibility question and to eliminate the No Effect on State Authorities and activities in the Coastal Plain are usual compatibility determination processes. The deemed to be compatible with the extent of leasing "activities" that might be purposes for which ANWR was included as compatible is debatable: At issue established and that no further findings or would be whether the term encompasses, for decisions are required to implement this example, necessary support activities, such as determination. construction and operation of port facilities, - staging areas, and personnel centers. Subsection (c) would also declare that the FLEIS is deemed to satisfy the requirements of NEPA with respect to CRS-219 Provision House Senate Comments actions by the Secretary to develop and promulgate leasing regulations, yet would require the Secretary to prepare an Environmental Impact Statement (EIS) with respect to other actions, some of which might usually require only a (shorter) environmental assessment. Consideration of alternatives would be limited to two choices, a preferred option and a "single leasing alternative." (Generally, an EIS analyzes several alternatives, including a "no action" alternative.) - Subsection (d) would declare that the title does not expand or limit state regulatory authority. Special Areas Sec. 2203(e) and (f). Subsection (e) No similar provision. would allow the Secretary to set aside up to 45,000 acres (and names one specific special area that must be designated) in which leases, if permitted, must prohibit surface occupancy. The FLEIS identified four special areas which together total more than 52,000 acres, so the Secretary would be required to select among these areas or any others that may seem significant. Section 2203(f) also would state that the closure authority in the ANWR title is the Secretary's sole closure authority, which might limit CRS-220 Provision House Senate Comments possible secretarial actions under the Endangered Species Act. Issuance and Revision of Sec. 2203(g). Regulations would be No similar provision. Regulations required to be issued within 15 months of enactment, and reviewed and revised periodically in light of any significant biological, environmental, or engineering data coming to the Secretary's attention. Leasing Procedures, Bidding Sec. 2204. The Secretary would establish No similar provision. System, Minimum Acreage procedures (a) to receive and consider nominations for areas to be included in a lease sale, (b) to hold the sales, and (c) provide for public notice and comment. The bidding system would be by sealed competitive cash bonus bids, and the first offering would total at least 200,000 acres. The first sale would be conducted within 22 months of enactment, with additional sales thereafter as industry interest warranted. Grant of Leases Sec. 2205. The Secretary could grant No similar provision. leases to the highest responsible qualified bidder. Leases could not be transferred to another party without approval of the Secretary, acting in consultation with the Attorney General. Terms and Conditions of Sec. 2206. Under §2206(a), leases would No similar provision. Leases; Project Labor provide for at least a 12.5% royalty Agreements payment; allow for seasonal closure of CRS-221 Provision House Senate Comments the Coastal Plain to exploratory drilling to protect caribou calving areas and other species; require lessees to be responsible for reclamation of adversely affected lands in the Coastal Plain; and provide that lessees could not delegate their obligation to reclaim lands without written approval of the Secretary. The subsection would further require that the reclamation standard be an ability to support the uses of the land before exploration and development, or "a higher or better use" as approved by the Secretary, and that the lease contain fish, wildlife, and environmental protection standards as required in §2203(a)(2). The subsection would require that lessees use their best efforts to provide employment and contracts to Alaska Natives and Native Corporations, and would prohibit export of oil produced under the lease. - Subsection 2206(b) would direct the Secretary to require lessees to negotiate project labor agreements (PLAs) -- "recognizing the Government's proprietary interest in labor stability and the ability of construction labor and management to meet the particular needs and conditions of projects to be developed ...." (A PLA is an agreement between a project owner or main CRS-222 Provision House Senate Comments contractor and the union(s) representing the craft workers for a particular project; it establishes the terms and conditions of work that will apply for the particular project.) Environmental Protection Sec. 2207. This section contains most No similar provision. (but not all) of the environmental protection provisions of the title. No Significant Adverse Effect; Sec. 2207(a). Subject to the No similar provision. This provision has been a focus of considerable 2,000-Acre Limit requirements in §2203 (see above), the debate concerning (a) its applicability to the more Secretary would ensure that oil and gas than 100,000 acres of Native lands in the Refuge, activities on the Coastal Plain resulted in (b) the facilities that would be limited; and (c) the "no significant adverse impact" on fish, economic and practical impacts of such a wildlife, their habitat, and the limitation. For more information, see CRS Report environment; require use of best RS22143, Oil and Gas Leasing in the Arctic commercially available technology; and National Wildlife Refuge (ANWR): the 2,000-Acre "ensure that the maximum amount of Limit. surface acreage covered by production and support facilities, including airstrips and any areas covered by gravel berms or piers for support of pipelines, does not exceed 2,000 acres on the Coastal Plain." Assessment and Mitigation Sec. 2207(b). The Secretary would have No similar provision. to require a site-specific analysis of the probable effects of drilling and other activities on fish, wildlife, and the environment; and a plan to avoid or reduce any significant adverse effect on these resources. The plan's developer would have to consult with any agencies CRS-223 Provision House Senate Comments with jurisdiction over matters mitigated in the plan. Promulgating Regulations Sec. 2207(c). Before implementing the No similar provision. leasing program, the Secretary would be required to promulgate "regulations, lease terms, conditions, restrictions, prohibitions, stipulations, and other measures" to ensure that activities on the Coastal Plain under this title were consistent with the title's environmental requirements and purposes. Compliance with Other Sec. 2207(d). This subsection would set No similar provision. Environmental Laws and out 21 requirements for the Requirements environmental standards in the leasing program, to be implemented through regulations, lease terms, etc. These requirements would include, among other things: complying with all applicable state and federal environmental laws; setting appropriate seasonal limits on operations; prohibiting public access via specified roads or other modes of transportation; consolidating facilities; treating and disposing of specified wastes, avoiding (to the extent practicable) streams, rivers, wetlands, etc.; complying with reasonable stipulations for cultural and archeological resources; and other requirements. CRS-224 Provision House Senate Comments Documents To Be Considered Sec. 2207(e). In developing the No similar provision. The documents are (1) the 1999 Northeast by Secretary regulations, lease terms, etc., the National Petroleum Reserve-Alaska Final Secretary is to consider stipulations and Integrated Activity Plan/Environmental Impact standards in three specified documents. Statement, (2) the environmental protection standards that governed the initial Coastal Plain seismic exploration program, and (3) Appendix 2 of the August 9, 1983, agreement between Arctic Slope Regional Corporation and the United States. Consolidation of Facilities Sec. 2207(f). The Secretary would be No similar provision. directed to develop and update a plan to consolidate facilities, avoid unnecessary duplication, site activities to minimize their environmental impacts, and use existing facilities where practicable. Access to Coastal Plain Sec. 2207(g). The Secretary would be No similar provision. required to manage the Coastal Plain to allow subsistence access, including the use of snowmobiles and motorboats (16 U.S.C. §3121), and to allow local residents generally to have "reasonable access" to the Coastal Plain for traditional uses. Expedited Judicial Review Sec. 2208. Section 2208 would require No similar provision. Subsections (a)(1) and (a)(2) appear to contradict that any complaints seeking judicial each other as to where suits are to be filed. review be filed within 90 days. Section - 2208(a)(3) would limit the scope of The standard set forth in §2208(a)(3) for review is review by stating that review of a unclear, but in this context arguably would make Secretarial decision, including overturning a decision more difficult. environmental analyses, would be limited to whether the Secretary complied with CRS-225 Provision House Senate Comments the terms of the ANWR Title, be based on the administrative record, and that the Secretary's analysis of environmental effects is "presumed to be correct unless shown otherwise by clear and convincing evidence to the contrary." Federal and State Distribution of Sec. 2209. This section would provide No similar provision. Sec. 312 of the Senate bill includes a preference Revenues; Low Income Home that 50% of adjusted revenues be paid to for using royalty oil and gas to benefit any federal Energy Assistance Alaska, and the balance deposited in the low-income energy assistance program. For more U.S. Treasury as miscellaneous receipts, information on the LIHEAP program; see CRS except for part of the federal share of Report RL31865, Low Income Home Energy bonus bids that would be available to be Assistance Program (LIHEAP): Program and appropriated for low income home Funding. energy assistance, and a portion (not to exceed $11 million in an unspent balance, with $5 million available for annual appropriation) that would go into a fund to assist Alaska communities under §2212 in addressing local impacts of energy development (see below). Section 2209(c) would allow certain revenues from bids for leasing to be available for appropriation for energy assistance for low-income households under 42 U.S.C. §8621. Rights of Way Across the Sec. 2210. This section would declare No similar provision. Coastal Plain that the provisions of 16 U.S.C. §3161 (an ANILCA provision containing a congressional finding in support of a single comprehensive statutory authority for approval of transportation systems) CRS-226 Provision House Senate Comments would not apply to oil and gas transportation on the Coastal Plain. The Secretary would have to ensure that rights of way and easements would not cause significant adverse effects on fish, wildlife, subsistence resources, and the environment, and that facilities were sited or designed to avoid unnecessary duplication of roads and pipelines. Appropriate regulations would have to be issued within 15 months of enactment, as required in §2203(g). Surface and Subsurface Estate Sec. 2211. The Secretary would be No similar provision. Conveyance to Native required to convey certain additional Corporations surface rights to the Kaktovik Inupiat Corporation and certain subsurface rights to the Arctic Slope Regional Corporation. Local Government Impact and Sec. 2212. The Secretary would be No similar provision. Under §2203(a), the Secretary is to establish and Community Service Assistance authorized to use funds from the Coastal implement a leasing program under the Mineral Plain Local Government Impact Aid Leasing Act, yet §2212 directs a revenue sharing Assistance Fund for financial assistance program different from that in the MLA, which to eligible entities as a result of oil and may raise validity questions. If the alternative gas exploration and development in the disposition were struck down and the revenue Coastal Plain. A maximum of $5 million provisions were determined to be severable, could be appropriated each year; the Alaska could receive 90% of ANWR revenues. unappropriated balance in the fund would be limited to a maximum of $11 million. CRS-227 Set America Free (SAFE) Provision House Senate Comments Short Title and Findings Secs. 2301-2302. The Set America Free No similar provision. Act of 2005. The findings in this title would recognize predictions of growing energy consumption and dependence upon imported oil, and the accompanying risks. Purpose Sec. 2303. A U.S. commission would No similar provision. make recommendations for "a coordinated and comprehensive North American energy policy that will achieve energy self-sufficiency by 2025" for not only the United States but Canada and Mexico as well. United States Commission on Sec. 2304. The panel would be called No similar provision. North American Energy United States Commission on North Freedom American Energy Freedom. Citizens of any of the three nations may be among the 16 appointees to the commission, which would submit a report on findings and recommendations within a year. $10 million would be authorized for two fiscal years to carry out the act. North American Energy Sec. 2305. The President would submit a No similar provision. Freedom Policy response or set of recommendations pursuant to the commission's report within 90 days of receipt of the report. CRS-228 Grand Canyon Hydrogen-Powered Transportation Demonstration Provision House Senate Comments Grand Canyon Hydrogen- Sections 2401-2406. The Secretaries of No comparable provision. Powered Transportation Energy and the Interior would be Demonstration required to establish a research and development program relating to hydrogen-based transportation technologies suitable for operations in sensitive areas such as national parks. Sec. 2405. Over the duration of the No comparable provision. program, the Secretaries would report to Congress annually on ongoing and planned activities. Sec. 2406. A total of $1.2 million would No comparable provision. be authorized over three years for the program. Additional Provisions Provision House Senate Comments Wind Energy Royalty Relief Sec. 2501. This provision, which was No comparable provision. added as a floor amendment (H.Amdt. 97), would reduce by 50% any royalty payments, excluding the costs of processing the rights-of-way, for wind energy generation on BLM lands that otherwise would be paid to the Treasury. CRS-229 Provision House Senate Comments This royalty relief provision would terminate after 10 years of enactment or after the Secretary of the Interior declared that at least 10,000 megawatts of electricity was available from renewable sources on public lands, whichever is sooner. Studies Provision House Senate Comments Alaska Natural Gas Pipeline No similar provision. Sec. 1303. Within six months of enactment, and every six months thereafter, FERC would be tasked with submitting a report to Congress describing progress in licensing and construction, and identifying issues impeding progress. Backup Fuel Capability Study No comparable section. Sec. 1306. This section would authorize DOE to study the effect of obtaining and maintaining liquid and other fuel backup capability at gas-fired power generation facilities, and other gas-fired industrial facilities. The study would also address methods Federal and State governments might use to encourage installation of backup fuel capability. The study would also identify changes required in the CRS-230 Provision House Senate Comments Clean Air Act (42 U.S.C. 7401 et seq.) to allow natural gas generators to add clean backup fuel capabilities. The effect on the supply and cost of natural gas would be analyzed. DOE would report on the study along with recommendations within 1 year. Indian Land Rights-of-Way No comparable section. Sec. 1307. DOE and DOI would conduct a joint study in consultation with stakeholders of issues regarding energy rights-of-way on tribal land. Within 1 year of enactment they would submit a report to Congress analyzing historic rates of compensation paid for energy rights-of-way on tribal land. The report would offer recommendations for appropriate standards for fair compensation to tribes and would offer an assessment of the tribal self- determination and sovereignty interests implicated. Mobility of Scientific and No comparable section. Sec. 1311. Within 2 years, DOE would Technical Personnel report on the policies and procedures of contractors operating a National Laboratory or research facility that interfere with the transfer of scientific and technical personnel among the Laboratories or facilities; and would recommend means of facilitating interlaboratory exchange of scientific and technical personnel. CRS-231 Provision House Senate Comments National Academy of Sciences No comparable section. Sec. 1312. Within 90 days, DOE would Report arrange for the National Academy of Sciences to study and identify obstacles to accelerating the research, development, demonstration, and commercial application cycle for energy technology; and the adequacy of DOE policies and procedures for resolving technology transfer-related disputes between DOE's contractors and the private sector. The Academy report would make recommendations to Congress. Report on Research and No comparable section. Sec. 1313. Within 180 days, DOE would Development Program arrange with the National Academy of Evaluation Methodologies Sciences to investigate and report on the scientific and technical merits of any evaluation methodology currently in use or proposed for use in relation to the scientific and technical programs of DOE by the Secretary or other Federal official; The Academy study would include any other views or plans regarding the future use of the evaluation methodology. Natural Gas Supply Shortage No similar provision. Sec. 1320. Within 6 months of Report enactment, the Secretary of Energy is directed to submit to Congress a report on supply of, and demand for natural gas over the period 2004-2015. The report would analyze all aspects of gas markets, as well as policy options for CRS-232 Provision House Senate Comments conservation, technology development and other factors that would affect supply and demand. - The secretary would be called upon to consult with industry and academic experts, and representatives of state and local governments, and tribal and consumer organizations. Study of Availability of Skilled No comparable section. Sec. 1337. The National Academy of Workers Sciences would be required to study the short-term and long-term availability of skilled workers to meet the energy and mineral security requirements of the United States. The study would assess the availability of skilled labor at both entry level and more senior levels. Submission of the study to Congress would be required within two years, and would include recommendations for future actions needed to meet future labor requirements. Incentives for Innovative Technologies Provision House Senate Comments Definitions No comparable provision Sec. 1401. This section would define "commercial technology" to mean a CRS-233 Provision House Senate Comments technology in general use in the commercial marketplace, but not a technology in a demonstration project funded by DOE. "Cost" would be defined in terms of "cost of a loan guarantee" within the meaning of section 502(5)(C) of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a(5)(C)). An "Eligible project" is described in section 1403. `'Guarantee'` would be defined in terms of "loan guarantee" in section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a), and includes a loan guarantee commitment (as defined in section 502 of the Federal Credit Reform Act of 1990 (2 U.S.C. 661a)). "Obligation" means the loan or other debt obligation that is guaranteed under this section. Terms and Conditions No comparable provision. Sec. 1402. This section would guarantee a loan for projects under this title only if an appropriation for the cost has been made, or a full payment received from the borrower for the cost of the obligation has been deposited into the Treasury. The loan guarantee would not exceed an amount equal to 80% of the project cost of the facility that is the subject of the guarantee. The Secretary would make determinations that there is a reasonable prospect of repayment of the principal and interest by the borrower CRS-234 Provision House Senate Comments and that the amount of the obligation (when combined with amounts available to the borrower from other sources) would be sufficient to carry out the project. The interest rate would not exceed the prevailing private sector interest rate for similar loans and risks. The obligation would require full repayment over a period not to exceed the lesser of 30 years, or 90% of the projected useful life of the financed physical asset. If a borrower defaults on the obligation, the holder of the loan guarantee could demand payment from the Secretary under conditions of repayment that account for unpaid interest and unpaid principal, and permit loan forbearance. Eligible Projects No comparable provision Sec. 1403. This section would provide loan guarantees for projects that avoid, reduce, or sequester air pollutants or greenhouse gas emissions, and employ new or significantly improved technologies. These technologies would include: renewable energy systems; advanced fossil energy (including coal gasification); hydrogen fuel cell for home, industry or transportation; advanced nuclear energy facilities; carbon capture and sequestration; efficient electrical generation, transmission, and distribution; efficient CRS-235 Provision House Senate Comments end-use energy; and production facilities for fuel-efficient vehicles. Guarantees would be made for integrated combined cycle gasification projects which generate electricity, produce energy from coal (of not more than 13,000 Btu/lb and mined in the western U.S.), and are located in a taconite-producing region of the United States. Facilities that generate gasification streams used in a Fischer- Tropsch process to produce ultra-clean premium fuels would be eligible for loan guarantees, as would industrial projects that gasify coal, biomass, or petroleum coke to produce synthesis gas fuel for which electricity accounts for at least 65% of the useful energy output. Clean coal technologies receiving tax credits would not be disqualified from receiving a guarantee under this title. Authorization of Appropriations No comparable provision. Sec. 1404. This section would authorize appropriated sums as necessary to provide the cost of guarantees under this title. CRS-236 Climate Change National Climate Change Technology Deployment Provision House Senate Comments Greenhouse Gas Intensity No comparable section. Sec. 1601. Would amend Title XVI of Reducing Technology Strategies the 1992 Energy Policy Act to add a new Section 1610 that would establish a new governmental structure to develop a national response strategy to promote technologies and practices to reduce greenhouse gas intensity, coordinate federal climate change activities, identify barriers to technologies that improve carbon intensity and implement a technology deployment program. The Secretary of Energy would establish an Interagency Coordinating Committee on Climate Change Technology within 180 days of enactment and the Director of the Office of Science and Technology Policy would submit a national deployment strategy within 18 months of enactment. Within 180 days of receipt of the strategy, the Secretary would establish a Climate Change Technology Program to assist the Committee in coordinating necessary deployment activities, and a Climate Change Science Program to assist the Committee in coordinating science related activities. Upon receipt of the Strategy, the Secretary is also to conduct an inventory of suitable carbon- CRS-237 Provision House Senate Comments intensity-reducing technologies. In addition, the Secretary would establish a DOE Climate Change Technology Working Group to identity barriers to deployment of carbon intensity reducing technologies. Using the inventory and study of deployment barriers, the Committee is to develop a program for providing credit-based incentives to eligible technologies based on criteria outlined in the section. Climate Infrastructure Credit No comparable provision. Sec. 1602. Would amend Title XVI of the 1992 Energy Policy Act to add a new Section 1611 that would establish a technology deployment program to promote technologies and practices to reduce greenhouse gas intensity. The program would be implemented through a Climate Credit Board created within the DOE. The technology deployment program would have an array of incentives available to encourage demonstration and deployment, including direct loans, loan guarantees, lines of credit, and production-incentive payments. - Eligible projects could also receive protection against what the section calls "regulatory failure," where the federal or state siting process delays a project beyond a time frame specified by DOE. CRS-238 Provision House Senate Comments Eligible projects include coal gasification and liquefaction, carbon sequestration, cogeneration technology, advanced nuclear power, lower emission transportation, renewable energy, and transmission upgrades. Climate Change Technology Deployment in Developing Countries Provision House Senate Comments Climate Change Technology No comparable section. Sec, 1611. This section would amend the Authorization of appropriations are such sums as Deployment in Developing Global Environmental Protection necessary to carry out this part (other than section Countries Assistance Act of 1989 by adding a new 736). Section 736 is the proposed State Part C entitled "Technology Deployment Department demonstration program section for 10 in Developing Countries." It would set eligible countries. No specific authorization for up a complimentary program designed to appropriations is provided by the bill for that encourage U.S. exports of technology to program. reduce greenhouse gas intensity in developing countries. The Department of State would be the lead agency to identify and inventory 25 greenhouse gas emitting developing countries within 180 days of enactment, and update the information every 18 months. The Secretary of State would also provide assistance, either directly or through international agencies, to greenhouse gas intensity reducing projects. The Secretary of State would also coordinate demonstration projects in at least 10 CRS-239 Provision House Senate Comments eligible countries according to criteria identified by the section. - The United State Trade Representative would be required to identify and negotiate removal of trade barriers to export of greenhouse gas intensity reducing technology in developing countries. - An interagency working group would be established to implement a Greenhouse Gas Intensity Reducing Technology Export Initiative to promote U.S. exports of such technologies to developing countries. Sense of the Senate on Climate No comparable section. Sec. 1612. This section is a Sense of the Change Senate resolution that human activities are a substantial cause of greenhouse gas accumulating in the atmosphere, resulting in average temperatures to rise outside natural variability, and that mandatory steps are required to slow or stop the growth in emissions. CRS-240 Index of Senate Sections House sections in italics have no comparable Senate section. Rather, they are the closest House section before the indicated Senate section. Senate bill House bill Senate bill House bill Senate bill House bill 101 101 203 203 252(e)(f) 1701(e) 102 102 211 1501 253 1701(d) 103 103 211(a) 1502(a) 254 1701(f) 104 104 212(b) 1501(c) 261 1802 105 105 212(c) 1511 262 1803 106 107 212(d) 1512 263 1804 107 109 212(f) 1512 264 1806 108 109 213 1508 265 1809 121 122 222(a) 1525 266 1810 122 123 222(b) 1526 267 1811 123 124 222(b) 1531(2) 268 1814 124 125 223(c) 1504 269 1816 125 126 223(c) 1503 270 1815 126 126 223(c) 1505 271 1820 127 126 224(a) 1506(a) 272 1819 131 131 224(b) 1506(b) 281 231 132 132 224(c) 1513 282 243 133 132 224(d) 1506(c) 283 243 134 132 225 1506 291 209 135 136 226 1507 301 304 135 133 227 204 301 301 136 133 228 204 302 302 137 133 229 1510 303 304 230 1513 138 134 311 2001 231 209 139 - 143 137 312 2002 232 1452 151 1616 313 2003 233 126 161 144 314 2004 234 1513 162 147 315 2005 241 - 245 204 163 148 316 2006 251 - 254 1701 located after 164 149 206 317 2007 201 201 251 1701(b) 318 2007 202 202 319 2008 252 1701(c) CRS-241 Senate bill House bill Senate bill House bill Senate bill House bill 320 2009 412 2103 721 711 321 2010 413 2104 722 754 321 329 414 2105 723 707 322 2011 415 2109 724 707 323 2012 416 2108 725 707 324 1616 501 501 731 751 325 1452 502 502 732 755 326 2019 503 503 733 756 327 2017 504 505 734 757 328 334 505 505 735 1614 341 2022 506 504 741 811 342 2023 601 601 742 811 343 2024 602 602 743 811 344 2026 603 603 751 - 757 743A 345 2029 604 604 801 801 346 2018 605 605 801 809 347 2033 606 606 901 - 903 900 348 2033 607 607 911(a,b & c) 930 371 2053 608 608 911(d) 931 381 320 609 609 912 928 382 330 610 611 913 924 383 330 621 633 914 927 384 332 622 635 915 922 385 332 623 636 916 924(c) 386 333 624 640 921 934 387 2013 625 632 922 933A 388 333 631 - 635 651 923 932(b) 389 332 701 701 924 932 391 358 702 701 925 933 401 401 703 704 931 945 402 402 704 704 932 939 403 403 705 707 933 945 404 404 706 731 934 - 935 938 405 404 711 772 936 943 406 411 712 771 937 939 407 412 713 772 938 - 944 939 411 2102 714 773 CRS-242 Senate bill House bill Senate bill House bill Senate bill House bill 945 956 1012 - 1013 921 1276 1266 946 947 1101 - 1103 907 1277 1267 946 951 1104 1298 1278 1268 946 955 1105 924 1279 1269 946 954 1106 907 1280 1270 946 953 1107 1298 1281 1271 946 952 1201 1201 1282 1272 947 948 1211 1211 1283 1273 948 949 1221 1221 1284 1274 948 950 1222 1222 1285 1275 949 - 950 957 - 961 1223 1224 1286 1276 951 968 1224 1226 1287 1277 952 964 1231 1231 1288 1292 953 - 955 968D 1232 1232 1291 1295 956 441 1233 1234 1292 1297 957 967 1234 1235 1295 1297 958 968D 1235 1236 1301 1616 961 910 1236 1237 1302 1901 962 906 1241 1241 1303 2501 963 900 1242 1241 1304 1616 964 903 1251 1251 1305 968D 965 904 1252 1252 1306 - 1307 2501 966 904 1253 1253 1308 706 967 905 1254 1254 1309 774 968 902 1261 1281 1310 1616 969 - 971 906 1262 - 1263 1282 1311 - 1313 2501 981 968B 1264 1283 1314 1223 982 1450 1265 1284 1315 1298 1001 921 1266 1286 1316 1298 1002 911 1266 1285 1316 1237 1003 913 1267 1287 1317 - 1318 1298 1004 914 1268 - 1270 1287 1319 1601 1005 - 1006 920 1271 1261 1320 2501 1007 - 1008 1003 1272 1262 1321 2051 1009 921 1273 1263 1322 2109 1010 920 1274 1264 1323 1605 1011 1002 1275 1265 1324 1606 CRS-243 Senate bill House bill Senate bill House bill 1325 1608 1546 1303 1326 1609 1547 1304 1327 1003 1548 - 1549 1313 1327 1610 1550 1313 1328 - 1330 1616 1551 1313 1331 1298 1552 - 1554 1316 1332 1616 1561 - 1573 1313 1333 1287 1601 2501 1334 - 1335 1616 1602 2501 1336 775 1611 2501 1337 2501 1612 2501 1338 1616 1401 - 1404 2501 1500 1300 1501 - 1504 1313 1503 1306 1505 1306 1506 1303 1507 1306 1508 - 1509 1313 1511 1313 1512 - 1514 1322 1515 1302 1521 1312 1522 1317 1523 - 1524 1312 1525 1317 1526 1317 1527 1311 1528 1312 1529 1312 1531 1316 1532 - 1535 1316 1541 1302 1542 1313 1543 - 1544 1316 1545 1313 CRS-244 Appendix A: Hydraulic Fracturing (Sec. 327 House Bill) Before 1997, EPA had not considered regulating hydraulic fracturing for oil and gas development, because it did not view this well-production process as an activity subject to regulation under SDWA's UIC program. In 1997, the 11th Circuit Court of Appeals ruled that the injection of fluids for the purpose of hydraulic fracturing constituted underground injection, that all underground injection must be regulated, and that hydraulic fracturing of coalbed methane (CBM) wells in Alabama must be regulated under the state's UIC program (LEAF v. EPA, 118 F. 3d 1467). Hydraulic fracturing involves the high-pressure injection of fluids into coal beds to enhance the recovery of oil and natural gas from underground formations. Water- based fluids are typically used as fracturing fluids; however, diesel fuel often is used instead of water, and various chemicals are added to fracturing fluids.3 While hydraulic fracturing has been used in the recovery of conventional oil and gas since the 1950s, this practice has been used for CBM recovery mainly since the 1990s. A growing concern is that, in many CBM-producing regions, the target coal beds occur within underground sources of drinking water, and the fracturing process injects fluids directly into the drinking water sources; EPA has determined that the use of diesel fuel as a fracturing fluid introduces benzene and other toxic substances directly into underground sources of drinking water.4 Also, because the process fractures rock, fracturing can create new pathways for natural gas (primarily methane) to enter drinking water aquifers. As the number of coalbed methane (CBM) wells and the use of hydraulic fracturing have increased rapidly in recent years, so has concern over the potential impact on water resources, particularly in the water-scarce West. Very few studies have been done to evaluate these impacts. In 2003, EPA's National Drinking Water Advisory Council recommended that EPA work to eliminate the use of diesel fuel and related additives in fracturing fluids that are injected into formations containing drinking water sources. In 2003, EPA entered into an agreement with three companies that provide most hydraulic fracturing services (BJ Services, Halliburton Energy Services, and Schlumberger Technology Corporation).5 Under this voluntary agreement, the companies 3 Environmental Protection Agency, Evaluation of Impacts to Underground Sources of Drinking Water by Hydraulic Fracturing of Coalbed Methane Reservoirs, Washington, D.C., June 2004, pp. 4-3 - 4-4. 4 Environmental Protection Agency, Evaluation of Impacts to Underground Sources of Drinking Water by Hydraulic Fracturing of Coalbed Methane Reservoirs, pp. 1-6. According to EPA, hydraulic fracturing of oil and gas found in conventional geologic traps is well established, but hydraulic fracturing of coal beds is relatively new. Conventional sites are usually very deep and involve saline ground water that is unsuitable for drinking water. In contrast, formations that contain coal bed methane can be near the surface where ground water may be used as a source of drinking water supplies. pp. 4-9 - 4-10. 5 Memorandum of Agreement Between the United States Environmental Protection Agency (continued...) CRS-245 conditionally agree to remove diesel fuel from CBM fluids injected directly into drinking water sources, if cost-effective alternatives are available. EPA has not sought to limit other toxic components in fracturing fluids, and other companies did not agree to cease injecting diesel fuel into drinking water sources. The National Drinking Water Advisory Council further recommended that EPA continue to study the extent and nature of public health and environmental problems that could occur as a result of hydraulic fracturing for coalbed methane production, and defend its authority to implement the UIC program in a manner that protects groundwater resources from contamination. However, oil and gas industry representatives argue that regulation is unnecessary and would slow natural gas development. In 2004, EPA issued a report, based primarily on a review of the literature, that concluded that the injection of hydraulic fracturing fluids into CBM wells poses little threat to underground sources of drinking water and requires no further study; however, EPA noted that very little documented research has been done on the environmental impacts of injecting fracturing fluids.6 EPA also noted that estimating the concentration of diesel fuel components and other fracturing fluids beyond the point of injection was beyond the scope of its study.7 The report has been criticized by some, and the EPA Inspector General has been asked to review a whistle-blower's assertions that EPA's findings are scientifically unfounded.8 (For more information, see CRS Report RL32873, Selected Environmental Provisions Related to the Omnibus Energy Bill (H.R. 6), 109th Congress, and CRS Report RL32262, Selected Legal and Policy Issues Related to Coalbed Methane Development.) Appendix B: Oil and Gas Exploration and Production Defined (Sec. 328, House Bill) The issue of how oil and gas exploration and production facilities are defined in the Clean Water Act (CWA) arises from stormwater permitting rules for small construction sites and municipal separate storm sewer systems that were issued by the Environmental Protection Agency (EPA) in 1999 and became effective March 10, 2003. Those rules, known as Phase II of the CWA stormwater program, require most small construction sites disturbing one to five acres and municipal separate storm sewer systems serving populations of up to 100,000 people to have a CWA discharge permit. The permits require pollution-prevention plans describing practices for 5 (...continued) and BJ Services Company, Halliburton Energy Services, Inc., and Schlumberger Technology Corporation, Dec. 12, 2003. 6 Ibid. p. 4-1. 7 Ibid. p. 4-12. 8 Letter (and technical analysis) to Senators Wayne Allard and Ben Nighthorse Campbell and Representative Diana DeGette from Weston Wilson, U.S. Environmental Protection Agency, Region 8, Oct. 8, 2004. CRS-246 curbing sediment and other pollutants from being washed by stormwater runoff into local water bodies. Phase I of the stormwater program required construction sites larger than five acres (including oil and gas facilities) and larger municipal separate storm sewer systems to obtain discharge permits beginning in 1991. As the March 2003 compliance deadline approached, EPA authorized a two-year extension of the Phase II rules for small oil and gas construction sites to allow the agency to assess the economic impact of the rule on that industry. In March 2005 EPA extended the exemption until June 2006 and said it would propose a specific rule for small oil and gas construction sites by September 11, 2005. EPA had initially assumed that most oil and gas facilities would be smaller than one acre in size and thus excluded from the Phase II rules, but recent Department of Energy data indicate that several thousand new sites per year would be of sizes subject to the rule. The provision in the House-passed version of H.R. 6 is identical to one in H.R. 6/S. 2095 in the 108th Congress, making EPA's delay permanent and making it applicable to construction activities at all oil and gas development and production sites, regardless of size, including those previously covered by Phase I rules. Industry has argued that the stormwater rule creates costly permitting requirements, even though the short construction period for drilling sites carries little potential for stormwater runoff pollution. Supporters say the amendment is intended to clarify existing CWA language. Opponents argue that the provision does not belong in the energy legislation, and that there is no evidence that construction at oil and gas sites causes less pollution than other construction activities, which are regulated under EPA's stormwater program. Appendix C: Clean Air Coal Program (Sec. 441 House, Sec. 956 Senate) A total of $500 million over FY2006-FY2010 would be authorized for pollution control projects to control mercury, nitrogen dioxide, sulfur dioxide emissions, particulate matter, or more than one pollutant; and allow use of the waste byproducts. Additional authorizations totaling $2.5 billion over FY2007-FY2013 would be provided for projects using coal-based electrical generation equipment and processes, and associated environmental control equipment. Project selection criteria would be based on significantly improving air quality, replacing less efficient units, and improving thermal efficiency. Up to 25% of projects would be cogeneration or other gasification projects. At least 25% of the projects would be solely for electrical generation, with priority for those generating less than 600 MW. Federal loans or loan guarantees would not exceed 30% of the total funds obligated during any fiscal year. The federal share of projects funded would not exceed 50%. No technology funded by the program, or level of emissions reduction achieved by funded projects, would be considered adequately demonstrated for purposes of Sections 111, 169, or 171 of the Clean Air Act. CRS-247 Appendix D: Price-Anderson Nuclear Liability Coverage (Secs. 601-612) Current Law. Under Price-Anderson, the owners of commercial reactors must assume all liability for nuclear damages awarded to the public by the court system, and they must waive most of their legal defenses following a severe radioactive release ("extraordinary nuclear occurrence"). To pay any such damages, each licensed reactor must carry financial protection in the amount of the maximum liability insurance available, which was increased by the insurance industry from $200 million to $300 million on January 1, 2003. Any damages exceeding that amount are to be assessed equally against all covered commercial reactors, up to $95.8 million per reactor (most recently adjusted for inflation on August 20, 2003). Those assessments -- called "retrospective premiums" -- would be paid at an annual rate of no more than $10 million per reactor, to limit the potential financial burden on reactor owners following a major accident. According to the Nuclear Regulatory Commission (NRC), 103 commercial reactors are currently covered by the Price-Anderson retrospective premium requirement. Funding for public compensation following a major nuclear incident, therefore, would include the $300 million in insurance coverage carried by the reactor that suffered the incident, plus the $95.8 million in retrospective premiums from each of the 103 currently covered reactors, totaling $10.2 billion. On top of those payments, a 5% surcharge may also be imposed, raising the total per-reactor retrospective premium to $100.6 million and the total potential compensation for each incident to about $10.7 billion. Under Price-Anderson, the nuclear industry's liability for an incident is capped at that amount, which varies depending on the number of covered reactors, the amount of available insurance, and an inflation adjustment that is made every five years. Payment of any damages above that liability limit would require congressional approval under special procedures in the act. The Price-Anderson Act also covers contractors who operate hazardous DOE nuclear facilities. The liability limit for DOE contractors is the same as for commercial reactors, excluding the 5% surcharge, except when the limit for commercial reactors drops because of a decline in the number of covered reactors. Because two closed reactors had been covered until recently (for a total of 105), the liability limit for commercial reactors, minus the surcharge, had been $10.4 billion, which remains the liability limit for DOE contractors. Price-Anderson authorizes DOE to indemnify its contractors for the entire amount, so any damage payments for nuclear incidents at DOE facilities would ultimately come from the U.S. Treasury. However, the law also allows DOE to fine its contractors for safety violations, and contractor employees and directors can face criminal penalties for "knowingly and willfully" violating nuclear safety rules. However, Section 234A of the Atomic Energy Act specifically exempts seven non-profit DOE contractors and their subcontractors. Under the same section, DOE automatically remits any civil penalties imposed on non-profit educational institutions serving as DOE contractors. Policy Context. The Price-Anderson Act's limits on liability were crucial in establishing the commercial nuclear power industry in the 1950s. Supporters of the Price-Anderson system contend that it has worked well since that time in ensuring CRS-248 that nuclear accident victims would have a secure source of compensation, at little cost to the taxpayer. However, opponents contend that Price-Anderson subsidizes the nuclear power industry by protecting it from some or most of the financial consequences of the worst conceivable accidents. Because no new U.S. reactors are currently planned, missing the deadline for extension has had little immediate effect on the nuclear power industry, as existing reactors continue to be covered. For the first time in more than 20 years, however, several U.S. utilities have announced that they are considering whether to build new reactors. It is unlikely that any such projects would move forward without Price- Anderson coverage. A lapse in Price-Anderson would also affect all subsequently signed DOE nuclear facility contracts, which would have to use alternate indemnification authority. Appendix E: Electric Reliability Standards (Sec. 1211) In both the House- and Senate-passed bills, this provision would require that FERC establish a regional advisory body if requested by at least two-thirds of the states within a region that have more than half of their electric load served within that region. The advisory body would be composed of one member from each participating state in the region, appointed by the Governor of each state, and could provide advice to the ERO or FERC on reliability standards, proposed regional entities, proposed fees, and any other responsibilities requested by FERC. The entire reliability provision would not apply to Alaska or Hawaii. Under the House version, the state of New York would be authorized to develop rules that would result in greater reliability for New York, as long as those rules do not result in lower reliability for neighboring states. Both House- and Senate- passed H.R. 6 would require the ERO to be funded through contributions from its utility members. The Congressional Budget Office (CBO) determined that, under the Unfunded Mandates Reform Act (UMRA) of 1995,9 these contributions would constitute an unfunded mandate both on the private sector and intergovernmentally, because both private sector utilities and those run by local governments (munis) would be obligated to contribute. The House-passed H.R. 6 would limit the total amount "of all dues, fees, and other charges collected by the ERO" to $50,000,000 annually, with no adjustment for inflation, through 2015. This limit was initially included in the House-passed H.R. 6 to avoid a point of order based on the budget resolution. UMRA limits would not apply to dues collected from Canadian utilities, and it is unclear whether the $50,000,000 limit on the ERO budget applies to fees collected from U.S. and Canadian utilities or just the U.S. utilities' contributions.10 This limit would restrict the cost of this mandate to less than the 9 P.L. 104-4, 109 Stat. 48 et seq. 10 According to NERC, Canadian utilities contribute approximately 12.5% to the total NERC budget, leaving U.S. utilities contributing approximately $45,500,000 to the 2005 NERC (continued...) CRS-249 threshold at which UMRA subjects congressional consideration of legislation containing intergovernmental mandates to a point of order. The 2005 budget for NERC and all of its regional entities, however, is $51,950,000, of which munis contributed approximately $6,370,000, and the ERO would be required to engage in functions beyond what NERC already performs. One new function is the ability of the ERO to impose and collect penalties. A $50,000,000 cap on all dues, fees, and other charges that can be collected by the ERO could limit the penalties that could be collected by the ERO. CBO provided no separate estimate for the cost of the mandates in this subtitle, but estimated that House-passed H.R. 6 as a whole contains both intergovernmental and private sector unfunded mandates that would exceed the applicable thresholds. The CBO estimate stated that the cost of complying with intergovernmental mandates, in aggregate, could be significant and likely would exceed the threshold established in UMRA ($62 million in 2005, adjusted annually for inflation) at some point over the next five years because CBO expects future damage awards for state and local governments under the bill's safe harbor provision (title XV) would likely be reduced.11 House-passed Section 1211(c) would authorize to be appropriated not more than $50 million per year for fiscal years 2006 through 2015 for all activities under the amendment to the Federal Power Act that creates the ERO. This is in addition to the dues paid by the ERO members. It is unclear whether FERC would be the sole recipient of the $50 million annual authorization since section 1211(b) specifically states that the ERO, and its regional entities, are not Departments, agencies, or instrumentalities of the United States Government. The proposed legislation is intended to provide federal jurisdiction over activities that are required to support reliability of the U.S. bulk power system. Clarifying FERC authority to establish and regulate an ERO is intended to improve reliability as restructuring of the U.S. bulk power system proceeds. Similar provisions were included in the conference report of H.R. 6 in the 108th Congress. Advocates of giving FERC authority over the ERO contend that central jurisdiction would provide more accountability. FERC would be ultimately responsible for reliability issues. If the penalties employed by the ERO were not successful, then FERC would have the authority to enforce penalties for entities that did not comply with reliability standards. Establishing this new relationship between FERC and the ERO would have the potential to improve coordination between market functions and reliability functions. Similar legislation has been introduced during the past several sessions of Congress, but has not been enacted, despite general support. Minor opposition to this proposal has centered on giving FERC jurisdiction over bulk power system reliability, contending that FERC has no 10 (...continued) budget. 11 Congressional Budget Office. Letter to Honorable David Dreier. April 19, 2005. The safe harbor provision would potentially provide a liability shield for all those who might be sued for supplying a defective renewable fuel or methyl tertiary butyl ether (MTBE). CRS-250 experience in this area. If FERC is given this authority, it would have to rely on the ERO for much of its expertise. Placing FERC in this position may add to the uncertainty associated with the changes in institutional structure as FERC takes on this new role. Appendix F: Standard Market Design (House Sec. 1235, Senate Sec. 1234) Under the NOPR, FERC would assert jurisdiction over all power transmission, including service to bundled retail customers. Commissioners from 15 states (Alabama, Arkansas, California, Georgia, Idaho, Kentucky, Louisiana, Mississippi, New Hampshire, North Carolina, South Carolina, Oregon, South Dakota, Washington, and Wyoming) have argued that the SMD proposal usurps state authority. On August 15, 2002, state regulators from 22 states and the District of Columbia (Illinois, Indiana, Iowa, Michigan, Minnesota, Missouri, Montana, North Dakota, Ohio, Oklahoma, Texas, Wisconsin, Delaware, the District of Columbia, New Jersey, New York, Pennsylvania, West Virginia, Connecticut, Maine, Massachusetts, New Hampshire, and Rhode Island) released a statement that "voiced support for FERC's ongoing effort to remedy undue discrimination in the use of the nation's interstate high voltage transmission system in order to create a truly competitive bulk power market." Some industry groups have voiced concerns about the implementation of SMD. On April 28, 2003, FERC staff issued Wholesale Power Market Platform, a White Paper intended to clarify FERC's SMD proposal. The White Paper responds to approximately 1,000 sets of formal comments submitted to FERC. In the White Paper, FERC states its intention to eliminate a proposed requirement that utilities join an Independent Transmission Provider. Instead, the final rule would require utilities to join an RTO or ISO. In the NOPR, FERC proposed to assert jurisdiction over the transmission component of bundled retail service. The White Paper reverses this position and states that the final rule will not assert new FERC jurisdiction over bundled retail sales. Some state officials have expressed concern that the proposed rule would infringe on state authority. FERC responded to this in the White Paper by clarifying that the final rule would not include a requirement for a minimum level of resource adequacy. In addition, the final rule would eliminate the NOPR's requirement that Firm Transmission Rights be auctioned. The White Paper noted that each RTO or ISO would need to have a cost recovery policy outlined in its tariff, but each region may differ on how participant funding would be used. In addition, FERC stated that the final rule would allow for phased implementation to address regional differences. The report language that accompanied the FY2003 Consolidated Appropriations Resolution asked the Department of Energy to analyze the SMD NOPR's impact on wholesale electricity prices, and the safety and reliability of generation and CRS-251 transmission facilities.12 DOE issued its report to Congress on April 30, 2003, but did not include changes from FERC's White Paper in its analysis. DOE, in part, quantitatively analyzed the wholesale and retail price impacts of SMD using two economic models: General Electric's Multi-Area Production Simulation (MAPS) and DOE's Policy Office Electricity Modeling System (POEMS). Some of the assumptions that DOE uses are: the annual increase in electricity demand is assumed to be approximately 1.8% per year from 2005 to 2020; most regions are assumed to have reserve margins of 15%; current environmental laws and regulations are assumed to apply; generator efficiency for fossil steam plants is assumed to be 2% to 4% higher in new RTO regions with SMD. In the non-SMD case, the models were not able to take into account freezes on retail rates in states that are transitioning to competitive markets, and no increase in transmission capacity is assumed. Under the SMD case, a 5% increase in transmission capability by 2005 is assumed by DOE due to improved operational efficiency at regional seams. In addition, DOE assumes that adopting the SMD would result in some savings that are difficult to quantify but would be a result of several factors including the consolidation of control areas from the currently existing 150, the possible avoidance of capital cost and software expenditures that would have been needed at existing control centers, improved regional planning, and consistency of market design. DOE assigns a 10% savings due to these efficiency improvements. DOE believes that the assumptions used in the models are conservative and result in an underestimation of the net economic benefits of the SMD. DOE calculates the median cost of FERC's SMD rule to be about $760 million per year, or about 21 cents per megawatt-hour. The model's range for uncertainties is estimated to be about $100 million. The cost varies significantly by region, ranging from 47 cents per megawatt-hour for GridFlorida to 12 cents per megawatt- hour for PJM.13 Regions with existing RTOs have zero additional costs. Under the SMD case, the effects of SMD on retail rates are influenced to a significant extent by whether the states in question have cost-of-service regulation or competitive retail choice. DOE found that for some importing regions with cost-based rates, the net result could be increased costs associated with wholesale purchases, which would be passed through to retail customers. For some exporting regions with cost-based rates, additional utility revenues from exports are expected to lead to lower retail prices for the region under the SMD case. In contrast, in regions in which most states have adopted retail choice, increased electricity exports are expected to lead to higher market-clearing prices in the short-term markets and somewhat higher consumer prices. However, in areas such as California that are projected to see increased imports, lower wholesale prices and lower prices for consumers are expected. DOE found that the magnitude of the projected changes, both positive and negative, decreases through 2020. Overall, DOE projects the net benefit for all consumers would be about $1 billion per year over the first six years, after factoring in the estimated $760 million per year and RTO costs. Over the long-term (2016-2020), the 12 Conference report H.Rept. 108-10 to accompany H.J.Res. 2. 13 The PJM control area includes all or parts of Delaware, Illinois, Indiana, Kentucky, Maryland, Michigan, New Jersey, North Carolina, Ohio, Pennsylvania, Tennessee, Virginia, West Virginia and the District of Columbia. CRS-252 net benefit is expected to be about $700 million per year. However, the projected change in retail prices varies by region. The mid-Atlantic region is expected to see a 4% decrease in retail prices, but Illinois, Wisconsin, and Arizona are expected to have a 3% increase in retail prices as a result of SMD. Appendix G: Cogeneration and Small Power Production Purchase and Sale Requirements (Sec. 1253) In addition to PURPA, the Fuel Use Act of 1978 (FUA) helped qualifying facilities (QFs) become established.14 Under FUA, utilities were not permitted to use natural gas to fuel new generating technology. QFs, which are by definition not utilities, were able to take advantage of abundant natural gas as well as new generating technology, such as combined-cycle plants that use hot gases from combustion turbines to generate additional power. These technologies lowered the financial threshold for entrance into the electricity generation business as well as shortened the lead time for constructing new plants. FUA was repealed in 1987, but by this time QFs and small power producers had gained a portion of the total electricity supply. This influx of QF power challenged the cost-based rates that previously guided wholesale transactions. Before implementation of PURPA, FERC approved wholesale interstate electricity transactions based on the seller's costs to generate and transmit the power. Since nonutility generators typically do not have enough market power to influence the rates they charge, FERC began approving certain wholesale transactions whose rates were a result of a competitive bidding process. These rates are called market-based rates. This first incremental change to traditional electricity regulation started a movement toward a market-oriented approach to electricity supply. Following the enactment of PURPA, two basic issues stimulated calls for further change: whether to encourage nonutility generation and whether to permit utilities to diversify into non-regulated activities. The Energy Policy Act of 1992 (EPACT) removed several regulatory barriers for entry into electricity generation to increase competition of electricity supply.15 However, EPACT does not permit FERC to mandate that utilities transmit exempt wholesale generator (EWG) power to retail consumers (commonly called "retail wheeling" or "retail competition"), an activity that remains under the jurisdiction of state public utility commissions. PURPA began to shift more regulatory responsibilities to the federal government, and EPACT continued that shift away from the states by creating new options for utilities and regulators to meet electricity demand. 14 P.L. 95-620. 15 P.L. 102-486. CRS-253 Proponents of PURPA repeal -- primarily investor-owned utilities (IOUs) located in the Northeast and in California -- argue that their state regulators' "misguided" implementation of PURPA in the early 1980s has forced them to pay contractually high prices for power they do not need. They argue that, given the current environment for cost-conscious competition, PURPA is outdated. The PURPA Reform Group, which promotes IOU interests, strongly supports repeal of §210 of PURPA contending that the current law's mandatory purchase obligation is anti-competitive and anti-consumer. Opponents of mandatory purchase requirement repeal (independent power producers, industrial power customers, most segments of the natural gas industry, the renewable energy industry, and environmental groups) have many reasons to support PURPA as it stands. Mainly, their argument is that PURPA introduced competition in the electric generating sector and, at the same time, helped promote wider use of cleaner, alternative fuels to generate electricity. Since the electric generating sector is not yet fully competitive, they argue, repeal of PURPA would decrease competition and impede the development of the renewable energy industry. Additionally, opponents of PURPA repeal argue that it would result in less competition and greater utility monopoly control over the electric industry. Some state regulators have expressed concern that §210 repeal would prevent them from deciding matters currently under their jurisdiction. Appendix H: Repeal of the Public Utility Holding Company Act of 1935 (House Sec. 1263, Senate Sec. 1273) Historically, electricity service was defined as a natural monopoly, meaning that the industry has (1) an inherent tendency toward declining long-term costs, (2) high threshold investment, and (3) technological conditions that limit the number of potential entrants. In addition, many regulators have considered unified control of generation, transmission, and distribution as the most efficient means of providing service. As a result, most people (about 75%) are currently served by a vertically integrated, investor-owned utility. As the electric utility industry has evolved, however, there has been a growing belief that the historic classification of electric utilities as natural monopolies has been overtaken by events and that market forces can and should replace some of the traditional economic regulatory structure. For example, the existence of utilities that do not own all of their generating facilities, primarily cooperatives and publicly owned utilities, has provided evidence that vertical integration has not been necessary for providing efficient electric service. Moreover, recent changes in electric utility regulation and improved technologies have allowed additional generating capacity to be provided by independent firms rather than utilities. The Public Utility Holding Company Act and the Federal Power Act (FPA) of 1935 (Title I and Title II of the Public Utility Act) established a regime of regulating electric utilities that gave specific and separate powers to the states and the federal government. A regulatory bargain was made between the government and utilities. CRS-254 In exchange for an exclusive franchise service territory, utilities must provide electricity to all users at reasonable, regulated rates. State regulatory commissions address intrastate utility activities, including wholesale and retail rate-making. State authority currently tends to be as broad and as varied as the states are diverse. At the least, a state public utility commission will have authority over retail rates, and often over investment and debt. At the other end of the spectrum, the state regulatory body will oversee many facets of utility operation. Despite this diversity, the essential mission of the state regulator in states that have not restructured is the establishment of retail electric prices. This is accomplished through an adversarial hearing process. The central issues in such cases are the total amount of money the utility will be permitted to collect and how the burden of the revenue requirement will be distributed among the various customer classes (residential, commercial, and industrial). Under the FPA, federal economic regulation addresses wholesale transactions and rates for electric power flowing in interstate commerce. Federal regulation followed state regulation and is premised on the need to fill the regulatory vacuum resulting from the constitutional inability of states to regulate interstate commerce. In this bifurcation of regulatory jurisdiction, federal regulation is limited and conceived to supplement state regulation. FERC has the principal functions at the federal level for the economic regulation of the electric utility industry, including financial transactions, wholesale rate regulation, transactions involving transmission of unbundled retail electricity, interconnection and wheeling of wholesale electricity, and ensuring adequate and reliable service. In addition, to prevent a recurrence of the abusive practices of the 1920s (e.g., cross-subsidization, self-dealing, pyramiding, etc.), SEC regulates utilities' corporate structure and business ventures under PUHCA. The electric utility industry has been in the process of transformation. During the past two decades, there has been a major change in direction concerning generation. First, improved technologies have reduced the cost of generating electricity as well as the size of generating facilities. Prior preference for large-scale -- often nuclear or coal-fired -- powerplants has been supplanted by a preference for small-scale production facilities that can be brought on line more quickly and cheaply, with fewer regulatory impediments. Second, this has lowered the entry barrier to electricity generation and permitted non-utility entities to build profitable facilities. One argument for additional PUHCA change has been made by electric utilities that want to further diversify their assets. Currently under PUHCA, a holding company can acquire securities or utility assets only if the SEC finds that such a purchase will improve the economic efficiency and service of an integrated public utility system. It has been argued that reform to allow diversification would improve the risk profile of electric utilities in much the same way as in other businesses: the risk of any one investment is diluted by the risk associated with all investments. Utilities have also argued that diversification would lead to better use of under-utilized resources (due to the seasonal nature of electric demand). Utility holding companies that have been exempt from SEC regulation argue that PUHCA discourages diversification because the SEC could repeal exempt status if exemption would be "detrimental to the public interest." CRS-255 For a number of years there has been significant bipartisan congressional support for repealing much of PUHCA. Since the 1980s, the Securities and Exchange Commission has testified before Congress that many provisions of PUHCA are no longer relevant and other provisions are redundant with state and other federal regulations.16 However, as a result of Enron's dealings and collapse, some in Congress have taken a somewhat different view toward significantly amending or repealing PUHCA.17 Even though Enron had claimed exemption from PUHCA, on February 6, 2003, Securities and Exchange Commission Chief Administrative Law Judge Brenda P. Murray denied Enron's PUHCA exemption applications of April 12, 2000, and February 28, 2002, amended on May 31, 2002.18 In the case of Enron, PUHCA, and many other laws, did not deter or prevent fraudulent filing of information with the SEC. State regulators have expressed concerns that increased diversification could lead to abuses, including cross-subsidization: a regulated company subsidizing an unregulated affiliate. Cross-subsidization was a major argument against the creation of exempt wholesale generators (EWGs) and has reemerged as an argument against further PUHCA change. In the case of electric and gas companies, non-utility ventures that are undertaken as a result of diversification may benefit from the regulated utilities' allowed rate of return. Moneymaking non-utility enterprises would contribute to the overall financial health of a holding company. However, unsuccessful ventures could harm the entire holding company, including utility subsidiaries. In this situation, opponents fear that utilities would not be penalized for failure in terms of reduced access to new capital, because they could increase retail rates. Appendix I: Continuation of Transmission Security Order (Sec. 1441) In 2002, a 24-mile 330-megawatt (MW) transmission cable was installed beneath the seabed of Long Island Sound between Connecticut and Long Island. Shortly after the line was installed, it was determined that in several places the cable was not buried to depths specified in permits issued by the U.S. Army Corps of Engineers (Corps) and the Connecticut Department of Environmental Protection (CDEP). While the Corps determined that operation of the cable would not pose environmental or navigational harm and did not object to the operation of the transmission line, the CDEP objected to the operation of the line based on procedural grounds. CDEP's position was that operation of the cable would violate the permit, unless the cable was installed to the permitted depth requirements. CDEP denied a request to modify the permit. On June 12, 2003, Cross-Sound, the owners of the cable, filed a new permit application with the CDEP. However, on June 26, 2003, Connecticut Governor John 16 Testimony is available at [http://www.sec.gov/news/testimony/021302tsich.htm]. 17 See [http://www.house.gov/commerce_democrats/press/107ltr129.shtml]. 18 Initial Decision Release No. 222 (File No. 3-10909) can be found at [http://www.sec.gov/ litigation/aljdec/id222bpm.htm]. CRS-256 Rowland signed into law a bill extending a prohibition on considering permits or applications related to certain infrastructure crossings of the sound. On August 14, 2003, the Northeast experienced a widespread electric blackout. In response, Secretary of Energy Spencer Abraham issued an emergency order to energize the cross-sound cable. This order was rescinded on May 7, 2004. Long Island Power Authority (LIPA) and Cross-Sound filed a petition with FERC to have the cable re- energized by July 1, 2004. At a June 17, 2004, FERC meeting, Chairman Pat Wood asked the parties to negotiate a settlement within seven days, after which FERC was ready to issue an order. On June 25, 2004, the parties came to an agreement and the cross-sound cable was re-energized. Appendix J: Deadline for Decision on Appeals under the Coastal Zone Management Act (Sec. 2013) Current Law. The consistency provisions in Section 307 of the CZMA guides state consideration of whether a proposed federal activity will be compatible with a federally approved and state-administered coastal zone management plan. Since the first state plan was approved in the mid-1970s, there has been considerable friction between states and federal agencies over the reach of the consistency provisions. States have sought broader application to have a strong role in decisions about the largest possible array of proposed federal activities, while the federal government has sought narrower interpretations, especially relating to offshore energy development. Determining an exact boundary separating actions on which the state is to have a primary role in halting a proposal from actions on which the state does not have such powers has been a subject of federal appeals and litigation, including decisions by the U.S. Supreme Court (notably Secretary of the Interior v. California, 464 U.S. 312 (1984)), in which the court determined that the sale of oil and gas leases on the outer continental shelf was not an act affecting the coastal zone). When a state and a federal agency cannot reach an agreement on a consistency determination, the law and regulations lay out an elaborate process for resolving that disagreement. Most disagreements are resolved through this process, but if no agreement can be reached, the final step is an appeal to the Secretary of Commerce to make a decision. Appeals to the Secretary have not been common. According to citations of appeals posted on the website of the Office of Ocean and Coastal Resource Management in the National Oceanic and Atmospheric Administration (NOAA) (viewed May 12, 2005), 38 consistency determinations were appealed to the Secretary between 1984 and 1999, and 19 of them involved proposed activities by oil companies. The appeals process, like all other aspects of consistency, is currently covered under a final rule issued by NOAA in the December 8, 2000, Federal Register. Section 319 in current law has less detail than the proposed amendment. It states that the Secretary will either issue a final decision on the appeal or publish a notice in the Federal Register stating why a decision cannot be reached within 90 days after the record has closed. If the Secretary publishes a notice that a decision CRS-257 has not been made, that decision must be issued within 45 days of the date of publication of that notice. Policy Context. Consistency appeals have been contentious and, in some instances, the appeals process has dragged on for long time periods. The 1996 amendments in Section 319 were meant to address those delays by establishing some time limits. This has proved unsatisfactory to some, who seek additional statutory language that would remove decisions about deadlines from the unpredictable rulemaking process by defining the length of component steps in law, and therefore the overall process, after an appeal to the Secretary has been filed. The consistency provision creates an unusual relationship where states can halt most federal actions that are incompatible with state interests. When enacted, the consistency requirement was viewed as a main reason why states would pursue development and implementation of coastal plans since the other incentive to participate, federal financial grants, always has been modest. This view appears to have some validity, as 34 of the 35 eligible states and territories are now administering federally approved coastal management programs. Appendix K: Domestic Offshore Energy Reinvestment (Sec. 2053) Policy Context. This is the most recent of repeated efforts to allocate a portion of federal offshore oil and gas revenues to coastal states to assist them in addressing the impacts of these activities. Recent Congresses, starting with the 105th, considered numerous similar legislative proposals. These proposals came to be known as CARA, or the Conservation and Reinvestment Act. In the 106th Congress, the House passed a version of CARA on May 11, 2000 (H.R. 701). Some of these proposals were also reflected in the Clinton Administration's Lands Legacy Initiative proposal in 2000, and also a one-time $150 million appropriation provided in the FY2001 Commerce appropriations legislation (P.L. 106-553) for coastal impact assistance. Support for the CARA proposals, which would also have funded many related federal natural resource protection programs, grew as the budget deficit of the early and mid-1990s was replaced by forecasts of a surplus, as protecting natural resources came to be viewed as part of the effort to address sprawl, and as efforts and support to secure federal funding for coastal resource protection and restoration efforts grew. With the replacement of the budget surplus forecast with deficit forecasts and changing national priorities since the 9/11 terrorist attacks, broad support for wide- ranging legislation like CARA has declined, but interest has remained in returning a portion of the money currently paid to the federal government by private companies leasing offshore areas to those locations most affected by the offshore activity. ------------------------------------------------------------------------------ For other versions of this document, see http://wikileaks.org/wiki/CRS-RL33006