The Senate Environment and Public Works Committee approved legislation by a narrow, nearly party-line 10-9 vote Thursday that would set first-ever restrictions on power plant emissions of mercury and the greenhouse gas carbon dioxide (CO2). A number of amendments to either strip the CO2 provisions or narrow the legislation were offered but withdrawn after each lawmaker noted they lacked support to attach their language.

In the biggest surprise of the session, Sen. Max Baucus (D-Mont.) voted against the bill, S. 556, the Clean Power Act, because of the crippling economic blow he said it would have on his parochial interests in Montana. Committee aides said after the vote that they had been unsure where Baucus would fall on the issue and had only become aware of his intent earlier this week. In his rejection of S. 556, Baucus appeared intent on saving face with environmental groups by pointing out that he supported neither the Clear Skies Initiative nor the Bush administration's recent effort to reform the Clean Air Act's New Source Review permit program. Baucus is up for re-election this November, a point driving many environmentalists to say they believed the lawmaker's vote was cast to appease local interests.

Despite Baucus' objections, Committee Chairman Jim Jeffords (I-Vt.) had enough support to move his bill due to the vote of Sen. Lincoln Chafee (R-R.I.). Chafee, a cosponsor of S. 556, floated an alternative to the Jeffords bill on Wednesday that included less strict targets for CO2, mercury, NOx and SO2. Sen. Thomas Carper (D-Del.) also proposed alternative language that addressed the four types of power plant emissions. Carper and Chafee, however, withdrew their amendments during the markup and put their support behind S. 556. A Jeffords aide acknowledged after the session that further negotiations may in fact lead to Jeffords taking some of the lawmakers' suggestions. "If they bring GOP support to a four-pollutant bill, then they're worth discussing," the aide said.

Looking ahead, Senate Majority Leader Tom Daschle (D-S.D.) said in an interview last week that he supports S. 556. Jeffords' aides said Thursday that they would soon be speaking with the Democratic leader to schedule floor time later this year. While S. 556 currently has 21 cosponsors, Jeffords said he knows of 52 senators who would support his proposal but noted he is eight votes shy of the number needed to break a filibuster.

Opponents of S. 556 blasted Jeffords on Thursday for opting to move his bill in a nearly partisan fashion. Sen. George Voinovich (R-Ohio) said he thought the legislation had no shot of moving off the Senate floor this year because of its inclusion of CO2 regulations. Voinovich was particularly critical of the notion that implementation of S. 556 would require some 35 new rulemakings and notice and comment provisions from the Environmental Protection Agency over the next 16 years. Any such changes to the Clean Air Act would prompt litigation, Voinovich said, driving further regulatory uncertainty for the utility industry. "This bill today is a lawyer's dream and a nightmare to anyone who cares about reducing emissions," he said.

As written, S. 556 sets a 2008 deadline for utilities to reach a 1.98 million-ton sulfur dioxide (SO2) cap in the eastern United States and a 275,000-ton cap for the western part of the country. For nitrogen oxides (NOx), S. 556 establishes a nationwide 1.51 million-ton cap. Under the bill, CO2 and mercury caps fall at 2.05 billion tons and 5 tons, respectively. Jeffords' proposal also establishes a 2008 deadline for EPA enforcement of non-mercury hazardous air pollutant (HAP) regulations and gives all utilities 40 years and older until 2013 to comply with a controversial "birthday" provision to install the best available control technology or face shutdown.

The hard-line stance in Jeffords' proposal drove several committee Republicans to float alternatives during the days leading up to the markup. One notable amendment from Sen. Robert Smith (R-N.H.) followed closely the cap-and-trade targets for NOx, SO2 and mercury emissions as called for by the Bush administration's Clear Skies Initiative. Differing from Jeffords' approach, Smith's language would have removed NSR permitting requirements for existing utility facilities while keeping silent on CO2 controls. Voinovich had also considered a substitute to S. 556 that would have incorporated NOx, SO2 and mercury reductions as written in S. 558, an acid-rain bill from Sens. Hillary Clinton (D-N.Y.) and Charles Schumer (D-N.Y.). Voinovich said that while he did not completely agree with all the provisions in S. 558, it would serve as a better starting point in negotiations as compared with S. 556.

Both the Smith and Voinovich substitute proposals were withdrawn prior to the final vote on S. 556.

John Stanton, vice president of air programs at the National Environmental Trust said the committee's acceptance of Jeffords' language and Smith's failure to garner enough support for his amendment signals a "sound rejection" of the Bush administration's climate change policy. Other environmentalists, including Frank O'Donnell of Clean Air Trust, said the White House did not want to see Clear Skies on the losing end of a committee vote and thus pushed Smith to hold the amendment. Following the markup, Sen. Michael Crapo (R-Idaho) and a couple of Bush administration EPA and Council on Environmental Quality officials stood outside the hearing room and expressed dissatisfaction that they were unable to advance Clear Skies and stop S. 556.

Among energy industry officials, the passage of S. 556 from the EPW Committee was both expected and disappointing. Scott Segal, a spokesman for the Electric Reliability Coordinating Council, said he was particularly upset because the Jeffords bill makes no effort to remove redundant CAA provisions -- such as NSR and upcoming regional haze and hazardous air pollutant regulations -- in lieu of the new emission targets. "This bill is all stick and no carrot," Segal said. "Whoever drafted S. 556 obviously had a seizure before they could put in the regulatory reform. So it's only half-baked and as a result does not rationalize environmental law."

Quin Shea, executive director of environmental activities at the Edison Electric Institute, echoed Segal in arguing that S. 556 does nothing to increase regulatory certainty or make current air quality regulations more cost-effective. Shea also criticized the allocation formula devised by Jeffords' staff. He said Jeffords' approach would directly provide power generators with only a small percentage of allowances, forcing them to purchase additional credits after they'd undertaken hundreds of billions of dollars in new emission control equipment. Further, Shea said little actual emissions trading would take place under S. 556, a "huge step backwards" considering the popularity and success of the current acid rain program.

"Certainly, there will be legitimate differences of opinion about what a new regulatory blueprint for power plant emission reductions should look like," he said. "But we are disappointed that the committee has approved a bill that makes little more than a rhetorical contribution to this important debate."

On the flip side, environmentalists rejoiced Thursday in one of their biggest and most anticipated victories of the year. David Hawkins, climate change center coordinator at the Natural Resources Defense Council and the top EPA air official during the Carter administration, said the bill "makes sure that consumers, not polluters, get the best deal."

Specifically, Hawkins applauded the same allocation approach that Shea criticized, explaining it holds market incentives for energy-efficient technologies and creates an "innovative consumer rebate provision" tied into the cap-and-trade program for CO2. Revenue from the sales of the emission allowances would be returned directly to consumers, Hawkins noted, making the bill different from other approaches that give the utility industry a "multi-billion dollar gift at the expense of consumers."

Not all of the amendments to S. 556 were withdrawn. Clinton, for one, added language to the final product that updates the standards and science behind the acid rain deposition research program established by the 1990 CAA amendments. And Sen. Barbara Boxer (D-Calif.) was successful in including an amendment that calls for S. 556 to consider and protect children, pregnant women, minority and low-income communities and other sensitive populations.

Voting for S. 556 were: Jeffords, Chafee, Boxer, Carper, Clinton, Sens. Jon Corzine (D-N.J.), Bob Graham (D-Fla.), Joe Lieberman (D-Conn.), Harry Reid (D-Nev.) and Ron Wyden (D-Ore.). Opponents of S. 556 were: Baucus, Crapo, Smith, Voinovich, Sens. Christopher Bond (R-Mo.), Pete Domenici (R-N.M.), James Inhofe (R-Okla.), Arlen Specter (R-Pa.) and John Warner (R-Va.).

EPA subpoena postponed

Other items pass

The committee also approved by voice vote S. 351, a bill from Sen. Susan Collins (R-Maine) that would prohibit the sale of mercury fever thermometers within 180 days except by prescription, provide $20 million in grants to outside parties for the creation of a national thermometer exchange program and create an interagency task force for the disposal of the collected mercury.

Lawmakers also unanimously signed off on S. 2664, a homeland security authorization bill for first-responders; H.R. 3322, the Bear River (Utah) Migratory Bird Refuge Visitor Center Act; and H.R. 3958, the Bear River Migratory Bird Refuge Settlement Act of 2002.