Tradeable Performance Standard Act
This bill establishes the Greenhouse Gas Pollution Reduction Program, which creates (1) enforceable targets to reduce greenhouse gas emissions from cogeneration facilities, electric facilities, and thermal facilities; (2) a system to allow such facilities to achieve the targets through a voluntary emission trading program; and (3) a thermal energy reporting program.
[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8582 Introduced in House (IH)]
<DOC>
116th CONGRESS
2d Session
H. R. 8582
To amend the Clean Air Act to establish a tradeable performance
standard covering emissions from the electricity generation and
industrial sectors, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
October 13, 2020
Mr. Casten of Illinois (for himself and Mr. Moulton) introduced the
following bill; which was referred to the Committee on Energy and
Commerce
_______________________________________________________________________
A BILL
To amend the Clean Air Act to establish a tradeable performance
standard covering emissions from the electricity generation and
industrial sectors, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Tradeable Performance Standard
Act''.
SEC. 2. TABLE OF CONTENTS.
The table of contents for this Act is as follows:
Sec. 1. Short title.
Sec. 2. Table of contents.
Sec. 3. Combating the climate crisis.
``TITLE VII--GREENHOUSE GAS POLLUTION REDUCTION PROGRAM
``Part A--Global Warming Pollution Reduction Targets
``Sec. 701. Definitions.
``Sec. 702. Reduction targets for covered entities.
``Part B--Designation of Greenhouse Gases and Thermal Energy Reporting
Program
``Sec. 711. Greenhouse gases.
``Sec. 712. Carbon dioxide equivalent value of greenhouse
gases.
``Sec. 713. Thermal energy reporting program.
``Sec. 714. EIA and EPA reporting.
``Part C--Program Rules
``Sec. 721. Requirements.
``Sec. 722. Distribution of emission allowances.
``Sec. 723. Trading.
``Sec. 724. Voluntary program participation.
``Sec. 725. Penalty for noncompliance.
``Sec. 726. Emission allowance tracking system.
``Sec. 727. Other program rules.
``Sec. 728. Oversight.
``Sec. 729. Regulations.
``Sec. 730. Savings provisions.
SEC. 3. COMBATING THE CLIMATE CRISIS.
The Clean Air Act (42 U.S.C. et seq.) is amended by adding after
title VI the following new title:
``TITLE VII--GREENHOUSE GAS POLLUTION REDUCTION PROGRAM
``PART A--GLOBAL WARMING POLLUTION REDUCTION TARGETS
``SEC. 701. DEFINITIONS.
``In this title:
``(1) Average carbon intensity for qualified electric
facilities.--The term `average carbon intensity for qualified
electric facilities' means the number that equals the total
amount of greenhouse gas emissions in metric tons of carbon
dioxide equivalent emitted from qualified electric facilities
in a calendar year as reported under section 714 divided by the
total quantity of megawatt hours of electricity produced by
qualified electric facilities in such calendar year as reported
under section 714.
``(2) Average carbon intensity for qualified thermal
facilities.--The term `average carbon intensity for qualified
thermal facilities' means the number that equals the total
amount of greenhouse gas emissions in metric tons of carbon
dioxide equivalent emitted from qualified thermal facilities in
a calendar year as reported under section 713 divided by the
total quantity of useful thermal energy output from qualified
thermal facilities in such calendar year as reported under
section 713.
``(3) Bottoming cycle cogeneration generator.--The term
`bottoming cycle cogeneration generator' means any generator
that produces electricity from otherwise-wasted heat, pressure,
or both, using any of the following technologies:
``(A) An organic ranking cycle.
``(B) A waste-heat recovery steam generator.
``(C) A back pressure steam turbine.
``(D) A Stirling engine.
``(4) Carbon dioxide equivalent.--The term `carbon dioxide
equivalent' means the unit of measure, expressed in metric
tons, of greenhouse gases, as provided under section 712.
``(5) Covered entity.--The term `covered entity' means each
of the following:
``(A) A qualified cogeneration facility.
``(B) A qualified electric facility.
``(C) A qualified thermal facility.
``(6) Designated representative.--The term `designated
representative' means, with respect to a covered entity, a
thermal reporting entity, or any other entity receiving or
holding emission allowances under this title, an individual
authorized, through a certificate of representation submitted
to the Administrator by the owners and operators, to represent
the owners and operators in all matters pertaining to this
title (including the holding, transfer, or disposition of
emission allowances), and to make all submissions to the
Administrator under this title.
``(7) Emission allowance.--The term `emission allowance'
means a limited authorization to emit, in an amount of, 1
metric ton of carbon dioxide equivalent of a greenhouse gas in
accordance with this title.
``(8) Fuel-based capacity.--The term `fuel-based capacity'
means--
``(A) for generators that produce useful thermal
energy output with the combustion of fuel, the peak
fuel combustion rate; and
``(B) for generators that produce useful thermal
energy output without the combustion of fuel, the peak
useful thermal energy output rate divided by 0.7.
``(9) Greenhouse gas.--The term `greenhouse gas' means any
gas listed in section 711.
``(10) Greenhouse gas emission.--The term `greenhouse gas
emission' means the release of a greenhouse gas into the
ambient air.
``(11) Hold.--The term `hold' means, with respect to an
emission allowance, to have in the appropriate account created
pursuant to the process under section 726(2).
``(12) Qualified cogeneration facility.--The term
`qualified cogeneration facility' means any generator that
simultaneously produces useful thermal energy output and
electricity and--
``(A) has a rated capacity of 2 megawatts or
greater; or
``(B) is classified as a qualified cogeneration
facility pursuant to section 724(c).
``(13) Qualified electric facility.--The term `qualified
electric facility' means any generator that produces
electricity, including a bottoming cycle cogeneration
generator--
``(A) with a rated capacity of 2 megawatts or
greater; or
``(B) with a rated capacity of less than 2
megawatts that is classified as a qualified electric
facility pursuant to section 724(a).
``(14) Qualified thermal facility.--The term `qualified
thermal facility' means any generator that produces thermal
energy--
``(A) with a rated fuel-based capacity of at least
50,000,000 British thermal units on a higher heating
value basis per hour or greater, excluding any
generator producing useful thermal energy output that
the Administrator determines is used to wholly or
partially provide carbon as a chemical ingredient for a
process to manufacture goods; or
``(B) with a rated fuel-based capacity of less than
50,000,000 British thermal units on a higher heating
value basis per hour that is classified as a qualified
thermal facility pursuant to section 724(b).
``(15) Thermal reporting entity.--The term `thermal
reporting entity' means--
``(A) a qualified thermal facility;
``(B) a qualified cogeneration facility;
``(C) any generator that produces useful thermal
energy output with a rated fuel-based capacity of at
least 30,000,000 British thermal units on a higher
heating value basis per hour, but less than 50,000,000
British thermal units on a higher heating value basis
per hour; or
``(D) any other entity that produces or delivers
useful thermal energy output the production or delivery
of which results or may result in greenhouse gas
emissions if the Administrator determines that
reporting under section 713 by such entity will help
achieve the targets specified in section 702.
``(16) Useful thermal energy output.--The term `useful
thermal energy output' means thermal energy as measured in
million British thermal units on a higher heating value basis
produced by a generator that produces thermal energy net of the
energy in inlet combustion air, feedwater, or any other fluids
not used as fuels of combustion.
``SEC. 702. REDUCTION TARGETS FOR COVERED ENTITIES.
``(a) In General.--The regulations issued under section 729 shall
establish enforceable targets for the greenhouse gas emissions of
covered entities, such that--
``(1) in 2030, the aggregate quantity of greenhouse gas
emissions from covered entities does not exceed 60 percent of
the aggregate quantity of greenhouse gas emissions from covered
entities in 2019; and
``(2) in 2040, the aggregate quantity of greenhouse gas
emissions from covered entities does not exceed zero.
``(b) Definition.--For purposes of this section, the term
`greenhouse gas emissions from covered entities in 2019' means
greenhouse gas emissions to which section 721 would have applied if the
requirements of this title for the specified year had been in effect
for 2019.
``PART B--DESIGNATION OF GREENHOUSE GASES AND THERMAL ENERGY REPORTING
PROGRAM
``SEC. 711. GREENHOUSE GASES.
``For purposes of this title, the following are greenhouse gases:
``(1) Carbon dioxide.
``(2) Methane.
``(3) Nitrous oxide.
``(4) Sulfur hexafluoride.
``(5) Any perfluorocarbon.
``(6) Nitrogen trifluoride.
``SEC. 712. CARBON DIOXIDE EQUIVALENT VALUE OF GREENHOUSE GASES.
``(a) In General.--Any provision of this title that refers to a
quantity or percentage of a quantity of a greenhouse gas shall be
treated as a reference to the quantity or percentage of the greenhouse
gas expressed in carbon dioxide equivalents.
``(b) Values.--Except as provided by the Administrator under
subsection (c), for the purposes of this title, the carbon dioxide
equivalent value of a greenhouse gas shall be equal to the 100-year
global warming potential for such greenhouse gas that is provided in
the Fifth Assessment Report of the Intergovernmental Panel on Climate
Change.
``(c) Use of 20-Year Global Warming Potential.--If the
Administrator determines that it is more appropriate for a greenhouse
gas, the Administrator may publish a determination in the Federal
Register that such greenhouse gas has a carbon dioxide equivalent value
equal to the 20-year global warming potential for such greenhouse gas
that is provided in the Fifth Assessment Report of the
Intergovernmental Panel on Climate Change.
``SEC. 713. THERMAL ENERGY REPORTING PROGRAM.
``(a) Regulations.--Not later than 18 months after the date of
enactment of this title, the Administrator shall issue regulations
establishing a program, to be known as the Federal thermal energy
reporting program. Such regulations shall--
``(1) require each thermal reporting entity to submit to
the Administrator data on--
``(A) the type, quality, and quantity of fuel used
for onsite useful thermal energy output production by
such thermal reporting entity;
``(B) the quantity of useful thermal energy output
produced by such thermal reporting entity as calculated
pursuant to subsection (e); and
``(C) the quantity of greenhouse gas emissions
associated with such useful thermal energy output
production;
``(2) require thermal reporting entities to submit to the
Administrator data sufficient to ensure compliance with or
implementation of the requirements of this title;
``(3) ensure the completeness, consistency, transparency,
accuracy, precision, and reliability of data gathered under the
Federal thermal energy reporting program;
``(4) include methods for avoiding double reporting to the
maximum extent possible;
``(5) require that thermal reporting entities provide the
data required in this section in reports submitted
electronically to the Administrator, in such form and
containing such information as may be required by the
Administrator;
``(6) include requirements for keeping records supporting
or related to, and protocols for auditing, data submitted under
the Federal thermal energy reporting program;
``(7) establish consistent policies for calculating carbon
content and greenhouse gas emissions for any type of fuel for
which data is submitted under the Federal thermal energy
reporting program;
``(8) provide for immediate dissemination, to States and
Indian Tribes, of all data reported under the Federal thermal
energy reporting program as soon as practicable after
electronic audit by the Administrator and any resulting
correction of data, except that data shall not be disseminated
under this paragraph if--
``(A) nondissemination of the data is vital to the
national security of the United States, as determined
by the President; or
``(B) the data is confidential business information
that cannot be derived from information that is
otherwise publicly available and that would cause
significant calculable competitive harm if published,
except that data that is confidential business
information shall be provided to a State or Indian
Tribe within whose jurisdiction the thermal reporting
entity is located if the Administrator determines that
such State or Indian Tribe has in effect protections
for confidential business information that are at least
as protective as protections applicable to the Federal
Government;
``(9) provide that the Administrator publish an aggregate
summary of all data reported under the Federal thermal energy
reporting program publicly on the internet as soon as
practicable after electronic audit by the Administrator and any
resulting correction of data, including publication of--
``(A) any confidential business data under
paragraph (8)(B); and
``(B) at the discretion of the President, data the
nondissemination of which was determined to be vital to
the national security of the United States under
paragraph (8)(A);
``(10) prescribe methods by which the Administrator shall,
in cases in which satisfactory data are not submitted by a
thermal reporting entity under the Federal thermal energy
reporting program to the Administrator for any period of time,
estimate the data for such thermal reporting entity required
under paragraph (1) with--
``(A) in the case of a thermal reporting entity
that is a qualified thermal facility or a qualified
cogeneration facility, an estimate of the highest
greenhouse gas emission levels that may have occurred
during the period for which data are missing; or
``(B) in the case of any other thermal reporting
entity, a reasonable estimate of the greenhouse gas
emission levels that may have occurred during the
period for which data are missing;
``(11) require the designation of a designated
representative for each thermal reporting entity;
``(12) require an appropriate certification, by the
designated representative for the thermal reporting entity, of
accurate and complete accounting of the data required under
paragraph (1), as determined by the Administrator; and
``(13) include requirements for the submission of other
data necessary for accurate and complete accounting of the
quantity of useful thermal energy output, and the quantity of
greenhouse gas emissions associated with such useful thermal
energy output production, as determined by the Administrator,
including data for quality assurance of monitoring systems and
other measurement devices.
``(b) Timing.--
``(1) Calendar years 2019 through 2022.--
``(A) In general.--Not later than March 21, 2023,
each thermal reporting entity shall submit to the
Administrator data required under the Federal thermal
energy reporting program with respect to each of
calendar years 2019 through 2022.
``(B) Waiver or modification.--The Administrator
may waive or modify reporting requirements for calendar
years 2019 through 2022 for thermal reporting entities
to the extent that the Administrator determines that
the thermal reporting entities did not keep data or
records necessary to meet such reporting requirements.
The Administrator may, in addition to or in lieu of
such reporting requirements, collect additional
information on energy consumption and production.
``(2) Subsequent calendar years.--With respect to calendar
year 2023 and each subsequent calendar year, each thermal
reporting entity shall submit quarterly data required under the
Federal thermal energy reporting program to the Administrator
not later than 60 days after the end of the applicable quarter,
except when the data is already being reported to the
Administrator on an earlier timeframe for another program.
``(c) Waiver of Reporting Requirements for Specific Entities.--The
Administrator may waive reporting requirements under this section for
specific entities to the extent that the Administrator determines that
sufficient and equally or more reliable verified and timely data are
available to the Administrator and the public under other statutory
requirements.
``(d) Interrelationship With Other Systems.--
``(1) In general.--In developing the regulations issued
under subsection (a), the Administrator shall take into account
the work done by the Energy Information Administration and
other mandatory Federal, State, or multistate programs to
collect information that is similar to the information to be
collected under this section.
``(2) Explanation.--Regulations issued under subsection (a)
shall include an explanation of any major differences in
information collected between the Federal thermal energy
reporting program and information available from the Energy
Information Administration and other mandatory Federal, State,
or multistate programs to collect similar information.
``(e) Calculation of Useful Thermal Energy Output.--The
Administrator and thermal reporting entities shall--
``(1) in the case of thermal reporting entities that have
revenue-grade send out meters, calculate useful thermal energy
output by using the data provided by those meters; and
``(2) in the case of thermal reporting entities that do not
have such meters, or that have such meters but for which the
Administrator determines that the values obtained by
calculating useful thermal energy output under paragraph (1)
are unreasonable, calculate useful thermal energy output based
on the metered fuel use for a given quarter multiplied by the
average conversion efficiency of fuel to useful thermal energy
output in all other similarly situated facilities using the
same fuel.
``SEC. 714. EIA AND EPA REPORTING.
``(a) In General.--Beginning with calendar year 2022, by the end of
each month, the Administrator of the Energy Information Administration
shall provide to the Administrator of the Environmental Protection
Agency information on the total amount of electricity produced from
qualified electric facilities during the previous month.
``(b) New Qualified Electric Facilities.--The Administrator of the
Environmental Protection Agency shall notify the Administrator of the
Energy Information Administration whenever an electric facility with a
rated capacity of less than 2 megawatts elects to be classified as a
qualified electric facility or a qualified cogeneration facility under
section 724.
``PART C--PROGRAM RULES
``SEC. 721. REQUIREMENTS.
``(a) In General.--By 12:01 a.m. on April 1 of a calendar year, a
covered entity shall surrender to the Administrator one emission
allowance for each metric ton of carbon dioxide equivalent of a
greenhouse gas emitted by the covered entity during the preceding
calendar year.
``(b) Acquisition of Emission Allowances.--A covered entity shall
acquire emission allowances as follows:
``(1) By receiving emission allowances as provided in
section 722.
``(2) By purchase, exchange, or transfer under section 723.
``(c) Applicability.--The requirement of this part applies with
respect to calendar year 2023 and subsequent calendar years.
``(d) Period of Use.--An emission allowance may be used by a
covered entity to comply with subsection (a) only for--
``(1) the calendar year in connection with which it is
distributed under section 722; or
``(2) the following calendar year.
``(e) Adjustment of Deadline.--The Administrator may, by rule,
establish a deadline for compliance with subsection (a) with respect to
a calendar year that is later than 12:01 a.m. on April 1 of the
following calendar year, as necessary to ensure the availability of
greenhouse gas emissions data, but in no event shall the adjusted
deadline be later than June 1.
``SEC. 722. DISTRIBUTION OF EMISSION ALLOWANCES.
``(a) Qualified Electric Facilities.--During a calendar year, the
Administrator shall distribute, on a continual basis, to a qualified
electric facility for each megawatt hour of electricity produced by the
qualified electric facility a number of emission allowances (or
fractions thereof) equal to the product of one multiplied by the
greater of--
``(1) zero; and
``(2) the lesser of--
``(A) the value equal to the product of 0.93 and
the preceding calendar year's average carbon intensity
for qualified electric facilities;
``(B) the value equal to the difference of--
``(i) the preceding calendar year's average
carbon intensity for qualified electric
facilities; minus
``(ii) the product of 0.06 multiplied by
calendar year 2022's average carbon intensity
for qualified electric facilities; or
``(C) a value set by the Administrator for purposes
of this subsection to ensure that the aggregate
quantity of greenhouse gas emissions from covered
entities does not exceed the targets specified in
section 702(a).
``(b) Qualified Thermal Facilities.--During a calendar year, the
Administrator shall distribute, on a continual basis, to a qualified
thermal facility for each million British thermal units of useful
thermal energy output produced by the qualified thermal facility a
number of emission allowances (or fractions thereof) equal to the
product of one multiplied by the greater of--
``(1) zero; and
``(2) the lesser of--
``(A) the value equal to the product of 0.93 and
the preceding calendar year's average carbon intensity
for qualified thermal facilities;
``(B) the value equal to the difference of--
``(i) the preceding calendar year's average
carbon intensity for qualified thermal
facilities; minus
``(ii) the product of 0.06 multiplied by
calendar year 2022's average carbon intensity
for qualified thermal facilities; or
``(C) a value set by the Administrator for purposes
of this subsection to ensure that the aggregate
quantity of greenhouse gas emissions from covered
entities does not exceed the targets specified in
section 702(a).
``(c) Qualified Cogeneration Facilities.--During a calendar year,
the Administrator shall distribute, on a continual basis, to a
qualified cogeneration facility--
``(1) for each megawatt hour of electricity produced by the
qualified cogeneration facility, a number of emission
allowances (or fractions thereof) calculated in accordance with
subsection (a); and
``(2) for each million British thermal units of useful
thermal energy output produced by the qualified cogeneration
facility, a number of emission allowances (or fractions
thereof) calculated in accordance with subsection (b).
``(d) Adjusted Distribution for Entering Into Certain Agreements.--
``(1) In general.--If an existing facility or a newly
constructed low-emission facility enters into an agreement
described in paragraph (2), then over the period of the
agreement the Administrator shall distribute emission
allowances to such facility in accordance with this subsection
in lieu of subsection (a), (b), or (c).
``(2) Agreement.--An agreement described in this paragraph
is a 10-year or longer bilateral agreement signed after the
date of enactment of this title between an existing qualified
electric facility, an existing qualified thermal facility, or
an existing qualified cogeneration facility, and a newly
constructed low-emission facility for the annual purchase of a
specified amount of emission allowances.
``(3) Definitions.--In this subsection:
``(A) The term `existing' means, with respect to a
facility, in operation as of the date of entry into an
agreement described in paragraph (2).
``(B) The term `existing facility' means an
existing qualified electric facility, an existing
qualified thermal facility, or an existing qualified
cogeneration facility that is a party to an agreement
described in paragraph (2).
``(C) The term `newly constructed' means that the
facility involved did not produce electricity or useful
thermal energy output prior to the date of entry into
an agreement described in paragraph (2).
``(D) The term `newly constructed low-emission
facility' means a newly constructed qualified electric
facility, a newly constructed qualified thermal
facility, or a newly constructed qualified cogeneration
facility that would emit a lesser quantity of
greenhouse gases per megawatt hour of electricity or
per million British thermal units of useful thermal
energy output, as applicable, than the Administrator
distributes to covered entities under subsection (a),
(b), or (c), as applicable, in the first full calendar
year during which the newly constructed facility
operates and is a party to an agreement described in
paragraph (2).
``(4) Distribution of allowances to an existing facility.--
``(A) In general.--For calendar years that are
covered by an agreement described in paragraph (2),
beginning with the first full calendar year during
which the newly constructed low-emission facility
operates, the Administrator shall distribute, on a
continual basis, to the existing facility--
``(i) for megawatt hours of electricity or
million British thermal units of useful thermal
energy output, as applicable, produced by the
existing facility that are covered by the
agreement, a number of emission allowances that
is equal to--
``(I) such number of megawatt hours
or million British thermal units, as
applicable; multiplied by
``(II) the average carbon intensity
for qualified electric facilities or
the average carbon intensity for
qualified thermal facilities, as
applicable, for such first full
calendar year; and
``(ii) for megawatt hours of electricity or
million British thermal units of useful thermal
energy output, as applicable, produced by the
existing facility exceeding those that are
covered by the agreement, the number of
emission allowances calculated under subsection
(a), (b), or (c), as applicable.
``(B) Calculation of megawatt hours or million
british thermal units covered by agreement.--For
purposes of subparagraph (A), the number of megawatt
hours of electricity or million British thermal units
of useful thermal energy output, as applicable,
produced by an existing facility that are covered by
the agreement described in paragraph (2) shall be equal
to--
``(i) the number of emission allowances
sold to the existing facility pursuant to the
agreement for the first full calendar year
described in subparagraph (A), divided by the
difference of--
``(I) the number of emission
allowances surrendered by the existing
facility to the Administrator for such
first full calendar year; minus
``(II) the number of emission
allowances distributed to the existing
facility by the Administrator for such
first full calendar year; multiplied by
``(ii) the total number of megawatt hours
of electricity or million British thermal units
of useful thermal energy output, as applicable,
produced by the existing facility in such first
full calendar year.
``(5) Distribution of allowances to a newly constructed
low-emission facility.--
``(A) In general.--For calendar years that are
covered by an agreement described in paragraph (2),
beginning with the first full calendar year during
which the newly constructed low-emission facility
operates, the Administrator shall distribute, on a
continual basis, to the newly constructed low-emission
facility--
``(i) for megawatt hours of electricity or
million British thermal units of useful thermal
energy output, as applicable, produced by the
newly constructed low-emission facility that
are covered by the agreement, a number of
emission allowances that is equal to--
``(I) such number of megawatt hours
or million British thermal units of
useful thermal energy output;
multiplied by
``(II) the average carbon intensity
for qualified electric facilities or
the average carbon intensity for
qualified thermal facilities, as
applicable, in such first full calendar
year; and
``(ii) for megawatt hours of electricity or
million British thermal units of useful thermal
energy output, as applicable, produced by the
newly constructed low-emission facility
exceeding those that are covered by the
agreement, the number of emission allowances
calculated under subsection (a), (b), or (c),
as applicable.
``(B) Calculation of megawatt hours or million
british thermal units covered by agreement.--For
purposes of subparagraph (A), the number of megawatt
hours of electricity or million British thermal units
of useful thermal energy output, as applicable,
produced by a newly constructed low-emission facility
that are covered by the agreement described in
paragraph (2) shall be equal to--
``(i) the number of emission allowances
sold to the existing facility pursuant to the
agreement for the first full calendar year
described in subparagraph (A), divided by the
difference of--
``(I) the number of emission
allowances surrendered by the newly
constructed low-emission facility to
the Administrator for such first full
calendar year; minus
``(II) the number of emission
allowances distributed to the newly
constructed low-emission facility by
the Administrator for such first full
calendar year; multiplied by
``(ii) the total number of megawatt hours
of electricity or million British thermal units
of useful thermal energy output, as applicable,
produced by the existing facility in such first
full calendar year.
``(6) Conditions.--An existing facility or newly
constructed low-emission facility may receive emission
allowances under this subsection only if--
``(A) such facility provides the Administrator a
copy of--
``(i) the applicable bilateral agreement;
and
``(ii) any amendment to such bilateral
agreement within 30 days of the amendment being
made; and
``(B) the Administrator certifies that allowing the
facility to maintain the bilateral agreement is not
impacting the ability to achieve the targets specified
in section 702(a)--
``(i) upon receiving the applicable
bilateral agreement, and at least once every 5
years thereafter; and
``(ii) upon receiving any amendment
thereto.
``SEC. 723. TRADING.
``(a) Permitted Transactions.--Except as otherwise provided in this
title, the lawful holder of an emission allowance may, without
restriction, sell, exchange, transfer, hold, or surrender to the
Administrator, the emission allowance.
``(b) Identification Numbers.--The Administrator shall assign to
each emission allowance a unique identification number.
``(c) Legal Status of Emission Allowances.--
``(1) In general.--An emission allowance distributed by the
Administrator under this title does not constitute a property
right.
``(2) Termination or limitation.--Nothing in this Act or
any other provision of law shall be construed to limit or alter
the authority of the United States to terminate or limit
emission allowances.
``(3) Other provisions.--Except as otherwise specified in
this Act, nothing in this Act relating to emission allowances
distributed under this title shall affect the application of
any other provision of law to a covered entity, or the
responsibility for a covered entity to comply with any such
provision of law.
``(d) Effectiveness of Emission Allowance Transfers.--No transfer
of an emission allowance shall be effective for purposes of this title
until a certification of the transfer, signed by the designated
representative of the transferor, is received and recorded by the
Administrator in accordance with regulations promulgated under section
729.
``SEC. 724. VOLUNTARY PROGRAM PARTICIPATION.
``(a) Voluntary Program Participation as Qualified Electric
Facility.--
``(1) In general.--A generator that produces electricity
with a rated capacity of less than 2 megawatts may, in
accordance with this subsection, elect to be classified as a
qualified electric facility for purposes of this title.
``(2) Qualification.--In order for a generator with a rated
capacity of less than 2 megawatts to be classified as a
qualified electric facility, the generator shall--
``(A) submit a notification to the Administrator of
the intention of the generator to elect to be
classified as a qualified electric facility;
``(B) receive approval of such classification from
the Administrator; and
``(C) designate a representative as required under
section 727(b).
``(3) Approval.--Not later than 90 after receipt of a
notification under paragraph (2)(A), the Administrator shall
notify the applicable generator whether the Administrator
approves or disapproves the classification of such generator as
a qualified electric facility.
``(4) Classification.--If a generator elects to be
classified as a qualified electric facility pursuant to this
subsection, such classification shall remain in effect unless
the facility produces no electricity over the previous calendar
year.
``(b) Voluntary Program Participation as a Qualified Thermal
Facility.--
``(1) In general.--A generator that produces thermal energy
with a rated fuel-based capacity of less than 50,000,000
British thermal units on a higher heating value basis per hour
may, in accordance with this subsection, elect to be classified
as a qualified thermal facility for purposes of this title.
``(2) Qualification.--In order for a generator that
produces thermal energy with a rated fuel-based capacity of
less than 50,000,000 British thermal units on a higher heating
value basis per hour to be classified as a qualified thermal
facility, the facility shall--
``(A) have a rated fuel-based capacity of no less
than 2,000,000 British thermal units on a higher
heating value basis per hour;
``(B) submit a notification to the Administrator of
the intention of the generator to elect to be
classified as a qualified thermal facility;
``(C) receive approval of such classification from
the Administrator;
``(D) report annually to the Administrator relevant
information collected on type, quality, and quantity of
fuel used for onsite useful thermal energy output
production, the quantity of useful thermal energy
output, and the quantity of associated greenhouse gas
emissions under section 713; and
``(E) designate a representative as required under
section 727(b).
``(3) Classification.--If a generator that produces useful
thermal energy output elects to be classified as a qualified
thermal facility pursuant to this subsection, such
classification shall remain in effect unless the facility--
``(A) falls below a rated fuel-based capacity of
2,000,000 British thermal units on a higher heating
value basis per hour; or
``(B) produces no useful thermal energy output over
the previous calendar year.
``(c) Voluntary Program Participation as Qualified Cogeneration
Facility.--
``(1) In general.--A generator that simultaneously produces
useful thermal energy output and electricity with a rated
capacity of less than 2 megawatts may, in accordance with this
subsection, elect to be classified as a qualified cogeneration
facility for purposes of this title.
``(2) Qualification.--In order for a generator that
simultaneously produces useful thermal energy output and
electricity with a rated capacity of less than 2 megawatts to
be classified as a qualified cogeneration facility, the
facility shall--
``(A) submit a notification to the Administrator of
the intention of the generator to elect to be
classified as a qualified cogeneration facility;
``(B) receive approval of the classification from
the Administrator;
``(C) report annually to the Administrator relevant
information collected on type, quality, and quantity of
fuel used for onsite useful thermal energy output
production, the quantity of useful thermal energy
output, and the quantity of associated greenhouse gas
emissions under section 713; and
``(D) designate a representative as required under
section 727(b).
``(3) Classification.--If a generator elects to be
classified as a qualified cogeneration facility pursuant to
this subsection, such classification shall remain in effect
unless the facility produces no electricity over the previous
calendar year.
``SEC. 725. PENALTY FOR NONCOMPLIANCE.
``(a) Civil Penalty.--
``(1) In general.--The owner or operator of a covered
entity that fails to surrender an emission allowance as
required by section 721(a) shall be liable for payment to the
Administrator of a penalty in the amount described in paragraph
(2).
``(2) Amount.--The amount of a penalty under paragraph (1)
shall be equal to the product of--
``(A) twice the highest monetary value (as
indicated by the emission allowance tracking system
established pursuant to section 726 over the previous
calendar year) for the sale or transfer of an emission
allowance; multiplied by
``(B) the number of emission allowances which the
owner or operator of the covered entity failed to
surrender as described in paragraph (1).
``(3) Timing.--A penalty required under this subsection
shall be immediately due and payable to the Administrator,
without demand, in accordance with regulations promulgated
under section 729.
``(4) No effect on liability.--A penalty due and payable by
the owners or operators of a covered entity under this
subsection shall not diminish the liability of the owners or
operators for any fine, penalty, or assessment against the
owners or operators for the same violation under any other
provision of this Act or any other law.
``(b) Replacement Emission Allowances.--The owner or operator of a
covered entity that fails to surrender one or more emission allowances
as required by section 721(a) for a calendar year shall surrender a
quantity of emission allowances that is equal to the quantity the
covered entity failed to surrender (in addition to the emission
allowances otherwise required to be surrendered) by the April 1st
deadline of the second succeeding calendar year.
``SEC. 726. EMISSION ALLOWANCE TRACKING SYSTEM.
``The regulations promulgated under section 729 shall provide for--
``(1) the establishment of a system to distribute emission
allowances to covered entities;
``(2) a process to create accounts in which covered
entities and any other entities that buy or sell emission
allowances may hold emission allowances;
``(3) the establishment of an emission allowance tracking
system to track--
``(A) the number of emission allowances
transferred;
``(B) the price or monetary value for which
emission allowances are transferred;
``(C) the date of each such transfer;
``(D) the parties involved in the transfer; and
``(E) any additional information the Administrator
determines necessary for each such transfer; and
``(4) the publication by the Administrator on the internet
of--
``(A) a weekly summary of average prices of
emission allowances weighted by transaction size, the
total number of emission allowances traded, and any
other additional information determined by the
Administrator as necessary for the orderly and
competitive functioning of any emission allowance
market;
``(B) the number of emission allowances distributed
by the Administrator under section 722 each month to
qualified electric facilities;
``(C) the number of emission allowances distributed
by the Administrator under section 722 each month to
qualified thermal facilities;
``(D) the number of emission allowances distributed
by the Administrator under section 722 each month to
qualified cogeneration facilities;
``(E) the number of emission allowances distributed
by the Administrator under section 722 during a
calendar year that are held by qualified electric
facilities at the end of each month;
``(F) the number of emission allowances distributed
by the Administrator under section 722 during a
calendar year that are held by qualified thermal
facilities at the end of each month;
``(G) the number of emission allowances distributed
by the Administrator under section 722 during a
calendar year that are held by qualified cogeneration
facilities at the end of each month;
``(H) the number of emission allowances distributed
by the Administrator under section 722 during a
calendar year that are held by entities other than
covered entities at the end of each month;
``(I) the number of emission allowances surrendered
to the Administrator each year by qualified electric
facilities;
``(J) the number of emission allowances surrendered
to the Administrator each year by qualified thermal
facilities; and
``(K) the number of emission allowances surrendered
to the Administrator each year by qualified
cogeneration facilities.
``SEC. 727. OTHER PROGRAM RULES.
``(a) Threshold Review.--For each category of covered entities
listed in section 701(5), the Administrator--
``(1) in 2025, and once every 5 years thereafter, shall
review the threshold for electricity or useful thermal energy
output production that is used to define covered entities in
such category; and
``(2) may by rule lower such threshold after consideration
of--
``(A) greenhouse gas emissions from covered
entities in such category, and from other entities of
the same type that produce less electricity or useful
thermal energy output (including greenhouse gas
emission sources that commence operation after the date
of enactment of this title that are not covered
entities); and
``(B) whether greater greenhouse gas emission
reductions can be cost-effectively achieved by lowering
the applicable threshold.
``(b) Designated Representatives.--The regulations promulgated
under section 729 shall require that each covered entity, and each
entity holding an emission allowance or receiving an emission allowance
from the Administrator under this title, submit to the Administrator a
certificate of representation designating a designated representative.
``(c) Savings Provision.--Nothing in this title shall be
construed--
``(1) as requiring a change of any kind in any State law
regulating electric utility rates and charges, or as affecting
any State law regarding such State regulation, or as limiting
State regulation (including any prudency review) under such a
State law;
``(2) as modifying the Federal Power Act or as affecting
the authority of the Federal Energy Regulatory Commission under
that Act; or
``(3) as interfering with or impairing any program for
competitive bidding for power supply in a State in which such a
program is established.
``(d) Position Limits.--
``(1) In general.--The regulations promulgated under
section 729 shall limit the number of emission allowances that
an entity may hold at any time in a calendar year.
``(2) Limits.--The Administrator, in consultation with the
Commodity Futures Trading Commission, shall set limits under
paragraph (1)--
``(A) on the number of emission allowances
distributed in a calendar year that an entity may hold
in such calendar year;
``(B) on the total number of emission allowances
that an entity may hold in a calendar year;
``(C) so that no entity may at any time hold a
number of emission allowances that may influence the
price of emission allowances; and
``(D) in a manner that will ensure adequate
liquidity for buyers and sellers of emission
allowances.
``(e) Status of Surrendered Emission Allowances.--Once an emission
allowance is surrendered to the Administrator under this title, the
emission allowance shall be disqualified from subsequent use under this
title, including subsequent sale, exchange, or submission.
``(f) Orderly and Competitive Market.--The regulations promulgated
under section 729 shall specify all procedures and requirements
necessary for the orderly and competitive functioning of any emission
allowance market.
``SEC. 728. OVERSIGHT.
``(a) In General.--Not later than January 1, 2022, and every 2
years thereafter, the Comptroller General of the United States shall
submit to Congress a report on--
``(1) the results of implementation of this title; and
``(2) the progress in meeting the targets specified in
section 702(a).
``(b) Contents.--Each report under subsection (a) shall include--
``(1) a comprehensive evaluation of--
``(A) the efficiency, transparency, and soundness
of the distribution of emission allowances under this
title, and the Federal thermal energy reporting
program;
``(B) the cost-effectiveness of this title in
achieving the targets specified in section 702(a); and
``(C) the effectiveness of this title in
facilitating the deployment of additional zero-carbon
electricity capacity and useful thermal energy output
capacity; and
``(2) recommendations, if any, for legislative, regulatory,
or administrative changes with respect to this title to improve
its effectiveness and to reduce or eliminate any identified
waste, fraud, or abuse.
``(c) Additional Contents.--Each report under subsection (a) shall
address the effectiveness of this title in--
``(1) creating and preserving jobs;
``(2) ensuring a manageable transition to a zero-emission
economy for working families and workers;
``(3) reducing, or enhancing sequestration of, greenhouse
gases;
``(4) developing clean technologies; and
``(5) maintaining a liquid market for emission allowances.
``SEC. 729. REGULATIONS.
``Except as otherwise specified in this title, the Administrator
shall promulgate final regulations to carry out this title not later
than 24 months after the date of enactment of this title.
``SEC. 730. SAVINGS PROVISIONS.
``Nothing in this title shall be interpreted to relieve any person
from complying with any requirement of another title of this Act.''.
<all>
Introduced in House
Introduced in House
Referred to the House Committee on Energy and Commerce.
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