House Barton Energy Bill compared with Senate Bingaman/Daschle Energy Bill

Updated as of 3/26/02 Crane comments 4/23/02 – There are pending amendments, including several electricity amendments to S.517 as of 4/23/02. It is unclear which amendments will be agreed to and attached to the bill.

***Red text signifies amendments that have been agreed to by the Senate as of 4/22/023/22/02***

Major Electricity Provisions	Barton bill (H.R. 4)	Bingaman/Daschle (S.517) As of 4/18/023/24/02 [with Thomas & other adopted amendments]	Comments
Regional coordination	No counterpart.	SEC. 101 Expresses federal policy to encourage state coordination on a regional basis. Puts DOE in charge of providing technical assistance to groups of states and calls for an annual conference organized by DOE. Renewable energy added to the list of programs eligible for technical assistance. Renewable energy added to the list of programs eligible for technical assistance.	Bingaman: Little in bill that fosters regional coordination policy objective. Both Bingaman and Barton are fed-centric bills.
Reliability	No role for states. [However consists of NERC/EEI language upon which WGA added modifications for Thomas amendment.] Does provide for deference and delegation of standard setting and enforcement on interconnection-wide basis. Preempts state reliability rules that are inconsistent with North American (NERC) or regional reliability rules	SEC 207 Directs FERC to set reliability standards. FERC may delegate responsibility to RTOs, NERC, or regional councils. Preempts state reliability actions that conflict with FERC’s wishes. Provides no role for states in setting standards, or influencing other governance issues.Senator Thomas amendment includes WGA/WICF/NERC/NARUC reliability language. Requires FERC to establish regulations authorizing ERO’s to delegate proposing and enforcing reliability standard authority to regional entities. Requires ERO’s to take steps to be recognized in Mexico and Canada. Nothing in this section preempts State’s authority. Establishes a Regional Advisory Body to provide advice to ERO’s, and to determine if standards are just, reasonable, and not unduly discriminatory or preferential, and FERC may give deference to this body.	Barton: Contrary to WGA policies. Fails to include provisions for regional advisory bodies of states. Bingaman: Contrary to policy objective of the bill because the bill provides no role for states acting on a regional basis. Bill provides no deference for standards set on an interconnection-wide basis.The Thomas amendment establishes strong State language, consistent with WGA’s policy objectives, and further decreasesprevents FERC's from having sole power over reliability authority.
Interconnection	At distribution level, FERC sets technical requirements and back up power requirements. At transmission level, FERC sets interconnection standards and back up power requirements.	SEC 205 Requires FERC to set technical standards and procedures for the interconnection of generation facilities used for the generation electric energy sold in interstate commerce. Requires utilities to interconnect distributed generation if it meets states technical and cost allocation standards.	Barton: FERC (not states) set technical standards for interconnection. FERC appears to set criteria for determining and allocating interconnection costs . FERC sets the criteria states must use in determining the rates that a utility can charge for backup power. Bingaman: FERC authority could reach down to solar panels on residences. This is a major intrusion into State authority. WGA policy recommends that states act to eliminate barriers to distributed generation.
Net metering	If state or non-regulated utility provisions for net metering fail to meet FERC established standards, FERC imposes its standards. States can have standards that are more conducive to net metering than FERC’s and can limit total amount of customer generation.	SEC 245 Requires utilities to offer net metering service. S.AMDT 3003 still requires this service.	Barton: This is a major intrusion into state authority. All states in the Western Interconnection already have net metering laws. Bingaman: This is a complete preemption of states.
Demand response	FERC must adopt demand response programs, but FERC’s programs must not displace existing demand response programs.	SEC 241 Requires a utility to offer real-time pricing if a customer asks for it. Requirement can be overridden by state PUC action taken within 1 year of enactment of the bill. SEC 241 amended (S.AMDT 3002) adding “time-of-use” section requiring every utility to offer time-of-use rates to customers requesting this service.	Barton: This is a major intrusion into state authority and will likely result in one-size-fits-all demand response programs (e.g., buying back load, real time pricing) that undermine state innovation. WGA policies supports utility and state action to improve price signals to consumers and demand exchange tariffs.
Open access Open Access cont.	Requires open transmission access by all FERC jurisdictional and non-jurisdictional utilities, except federal PMAs and ERCOT. Small utilities may be exempted from requirement. Requires recovery of utility stranded costs if a state or local government creates a local distribution company.	SEC 201 and SEC 209 Similar to Barton. Does not require action by state and municipal utilities that would jeopardize their tax exempt bond status. Prohibits policies that penalize intermittent (e.g., wind) generators. Definition of unregulated transmitting utility changed to exclude utilities selling at wholesale within a single state. SEC 208 “SEC 217 (S.AMDT 3001) amended to require that rates not unduly prejudice or disadvantage intermittent generators, strikes the “rebuttable presumption of no adverse impact” language with regard to intermittent generators who collectively comprise 20% or less of total generation, ensures complete cost recovery for transmitting utility courtesy of the intermittent generators, and removes the long-term contract requirement when possibly requiring transmitting utilities to offer access to nonfirm transmission service.	This would short circuit a pending Supreme Court decision on FERC’s power to order open transmission access.
RTOs RTO’s cont.	Directs FERC to order transmitting utilities to join an RTO in 12 months. Prohibits FERC from using incentives/penalties (e.g., deny authority to sell power at market-based rates) to force participation in RTOs. Requires FERC to set uniform market rules. Automatically approves the geography of an RTO if the proposed RTO passes a cost/benefit test (the burden is on FERC to prove the applicant’s cost/benefit analysis is wrong) OR the RTO has sufficient generation within its boundary to meet load, can manage transmission congestion with little help from neighboring RTOs, and serves at least 50,000 MW of load. Directs FERC to set “uniform market rules.” If RTO applicants don’t like FERC’s action on their application, they can get a court review of FERC’s decision.	No provision. Therefore by implication supports current FERC actions to mandate the scope, size and composition of RTOs-	Barton: An RTO has no requirement to respond to state market power concerns. There is no state role in RTOs (other than FERC consultation with states). It is not clear if the requirement of “uniform market rules” will allow for differences in rules that may be required to meet conditions in the Western Interconnection. This section does not apply to ERCOT. Bingaman just dropped provision to avoid controversy and since FERC was already implementing through orders.
Transmission expansion	Requires FERC to provide incentives for transmission construction. Among other requirements, transmission pricing must be consistent with gas pipeline pricing. Potential reach into distribution assets if determined necessary to assure reliability, support interstate markets, expand transmission capacity needed to sustain growth in wholesale competition.	No Provision-- [Pending amendment, Sen. Landrieu (La), specifies that new generators pay for new transmission, and not system at large, unless the trnasmisson is necessary for reliability.]	Barton: The language may require FERC to adopt an “open season” system of paying for new transmission, rather than spreading the costs of new transmission to all consumers.
Eminent domain	Gives FERC the power of eminent domain if a state: does not have the authority to approve transmission facilities; does not approve a transmission line proposal within 1 year, or conditions its approval in a way that makes the project uneconomic; or delays its approval for more than 1 year.	No provision.-	Barton: This is contrary to WGA policies. It does nothing to fix major transmission issues in the West, which is securing rights-of-way across federal lands. In granting eminent domain, FERC is not even required to hold a hearing in the affected state. The bill presents no findings to the problem being addressed. For example, no state in the Western Interconnection has ever denied a permit for an interstate transmission line and many of the claims being made about states blocking transmission proposals in the East are bogus.
Market information	--	SEC 208 Requires a publicly-available system to provide information on wholesale market prices and transmission services. Allows FERC to keep some information confidential. Strike SEC. 202 – SEC 206 are struck or stricken and replaced with S.AMDT 3000. This amendment increases the value a public utility facility must be before it has to secure an order from the Commission from $1 million to $10 million, exempts facilities that will exclusively sell retail power from having to secure an order from the Commission, requires expeditious processing of applications, changes the definition by which the Commission must determine justness of market based rates and adds a five month window for the refund effective date to the language in the underlying bill that initially required the refund “ [the day] on which the complaint is filed.” It also strikes the transmission interconnection provision.	Bingaman: During the Western electricity crisis states had difficulty getting access to needed information. Enron debacle may indicate additional info needs to be provided.
BPA	Provides BPA special treatment regarding RTO participation under which BPA determines the conditions under which it will participate in an RTO and has the ability to terminate its participation in an RTO if it determines the RTO is failing to meet the terms and conditions BPA set for its participation in the RTO. Directs BPA to negotiate contracts with aluminum smelters to ensure long-term economic operation of the smelters.	-No RTO requirements-
WAPA	Requires WAPA to join RTOs like other utilities.	--No RTO requirements
PUHCA	Repeals, but provides state access to books.	Subtitle B Similar to Barton. Also requires FERC approval for disposition of electric or gas utility assets of more than $1 million. Requires study by federal agency task force that would, among other things, evaluate the role of PUCs in regulating competition. There are no state members or task force. States given the power to obtain holding company books and records without first instituting a proceeding.	Enron debacle may indicate need for additional oversight controls and need for more detailed information.
PURPA	Repeals and requires FERC to ensure that utilities do not absorb any power purchases costs under PURPA.	Subtitle C Similar to Barton.	Mandatory recovery of costs by utilities undercuts state PUC authority.
Trade practices	Allows the FTC to set and enforce rules on slamming and cramming. States can have rules, but such rules must be not be inconsistent with FTC rules.	SEC 253 Similar to Barton: SEC 256 amended with S.AMDT 3004 providing much stronger “State” language with regard to Subtitle D – Consumer Protection. S.AMDT 3014 established the Office of Consumer Advocacy within the Department of Justice to oversee FERC matters on rates.	Provision largely unnecessary since it is believed that Western states authorizing retail access have adopted similar protections. If the FTC adopts weak rules that do not protect consumers, this section could be used to block stronger state rules (as DOT has done to block state transportation regulations).
Privacy	FTC may adopt privacy rules. States can have rules that provide greater protection.	SEC 252 Similar to Barton.	Barton: Federal rules may be unnecessary. The FTC will decide whether state rules provide greater protection.
Information disclosure	--	SEC 251 FTC to set rules on billing information utilities must provide to customers, including nature of service provided, prices, fuels used to generate electricity being consumed, and emissions.	Bingaman: Inserts FERC into state decisions on billing information. Preempts, rather than assists state efforts to provide information to consumers on fuel sources and emissions.
Aggregation	Prohibits any state or local government from blocking the ability of an entity to aggregate load in a retail access state.	No Provision--
State public purpose charges	Says the Federal Power Act does not affect the authority of a state to establish public purpose charges.	No Provision--	Barton: The listing of areas included in a public purpose charge may lead to challenges if states adopt or now impose charges for purposes beyond those listed, for instance: distribution franchise tax, gross receipts tax, tax compliance charges, etc
Retail access	Says the Federal Power Act does not affect authority of states to decide whether to require retail access.	No Provision--
Universal and affordable service	Expresses sense of Congress that everyone should have access to affordable power, and states should ensure that retail competition does not result in a loss of service.	No Provision--	Barton: Rather than expressing platitudes about what the states should do, Congress should put up money to ensure access to affordable power.
Greenhouse gases	-HR 4: No counterpart-	SEC 242 (a) (9) Requires utilities to implement a 10 year plan to increase efficiency of fossil fuel plants. Requires utilities to implement a 10-year plan to increase efficiency of fossil fuel plants.
Renewable production incentive	HR 4 expands 1.7 cents/Kwhr to all renewables and extends for ten years.--	SEC 261 Expands incentive beyond wind and biomass to landfill gas, incremental hydropower and ocean energy. S.AMDT 3060 strikes SEC 264 providing for Rural Construction Grants. S.AMDT 3065 defines a “nonprofit electric cooperative” rather than “an electricity generating cooperative exempt from taxation” as a qualified renewable energy facility to participate in the Renewable Energy Production Incentive Program.	Bingaman: Incentive is counterpart of federal tax credit for tax-exempt entities. Tax incentive may be part of Senate Finance Committee package that hasn’t been released yet.
Federal renewable energy purchase requirement	--	SEC 263 Requires the federal government to buy an increasing amount of renewable energy, with a preference for power generated on Indian lands. SEC 263 amended by S.AMDT 3005 which adds municipal waste to definition of renewable energy, and requires a biennial report on the progress of this section.
Grants for rural areas	--	SEC 264 Authorizes ($20 m) for grants to public entities and tribes for efficiency, renewables, and modernization of facilities. In addition to Indian tribes, Tribal Colleges or Universities are eligible for rural electrification grants. S.AMDT 3059 subtitle E – “Rural and Remote Community Fairness Act” established to authorize rural and remote community electrification grants. $100 million is appropriated for this program for each FY 03-09.
Renewable portfolio standard	-No counterpart to annual standard-	SEC 265 Requires that a certain percentage of power sold at retail be from new renewable generation beginning at 2.5% in 2005 and rising .5% annually to 2020. Provides for a credit trading program (with double credits for generation on Indian lands). States can set more stringent requirements. S.AMDT 3016 (Bingaman) reduces phase-in of RPS standard to 1% in 2005 increasing to 10% in 202015 and provides credit for exisitng eligible RPS generation, so over-all increase is only 8.5%. is the current RPS and has been substantially altered from the underlying bill. S.AMDT 3049 clarifies the definition of biomass to include trees with diameter < 12” , slash, mill residue, and brush.	A nation-wide credit program should significantly expand renewable generation in the West which generally has the highest quality renewable energy resources.
Renewables on federal lands	No explicit counterpart.-	SEC 266 Requires pilot program to develop wind and solar on federal lands. DOE can pay up to 15% of the cost of such projects. Requires wind and solar development to be considered in BLM and Forest Service land use plans. Pilot program for wind and solar energy facilities developed by Sec.’s Interior, Energy, Ag is to be a cost-share demonstration program.
Hydro relicensing	-HR 4 -	Section replaced with H.R. 4Hydro relicensing title
Indian program	-HR 4: Indian gov’ts are qualified generators under renewables provisions.-	TITLE IV Indian energy program title, including feasibility study of combined wind and hydro on the Missouri river. Sec. of Energy required to report to Congress on Indian tribes use of federal power allocations.
Nuclear Nuclear cont.	-Separate House bill for Price Anderson- HR 4 extends nuclear power plant licensing period to 40 yrs; takes nuclear waste fund off-budget; $340 million for Portsmouth Facility, $254 million for gas centrifuge and $30 million for in-situ uranium mining technologies.	TITLE V Reauthorizes Price-Anderson Act on nuclear liability. Limits sales by federal government of uranium hexafloride. Prohibits reactivation of the fast flux reactor. Date for reports on next renewal of the Price-Anderson Act changed from 2013 to 2008. Exemption from civil penalties for not-for-profit contractors clarified. Prohibition on uranium sales replaced by volume limitations on sales from the DOE’s uranium stockpile. Authorization levels for thorium remediation replaced by authorization levels in the House-passed bill. (S.AMDT 2995) Establishes a program that will result in regulatory approvals and design completion in a phased approach with joint government/industry cost sharing to allow for the construction and startup of new nuclear plants by 2010. Appropriations will be “as necessary.” S.AMDT 3009, established an Office of Spent Nuclear Fuel Research within DOE. S.Amdt 3024, Limits antitrust reviews to DOJ only, reserves decommissioning resources from loss during bankruptcy (even by a former owner) by creating an exception to discharge before all other creditor claims are met.

Other Major Provisions	H.R. 4	Bingaman/Daschle (S.517) As of 4/18/023/24/02	Comments
Indian Lands Energy Development		TITLE IV Establishes Indian Energy Office in DOI. Provides 90% loan guarantees for energy projects, with $2 billion total guarantee cap and other incentives for siting on Indian lands.	Provision should assist in CSP projects in southwestern states.
Arctic Coastal Plain Energy Development	Authorizes 2,000 acres for lease for oil and gas exploration within ANWR with limited NEPA update requirements.	TITLE VII Authorizes 80%, up to $10 billion loan guarantees for gas pipeline from the north slope to Alberta, providing application submitted within 6 months of enactment. Route Neutral. Use existing pipeline application procedures for remaining links due to interties with existing transport infrastructure. The bill has picked the southern route by prohibiting the issuance of any permit which would authorize the transport of Alaska North Slope natural gas via a pipeline running offshore in the Beaufort Sea between Alaska and Canada (S.AMDT 2980). Some safety included in the amendments. (sec 721, 722) S. AMDT 3069 creates the Alaska Natural Gas Pipeline Act of 2002 to provide a statutory framework for the expedited approval, construction, and initial operation of an Alaska natural gas transportation project.	HR 4 does not address the gas pipeline. Senate floor amendment specifiying route along TAPS to Fairbanks to ALCAN highway to Alberta rather than arctic shelf to Canadian NW Territories to Alberta. Senate Floor amendment and cloture on ANWR. Gas industry and pipeline interests split on route designation. NAM strongly supports pipeline, fears rise in nat gas prices as economy rebounds, with industry moving when prices reach $3.50-4.00 mcf. API, NPRA, NAM and other industry & labor groups support opening ANWR.
Oil & Gas Production	Provides incentives for federal leasing by cost reductions, reducing admin burdens and accelerating decisions	TITLE VI Authorizes $60 million/yr to assure timely leasing and accelerating admin practices on federal lands. Authorizes DOE to establish an orphaned & abandoned oil and gas well program to clean-up environmental hazards on Fed lands and to provide technical assistance to States to address the same problems.	Environmental support for clean-up provisions. API, NPRA, NAM support these production incentives, but see them as modest.
Increased vehicle fuel efficiency	Requires a reduction of 5 billion gals of gasoline in light truck fleet in model yrs 2004-10. Federal fleet to increase fuel economy.	TITLE VIII SEC 822 establishing the “National Motor Vehicle Efficiency Improvement Program” is struck or stricken by S.AMDT 3007.	NAM will oppose increase in CAFÉ standards.
Alternative & Renewable Fuels Alternative & Renewable Fuels cont	Federal fleet incentives, 20 pilot programs for alternative fueled/ultra-low diesel fleets and green school bus program. Over $200 million authorized.	SEC 819 Applicable quantity of renewable fuel volume to increase by 300 million gallons in each year 2004-2012. A system of credits is established for trading and procurement. Small refineries are exempted until 2008. SEC 821 The head of each executive agency shall determine the average fuel economy for that agencies fleet baseline year of 1999. By Sept. 2003, each fleet’s avg. fuel economy must be at least 1 mpg greater than 1999, and by Sept. 2005, at least 3 mpg greater than 1999. SEC 811 Federal fleets mandated to use 50% alt fuels by 2003, and 75% by 2005 in “dual fueled vehicles.” Federal fleets mandated to use 50% alt fuels if vehicles are equipped and 75% by 2005. Authorizes 4 yr, $260 million, for green school bus pilot programs and fuel cell bus development program. In PADS II, III & IV, renewable content of all motor fuels are to increase from 2.3 to 5 billion gals from 2004-2012. SEC 801 – 811, replaced with S.AMDT 2997, that changes the CAFÉ standards in the underlying bill, replacing them with much “looser” language allowing for phased increases in average fuel economy standards based on the Secretary of Transportations considerations (such as technical and economic). It also increases the time frame to achieve goals. Also strikes the credit trading program and exempts the Department of Defense to requirements that federal fleets procure alternative fueled and hybrid light duty trucks. S AMDT 3141, Directs DOE to develop a Fuel Cell Vehicle Program which assures 100,000 H2-fueled feul cell vehicles to be available for sale in the US by 2010 and 2.5 million of such vehicles by 2020 & annually thereafter. S.Amdt 3088, directs the Secretary of Energy to identify barriers to providing adequate transmission for remote sources of renewable energy, and to provide ways to access the grid that don’t unfairly disadvantage these sources.	API and NPRA strongly opposed to ethanol mandate. API also strongly opposes lowering the distillation index (driveability) of fuel to reduce emissions from cold starts.
Federal Fuel Reformulation & Cleanup	EPA & DOE to study and rationalize boutique fuel blendstock and reduce prices to consumers. LUST authorization increased $200 for MTBE clean-up.	SEC 833 Bans MTBE in 4 yrs, Govs can waive O2 content requirement. Increase LUST authorization by $200 million/yr. New grant program of $250 million to assist merchant methanol plants to change over.	API and NPRA oppose banning MTBE.
Assistance to Low Income Consumers & Energy Efficiency	$17 billion, FY'01-5, LIHEAP $1.4 billion, FY'02-5, Weatherization $400 million, FY'02-5, State energy grants.	TITLE IX LIHEAP funding increased $3.4 billion over 3 yrs, $1.2 billion for weatherization over 3 yrs & 100 million for 2003-2004, 125 million for 2005, and as necessary following that for State Energy Grants. $110/yr State Energy grants. $200 million/yr for schools and $10 million/yr for low income pilot programs.	AIP supports.
Energy Efficiency for Consumer Products	Continues Energy Star program and extends to buildings, FTC appliance labeling. DOE to issue std for standby mode of appliances at 1 watt.	SEC 913 & SEC 914 Energy Star and Energy Labeling continued. Mandated standards for central air conditioners, other products such as transformers and standby modes for appliances. FHA mortgage insurance incentive for energy efficient housing.
Climate Change & Energy Policy	No provision.	SEC 1013 Establishes a National Office of Climate Change Response in Exec Office of the President, $5 million/yr, FY'03-'11, for operations. $4.75 billion over same period for activities at DOE: support technology innovation, & development of a greenhouse gas emissions database including mandatory registry and reporting of such emissions. S.AMDT 3059 subtitle E – “Rural and Remote Community Fairness Act” established to authorize rural and remote community electrification grants. $100 million is appropriated for this program for each FY 03-09. ERIC.. I MOVED THIS TO THE ELECTRIC TITLE UNDER RURAL GRANTS?? REMOVE FROM HERE??	API has concerns with mandatory registry, its membership divided. API and NAM would support extension of 1605(b) program from Energy Policy Act’92, with improvements: assure regularization of activities, certification process of reductions and broadened participation by industrial and business interests.
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