Fuel standards not included in draft measure

By the OGJ Online Staff

HOUSTON, July 10 -- Under fire from Democrats for emphasizing production over conservation, the Republican-led House Energy and Commerce Subcommittee on Energy and Air Quality began work Tuesday on legislation billed as an conservation and energy efficiency package.

The latest draft does not include any mention of boosting Corporate Average Fuel Economy standards that was included in earlier drafts; bill sponsors removed it from the legislation as leaders from both parties seek to reach a deal before the bill reaches the full House later this month.

Language regarding reformulated gasoline was also trimmed back dramatically--there is no specific mention of retooling oxygenate standards that were incorporated in earlier drafts. The bill does direct the US Environmental Protection Agency to reduce paperwork associated with RFG inventories. More language on the RFG issue, either through a committee markup or a floor amendment is also anticipated.

The White House next week will hold a series of town meetings next week with the vice president in an effort to educate the public "outside the Beltway" about the president's energy plan. They hope to deflect criticism the plan relieves too heavily on drilling and help for the oil industry.

The bill's major provisions call for revamping rules for nuclear and hydroelectric generation, beefing up research into clean coal technology, boosting federal government building efficiency standards, setting new efficiency standards for various products, and smoothing the transition to summer gasoline use.

Some of the provisions are taken from the Bush administration's proposed energy policy. Republican lawmakers hope to have an energy bill for the president to sign before Labor Day.

The bill would take the $10 billion Nuclear Waste Fund off-budget. The fund was set up as a separate account with a dedicated revenue source to establish a radioactive waste disposal site. But site selection has been caught in nuclear energy politics and no location has been selected. Meanwhile, on site disposal facilities are filling up. If the money is made available for exclusive use of disposing of radioactive waste, the US Department of Energy projects the cash flow would be sufficient for pay for the program.

The bill would also starts the 40-year operating clock for new nuclear reactors only when a plant actually begins to generate electricity. Presently, the law starts the clock when the combined construction and operating license is issued, which could be up to 5 years before operations begin.

The bill would also allows the Nuclear Regulatory Commission to collect licensing fees from federal facilities. The NRC administers about 350 licenses at 25 federal agencies. If adopted, the agency could collect up to $4 million/year in fees from federal agencies it regulates.

With respect to hydropower, the bill allows for alternative conditions to be set during licensing process, if environmental protection is maintained and when the impact on power generation and implementation costs can be lowered. The legislation also requires the Federal Energy Regulatory Commission to revise its data collection procedures for hydroelectric licensing.

The Department of Energy would be authorized to develop accelerated programs for the production and supply of electricity using clean coal methods and equipment. DOE could fund up to 50% of a project's cost, if it meets certain energy efficiency and environmental performance criteria.

The bill provides tax credits for emission reductions and efficiency improvements in existing coal-based generating facilities and allows tax credits for early commercial application and production from advanced clean coal technology programs.

The bill would establish new mandatory efficiency requirements for federal buildings and encourages the use of unconventional and renewable energy resources to achieve these targets. It requires all air conditioning and heat pump units acquired by the federal government after certain dates must meet efficiency standards equal to California�s current standards.

It would establish a bank within the federal government providing low-interest loans to federal agencies to fund energy efficiency projects.

The bill authorizes $3.4 billion for fiscal years 2001-2005 for assisting low income consumers with payment of high energy bills, representing a 70% increase over total LIHEAP funding appropriated for the year 2000.

Efficiency standards for televisions sets, furnace fans, ceiling fans, and cold drink vending machines would be required under the legislation.