» Legislative Alerts Archive

Background

The National Office is pleased to provide you with this Legislative Alert, which contains an overview of the discussion draft for the American Clean Energy and Security Act of 2009 (ACES) and how clean water agencies might be impacted. Chairman Henry A. Waxman (D-Calif.) of the House Energy and Commerce (E&C) Committee and Chairman Edward J. Markey (D-Mass.) of the E&C Energy and Environment Subcommittee released a draft of clean energy and climate change legislation on March 31 that they hope to report out of committee before the Memorial Day Recess. The draft American Clean Energy and Security Act of 2009 (ACES) would establish a cap-and-trade system for greenhouse gasses (GHGs) and set new standards for renewable energy programs. The draft legislation requires a 20 percent cut from 2005 carbon emissions levels by 2020, 42 percent by 2030, and 83 percent by 2050. President Obama had called for 14 percent cuts by 2020 and 80 percent cuts by mid-century, making the House bill slightly more aggressive.

Specifically, the legislative proposal would create a cap-and-trade system that covers any entity emitting more than 25,000 tons of carbon dioxide equivalents per year (Sec. 722). While most wastewater treatment facilities would not fall under this cap, it is still unclear whether a small number of large facilities that incinerate their biosolids would be included. The draft language does not provide specifics on what percentage of those credits would be allocated to polluters each year at no cost, or how many would need to be purchased. The language also does not address how revenue collected from the cap-and-trade system would be spent. Markey and Waxman have said that the plan would most likely include some free allocations of credits, at least in the initial period, and some auctioning. Revenues from carbon auctions would then likely be used for consumer rebates and energy investments, but the bill's authors are leaving the specifics up to committee members.

There is also no explicit mention of "wastewater treatment operations" within the bill’s Additional Greenhouse Gas Standards (Sec. 811), which targets stationary sources of carbon dioxide equivalents that are not covered by the overall cap. Sec. 771 of HR 6186, Chairman Markey's climate bill from the previous Congress, had included mandatory performance standards for wastewater utilities to reduce methane emissions. The ACES instead directs the U.S. Environmental Protection Agency (EPA) to set emission standards for a “list of categories of stationary sources consisting of sources that individually had uncapped greenhouse gas emissions greater than 10,000 tons of carbon dioxide equivalent and that, in the aggregate, were responsible for emitting at least 20 percent of the uncapped greenhouse gas emissions.” EPA would also need to regulate each source category “that is responsible for at least 10 percent of the uncapped methane emissions.” Wastewater operations are responsible for only about .45 percent of uncapped methane emissions nationwide.

Potential Opportunities for Wastewater Agencies

NACWA’s initial examination of the language found several potential opportunities for NACWA members to access funding made available through the cap-and-trade program. First, the ACES would require the National Oceanic and Atmospheric Administration (NOAA) to perform a national vulnerability assessment, evaluating regional vulnerabilities to climate change impacts on human health, natural resources, and infrastructure. The legislation would then authorize funding for state, local, and tribal projects to assist communities with adapting to these vulnerabilities. It would require federal natural resources agencies to develop and implement adaptation plans for natural resources under the Natural Resources Climate Change Adaptation Fund (Title IV (Sec. 490)), which provides funding "to the EPA Administrator for use in adaptation activities restoring and protecting – freshwater ecosystems, estuarine ecosystems, and watersheds.” (Sec. 490 (c)(5)) NACWA will work with Congressional staff and our allies to either modify this Section to make water infrastructure projects explicitly eligible or move to have our own "Climate Change Fund" focused explicitly on water quality, reuse, recycling, and other wastewater infrastructure activities.

There is also a provision (Title III (Part D)) for offsets - up to 2 billion tons worth each year, “split evenly between domestic and international offsets.” This is more than 27% of the U.S.’s total annual emissions. Fully 10% of the document, from pages 372 to 436, deals directly or indirectly with the offsets issue. The draft legislation makes clear that the buying and selling of emissions credits “is not restricted to owners and operators of covered entities,” which means that municipal wastewater agencies can potentially be involved in the carbon emissions market. The bill would create the Federal Energy Regulatory Commission, charged with regulating the cash market in emission allowances and offsets. Non-covered entities such as wastewater agencies would be allowed to submit offset projects and activities to this commission. An early action provision (Sec. 740) is also included that allows offset credits to be issued for projects that were started after Jan. 1, 2001 and meet criteria set forth by the Federal Energy Regulatory Commission. An advisory board is established to periodically review the offsets program to ensure it is working as intended.

The Transitioning to a Clean Energy Economy section of the bill (Title IV) overall is an area of the legislation that NACWA is looking to for additional funding opportunities. This title is meant to protect U.S. consumers and industry from large and unpredictable rises in energy costs while promoting green jobs during the transition to a clean energy economy. NACWA is going to seek language in this section of the bill that will provide funding to help offset the enormous increases in electricity costs wastewater utilities are projected to face.

Finally, the ACES includes a broad program of support for energy efficiency standards and investments across the economy and society. Between $500 and $3,000 is provided per household for families which weatherize their home to reduce energy use at least 20%. Similar financial support is also provided for weatherization of commercial and public sector buildings. Specifically, the bill would amend the Energy Independence and Security Act of 2007 to include nonprofit hospitals and “public health facilities” as eligible for grants and loans for energy efficiency projects. NACWA will seek language in this section of the bill to make water infrastructure projects explicitly eligible.

Leadership Sets an Aggressive Schedule for Consideration; Senate Timetable Unclear

As mentioned earlier, Chairman Waxman would like to report this legislation out of his committee prior to Memorial Day recess. The preliminary schedule calls for Energy and Environment Subcommittee hearings the week of April 20, followed by Subcommittee markup the week of April 27, and a full E&C Committee markup the week of May 11. Waxman would then move it to the full House floor for consideration and passage. Though this is an extremely short schedule, NACWA has been assured by congressional staff that this discussion draft is still a work in progress and that good ideas on how to improve it will be welcomed. The Association will continue to work with staff to secure additional funding and ensure that this climate legislation addresses the needs of wastewater agencies.

Meanwhile, similar climate legislation is going to face an even tougher fight on the Senate side, where Democrats hold a slimmer majority and need Republican votes to overcome a promised filibuster. Several prominent Republicans have already labeled the draft bill in the House as nothing more than an expensive new tax on business and consumers, and moderate democrats are wary of a cap-and-trade bill’s effect on energy prices and jobs. As a result, Senator Barbara Boxer (D-Calif.), Chair of the Senate Environment and Public Works (EPW) Committee, has taken a wait-and-see approach before moving forward with her own climate change bill. NACWA will continue to meet EPW staff as they develop legislation to ensure there is strong support for making wastewater infrastructure adaptation needs, water reuse and water recycling infrastructure projects, and research a funding priority in the Climate Bill.

If you have input regarding concerns or questions with the bill, please contact NACWA’s Director of Legislative Affairs, Pat Sinicropi at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or 202/533-1823 or NACWA’s Manager of Legislative Affairs, Byron DeLuke at This e-mail address is being protected from spambots. You need JavaScript enabled to view it or 202/833-4655.