Clean Coal Power Act of 2004

IN THE HOUSE OF REPRESENTATIVES

March 11, 2003
Mr. PARKERSON (for himself) introduced the following bill; which was referred to the Committee on Science, and in addition to the Committees on Ways and Means, and Energy and Commerce, 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

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A BILL
To facilitate the production and generation of coal -based power.

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 `Clean Coal Power Act of 2004'.

SEC. 2. DEFINITIONS.

For purposes of this Act:

(1) COST AND PERFORMANCE GOALS- The term `cost and performance goals' means the cost and performance goals established under section 101(a).

(2) SECRETARY- The term `Secretary' means the Secretary of Energy.

TITLE I--CLEAN COAL GENERATION, FEEDSTOCKS, AND TRANSPORTATION

SEC. 101. COAL AND RELATED PROGRAMS.

(a) ESTABLISHMENT OF COST AND PERFORMANCE GOALS-

(1) IN GENERAL- The Secretary shall perform an assessment that identifies cost and performance goals, for achievement in 2007, 2015, and the years after 2020, for technologies that would permit the continued cost-competitive use of coal for electricity generation, as chemical feedstocks, and as transportation fuel.

(2) CONSULTATION- In establishing the cost and performance goals under this subsection, the Secretary shall--

(A) consider activities and studies undertaken by industry in cooperation with the Department of Energy in support of the assessment performed under paragraph (1); and

(B) consult with interested entities, including coal producers, industries using coal , organizations to promote coal and advanced coal technologies, environmental organizations, and organizations representing workers.

(3) TIMING- The Secretary shall--

(A) not later than 120 days after the date of enactment of this Act, issue a set of draft cost and performance goals for public comment; and

(B) not later than 180 days after the date of enactment of this Act, after taking into consideration any public comments received, transmit to Congress the final cost and performance goals.

(b) STUDY-

(1) IN GENERAL- Not later than 1 year after the date of enactment of this Act, and once every 2 years thereafter through 2016, the Secretary, in cooperation with other appropriate Federal agencies, shall conduct and transmit to the Congress a study to--

(A) identify technologies that, by themselves or in combination with other technologies, may be capable of achieving the cost and performance goals;

(B) assess the costs that would be incurred by, and the period of time that would be required for, the deployment of technologies that, by themselves or in combination with other technologies, contribute to the achievement of the cost and performance goals;

� develop recommendations for technology programs, which the Department of Energy could carry out in cooperation with industry, by themselves or in combination with other technologies, to achieve the cost and performance goals; and

(D) develop recommendations for additional authorities required to achieve the cost and performance goals and review and recommend changes, if any, to those cost and performance goals if the Secretary determines that such changes are necessary.

(2) EXPERT ADVICE- In carrying out this subsection, the Secretary shall give due weight to the expert advice of representatives of the entities described in subsection (a)(2)(B).

SEC. 102. PRODUCTION AND GENERATION OF COAL -BASED POWER.

(a) IN GENERAL- The Secretary shall carry out a program to facilitate production and generation of coal -based power through methods and equipment under--

(1) this title;

(2) the Federal Nonnuclear Energy Research and Development Act of 1974 (42 U.S.C. 5901 et seq.);

(3) the Energy Reorganization Act of 1974 (42 U.S.C. 5801 et seq.); and

(4) title XVI of the Energy Policy Act of 1992 (42 U.S.C. 13381 et seq.).

(b) CONDITIONS- The program described in subsection (a) shall be designed to achieve the cost and performance goals.

SEC. 103. AUTHORIZATION OF APPROPRIATIONS.

(a) IN GENERAL- There are authorized to be appropriated to the Secretary $200,000,000 for fiscal year 2005, $210,000,000 for fiscal year 2006, and $220,500,000 for fiscal year 2007, to remain available until expended, for carrying out the program under section 102, which may include--

(1) innovations for existing plants;

(2) integrated gasification combined cycle;

(3) advanced combustion systems;

(4) turbines for synthesis gas derived from coal ;

(5) carbon capture and sequestration;

(6) coal -derived transportation fuels and chemicals;

(7) solid fuels and feedstocks;

(8) advanced coal -related projects; and

(9) advanced separation technologies.

(b) LIMIT ON USE OF FUNDS- The Secretary shall not use funds appropriated under this section until 30 days after the Secretary has transmitted to the Congress a report describing the proposed use of such funds and containing a plan that includes--

(1) a detailed description of how proposals, if any, will be solicited and evaluated, including a list of all activities expected to be undertaken;

(2) a detailed list of technical milestones for each coal and related technology that will be pursued; and

(3) a description of how the programs for which such funds are authorized will be carried out so as to complement and not duplicate activities authorized under the Clean Coal Power Initiative authorized under title II.

TITLE II--CLEAN COAL POWER INITIATIVE

SEC. 201. PROJECT CRITERIA.

(a) IN GENERAL- The Secretary shall provide funding under this title for coal energy generation projects that advance efficiency, environmental performance, and cost competitiveness well beyond the level of technologies that on a full scale are in operation or have been demonstrated as of the date of enactment of this Act.

(b) TECHNICAL CRITERIA FOR CLEAN COAL POWER INITIATIVE-

(1) GASIFICATION-

(A) TECHNOLOGIES- In allocating the funds made available under section 204(a), the Secretary shall ensure that up to 80 percent of the funds are used for coal -based gasification technologies, including gasification combined cycle, gasification fuel cells, gasification coproduction, and hybrid gasification/combustion projects.

(B) TECHNICAL MILESTONES- The Secretary shall set technical milestones specifying emissions levels for projects funded under this paragraph. The milestones shall be designed to increasingly restrict emissions levels through the life of the program. The milestones shall be designed to achieve by 2020 coal gasification projects able--

(i) to remove 99 percent of sulfur dioxide;

(ii) to emit no more than .05 lb of NOX per million Btu;

(iii) to achieve substantial reductions in mercury emissions; and

(iv) to achieve a thermal efficiency of--

(I) 60 percent for coal of more than 9,000 Btu;

(II) 59 percent for coal of 7,000 to 9,000 Btu; and

(III) 50 percent for coal of less than 7,000 Btu.

(2) OTHER PROJECTS- For projects not described in paragraph (1), the Secretary shall set technical milestones specifying emissions levels. The milestones shall be designed to increasingly restrict emissions levels through the life of the program. The milestones shall be designed to achieve by 2010 projects able--

(A) to remove 97 percent of sulfur dioxide;

(B) to emit no more than .08 lb of NOX per million Btu;

� to achieve substantial reductions in mercury emissions; and

(D) except as provided in paragraph (4), to achieve a thermal efficiency of--

(i) 45 percent for coal of more than 9,000 Btu;

(ii) 44 percent for coal of 7,000 to 9,000 Btu; and

(iii) 40 percent for coal of less than 7,000 Btu.

(3) CONSULTATION- Before setting the technical milestones under paragraphs (1)(B) and (2), the Secretary shall consult with the Administrator of the Environmental Protection Agency and interested entities, including coal producers, industries using coal , organizations to promote coal or advanced coal technologies, environmental organizations, and organizations representing workers.

(4) EXISTING UNITS- In the case of projects at coal -powered electricity generating facilities existing as of the date of enactment of this Act, in lieu of the thermal efficiency requirements set forth in paragraph (1)(B)(iv) and (2)(D), the projects shall be designed to achieve an overall thermal efficiency improvement, compared to the efficiency of the unit as of the date of enactment of this Act, of not less than--

(A) 7 percent for coal of more than 9,000 Btu;

(B) 6 percent for coal of 7,000 to 9,000 Btu; and

� 4 percent for coal of less than 7,000 Btu.

(5) PERMITTED USES- In allocating amounts made available under this title, the Secretary may fund projects that include as part of the project the separation and capture of carbon dioxide.

� FINANCIAL CRITERIA- The Secretary shall not provide a funding award under this title unless the recipient has documented to the satisfaction of the Secretary that--

(1) the award recipient is financially viable without the receipt of additional Federal funding;

(2) the recipient will provide sufficient information to the Secretary for the Secretary to ensure
that the award funds are spent efficiently and effectively; and


(3) a market exists for the technology , as evidenced by statements of interest in writing from potential purchasers of the technology .

(d) FINANCIAL ASSISTANCE- The Secretary shall provide financial assistance to projects that meet the requirements of subsections (a), (b), and � and are likely to--

(1) achieve overall cost reductions in the utilization of coal to generate useful forms of energy;

(2) improve the competitiveness of coal among various forms of energy in order to maintain a diversity of fuel choices in the United States to meet electricity generation requirements; and

(3) demonstrate methods and equipment that are applicable to 25 percent of the electricity generating facilities that use coal as the primary feedstock as of the date of the enactment of this Act.

(e) FEDERAL SHARE- The Federal share of the cost of a project funded under this title shall not exceed 50 percent.

(f) APPLICABILITY- No technology , or level of emission reduction, shall be treated as adequately demonstrated for purposes of section 111 of the Clean Air Act, achievable for purposes of section 169 of that Act, or achievable in practice for purposes of section 171 of that Act solely by reason of the use of such technology , or the achievement of such emission reduction, by one or more facilities receiving assistance under this title.

SEC. 202. REPORT.

Not later than 1 year after the date of the enactment of this Act, and once every 2 years thereafter through 2012, the Secretary, in consultation with other appropriate Federal agencies, shall transmit to the Congress a report describing--

(1) the technical milestones set forth in section 201 and how those milestones ensure progress toward meeting the requirements of subsections (b)(1)(B) and (b)(2) of section 201; and

(2) the status of projects funded under this title.

SEC. 203. CLEAN COAL CENTERS OF EXCELLENCE.

As part of the program authorized under this title, the Secretary shall award competitive, merit-based grants to universities for the establishment of Centers of Excellence for Energy Systems of the Future. The Secretary shall provide grants to universities that can show the greatest potential for advancing new clean coal technologies.

SEC. 204. AUTHORIZATION OF APPROPRIATIONS.

(a) CLEAN COAL POWER INITIATIVE- Except as provided in subsection (b), there are authorized to be appropriated to the Secretary to carry out the activities authorized by this title $200,000,000 for each of the fiscal years 2005 through 2013, to remain available until expended.

(b) LIMIT ON USE OF FUNDS-

(1) OBLIGATION OF FUNDS- The Secretary is authorized to obligate the use of funds under this section prior to the fiscal year such funds are authorized for under subsection (a), subject to appropriations.

(2) REPORT- The Secretary shall transmit to the Congress a report describing the proposed use of funds which includes--

(A) a detailed assessment of whether the aggregate funding levels provided under subsection (a) are the appropriate funding levels for this title;

(B) a detailed description of how proposals will be solicited and evaluated, including a list of all activities expected to be undertaken;

� a detailed list of technical milestones for each technology that will be pursued; and

(D) a detailed description of how the initiative under this title will avoid problems enumerated in General Accounting Office reports on the Clean Coal Technology Program, including problems that have resulted in unspent funds and projects that failed either financially or scientifically.

(3) USE OF FUNDS- The Secretary may not use funds appropriated under this section until 30 days have elapsed after receipt of the report under paragraph (2).

� APPLICABILITY- Subsection (b) shall not apply to any project selected before September 30, 2004.

TITLE III--CONSERVATION

SEC. 301. CREDIT FOR PRODUCTION FROM A QUALIFYING CLEAN COAL TECHNOLOGY UNIT.

(a) CREDIT FOR PRODUCTION FROM A QUALIFYING CLEAN COAL TECHNOLOGY UNIT- Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to business related credits) is amended by adding at the end the following new section:

`SEC. 45G. CREDIT FOR PRODUCTION FROM A QUALIFYING CLEAN COAL TECHNOLOGY UNIT.

`(a) GENERAL RULE- For purposes of section 38, the qualifying clean coal technology production credit of any taxpayer for any taxable year is equal to the product of--

`(1) the applicable amount of clean coal technology production credit, multiplied by

`(2) the applicable percentage of the kilowatt hours of electricity produced and the equivalent heat value of other fuels or chemicals produced by the taxpayer during such taxable year at a qualifying clean coal technology unit, but only if such production occurs during the 10-year period beginning on the date the unit was returned to service after becoming a qualifying clean coal technology unit.

`(b) APPLICABLE AMOUNT-

`(1) IN GENERAL- For purposes of this section, the applicable amount of clean coal technology production credit is equal to $0.0034 per kilowatt-hour of electricity produced and the equivalent heat value of other fuels or chemicals produced from not more than 300,000 kilowatts of nameplate capacity at the same qualifying clean coal technology unit.

`(2) INFLATION ADJUSTMENT- For calendar years after 2004, the applicable amount of clean coal technology production credit shall be adjusted by multiplying such amount by the inflation adjustment factor for the calendar year in which the amount is
applied. If any amount as increased under the preceding sentence is not a multiple of 0.01 cent, such amount shall be rounded to the nearest multiple of 0.01 cent.


`� APPLICABLE PERCENTAGE- For purposes of this section, with respect to any qualifying clean coal technology unit, the applicable percentage is the percentage equal to the ratio which the portion of the national megawatt capacity limitation allocated to the taxpayer with respect to such unit under subsection (e) bears to the total megawatt capacity of such unit.

`(d) DEFINITIONS AND SPECIAL RULES- For purposes of this section--

`(1) QUALIFYING CLEAN COAL TECHNOLOGY UNIT- The term `qualifying clean coal technology unit' means a clean coal technology unit of the taxpayer which--

`(A) on the date of the enactment of this section was a coal -based electricity generating steam generator-turbine unit which was not a clean coal technology unit,

`(B) has a nameplate capacity rating of 300,000 kilowatts as of the date of enactment of this section,

`� becomes a clean coal technology unit as the result of the retrofitting, repowering, or replacement of the unit with clean coal technology , the nameplate capacity of which may then be greater than 300,000 kilowatts, during the 10-year period beginning on the date of the enactment of this section,

`(D) is not receiving nor is scheduled to receive funding under the Clean Coal Technology Program, the Power Plant Improvement Initiative, or the Clean Coal Power Initiative administered by the Secretary of Energy, and (E) receives an allocation of a portion of the national megawatt capacity limitation under subsection (e), which shall not exceed 300,000 kilowatts.

`(2) CLEAN COAL TECHNOLOGY UNIT- The term `clean coal technology unit' means a unit which--

`(A) uses clean coal technology , including advanced pulverized coal or atmospheric fluidized bed combustion, pressurized fluidized bed combustion, integrated gasification combined cycle, or any other technology for the production of electricity.

Aye

Aye

aye

Nay

The Chair votes aye.

This bill passes 4-1.