H.R. 1689 (111th): Carbon Capture and Storage Early Deployment Act

111th Congress, 2009–2010. Text as of Mar 24, 2009 (Introduced).

Status & Summary | PDF | Source: GPO

I

111th CONGRESS

1st Session

H. R. 1689

IN THE HOUSE OF REPRESENTATIVES

March 24, 2009

(for himself, Mr. Upton, Mr. Dingell, Mr. Barton of Texas, Mr. Rahall, Mr. Whitfield, Mr. Murtha, Mr. Costello, Mr. Holden, Mr. Pomeroy, Mr. Davis of Alabama, Mr. Doyle, Mr. Hill, Mr. Butterfield, and Mr. Wilson of Ohio) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committee on Science and Technology, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To accelerate the development and early deployment of systems for the capture and storage of carbon dioxide emissions from fossil fuel electric generation facilities, and for other purposes.

1.

Short title

This Act may be cited as the Carbon Capture and Storage Early Deployment Act .

2.

Definitions

(1)

Secretary

The term Secretary means the Secretary of Energy.

(2)

Distribution utility

The term distribution utility means an entity that distributes electricity directly to retail consumers under a legal, regulatory, or contractual obligation to do so.

(3)

Electric utility

The term electric utility has the meaning provided by section 3(22) of the Federal Power Act (16 U.S.C. 796(22)).

(4)

Fossil fuel-based electricity

The term fossil fuel-based electricity means electricity that is produced from the combustion of fossil fuels.

(5)

Fossil fuel

The term fossil fuel means coal, petroleum, natural gas or any derivative of coal, petroleum, or natural gas.

(6)

Corporation

The term Corporation means the Carbon Storage Research Corporation established in accordance with this Act.

(7)

Qualified industry organization

The term qualified industry organization means the Edison Electric Institute, the American Public Power Association, the National Rural Electric Cooperative Association, a successor organization of such organizations or a group of owners or operators of distribution utilities delivering fossil fuel-based electricity who collectively represent at least 20 percent of the volume of fossil fuel-based electricity delivered by distribution utilities to consumers in the United States.

(8)

Retail consumer

The term “retail consumer” means an end-user of electricity.

3.

Carbon Storage Research Corporation

(a)

Establishment

(1)

Referendum

Qualified industry organizations may conduct, at their own expense, a referendum among the owners or operators of distribution utilities delivering fossil fuel-based electricity for the creation of a Carbon Storage Research Corporation. Such referendum shall be conducted by an independent auditing firm agreed to by the qualified industry organizations. Voting rights in such referendum shall be based on the quantity of fossil fuel-based electricity delivered to consumers in the previous calendar year or other representative period as determined by the Secretary pursuant to section 6. Upon approval of those persons representing two-thirds of the total quantity of fossil fuel-based electricity delivered to retail consumers, the Corporation shall be established unless opposed by the State regulatory authorities pursuant to paragraph (2). All distribution utilities voting in the referendum shall certify to the independent auditing firm the quantity of fossil fuel-based electricity represented by their vote.

(2)

State regulatory authorities

Upon its own motion or the petition of a qualified industry organization, each State regulatory authority shall consider its support or opposition to the creation of the Corporation under paragraph (1). State regulatory authorities may notify the independent auditing firm referred to in paragraph (1) of their views on the creation of the Corporation within 180 days after the enactment of this Act. If 40 percent or more of the State regulatory authorities submit to the independent auditing firm written notices of opposition, the Corporation shall not be established notwithstanding the approval of the qualified industry organizations as provided in paragraph (1).

(b)

Termination

The Corporation shall be authorized to collect assessments and conduct operations pursuant to this Act for a 10-year period from the date 6 months after the date of enactment of this Act. After such 10-year period, the Corporation is no longer authorized to collect assessments and shall be dissolved on the date 15 years after such date of enactment, unless the period is extended by an Act of Congress.

(c)

Governance

The Corporation shall operate as a division or affiliate of the Electric Power Research Institute (EPRI) and be managed by a Board of not more than 15 voting members responsible for its operations, including compliance with this Act. EPRI, in consultation with the Edison Electric Institute, the American Public Power Association and the National Rural Electric Cooperative Association shall appoint the Board members under subparagraphs (A), (B), and (C) of paragraph (1) from among candidates recommended by those organizations. At least a majority of the Board members appointed by EPRI shall be representatives of distribution utilities subject to assessments under section 5.

(1)

Members

The Board shall include at least one representative of each of the following:

(A)

Investor-owned utilities.

(B)

Utilities owned by a State agency or a municipality.

(C)

Rural electric cooperatives.

(D)

Fossil fuel producers.

(E)

Non-profit environmental organizations.

(F)

Independent generators or wholesale power providers.

(G)

Consumer groups.

(2)

Nonvoting Members

The Board shall also include as additional non-voting Members the Secretary of Energy or his designee and 2 representatives of State regulatory authorities as defined in section 3(17) of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2602, 3(17)), each designated by the National Association of State Regulatory Utility Commissioners from States that are not within the same transmission interconnection.

(d)

Compensation

Corporation Board members shall receive no compensation for their services, nor shall Corporation Board members be reimbursed for expenses relating to their service.

(e)

Terms

Corporation Board members shall serve terms of 4 years and may serve not more than 2 full consecutive terms. Members filling unexpired terms may serve not more than a total of 8 consecutive years. Former members of the Corporation Board may be reappointed to the Corporation Board if they have not been members for a period of 2 years. Initial appointments to the Corporation Board shall be for terms of 1, 2, 3, and 4 years, staggered to provide for the selection of 3 members each year.

(f)

Status of Corporation

The Corporation shall not be considered to be an agency, department, or instrumentality of the United States, and no officer or director or employee of the Corporation shall be considered to be an officer or employee of the United States Government, for purposes of title 5 or title 31 of the United States Code, or for any other purpose, and no funds of the Corporation shall be treated as public money for purposes of chapter 33 of title 31, United States Code, or for any other purpose.

4.

Functions and administration of the Corporation

(a)

In general

The Corporation shall establish and administer a program to accelerate the commercial availability of carbon dioxide capture and storage technologies and methods, including technologies which capture and store, or capture and convert, carbon dioxide. Under such program competitively awarded grants, contracts, and financial assistance shall be provided and entered into with eligible entities. Except as provided in subsection (g), the Corporation shall use all funds derived from assessments under section 5 to issue grants and contracts to eligible entities.

(b)

Purpose

The purposes of the grants, contracts, and assistance under this section shall be to support commercial-scale demonstrations of carbon capture or storage technology projects capable of advancing the technologies to commercial readiness. Such projects should encompass a range of different coal and other fossil fuel varieties, be geographically diverse, involve diverse storage media, and employ capture or storage, or capture and conversion, technologies potentially suitable either for new or for retrofit applications.

(c)

Eligible entities

Entities eligible for grants, contracts or assistance under this section may include distribution utilities, electric utilities and other private entities, academic institutions, national laboratories, Federal research agencies, State research agencies, non-profit organizations, or consortiums of 2 or more entities. Pilot-scale and similar small-scale projects are not eligible for support by the Corporation.

(d)

Administration

The members of the Board of Directors of the Corporation shall elect a Chairman and other officers as necessary, may establish committees and subcommittees of the Corporation, and shall adopt rules and bylaws for the conduct of business and the implementation of this Act. The Board shall appoint an Executive Director and professional support staff who may be employees of the Electric Power Research Institute. After consultation with the Technical Advisory Committee established under section 10, the Secretary, and the Director of the National Energy Technology Laboratory to obtain advice and recommendations on plans, programs, and project selection criteria, the Board shall establish priorities for grants, contracts, and assistance; publish requests for proposals for grants, contracts and assistance; award grants, contracts and assistance competitively, on the basis of merit, after the establishment of procedures that provide for scientific peer review by the Technical Advisory Committee. The Board shall give preference to applications that reflect the best overall value and prospect for achieving the purposes of the Act, such as those which demonstrate an integrated approach for capture and storage or capture and conversion technologies. The Board members shall not participate in making grants or awards to entities with whom they are affiliated.

(e)

Uses of grants, contracts, and assistance

A grant, contract, or other assistance provided under this section may be used to purchase carbon dioxide when needed to conduct tests of carbon dioxide storage sites, in the case of established projects that are storing carbon dioxide emissions, or for other purposes consistent with the purposes of this Act. The Corporation shall make publicly available at no cost information learned as a result of projects which it supports financially.

(f)

Intellectual property

The Board shall establish policies regarding the ownership of intellectual property developed as a result of Corporation grants and other forms of technology support. Such policies shall encourage individual ingenuity and invention.

(g)

Administrative expenses

Up to 5 percent of the funds collected in any fiscal year under section 5 may be used for the administrative expenses of operating the Corporation (not including costs incurred in the determination and collection of the assessments pursuant to section 5).

(h)

Programs and budget

Before August 1 each year, the Corporation, after consulting with the Technical Advisory Committee and the Secretary and the Director of the Department’s National Energy Technology Laboratory and other interested parties to obtain advice and recommendations, shall publish for public review and comment its proposed plans, programs, project selection criteria, and projects to be funded by the Corporation for the next calendar year. The Corporation shall also publish for public review and comment a budget plan for the next calendar year, including the probable costs of all programs, projects, and contracts and a recommended rate of assessment sufficient to cover such costs. The Secretary may recommend program and activities the Secretary considers appropriate.

(i)

Records; audits

The Corporation shall keep minutes, books, and records that clearly reflect all of the acts and transactions of the Corporation and make public such information. The books of the Corporation shall be audited by a certified public accountant at least once each fiscal year and at such other times as the Corporation may designate. Copies of each audit shall be provided to the Congress, all Corporation board members, all qualified industry organizations, each State regulatory authority and, upon request, to other members of the industry. If the audit determines that the Corporation’s practices fail to meet generally accepted accounting principles the assessment collection authority of the Corporation under section 5 shall be suspended until a certified public accountant renders a subsequent opinion that the failure has been corrected.

(j)

Public Access

(1)

The Corporation Board’s meetings shall be open to the public and shall occur after at least 30 days advance public notice. Meetings of the Board of Directors may be closed to the public where the agenda of such meetings includes only confidential matters pertaining to project selection, the award of grants or contracts, personnel matter, or the receipt of legal advice.

(2)

The minutes of all meetings of the Corporation shall be made available to and readily accessible by the public.

(k)

Annual report

Each year the Corporation shall prepare and make publicly available a report which includes an identification and description of all programs and projects undertaken by the Corporation during the previous year. The report shall also detail the allocation or planned allocation of Corporation resources for each such program and project. The Corporation shall provide its annual report to the Congress, the Secretary, each State regulatory authority, and upon request to the public.

5.

Assessments

(a)

Amount

(1)

In all calendar years following its establishment, the Corporation shall collect an assessment on distribution utilities for all fossil fuel-based electricity delivered directly to retail consumers (as determined under section 6). The assessments shall reflect the relative carbon dioxide emission rates of different fossil fuel-based electricity, and initially shall be not less than the following amounts for coal, natural gas, and oil:

Fuel typeRate of assessment per kilowatt hour
Coal$0.00043
Natural Gas$0.00022
Oil$0.00032.
(2)

The Corporation is authorized to adjust the assessments on fossil fuel-based electricity to reflect changes in the expected quantities of such electricity from different fuel types, such that the assessments generate not less than $1.0 billion and not more than $1.1 billion annually. The Corporation is authorized to supplement assessments through additional financial commitments.

(b)

Investment of funds

Pending disbursement pursuant to a program, plan, or project, the Corporation may invest funds collected through assessments under this section, and any other funds received by the Corporation, only in obligations of the United States or any agency thereof, in general obligations of any State or any political subdivision thereof, in any interest-bearing account or certificate of deposit of a bank that is a member of the Federal Reserve System, or in obligations fully guaranteed as to principal and interest by the United States.

(c)

Reversion of unused funds

If the Corporation does not disburse, dedicate or assign 75 percent or more of the available proceeds of the assessed fees in any calendar year 7 or more years following its establishment, due to an absence of qualified projects or similar circumstances, it shall reimburse the remaining undedicated or unassigned balance of such fees, less administrative and other expenses authorized by this Act, to the distribution utilities upon which such fees were assessed, in proportion to their collected assessments.

6.

ERCOT

(a)

Assessment, collection, and remitance

(1)

Notwithstanding any other provision of this Act, within ERCOT, the assessment provided for in section 5 shall be—

(A)

levied directly on qualified scheduling entities, or their successor entities;

(B)

charged consistent with other charges imposed on qualified scheduling entities as a fee on energy used by the load serving entities; and

(C)

collected and remitted by ERCOT to the Corporation in the amounts and in the same manner as set forth in section 5.

(2)

The assessment amounts referred to in paragraph (1) shall be—

(A)

determined by the amount and types of fossil fuel-based electricity delivered directly to all retail customers in the prior calendar year beginning with the year ending immediately prior to the period described in section 3(b); and

(B)

take into account the number of renewable energy credits retired by the load serving entities represented by a qualified scheduling entity within the prior calendar year.

(b)

Administration expenses

Up to 1 percent of the funds collected in any fiscal year by ERCOT under the provisions of this section may be used for the administrative expenses incurred in the determination, collection and remittance of the assessments to the Corporation.

(c)

Audit

ERCOT shall provide a copy of its annual audit pertaining to the administration of the provisions of this section to the Corporation.

(d)

Definitions

For the purposes of this section:

(1)

The term “ERCOT” means the Electric Reliability Council of Texas.

(2)

The term “load serving entities” has the meaning adopted by ERCOT Protocols and in effect on the date of enactment of this Act.

(3)

The term “qualified scheduling entities” has the meaning adopted by ERCOT Protocols and in effect on the date of enactment of this Act.

(4)

The term “renewable energy credit” has the meaning as promulgated and adopted by the Public Utility Commission of Texas pursuant to section 39.904(b) of the Public Utility Regulatory Act of 1999, and in effect on the date of enactment of this Act.

7.

Determination of fossil fuel-based electricity deliveries

(a)

Findings

The Congress finds that:

(1)

The assessments under section 5 are to be collected based on the amount of fossil fuel generated electricity delivered by each distribution utility.

(2)

Since many distribution utilities purchase all or part of their retail consumer’s electricity needs from other entities, it may not be practical to determine the precise fuel mix for the power sold by each individual distribution utility.

(3)

It may be necessary to use average data, often on a regional basis with reference to Regional Transmission organization or NERC regions, to make the determinations necessary for making assessments.

(b)

DOE proposed rule

The Secretary, acting in close consultation with the Energy Information Administration, shall issue for notice and comment a proposed rule to determine the level of fossil fuel electricity delivered to retail customers by each distribution utility in the United States during the most recent calendar year or other period determined to be most appropriate. Such proposed rule shall balance the need to be efficient, reasonably precise and timely, taking into account the nature and cost of data currently available and the nature of markets and regulation in effect in various regions of the country. Different methodologies may be applied in different regions if appropriate to obtain the best balance of such factors.

(c)

Final rule

Within 6 months after the enactment of this Act, and after opportunity for comment, the Secretary shall issue a final rule under this section for determining the level and type of fossil fuel electricity delivered to retail customers by each distribution utility in the United States during the appropriate period. In issuing such rule, the Secretary may consider opportunities and costs to develop new data sources in the future and issue recommendations for the Energy Information Administration or other entities to collect such data. After notice and opportunity for comment the Secretary may, by rule, subsequently update and modify the methodology for making such determinations.

(d)

Annual determinations

Pursuant to the final rule issued under subsection (c), the Secretary shall make annual determinations of the amounts and types for each such utility and publish such determinations in the Federal Register. Such determinations shall be used to conduct the referendum under section 3 and by the Corporation in applying any assessment under this title.

(e)

Rehearing and judicial review

The owner or operator of any distribution utility that believes that the Secretary has misapplied the methodology in the final rule in determining the amount and types of fossil fuel electricity delivered by such distribution utility may seek rehearing of such determination within 30 days of publication of the determination in the Federal Register. The Secretary shall decide such rehearing petitions within 30 days. The Secretary’s determinations following rehearing shall be final and subject to judicial review in the United States court of appeals for the District of Columbia.

8.

Compliance with Corporation assessments

The Corporation may bring an action in the appropriate court of the United States to compel compliance with an assessment levied by the Corporation under this Act. A successful action for compliance under this section may also require payment by the defendant of the costs incurred by the Corporation in bringing such action.

9.

Midcourse review

Not later than 5 years following establishment of the Corporation, the Comptroller General of the United States shall prepare an analysis, and report to Congress, assessing the Corporation’s activities, including project selection and methods of disbursement of assessed fees, impacts on the prospects for commercialization of carbon capture and storage technologies, and adequacy of funding. The report shall also make such recommendations as may be appropriate in each of these areas. The Corporation shall reimburse the Government Accountability Office for the costs associated with performing this midcourse review.

10.

Recovery of costs

(a)

In general

A distribution utility whose transmission, delivery, or sales of electric energy are subject to any form of rate regulation shall not be denied the opportunity to recover the full amount of the prudently incurred costs associated with complying with this Act, consistent with applicable State or Federal law.

(b)

Ratepayer Rebates

Regulatory authorities that approve cost recovery pursuant to subsection (a) may order rebates to ratepayers to the extent that distribution utilities are reimbursed undedicated or unassigned balances pursuant to section 5(c).

11.

Technical Advisory Committee

(a)

Establishment

There is established an advisory committee, to be known as the Technical Advisory Committee.

(b)

Membership

The Technical Advisory Committee shall be comprised of not less than 7 members appointed by the Board from among academic institutions, national laboratories, independent research institutions, and other qualified institutions. No member of the Committee shall be affiliated with EPRI or with any organization having members serving on the Board. At least one member of the Committee shall be appointed from among officers or employees of the Department of Energy recommended to the Board by the Secretary of Energy.

(c)

Chairperson and Vice Chairperson

The Board shall designate one member of the Technical Advisory Committee to serve as Chairperson of the Committee and one to serve as Vice Chairperson of the Committee.

(d)

Compensation

The Board shall provide compensation to members of the Technical Advisory Committee for travel and other incidental expenses and such other compensation as the Board determines to be necessary.

(e)

Purpose

The Technical Advisory shall provide independent assessments and technical evaluations, as well as make non-binding recommendations to the Board, concerning Corporation activities, including but not limited to the following:

(1)

Reviewing and evaluating the Corporation’s plans and budgets described in section 4 (h), as well as any other appropriate areas, which could include approaches to prioritizing technologies, appropriateness of engineering techniques, monitoring and verification technologies for storage, geological site selection, cost control measures.

(2)

Making annual non-binding recommendations to the Board concerning any of the matters referred to in paragraph (1), as well as what types of investments, scientific research, or engineering practices would best further to the goals of the Corporation.

(f)

Public availability

All reports, evaluations, and other materials of the Technical Advisory Committee shall be made available to the public by the Board, without charge, at time of receipt by the Board.

12.

Lobbying restrictions

No funds collected by the Corporation shall be used in any manner for influencing legislation or elections, except that the Corporation may recommend to the Secretary and the Congress changes in this Act or other statutes that would further the purposes of this Act.

13.

Davis-Bacon Compliance

The Corporation shall ensure that entities receiving grants, contracts, or other financial support from the Corporation for the project activities authorized by this Act are in compliance with the Davis-Bacon Act (40 U.S.C. 276a–276a–5).