On March 2, House Energy and Commerce Committee Chairman Frank Pallone (D-NJ), Environment and Climate Change Subcommittee Chairman Paul Tonko (D-NY) and Energy Subcommittee Chairman Bobby Rush (D-IL) re-introduced the Climate Leadership and Environmental Action for our Nation’s Future Act (CLEAN Future Act), a comprehensive proposal aimed at transitioning the US to net-zero greenhouse gas (GHG) emissions by mid-century. The revised CLEAN Future Act comes as Congress, in the coming weeks and months, is expected to turn its focus to an infrastructure/stimulus package after lawmakers conclude consideration of COVID-19 relief legislation. This next legislation is likely to focus significantly on clean energy and climate change. President Biden views climate change as one of the four “historic crises” facing the United States, along with the COVID-19 pandemic, the economy and racial injustice.

This year’s CLEAN Future Act includes significant changes from last year’s bill, including most notably revising the date for utilities to reach 100 percent clean electricity from 2050 to 2035 in line with President Biden’s goal. In addition, the CLEAN Future Act authorizes US$565 billion in spending over 10 years, up from US$316 billion in last year’s bill.

The CLEAN Future Act, however, does not include a carbon tax. While there is increasing support for carbon pricing among industry with the American Petroleum Institute considering supporting the concept, Chairman Pallone, in a press conference unveiling the CLEAN Future Act, suggested that it is time to move on from carbon pricing.

Chairman Pallone indicated that the Committee wants to move the CLEAN Future Act through regular order with hearings and a mark-up. It remains to be seen whether portions of the CLEAN Future Act could be incorporated into a budget reconciliation package. It also is unclear whether some of the more ambitious provisions in the CLEAN Future Act, such as the Clean Energy Standard, could garner support among moderate Senate Democrats.

Below is a summary of the key provisions from the CLEAN Future Act.

Title I: national climate target

The CLEAN Future Act adopts the goal of transitioning the US to net-zero GHG emissions by 2050. In a change from last year’s bill, this year’s version establishes an interim goal of the US reducing GHG emissions 50 percent below 2005 levels by 2030. Federal agencies, under the bill, are directed to “use all existing authorities to put the US on a path toward meeting this net-zero emissions target.” The Environmental Protection Agency (EPA), on an annual basis, must evaluate federal agencies’ plans and make recommendations on how such agencies could strengthen their GHG emission reduction goals.

Title II: power

Clean energy standard

One of the most significant changes from last year’s bill is moving up the deadline from 2050 to 2035 for all retail electricity suppliers to garner 100 percent clean electricity. The 2035 deadline for the CES is consistent with the goals set by President Biden during last year’s campaign. The new legislation also sets an interim goal of retail electricity suppliers reaching 80 percent clean electricity by 2030.

With the shift from the 2050 to 2035 deadline, the CLEAN Future Act does provide some flexibility to retail electricity suppliers in meeting their clean energy requirements. EPA, beginning in 2030, could extend an individual retail electricity supplier’s compliance obligation annually if the supplier submits alternative compliance payments for more than 10 percent of its compliance obligation in the two prior consecutive years.

Transmission

With President Biden and Congressional Democrats de-carbonization goals, there is an increasing focus on building out more transmission to bring renewable energy to population centers. The CLEAN Future Act allows the Federal Energy Regulatory Commission (FERC) to issue permits for the construction or modification for certain interstate transmission facilities if a state denies an application for the siting of such a transmission project. In addition, the legislation clarifies that FERC can allocate costs associated with non-transmission alternatives for cost recovery through transmission rates.

Public participation and energy market reforms

The CLEAN Future Act clarifies that sections 205 and 206 of the Federal Power Act permit FERC to approve carbon pricing regimes. FERC held a technical conference on carbon pricing last fall amidst increasing discussion about incorporating carbon pricing into organized electricity markets.

The CLEAN Future Act also states that FERC must consider climate change as part of its public interest determination under the Natural Gas Act. Over the last several years, there have been several court cases assessing whether and to what extent FERC must analyze the indirect climate change effects associated with interstate natural gas pipelines.

PURPA reforms

The CLEAN Future Act amends the Public Utility Regulatory Policy Act (PURPA) by directing states, as part of their resource-planning processes, to assess energy storage systems; encouraging the use of “non-wires” solutions; and safeguarding qualifying facilities’ right-to-contract. In addition, the CLEAN Future Act requires that utilities consider non-wire alternatives, including distributed generation, energy storage, demand response, efficiency, microgrids and grid control.

Other

DOE must establish a program to fund efforts to improve the resiliency, performance or efficiency of the electricity grid.

Under the legislation, FERC will expand its dam safety authority by providing safety guidelines and financial viability requirements for dam licensing. FERC is also directed conduct a conference on dam safety.

DOE must also enter into at least long-term power purchase agreement with an advanced nuclear reactor.

Title III: efficiency

This section sets national energy savings targets for buildings through model building energy codes that will require zero-energy-ready buildings by 2030.

The bill reauthorizes and expands the State Energy-Efficient Appliance Rebate Program; provides funding for public facilities projects related to resiliency, energy efficiency, renewable energy, and grid integration; establishes a program to provide rebates to homeowners for wildfire-resistant upgrades; and establishes an energy saving training and education program.

Title IV: transportation

The CLEAN Future Act establishes DOE programs to deploy electric vehicle supply equipment, including directing the Department to study deployment of such infrastructure in underserved communities. EPA, under the bill, is also directed to develop GHG standards for new nonroad vehicles and existing in-service aircraft engines.

The CLEAN Future Act also aims to reduce emissions at ports through EPA grants and additional funding for the Diesel Emission Reduction Act program.

Title V: industry

The CLEAN Future Act includes a variety of measures to help reduce emissions from the industrial sector. In particular, the bill establishes a “Buy Clean Program” that would encourage projects receiving federal funding to procure low-carbon industrial products. The bill also creates new an EPA Climate Star program to promote cleaner programs and a DOE Sustainable Industry Rebate Program to support energy, and water improvements to industrial facilities.

Title VI: environmental justice

This section creates several new programs, offices, and funding streams including paying for the removal and replacement lead service lines in disadvantaged communities; administering climate justice grants; building capacity in environmental justice communities; providing environmental justice basic training for communities; establishing an Office of Energy Equity, within the DOE, to develop an agency-wide environmental justice strategy, address energy costs, and address conservation measures; and establishing a clearinghouse, within the EPA, to access environmental justice information.

The legislation places limits on the issuance of air pollution permits for major sources in areas overburdened by pollution; requires significant expansion of air quality monitoring for toxic air pollutants; expands the national ambient air monitoring network; and increases access to air quality information.

The bill establishes a timeline for EPA to assess and address cumulative public health risks; and sets a ten-year deadline for the cleanup of all federal vulnerable Superfund sites.

The federal government will seek to strengthen nondiscriminatory treatment and meaningful involvement by requiring environmental justice training for federal employees; and the bill directs each EPA region to conduct biennial meetings on strategies and efforts by community stakeholders.

Title VII: super pollutants

The CLEAN Future Act directs the EPA to regulate methane emissions. Specifically, existing oil and gas sources would be required to reduce methane emissions 65 percent below 2012 levels by 2025 and 90 percent by 2030. The bill also prohibits flaring for new sources and requires that existing sources phase out flaring by 2028. Under the bill, states can receive funding to help natural gas distribution companies inspect, repair and replace aging pipeline infrastructure.

The CLEAN Future Act would also direct the EPA to assess whether existing regulations are sufficient to reduce black carbon emissions.

Title VIII: economy-wide policies

Building upon the cooperative federalism model in the Clean Air Act and other federal environmental statutes, the CLEAN Future Act sets a national standard of net-zero GHG emissions by 2050 but delegates authority to states to develop their own plans to meet this standard. States could work with each other, e.g., through compacts such as the Regional Greenhouse Gas Initiative (RGGI), to meet the federal standard. The EPA would retain authority to review and approve state plans. If a state fails to submit a proposal or if the EPA rejects a state’s plan, then major emitters in that state would be assessed a backstop carbon fee.

This sections states that over 40 percent of funds made available under the CLEAN Future Act must benefit environmental justice communities.

A new addition to the bill creates a Clean Energy and Sustainability Accelerator, which provides US$100 billion to be leveraged by public and private funds for states, cities, communities, and businesses to transition to a clean energy economy, including funding technologies and infrastructure, climate resiliency, building efficiency and electrification, industrial decarbonization, and transportation electrification.

In addition, the bill directs the Securities and Exchange Commission to require public companies to disclose data on exposure to and risks from direct and indirect GHG emissions.

Title IX: waste reduction

The bill aims to reduce waste and modernize recycling and waste management, including post-consumer recycled content standards, implementing a national bottle deposit program, and directs the EPA to clarify federal procurement responsibilities of products for recovered material. It also includes a federal task force to create an extended producer responsibility system.

Under the legislation, the EPA must pause the permitting of plastic production and related facilities until the Agency updates air regulations for these sectors.

The CLEAN Future Act establishes grant programs to invest in community-level zero-waste initiatives; reduce the amount of waste that ends up in landfills; improve education and outreach related to recycling and waste reduction at the federal, state, and local levels; improve the collection, recycling, and reuse of batteries and other forms of electronic waste.

Title X: worker and community transition

The last section is completely new and includes numerous programs to address the federal coordination and the needs of workers and communities affected by the transition to a clean energy economy, including a program for community-based organizations in affected communities to advise workers and communities; and a program to provide financial assistance to local governments that have lost significant amounts of revenue due to the nation’s transition to net-zero GHG emissions.

The bill also creates an Office of Energy and Economic Transition in the Executive Office of the President, an interagency task force, and stakeholder advisory committee.