Air Quality: Multi-Pollutant Legislation in the 109th Congress

Order Code RL32755

CRS Report for Congress

Received through the CRS Web

Air Quality: Multi-Pollutant Legislation

in the 109th Congress

Updated May 8, 2006

-name redactedSpecialist in Energy Policy

Resources, Science, and Industry Division

-name redactedSpecialist in Environmental Policy

Resources, Science, and Industry Division

Congressional Research Service ˜ The Library of Congress

Air Quality: Multi-Pollutant Legislation

in the 109th Congress

Summary

With the prospect of new layers of complexity being added to air pollution

controls, and with electricity restructuring putting a premium on economic efficiency,

interest is being expressed in finding mechanisms to achieve health and

environmental goals in simpler, more cost-effective ways. The electric utility

industry is a major source of air pollution, particularly sulfur dioxide (SO2), nitrogen

oxides (NOx), and mercury (Hg), as well as suspected greenhouse gases, particularly

carbon dioxide (CO2). At issue is whether a new approach to environmental

protection could achieve the nation’s air quality goals more cost-effectively than the

current system.

One approach being proposed is a “multi-pollutant” strategy — a framework

based on a consistent set of emissions caps, implemented through emissions trading.

Just how the proposed approach would fit with the current (and proposed) diverse

regulatory regimes remains to be worked out; they might be replaced to the greatest

extent feasible, or they might be overlaid by the framework of emissions caps.

In February 2002, the Bush Administration announced two air quality initiatives.

The first, “Clear Skies,” would amend the Clean Air Act to place emission caps on

electric utility emissions of SO2, NOx, and Hg. Implemented through a tradeable

allowance program, the emissions caps would generally be imposed in two phases:

2008 and 2018. The second initiative begins a voluntary greenhouse gas reduction

program. This plan, rather than capping CO2 emissions, focuses on improving the

carbon efficiency of the economy, reducing current emissions of 183 metric tons per

million dollars of GDP to 151 metric tons per million dollars of GDP in 2012.

In the 109th Congress, seven bills have been introduced that would impose

multi-pollutant controls on utilities. Two of the bills, H.R. 227 and S. 131, are

modified versions of the Administration’s three-pollutant proposal. The other five

bills, S. 150, S. 730, S. 2724, H.R. 1451, and H.R. 1873, are four-pollutant proposals

that include carbon dioxide. S. 150 is similar to a bill reported by the Senate

Environment and Public Works Committee in the 107th Congress. Likewise, H.R.

1451 is similar to H.R. 1256, introduced in the 107th Congress. H.R. 1873 and S.

2724 are revised versions of S. 843, introduced in the 108th Congress. All of these

bills involve some form of emission caps, typically beginning in 2010; most include

a tradeable credit program to implement that cap. The provisions concerning SO2,

NOx, and Hg in S. 150, S. 730, S. 2724, H.R. 1451, and H.R. 1873 are generally

more stringent and take full effect earlier than the comparable provisions of S. 131.

S. 150, S. 730, S. 2724, H.R. 1451, and H.R. 1873 would cap utility emissions of

CO2. It is difficult to compare those CO2 caps with the Administration’s proposal

concerning CO2 — both because the Administration’s proposal is voluntary rather

than mandatory and because it is broader (covering all greenhouse gas emissions

rather than just utility CO2 emissions). However, it appears that actual U.S.

greenhouse gas emissions would be higher under the Administration’s proposal than

those allowed by S. 150, S. 730, and H.R. 1451. This report will be updated as

warranted.

Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

The Bush Administration’s Proposals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

Proposed Legislation and Legislative Action in the 109th Congress . . . . . . . 3

SO2, NOx, and Hg Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Related Regulatory Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

CO2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

List of Tables

Table 1. Emissions from U.S. Fossil-Fuel Electric Generating Plants . . . . . . . . . 1

Table 2. Comparison of Administration’s Voluntary Program with

Proposed Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Appendix. Comparison of Multi-Pollutant Control Proposals . . . . . . . . . . . . . . . 7

Air Quality: Multi-Pollutant Legislation

in the 109th Congress

Introduction

Electric utility generating facilities are a major source of air pollution. The

combustion of fossil fuels (petroleum, natural gas, and coal), which accounts for

about two-thirds of U.S. electricity generation, results in the emission of a stream of

gases. These gases include several pollutants that directly pose risks to human health

and welfare, including particulate matter (PM),1 sulfur dioxide (SO2), nitrogen oxides

(NOx), and mercury (Hg). Particulate matter, SO2, and NOx are currently regulated

under the Clean Air Act (CAA), and the Environmental Protection Agency (EPA) has

promulgated rules to regulate mercury beginning in 2010. Other gases may pose

indirect risks, notably carbon dioxide (CO2), which may contribute to global

warming.2 Table 1 provides estimates of SO2, NOx, and CO2 emissions from electric

generating facilities. Annual emissions of Hg from utility facilities are more

uncertain; current estimates indicate about 48 tons. Utilities are subject to an array

of environmental regulations, which affect in different ways both the cost of

operating existing generating facilities and the cost of constructing new ones.

Table 1. Emissions from U.S. Fossil-Fuel Electric Generating Plants

(thousands of metric tons)

Emissions

1999

2000

2001

2002

2003

2004

SO2

12,445

11,297

10,966

10,515

10,643

10,307

NOx

5,732

5,380

5,045

4,802

4,326

3,951

CO2

2,326,558

2,429,394

2,379,603

2,395,232

2,415,804

2,444,443

Source: Energy Information Administration. Includes emissions from combined-heat-and-power plants.

The evolution of air pollution controls over time and as a result of growing

scientific understanding of health and environmental impacts has led to a

multilayered and interlocking patchwork of controls. Moreover, additional controls

are in the process of development, particularly with respect to NOx as a precursor to

ozone, to both NOx and SO2 as contributors to PM2.5, and to Hg as a toxic air

pollutant. Also, under the United Nations Framework Convention on Climate

1

Particulate matter is regulated depending on the particle size; current regulations address

particles less than 10 microns in diameter (PM10); EPA has promulgated regulations for

particles less than 2.5 microns in diameter (PM2.5) that are in the process of being

implemented. SO2 and NOx emissions would be affected by regulations of PM2.5.

2

Steam-electric utilities produce minor amounts of volatile organic compounds (VOCs),

carbon monoxide (CO), and lead — on the order of 2% or less of all sources.

CRS-2

Change (UNFCCC), the United States agreed to voluntary limits on CO2 emissions.

The current Bush Administration has rejected the Kyoto Protocol, which would

impose mandatory limits, in favor of a voluntary reduction program. In contrast to

the Administration’s position, in June 2005, the Senate passed a Sense of the Senate

calling for mandatory controls on greenhouse gases while not imposing significant

harm to the economy.3

For many years the complexity of the air quality control regime has caused some

observers to call for a simplified approach. Now, with the potential both for

additional control programs on SO2 and NOx and for new controls directed at Hg and

CO2 intersecting with the technological and policy changes affecting the electric

utility industry, such calls for simplification have become more numerous and

insistent. One focus of this effort is the “multi-pollutant” or “four-pollutant”

approach. This approach involves a mix of regulatory and economic mechanisms

that would apply to utility emissions of up to four pollutants in various proposals —

SO2, NOx, Hg, and CO2. The objective would be to balance the environmental goal

of effective controls across the pollutants covered with the industry goal of a stable

regulatory regime for a period of years.4

The Bush Administration’s Proposals

In February 2002, the Bush Administration announced two air quality proposals

to address the control of emissions of SO2, NOx, Hg, and CO2.5 The first proposal,

called “Clear Skies,” would amend the Clean Air Act to place emission caps on

electric utility emissions of SO2, NOx, and Hg. Implemented through a tradeable

allowance program, the emissions caps would be imposed in two phases: 2010 (2008

in the case of NOx) and 2018. As part of a complete rewrite of Title IV of the Clean

Air Act, the Administration’s proposal was introduced in the 108th Congress as H.R.

999 and S. 485. Revised versions of Clear Skies legislation have been introduced in

the 109th Congress as H.R. 227 and S. 131.6

The second Administration proposal initiates a new voluntary greenhouse gas

reduction program, similar to ones introduced by the earlier George H. W. Bush and

Clinton Administrations.7 Developed in response to the U.S. ratification of the 1992

UNFCCC, these previous plans projected U.S. compliance, or near compliance, with

3

S.Amdt. 866 to H.R. 6, The Energy Policy Act of 2005 (June 22, 2005).

4

CRS Report RL30878, Electricity Generation and Air Quality: Multi-Pollutant Strategies,

by (name redacted) and (name redacted).

5

Papers outlining the Administration’s proposals are available from the White House

website: [http://www.whitehouse.gov/news/releases/2002/02/clearskies.html] for the three

pollutant proposal, and [http://www.whitehouse.gov/news/releases/2002/02/climatechange.

html] for the climate change initiative.

6

While H.R. 227 adopts the SO2 and NOx emission caps of the Administration’s Clear Skies

proposal, it does not include many other provisions, including regulatory changes.

7

For a discussion of those previous plans, see CRS Report 94-404 ENR, Climate Change

Action Plans, by (name redacted) and (name redacted), May 9, 1994 (archived, available from the

authors).

CRS-3

the UNFCCC goal of stabilizing greenhouse gas emissions at their 1990 levels by the

year 2000 through voluntary measures. The Bush Administration proposal does not

make that claim, only projecting a 100 million metric ton reduction in emissions from

what would occur otherwise in the year 2012. Instead, the plan focuses on improving

the carbon efficiency of the economy, reducing current emissions of 183 metric tons

per million dollars of GDP to 151 metric tons per million dollars of GDP in 2012.

It proposes several voluntary initiatives, along with increased spending and tax

incentives, to achieve this goal. The Administration notes that the new initiatives

would achieve about one-quarter of the objective, while three-quarters of the

projected reduction would occur through already existing efforts.

Proposed Legislation and Legislative Action

in the 109th Congress

In the 109th Congress, seven bills have been introduced that would impose

multi-pollutant controls on utilities. Two of the bills, H.R. 227 (Sweeney) and S. 131

(Inhofe), are modified versions of the Administration’s three-pollutant proposal. The

other five bills, S. 150 (Jeffords), S. 730 (Leahy), S. 2724 (Carper), H.R. 1451

(Waxman), and H.R. 1873 (Bass), are four-pollutant proposals that include carbon

dioxide. S. 150 is similar to a bill reported by the Senate Environment and Public

Works Committee in the 107th Congress. Likewise, H.R. 1451 is similar to H.R.

1256, introduced in the 107th Congress. Finally, H.R. 1873 and S. 2724 are revised

versions of S. 843, introduced in the 108th Congress. All of these bills involve some

form of emission caps, typically beginning in 2010; most include a tradeable credit

program to implement that cap. The provisions concerning SO2, NOx, and Hg in S.

150, S. 730, S. 2724, H.R. 1451, and H.R. 1873 are generally more stringent and take

full effect earlier than the comparable provisions of S. 131. S. 150, S. 730, S. 2724,

H.R. 1451, and H.R. 1873 would cap utility emissions of CO2. It is difficult to

compare those CO2 caps to the Administration’s proposal concerning CO2 — both

because the Administration’s proposal is voluntary rather than mandatory and

because it is broader (covering all greenhouse gas emissions rather than just utility

CO2 emissions). However, it appears that actual U.S. greenhouse gas emissions

would be higher under the Administration’s proposal than those allowed by S. 150,

S. 730, and H.R. 1451.

The seven bills are summarized in the Appendix. Each of these bills, except

S. 730, generally builds on the SO2 allowance trading scheme contained in Title IV

of the 1990 Clean Air Act Amendments (CAAA).8 Under this program utilities are

given a specific allocation of permitted emissions (called allowances) and may

choose to use those allowances at their own facilities, or, if they do not use their full

quota, to bank them for future use or to sell them to other utilities needing additional

allowances. In contrast, S. 730 permits emissions averaging within a single facility,

but not across sites.

SO2, NOx, and Hg Controls. As indicated in the Appendix, the caps for

SO2 and NOx in S. 131 are less stringent for 2010 than in S. 150, S. 730, and H.R.

1451, and remain less stringent even through the second phase beginning in 2018.

8

P.L. 101-549.

CRS-4

H.R. 227 would require full compliance with its SO2 and NOx provisions by 2014,

in effect accelerating S. 131’s proposed phase 2 emission caps by four years.

However, S. 131’s phase 1 NOx reduction would begin two years earlier (2008) than

S. 150, S. 730, H.R. 227, or H.R. 1451, and one year sooner than H.R. 1873.

Allowance allocation schemes for the bills also differ, with S. 150 containing

detailed provisions for allocating SO2, NOx, and CO2 allowances to various

economic sectors and interests. In most cases, these interests (or their trustees in the

case of households and dislocated workers and communities) would auction off (or

otherwise sell) their allowances to the affected utilities, and use the collected funds

for their own purposes. In contrast, S. 131 would base its allowance formulas on fuel

usage adjusted by factors specified in the bill, while H.R. 227 and H.R. 1451 would

leave the allocation issue to EPA. S. 730 provides no specifics on allocating and

implementing its SO2, NOx, and CO2 caps on electric utilities, whereas H.R. 1873

and S. 2724 specify CO2 and NOx limitations based on electricity output, and SO2

limitations based on the current Title IV program.

On mercury, S. 131’s emissions goal would allow about three times more

emissions and eight more years for compliance than S. 150, S. 730, and H.R. 1451,

which also would mandate plant-by-plant controls; H.R. 227 would require EPA to

promulgate Hg regulations by March 15, 2005; and H.R. 1873 and S. 2724 provide

for limitations in between those of S. 150 and S. 131, but includes unit-by-unit

emissions limitations. (It is difficult to compare the Hg controls of S. 131, S. 150, S.

730, S. 2724, H.R. 1451, or H.R. 1873 to H.R. 227, which does not specify an Hg

emissions goal, leaving regulation up to EPA.) S. 730 is the most comprehensive bill

with respect to Hg control, including not only a stringent cap on electric utility

emissions but also substantial reduction requirements for six other categories of Hg

emitters.

Related Regulatory Provisions. In addition to the emissions caps, S. 131

would substantially modify or eliminate several provisions in the Clean Air Act with

respect to electric generating facilities. The bill would eliminate New Source

Performance Standards (NSPS) (Section 111) and replace them with statutory

standards for SO2, NOx, particulate matter, and Hg for new sources. Modified

sources could also opt to comply with these new statutory standards and be exempted

from the applicable Best Available Control Technology (BACT) determinations

under Prevention of Significant Deterioration (PSD) provisions (CAA, Part C) or

Lowest Achievable Emissions Rate (LAER) determinations under non-attainment

provisions (CAA, Part D). Compliance with these provisions exempts such facilities

from New Source Review (NSR), PSD-BACT requirements, visibility Best Available

Retrofit Technology (BART) requirements, Maximum Achievable Control

Technology (MACT) requirements for Hg, and non-attainment LAER and offset

requirements. The exemption does not apply to PSD-BACT requirements if facilities

are within 50 km of a PSD Class 1 area. Existing sources can also receive these

exemptions if they agree to meet a particulate matter standard specified in the bill

along with good combustion practices to minimize carbon monoxide emissions

within three years of enactment. In addition, S. 131 would provide these exemptions

for industrial sources that choose to opt into the Clear Skies program.

H.R. 1873 also contains significant regulatory provisions. The bill would revise

the NSR program to require pre-1971 electric generating units to meet specific SO2

CRS-5

and NOx performance standards (a provision also contained in S. 2724 but with more

stringent standards). In addition, H.R. 1873 would require LAER and BACT

definitions be revised on a biannual basis and place a cost cap on any LAER

definition. In conjunction with these changes, the bill would eliminate the current

CAA offset requirement in non-attainment areas beginning in 2010. H.R. 1873 would

also provide affected units a 20-year exemption from BART requirements under the

CAA visibility provisions. Other changes to the visibility provision include the

codification of the Western Regional Air Partnership (WRAP) agreement with

respect to sulfur dioxide emissions.

S. 150 would require all powerplants 40 years or older to meet emission

limitations based on current best available control technology for a new source. In

a similar vein, H.R. 1451 would require all powerplants 30 years or older to meet

current New Source Performance Standards (NSPS) requirements.

S. 131 also would include an exemption for steam electric generating facilities

from Hg regulation under Section 112 of the CAA (including the residual risk

provisions), and relief from enforcement of any Section 126 petition (with respect to

reducing interstate transportation of pollution) before December 31, 2014.

In addition to its NSR provision, S. 2724 would eliminate the annual NOx cap

established under EPA’s recently promulgated Clean Air Interstate rule (CAIR) upon

promulgations of S. 2724’s new NOx program or January 1, 2009, whichever occurs

last. It would retain CAIR’s seasonal NOx cap for ozone.

Neither H.R. 227, S. 150, S. 730, nor H.R. 1451 would provide such regulatory

relief provisions.

CO2. Of the seven bills, S. 150, S. 730, S. 2724, H.R. 1451, and H.R. 1873

would specify CO2 reductions. In contrast, the Administration’s CO2 proposal relies

on various voluntary programs and incentives to encourage reductions in greenhouse

gases from diverse sources, including CO2 emissions from electric generation.

Based on the estimate provided by the Administration’s climate change

proposal, and using the 2002 Climate Action Report9 (CAR) for projections to 2010,

Table 2 presents estimates of U.S. greenhouse gas emissions in 2010, assuming the

Administration’s voluntary program reaches a proportional percentage of its 2012

goals.10 This should not be taken as a given, as neither the George H. W. Bush

Administration’s program nor the Clinton Administration’s program achieved their

stated goals. Thus, in one sense, comparing a mandatory reduction program such as

that proposed by S. 150, S. 730, S. 2724, H.R. 1451, or H.R. 1873 with the

Administration’s voluntary program is comparing apples to oranges. The first is

legally binding, the second is an exhortation.

9

Climate Action Report — 2002, at [http://www.epa.gov/globalwarming/publications/car/

index.html]. This is the U.S. report to the UNFCCC Secretariat on U.S. emissions and

measures taken to reduce them.

10

For a discussion of emission projections and trends, see CRS Report 98-235 ENR, Global

Climate Change: U.S. Greenhouse Gas Emissions — Status, Trends, and Projections, by

(name redacted) and (name redacted).

CRS-6

While S. 150, S. 730, and H.R. 1451 focus on electric utility emissions, the

mandated reductions would result in lower total greenhouse gas emissions in 2010

than those projected to occur under the Administration’s initiative that includes all

sources of all greenhouse gases. Both H.R. 1873 and S. 2724 require fewer

reductions than the Administration hopes to achieve from its economy-wide

initiative. However, neither the proposed legislation nor the Administration’s

initiative would be sufficient to bring U.S. emissions near the 1990/1995 baseline

used under the 1997 Kyoto Protocol, much less the 7% reduction in emissions from

that baseline that would have been assigned to the United States under the Protocol.

Discussion in the CAR observes that the pace of economic growth would affect

emissions. A high economic growth scenario would increase energy use and related

carbon emissions, compared to the reference case of “business as usual”; likewise,

lower economic growth would decrease emissions. For example, under a high

economic growth scenario, greenhouse emissions in 2010 would increase 37.7%

above those in 1990, based on energy growth alone. This increase would represent

an additional 53 million metric tons of emissions over the reference case.11 However,

S. 150 and S. 730 would cap emissions from increased electricity generation at 1990

levels, which would reduce the 53 million metric tons by 16 million metric tons, or

30% of the high growth increase. The Administration’s initiative is voluntary and

addresses carbon intensity, not absolute emission levels; it does not cap emissions

growth.

Table 2. Comparison of Administration’s Voluntary Program

with Proposed Legislation

Percentage change v.

business as usual (2010)

Percentage change v.

1990/1995 baseline levels

per the Kyoto Protocol

S. 150, S. 730

-8.2%

+21.2%

H.R. 1451

-9.4%

+19.6%

H.R. 1873/S. 2724a

-1.5%

+30.1%

Administration’s

Voluntary Programb

-3.6%

+27.3%

Business as Usual

0

+32.0%

Source: CRS calculations based on projections contained in 2002 CAR.

a. Bills include a second phase in 2015 that would further reduce emissions.

b. Assumes 80% of the Administration’s 2012 voluntary goal is achieved in 2010.

11

Energy Information Administration, Annual Energy Outlook 2000, DOE/EIA-0383

(Washington, DC, 2002), December 2001, p. 177.

CRS-7

Appendix. Comparison of Multi-Pollutant Control Proposals

Provisions

H.R. 227

(Sweeney)

S. 150 (Jeffords)

S. 131

(Inhofe)

S. 730

(Leahy)

H.R. 1451

(Waxman)

H.R. 1873

(Bass)

S. 2724

(Carper)

Emissions

Cap on NOx

2.1 million

tons in 2010,

declining to

1.7 million

tons in 2014.

1.51 million tons

in 2010.

2.19 million tons in

2008, declining to

1.79 million tons in

2018.

1.51 million tons

from utilities in

2010.

Estimated at

1.5 million

tons in 2010.

1.87 million tons

in 2009,

declining to 1.7

million tons in

2015.

1.9 million tons in

2009 (East)/2010

(West) declining to

1.62 in 2015.

Emissions

Cap on SO2

4.45 million

tons in 2010,

declining to

3.0 million

tons in 2014.

2.25 million tons

in 2010.

4.5 million tons in

2010, declining to 3.0

million tons in 2018.

2.25 million tons

from utilities in

2010.

2.23 million

tons in 2010.

4.5 million tons

in 2010,

declining to 3.5

million tons in

2014, and to

2.25 million tons

in 2017.

4.5 million tons in

2010, declining to 2.0

million tons in 2015.

Emission Cap

on CO2

Not covered.

2.05 billion tons

from utilities in

2010.

Not covered.

2.05 billion tons

from utilities in

2010.

Estimated at

1.937 billion

tons in 2010.

Estimated at

2.65 billion tons

in 2010,

declining to 2.45

billion tons in

2015.

Estimated at 2.65

billion tons in 2010,

declining to 2.45

billion tons in 2015.

Emissions

Cap on

Mercury

EPA to

promulgate

regulations by

March 15,

2005.

5 tons in 2009.

34 tons in 2010,

declining to 15 tons in

2018.

5 tons in 2009

from utilities;

percentage

reductions up to

95% for other Hg

sources.

Estimated at

4-5 tons in

2010.

24 tons in 2010,

declining to 10

tons in 2015.

Estimated at 19-23

tons in 2010,

declining to 7-8 tons

in 2015.

Scope

50 states and

DC.

50 states and DC.

50 states, DC, and

territories.

50 states and DC.

50 states and

DC.

50 states and

DC.

50 states and DC.

Affected

Units

Electric

generating

facilities 25

Mw or

greater; Hg

regulations to

include

Electric

generating

facilities 15 Mw

or greater (coalfired only for

Hg).

Existing electric

generating facilities

25 Mw or greater

(coal-fired only for

Hg); co-generation

sources exempted.

For all pollutants:

all electric

generating

facilities.

Electric

generating

facilities 15

Mw or

greater.

Electric

generating

facilities 25 Mw

or greater (coalfired only for

Hg).

Electric generating

facilities 25 Mw or

greater (coal-fired

only for Hg).

For Hg only: Six

categories of

CRS-8

Provisions

H.R. 227

(Sweeney)

S. 150 (Jeffords)

S. 131

(Inhofe)

industrial

sources.

Penalties for

noncompliance

NOx: $6,000

per excess ton

plus one-forone offset

from future

emission

allocations.

SO2: same as

CAA, title IV.

Hg: not

specified,

CAA

enforcement

provisions

would apply.

S. 730

(Leahy)

H.R. 1451

(Waxman)

H.R. 1873

(Bass)

S. 2724

(Carper)

Determined

by EPA.

NOx: $5,000 per

excess ton plus

one-for-one

offset from

future emission

allocations.

NOx: Twice the

average price per

excess ton plus onefor-one offset from

future emission

allocations.

SO2: same as

CAA, title IV.

SO2: same as CAA,

title IV.

Hg: $10,000 per

excess pound

plus one-for-one

offset from

future emissions

allocations.

Hg: $50,000 per day

for each excess pound

emitted.

industrial boilers,

processes,

incinerators and

combusters.

NOx , SO2 and

CO2 same as

CAA, title IV,

except excess

emission penalty

is three times the

average market

price for

allowances.

Hg: three times

the average Hg

control costs per

gram of excess

emission.

NOx, SO2, Hg:

reduces the excess

emissions penalties

under CAA, title IV to

the EPA auction

clearing price for

allowances plus onefor-one offset from

future emission

allocations, if paid

within 30 days.

Otherwise, the

number of excess

emissions is

multiplied by 1.5 for

penalty purposes.

For NOx, SO2

CO2: not

specified, CAA

enforcement

would apply.

Hg: CAA

enforcement

defined.

CO2: $100 per

excess ton plus

one-for-one

offset from

future emissions

allocations.

CO2: $100 per excess

ton plus one-for-one

offset from future

emissions allocations.

CRS-9

Provisions

Special

Provisions

H.R. 227

(Sweeney)

EPA to

determine by

2014 whether

emission

reductions

sufficient to

protect

sensitive

regional

ecosystems; if

not, EPA must

promulgate

rules requiring

additional

NOx and SO2

reductions

within two

years of such

determination.

S. 150 (Jeffords)

Beginning in

2014, all

powerplants 40

years or older

must meet

emission

limitations based

on current best

available control

technology for a

new major

source.

SO2 cap divided

by region (West

and East) with no

trading permitted

between regions.

EPA to determine

by 2013 whether

emission

reductions

sufficient to

protect sensitive

regional

ecosystems; if

not, EPA must

promulgate rules

requiring

additional NOx

and SO2

reductions within

two years of such

determination.

Other provisions

to protect local air

quality.

S. 131

(Inhofe)

S. 730

(Leahy)

H.R. 1451

(Waxman)

H.R. 1873

(Bass)

S. 2724

(Carper)

New performance

standards for new

sources replace

current NSPS for new

sources. Compliance

with bill’s provisions

exempts facilities

from New Source

Review (NSR), PSDBACT requirements,

visibility BART

requirements, and

non-attainment LAER

and offset

requirements. The

exemption does not

apply to PSD-BACT

requirements if

facility is within 50

Km of Class 1 area.

Existing sources can

opt in by meeting a

particulate standard.

SO2 cap divided

by region (West

and East);

however, regions

are not defined.

All

powerplants

30 years or

older must

meet current

New Source

Performance

Standard

(NSPS)

requirements.

Revises NSR

program to

require pre-1971

electric

generating units

to meet specific

SO2 and NOx

performance

standards.

Requires EPA to

revise LAER

and BACT

definition on biannual basis and

puts a cost cap

on LAER

definition.

Current CAA

offset

requirement in

non-attainment

areas eliminated

in 2010.

NOx cap divided by

region (West and

East).

Exempts utility units

from Hg regulation

under CAA, Section

112, including

residual risk

provisions.

Western

Regional Air

Partnership

(WRAP)

agreement

codified.

Prevents EPA from

enforcing Section 126

petitions before

December 31, 2014.

Exempts

affected units

from visibility

BART

requirements for

20 years.

NOx cap divided by

region (West and

East).

Revises NSR program

to require affected

electric generating

units 50 years or older

to meet specific SO2

and NOx performance

standards beginning in

2020.

CRS-10

Provisions

Implementation

Strategy

H.R. 227

(Sweeney)

Tradeable

allowance

system for

SO2 and NOx.

Hg

compliance on

a source-bysource basis.

S. 150 (Jeffords)

Tradeable

allowance system

for SO2 (restricted

between East and

West regions),

NOx and CO2.

Allowances

allocated to

various sectors

and interests,

including

households,

dislocated

workers and

communities,

electricity

intensive

industries,

affected utilities,

energy efficiency

and renewable

energy activities,

and sequestration

activities.

Hg compliance

on a source-bysource basis

(plantwide

averaging

explicitly

allowed).

S. 131

(Inhofe)

S. 730

(Leahy)

H.R. 1451

(Waxman)

H.R. 1873

(Bass)

S. 2724

(Carper)

Tradeable allowance

system for SO2, NOx,

and Hg. Allocation

formulas based on

historic fuel usage

adjusted by factors

specified in the bill.

For SO2, NOx,

and CO2: no

allocation

formula or

implementation

strategy specified.

To be

determined

by EPA —

market

mechanisms

permitted

(except for

Hg).

Tradeable

allowance

system for all

pollutants. For

NOx, Hg, and

CO2, allocations

based on historic

electricity

output. For SO2

allocations based

on current Title

IV scheme.

Tradeable allowance

system for NOx

(restricted between

east and west regions),

SO2 and CO2. For

NOx, and CO2,

allocations based on

historic electricity

output. For SO2

allocations based on

current Title IV

scheme.

Special reserves

for new units

provided for all

pollutants

covered.

CO2 program includes

allowance allocations

for incremental

nuclear capacity and

renewable energy,

along with

sequestration and

early action

provisions.

7% of SO2 and 5% of

NOx and Hg

allowances are set

aside for new units.

For Hg from

electric

generating

facilities:

allocation is

based on

electricity output.

Emissions

averaging is

permitted within a

facility.

For Hg from

other sources:

allocation is

based on a

percentage

reduction from an

historic baseline

or, for some

categories, an

emission

performance rate.

CO2 program

includes

allowance

allocations for

incremental

nuclear capacity

and renewable

energy, along

with

sequestration

and early action

provisions.

For Hg, unit-byunit emissions

limitations

included.

Source: Congressional Research Service.

For Hg, a source-bysource limitation is

based on the less

stringent of an outputbased performance

standard or percent

reduction from inlet

Hg levels. Emissions

averaging is permitted within a facility.

Reserves for new units

provided for CO2,

NOx, and SO2.

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