Rep. Rick Boucher (D-Va.) has been trying for the past year to get Congress to set up an independent corporation dedicated to clean coal development. He introduced the Carbon Capture and Storage Early Deployment Act (HR 6258), which provoked some hearings in 2008, but it went nowhere and died. So this spring he reintroduced the bill, virtually unchanged (HR 1689).
What happened next is further proof of the enormous leverage Boucher wields as a coal state Democrat in shaping national climate legislation.
His bill was incorporated wholesale as pages 52-75 into the American Clean Energy and Security Act of 2009 (ACES), the climate bill Reps. Henry Waxman and Ed Markey are shepherding through the House.
It fills section 114 of the Clean Energy Title of the Waxman-Markey bill, and it is a giant gift to the utility industry. It would create the Carbon Storage Research Corporation and funnel $10 billion to support the corporation over the next 10 years, with up to $500 million designated simply for "administrative expenses" to be spent at the discretion of its officers.
The most curious part is where all that money is going to come from. The answer: from every ratepayer who uses electricity, in the form of an almost invisible tax that would average 50-cents-a-month, conveniently referred to as an "assessment."
Republican opponents of climate legislation have been telling the public that a cap-and-trade bill would impose a "light switch tax." It was a witty and effective slogan used to scare voters during a recession.
The political irony is that Boucher, together with 20 co-sponsors including Republican climate-bashing Reps. Joe Barton and John Shimkus, have imposed a light switch tax of their own, with 100% of the proceeds earmarked as an enormous hunk of pork for coal-fired utilities.
"This is every industry's dream – to have the proceeds of a monopoly tax dedicated entirely to your interests," said Dan Greenwood, a professor of corporate finance and law at Hofstra University's School of Law. "The money doesn't need to be re-appropriated every year, all of it is dedicated to your industry, and your industry gets to decide on how the money is allocated."
The purpose of the Carbon Storage Research Corporation is to "establish and administer a program to accelerate the commercial availability of carbon dioxide capture and storage technologies and methods" through "competitively awarded grants, contracts, and financial assistance."
The corporation would be empowered to collect and spend $1 billion every year, and the bill says that "up to 5 percent of the funds collected in any fiscal year ... may be used for the administrative expenses of operating the Corporation" (see page 62).
That's $50 million a year in administrative expenses authorized for 10 years for the corporation, which for governance purposes is to become "a division or affiliate of the Electric Power Research Institute (EPRI)." EPRI is a non-profit that conducts research and development on electricity generation. Its members represent more than 90% of the electricity generated and delivered in the United States.
EPRI's 2007 financial statements report total assets of $185 million, which would increase more than 25% with the addition of $50 million in administrative expenses. With the annual addition of the full billion dollar allocation over the next 10 years, the American Clean Energy and Security Act would increase the size of EPRI's assets more than 50-fold.
There is no parallel provision in the Waxman-Markey bill to set up a federally created corporation within an existing non-profit or industry organization to support solar or wind energy development at such an astonishingly generous scale.
Less than a week after the Waxman-Markey bill was successfully voted out of the House Energy and Commerce Committee, EPRI announced the formation of a National Carbon Capture Center (NCCC).
PALO ALTO, Calif. - (May 27, 2009) - The Electric Power Research Institute (EPRI) announced today that it has joined with Southern Company, the U.S. Department of Energy (DOE) and four other companies in forming the National Carbon Capture Center (NCCC) for the development and testing of advanced technologies to capture carbon dioxide from coal-fired power plants.
The NCCC is located at the Power Systems Development Facility (PSDF), a research and development complex south of Birmingham, Ala., and will be managed and operated by Southern Company. Companies that will initially participate in the project also include American Electric Power, Luminant, Peabody Energy, and Arch Coal; others are expected to join the initiative as work progresses.