Powerplant and Industrial Fuel Use Act of 1978

(Conference report filed in Senate, S. Rept. 95-988)

=Title I: General Provisions= - Powerplant and Industrial Fuel Use Act - Sets forth the purposes of this Act, which are to be carried out in a manner consistent with applicable environmental requirements. Applies the provisions of this Act in all the States, Puerto Rico, and the territories and possessions of the United States. Applies the provisions of titles II and III of this Act, generally, to powerplants and installations situated within the contiguous 48 States, Alaska, and the District of Columbia.

=Title II: New Facilities= - Prohibits: (1) the use of natural gas or petroleum as a energy source in any new electric powerplant; and (2) construction of any new electric powerplant without the capability to use coal or any alternate fuel as a primary energy source.

Prohibits the use of natural gas or petroleum as the primary energy source in a new major fuel-burning installation (MFBI) consisting of a boiler. Authorizes the Secretary of Energy to prohibit, by rule, categories of new MFBI's, other than boilers, from using natural gas or petroleum as a primary energy source. Authorizes the Secretary to prohibit, by order, the use of natural gas or petroleum as a primary energy source in any new MFBI, other than boiler, which is not within any category established by rule. Provides that no order may be issued if it is demonstrated that there would have been granted an exemption if such MFBI had been subject to a category rule. States that if the powerplant or MFBI is entitled to a temporary exemption, the Secretary shall issue the prohibition but stay its effect during the exemption period.

Requires the Secretary to provide temporary exemptions from such prohibitions: (1) generally due to the lack of an alternate fuel supply, site limitations, or environmental requirements; (2) based upon future use of synthetic fuels; (3) if such exemption would be in the public interest; and (4) for certain installations, upon demonstration by the petitioner that coal or another alternate fuel will be used at least 75 percent of the annual fuel heat input rate upon the expiration of such exemption.

Provides that such exemption periods may not exceed five years, with certain exceptions where the exemption periods may not exceed ten years.

Requires the Secretary to provide permanent exemptions from such prohibitions: (1) due to the lack of an alternate fuel supply, site limitations, environmental requirements, or difficulty in obtaining adequate capital for the financing of such powerplant or MFBI; (2) due to certain State or local requirements; (3) for cogeneration facilities; (4) for certain fuels mixtures containing natural gas or petroleum; (5) for powerplants or MFBI's operated only for emergency purposes; (6) for powerplants where necessary to prevent impairment of reliability of service; (7) for peakload powerplants; (8) for intermediate load powerplants; (9) for MFBI's based upon product or process requirements; and (10) for MFBI's necessary to meet scheduled equipment outages. Stipulates that, except in cases of exemptions for fuel mixtures and peakload powerplants, the Secretary may grant such permanent exemptions only: (1) if the petitioner has demonstrated that the use of a mixture of petroleum and coal or other alternate fuels are not economically or technically feasible; and (2) the Secretary has not made a finding that the use of a method of fluidized bed combustion of coal or another alternate fuel is economically and technically feasible.

Requires that, in the case of a powerplant, the appropriate State regulatory authority approve the proposed powerplant before the requested exemption can take effect. Provides that, except in the case of cogeneration or peakload exemptions, the Secretary may not grant an exemption for a new powerplant unless he finds that the petitioner has demonstrated that, despite good faith effort, no alternative supply of electric power is available within a reasonable distance to the petitioner's utility system and at a reasonable cost without impairing reliability of service.

Stipulates that such exemptions shall be on such terms and conditions as the Secretary determines appropriate, including terms and conditions requiring the use of effective fuel conservation measures which are practicable and consistent with the purposes of this Act. Provides that in the case of any temporary exemption, the terms and conditions are to be designed to insure that when the exemption period ends the powerplant or installation will be in compliance with the applicable prohibitions. Sets forth requirements for compliance plans.

=Title III: Existing Facilities= - Prohibits any existing powerplant from: (1) using natural gas as its primary energy source beginning January 1, 1990; (2) using natural gas as its primary energy source before January 1, 1990, unless it used natural gas as a primary energy source at any time during calendar year 1977; and (3) using greater proportions of natural gas than it used in calendar years 1974 through 1976, or if a powerplant began operation on or after January 1, 1974, in greater proportions than used during the first two calendar years of operation.

Authorizes the Secretary to issue prohibitions against any existing powerplant or MFBI using natural gas or petroleum as a primary energy source if he finds prior to issuing the proposed rule or order that: (1) the powerplant or MFBI has, or previously had, the technical capability to use coal or another alternate fuel as a primary energy source; (2) such powerplant or MFBI has the technical capability to use coal or another alternate fuel as a primary energy source, or could have such capability without substantial physical modification or substantial reduction in its rated capacity; and (3) it is financially feasible to use coal or another alternate fuel as a primary energy source in such powerplant or MFBI. Authorizes the Secretary, in case of any existing electric powerplant or MFBI in which the Secretary finds it is technically and financially feasible to use a mixture of petroleum or natural gas and coal or an alternate fuel as a primary energy source, to prohibit the use of petroleum or natural gas in excess of the amounts necessary to maintain reliability of operation of such unit consistent with maintaing reasonable fuel efficiency.

Directs the Secretary to issue: (1) case-by-case orders; and (2) rules by category prohibiting certain existing electric powerplants or MFBI's from using natural gas or petroleum.

Requires the Secretary to provide temporary exemptions from such prohibitions: (1) due to the lack of an alternate fuel supply, site limitations, or environmental requirements; (2) based upon future use of synthetic fuels; (3) based upon use of innovative technologies; (4) for units to be retired; (5) if such exemption would be in the public interest; (6) for peakload powerplants; and (7) where such an exemption is necessary to prevent impairment of reliability of service. Provides that such exemption periods may not exceed five years, with certain exceptions where the exemption periods may not exceed ten years.

Requires the Secretary to provide permanent exemptions from such prohibitions: (1) due to the lack of an alternative fuel supply, site limitations, or environmental requirements; (2) due to certain State or local requirements; (3) for cogeneration facilities; (4) for certain fuel mixtures containing natural gas or petroleum for powerplants or MFBI's operated only for emergency purposes; (7) for peakload powerplants; (8) for intermediate load powerplants; (9) for certain powerplants with capacities of less than 250,000,000 Btu's per hour; (10) for the use of liquified natural gas by certain powerplants if the Administrator of the Environmental Protection Agency or the appropriate State air pollution control agency certifies that the use of coal by such powerplant will cause or contribute to air pollution, and would not comply with applicable environmental requirements; (11) for MFBI's served by certain international pipelines; (12) for MFBI's based upon product or process requirements; and (13) MFBI's necessary to meet schedules equipment outages. Stipulates that, except in cases of certain exemptions, the Secretary may grant such permanent exemptions only: (1) if the petitioner has demonstrated that the use of a mixture of petroleum and coal or other alternate fuels is not economically or technically feasible; and (2) the Secretary has not made a finding that the use of a method of fluidized bed combustion of coal or another alternate fuel is economically and technically feasible.

Stipulates that such exemptions shall be on such terms and conditions as the Secretary determines appropriate, including terms and conditions requiring the use of effective fuel conservation measures which are practicable and consistent with the purposes of this Act. Provides that in the case of temporary exemption, the terms and conditions are to be designed to insure that when the exemption period ends, the powerplant or installation will be in compliance with the applicable prohibitions. Sets forth requirements for compliance plans.

=Title IV: Additional Prohibitions; Emergency Authorities= - Authorizes the Secretary to prohibit the use of natural gas in existing boilers (other than MFBI's) for space heating purposes, if he finds that: (1) such boiler consumes 300 Mcf or more of natural gas on a peak day; (2) such boiler has, or had, the technical capability to use petroleum as a primary energy source as of the date of publication of the rule; (3) such boiler could have the technical capacity to use petroleum as a primary energy source without substantial physical modification of the boiler or substantial reduction in the rated capacity of the boiler; (4) it is financially feasible for such boiler to use petroleum as a primary energy source; and (5) such prohibition is consistent with the purposes of this Act. Stipulates that any existing boiler to be covered by any such rule must be specifically identified in such rule.

Authorizes the Secretary to prohibit the use of natural gas in a new boiler (other than a MFBI) for space heating purposes, if he finds that: (1) such boiler will, by design, be capable of consuming 300 Mcf or more of natural gas per day; and (2) such prohibition is consistent with the purposes of this Act. Defines "new boilers" as any boiler for which no commitment for construction or acquisition has occurred as of the date of publication of the proposed rule or order.

Directs the Secretary to exempt any person from such prohibitions if such person demonstrates that an adequate and reliable source of petroleum is not likely to be available during the period of the exemption.

Prohibits the installation of new outdoor lighting fixtures using natural gas, effective beginning on the date of enactment of this Act. Directs the Secretary, within 180 days of such date, to prohibit local distribution companies from providing natural gas service for use in outdoor lighting.

Directs the Secretary to provide exemptions from such prohibition: (1) for any new or existing memorial lights or lights of historical significance, upon petition to the Secretary and a certification made by a Federal, State, or local government agency or by an appropriate historic association; (2) for existing commercial lighting units which are of a traditional nature and which conform with the cultural or architectural style of the area where the light is located; and (3) for industrial, residential and municipal users for reasons of safety, time to obtain substitute lighting, costs, and because the exemption is in the public interest and is consistent with the purposes of this Act. Permits the Secretary to delegate his authority and responsibility regarding outdoor lighting to the appropriate regulatory authority of State, if such delegation would be consistent with the purposes of this Act.

Subjects all Federal agencies to the prohibitions, terms, conditions, or other substantial or procedural requirements under this Act. Permits the President to exempt an agency where it is in the paramount interest of the United States (in the case of military agencies and functions) or where funds requested by the President from the Congress have not been appropriated.

Directs the President to require Federal agencies which provide any form of Federal financial assistance through loans, grants, or contracts to effectuate the purposes of this Act relating to the conservation of petroleum and natural gas. Provides for exemptions from such requirement when it is in the national interest, and if the President has notified the Congress of any such exemption at least 60 days before it is effective.

Directs the President to submit annual reports to the Congress on actions taken by the President and each Federal agency regarding conservation in Federal facilities, contracts, and financial assistance programs.

Authorizes the President, in specified emergency circumstances, to: (1) by order, allocate coal (and require the transportation thereof) for the use of any electric powerplant or MFBI in order to insure reliability of electric service or prevent unemployment, or protect public health, safety, or welfare; (2) by order, prohibit any electric powerplant or MFBI from using natural gas or petroleum, or both; and (3) stay the application of any provision of this Act or any rule or order issued thereunder. Stipulates that the President may not delegate the authority to issue any such order, but he may direct Federal agencies to issue rules or regulations or take other actions necessary to issue such orders.

Provides authority to use natural gas or petroleum to operate a peakload powerplant or MFBI during a temporary emergency condition, under rules prescribed by the Secretary if: (1) the operator of such powerplant or MFBI notifies the Secretary, within 24 hours of such use; and (2) the Secretary has not notified such operator that the emergency condition does not exist or does not warrant such use.

Directs the Secretary to prohibit existing electric powerplants which during calendar year 1977 used coal or another alternate fuel from increasing their use of petroleum without a Federal permit. Provides that such permits shall be issued if a powerplant cannot otherwise comply with the requirements of the Clean Air Act and the appropriate State regulatory authority has certified that the increased use of petroleum is necessary to prevent impairment of reliability of service.

=Title V: System Compliance Option= - Provides that existing electric powerplants owned or operated by an electric utility are to be considered in compliance with any prohibition under title III of this Act concerning the use of natural gas if there is in effect a plan of system compliance for such utility approved by the Secretary. Stipulates that election of such option would preclude any other exemption except as otherwise expressly permitted. States that such plans must be submitted to the Secretary before January 1, 1980, and sets forth requirements for approval of such plans.

Requires the approval of the Secretary of natural gas contracts, contract extensions, or renewals under such plans. Prohibits the Secretary from approving any contract, or extension or renewal which provides for the delivery of natural gas after December 31, 1999.

=Title VI: Financial Assistance= - Provides that the Governor of any State may, upon making certain findings regarding any area to be impacted by increased coal or uranium production, designate the area as an energy-impacted region and notify the Secretary and the Secretary of Agriculture. Subjects such designation to the approval of the Secretary and the Secretary of Agriculture.

Authorizes the Secretary of Agriculture, upon the approval of any such designation to make 100 percent Federal planning grants available to the affected States. Stipulates that the total amount of such planning grants shall not exceed ten percent of the total appropriation for this program in any year. Sets forth the contents of such plans.

Authorizes the Secretary of Agriculture to acquire certain real property within such an area which is needed for public facilities and housing, subject to the approval of the Governor of the affected State. Provides that such acquisition may be by purchase, donation, lease, or exchange, and shall be transferred to the State. Provides for grants to the States for acquisition of such lands, and for site development, which may not exceed 75 percent of the costs.

Requires persons engaged in coal or uranium development activities within such areas to report to the Secretary of Energy, upon the request of the Governor of the affected State, regarding projected employment levels, projected quantity of coal or uranium to be produced, processed or transported, and actions planned to provide housing and other facilities for employees.

Directs the Secretary of Agriculture to administer such program through the Farmers Home Administration and other appropriate agencies within the Department of Agriculture.

Authorizes the appropriation of $60,000,000 for fiscal year 1979, and $120,000,000 for fiscal year 1980, to the Secretary, for purposes of such program. Requires the Secretary and the Secretary of Agriculture to enter into an agreement for the allocation of such funds, and directs the Secretary to transfer to the Secretary of Agriculture amounts determined under such agreement.

Directs Federal agencies which regulate the health and safety of persons working in coal, uranium, metal, or nonmetallic mines to interpret and utilize their authorities fully and promptly.

Authorizes the Secretary to provide loans for existing powerplants to finance the purchase and installation of certified air pollution control devices necessary in order to convert to coal or other alternate fuel as a primary energy source. Stipulates that such loans may not exceed two-thirds of the cost of purchasing and installing such air pollution control devices. Authorizes the appropriation of $400,000,000 for each of fiscal years 1979 and 1980, to carry out such loan program.

=Title VII: Administration and Enforcement= - Sets forth administrative procedures concerning rules prescribed under this Act. Provides for: (1) notices of rules and orders imposing prohibitions; (2) public comment on prohibitions and exemptions; (3) transcripts of such public hearings; (4) Environmental Protection Agency and Federal Trade Commission comment on any petition and any proposed rule or order; and (5) judicial review in the United States Court of Appeals for any person who is aggrieved by a rule, order, or denial.

Authorizes the Secretary, the President or the Federal Energy Regulatory Commission to require the submission of information and reports by any person subject to this Act. Requires any person who owns, operates, or proposes to operate any existing powerplant required to come into compliance with the prohibitions of this Act, to submit annual compliance reports to the Secretary, beginning on or before January 1, 1980.

Requires the Secretary to issue written notices of violations of this Act. Stipulates that a corporate officer shall not be subject to imprisonment unless he knew of noncompliance by the corporation or had received from the Department of Energy notice of noncompliance. Provides that no person shall be liable for any penalty for operating a powerplant in excess of that allowed by an exemption granted for peakload powerplant operation, under certain conditions.

Subjects any person who willfully violates any prohibition under this Act, or rule or order, (except the prohibition on the use of natural gas for decorative outdoor lighting) to a fine of not more than $50,000 or imprisonment for not more than one year, or both. Subjects any person who violates any such provision of this Act, or rule or order, to a civil penalty of not more than $25,000 for each violation. Sets forth civil penalties for use of natural gas or petroleum in amounts in excess of those authorized in an exemption, and for violation of the prohibition on the use of natural gas for decorative outdoor lighting. Authorizes injunctive relief, including interim equitable relief, in accordnace with the Department of Energy Organization Act.

Authorizes any aggrieved person to commence a civil action for mandatory or injunctive relief against the Secretary, or any Federal agency which has a responsibility under this Act if there is an alleged failure of the Secretary of such agency to perform any nondiscretionary act or duty.

Permits any person who receives natural gas pursuant to a contract in effect on April 20, 1977, the use of which is prohibited under the provisions of title II or title III, or any rule or order thereunder, to transfer all or part of his interests under such contract, and receive consideration from the person to whom such contractual interests are transferred. Directs the Federal Energy Regulatory Commission to institute a rulemaking proceeding to establish guidelines, on a regional or national basis, to determine maximum consideration permitted as just compensation.

Directs the President, acting through the Secretary and the Administrator of the Environmental Protection Agency, to study the alternative national uses of coal available to meet the Nation's energy requirements consistent with national environment protection, economic recovery, and full employment policies. Directs the Secretary to study: (1) the performance and competition of the coal industry; (2) the impact of prohibitions under this Act on employees; (3) the problems of compliance with this Act of small electric utility systems; and (4) the use of petroleum and natural gas or combustors. Directs the Administrator of the Environmental Protection Agency to conduct a continuing study of air pollution emissions from new and existing electric powerplants and MFBI's required to use coal or other alternative fuels. Sets forth requirements concerning reports to the Congress on such studies, and authorizes appropriations to carry out such studies.

Establishes an interagency committee composed of the heads of the Departments of Energy, Commerce, Interior, Transportation, Housing and Urban Development, and Health, Education and Welfare, the Environmental Protection Agency, the Appalachian Regional Commission, the Farmers' Home Administration, the Office of Management and Budget, and such other Federal agencies as the Secretary shall designate. Declares it the function of such Committee to study the socioeconomic impacts of expanded coal production and rapid energy development in general, on States, including local communities, and on the public. Directs the committee to submit a detailed report to the Congress on such study within one year of the effective date of this Act, together with recommendations for additional legislation.

Authorizes the appropriation of $11,900,000 for fiscal year 1979, to carry out the purposes of this Act.

Sets forth provisions which coordinate this Act with other provisions of law.

=Title VIII: Miscellaneous Provisions= Directs the Secretary to require disclosure of all coal reserves except small reserves. Amends the Energy Policy and Conservation Act by extending the loan guarantees to coal preparation facilities associated with new underground coal production.

Authorizes the appropriation of $100,000,000 for deposit in the Railroad Rehabilitation and Improvement Fund established by the Railroad Revitalization and Regulatory Reform Act of 1976. Stipulates that such funds are to be used to provide financial assistance to railroads for maintenance, rehabilitation, improvement, and acquisition of equipment and facilities which will be used for the rail transportation of coal to regions or States which can use coal in greater quantities. Authorizes the Office of Rail Public Council to present the views of users of rail services, the general public and affected communities, and where appropriate, the railroads, before Federal agency proceedings concerning the impact of energy proposed and actions on rail transportation.

Directs the Secretary to report to the Congress annually on March 1, on the action taken under this Act and under the Energy Supply and Environmental Coordination Act of 1974 during the preceding calendar year, and the actions to be taken.

=Title IX: Effective Dates= - States that the provisions of this Act take effect 180 days after the date of enactment. Authorizes the Secretary to immediately issue rules pursuant to this Act which shall take effect on the same such effective date. Authorizes the Secretary to grant interim exemptions for certain new electric powerplants.