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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| SENATE BILL |
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| INTRODUCED BY ERICKSON, MUSTO, O'PAKE, WOZNIAK, LEACH, ALLOWAY AND WONDERLING, MARCH 19, 2009 |
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| REFERRED TO ENVIRONMENTAL RESOURCES AND ENERGY, MARCH 19, 2009 |
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| AN ACT |
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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. |
11 | The General Assembly of the Commonwealth of Pennsylvania |
12 | hereby enacts as follows: |
13 | Section 1. The definition of "alternative energy sources" |
14 | and "Tier II alternative energy source" in section 2 of the act |
15 | of November 30, 2004 (P.L.1672, No.213), known as the |
16 | Alternative Energy Portfolio Standards Act, are amended by |
17 | adding paragraphs and the section is amended by adding |
18 | definitions to read: |
19 | Section 2. Definitions. |
20 | The following words and phrases when used in this act shall |
21 | have the meanings given to them in this section unless the |
22 | context clearly indicates otherwise: |
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1 | * * * |
2 | "Alternative energy sources." The term shall include the |
3 | following existing and new sources for the production of |
4 | electricity: |
5 | * * * |
6 | (14) Advanced coal combustion with limited carbon |
7 | emissions, which means the production of electric power from |
8 | a generation facility that: |
9 | (i) Is fueled by coal or gas derived from an |
10 | advanced coal gasification plant. |
11 | (ii) Captures, either in the advanced coal |
12 | gasification plant or in the electrical generation |
13 | facility, and permanently sequesters at least the |
14 | following amount of all carbon dioxide produced: |
15 | (A) 40% from June 1, 2015 to May 31, 2019. |
16 | (B) 60% from June 1, 2019 to May 31, 2024. |
17 | (C) 90% from June 1, 2024 and thereafter. |
18 | (D) The requirement under clause (C) shall be |
19 | waived if commercially proven and project-financeable |
20 | technology is not available. |
21 | (iii) Has been designed to accommodate the required |
22 | additional processing equipment to produce power with a |
23 | maximum of 1,000 pounds of carbon dioxide emissions per |
24 | megawatt hour. |
25 | * * * |
26 | "Carbon dioxide sequestration network." Geological |
27 | subsurface formations within this Commonwealth with suitable cap |
28 | rock, sealing faults and anticline used by the Department of |
29 | Conservation and Natural Resources for the permanent storage of |
30 | carbon dioxide from advanced coal combustion with limited carbon |
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1 | emissions plants or other sources within this Commonwealth along |
2 | with the facilities necessary to transport the carbon dioxide |
3 | from the surface to the subsurface formations and monitor the |
4 | permanent storage of the carbon dioxide in subsurface |
5 | formations. The term shall not include use of the carbon dioxide |
6 | for enhanced resource recovery. |
7 | * * * |
8 | "DCNR." The Department of Conservation and Natural Resources |
9 | of the Commonwealth. |
10 | * * * |
11 | "Enhanced resource recovery." The use of carbon dioxide |
12 | injection or other techniques for increasing the amount of oil, |
13 | natural gas or coal bed methane extracted from geologic |
14 | formations. |
15 | * * * |
16 | "Tier II alternative energy source." Energy derived from: |
17 | * * * |
18 | (8) Advanced coal combustion with limited carbon |
19 | emissions. |
20 | * * * |
21 | Section 2. Section 3(a),(b),(c), (f) and (g) of the act, |
22 | amended July 17, 2007 (P.L.114, No.35), are amended and the |
23 | section is amended by adding subsections to read: |
24 | Section 3. Alternative energy portfolio standards. |
25 | (a) General compliance and cost recovery.-- |
26 | (1) From the effective date of this act through and |
27 | including the 15th year after enactment of this act and each |
28 | year thereafter, the electric energy sold by an electric |
29 | distribution company or electric generation supplier to |
30 | retail electric customers in this Commonwealth shall be |
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1 | comprised of electricity generated from alternative energy |
2 | sources and in the percentage amounts as described under |
3 | subsections [(b) and (c)] (b), (c) and (c.1). |
4 | (2) Electric distribution companies and electric |
5 | generation suppliers shall satisfy both requirements set |
6 | forth in subsections [(b) and (c)] (b), (c) and (c.1), |
7 | provided, however, that an electric distribution company or |
8 | an electric generation supplier shall be excused from its |
9 | obligations under this section to the extent that the |
10 | commission determines that force majeure exists. |
11 | (3) All costs for: |
12 | (i) the purchase of electricity generated from |
13 | alternative energy sources, including the costs of the |
14 | regional transmission organization, in excess of the |
15 | regional transmission organization real-time locational |
16 | marginal pricing, or its successor, at the delivery point |
17 | of the alternative energy source for the electrical |
18 | production of the alternative energy sources; and |
19 | (ii) payments for alternative energy credits,in both |
20 | cases that are voluntarily acquired by an electric |
21 | distribution company during the cost recovery period on |
22 | behalf of its customers shall be deferred as a regulatory |
23 | asset by the electric distribution company and fully |
24 | recovered, with a return on the unamortized balance, |
25 | pursuant to an automatic energy adjustment clause under |
26 | 66 Pa.C.S. § 1307 (relating to sliding scale of rates; |
27 | adjustments) as a cost of generation supply under 66 |
28 | Pa.C.S. § 2807 (relating to duties of electric |
29 | distribution companies) in the first year after the |
30 | expiration of its cost-recovery period. After the cost- |
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1 | recovery period, any direct or indirect costs for the |
2 | purchase by electric distribution of resources to comply |
3 | with this section, including, but not limited to, the |
4 | purchase of electricity generated from alternative energy |
5 | sources, payments for alternative energy credits, cost of |
6 | credits banked, payments to any third party |
7 | administrators for performance under this act and costs |
8 | levied by a regional transmission organization to ensure |
9 | that alternative energy sources are reliable, shall be |
10 | recovered on a full and current basis pursuant to an |
11 | automatic energy adjustment clause under 66 Pa.C.S. § |
12 | 1307 as a cost of generation supply under 66 Pa.C.S. § |
13 | 2807. |
14 | (b) Tier I and solar photovoltaic shares.-- |
15 | (1) Two years after the effective date of this act, at |
16 | least 1.5% of the electric energy sold by an electric |
17 | distribution company or electric generation supplier to |
18 | retail electric customers in this Commonwealth shall be |
19 | generated from Tier I alternative energy sources. Except as |
20 | provided in this section, the minimum percentage of electric |
21 | energy required to be sold to retail electric customers from |
22 | alternative energy sources shall increase to 2% three years |
23 | after the effective date of this act. The minimum percentage |
24 | of electric energy required to be sold to retail electric |
25 | customers from alternative energy sources shall increase by |
26 | at least 0.5% each year so that at least 8% of the electric |
27 | energy sold by an electric distribution company or electric |
28 | generation supplier to retail electric customers in that |
29 | certificated territory in the 15th year after the effective |
30 | date of this subsection is sold from Tier I alternative |
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1 | energy resources. |
2 | (1.1) After the 15th year of the effective date of this |
3 | subsection, the minimum percentage of electric energy |
4 | required to be sold to retail electric customers from Tier I |
5 | alternative energy sources is: |
6 | (i) 10% for June 1, 2021, through May 31, 2022. |
7 | (ii) 12% for June 1, 2022, through May 31, 2023. |
8 | (iii) 14% for June 1, 2023, through May 31, 2024. |
9 | (iv) 16% for June 1, 2024, through May 31, 2025. |
10 | (v) 18% for June 1, 2025, through May 31, 2026. |
11 | (vi) 20% for June 1, 2026, and thereafter. |
12 | (2) The total percentage of the electric energy sold by |
13 | an electric distribution company or electric generation |
14 | supplier to retail electric customers in this Commonwealth |
15 | that must be sold from solar photovoltaic technologies is: |
16 | (i) 0.0013% for June 1, 2006, through May 31, 2007. |
17 | (ii) 0.0030% for June 1, 2007, through May 31, 2008. |
18 | (iii) 0.0063% for June 1, 2008, through May 31, |
19 | 2009. |
20 | (iv) 0.0120% for June 1, 2009, through May 31, 2010. |
21 | (v) 0.0203% for June 1, 2010, through May 31, 2011. |
22 | (vi) 0.0325% for June 1, 2011, through May 31, 2012. |
23 | (vii) 0.0510% for June 1, 2012, through May 31, |
24 | 2013. |
25 | (viii) 0.0840% for June 1, 2013, through May 31, |
26 | 2014. |
27 | (ix) 0.1440% for June 1, 2014, through May 31, 2015. |
28 | (x) 0.2500% for June 1, 2015, through May 31, 2016. |
29 | (xi) 0.2933% for June 1, 2016, through May 31, 2017. |
30 | (xii) 0.3400% for June 1, 2017, through May 31, |
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1 | 2018. |
2 | (xiii) 0.3900% for June 1, 2018, through May 31, |
3 | 2019. |
4 | (xiv) 0.4433% for June 1, 2019, through May 31, |
5 | 2020. |
6 | (xv) 0.5000% for June 1, 2020, [and thereafter.] |
7 | through May 31, 2021. |
8 | (xvi) 0.9000% for June 1, 2021, through May 31, |
9 | 2022. |
10 | (xvii) 1.3000% for June 1, 2022, through May 31, |
11 | 2023. |
12 | (xviii) 1.7000% for June 1, 2023, through May 31, |
13 | 2024. |
14 | (xix) 2.1000% for June 1, 2024, through May 31, |
15 | 2025. |
16 | (xx) 2.5000% for June 1, 2025, through May 31, 2026. |
17 | (xxi) 3.000% for June 1, 2026, and thereafter. |
18 | (3) Upon commencement of the beginning of the 6th |
19 | reporting year, and every five years thereafter, the |
20 | commission shall undertake a review of the compliance by |
21 | electric distribution companies and electric generation |
22 | suppliers with the requirements of this act. The review shall |
23 | also include the status of alternative energy technologies |
24 | within this Commonwealth and the capacity to add additional |
25 | alternative energy resources. The commission shall use the |
26 | results of this review to recommend to the General Assembly |
27 | additional compliance goals beyond year [15] 21. The |
28 | commission shall work with the department in evaluating the |
29 | future alternative energy resource potential. |
30 | (4) As of May 31, 2021, and thereafter, 50% of electric |
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1 | energy from solar photovoltaic technologies supplied to |
2 | retail customers shall be generated from solar photovoltaic |
3 | systems located within this Commonwealth in meeting the |
4 | requirements of paragraph (2). |
5 | (c) Tier II share.--Of the electrical energy required to be |
6 | sold from alternative energy sources identified in Tier II, the |
7 | percentage that must be from these technologies is for: |
8 | (1) Years 1 through 4 - 4.2%. |
9 | (2) Years 5 through 9 - 6.2%. |
10 | (3) Years 10 through 14 - [8.2%] 11.2%. |
11 | (4) Years 15 and thereafter - [10.0%] 13.0%. |
12 | (c.1) Retail sales from advanced coal combustion.--The total |
13 | electric energy sold by an electric distribution company or |
14 | electric generation supplier to retail electric customers in |
15 | this Commonwealth that shall be sold from advanced coal |
16 | combustion with limited carbon emissions is all of the electric |
17 | energy available from advanced coal combustion with limited |
18 | carbon emissions up to a maximum of 3.0% of the total electric |
19 | energy sold by an electric distribution company or electric |
20 | generation supplier to retail electric customers in this |
21 | Commonwealth for the reporting period which begins June 1, 2015, |
22 | and for each reporting period thereafter pursuant to subsection |
23 | (c). If at any time on or after June 1, 2015, the network |
24 | provided for under section 8.1, or other network permitted to |
25 | permanently sequester carbon dioxide, is not available to |
26 | receive carbon dioxide for sequestration through no fault of an |
27 | advanced coal combustion with limited carbon emissions facility, |
28 | a facility need not sequester carbon dioxide in order to |
29 | generate alternative energy credits provided the facility is |
30 | capable of capturing to the department's satisfaction the amount |
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1 | of carbon dioxide required by paragraph (14)(ii) of the |
2 | definition of "alternative energy sources" in section 2. |
3 | (c.2) Force majeure.--On or after December 31, 2015, if the |
4 | commission determines that construction of an advanced coal |
5 | combustion with limited carbon emissions facility has not been |
6 | commenced, this determination shall constitute force majeure, |
7 | and electric distribution companies and electric generation |
8 | suppliers shall be excused from all or part of their obligation |
9 | under subsection (c.1), as determined by the commission. |
10 | (c.3) Long-term contracts.--Upon review and approval of the |
11 | commission, an electric distribution company may enter into a |
12 | long-term contract of up to 25 years to purchase the energy, |
13 | capacity or alternative energy credits of an advanced coal |
14 | combustion with limited carbon emissions facility. The contract |
15 | shall provide for cost recovery of costs associated with carbon |
16 | capture, including, but not limited to, any fees charged by the |
17 | Department of Conservation and Natural Resources pursuant to |
18 | section 8.1(b) with regard to the carbon dioxide sequestration |
19 | network. The commission shall determine that the contract is |
20 | reasonable, taking into consideration the following: |
21 | (1) The price of the energy purchased under the long- |
22 | term contract. |
23 | (2) The price of capacity purchased under the long-term |
24 | contract. |
25 | (3) The price of alternative energy credits, provided |
26 | that the cost of an alternative energy credit purchased from |
27 | advanced coal combustion with limited carbon emissions shall |
28 | not exceed $45 per megawatt hour (MWh). |
29 | (4) Prior to the effective date of the contract, the |
30 | value of any carbon emission credits or other credits that |
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1 | the seller obtains from the advanced coal combustion with |
2 | limited carbon emissions facility. |
3 | (5) After the effective date of the contract, the value |
4 | of any additional Federal or State carbon credits, allowances |
5 | or other financial benefits shall be reflected in the price |
6 | of the resource in a manner which recognizes savings to |
7 | customers and does not reduce the economic return to the |
8 | seller, provided that the seller demonstrates that it has |
9 | made a commercially reasonable effort to distribute any |
10 | economic incentives it has realized to electric distribution |
11 | companies. A contract approved by the commission under this |
12 | subsection shall be deemed to meet the requirements of 66 |
13 | Pa.C.S. § 2807(e) (relating to duties of electric |
14 | distribution companies). |
15 | * * * |
16 | (f) Alternative compliance payment.-- |
17 | (1) At the end of each program year, the program |
18 | administrator shall provide a report to the commission and to |
19 | each covered electric distribution company showing their |
20 | status level of alternative energy acquisition. |
21 | (2) The commission shall conduct a review of each |
22 | determination made under subsections [(b) and (c)] (b), (c) |
23 | and (c.1). If, after notice and hearing, the commission |
24 | determines that an electric distribution company or electric |
25 | generation supplier has failed to comply with subsections |
26 | [(b) and (c)] (b), (c) and (c.1), the commission shall impose |
27 | an alternative compliance payment on that company or |
28 | supplier. |
29 | (3) The alternative compliance payment, with the |
30 | exception of the solar photovoltaic share compliance |
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1 | requirement set forth in subsection (b)(2), shall be $45 |
2 | times the number of additional alternative energy credits |
3 | needed in order to comply with subsection (b) or (c). |
4 | (4) [The alternative compliance payment for the solar |
5 | photovoltaic share shall be 200% of the average market value |
6 | of solar renewable energy credits sold during the reporting |
7 | period within the service region of the regional transmission |
8 | organization, including, where applicable, the levelized up- |
9 | front rebates received by sellers of solar renewable energy |
10 | credits in other jurisdictions in the PJM Interconnection, |
11 | L.L.C. transmission organization (PJM) or its successor.] The |
12 | alternative compliance payment for the solar photovoltaic |
13 | alternative share shall be established by the commission in |
14 | an amount and for a period of years necessary to promote the |
15 | market for solar photovoltaic alternative energy credits. The |
16 | alternative compliance payment for the solar photovoltaic |
17 | share may vary over the time period established by the |
18 | commission but shall be at least 200% of the average market |
19 | value for solar photovoltaic alternative energy credits sold |
20 | within the service region of the PJM Interconnection, L.L.C. |
21 | transmission organization in the year prior to the |
22 | establishment of the alternative compliance payment schedule. |
23 | The commission shall review the solar photovoltaic |
24 | alternative compliance payment schedule at least once per |
25 | year and shall establish an alternative compliance payment |
26 | schedule for additional years as needed to promote the market |
27 | for solar photovoltaic alternative energy credits. |
28 | (5) The commission shall establish a process to provide |
29 | for, at least annually, a review of the alternative energy |
30 | market within this Commonwealth and the service territories |
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1 | of the regional transmission organizations that manage the |
2 | transmission system in any part of this Commonwealth. The |
3 | commission will use the results of this study to identify any |
4 | needed changes to the cost associated with the alternative |
5 | compliance payment program. If the commission finds that the |
6 | costs associated with the alternative compliance payment |
7 | program must be changed, the commission shall present these |
8 | findings to the General Assembly for legislative enactment. |
9 | (g) Transfer to sustainable development funds.-- |
10 | (1) Notwithstanding the provisions of 66 Pa.C.S. §§ 511 |
11 | (relating to disposition, appropriation and disbursement of |
12 | assessments and fees) and 3315 (relating to disposition of |
13 | fines and penalties), alternative compliance payments imposed |
14 | pursuant to this act shall be paid into Pennsylvania's |
15 | Sustainable Energy Funds created under the commission's |
16 | restructuring orders under 66 Pa.C.S. Ch. 28 (relating to |
17 | restructuring of electric utility industry). Alternative |
18 | compliance payments shall be paid into a special fund of the |
19 | Pennsylvania Sustainable Energy Board, established by the |
20 | commission under Docket M-00031715, and made available to the |
21 | Regional Sustainable Energy Funds under procedures and |
22 | guidelines approved by the Pennsylvania Energy Board. |
23 | (2) The alternative compliance payments shall be |
24 | utilized solely for projects that will increase the amount of |
25 | electric energy generated from alternative energy resources |
26 | for purposes of compliance with subsections [(b) and (c)] |
27 | (b), (c) and (c.1). |
28 | * * * |
29 | Section 3. The act is amended by adding a section to read: |
30 | Section 8.1. Carbon dioxide sequestration network. |
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1 | (a) Establishment of network.--DCNR shall develop and |
2 | operate a carbon dioxide sequestration network utilizing |
3 | appropriate geologic formations and facilities on State forest |
4 | land or as otherwise acquired by DCNR for the purposes set forth |
5 | in this subsection. DCNR may acquire, on behalf of the |
6 | Commonwealth, geologic formations and facilities required for |
7 | the carbon dioxide sequestration network by purchase, gift, |
8 | lease or condemnation. The carbon dioxide sequestration network |
9 | shall only be utilized to store carbon dioxide generated within |
10 | this Commonwealth. |
11 | (b) Fees.--DCNR shall collect reasonable fees from entities |
12 | that transport to or through, deposit in or otherwise utilize |
13 | the carbon dioxide sequestration network. DCNR shall enter into |
14 | agreements with the entities establishing the terms and |
15 | conditions for use of the carbon dioxide sequestration network |
16 | and the payment of appropriate fees prior to the transport of |
17 | any carbon dioxide into the carbon dioxide sequestration |
18 | network. Fees shall be established to recover the total cost, |
19 | less any nonreimbursable Federal funding, of developing and |
20 | operating the carbon dioxide sequestration network. Recoverable |
21 | costs shall include, but are not limited to, the cost to acquire |
22 | or obtain the right to use geologic formations or facilities |
23 | required for the carbon dioxide sequestration network, |
24 | construction costs, insurance costs and other costs to operate |
25 | and maintain the network. |
26 | (c) Establishment of fund.--There is established in the |
27 | State Treasury a Carbon Sequestration Fund. The Carbon |
28 | Sequestration Fund shall be a nonlapsing fund and the money |
29 | deposited into this fund is specifically appropriated to DCNR to |
30 | carry out the purposes of this section at the discretion of the |
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1 | Secretary of Conservation and Natural Resources. |
2 | (d) Permitting requirements.--The department shall develop |
3 | regulations necessary to permit the siting and operation of the |
4 | carbon dioxide sequestration facility authorized by this |
5 | section. The regulations shall include, but not be limited to, |
6 | the following: |
7 | (1) Risk assessment. |
8 | (2) Geologic site characterization including, but not |
9 | limited to, modeling and verification of fluid movement. |
10 | (3) Corrective action. |
11 | (4) Well construction, operation and mechanical |
12 | integrity testing. |
13 | (5) Monitoring and site closure. |
14 | No carbon dioxide may be accepted for sequestration until all |
15 | applicable permits have been approved. |
16 | (e) Operation.-- |
17 | (1) DCNR may enter into contracts for the development |
18 | and operation of the carbon dioxide sequestration network. |
19 | DCNR or its contractor shall evaluate the requirements for |
20 | safe operation of the carbon dioxide sequestration network |
21 | including, but not limited to, geologic site |
22 | characterization, modeling and verification of fluid |
23 | movement, well construction, mechanical integrity testing, |
24 | monitoring, corrective action and site closure. No carbon |
25 | dioxide may be accepted for sequestration until all |
26 | applicable permits have been approved. |
27 | (2) Prior to commencement of operation of the carbon |
28 | dioxide sequestration network and periodically thereafter, |
29 | DCNR or its contractor shall assess the risks associated with |
30 | the operation. DCNR and the Department of General Services |
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1 | shall determine the appropriate method to insure the |
2 | operation of the carbon dioxide sequestration network and |
3 | shall insure the operation as deemed appropriate. |
4 | (f) Title to carbon dioxide and immunity.-- |
5 | (1) All right, title and interest in and to carbon |
6 | dioxide delivered to the property line of the |
7 | Commonwealth-owned lands or other lands upon which the |
8 | Commonwealth's carbon dioxide sequestration network is |
9 | located by the advanced coal combustion with limited carbon |
10 | emission facilities that, individually or collectively, first |
11 | meet the maximum requirements of section 3(c.1) as determined |
12 | by the department, shall be transferred to the Commonwealth |
13 | and the Commonwealth shall accept and receive all the right, |
14 | title and interest in and to such carbon dioxide, including, |
15 | but not limited to, any liabilities associated with the |
16 | carbon dioxide, current or future environmental benefits, |
17 | marketing claims, associated voluntary or compliance-based |
18 | emissions allocations or offsets, but not alternative energy |
19 | credits provided by section 3(e). |
20 | (2) Upon and after transfer and conveyance of carbon |
21 | dioxide as provided under paragraph (1), the owner of an |
22 | advanced coal combustion plant with limited carbon emissions |
23 | shall be immune from liabilities regarding the storage of |
24 | carbon dioxide within and the release, escape or migration of |
25 | carbon dioxide from the Commonwealth's carbon dioxide |
26 | sequestration network and subsurface storage site. |
27 | Section 4. This act shall take effect immediately. |
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