H.R. 3826

Electricity Security and Affordability Act

Date
March 5, 2014 (113th Congress, 2nd Session)

Staff Contact
Emily Leviner

Floor Situation

On Wednesday, March 5, 2014, the House will begin consideration H.R. 3826, the Electricity Security and Affordability Act, under a rule.  H.R. 3826 was introduced on January 9, 2014 by Rep. Ed Whitfield (R-KY) and has ninety-four cosponsors.  The bill was marked up by the House Energy and Commerce Committee on January 28, 2014 and was ordered reported by a vote of 29-19.[1]

Bill Summary

H.R. 3826 provides guidance to the Environmental Protection Agency (EPA) on its pending greenhouse gas (GHG) emissions standards for fossil fuel-fired power plants.  The bill provides two sets of guidelines: one for new plants and another for existing plants. 

For GHG emissions standards developed for new plants, H.R. 3826 requires the EPA to 1) establish separate standards for natural gas and coal-fired power plants; and 2) ensure the standards for coal-fired plants reflect emissions levels that have proven to be achievable using commercially available technologies.  For GHG standards for reconstructed, modified, or existing plants, H.R. 3826 requires “that the EPA Administrator report to Congress on the cost and other impacts, and that the regulation . . . not take effect unless Congress enacts a federal law specifying the effective date.”[1]

H.R. 3826 also “repeal[s] EPA’s earlier proposed rules for new power plants, including the rule announced on September 20, 2013, any subsequently issued rules for new plants that do not meet the requirements of the bill, and any GHG standards or guidelines applicable to modified, reconstructed, or existing plants issued prior to the date of enactment.”[2]



[1] Id. at 2.

[2] Id. at 10 (emphasis added).

Background

In June of 2013, President Obama announced his Climate Action Plan which, in part, directed the EPA to set GHG emissions standards for new and existing fossil fuel-fired power plants.  The President directed that the rules be promulgated pursuant to authority under Section 111 of the Clean Air Act, often called the New Source Performance Standards (NSPS) program.[1]

On September 20, 2013, the EPA announced the proposed GHG emissions standards for new fossil fuel-fired power plants.[2] If finalized, it will mark the first time a uniform national standard on power plant GHG emissions has been imposed.  The proposed regulations create separate emissions limits for natural gas plants and coal powered plants, and would impose a de facto ban on the construction of new coal plants in the U.S.  Although the EPA asserts that coal plants can use carbon capture and storage (CCS) technologies to meet the standard, the new emissions levels are impossible for coal plants to meet using currently available technologies.  The necessary CCS technologies are cost prohibitive and have not been demonstrated at any full scale commercial power plant in the world.[3]  In congressional testimony on the status of DOE’s clean coal programs, the Deputy Assistant Secretary for Clean Coal “testified that CCS for new coal plants could increase electricity costs dramatically, stating that for the first generation technology for a pulverized coal plant adding CCS ‘looks something like a 70 or 80 percent increase on the wholesale price of electricity.’”[4]  Beyond cost and technological concerns, “EPA’s proposed standards for new plants have raised further legal controversy because the Energy Policy Act of 2005 . . . [effectively prohibits] EPA from prematurely mandating use of a technology before it is commercially viable.”[5]  The impact of these regulations, which would effectively eliminate coal as a source of future electricity generation, will extend far beyond the twenty-five states where coal is mined.[6]

EPA is also in the process of developing proposed GHG emissions standards for existing fossil fuel-fired power plants.  “There is significant concern that the agency will seek to set standards that go beyond the scope of the agency’s legal authorities under section 111(d) [of the Clean Air Act].”[7]  In a November 2013 congressional hearing, one state regulator testified that “EPA is not authorized to impose emissions standards on existing sources.  Rather, EPA can only establish a unit-specific guideline that describes what control technologies have been demonstrated.”[8]  Another witness explained that if the proposed standards for existing plants require CCS technologies, “[m]ost, if not all coal-fired units will be forced to retire . . . which would astronomically increase electricity rates and ultimately cause further job losses.”[9]  “While EPA has not yet proposed standards for existing power plants, the costs and job impacts of such regulations have the potential to be very significant given coal-fired power generation currently supplies approximately 40 percent of the nation’s electricity.”[10]



[1] “That statute authorizes EPA, in certain circumstances, to establish standards of performance under Section 111(b) for new stationary sources, and issue guidelines under Section 111(d) for existing stationary sources.”  Id. at 2.

[3] Committee Report at 3.  “EPA maintains in the proposed rule that CCS technologies for new coal-fired power plants have been ‘adequately demonstrated’ for purposes of CAA section 111 based on three government-funded CCS power plant projects under the Department of Energy’s (DOE) Clean Coal Power Initiative, including a project under construction in Mississippi, and two planned projects in Texas and California.  EPA also cites a fourth small-scale, Canadian government-funded CCS post-combustion project under construction in Saskatchewan, Canada.”  Id.  Yet, [n]one of the four government funded projects cited by EPA is in operation, and two of the projects have not yet broken ground.”  Id.

[4] Id. at 7 (emphasis added).

[5] Id. at 5-6. 

[6] American Coalition for Clean Coal Electricity: Coal Facts (Oct. 17, 2013).

[7] Committee Report at 8.

[8] Id. at 9 (emphasis added).

[9] Id. (emphasis added).

[10] Id.

Cost

According to CBO estimates, “Implementing H.R. 3826 would cost $2 million over the 2015-2019 period, subject to the availability of appropriated funds.”  Enacting the bill would not affect direct spending, authorize any new appropriations, or create any new programs.

Amendments

1)         Reps. Smith (R-TX) and Schweikert (R-AZ) Amendment #4Amendment requires the Administrator to apply the specific criteria, under the bill, for setting a standard based on the best system of emission reduction for new sources within the coal category, when setting a standard for any fossil fuel category.

2)         Reps. Capps (D-CA) and McNerney (D-CA) Amendment #5 Amendment allows the EPA to consider all pollution control technologies being used in the United States or elsewhere when setting new power plant emission standards.

3)         Rep. Capito (R-WV) Amendment #1Amendment clarifies that the bill does not preclude a performance standard that is based on a technology developed in a foreign country, as long as that technology has been demonstrated to be achievable at power plants in the United States.

4)         Rep. McKinley (R-WV) Amendment #2Amendment requires the EPA when submitting their report to Congress to consult with the Energy Information Administration; Comptroller General; National Energy Technology Laboratory; and the National Institute for Standards and Technology.

5)         Rep. McKinley (R-WV) Amendment #3Amendments requires the EPA, when reporting to Congress, to look at the economic impact of such rule or guidelines, including the potential effects on: require capital investments and projected costs for operation and maintenance of new equipment required to be installed; and the global competitiveness of the United States.      

6)         Reps. Schakowsky (D-IL) and Lowenthal (D-CA) Amendment #8Amendment accepts the scientific finding of the EPA that greenhouse gas pollution is "contributing to long-lasting changes in our climate that can have a range of negative effects."

7)         Rep. Latta (R-OH) Amendment #7Amendment clarifies that the definition of “demonstration project” refers to projects that are receiving federal government funding or financial assistance.  The amendment responds to an issue raised at markup of the bill that the definition of “demonstration project” as a project receiving government funding or assistance (for purposes of the Energy Policy Act of 2005) was ambiguous. 

8)         Rep. Waxman (D-CA) Amendment #6Amendment provides that the bill takes effect when the Administrator of the EIA certifies that another Federal program, other than one under section 111 of the Clean Air Act, will reduce carbon pollution in at least equivalent quantities, with similar timing and from the same sources as the reductions required under the rules and guidelines nullified by section 4.

Additional Information

For questions or further information contact the GOP Conference at 5-5107.