PRIOR PRINTER'S NO. 1000

PRINTER'S NO.  2177

  

THE GENERAL ASSEMBLY OF PENNSYLVANIA

  

HOUSE BILL

 

No.

80

Session of

2009

  

  

INTRODUCED BY VITALI, ROSS, GEORGE, DePASQUALE, HARPER, FREEMAN, M. O'BRIEN, GOODMAN, CREIGHTON, MOUL, O'NEILL, MANDERINO, BELFANTI, MELIO, SANTONI, HARHART, READSHAW, GIBBONS, ADOLPH, MENSCH, HORNAMAN, CARROLL, MYERS, JOSEPHS, LENTZ, DeWEESE, CONKLIN, PETRI, GINGRICH, CURRY, DRUCKER, MICOZZIE, GERBER, SABATINA, KULA, MAHONEY, BARBIN AND SEIP, MARCH 12, 2009

  

  

AS REPORTED FROM COMMITTEE ON ENVIRONMENTAL RESOURCES AND ENERGY, HOUSE OF REPRESENTATIVES, AS AMENDED, JUNE 16, 2009   

  

  

  

AN ACT

  

1

Amending the act of November 30, 2004 (P.L.1672, No.213),

2

entitled, "An act providing for the sale of electric energy

3

generated from renewable and environmentally beneficial

4

sources, for the acquisition of electric energy generated

5

from renewable and environmentally beneficial sources by

6

electric distribution and supply companies and for the powers

7

and duties of the Pennsylvania Public Utility Commission,"

8

further providing for definitions and for alternative energy

9

portfolio standards; and providing for carbon dioxide

<--

10

sequestration network sequestration facility permitting and

<--

11

for title to carbon dioxide, immunity and transfer of

12

liability; establishing the Carbon Dioxide Indemnification

13

Fund; providing for Commonwealth-owned carbon dioxide

14

sequestration facility and transportation pipeline;

15

establishing the Carbon Sequestration Fund; and providing for

16

application of the Public Utility Code to transporters of

17

carbon dioxide.

18

The General Assembly of the Commonwealth of Pennsylvania

19

hereby enacts as follows:

20

Section 1.  The definition of "alternative energy sources"

21

and "Tier II alternative energy source" in section 2 of the act

22

of November 30, 2004 (P.L.1672, No.213), known as the

23

Alternative Energy Portfolio Standards Act, are amended by

 


1

adding paragraphs and the section is amended by adding

2

definitions to read:

3

Section 2.  Definitions.

4

The following words and phrases when used in this act shall

5

have the meanings given to them in this section unless the

6

context clearly indicates otherwise:

7

* * *

8

"Alternative energy sources."  The term shall include the

9

following existing and new sources for the production of

10

electricity:

11

* * *

12

(14)  Advanced coal combustion with limited carbon

13

emissions, which means the production of electric power from

14

a generation facility that:

<--

15

(i)  Is is fueled by coal, waste coal or gas derived

<--

16

from an advanced coal gasification plant.

<--

17

(ii)  Captures that:

<--

18

(i)  Begins commercial operation after January 1,

19

2009, and captures, either in the advanced coal

20

gasification plant or in the electrical generation

21

facility, and permanently sequesters delivers to a carbon

<--

22

dioxide sequestration facility in this Commonwealth for

23

permanent sequestration at least the following amount of

24

all carbon dioxide produced:

25

(A)  40% from June 1, 2015 to May 31, 2019.

26

(B)  60% from June 1, 2019 to May 31, 2024.

27

(C)  90% from June 1, 2024 and thereafter.

28

(D)  The requirement under clause (C) shall be

29

waived if commercially proven and project-financeable

30

technology is not available as determined by the

<--

- 2 -

 


1

department.

2

(iii) (ii)  Has been designed to accommodate the

<--

3

required additional processing equipment to produce power

4

with a maximum of 1,000 pounds of carbon dioxide

5

emissions per megawatt hour. OR begins commercial

<--

6

operation before January 1, 2009, and captures and

7

delivers to a carbon dioxide sequestration facility in

8

this Commonwealth for permanent sequestration no less

9

than the following amount of carbon dioxide produced:

10

(A)  40% from June 1, 2015 to May 31, 2019.

11

(B)  60% from June 1, 2019 to May 31, 2024.

12

(C)  90% from June 1, 2024 and thereafter.

13

* * *

14

"Carbon dioxide."  Anthropogenically generated carbon dioxide

<--

15

of sufficient purity and quality as to not compromise the

16

ability of the carbon dioxide transportation pipeline or

17

sequestration facility to safely and effectively transport and

18

sequester the carbon dioxide.

19

"Carbon dioxide sequestration facility."  Geological

20

subsurface formations within this Commonwealth with suitable cap

21

rock, sealing faults and anticline for the permanent storage of

22

carbon dioxide from advanced coal combustion with limited carbon

23

emissions facilities or other sources within this Commonwealth

24

along with the facilities necessary to transport the carbon

25

dioxide from the surface to the subsurface formations and

26

monitor the permanent storage of the carbon dioxide in

27

subsurface formations. The term shall not include use of the

28

carbon dioxide for enhanced resource recovery or the carbon

29

dioxide transportation pipelines used to transport the carbon

30

dioxide to the sequestration facility.

- 3 -

 


1

"Carbon dioxide sequestration network."  Geological

2

subsurface formations within this Commonwealth with suitable cap

3

rock, sealing faults and anticline used by the Department of

4

Conservation and Natural Resources for the permanent storage of

5

carbon dioxide from advanced coal combustion with limited carbon

6

emissions plants or other sources within this Commonwealth along

7

with the facilities necessary to transport the carbon dioxide

8

from the surface to the subsurface formations and monitor the

9

permanent storage of the carbon dioxide in subsurface

10

formations. The term shall not include use of the carbon dioxide

11

for enhanced resource recovery.

12

"Carbon dioxide transportation pipeline."  A pipeline within

<--

13

this Commonwealth used to transport carbon dioxide from a

14

facility within this Commonwealth to a carbon dioxide

15

sequestration facility.

16

* * *

17

"DCNR."  The Department of Conservation and Natural Resources

18

of the Commonwealth.

19

* * *

20

"Enhanced resource recovery."  The use of carbon dioxide

21

injection or other techniques for increasing the amount of oil,

22

natural gas or coal bed methane extracted from geologic

23

formations.

24

* * *

25

"Person."  An individual, corporation, partnership,

<--

26

association or other entity recognized by law as the subject of

27

rights, duties or obligations. The term includes the United

28

States, a Federal agency, the Commonwealth, an agency or

29

instrumentality of the Commonwealth and a political subdivision.

30

* * *

- 4 -

 


1

"Tier II alternative energy source."  Energy derived from:

2

* * *

3

(8)  Advanced coal combustion with limited carbon

4

emissions.

5

* * *

6

Section 2.  Section 3(a),(b),(c), (f) and (g) of the act,

7

amended July 17, 2007 (P.L.114, No.35), are amended and the

8

section is amended by adding subsections to read:

9

Section 3.  Alternative energy portfolio standards.

10

(a)  General compliance and cost recovery.--

11

(1)  From the effective date of this act through and

12

including the 15th year after enactment of this act and each

13

year thereafter, the electric energy sold by an electric

14

distribution company or electric generation supplier to

15

retail electric customers in this Commonwealth shall be

16

comprised of electricity generated from alternative energy

17

sources and in the percentage amounts as described under

18

subsections [(b) and (c)] (b), (c) and (c.1).

19

(2)  Electric distribution companies and electric

20

generation suppliers shall satisfy both requirements set

21

forth in subsections [(b) and (c)] (b), (c) and (c.1),

22

provided, however, that an electric distribution company or

23

an electric generation supplier shall be excused from its

24

obligations under this section to the extent that the

25

commission determines that force majeure exists.

26

(3)  All costs for:

27

(i)  the purchase of electricity generated from

28

alternative energy sources, including the costs of the

29

regional transmission organization, in excess of the

30

regional transmission organization real-time locational

- 5 -

 


1

marginal pricing, or its successor, at the delivery point

2

of the alternative energy source for the electrical

3

production of the alternative energy sources; and

4

(ii)  payments for alternative energy credits,in both

5

cases that are voluntarily acquired by an electric

6

distribution company during the cost recovery period on

7

behalf of its customers shall be deferred as a regulatory

8

asset by the electric distribution company and fully

9

recovered, with a return on the unamortized balance,

10

pursuant to an automatic energy adjustment clause under

11

66 Pa.C.S. § 1307 (relating to sliding scale of rates;

12

adjustments) as a cost of generation supply under 66

13

Pa.C.S. § 2807 (relating to duties of electric

14

distribution companies) in the first year after the

15

expiration of its cost-recovery period. After the cost-

16

recovery period, any direct or indirect costs for the

17

purchase by electric distribution of resources to comply

18

with this section, including, but not limited to, the

19

purchase of electricity generated from alternative energy

20

sources, payments for alternative energy credits, cost of

21

credits banked, payments to any third party

22

administrators for performance under this act and costs

23

levied by a regional transmission organization to ensure

24

that alternative energy sources are reliable, shall be

25

recovered on a full and current basis pursuant to an

26

automatic energy adjustment clause under 66 Pa.C.S. §

27

1307 as a cost of generation supply under 66 Pa.C.S. §

28

2807.

29

(b)  Tier I and solar photovoltaic shares.--

30

(1)  Two years after the effective date of this act, at

- 6 -

 


1

least 1.5% of the electric energy sold by an electric

2

distribution company or electric generation supplier to

3

retail electric customers in this Commonwealth shall be

4

generated from Tier I alternative energy sources. Except as

5

provided in this section, the minimum percentage of electric

6

energy required to be sold to retail electric customers from

7

alternative energy sources shall increase to 2% three years

8

after the effective date of this act. The minimum percentage

9

of electric energy required to be sold to retail electric

10

customers from alternative energy sources shall increase by

11

at least 0.5% each year so that at least 8% of the electric

12

energy sold by an electric distribution company or electric

13

generation supplier to retail electric customers in that

14

certificated territory in the 15th year after the effective

15

date of this subsection is sold from Tier I alternative

16

energy resources.

17

(1.1)  After the 15th year of the effective date of this

18

subsection, the minimum percentage of electric energy

19

required to be sold to retail electric customers from Tier I

20

alternative energy sources is:

21

(i)  10% for June 1, 2021, through May 31, 2022.

22

(ii)  12% for June 1, 2022, through May 31, 2023.

23

(iii)  14% for June 1, 2023, through May 31, 2024.

24

(iv)  16% for June 1, 2024, through May 31, 2025.

25

(v)  18% for June 1, 2025, through May 31, 2026.

26

(vi)  20% for June 1, 2026, and thereafter.

27

(2)  The total percentage of the electric energy sold by

28

an electric distribution company or electric generation

29

supplier to retail electric customers in this Commonwealth

30

that must be sold from solar photovoltaic technologies is:

- 7 -

 


1

(i)  0.0013% for June 1, 2006, through May 31, 2007.

2

(ii)  0.0030% for June 1, 2007, through May 31, 2008.

3

(iii)  0.0063% for June 1, 2008, through May 31,

4

2009.

5

(iv)  0.0120% for June 1, 2009, through May 31, 2010.

6

(v)  0.0203% for June 1, 2010, through May 31, 2011.

7

(vi)  0.0325% for June 1, 2011, through May 31, 2012.

8

(vii)  0.0510% for June 1, 2012, through May 31,

9

2013.

10

(viii)  0.0840% for June 1, 2013, through May 31,

11

2014.

12

(ix)  0.1440% for June 1, 2014, through May 31, 2015.

13

(x)  0.2500% for June 1, 2015, through May 31, 2016.

14

(xi)  0.2933% for June 1, 2016, through May 31, 2017.

15

(xii)  0.3400% for June 1, 2017, through May 31,

16

2018.

17

(xiii)  0.3900% for June 1, 2018, through May 31,

18

2019.

19

(xiv)  0.4433% for June 1, 2019, through May 31,

20

2020.

21

(xv)  0.5000% for June 1, 2020, [and thereafter.] 

22

through May 31, 2021.

23

(xvi)  0.9000% for June 1, 2021, through May 31,

24

2022.

25

(xvii)  1.3000% for June 1, 2022, through May 31,

26

2023.

27

(xviii)  1.7000% for June 1, 2023, through May 31,

28

2024.

29

(xix)  2.1000% for June 1, 2024, through May 31,

30

2025.

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1

(xx)  2.5000% for June 1, 2025, through May 31, 2026.

2

(xxi)  3.000% for June 1, 2026, and thereafter.

3

(3)  Upon commencement of the beginning of the 6th

4

reporting year, and every five years thereafter, the

5

commission shall undertake a review of the compliance by

6

electric distribution companies and electric generation

7

suppliers with the requirements of this act. The review shall

8

also include the status of alternative energy technologies

9

within this Commonwealth and the capacity to add additional

10

alternative energy resources. The commission shall use the

11

results of this review to recommend to the General Assembly

12

additional compliance goals beyond year [15] 21. The

13

commission shall work with the department in evaluating the

14

future alternative energy resource potential.

15

(4)  As of May 31, 2021, and thereafter, 50% of electric

<--

16

energy from solar photovoltaic technologies supplied to

17

retail customers shall be generated from solar photovoltaic

18

systems located within this Commonwealth in meeting the

19

requirements of paragraph (2).

20

(4)  Electric energy from solar photovoltaic technologies

<--

21

supplied to retail customers shall be generated from solar

22

photovoltaic systems located within this Commonwealth in

23

meeting the requirements of paragraph (2).

24

(5)  Notwithstanding the other provisions of this act,

25

credits generated from solar photovoltaic technologies

26

outside this Commonwealth may be used to demonstrate

27

compliance under this act provided the credit was acquired

28

prior to the effective date of this subsection.

29

(c)  Tier II share.--Of the electrical energy required to be

30

sold from alternative energy sources identified in Tier II, the

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1

percentage that must be from these technologies is for:

2

(1)  Years 1 through 4 - 4.2%.

3

(2)  Years 5 through 9 - 6.2%.

4

(3)  Years 10 through 14 - [8.2%] 11.2%.

5

(4)  Years 15 and thereafter - [10.0%] 13.0%.

6

(c.1)  Retail sales from advanced coal combustion.--The total

7

electric energy sold by an electric distribution company or

8

electric generation supplier to retail electric customers in

9

this Commonwealth that shall be sold from advanced coal

10

combustion with limited carbon emissions is all of the electric

11

energy available from advanced coal combustion with limited

12

carbon emissions up to a maximum of 3.0% of the total electric

13

energy sold by an electric distribution company or electric

14

generation supplier to retail electric customers in this

15

Commonwealth for the reporting period which begins June 1, 2015,

16

and for each reporting period thereafter pursuant to subsection

17

(c). If at any time on or after June 1, 2015, the network carbon

<--

18

dioxide sequestration facility provided for under section 8.1 

<--

19

12, or other network sequestration facility permitted to

<--

20

permanently sequester carbon dioxide in this Commonwealth, is

<--

21

not available to receive OPERATING AND CAPABLE OF RECEIVING

<--

22

carbon dioxide for sequestration through no fault of an advanced

23

coal combustion with limited carbon emissions facility, a

24

facility need not sequester carbon dioxide in order to generate

25

alternative energy credits provided:

<--

26

(1)  the The facility is capable of capturing to the

<--

27

department's satisfaction the amount of carbon dioxide

28

required by paragraph (14)(ii) of the definition of

29

"alternative energy sources" in section 2.

30

(2)  The total value of the alternative energy credits

<--

- 10 -

 


1

sold by the advanced coal combustion with limited carbon

2

emissions facility during times when the carbon dioxide

3

emissions from the facility are not sequestered shall not

4

exceed the costs that the facility incurred in installing

5

carbon capture equipment and in installing additional

6

equipment necessary to process coal for carbon capture

7

purposes, as determined by the department. Costs incurred in

8

installing carbon capture equipment shall not include Federal

9

or State financial assistance received by the facility.

10

(c.2)  Force majeure.--On or after December 31, 2015, if the

11

commission determines that construction of an advanced coal

12

combustion with limited carbon emissions facility has not been

13

commenced, this determination shall constitute force majeure,

14

and electric distribution companies and electric generation

15

suppliers shall be excused from all or part of their obligation

16

under subsection (c.1), as determined by the commission.

17

(c.3)  Long-term contracts.--Upon review and approval of the

18

commission, an electric distribution company may enter into a

19

long-term contract of up to 25 years to purchase the energy,

20

capacity or alternative energy credits of an advanced coal

21

combustion with limited carbon emissions facility. The contract

22

shall provide for cost the recovery of costs associated with

<--

23

carbon capture, including, but not limited to, any fees charged

24

by the Department of Conservation and Natural Resources pursuant

<--

25

to section 8.1(b) with regard to the carbon dioxide

26

sequestration network owner or operator of the carbon dioxide

<--

27

sequestration facility or a carbon dioxide transportation

28

pipeline. The commission shall determine that whether the

<--

29

contract is reasonable, taking into consideration the following:

30

(1)  The price of the energy purchased under the long-

- 11 -

 


1

term contract.

2

(2)  The price of capacity purchased under the long-term

3

contract.

4

(3)  The price of alternative energy credits, provided

5

that the cost of an alternative energy credit purchased from

6

advanced coal combustion with limited carbon emissions shall

7

not exceed $45 per megawatt hour (MWh).

8

(4)  Prior to the effective date of the contract, the

9

value of any carbon emission credits or other credits that

10

the seller obtains from the advanced coal combustion with

11

limited carbon emissions facility.

12

(5)  After the effective date of the contract, the value

13

of any additional Federal or State carbon credits, allowances

14

or other financial benefits shall be reflected in the price

15

of the resource in a manner which recognizes savings to

16

customers and does not reduce the economic return to the

17

seller, provided that the seller demonstrates that it has

18

made a commercially reasonable effort to distribute any

19

economic incentives it has realized to electric distribution

20

companies. A contract approved by the commission under this

21

subsection shall be deemed to meet the requirements of 66

22

Pa.C.S. § 2807(e) (relating to duties of electric

23

distribution companies).

24

* * *

25

(f)  Alternative compliance payment.--

26

(1)  At the end of each program year, the program

27

administrator shall provide a report to the commission and to

28

each covered electric distribution company showing their

29

status level of alternative energy acquisition.

30

(2)  The commission shall conduct a review of each

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1

determination made under subsections [(b) and (c)] (b), (c)

2

and (c.1). If, after notice and hearing, the commission

3

determines that an electric distribution company or electric

4

generation supplier has failed to comply with subsections

5

[(b) and (c)] (b), (c) and (c.1), the commission shall impose

6

an alternative compliance payment on that company or

7

supplier.

8

(3)  The alternative compliance payment, with the

9

exception of the solar photovoltaic share compliance

10

requirement set forth in subsection (b)(2), shall be $45

11

times the number of additional alternative energy credits

12

needed in order to comply with subsection (b) or (c).

13

(4)  [The alternative compliance payment for the solar

14

photovoltaic share shall be 200% of the average market value

15

of solar renewable energy credits sold during the reporting

16

period within the service region of the regional transmission

17

organization, including, where applicable, the levelized up-

18

front rebates received by sellers of solar renewable energy

19

credits in other jurisdictions in the PJM Interconnection,

20

L.L.C. transmission organization (PJM) or its successor.] The

21

alternative compliance payment for the solar photovoltaic

22

alternative share shall be established by the commission in

23

an amount and for a period of years necessary to promote the

24

market for solar photovoltaic alternative energy credits. The

25

alternative compliance payment for the solar photovoltaic

26

share may vary over the time period established by the

27

commission but shall be at least 200% of the average market

28

value for solar photovoltaic alternative energy credits sold

29

within the service region of the PJM Interconnection, L.L.C.

30

transmission organization in the year prior to the

- 13 -

 


1

establishment of the alternative compliance payment schedule.

2

The commission shall review the solar photovoltaic

3

alternative compliance payment schedule at least once per

4

year and shall establish an alternative compliance payment

5

schedule for additional years as needed to promote the market

6

for solar photovoltaic alternative energy credits.

7

(5)  The commission shall establish a process to provide

8

for, at least annually, a review of the alternative energy

9

market within this Commonwealth and the service territories

10

of the regional transmission organizations that manage the

11

transmission system in any part of this Commonwealth. The

12

commission will use the results of this study to identify any

13

needed changes to the cost associated with the alternative

14

compliance payment program. If the commission finds that the

15

costs associated with the alternative compliance payment

16

program must be changed, the commission shall present these

17

findings to the General Assembly for legislative enactment.

18

(g)  Transfer to sustainable development funds.--

19

(1)  Notwithstanding the provisions of 66 Pa.C.S. §§ 511

20

(relating to disposition, appropriation and disbursement of

21

assessments and fees) and 3315 (relating to disposition of

22

fines and penalties), alternative compliance payments imposed

23

pursuant to this act shall be paid into Pennsylvania's

24

Sustainable Energy Funds created under the commission's

25

restructuring orders under 66 Pa.C.S. Ch. 28 (relating to

26

restructuring of electric utility industry). Alternative

27

compliance payments shall be paid into a special fund of the

28

Pennsylvania Sustainable Energy Board, established by the

29

commission under Docket M-00031715, and made available to the

30

Regional Sustainable Energy Funds under procedures and

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1

guidelines approved by the Pennsylvania Energy Board.

2

(2)  The alternative compliance payments shall be

3

utilized solely for projects that will increase the amount of

4

electric energy generated from alternative energy resources

5

for purposes of compliance with subsections [(b) and (c)]

6

(b), (c) and (c.1).

7

* * *

8

Section 3.  The act is amended by adding a section sections 

<--

9

to read:

10

Section 8.1.  Carbon dioxide sequestration network.

<--

11

(a)  Establishment of network.--DCNR shall develop and

12

operate a carbon dioxide sequestration network utilizing

13

appropriate geologic formations and facilities on State forest

14

land or as otherwise acquired by DCNR for the purposes set forth

15

in this subsection. DCNR may acquire, on behalf of the

16

Commonwealth, geologic formations and facilities required for

17

the carbon dioxide sequestration network by purchase, gift,

18

lease or condemnation. The carbon dioxide sequestration network

19

shall only be utilized to store carbon dioxide generated within

20

this Commonwealth.

21

(b)  Fees.--DCNR shall collect reasonable fees from entities

22

that transport to or through, deposit in or otherwise utilize

23

the carbon dioxide sequestration network. DCNR shall enter into

24

agreements with the entities establishing the terms and

25

conditions for use of the carbon dioxide sequestration network

26

and the payment of appropriate fees prior to the transport of

27

any carbon dioxide into the carbon dioxide sequestration

28

network. Fees shall be established to recover the total cost,

29

less any nonreimbursable Federal funding, of developing and

30

operating the carbon dioxide sequestration network. Recoverable

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1

costs shall include, but are not limited to, the cost to acquire

2

or obtain the right to use geologic formations or facilities

3

required for the carbon dioxide sequestration network,

4

construction costs, insurance costs and other costs to operate

5

and maintain the network.

6

(c)  Establishment of fund.--There is established in the

7

State Treasury a Carbon Sequestration Fund. The Carbon

8

Sequestration Fund shall be a nonlapsing fund and the money

9

deposited into this fund is specifically appropriated to DCNR to

10

carry out the purposes of this section at the discretion of the

11

Secretary of Conservation and Natural Resources.

12

(d)  Permitting requirements.--The department shall develop

13

regulations necessary to permit the siting and operation of the

14

carbon dioxide sequestration facility authorized by this

15

section. The regulations shall include, but not be limited to,

16

the following:

17

(1)  Risk assessment.

18

(2)  Geologic site characterization including, but not

19

limited to, modeling and verification of fluid movement.

20

(3)  Corrective action.

21

(4)  Well construction, operation and mechanical

22

integrity testing.

23

(5)  Monitoring and site closure.

24

No carbon dioxide may be accepted for sequestration until all

25

applicable permits have been approved.

26

(e)  Operation.--

27

(1)  DCNR may enter into contracts for the development

28

and operation of the carbon dioxide sequestration network.

29

DCNR or its contractor shall evaluate the requirements for

30

safe operation of the carbon dioxide sequestration network

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1

including, but not limited to, geologic site

2

characterization, modeling and verification of fluid

3

movement, well construction, mechanical integrity testing,

4

monitoring, corrective action and site closure. No carbon

5

dioxide may be accepted for sequestration until all

6

applicable permits have been approved.

7

(2)  Prior to commencement of operation of the carbon

8

dioxide sequestration network and periodically thereafter,

9

DCNR or its contractor shall assess the risks associated with

10

the operation. DCNR and the Department of General Services

11

shall determine the appropriate method to insure the

12

operation of the carbon dioxide sequestration network and

13

shall insure the operation as deemed appropriate.

14

(f)  Title to carbon dioxide and immunity.--

15

(1)  All right, title and interest in and to carbon

16

dioxide delivered to the property line of the

17

Commonwealth-owned lands or other lands upon which the

18

Commonwealth's carbon dioxide sequestration network is

19

located by the advanced coal combustion with limited carbon

20

emission facilities that, individually or collectively, first

21

meet the maximum requirements of section 3(c.1) as determined

22

by the department, shall be transferred to the Commonwealth

23

and the Commonwealth shall accept and receive all the right,

24

title and interest in and to such carbon dioxide, including,

25

but not limited to, any liabilities associated with the

26

carbon dioxide, current or future environmental benefits,

27

marketing claims, associated voluntary or compliance-based

28

emissions allocations or offsets, but not alternative energy

29

credits provided by section 3(e).

30

(2)  Upon and after transfer and conveyance of carbon

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1

dioxide as provided under paragraph (1), the owner of an

2

advanced coal combustion plant with limited carbon emissions

3

shall be immune from liabilities regarding the storage of

4

carbon dioxide within and the release, escape or migration of

5

carbon dioxide from the Commonwealth's carbon dioxide

6

sequestration network and subsurface storage site.

7

Section 8.1.  Sequestration facility permitting.

<--

8

(a)  Prohibition.--No person may operate a carbon dioxide

9

sequestration facility without a permit from the department.

10

(b)  Facility sites.--The Environmental Quality Board shall,

11

by regulation, establish the conditions under which a carbon

12

dioxide sequestration facility may be located, developed and

13

operated. The regulations promulgated by the board shall provide

14

for the protection of public health, safety and environment and

15

shall include, but not be limited to, the following:

16

(1)  Geologic site characterization.

17

(2)  Sequestration facility performance standards.

18

(3)  Well location restrictions and well construction

19

standards, including operation and mechanical integrity

20

testing.

21

(4)  Risk assessment, corrective action and emergency

22

response requirements.

23

(5)  Monitoring, recordkeeping and reporting

24

requirements.

25

(6)  Facility closure, postclosure and final closure

26

certification requirements.

27

(7)  Financial assurance requirements, including bonding

28

or insurance, in amounts sufficient to ensure the carbon

29

sequestration facility will be constructed, operated, closed

30

and monitored during the postclosure period in accordance

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1

with regulations promulgated under this section.

2

(8)  Fees in an amount sufficient to recover the

3

department's cost of administering this section.

4

(9)  Fees for every ton of carbon dioxide accepted by a

5

carbon dioxide sequestration facility in an amount sufficient

6

to monitor and maintain the facility after final closure of

7

the facility and take remedial actions if necessary after

8

final closure of the facility. The fees shall be paid by the

9

operator of a carbon dioxide sequestration facility to the

10

department on a quarterly basis.

11

(10)  Public notice requirements, including notification

12

of a release.

13

(11)  Criteria used to determine that carbon dioxide has

14

been permanently sequestered.

15

(12)  Other requirements necessary to evaluate the

16

proposed carbon dioxide sequestration facility and to ensure

17

safe and environmentally protective operation of the

18

facility.

19

(c)  Powers, duties and enforcement authority of

20

department.--The department shall have the same powers, duties

21

and enforcement authority provided by the act of July 7, 1980

22

(P.L.380, No.97), known as the Solid Waste Management Act, to

23

carry out the purposes of this section. Operators of a carbon

24

dioxide sequestration facility shall have the same rights and be

25

subject to the same penalties as provided by the Solid Waste

26

Management Act; however, an administrative penalty assessed by

27

the department for a violation of this section shall not exceed

28

$50,000 per day per violation.

29

Section 8.2.  Title to carbon dioxide, immunity and transfer of

30

liability.

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1

(a)  Title to carbon dioxide.--The right, title and interest

2

in and to carbon dioxide delivered to a carbon dioxide

3

sequestration facility by the advanced coal combustion with

4

limited carbon emission facilities that, individually or

5

collectively, first meet the maximum requirements of section

6

3(c.1), as determined by the department, shall be transferred to

7

the carbon dioxide sequestration facility and the facility shall

8

accept and receive the right, title and interest in and to such

9

carbon dioxide, including, but not limited to, liabilities

10

associated with the carbon dioxide, current or future

11

environmental benefits, marketing claims, associated voluntary

12

or compliance-based emissions allocations or offsets, but not

13

alternative energy credits provided by section 3(e).

14

(b)  Immunity.--Upon and after transfer and conveyance of

15

carbon dioxide as provided under subsection (a), the owner of an

16

advanced coal combustion plant with limited carbon emissions

17

shall be immune from liabilities regarding the storage of carbon

18

dioxide within and the release, escape or migration of carbon

19

dioxide from the carbon dioxide sequestration facility.

20

(c)  Transfer of liability.--Upon final closure of a carbon

21

dioxide sequestration facility, as determined by the department,

22

the right, title or interest in the carbon dioxide and liability

23

for any release from the facility shall be transferred to and

24

accepted by the Commonwealth provided the operator of the carbon

25

dioxide sequestration facility has paid the appropriate fees

26

under section 8.1.

27

Section 8.3.  Carbon Dioxide Indemnification Fund.

28

(a)  Establishment.--There is hereby established in the State

29

Treasury a nonlapsing fund to be known as the Carbon Dioxide

30

Indemnification Fund. Money collected by the department under

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1

section 8.1(b)(9) shall be deposited in the fund and shall only

2

be expended by the department to monitor and maintain carbon

3

dioxide sequestration facilities after final closure and to take

4

remedial actions, if necessary, after final closure.

5

(b)  Money collected under section 8.1.--Fines, civil

6

penalties and permit fees collected by the department under

7

section 9 are hereby appropriated to the department to carry out

8

the purposes of section 8.1.

9

Section 8.4.  Commonwealth-owned carbon dioxide sequestration

10

facility and transportation pipeline.

11

(a)  Development and operation.--DCNR may develop and operate

12

a carbon dioxide sequestration facility and carbon dioxide

13

transportation pipeline necessary to deliver carbon dioxide to

14

the facility, which may be located on State forest land or on

15

other land acquired by DCNR, on behalf of the Commonwealth, for

16

such purpose by purchase, gift, lease or condemnation. A carbon

17

dioxide sequestration facility or carbon dioxide transportation

18

pipeline developed and operated by DCNR shall only be utilized

19

to store carbon dioxide generated within this Commonwealth.

20

(b)  Fees.--DCNR shall collect reasonable fees from entities

21

that deposit in or otherwise utilize a carbon dioxide

22

sequestration facility or a carbon dioxide transportation

23

pipeline owned by the Commonwealth. DCNR shall enter into an

24

agreement with entities seeking to use the Commonwealth facility

25

or pipeline establishing the terms and conditions for such use

26

and the payment of appropriate fees prior to the deposit of any

27

carbon dioxide into the carbon dioxide transportation pipeline

28

or sequestration facility. Fees shall be established to recover

29

the total cost, less nonreimbursable Federal funding, of

30

developing and operating the carbon dioxide sequestration

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1

facility or transportation pipeline. Recoverable costs shall

2

include, but are not limited to, the cost to acquire or obtain

3

the right to use geologic formations or facilities required for

4

the carbon dioxide sequestration facility or rights-of-way for

5

the carbon dioxide transportation pipeline, construction costs,

6

insurance costs and other costs to operate and maintain the

7

sequestration facility or transportation pipeline.

8

(c)  Establishment of fund.--Prior to the receipt of fees by

9

DCNR for the delivery of carbon dioxide through a carbon dioxide

10

transportation pipeline or deposit of carbon dioxide into a

11

carbon dioxide sequestration facility, the State Treasury shall

12

establish a nonlapsing fund to be known as the Carbon

13

Sequestration Fund. Money deposited into this fund is

14

specifically appropriated to DCNR to carry out activities

15

related to any Commonwealth-owned carbon dioxide transportation

16

pipeline or carbon dioxide sequestration facility performed by

17

DCNR at the discretion of the Secretary of Conservation and

18

Natural Resources.

19

(d)  Contracting and insuring.--DCNR may enter into contracts

20

for the development and operation of the carbon dioxide

21

sequestration facility or transportation pipeline. DCNR and the

22

Department of General Services shall determine the appropriate

23

method to insure the operation of the carbon dioxide

24

sequestration facility or transportation pipeline and shall

25

insure the operation as deemed appropriate. In no event,

26

however, shall the Commonwealth indemnify the developer or

27

operator of the carbon dioxide sequestration facility or

28

transportation pipeline from liability where the actions of the

29

developer or operator constitute gross negligence or intentional

30

misconduct.

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1

Section 8.5.  Application of the Public Utility Code to

2

transporters of carbon dioxide.

3

Entities transporting or conveying carbon dioxide by pipeline

4

or conduit for compensation under this act shall be considered a

5

public utility under 66 Pa.C.S. § 102 (relating to definitions)

6

and subject to the provisions of 66 Pa.C.S. (relating to public

7

utilities).

8

Section 4.  The provisions of this act are severable. If any

9

provision of this act or its application to any person or

10

circumstance is held invalid, the invalidity shall not affect

11

other provisions or applications of this act which can be given

12

effect without the invalid provision or application.

13

Section 4 5.  This act shall take effect immediately.

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