Senate Energy Committee Reports Energy Bill
On a Near-Unanimous 21-1 Vote
Senate Energy & Natural Resources Committee today approved a bipartisan energy bill that diversifies
The committee reported the bill with a 21-1 vote. Work on the legislation began in January and ended after five days of mark-up.
The bill’s unprecedented conservation and efficiency measures will save 1.1 trillion cubic feet of natural gas by 2020 – equivalent to current annual consumption of
In addition, the bill modernizes and expands the nation’s electricity grid and encourages the design and deployment of advanced nuclear technologies, clean coal technologies and hydrogen technologies aimed at moving
Chairman Domenici’s statement:
“I am proud of this energy bill. I congratulate my Republican and Democrat committee colleagues for their commitment to crafting a bipartisan bill that makes a real difference in
“This committee found a path to compromise on tough issues, including electricity modernization, LNG siting and hydropower relicensing. This is a very good start. I look forward to the kind of productive and cordial debate on the Senate floor that I’ve seen in the committee. I recognize we have a tough conference ahead of us. The Senate bill is different from the House bill in several key areas. But Chairman Barton and I are both determined to deliver a strong energy bill to the President’s desk for his signature. I think that shared resolve will steer us through conference.”
Senator Bingaman’s statement:
“What the Committee has done is a real achievement. This bill pushes forward on developing and commercializing new technologies on the energy supply side that will be cleaner than what we now have in place. It pushes equally hard on the efficiency side. And it sets out the right path forward, in my view, for our electric utility industry. I look forward to continuing to work with Chairman Domenici, so that we have the same thoughtful, bipartisan approach to energy on the Senate floor as we have had in committee.”
Summary of the provisions in the bill:
• Establishes requirements for energy and water savings in Congressional Buildings.
• Requires annual reduction in the consumption of energy by federal buildings.
• Strengthens requirements that federal managers procure energy efficient products.
• Extends the Energy Savings Performance Contracts program.
• Encourages business and industry to enter into voluntary programs with the Department of Energy to reduce energy consumption by not less than 2.5% annually.
• Establishes energy efficiency standards for federal buildings.
• Authorizes $1.23 billion for three years for weatherization assistance.
• Encourages States to periodically revise and upgrade their energy conservation plans.
• Authorizes the expenditure of up to $250 million over five years to provide rebates to consumers purchasing energy efficient appliances.
• Creates a grant program to help States and Local governments encourage the construction of energy efficient public buildings.
• Establishes a model building energy code compliance program.
• Establishes educational programs to heighten consumer awareness of the benefits of energy efficiency and energy conservation.
• Establishes energy conservation standards for a number of products including commercial refrigerators, freezers, and refrigerator-freezers, battery chargers, distribution transformers, commercial clothes washers, dehumidifiers, commercial ice makers and commercial package air conditioning and heating equipment.
• Encourages electric and natural gas utilities to reduce energy consumption.
• Directs the President to develop and implement measures to save 1 million barrels of oil per day by 2015.
• Provides for an ongoing assessment of renewable energy resources.
• Extends existing authority for incentive programs for production of renewable electricity by nonprofit electric utilities.
• Requires the Federal government to purchase a set amount of electric energy from renewable resources.
• Requires an update of energy plans for insular areas.
• The use of biomass from Federal or Indian lands is encouraged by the creation of two grant programs to produce electric energy or heat from biomass and to improve biomass utilization technology.
• The program encourages removal of hazardous fuels from the highest risk areas on Federal and Indian lands and development of new technologies to use biomass.
• Updates the Geothermal Steam Act by amending the leasing provisions to provide for a competitive leasing system.
• Also directs other actions that will facilitate new development of geothermal resources.
• Reforms the hydropower licensing process of the Federal Power Act:
• Allows a 2mw hydropower project in
• Amends the State of
• Sets an 8-billion gallon renewable fuels standard by 2012 and exempts
• Provides critical research related to the country’s most abundant fossil resource: coal.
• Authorizes a Clean Coal Power Initiative, providing $200 million annually for clean coal research in coal-based gasification and combustion technologies. The Secretary of Energy is directed to set increasingly restrictive emission targets over the life of the program to develop state-of-the-art technology.
• Amends several provisions of the Mineral Leasing Act governing the Federal Coal Leasing Program, including those pertaining to: lease modifications to avoid the bypass of coal; mining requirements for logical mining units; payment of advance royalties; and the deadline for submission of a coal lease operation and reclamation plan.
• The Electricity Title improves grid reliability, promotes transmission infrastructure development and security, reduces regulatory uncertainty, and increases consumer protections.
• Subtitle A establishes mandatory reliability rules.
• Subtitle B addresses transmission siting; third-party financing of transmission; and research programs related to transmission upgrades and improvements.
• Subtitle C authorizes FERC to exercise limited jurisdiction over unregulated transmitting utilities to ensure open access to the transmission grid; protects transmission access for native load customers;. and terminates FERC’s proposed rulemaking on Standard Market Design.
• Subtitle D directs FERC to issue rules on transmission pricing policies and authorizes FERC to approve a participant funding cost allocation plan as long as it results in just and reasonable rates.
• Subtitle E amends the Public Utility Regulatory Policies Act of 1978 (PURPA). It prospectively repeals the requirement for mandatory purchase from qualifying facilities by electric utilities if a competitive market exists and establishes new criteria for qualifying cogeneration facilities.
• Subtitle F bans market manipulation; prohibits false statements; addresses market transparency; increases penalties for violations of the Federal Power Act; changes the refund effective date from 60 days after the date of filing to the date of filing; protects consumers against unfair trade practices; and establishes the Office of Consumer Advocacy in the Department of Energy.
• Subtitle G defines new terms in the Federal Power Act.
• Subtitle H makes technical and conforming changes to the Federal Power Act.
• Repeals the Public Utility Holding Company Act of 1935 (PUHCA) to encourage investment in the nation’s electricity infrastructure.
• Amends Section 203 of the Federal Power Act to allow FERC to review the acquisition by an electric or transmitting utility holding company of a gas utility company.
• The new Section 203 would also require FERC to approve a public utility’s acquisition of generation facilities that are subject to FERC jurisdiction for ratemaking purposes. It applies to transactions valued in excess of $10,000,000 and requires FERC to consider factors such as effects on markets, rates, and regulation when evaluating whether a transaction is consistent with the public interest.
• Section 203 would require FERC to make an additional finding that a transaction will not result in cross-subsidizations of associate companies to the detriment of the utility.
• Section 203 requires FERC to adopt rules for the expeditious consideration of applications.
• Also bans traders convicted of market manipulate from holding officer or director positions in utility companies.
• Provides for programs to ensure that nuclear energy remains a major component of the Nation’s energy supply.
• Price Anderson liability protection is extended through 2016 for both NRC licensees and DOE contractors.
• Coverage is indexed for inflation, and non-profit contractors of the Department are made subject to payment of penalties assessed for nuclear safety violations.
• Provides for the export of high enriched uranium to
• Requires the DOE to propose a permanent disposal facility to Congress for Greater Than Class C waste with one year of enactment.
• A research, development, and construction project is authorized for a new test reactor to be constructed at the Idaho National Laboratory.
• The reactor will serve as a national test bed for advanced reactor technologies that provide improved attributes over existing plants, and for co-generation of hydrogen by nuclear energy.
Vehicles and Fuels:
• Strengthens the requirement that federal vehicle fleets use alternate fuels in those vehicles
that are capable of using such fuels and requires the Secretary of Energy report to the congress on the use of alternative fuels.
• Sunsets the alternate fuel vehicle requirements for covered vehicle fleets in 2015. The program was originally conceived as a means of reducing petroleum consumption by substituting alternative fuels in large fleets of vehicles in large fleets.
• Authorizes appropriations for implementation and enforcement of federal fuel economy standards.
• Creates a federal/industry research partnership to improve railroad engine fuel efficiency and environmental performance.
• Directs the Secretary of Energy to develop a program to encourage energy conservation through the use of bicycles as a substitute for vehicular transportation.
• Establishes a program to promote the reduction of engine idling in heavy vehicles to reduce fuel consumption and air emissions.
• Establishes a program to encourage the purchase of stationary and vehicular hydrogen fuel cell systems.
• Directs the Secretary to conduct a broad-based research program supporting private sector efforts in hydrogen and fuel cell development, including production, storage, distribution and use of hydrogen; and fuel cell applications for transportation and stationary uses.
• Sets a goal of enabling the private sector to make a commercialization decision on fuel cell vehicle production hydrogen for transportation by 2015.
• Requires enhanced public education and university research in fundamental sciences, application design and systems concepts, including materials, subsystems, manufacturability, maintenance and safety.
• Directs the Secretary to transfer critical hydrogen and fuel cell technologies to the private sector and to foster the exchange of non-proprietary information.
• Establishes demonstration programs for hydrogen technologies and fuel cell vehicles for light-duty and heavy-duty vehicles.
• Supports the timely development of safety codes and standards related to fuel cell vehicles, hydrogen energy systems, and stationary fuel cells.
Research and Development:
• Creates the Next Generation Lighting Initiative, a public-private partnership to develop advanced solid-state lighting devices. These devices are longer lasting and more energy efficient and cost-effective than incandescent or fluorescent lighting.
• Establishes the National Building Performance Initiative to integrate Federal, State, and voluntary private sector efforts to reduce the costs of construction, operation, maintenance, and renovation of buildings to improve energy efficiency.
• Requires the Secretary to conduct research and development efforts to ensure the reliability, efficiency, and environmental integrity of the nation’s electrical transmission and distribution systems.
• Requires the Secretary to conduct cutting-edge research and development in renewable energy, including bioenergy from celluosic feedstocks, concentrating solar power, ocean energy, and cogeneration of hydrogen and electricity from renewable sources.
• Requires the Secretary to support education in nuclear engineering and nuclear-related technologies through grants to university departments for research and support for facilities.
• Requires the Secretary to investigate new techniques to reduce the volume and toxicity of spent fuel from commercial nuclear reactors.
• Creates a program to study measures to improve the safety and security of nuclear facilities from natural disasters and deliberate attacks.
• Directs the Secretary to survey industrial applications of large radioactive sources and to establish a research program aimed at developing alternatives to these sources that would reduce safety, environmental, and proliferation risks associated with these large sources.
• Establishes a program to research and develop technologies to capture carbon dioxide emissions from coal-fired power plants and to safely store these emissions so that they are permanently isolated from the atmosphere.
• Encourages research and development on methane hydrates, an unconventional form of fossil fuel that exists in potentially huge reserves off
Incentives for Innovative Technologies:
• Creates a unified, comprehensive program for encouraging the commercialization of a broad spectrum of new technologies that provide clean, renewable
• The technologies have to avoid, reduce of sequester air pollutants or man-made greenhouse gasses, and the technology has to be new or significantly improved over what is available in the marketplace.
• The guarantees can only be for 80 percent of the cost of a project – the developers will share in the risk.
• Constructs the program in accordance with the Federal Credit Reform Act.
• Requires the cost of the guarantee to be paid in advance through appropriations or payment from those seeking the loan guarantee in the amount determined by CBO to reflect the risk of default.
Oil and Gas:
• Provides permanent authority to operate the Strategic Petroleum Reserve and other energy programs.
• Permanently authorizes the Northeast Home Heating Oil Reserve (NHOR). Established in 2000, the NHOR holds two million barrels of emergency fuel stocks stored at commercial tank farms. Two million barrels would give Northeast consumers adequate supplies for approximately 10 days, the time required for ships to carry heating oil from the Gulf of Mexico to
• Authorizes the federal government to continue to receive physical quantities of oil and gas royalty-in-kind payments provided the Secretary determines that receiving royalties in-kind provides benefits to the United States greater than or equal to those that it would have received in-value.
• Marginal property production incentives: Requires the Secretary to use the authority available to the Secretary as of one day prior to the date of enactment to accept and consider petitions and either approve or disapprove a petition for relief on marginal wells within 90 days after the date of receipt.
• Provides incentives for natural gas production from deep wells in the shallow waters of the
• Authorizes that the suspension of royalties for leases in water depths greater than 400 meters in the Planning Areas outlined in section (a) shall be established at volumes enumerated in subsection (b). This section authorizes that Secretary to have discretion based upon market price in placing limitations upon royalty relief granted.
• Amends the Naval Petroleum Reserve Production Act by transferring leasing provisions for the National Petroleum Reserve-Alaska from the Interior and Related Agencies Appropriations Act of 1981 to the Naval Petroleum Reserve Production Act.
• Directs the Secretary of the Interior in cooperation with the State of Alaska, North Slope Borough, Arctic Slope Regional Corporation and other federal agencies, to establish a long term effort to improve coordination and collection of scientific information needed by regulatory and land management agencies in managing public resources on the North Slope of Alaska.
• Provides a five-year, $20,000,000 annual authorization to the Secretary of the Interior to develop a program to remediate, reclaim, and close, orphaned, abandoned, or idled wells on Federal land.
• Combined hydrocarbon leasing – This section amends the Mineral Leasing Act to authorize the Secretary of the Interior to issue separately, for the same area, a lease for tar sand and a lease for oil and gas. It also requires a lease for tar sand to be issued using the same bidding process, annual rental, and posting period as a lease issued for oil and gas.
• Alternate energy-related uses on the outer Continental Shelf: This section seeks to protect the economic and land use interests of the
• Preservation of geological and geophysical data: This section directs the Secretary of the Interior to develop a data preservation program, working in cooperation with the States to archive geological, geophysical, and engineering data and samples related to oil and gas development.
• Oil and gas lease acreage limitations: Amends the Mineral Leasing Act provision relating to the limitation on the amount of acreage that can be held by a person under lease in any one state.
• Requires the Secretary of the Interior to arrange for the National Academy of Public Administration to perform a review of Federal onshore oil and gas leasing practices and report to Congress within 18 months.
• Directs the Secretaries of the Interior and Agriculture to improve administration of Federal oil and gas leasing programs including the improvement of inspection and enforcement of oil and gas activities. It also requires the development and implementation of best management practices.
• Requires the Secretaries of the Interior and the Secretary of Agriculture to enter into a memorandum of understanding to improve coordination and consultation on oil and gas leasing activities.
• Creates a pilot project to improve Federal permit coordination in six western BLM offices. This section requires the Secretary of the Interior to establish a Federal Permit Streamlining Pilot Project that requires that relevant federal agencies deploy staff to work with BLM land managers as a team on all environmental permits and land use planning documents in order to coordinate and improve Federal decision-making with respect to the permits. The section directs the Secretary of the Interior to assign such additional personnel to the six BLM offices as necessary to ensure effective implementation of the Pilot Program.
• Energy facility rights-of-way and corridors on Federal land: This section requires the Secretary of the Interior, with respect to public lands, and the Secretary of Agriculture, with respect to National Forest System lands, to designate utility corridors in Western States and to incorporate such corridors into land use and resource management plans within 24 months following enactment of the section. The section also requires the Secretary of Energy to develop a memorandum of understanding with the Secretary of the Interior, the Secretary of Agriculture, and the Secretary of Defense to coordinate applicable Federal authorizations and environmental reviews related to a proposed or existing utility facility.
• Oil shale leasing: This section requires the Secretary of the Interior to make lands available, within one year, to lease for the purpose conducting research and development activities that will lead to new technology for producing oil from oil shale. The Secretary is also required to complete a programmatic environmental impact statement within 18 months on leasing public lands for commercial leasing. It also requires a report analyzing a potential program for leasing oil shale for commercial development and to update resource information by conducting a National Oil Shale Assessment.
• Coastal impact assistance program: This section amends the Outer Continental Shelf Lands Act and authorizes to be appropriated to the Secretary revenues of $500,000,000 annually from FY 2006 to 20011. These Outer Continental Shelf revenues are to be disbursed to the coastal states and political subdivisions not under federal leasing moratoria for certain dedicated authorized uses. This section also directs states to submit to the federal government a coastal impact assistance plan in a prescribed time period.
• Clarifies FERC’s exclusive jurisdiction under the Natural Gas Act for siting, construction, expansion and operation of import/export facilities located onshore or in State waters. This section does not provide FERC eminent domain authority over siting LNG facilities.
• Codifies FERC’s Hackberry policy. In Hackberry, FERC allowed for sole propriety ownership of an LNG terminal (eliminating open access requirements) as a way to encourage site development.
• Allows FERC to grant new storage capacity market-based rate treatment, notwithstanding the fact the applicant may have market power, if (1) it is in the public interest, (2) it is needed storage capacity, and (3) customers are adequately protected.
• Establishes FERC as the lead agency for NEPA purposes and provides FERC authority to set schedules for required Federal authorizations. Agencies with jurisdiction over natural gas infrastructure are encouraged to coordinate their proceedings with the timeframe established by FERC. If a schedule deadline is not met, the President may issue a decision.
• Increases penalties under the Natural Gas Act and Natural Gas Policy Act, parallel to increases in the Federal Power Act ($5,000 to $1,000,000). This section also creates a civil penalty under Natural Gas Act.
• Amends the Natural Gas Act to ban any “manipulative or deceptive device or contrivance” (as those terms are used in section 10(b) of the Securities Exchange Act of 1934 (15 U.S.C. 78j (b))), in connection with jurisdictional natural gas transactions, that are in violation of FERC rules.
• Authorizes FERC to establish an electronic information system to provide information about the price or transportation costs of natural gas in interstate commerce. This section requires FERC to exempt from disclosure information the disclosure of which would be detrimental to the operation of an effective market or which would jeopardize system security. This section shall not affect the CFTC’s exclusive jurisdiction with respect to commodities under the Commodity Exchange Act. This section provides that FERC shall not compete with private sector publishers of energy prices.
• Amends the CZMA by establishing a 270-day period in which the Secretary of Commerce must close the decision record. The Secretary may stay the 270-day clock for up to 60 days to acquire supplemental information regarding the consistency determination or clarifying information from a party to the proceeding related to information already in the record. The section provides that the Secretary has 90 days after the record is closed (90 days after the 270 to 330 days, if stayed 60 days) to issue a decision or explain why it cannot, in which case the Secretary has an additional 45 days to issue a decision. In total, this section allows for 1 year and 100 days for the Secretary to complete action on an appeal of a consistency determination.
• Directs the Secretary of Energy, in cooperation and consultation with Secretary of Transportation, Secretary of Homeland Security, FERC, and Governors of coastal states, to convene at least 3 forums to discuss LNG siting issues such as siting, safety, and emergency response. The purpose of the forums is to identify and develop best practices related to LNG and to foster cooperative efforts.
• Instructs the DOI to make an assessment of oil and gas resources in the Outer Continental Shelf.
• Bans traders convicted of market manipulation from serving as directors or officers of utility companies.
• This title, referred to as the Indian Tribal Energy Development and Self Determination Act of 2005, assists Indian Tribes in the development of Indian energy resources by increasing Tribes’ internal capacity to develop their own resources.
• Provides grants, low-interest loans, loan guarantees and technical assistance, and streamlines the approval process for Tribal leases, agreements, and rights-of-way so that outside parties have more incentive to partner with Tribes in developing energy resources.
• Included in this title are provisions creating an Office of Indian Energy Policy and Programs within the Department of Energy to support the development of tribal energy resources.
• Makes Dine Power Authority, a Navajo Nation enterprise, eligible for funding under this title.
• Directs the Secretary of Housing and Urban Development to promote energy efficiency for Indian housing.
• The title also provides a complete substitute for title 26 of the Energy Policy Act of 1992.
• Sections 2602 and 2603 instructs the Secretary of Interior to develop an Indian energy resource development program to provide grants and low-interest loans to tribes to develop and utilize their energy resources and to enhance the legal and administrative ability of tribes to manage their resources.
• Section 2602 also directs DOE to develop a program to support and implement research projects that provide tribes with opportunities to participate in carbon sequestration practices.
• Section 2602 creates a DOE loan guarantee program and directs the Energy Secretary to give priority to any project using new technology, such as coal gasification, carbon capture and sequestration or renewable energy-based electricity generation.
• The DOE Secretary shall provide guarantees for no more than $2 billion at any time.
• Section 2604 establishes a process by which an Indian tribe, upon demonstrating its technical and financial capacity and receiving approval of their Tribal Energy Resource Agreement, could negotiate and execute energy resource development leases, agreements and rights-of-way with third parties without first obtaining the approval of the Secretary of the Interior.
• Section 2604 also requires the Department of Interior to conduct a periodic review of tribal activities under the TERA and requires the tribes to monitor the activities of their business partners.
• Section 2606 authorizes WAPA to make power allocations to meet the firming and reserve needs of Indian-owned energy projects and acquire power generated by Indian tribes for firming and reserve needs, so long as the rates and terms are competitive.
• Section 2607 authorizes a study of wind and hydropower potential along the
Personnel and Training:
• Requires establishment of training guidelines for electric energy industry personnel and centers for building technologies and power plant operations training.
• Directs increased activity by the Department of Energy to improve recruitment of under-represented groups into energy professions.
• Establishes research fellowships for energy research to encourage and support outstanding young scientists and engineers and outstanding senior researchers.
• Creates a new Assistant Secretary position and expresses the sense of the Congress that the position should be used to improve management of Nuclear Energy at the Department of Energy, and grants the Secretary of Energy authority to enter into other transactions as appropriate to further research, development, or demonstration goals of the Department.
Sec.1601.Energy and water saving measures in congressional buildings.
Sec.1602.Increased hydroelectric generation at existing Federal facilities.
Sec.1603.Alaska Natural Gas Pipeline.
Sec.1604.Renewable energy on Federal land.
Sec.1605.Coal bed methane study.
Sec.1606.Backup fuel capability study.
Sec.1607.Indian land rights-of-way.
Sec.1608.Review of Energy Policy Act of 1992 programs.
Sec.1609.Study of feasibility and effects of reducing use of fuel for automobiles.
Sec.1610.Hybrid distributed power systems.
Sec.1611.Mobility of scientific and technical personnel.
Sec.1613.Report on research and development program evaluation methodologies.
Sec.1614.Transmission system monitoring study.
Sec.1615.Interagency review of competition in the wholesale and retail markets for electric energy.
Sec.1616.Study on the benefits of economic dispatch.
Sec.1617.Study of rapid electrical grid restoration.
Sec.1618.Development of cogeneration.
Sec.1619.Study on inventory of petroleum and natural gas storage.
Sec.1620.Natural gas supply shortage report.
Sec.1621.Split-estate Federal oil and gas leasing and development practices.
Sec.1622.Resolution of Federal resource development conflicts in the
Sec.1623.Study of energy efficiency standards.
Sec.1625.Oil bypass filtration technology.
Sec.1626.Total integrated thermal systems.
Sec.1628.Reliability and consumer protection assessment.
# # #
Democratic Communications Director
Senate Energy & Natural Resources