This week, Chairman Henry A. Waxman (D-CA) of the Energy and Commerce Committee and Chairman Edward J. Markey (D-MA) of the Energy and Environment Subcommittee held four days of legislative hearings on the discussion draft of “The American Clean Energy and Security Act of 2009,” released March 31, 2009. Numerous and varied witnesses testified at this week’s hearings, including EPA Administrator Lisa Jackson, DOE Secretary Stephen Chu, and DOT Secretary Ray LaHood. Also testifying were representatives of the renewable energy sector, oil, gas, and utility industry, and environmental and scientific organizations.
As initially reported in the April 3, 2009 edition of the Washington Energy Report, the discussion draft is markedly devoid of language regarding the disbursement of tradable emission allowances under the proposed cap and trade program. Whether emission allowances should be issued for free or sold at auction (or distributed using some hybrid of the two approaches) remains a highly controversial issue. While intense lobbying is underway behind the scenes, representatives from the utility sector urged the Energy and Commerce Committee to set aside forty percent of the allowances for free distribution to regulated local distribution companies, arguing that such a measure would cushion the economic impact of climate change legislation on electricity consumers.
Other key issues include emission limits, which the discussion draft sets at twenty percent below 2005 levels by 2020, and eighty-three percent by 2050, and renewable energy production goals, which the draft places at twenty percent by 2020. Although no bill has yet been introduced, a markup in the Energy and Environment Subcommittee is scheduled to begin next week. A new version of the draft, which will include allowance language, is expected at some point in advance of the mark-up.
Significant work lays ahead for the draft’s proponents. A number of moderate Democrats on the Committee have already expressed serious concerns with the discussion draft, with commentators speculating that, when it comes to climate legislation, votes are more likely to be cast along regional lines than party lines.