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Washington DC -- In a mid-year report card issued today, the Sustainable Energy Coalition gave the U.S. Senate and U.S. House of Representatives each an overall grade of "D" for their handling of sustainable energy issues thus far this session. Neither congressional chamber received a grade of better than "C-" in any of the six legislative programs graded but each was awarded one or more failing grades in several areas. The report card reflects Congress' handling of sustainable energy tax

Issues as well as funding for the U.S. Department of Energy's renewable energy and energy efficiency programs and the U.S. Environmental Protection Agency's Clean Air Partnership Fund and highly successful energy efficiency and climate protection programs. It also considers how Congress has dealt

to date with both climate change and electricity utility restructuring issues as well as subsidies for dangerous and polluting energy technologies.

"The nation continues to sizzle with record-setting temperatures and weather extremes that have left large portions of the United States parched, hundreds of citizens dead, and billions of dollars in crop losses and other property damage," warned Ken Bossong, executive director of the SUN DAY Campaign. "Yet Congress has not only failed to address the problem of climate change but to worsen it by increasing taxpayer subsidies for the dirty energy sources contributing to global warming while slashing support for

those clean energy programs that can serve as solutions."

"Congress' failure to promote energy efficiency and renewable energy has made America ever more dependent on imported oil and eroded its leadership role in the international energy marketplace," added William Holmberg, executive director of Global BioRefineries, Inc. "Its poor performance

poses real danger to our national security."

Although the report card acknowledges positive action in support of sustainable energy issues by individual members of Congress, the grades awarded primarily reflect final floor action on each of these issues. Hence, an "Incomplete" was given in several instances where legislation has yet

to reach either the House or Senate floor.

The Sustainable Energy Coalition is a coalition of 35 national business, consumer, environmental, and energy policy organizations (list available

upon request) founded in 1992 to promote increased support for energy

efficiency and renewable energy technologies. This report card was issued as part of the Sustainable Energy Coalition's contribution to the Earth Day 2000 campaign and its Clean Energy Agenda.

CONGRESSIONAL SUSTAINABLE ENERGY REPORT CARD

GRADES

A - Excellent; B - Above Average; C- Average; D - Poor; F-Failed; I – Incomplete

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PROGRAMS

1.TAX CREDITS FOR ENERGY EFFICIENCY & RENEWABLE ENERGY

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House: F Senate: C-

House - The House tax bill included more than $600 million in cuts for the oil and gas industry for domestic oil producers and overseas oil refiners as well as millions of dollars in additional tax breaks for the nuclear power industry for reactor decommissioning according to an analysis done by Friends of

The Earth. However, notwithstanding efforts by individual members such as Reps. Bill Thomas (R-CA), Matt Salmon (R-AZ), and Wally Herger (R-CA) to secure tax support for sustainable energy programs, absolutely no incentives for any energy efficiency or renewable energy applications, as

had been recommended by the President and both Republican and Democratic members of the House, were included.

Senate - Due to the efforts of members of the Senate Finance Committee, the Senate tax bill included an extension of the existing production tax credit for wind energy as well as for biomass systems. However, the Senate included no other tax credits for investments in solar or geothermal energy or energy efficiency technologies, as had been recommended by the President and both Republican and Democratic members of the Senate. The Senate tax bill also includes $450 million in fossil energy tax breaks.

2. DOE's SUSTAINABLE ENERGY RESEARCH, DEVELOPMENT & DEMONSTRATION

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House: D+ Senate: D-

House - The House accepted the $30 million Salmon/Udall add-on amendment which raised FY'00 funding for the U.S. Department of Energy's renewable energy programs to $309 million which is still 8% below the FY'99 appropriation and 23% below the Administration's FY'00 request of $399 million. Moreover, it has inflated the reported funding levels for renewable energy programs by earmarking funds for renewable energy RD&D in DOE's Office of Energy Research; however, those funds are likely to be

siphoned off to support basic research projects with questionable connection to renewable energy. It also provided $687 million for DOE's energy efficiency programs -- a level roughly 1% below the FY'99 appropriation of $692 million but fully 18% below the Administration's FY'00 request of $838 million.

Senate - Even though 54 Senators had earlier signed a letter of support for increased renewable energy funding, the Senate voted 60-39 to sustain a parliamentary maneuver by Senators Pete Domenici (R-NM) and Harry Reid (D-NV) to block a floor vote on the Jeffords/Roth/Allard amendment which would have brought funding levels closer to the President's request for the U.S. Department of Energy's renewable energy programs. The Senate ultimately approved a FY'00 budget of $302 million for DOE's renewable energy programs -- 10% below last year's levels ($336 million) and 22% below the Administration's request of $399 million. The Senate Interior Appropriations bill currently provides for a FY'00 budget of $694 million for DOE's energy efficiency programs -- roughly equal to the FY'99 appropriation of $692 million but 17% below the Administration's request of $838 million; the full Senate has yet to act on this bill.

3. CUTTING DOE's PORK BARREL NUCLEAR R&D PROJECTS

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House: F Senate: F

House - The House increased funding for the U.S. Department of Energy's nuclear fusion RD&D program to $250 million -- an increase of $27 million -- and funding for so-called "termination" costs for assorted nuclear power programs at $10 million higher than the budget request. While it did reduce overall nuclear fission RD&D funding for FY'00 by $18 million below the FY'99 level, funding for wasteful commercial nuclear R&D has increased by $1 million over FY'99.

Senate - The Senate approved a small ($4 million) increase in FY'00 funding for the U.S. Department of Energy's commercial nuclear energy programs to $288 million and provided essentially level funding ($220 million) for the agency's fusion energy program.

4. EPA's CLIMATE TECHNOLOGY PROGRAMS & CLEAN AIR PARTNERSHIP FUND

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House: I Senate: I

House - In the VA/HUD Appropriations bill, yet to be voted on by the full House, the Appropriations committee cut funding for EPA's highly successful climate change and pollution prevention programs -- providing only about half the funding requested by the Administration and less than actual FY'99 funding. However, the committee did approve $36.5 million for the new Clean Air Partnership Fund although that amount is more than $5 million below the subcommittee recommendation and well below the $200 million requested by the Administration for FY'00. On the other hand, Rep. Joe Knollenberg (R-MI) is threatening to attach a rider blocking an EPA rule reducing smog pollution when the bill reaches the House floor. The House bill also includes report language directing the EPA to further support renewable energy programs.

Senate - The Senate has not yet acted on this issue.

5. ELECTRIC UTILITY RESTRUCTURING: CLEAN ENERGY

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House: I Senate: I

House - There have been no committee votes or floor action yet on utility restructuring. Progressive restructuring bills have been introduced by Reps. Dennis Kucinich (D-OH) and Frank Pallone (D-NJ). However, a draft bill by Rep. Joe Barton (R-TX), chairman of the House Commerce Committee's Subcommittee on Energy & Power, includes no comprehensive provisions that would promote renewable energy and energy efficiency programs.

Senate - There have been no committee votes or floor action yet on utility restructuring. Senator Jim Jeffords (R-VT) has introduced a bill with strong renewable energy and energy efficiency provisions. However, draft outlines for utility restructuring legislation developed individually by the

Democratic and Republican leadership include no comprehensive provisions that would promote renewable energy and energy efficiency programs.

6. CLIMATE CHANGE

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House: F Senate: D-

House - The House once again accepted riders to the VA/HUD, Agriculture, Energy & Water, Foreign Operations, Interior, and Commerce/Justice appropriations bills introduced by Rep. Joe Knollenberg (R-MI) that essentially act as a "gag order" and prohibit the expenditure of funds on

any actions that could be construed as implementing or preparing to implement the Kyoto Protocol prior to ratification. In a similar vein, the House also accepted a CAFE rider for the fourth straight year to the Transportation Appropriations bill introduced by Rep. Frank Wolf (R-VA) that prohibits the expenditure

of any funds to even consider an increase in fuel efficiency standards for

cars, SUVs, and other light trucks.

Senate - The Senate has continued to maintain a similarly hostile climate towards potential consideration of the Kyoto Protocol thereby discouraging the White House from submitting the treaty for a vote. As one example, the pending Senate Interior Appropriations bill includes a rider introduced by Senator Thad Cochran (R-MS) that, while milder than originally proposed, could interfere with funding for federal energy savings programs generally and the Administration's new executive order to increase energy efficiency

at federal facilities in particular. On the other hand, if the Transportation Appropriations bill comes to the floor, Sens. Slade Gorton (R-WA), Diane Feinstein (D-CA), and Richard Bryan (D-NV) reportedly will offer a sense of the Senate resolution, as an amendment, that would instruct conferees not to recede to the House CAFE rider that precludes funding for efforts to raise auto fuel efficiency standards; 31 Senators earlier signed a letter to the White House urging it to oppose the CAFE rider .

SUMMARY: House: D Senate: D

FINAL REPORT - Congress' performance thus far this year on a range of sustainable energy funding and tax issues has been poor and it has completely failed the American public in its handling of the threat posed by climate change. Even a minimalist strategy of cost-effective, no-regrets policies

and programs to promote energy security, reduce air pollution, and deal with climate change would have required far more than this Congress has delivered. If Congress does not begin now to bring up its grades by supporting programs to promote clean energy options, it risks eventual expulsion by the voters.

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SUSTAINABLE ENERGY COALITION

Washington, DC

BUSINESS, ENVIRONMENTAL GROUPS CRITIQUE REP. ARTON'S UTILITY RESTRUCTURING BILL

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For Release: September 1, 1999

Contact: Eric Wesselman 202-332-0900

WASHINGTON DC -- Today, sixteen member groups of the Sustainable Energy Coalition sent a detailed critique of the draft electric utility restructuring legislation, the Electricity Competition and Reliability

Act, to its primary author Rep. Joe Barton (R-TX), chairman of the House Commerce Committee's Subcommittee on Energy & Power.

The groups warned that "unless restructuring is carefully crafted, negative impacts on environmental quality and human health are likely to be one of the unintended consequences" noting that "the draft is missing a number of critical provisions that we believe are essential for inclusion in a final bill."

The groups further called for a redraft of the bill to include the following:

- Public Benefits Trust (PBT) - "The PBT is designed to restore industry investment in energy efficiency, low income energy services, renewable energy, and environmental research and development. The PBT is not a new fee as these investments have been embedded in the rate structures of most states."

- Renewables Portfolio Standard (RPS) - "The RPS, which has been adopted in seven states including Texas, uses market mechanisms to ensure that a small but growing percentage of the nation's electricity is produced from renewable sources."

- Emissions - "To ensure a competitive market, and necessary environmental improvement, any restructuring legislation should: (1) require all power plants, regardless of age or location, to meet minimal environmental standards for sulfur dioxide and nitrogen oxides met by new plants built today, allowing cap-and-trade compliance mechanisms where appropriate; and (2) set stringent caps on power sector emissions of carbon dioxide and mercury."

- Net Metering - "We appreciate inclusion of the net metering provision."

The letter goes on to note that the inclusion in the draft bill of an expanded Renewable Energy Production Incentive (REPI) alone "will not provide enough certainty for renewable energy investors or developers."

The full text of the letter and list of signers follows.

The Sustainable Energy Coalition is a coalition of national business, environmental, consumer, and energy policy organizations founded in 1992 to promote increased use of renewable energy and energy efficient technologies. The letter below was prepared as part of the Coalition's contribution to the Earth Day 2000 campaign and its Clean Energy Agenda.

September 1, 1999

The Honorable Joe Barton

Chairman

House Commerce Subcommittee on Energy and Power

United States House of Representatives

Washington, DC 20515

Dear Chairman Barton:

We, the undersigned business, consumer, environmental and energy policy organizations are writing to respond to your request for comments on the Discussion Draft of the Electricity Competition and Reliability Act which was released on August 4, 1999.

A decision to restructure the electric utility industry is likely to bring unintended consequences for American society. Unless restructuring is carefully crafted, negative impacts on environmental quality and human health are likely to be one of the unintended consequences. Environmental issues are inextricably linked to industry restructuring. The electricity industry generates two-thirds of sulfur dioxide (SO2) emissions and over one-fourth of nitrogen oxide (NOx) emissions, which produce acid rain and smog and have been linked to increases in respiratory and heart disease and hospital admissions for people with asthma.

In addition, power plants produce more than one-third of the total carbon dioxide (CO2) emissions and are a major source of mercury emissions. Should restructuring move forward in this Congress, it is imperative that environmental issues be addressed.

We are pleased to have the opportunity to make comments on the draft bill, especially since the draft is missing a number of critical provisions that we believe are essential for inclusion in a final bill. We encourage a redraft of the bill to include the following:

Public Benefits Trust (PBT) - The PBT is designed to restore industry investment in energy efficiency, low income energy services, renewable energy, and environmental research and development. The PBT is not a new fee as these investments have been embedded in the rate structures of most states. Over the last two decades, these investments have delivered literally billions of dollars of economic, environmental, reliability, and equity benefits to U.S. electricity customers. With the arrival of electric-industry

restructuring, however, these investments have declined dramatically, as utilities have

been unsure that they would continue to be recovered in rates. The Administration's bill and other bills currently pending in the House and Senate include a PBT, which would help restore these critical investments using the same mechanism that has been used in years past: the public investment would be recovered in electric rates paid by all customers. Without the PBT, the United States will lose the lion's share of these widely dispersed public benefits. This provision would simply retain in electric rates some of our nation's most productive and affordable environmental and equity solutions, while relieving pressures to meet these urgent needs through new taxes or regulatory initiatives.

Renewables Portfolio Standard (RPS) - The RPS, which has been adopted in seven states including Texas, uses market mechanisms to ensure that a small but growing percentage of the nation's electricity is produced from renewable sources. Currently, about two percent of U.S. electricity is produced by

the four energy sources (wind, biomass, geothermal and solar) that are covered in RPS proposals. It would provide the greatest amount of clean power for the lowest price and an ongoing incentive to drive down costs. The RPS would also ensure steady, predictable growth of the nation's renewable energy industry. It would enable the industry to obtain lower-cost financing and achieve economies of scale and production that would make the technologies more competitive. The RPS would ensure that the lowest cost renewables are developed by creating competition among renewable developers. The RPS would also have low administrative costs, since the market would decide what kinds of renewable energy would be produced. The PBT would complement an RPS by targeting emerging higher cost renewable energy technologies that would not benefit under an RPS, but have enormous long-term potential.

A 1999 study by the Union of Concerned Scientists found that the U.S. could increase the share of electricity generated from renewable sources to about 10 times current levels over the next 20 years, and still see a 13 percent decrease in electricity prices. Expanding renewable electricity use to

these levels would also freeze power plant emissions of carbon dioxide at about year 2000 levels. (see A Powerful Opportunity: Making Renewable Electricity the Standard, enclosed.)

The Renewable Energy Production Incentive Program alone, included in the draft bill, will not provide enough certainty for renewable energy investors or developers. Furthermore, by relying on funding through the annual appropriations process, the renewables industry can not rely on the REPI

as a stable, long-term source of funding for attaining favorable financing. In fact, current appropriation levels have not provided adequate funding given public power's demand for the Renewable Energy Production Incentive Program.

We also note that the House-passed tax bill included hundreds of millions of incentive dollars for domestic oil producers, overseas oil refiners and nuclear decommissioning. Under this tax cut program an RPS is even more critical. The RPS would help renewable technology compete on a more level playing field.

We urge inclusion of a market-based RPS, coupled with the Public Benefits Trust, as the best way to maximize the potential for clean renewable energy.

Emissions - A real competitive market for electricity must eliminate significant barriers to entry by competitors. One major barrier to entry is the anti-competitive subsidy enjoyed by older, grandfathered power plants that do not meet the environmental performance requirements required of, and achieved by, new plants built today. As a consequence, older plants are allowed by law to emit some pollutants at 4-10 times the rate of new market entrants. This market distortion could also result in increased reliance on older, more polluting plants; for example, a recent study by the U.S PIRG Education Fund and the Environmental Working Group showed that generation from these older plants rose by 16% nationwide from 1992-98.

To ensure a competitive market, and necessary environmental improvement, any restructuring legislation should: (1) require all power plants, regardless of age or location, to meet minimal environmental standards for sulfur dioxide and nitrogen oxides met by new plants built today, allowing cap-and-trade compliance mechanisms where appropriate; and (2) set stringent caps on power sector emissions of carbon dioxide and mercury.

Net Metering - We appreciate inclusion of the net metering provision, which insures the "plug and play" concept, which was developed when telecommunications was deregulated. Representatives Bartlett, Ehlers and Inslee have crafted a similar net metering approach that is very comprehensive. We would appreciate your review of their bill.

Representatives of the organizations signing this letter are available to assist you and your staff with further refinements of the legislation. Please contact either Ron Sundergill or Eric Wesselman at the Union of Concerned Scientists (Phone: 202.332.0900) for further information or assistance. Thanks again

for the opportunity to relay our suggestions to you.

Sincerely,

Alliance to Save Energy

American Council for an Energy-Efficient Economy

American Solar Energy Society

Clean Fuels Foundation

Environmental and Energy Study Institute

Fuel Cells 2000

Geothermal Energy Association

Global Biorefineries Inc.

National BioEnergy Industries Association

Natural Resources Defense Council

Pellet Fuels Institute

Physicians for Social Responsibility

Public Citizen

Solar Energy Industries Association

SUN DAY Campaign

Union of Concerned Scientists

US Public Interest Research Group

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