Clean Fuels and Environmental Protection Act of 1989

Clean Fuels and Environmental Protection Act of 1989 - Amends the Clean Air Act to phase in, within ten years of this Act's enactment, a nationwide reduction in annual emissions of sulfur dioxide from fossil fuel fired electric utility steam generating units of 10,000,000 tons measured from 1980 emissions levels.

Prohibits State plans from allocating emissions reductions to small utility power plants where the plant's costs of compliance would significantly exceed the statewide average for all such plants or result in significant adverse competitive effects on such plant.

Requires the Administrator of the Environmental Protection Agency to review and report to the Congress on sulfur dioxide and nitrogen oxide emissions trends for sources not subject to this Act and to forecast the trend in such emissions.

Authorizes governors of certain States to submit certifications to the Administrator in lieu of compliance plans for first phase emissions reductions. Permits only certain coal-burning power plants to be certified.

Requires the Administrator, in order to help Indiana, Ohio, and Illinois meet the applicable phase one allocation, to issue an order requiring the owners or operators of the Clifty Creek, Kyger Creek, and Joppa power plants to comply with emissions standards for sulfur dioxide which are equivalent to new source performance standards for units constructed after September 18, 1978, unless such units are not appropriate retrofit candidates. Provides that compliance costs shall be borne by the Secretary of Energy and permits the Secretary to pay a share of any increased operating and maintenance costs.

Requires States to: (1) submit for the Administrator's approval State plans establishing emissions limitations, compliance schedules, and other enforceable measures necessary for achieving required sulfur dioxide emissions reductions; and (2) consider, and make available for public comment, cost and employment impact information regarding the various emissions control options before adopting final plans. Exempts from such submission requirements States with approved certifications. Provides for the coordination of State plans with respect to electric utilities which serve rate payers in more than one State. Requires such plans' revisions to contain emissions tonnage ceilings for the aggregate of all electric utility steam generating units operated by a single company.

Credits States with certain sulfur dioxide emissions reductions achieved after 1980 and before this Act's enactment by fossil fuel fired electric utility steam generating units not covered by this Act. Requires a State to biannually quantify its current level of sulfur dioxide emissions, report its findings to the Administrator on a source-by-source basis, and revise its plans if the Administrator finds it to be substantially inadequate for purposes of this Act's requirements.

Directs the Administrator to impose a noncompliance penalty against the owner or operator of a stationary source, based on the number of pounds of excess emissions from such source, if: (1) the State in which such source is located fails to submit a plan or certification to the Administrator which is approved; or (2) such source does not comply with plan or certification requirements.

Allows State plans to provide for trading of emissions reduction requirements: (1) among electric utility units within a State; (2) among electric utilities in more than one State which participate in the same power pool or are owned and operated by a single electric utility or utilities which are part of the same holding company; and (3) between electric utility units and certain other major sources within the State.

Requires utility and non-utility fossil fuel fired steam generating units and major sources of process emissions to maintain, and make available to the public, records on emissions and hours of operation.

Establishes the Clean Fuels Emission Reduction Equity Fund to provide for payments to electric utilities for costs attributable to meeting emissions reduction requirements, adopting energy conservation measures, and installing clean coal or other technologies. Limits the amount of such payments and sets forth eligibility requirements for utilities seeking to receive such payments.

Directs the Administrator to collect fees from persons: (1) emitting sulfur dioxide or nitrogen oxide in the generation of electric energy from fossil fuels; or (2) importing electric energy into the United States. Sets the maximum fee at 1.0 mill per kilowatt hour. Authorizes the Administrator to provide that States with lower emissions have lower fees. Prohibits such fees from being imposed after 2003.

Prohibits the increase of aggregate annual statewide emissions of sulfur dioxide from fossil fuel fired electric utility steam generating units beyond the emissions level required to be achieved by the end of the second phase of the emissions reduction program.

Directs the Administrator to conduct a study of the cost effectiveness and net effects on air quality of obtaining a reduction of from two to four million tons (from 1985 levels) in emissions of oxides of nitrogen from fossil fuel fired electric utility steam generating units, considering the effects of such air pollutant on ozone formation as well as acid deposition. Requires that such study be completed by 1993 and submitted to the Congress. Directs the Administrator to: (1) establish oxides of nitrogen emissions limitations of 2,000,000 (measured from 1985 levels) tons annually for fossil fuel fired electric utility steam generating units by 1995; and (2) require States to submit plans for compliance with such limitations.

Makes it a priority to achieve emissions reductions through conservation of electricity or energy.

Authorizes a State to extend for up to three years the date by which a fossil fuel fired electric utility steam generating unit which utilizes clean coal technology must meet sulfur dioxide emissions reduction requirements. Excuses State failures to meet emissions reduction requirements when such failures are solely attributable to such extensions. Prohibits extensions to utilities which have not committed to such technology at least two years prior to the deadline for phase II reductions under this Act.

Prohibits the early termination of any fossil fuel supply contract by reason of changed circumstances wrought by this Act or State compliance plans.

Directs the Secretary to establish a Clean Coal and Climate Change Control Technology Application Program. Authorizes the Secretary, during FY 1991 through 1995, to make grants to owners or operators of fossil fuel fired steam generating units for the installation and use of clean coal technology, conservation measures, or renewable resource technology which: (1) has not been adequately applied on a commercial scale; and (2) has a reasonable likelihood of achieving more cost-effective continuous emissions reductions of sulfur dioxide, oxides of nitrogen, or carbon dioxide than any system or equipment which has been adequately applied. Authorizes appropriations for such program.