On Friday, May 15th, Chairman Henry Waxman of the Energy and Commerce Committee and Chairman Edward Markey of the Energy and Commerce Committee, Subcommittee on Energy and Environment introduced H.R. 2454, the American Clean Energy and Security Act of 2009. Consistent with the initial draft of the legislation (issued on March 31st), the bill is designed to address various energy and environmental issues, including: national levels of greenhouse gas emissions, the national electric generation portfolio and transmission infrastructure, energy efficiency standards and "green" job creation, among others.  

H.R. 2454 incorporates several changes to the initial draft, including a change to the cap on emissions of greenhouse gases. The draft bill proposed a cap on emissions of 20 percent below 2005 levels by 2020. H.R. 2454 reduces the emissions target to 17 percent below 2005 levels by 2020, but maintains a long-term reduction target of 83 percent by 2050. H.R. 2454 also requires that states produce 20 percent of their electricity from renewable sources by 2025. This is lower than the initial proposal to produce 25 percent of electricity from renewable sources by 2025. H.R. 2454 no longer requires electricity or natural gas distribution companies to meet separate efficiency targets. The bill now allows increased energy efficiency to account for one quarter of the 20 percent requirement and the definition of "renewable sources" has been amended to allow for increased use of biomass. The bill also incorporates the expanded biomass provision of the renewable electricity standard into the renewable fuel standard originally authorized by the Energy Independence and Security Act of 2007. This would allow more sources of biomass to be used to make cellulosic ethanol and other biofuels. Further information and the bill text can be found at www.energycommerce.house.gov/.

Another significant development regarding H.R. 2454 is that Chairmen Waxman and Markey have issued a proposal for allocating emissions allowances that would be generated as a result of the proposed cap and trade program to limit greenhouse gas emissions. Rather than auctioning 100 percent of the allowances at the outset of the program, utilities would receive 35 percent of the free permits; energy-intensive and trade-exposed industries such as steel, cement and glass would get 15 percent; natural gas distributors would get nine percent; firms making electric and advanced technology vehicles would get three percent; oil refiners would get two percent and various other stakeholders would be awarded some percentage of free permits at the beginning of the new program.These free permits would, however, be phased out as the program progresses.  

Chairmen Waxman and Markey have stated their goal of completing consideration of H.R. 2454 by Memorial Day. Speaker Pelosi has stated her goal is for the House of Representatives to pass H.R. 2454 by August. Today, the Energy and Commerce Committee will begin debating amendments. However, eight other House Committees have been assigned jurisdiction of the bill and must address H.R. 2454, or portions of it, before if can be considered by the full House. Majority Leader Reid has indicated that the Senate will wait to receive the bill from the House before full debate will occur by that chamber.