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IN A NUTSHELL: As reported in an AGI special update, the Senate spent the last week of July debating comprehensive energy legislation. That debate quickly devolved into bickering over nearly 400 proposed amendments and waging a partisan fight over President Bush's judicial nominees. Rather than leave town for the August recess without finishing the energy debate, Senate Minority Leader Tom Daschle (D-SD) and Senate Majority Leader Bill Frist (R-TN) brokered a deal under which this year's bill, S. 14, was traded for last year's, S. 517. The bill passed 84-14 setting the stage for a Conference Committee of House and Senate members to iron out the differences between this bill and the bill that the House passed, H.R. 6, on April 11th.

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THE DEAL: In the end, the one thing all sides could agree on was that it was better to pass a bill and move the energy debate further along in the legislative process than to do nothing at all. Democrats, who were losing votes on many of their amendments, agreed to the switch because last year's bill was sheparded through the process under a Democrat-controlled Senate by Daschle. Senate Republicans agreed to the switch believing that they can craft a bill closely mirroring the House-passed, presidentially backed version when the House and Senate meet for a Conference Committee.

Suprisingly, there was no objection to the unanimous consent (UC) agreement under which the bills were swapped. Any Senator, especially one of the 11 senators who voted against last year's version, could have objected and put an end to the deal. To pacify the objections of Senator Maria Cantwell (D-WA), Senators promised to allow separate votes later this year on energy-market manipulation. In order to win support from Senator McCain (R-AZ) for the switch, McCain and Senator Lieberman (D-CT) were guaranteed 6 hours of floor time to debate climate change when the Environment and Public Works Committee's Climate Stewardship Act comes up for debate. McCain and Lieberman are expected to offer an amendment that would set a national goal of stabilizing U.S. greenhouse emissions for several major industrial sectors at year 2000 levels by the year 2010.

Once the switch was made, 14 Senators still voted against the bill. They were Senators Barbara Boxer (D-CA), Hillary Rodham Clinton (D-NY), Russ Feingold (D-WI), Dianne Feinstein (D-CA), Edward Kennedy (D-MA), Jon Kyl (R-AZ), Frank Lautenberg (D-NJ), Patty Murray (D-WA), Jack Reed (D-RI), Charles Schumer (D-NY), John Sununu (R-NH), Ron Wyden (D-OR), McCain and Cantwell.

HOW THE TWO SENATE BILLS DIFFER: The major points of difference between the old and new Senate bills are:

• Renewable portfolio standards: Last year's bill would mandate electricity suppliers generate 10 percent of their power from renewable energy sources by 2020. This year, no RPS provision was included because Senators did not get that far on the list of amendments to debate.
• Climate change: Last year's bill would keep greenhouse gas (GHG) reporting voluntary for at least five years, but included a trigger that would make the registry mandatory if after five years it accounts for less than 60 percent of U.S. GHG emissions. This year, no climate change provisions were included because Senators did not get that far on the list of amendments to debate.
• Electricity: Last year's bill would amend the Federal Power Act to give the Federal Energy Regulatory Commission authority over regional transmission organizations (RTOs) and the ability to approve reliability standards for RTOs. This year, no language was included giving FERC powers to authorize RTO formation, and FERC would be prevented from implementing its "standard market design" reform plan until 2005, an issue that was not addressed last year.
• Price-Anderson Act reauthorization: Last year's bill called for reauthorization of the Price-Anderson nuclear liability act until 2012. This year's version would reauthorize Price-Anderson permanently.
• Nuclear power industry funding: Last year's bill said the Energy Department should aggressively pursue construction of a new power plant by 2010. This year's legislation would go much further, authorizing $1.13 billion for construction of an Advanced Reactor Hydrogen Co-Generation Project at the Idaho National Engineering and Environmental Laboratory. This year's bill also would provide nuclear loan guarantees.
• Hydropower: Last year's hydropower language would create two new procedures for hydropower relicensing, as opposed to four this year. The previous Senate bill also would allow any stakeholder to submit alternative conditions for operations and give the licensee's proposal greater weight, but S. 14 would allow only license applicants to submit an alternative in a "trial-type" hearing. Another significant difference between the two bills is that this year's language would make an even more explicit change in the definition of fish passage that would allow dam owners to use hatcheries as a substitute.
• Indian energy: The Indian energy titles in S. 517 and S. 14 are similar, but one difference generated much debate this year. Last year's title would have let tribes approve contracts, leases and rights-of-way for electricity generation and distribution projects, without approval from the Interior secretary. This year's title would broaden that to other kinds of energy projects. During floor debate in June, Sens. Daniel Inouye (D-HI)and Bingaman (D-NM) tried to strike the language, which they said would exempt the energy projects from National Environmental Policy Act reviews, but the Senate tabled their amendment, 52-47.
• Tax title: Though very close in total dollar amounts, last year's $14.5 billion tax package included no offsets. Both tax titles would include credits for the purchase of alternative motor vehicles and electric cars and incentives for the purchase of energy efficient appliances. This year's tax package was scored at $15.7 billion.

HOW THE HOUSE AND SENATE BILLS STACK UP: There are vast differences between last year's Senate bill, S. 517, and this year's House bill, H.R. 6. The 2002 Senate bill would have directed utilities to increase the amount of electricity generated by wind power and other renewable sources and created a new White House office on climate change and a registry of companies' greenhouse gas emissions. The House bill does not. This year's House legislation approved drilling in the Arctic National Wildlife Refuge; S. 517 did not. The Senate and House versions also differ on the authority given to federal regulators to oversee utility mergers. A chart showing how last year's Senate bill stacks up to this year's House bill can be found at http://www.agiweb.org/gap/legis108/energy_bill_comparison.html.

Going into conference a few issues have bipartisan support, like doubling production of ethanol, a corn-based gasoline additive, and restrictions on the Federal Energy Regulatory Commission's attempts to open the nation's power transmission system to more long-distance deliveries of electricity. However, in shelving this year's Republican energy bill, S.14, Senate GOP leaders gave up some important issues, including loan guarantees for half a dozen new nuclear power plants. Senate Republicans will be struggling to make up for lost ground and depending on the House to help them along the way.

The Conference Committee could convene as early as this fall to begin working out the differences between these two bills. They will have until the end of the 108th Congress, late fall or early winter 2004, to present a bill to the House and Senate, respectively, for a yes-or-no vote. No amendments may be made to legislation emerging from a Conference Committee.

Update prepared by Emily M. Lehr, AGI Government Affairs Program

Sources: Environment & Energy Daily, The Washington Post

Please send any comments or requests for information to the AGI Government Affairs Program.

Posted August 4, 2003

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