H.R. 2454, the American Clean Energy and Security Act of 2009, was introduced May 15, 2009,
by Representatives Waxman and Markey, and was subsequently modified (both technical and
substantive changes) and ordered reported by the House Committee on Energy and Commerce on
May 21, 2009. The bill was reported (amended) June 5 (H.Rept. 111-137, Part I). Among the
major provisions of the bill are the following:
H.R. 2454 contains provisions that would amend the Clean Air Act to establish a cap-and-trade
system designed to reduce U.S. greenhouse gas emissions 17% below 2005 levels by 2020 and
83% below 2005 levels by 2050. The market-based approach would establish an absolute cap on
the emissions and would allow trading of emissions permits (“allowances”). The bill achieves its
broad coverage through an upstream compliance mandate on petroleum and most fluorinated gas
producers and importers, and a downstream mandate on electric generators, industrial sources,
and natural gas local distribution companies (LDCs). The bill allocates a substantial percentage of
the allowances for the benefit of energy consumers and low-income households. As the program
proceeds through the mid-2020s it shifts to more government auctioning with most of the
proceeds returned to households. The bill’s allocation scheme includes free allowance allocations
to energy-intensive, trade-exposed industries, merchant coal-fired electric generators, and
petroleum refiners. An important cost control mechanism in the cap-and-trade program is the
availability of domestic and international offsets.
The bill contains energy efficiency provisions that cover grants, standards, rebates and other
programs for buildings, lighting and commercial equipment, water-using equipment, wood
stoves, industrial equipment, and healthcare facilities.
H.R. 2454 contains several provisions related to vehicles and fuels, including incentives to
produce plug-in vehicles and other advanced technology vehicles. Three percent of allowances
from the greenhouse gas cap-and-trade program would be allocated to the automotive sector to
provide grants to refit or establish plants to build plug-ins and other advanced vehicles. The bill
would also establish a “cash-for-clunkers” program, providing new vehicle purchasers and lessees
with vouchers worth up to $4,500 for a new, more efficient vehicle to replace an older, less
efficient vehicle, and directs the Environmental Protection Agency (EPA) to establish greenhouse
gas emissions standards for various transportation sectors.
The bill requires EPA to develop a unified national strategy for addressing the key legal and
regulatory barriers to deployment of commercial scale carbon capture and sequestration.
The legislation would amend the Public Utility Regulatory Policies Act of 1978 (PURPA) to
create an integrated energy efficiency and renewable electricity standard starting in 2011,
requiring retail electricity suppliers to meet 20% of their electricity demand through renewable
energy sources and energy efficiency by 2020.
The bill provides for smart grid technologies, including products that can be equipped with smart
grid capability, requirements for electric power retailers to reduce their peak loads using smart
grid and other energy efficient technologies, and requirements that power suppliers ensure that
utility smart grid systems will be compatible with plug-in electric drive vehicles.