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Statement by United States Senator Larry Craig

Clean Portfolio Standard vs. Renewable Portfolio Standard

June 13, 2007

Mr. CRAIG. Mr. President, I will speak for a few moments. The Senator from Tennessee is here and waiting for some charts to visit about the issue that is before us, RPS versus CPS standards, that drive the marketplace toward cleaner fuels, renewable fuels, and a variety of different packages.

A few moments ago, I mentioned, when the Senator from New Mexico, Mr. Bingaman, produced a letter from the American Wind Energy Association, that in part I believe CPS, based on their point of view, had been somewhat mischaracterized by that letter. Now, here is someone who supports wind. The Senator from Idaho strongly supports wind. We see windmills, large windmills, going up across Idaho. The Senator from Tennessee would come out there and say: Oops, there goes the landscape. There goes the vista. The Senator from Idaho is a little concerned about that, too, because some of those beautiful high plateaus of Idaho are now being dotted with windmills.

At the same time, there is no question that wind remains a valuable source, and we are subsidizing it and supporting it. But I don't think we ought to bias the marketplace toward it entirely, and that is why you now see a new standard offered as a second-degree amendment called CPS, clean portfolio standard.

When I say that, let me make the point that is important, that I think is critical. The American Wind Energy Association, when they mischaracterized clean portfolio standard, did so in the following ways: The proposed CPS clearly requires carbon capture and storage. They say it does not. The word ``sequestration'' means carbon capture and storage, and you don't get a credit for it until you do it. I think that is clear. I think that was a mischaracterization. CPS clearly states that any additional clean technologies beyond already highlighted would require the Secretary of Energy to determine, if they apply through a rulemaking process. In other words, no easy rides and no opt-out.

We have 23 States that have some form of RPS, renewable portfolio standard. They have done it on their own. The Senator from New Mexico makes that point very clearly. There is a desire in our country today to move us toward renewables and a cleaner portfolio standard, but there is no opt-out in CPS. They come to the Secretary, and the Secretary certifies that which they already have, if it fits within the portfolio that is being proposed as a CPS. There is no State opt-out in that provision. CPS allows the States with existing clean portfolio programs to certify.

I think that is a very important and necessary statement to make. I don't see that as an opt-out, I see that as conforming, giving credits to, and causing those who have already taken the initiative not to be penalized. It is arguable that the RPS that is being proposed in the Bingaman amendment would cause them to have to reshape or conform because they are all a little different or they couldn't gain as much credit under an RPS as they could a CPS. But that we don't know. What we do know is, no State opts out.

We are now talking about a Federal standard against a myriad of State standards in which 23 States have already established some form of renewable portfolio. There is no uniformity in that 23-State standard, so, as I said, it is very difficult to comply with the standard. CPS is flexible enough, that it will not allow States to opt out.

Deduct nukes from the base. By adding nuclear--new nuclear--we will have a much broader portfolio than I think Senator Bingaman's RPS. Adding nuclear does not detract from the accomplishments of that bill. It modernizes the bill. It brings us to where America's thoughts are today, not where America's clean thoughts started in the mid-1990s. Let's get modern.

Yes, there are a lot of interest groups that have vested interests in the old standard. There are a lot of interest groups in this town and around the Nation that move very slowly. They move the body politics of their organizations slowly so they have to argue what was then instead of what is now. What is now in the minds of the average American who looks at new technology is: Is it clean? And if it is clean, it is acceptable. If it isn't clean, it isn't.

Idaho is privileged at being right at the top of the States of the Nation in nonemitting sources, clean air, and less carbon. We are very proud of that--Vermont and Idaho. Last year, Idaho, a State that has largely accepted production in all forms, said no to a coal-fired plant. They said no because it wasn't as clean as they wanted it to be. But if it were a plant that could sequester, if it were a plant that were clean, and it was coal, why shouldn't it count today in a new standard?

Why shouldn't the marketplace incentivize cleanliness--nonemitting sources--instead of the old nonemitting sources of the past--wind and biomass? But biomass, under current technologies, emits some CO 2. It is much cleaner than most, but depending on the technology involved, is not a perfect form, if you will, compared to wind. But it is renewable, so under that definition, while it is not as clean as we would like it to be, and it will be in the future because it is renewable, it fits into the old standard.

I think those are profound arguments that bring us to where we are today. And I would like to say to the American Wind Energy Association: You are not disadvantaged under CPS, but you are not exclusive to the market. You have to share the riches of growth in a clean technology with other forms as they come along. Yes, you will be subsidized, but you will not have exclusivity.

I think for the West and for the marvelous open spaces and the vistas of the West, that is not all a bad idea. While I promote wind, and wind is now coming to Idaho, I don't think it ought to be exclusive in the market. As I have said before, and the maps have been shown, why disadvantage the Southeast? Why say to the Southeast you have to go buy it because you can't produce it? Let's give them an opportunity to be as clean as everyone else wants to be by giving them the advantages of all that is necessary.

Mr. BINGAMAN. Mr. President, I appreciate the comments of my friend and colleague from Idaho. I would just direct a question to him and see if I am confused or he is confused, or just where the confusion lies. He says there is not authority in the Domenici proposal, the clean energy proposal; that there is not authority for a State to opt out. Here is the sentence on page 9 of that legislation. It says:

On submission by the Governor of a State to the Secretary - that is the Secretary of Energy - of a notification that the State has in effect, and is enforcing, a State portfolio standard that substantially contributes to the overall goals of the Federal clean portfolio standard under this section, the State may elect not to participate in the program under this section.

Now, that clearly states, as I understand it, that it is entirely up to the State whether it chooses to participate in the program or chooses not to participate in the program, and there is no discretion on the part of the Secretary of Energy about it at all. There is no certification required by the Secretary of Energy. There is no requirement that the State program meet any particular standard other than it contribute to the overall goals of the Federal standard.

To me, that means a State can opt out of the Federal program, unless I am misreading it.

Mr. CRAIG. Mr. President, I can't argue whether the Senator is or is not misreading. The intent is for the Secretary of DOE to certify that the State meets those standards, and if the State meets the standard that you and I would put forth, then why don't they have a chance to stand down for a time? It is a question of meeting the standard, not ignoring the standard.

Mr. BINGAMAN. Well, Mr. President, let me just reiterate that the clear language of the statute states if the State determines that it has a ``portfolio standard that substantially contributes to the overall goals of the Federal clean portfolio standard, then the State may elect not to participate in the program.''

To me, that is a clear opt-out for the State. There is no requirement that anybody certify or anything else. If I were Governor of New Mexico, I could type up a letter, send it off to the Secretary and say we are opting out--include us out--and that clearly would let me out of the program.

So I don't think the bill says what the Senator has indicated.

Mr. CRAIG. Well, if it doesn't, I am one who would change that. It is clearly not my intent, nor I believe the intent of CPS, to allow States to opt out. It is to broaden the portfolio standard, not to opt out because I think, with 23 States now moving in that direction, there is a recognition of the value of some of this. If there needs to be a correction for your satisfaction as the chairman of the committee, I am certainly one who is willing to make that. But it was my understanding and my reading of the language that the Secretary of DOE has the right to certify, and in certifying could allow based on the standard met an opt-out.

Mr. BINGAMAN. Mr. President, I appreciate the comments from my friend. I would just say he is describing a provision in an amendment that is not before us. I want to point that out to my colleagues.

Mr. CRAIG. Mr. President, we obviously have a disagreement as to what is or is not. But I think we both agree on a principle that we have just talked about.