Top 10 Highlights of Kerry-Graham-Lieberman Senate Climate Proposal

By Juliet Eilperin, Washington Post

The nation’s largest electric utilities association and three of the country’s biggest oil companies will endorse the climate proposal Sens. John Kerry (D-Mass.), Lindsey O. Graham (R-S.C.) and Joseph I. Lieberman (I-Conn.) will introduce Monday, Kerry told supporters in a private phone call Thursday evening.

The declarations of support show the three senators have made some inroads with the business community in drafting their plan, but have yet to win over traditional opponents of mandatory limits on greenhouse gas emissions. Several consumer groups will back the plan as well. Kerry’s office declined to comment on the matter.

The Edison Electric Institute — whose members generate the bulk of the nation’s electricity — and two of its influential CEOs, Exelon’s John Rowe and Duke Energy’s Jim Rogers, will declare their support Monday, sources said. While Kerry did not name the three oil companies, a source familiar with the negotiations said Shell, BP and ConocoPhillips would back the climate measure.

Winning over business interests who face regulation by the Environmental Protection Agency, Graham said Thursday, is essential to enlisting Republican support for the proposal. “The goal is to have the business community come forward and say, ‘This is a better solution to the EPA,'” he said.

The top 10 highlights of the proposal Kerry outlined in the phone call:

  1. The bill would take effect in 2013 and by 2020 would cut U.S. greenhouse gas emissions 17 percent compared to 2005 levels, and 80 percent by 2050.
  2. Trade-sensitive and energy-intensive industries would get a four-year delay before they would be subject to greenhouse gas limits.
  3. Two-thirds of the revenues generated by auctioning off pollution allowances for utilities would be returned to consumers through local distribution companies.
  4. Oil companies will be subject to pollution allowances that will be retired over time, rather than a linked fee. In an effort to counter criticism that any sort of carbon limits on fuel sales constitutes a gas tax, the Congressional Budget Office will issue a document stating this provision will not constitute a tax. All diesel oil fuel revenues will be set aside and directed to the Highway Trust Fund.
  5. The bill will preempt both the states’ and EPA’s ability to regulate greenhouse gases under the Clean Air Act, as long as emitters comply with the standards outlined in the measure. The EPA will monitor and enforce compliance with the law.
  6. The bill will contain a nuclear title providing loan guarantees and liability protections for the construction of up to 12 plants.
  7. The measure will provide $10 billion to the coal industry for “clean coal technology” that will capture emissions from coal-fired power plants, and it will provide an accelerated bonus for early deployment of this technology.
  8. It will provide financial incentives for natural gas and electric vehicles.
  9. The proposal will provide a hard price collar for the price of carbon, with both a ceiling and a floor.
  10. It will also include the entire energy bill passed last year by the Senate Energy and Natural Resources Committee.