Billy Tauzin

Mr. TAUZIN

Mr. TAUZIN. Mr. Speaker, I yield myself 3 minutes. Mr. Speaker, it is the season of Thanksgiving, and this House is about to say thank you to a generation of Americans who we ought to say thank you to, and we are about to say it in the most important way we can. We are about to pass a $400 billion-insured drug account for these citizens who have no drug insurance today. We are about to pass a voluntary plan that gives them the right to join or not join, their choice, not mandated by government. It includes catastrophic coverage so they never have to lose everything they have worked for and saved for all of their lives. And we give to all Americans on this Thanksgiving holiday a chance to open up health savings accounts, tax- free in, tax-free out, tax-free interest earned to build their own long-term health care plans for the future. This, indeed, is a time of Thanksgiving, and it is indeed a time for this generation to be true to our obligations of the previous generation. This bill does that. It gives the new generation choice in drug coverage for the first time. It is amazing to me tonight, this debate. I have taken my parents to the hospital many times during my dad's life and my mom's. I do not ever once remember a doctor asking me as I checked in to the room there whether my mom was a Democrat or a Republican. This is not a partisan issue. I have gone and filled my mom's prescriptions every now and then for her. They never asked me at the pharmacy what party she belongs to. And when health deserts us in our senior years, when the ravages of time take us and we pass away, no mortuary worker stamps Democrat or Republican on our tombstones. Health care is not a partisan issue, and it should not be a partisan issue. We have a chance today to do something that seniors desperately need, and we ought to join tonight together to do it. There are a lot of people who helped write this bill. Let me tell you who they were. They were, of course, the members of the conference committee who worked together to put this bill together, but there were a lot of staffers; and I want to mention them today. They are the staff of the House and Senate legislative counsel. Special thanks to the House legislative counsel, Ed Grossman, who is a draftsman extraordinaire. Additional thanks go to Pierre Oisson and Peter Goodlow. From the Senate side, Ruth Ernst and John Goetchus and Jim Scott. Other staff members of the Congressional Budget Office and analysts, these individuals deserve great compliments for their analysis, their integrity, and their hard work. I want to thank Doug Holtz-Eakin and Steve Lieberman, Tom Bradley, and the entire CBO staff who worked night times and days for us. I want to thank Tom Scully and the whole staff at HHS and CMS who sat and worked with us day after day to craft this bill. I specifically want to thank the staffs of our committees. From Ways and Means, John McManus, who did such a great job; Madeleine Smith and Deborah Williams, and Joel White. From the majority side of the Finance Committee, I would like to thank Linda Fishman, Mark Hayes, Leah Kegler, Colin Roskey, and Jennifer Bell. Recognition is deserved to Liz Fowler and Andrea Cohen, Pat Bousilman and Jonathan Blum. Last, but not least, all of the Committee on Energy and Commerce staff who toiled so hard for us, let me thank them again, over and over again: Dan Brouilette, Patrick Morrisey, Chuck Clapton, Jeremy Allen, Patrick Ronan, Kathleen Weldon, and Jim Barnette. They did a marvelous job for this House, and we owe them a debt of thanks. Thank you all.

Mr. TAUZIN. Mr. Speaker, I yield myself 30 seconds. Mr. Speaker, again let me read the language of the bill that the gentleman just referred to, that terrible piece of language. It says in effect that in administering the prescription drug benefit program established under this, the Secretary may not, number two, interfere in any way with negotiations between private entities and drug manufacturers or wholesalers; or, three, otherwise interfere with the competitive nature of providing prescriptive drug benefit through private entities. That language in the bill comes from a motion to recommit prepared and filed in this House in the 106th Congress by the gentleman from California (Mr. Stark) on his motion to recommit. It is language of the other side that they are complaining about.

Mr. TAUZIN. Mr. Speaker, I might inquire of the gentleman from Michigan (Mr. Dingell) if he has further speakers. I am reserving for the Speaker of the House to close.

Mr. TAUZIN. Mr. Speaker, then I would advise my friend to take advantage of that time at this time and the Speaker will close on the Republican side.

Mr. TAUZIN. Mr. Speaker, I can assure my friend that is true.

Mr. TAUZIN. Mr. Speaker, in order to close this historic debate we yield the balance of our time to the distinguished Speaker of this, the whole House of Representatives, the gentleman from Illinois (Mr. Hastert).

Mr. TAUZIN

Mr. TAUZIN. Mr. Speaker, I ask unanimous consent that the motion to suspend the rules and pass the Senate bill S. 877, as amended, which is the spam bill that we have bipartisan agreement on, be modified by the amendment that is at the desk, which has been cleared with the other side.

Mr. TAUZIN

Mr. TAUZIN. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and include extraneous material on H.R. 1.

Mr. TAUZIN

Mr. TAUZIN. I rise to elaborate on the colloquy I had with Mr. Norwood during consideration of the conference report for H.R. 6 regarding section 1242 (relating to participant funding). Section 1242 (``Voluntary transmission pricing plans'') adds a new section 219 to the Federal Power Act. Under this section, any transmission provider (``TP''), regardless of whether the TP is a member of an RTO or ISO, is eligible to submit a transmission pricing plan to the FERC. In the case of a participant funding (``PF'') plan, the Federal Energy Regulatory Commission (``FERC'') must approve the plan if it meets the requirements of the section, regardless of whether a TP is in an RTO or ISO, because the native load customers of the TP should not be penalized by being compelled to pay for unneeded generator interconnection transmission upgrades. The provision requires the FERC to approve a PF plan if the plan is just and reasonable and meets other requirements relating to cost responsibility and allocation. The rates referenced means rates as they affect the TP's shareholders and native load customers. The rate must not be so low as to be confiscatory of the TP-shareholder's property. At the same time, the rate must not unjustly shift costs to the TP's native load customers. The just and reasonable requirement here operates in the context of a clear policy choice by Congress in favor of PF where an application meets the other requirements of this section. The requirements of (b)(2)(B) constitute a limitation or channelling of the FERC's discretion within the bounds of the just and reasonable standard, which the courts have held does not require a specific formula, method, or single numeric result in any given case. In determining the zone of reasonableness, the FERC is required to comply with the policy of allowing PF as provided in (b)(2)(B). PF ensures just and reasonable rates in three ways. First, the TP fully recovers (in charges assessed to all transmission customers) the costs of any monetary credits it must grant to the party requesting the upgrade. Second, PF protects consumers from bearing costs for facilities they do not need, by ensuring that the party causing the upgrade costs is assigned those costs. Third, rates are kept at reasonable levels by ensuring that generation and transmission are sited in an economically efficient manner. Subsection (b)(2)(B) provides that the upgrade costs are ``assigned in a fair manner.'' The costs ``assigned'' or ``paid'' here means the costs initially allocated at the time of the upgrade. If a cost is assigned to the TP, the TP rolls that cost into its embedded cost rate base and recovers the entire cost in a transmission charge assessed to all its own transmission customers. If a cost is assigned to, or paid by, the requesting party, the requesting party makes a lump-sum payment at the outset, financed by whatever means the requester arranges. Subsequently, the requesting party pays the same embedded cost transmission charge assessed to and paid by any transmission customer-- this charge is not considered a ``payment'' in this context. Subsection (b)(2)(B)(i) means that if, at the time of the request, the native load customers had no need for the upgrade, they do not have to pay for it. The phrase ``such transmission service related expansion or new generator interconnection'' refers to the specific upgrade requested. Thus, if the TP would not have built the same upgrade at the same time to serve its own customers, such customers should not have to pay for it. The phrase ``would not have required'' means that, at the time the upgrade is requested, the native load customers would not have needed the upgrade to reliably meet their load. Projected or hypothetical future ``needs'' or other ``benefits'' in no way qualify as upgrades required by these customers for the purposes of this provision. Going forward, the requester would be charged the same embedded cost transmission service charge as any other transmission customer--a charge that includes the cost of any monetary credit (as it is used) or any other item in the embedded cost ratebase. This point is made clear in subsection (b)(2)(B)(iii)(I), which provides that a monetary credit would be ``against the transmission charges that the funding entity or its assignee is otherwise assessed [by the TP].'' Clause (ii) is a clarification of precisely what costs are assigned in the up-front allocation of the upgrade costs. Clause (ii)(I) references the requirement that the requesting party ``pay for'' the ``assigned'' cost of the upgrade as set forth in clause (i). This language means that the requesting party makes a lump sum payment at the time of the upgrade for the costs of constructing the upgrade and any costs associated with completing the upgrade. Clause (ii)(II) makes clear that the requester is not also assigned, as part of this initial, lump-sum payment, certain future costs, resulting from the upgrade, that are later' included in the TP's embedded cost rate base. The initial cost of the ``physical'' upgrade is not directly or immediately included in the embedded cost because the upgrade itself is paid for (assigned to) up front by the requesting party. The term ``embedded cost'' is a term of art typically defined as funds already expended for investment in plant and operating expenses, as shown on the utility's books. The physical upgrade does not immediately qualify as a cost of ``plant'' because the TP has not been assigned the cost in the initial upgrade--such cost is paid for in the initial cost assignment by the requester, not by the TP. The ``cost of the requested upgrade'' does, however, enter the TP's embedded cost basis in the form of any monetary credit given to the requester as compensation for the requester's initial payment. Because this credit is a credit against the transmission charge assessed to the requester, it is revenue foregone by the TP that must be recovered in the TP's rolled-in transmission rate. This cost is included in the TP's embedded cost charge to all transmission customers each billing period in the form of the cost of the monetary credit. Every transmission customer's rate (including the requester's) includes the cost of such credit. The difference for the requester is that he gets a credit against the same embedded cost transmission rate as charged to all transmission customers. Clause (ii)(II) means that, in the initial cost assignment, the requester does not also pay up front for the future rolled-in cost of the monetary credit. In the initial cost assignment, the requester pays only once for the transmission upgrade--and, under a PF plan using the monetary credit approach of (iii)(1), he gets full compensation for that lump sum payment in the form of the monetary credit over a 30 year period. In this lump-sum, up-front cost allocation, the requester does not have to pay for the upgrade twice by paying in advance for the monetary credit cost of the upgrade. For clarity, subclause (II) is expressed as a formula. The ``difference'' between the embedded cost including the upgrade and the embedded cost absent the upgrade equals the total cost of credits associated with the upgrade. Subclause (ii), in other words, means that the requester does not, in the up-front cost allocation, need to pay for both the cost of building the upgrade and the future cost of the credits needed to compensate it for that payment. Subsequent to the initial cost allocation, the requester, like any other transmission customer, is assessed a standard transmission service charge for accessing the transmission system. It is against this service charge that any monetary credit under (iii)(I) is applied. Nothing in the provision prevents the TP from rolling the cost of the monetary credit into the embedded cost transmission charge for the use of the system--a charge that all transmission customers must pay as they take service. Clause (ii)(II) does not say or imply that the requester should not have to pay a transmission charge for the use of the system. Such a misreading would result in an unjust and unreasonable confiscation of utility-shareholder property, as well as an absurd departure from the FERC policy requiring all transmission customers to pay an access charge derived from the embedded cost of the system, including the cost of any credits given as the requester is assessed transmission charges. In other words, the provision is not intended to give the requester a double credit or double compensation (i.e., a discounted transmission rate on top of a credit or other compensation). Conversely, the fact that the requester is assessed this charge (including the portion of the charge attributable to the cost of the monetary credit) in no way means that the requester is having to ``pay twice'' for the upgrade, because the transmission service charge is entirely separate from the cost allocation provided for in clause (ii). The requester pays for the upgrade in advance, and in exchange receives the credit or rights. By contrast, the requester is assessed a transmission charge in exchange for accessing the transmission system. Thus, this is not so-called ``and'' pricing. Clause (iii) provides that the requester over time shall receive a form of compensation for its up-front, lump-sum payment. This compensation may be in the form of a monetary credit of equal value, or financial or physical transmission rights, or another form of compensation proposed by the TP. Under (iii)(I), the requirement that the crediting period be ``not more than 30 years'' means that, so long as the crediting period proposed in the plan is 30 years or less, the FERC has no discretion to require that the crediting period be different from the proposed period. The term ``full compensation'' in clause (iii) generally means that the requester gets appropriate compensation in exchange for making the up-front payment for the upgrade. In the case of a monetary credit under (iii)(I), this compensation is specifically identified as being ``equal'' to the cost of the participant funded facilities (spread over 30 years). In the case of the ``financial or physical rights'' option under (iii)(II), the compensation need not be quantified in terms of an amount equal to the cost of the upgrade. For example, in the case of a market using locational marginal pricing (``LMP''), such amount need not (and cannot) be calculated in advance. Nevertheless, such property rights resulting from the expansion are of great benefit to the requester as a hedge against paying potential congestion charges in the future. Thus, they are appropriate compensation. Subclause (III) gives the TP the option of proposing a different form of compensation. It does not give FERC discretion to require a different form of compensation when the TP proposes a monetary credit under subclause (I) or appropriate rights under subclause (II). To ensure that native load consumers are protected from paying for facilities they do not need, I urge my colleagues in the House and Senate to vote for the conference report.

Mr. TAUZIN

Mr. TAUZIN. Mr. Speaker, let me first pay special thanks and appreciation to the gentleman from Louisiana (Mr. Baker) who has worked tirelessly this week to try to find some rational amendment to this bill that made it somewhat better for those of us who represent districts that are literally so low along the coast of this country, mine included. You can imagine living in coastal Louisiana and most of the Cajuns I represent live there, very poor people in many cases who live and have lived there for centuries almost in that same area, to try to make this a little better. Let me explain the problem that coastal communities face, particularly coastal Louisiana, with a bill like this. First of all, the flood insurance program is kind of special in America. Flood victims are the only ones who are obliged to belong to an insurance program. We do not have an earthquake insurance program. We do not have a fire insurance program for the homes in California that were damaged by these fires. We do not have violence insurance programs for the urban city. What we have is a flood insurance program that we are mandated to join. Unlike the other disasters that strike America, whether it is tornadoes, earthquakes or other fire disasters out West, when those disasters come, this Congress, this government, responds fully to assist those victims through FEMA. In flood-prone areas, we are obliged to put up our premiums in a flood insurance program and that Flood Insurance Program, I am told, has not lost a dime. It is not paid by taxpayers. The flood losses are paid, instead, by the premiums that go into that fund. Louisiana happens to drain 43 States. Forty-three States of America, from the Appalachians to the Rockies, drain right through Louisiana. Coming from the North are tons of water, coming from the South is the Gulf of Mexico, and we are eroding at 35 square miles a year. Do we get help? Sometimes, yes, we get some levees built once in a while. Mostly we get resistance from the Federal Government in building levees to protect those poor Cajuns who live in coastal Louisiana. And now comes a bill that says, well, if you're unlucky enough to get flooded too often, you just might have to sell your home to the Federal Government, and then you can't do anything with your property anymore. You have to move out. We got kicked out of Nova Scotia in 1755, and we came to America, and we settled in Louisiana. You are not going to kick us out of Louisiana, not with this bill or any other bill. What is wrong with this notion is that it penalizes flood victims unlike it penalizes any other victims in America. First, you have to buy the insurance. Second, if you get flooded too many times, the government can take your house because you cannot pay the mitigation. You cannot afford to lift an old family home up 14 feet in the air. Thirty-five square miles of loss in erosion every year. FEMA predicts right now that if the folks who live in New Orleans get hit by a Category 4 hurricane coming through Lake Borgne or Barataria Bay, 27 feet of water in New Orleans. It comes down to luck in some cases. If the storm hits you too often and you get flooded too often, you get penalized under this bill. If you are living in the lowest part in New Orleans, but you did not get flooded yet, the levees have held, you are okay. You do not have to sell your home, you do not have to mitigate, you do not have to pay excessive premiums. Mr. Speaker, I thank the gentleman from Louisiana (Mr. Baker) for helping this bill get better, but it is still a bad bill.

Mr. TAUZIN

Mr. TAUZIN. Mr. Speaker, pursuant to House Resolution 443, I call up the conference report on the bill (H.R. 6) to enhance energy conservation and research and development, to provide for security and diversity in the energy supply for the American people, and for other purposes.

Mr. TAUZIN. Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks and insert extraneous material into the Record on H.R. 6.

Mr. TAUZIN. Mr. Speaker, I yield myself 4 minutes. Mr. Speaker, there may be no other bill the House considers this year or next that will benefit America more than H.R. 6, the Energy Policy Act of 2003. Let me tell my colleagues what this conference report is about. It is about America's energy security, America's energy reliability, and it is about American jobs. First, Mr. Speaker, apart from homeland security and defense appropriations, this bill will do more for the security of our country than any legislation that we will consider in a long time. The Middle East remains one of the most dangerous corners of the world, and our heavy dependence upon oil from that region simply cannot continue. That is why H.R. 6 removes the artificial impediments to domestic oil and gas exploration and development. That is also why the bill takes a 21st-century approach to energy by investing literally billions of dollars into research and technology to promote nonconventional sources of power. I am pleased, in particular, that we have followed through on President Bush's request to fund the FreedomCar initiative. If hydrogen cars are the wave of the future, and they may well be, then 20 or 30 years from now, people will look back on the investments we make in this conference report as the genesis for zero-emission, highly efficient vehicles. We also make enormous strides in the area of conservation and efficiency. Indeed, according to the American Council on an Energy Efficient Economy, the provisions of this bill in these areas will eliminate the need for 294 new 300-megawatt electricity plants by the year 2020. That is real conservation. Next, Mr. Speaker, the conference report is about energy reliability. We can have all of the oil, natural gas, coal, and renewable energy in the world; but it does not do us any good if we cannot get the energy to America's families and businesses. Two years ago, we witnessed rolling blackouts in California. And, of course, just 3 months ago, we saw some 50 million Americans in much of the Northeast and Midwest crippled by power failures that could cost the economy billions and billions of dollars. These blackouts are intolerable in the year 2003. We simply cannot permit this. And so we have adopted consensus-based reliability standards that have been negotiated over the past several years. We have included transmission incentives to build new transmission systems. We have new provisions on siting to make sure we can improve transmission facilities. And we have eliminated artificial barriers to new investment in the electricity grid by repealing the old Public Utility Holding Company Act. In short, when the provisions of H.R. 6 are fully deployed in the marketplace, the American people will be able to count on a stronger, more reliable electricity system. Finally, H.R. 6 is about jobs. We estimate this conference report will create upwards of 800,000 new jobs, not to mention preserving valuable jobs in manufacturing, construction, agriculture, and technology that are frankly being lost today because of the high energy prices in our society. Here is how: the construction of the new Alaska natural gas pipeline will create some 400,000 direct and indirect jobs. Investment in clean coal technologies will create 40,000 new jobs and 10,000 white collar jobs in math, engineering, physics, and science. The new renewable fuel standard could create as many as 214,000 new jobs alone. Incentives for the solar industry will create 20,000 new jobs. Mr. Speaker, the list goes on and on. The point is that through a combination of removing barriers to energy production and making sound, enlightened developments in America's energy future, we will do more for the American economy than virtually any other legislation we consider in the 108th Congress. Our economy is recovering. This bill makes it certain. I urge my colleagues to vote in favor of this conference report, for America's security, for America's energy reliability, and for American jobs. Mr. Speaker, I reserve the balance of my time.

Mr. TAUZIN. Mr. Speaker, I am honored to yield 1\1/2\ minutes to the distinguished gentleman from North Carolina (Mr. Burr), vice chairman of the Committee on Energy and Commerce.

Mr. TAUZIN. Mr. Speaker, the gentleman's statement is correct. That is the purpose and intent of section 970 of title IX.

Mr. TAUZIN. Mr. Speaker, if they meet the terms of the section, that is correct.

Mr. TAUZIN. Mr. Speaker, I yield 1 minute to the distinguished gentleman from Louisiana (Mr. John) who understands this is a great energy bill for America's future.

Mr. TAUZIN

Mr. TAUZIN. Mr. Speaker, I thank the gentleman for yielding me this time. First of all, let me thank the Committee on Rules for the expeditious handling of this rule so that we can get to the final vote, we hope, on the energy conference report, which was approved last night in open conference on a voice vote on the House side and was approved on the Senate side by a ten to three bipartisan vote. I wish to remind my colleagues that when this bill passed the House in April that it indeed was a bipartisan vote that sent it into the conference. And despite some of the rhetoric on the bill, let me give the House some actual facts. The facts are that this is not at all a bill written in some dark room like conferees meeting in secret. There were nine public meetings to debate the comprehensive national energy bill since the year 2002. That comprised about 24 hours and 47 minutes of meetings. In fact, since 2001, there have been 28 hearings, public meetings and hearings on this bill. In 2003, there was 7 hours and 22 amendments considered in the Committee on Energy and Commerce alone, not counting all the other committees of the House that have worked on this bill. The full committee markup took 15 hours, with 58 amendments considered. And again, last night in the conference, we considered another dozen or so amendments, several of which were adopted as we made our final offer to the Senate. So, indeed, there have been a lot of public meetings and a lot of discussion. This process has gone on now for 3 years. Much of the conference committee report was worked out in conference with the Senate in last year's session in which about 60 or 70 percent of the conference work was done. In addition to which, in this year, in this conference, there were over 10 meetings between Republican and Democratic staff to work out details of the draft; and, in fact, there were 48 hours of discussion in those 10 meetings. In short, there have been extensive public hearings and debate, and today I hope we will have the final debate on the most comprehensive energy policy perhaps this country has ever seen, certainly in the last 10 years, at a time when this country desperately needs energy security, affordability, and reliability. Never has there been a downturn in the U.S. economy that has not been related to some prices in energy; and the downturn we recently experienced has been associated with high prices, shortages, blackouts, and, in some cases, a loss of jobs and loss of personal security, because plants have shut down and begun to talk about moving out of this great country. This bill is critical to stopping that job loss, to building another 800,000 to 1 million new jobs in this economy, and to creating new initiatives in conservation and renewable fuels and vast new initiatives to make sure that we burn cleaner fuels and that, in fact, this country is better off as we move into an economic future that all of us want and desire for our country. Mr. Speaker, I urge adoption of the rule, and later I will urge adoption of the bill.

Mr. TAUZIN. Mr. Speaker, yes, it does. And it is a little complex, so let me try to explain. Briefly the requester would, in fact, pay the same transmission cost as any other transmission customer. The embedded cost language simply clarifies that in the up-front lump-sum payment to fund the upgrade, the requester is not required to pay both the cost of the physical upgrade and the entire future cost of any monetary credits or the compensation the requester will later receive. The embedded cost of the physical upgrade is not rolled into the rate base because it is paid for up front by the requester. The cost of the upgrade in terms of the monetary credits used to compensate the requester, however, are rolled into the rate base. Thus, these costs are included in the imbedded cost transmission charges on a prorated base as the credits are provided to the requester. All transmission customers, of course, must pay this transmission charge.

Mr. TAUZIN. Mr. Speaker, will the gentleman yield?

Mr. TAUZIN. Yes, I can. The conferees intend that section 231 of the conference agreement shall go into effect immediately upon enactment and be available to license applicants in all ongoing and future hydroelectric licensing proceedings under the Federal Power Act. The conferees also note that section 231 is intended to complement, not undo, the reforms to the licensing process recently implemented by the Federal Energy Regulatory Commission.

Mr. TAUZIN. Mr. Speaker, will the gentlewoman yield?

Mr. TAUZIN. Mr. Speaker, that is indeed our intent. Our purpose in requiring GSA to spread this incremental cost across the entire Federal fleet is, in fact, to remove the cost disincentive for some Federal agencies, to improve EPACT compliance, and to minimize the overall cost to the Federal fleet.

Mr. TAUZIN. Mr. Speaker, if the gentleman will yield, I will be happy to try.

Mr. TAUZIN. Mr. Speaker, the gentleman from Georgia (Mr. Norwood) is absolutely correct.