The bill ordered reported by the Committee on Energy and Commerce in this Congress differs dramatically from the one reported in the previous Congress. In the 107th Congress, the Committee worked in a bipartisan manner to report a bill that most of our Committee could support. In order to do so, the Committee developed bipartisan compromises in some areas, such as hydroelectric relicensing, and agreed to defer consideration of other matters, such as electricity issues, until a consensus arose.

In this Congress, Republicans included a variety of controversial provisions which weaken environmental laws and reduce protections for consumers and investors.

Title I – Energy Conservation (and Efficiency)

This title consists of generally noncontroversial provisions agreed to by the House and Senate during the 107th Congress conference on H.R. 4, "Securing America’s Future Energy Act." It includes provisions on existing Federal energy conservation programs, Federal demand management, the "Energy Star" program, and various regulatory programs for energy efficient products, appliances, and buildings. It also reauthorizes the Low Income Home Energy Assistance Program through 2006, and requires the Department of Health and Human Services to report on prevention of loss of life from extreme temperatures.

Title II – Oil and Gas

Many provisions are identical to the 107th conference agreement and largely noncontroversial, such as permanent authorization of the Strategic Petroleum Reserve (SPR) and Northeast Home Heating Oil Reserve, and enabling legislation for a natural gas pipeline from Alaska’s north slope limiting applications to the "southern route."

Title II also includes several provisions not included in legislation considered during the 107th Congress, two of which are relatively noncontroversial. The first authorizes a Department of Energy (DOE) demonstration program on "Unproven Oil and Natural Gas Reserve Recovery" (Sec. 2301). The second is a bipartisan compromise (based on the Markey amendment withdrawn at the Subcommittee markup) to improve natural gas market data transparency (Sec. 2402).

Title II also addresses controversial matters, including a provision on hydraulic fracturing which departs from a compromise reached during the conference on H.R. 4 in the 107th Congress. The new provision (Sec. 2001) overturns an 11th Circuit Court of Appeals decision, and eliminates existing federal authority under the Safe Drinking Water Act to ensure that hydraulic fracturing does not endanger underground drinking water sources.

Title II includes two other new controversial provisions. The first, which relates to natural gas pipeline construction projects (including liquefied natural gas facilities), indirectly amends the Coastal Zone Management Act and appears to undermine state "consistency" determinations (Sec. 2401). The second amends the Federal Water Pollution Control Act (Sec. 2403).

Title III – Hydroelectric Relicensing

Title III alters the hydroelectric relicensing process by conferring super-party status on license applicants by allowing them to propose alternatives to the mandatory conditions of the resource agencies. The Secretary of the relevant agency must accept the alternative provided it meets certain criteria, one of which is a weaker standard for the protection of public lands. License applicants are also entitled to an on-the-record, trial-type hearing, and a referral of their disputes to the FERC's Dispute Resolution Service. None of these procedural entitlements are granted to other legitimate stakeholders in the relicensing process including states, tribes, sportsmen, or concerned citizens.

The title also contains a rollback of fishway prescriptions that have been a part of the law for nearly 100 years. By allowing license applicants to substitute a hatchery for a fishway, the bill could have disastrous effects on migratory fish species. Allowing fish to pass upstream and downstream of a dam ensures that their natural patterns and life cycle are not interrupted. This is vital not only to the species, but to river health in general.

This title also contains the bulk of an amendment adopted at Subcommittee (offered by Rep. Shadegg) that creates a new incentive payment program for hydroelectric facilities that are located on existing dams that currently do not generate electricity. This program is authorized at $10 million per year for 10 years, and provides that no facility may receive more than $750,000 per year. It also includes an incentive payment program for capital improvements at existing facilities.

Title IV – Nuclear Matters

Title IV includes a number of matters reported by the Committee and passed by the House during the 107th Congress, including a 15-year reauthorization of the Price-Anderson Act (identical to H.R. 2983 in the 107th Congress, which included several bipartisan reforms); several noncontroversial provisions concerning the Nuclear Regulatory Commission (NRC); and several provisions from the 107th Congress House counterterrorism bill. The title also includes a uranium sales provision which is similar but not identical to a section in H.R. 4 during the 107th Congress. The title also includes a new provision on medical isotope production (Sec. 4031).

Title V – Vehicles and Fuels

This title modifies the purchase requirements for Federal automobile fleets under the Energy Policy Act of 1992. It also contains the President’s hydrogen fuel program and a series of research, development, and deployment incentives for advanced vehicle technologies that were part of H.R. 4, as it passed the House in the 107th Congress, or were under consideration in the House-Senate conference on H.R. 4.

Title VI – DOE Programs

Title VI includes a number of agreements from the 107th Congress conference on H.R. 4. Some of these provisions, in a different form, were reported by the House Committee on Science in the 107th Congress. While much of this title is substantively noncontroversial, it includes a controversial provision on nuclear fuel recycling (Sec. 6411).

Title VII – Electricity

During the 107th Congress, comprehensive energy legislation reported by the Committee on Energy and Commerce and included in H.R. 4 as passed by the House, did not address electricity issues. This is a highly contentious title. Its major provisions include:

(1) Transmission rates – It directs FERC to set rates that encourage investment in new transmission capacity. It may tilt the Commission in favor of building lines instead of encouraging demand reduction or new generation located near customers (e.g., distributed generation) (Sec. 7011).

(2) Transmission siting – It authorizes FERC to preempt state transmission line siting decisions for "congestion areas" designated by DOE (Sec. 7012). It also authorizes DOE to preempt other agencies’ decisions on siting transmission lines on Federal lands, including denials pursuant to the Endangered Species Act, the Clean Water Act, and the Federal Land Management and Policy Act (Sec. 7012(j)). It also authorizes states to form voluntary interstate regional transmission siting compacts (Sec. 7012(k)).

(3) Public power and FERC jurisdiction – It subjects public power (Federal agencies, municipal power entities, and rural cooperatives) to FERC transmission authority under a "comparability" standard (for rates, terms and conditions of transmission service). It exempts some small public entities that do not own or operate interstate transmission facilities (Sec. 7021).

It also includes a sense of Congress provision that voluntary participation in a regional transmission organization (RTO) is desirable (Sec. 7022(a)), and that RTO members should be provided a return on equity to support transmission expansion (Sec. 7022(b) - this is similar to the policy in Sec. 7011). It authorizes Federal agencies to participate in RTO’s (Sec. 7022(d)). Subjects public power to limited FERC refund and investigative authority (Sec. 7092).

(4) Native load – It provides a priority in transmission service to any party that owns interstate transmission facilities (or holds a contract of service agreement for firm transmission service used to purchase or deliver power) to meet a "service obligation" or fulfill a wholesale contract existing on March 28, 2003 (Sec. 7023). This priority takes precedence over other parties’ use of the transmission system, and is specifically declared not to constitute an "undue discrimination or preference" under the Federal Power Act (Sec. 7023(e)).

A "savings clause" for some actions at certain independent transmission organizations was adopted at full committee, the effect of which is unclear (the affected "ISO’s" are: PJM, New York ISO, New England ISO, Midwest ISO/MISO, and the California ISO).

(5) Reliability – It includes the latest "consensus" transmission reliability language, with special New York State provisions (Sec. 7031).

(6) Public Utility Holding Company Act of 1935 (PUHCA) – It repeals PUHCA. Despite concerns raised by recent scandals and growing utility market woes, the only protection adopted for consumers and investors is a "books and records" provision that imposes a higher burden on state regulators seeking information than on FERC (Sec. 7041 et seq).

(7) Public Utility Regulatory Policies Act of 1978 (PURPA) – It requires that states consider "real-time pricing and time-of-use metering" (Sec. 7061), "smart metering" (Sec. 7063), and "net metering" (Sec. 7071); includes a modified version of the Boucher amendment accepted in Subcommittee to terminate mandatory purchase and sale agreement under certain conditions (Sec. 7062).

(8) Renewable energy – It reauthorizes a renewable energy production incentive program (REPI), expanding to include landfill gas (Sec. 7072).

(9) Market reforms – It contains "lite" provisions on FERC market transparency rules for wholesale electricity sales and interstate transmission of electricity (Sec. 7081). It bans roundtrip trading (Sec. 7082). It increases FERC fines (Sec. 7084). It changes the date from which refunds may be imposed to the date of complaint (Sec. 7091).

Note: Each of these provisions is weaker than reforms included in the Democratic substitute amendment for Title VII offered in Subcommittee by Representative Dingell (identical to H.R. 1272).

(10) Sanctity of contract – It alters the Federal Power Act’s "just and reasonable" standard for FERC reform of contracts. It sets a tougher "necessary to protect the public interest" standard and shifts the burden of proof to the Commission (Sec. 7092(d)). At full committee, an amendment was adopted providing that this section only affects future contracts, with the exception of interconnection agreements.

(11) FERC merger authority – It retains the Boucher Subcommittee amendment (which restored FERC’s current authority to review mergers), but directs DOE to study whether current law is redundant of other Federal laws, and directs FERC to report on various merger orders (Sec. 7101).

Title VIII – Coal

This title is based on the 107th Congress H.R. 4 conference agreement on this matter, with some consensus changes.

Title IX – Renewable Fuels Standard

Title IX addresses the use of oxygenated fuels (ethanol and methyl tertiary butyl ether (MTBE)) in Reformulated Gasoline (RFG) as required under section 211(k) of the Clean Air Act (CAA). This title was added to the Committee Print after the March 19, 2003, Subcommittee markup.

The bill requires the use of five billion gallons of ethanol by 2015. Liability protection for MTBE and ETBE is included. There is no phase-down or ban of MTBE. Authorization for MTBE transition assistance is included and the previous boutique fuels provisions are also included.

Title X – Automobile Efficiency

This title requires a National Highway Traffic Safety Administration (NHTSA) study of the Corporate Average Fuel Economy (CAFE) program and authorizes appropriations of $5 million to NHTSA for fiscal years 2004 through 2006 to implement and enforce CAFE standards.

Other Matters

An amendment was adopted that bars the export of materials or technology to countries on the terrorism list (i.e., North Korea, Iraq, and Iran).