The American Power Act, also known as the Kerry-Lieberman climate change bill, is being prepared for a push to bring it to consideration in the Senate work session starting after the July 4th holiday. Sources indicate that the Democratic Caucus held last Thursday, June 24th, demonstrated strong support for a comprehensive climate and energy bill rather than a piecemeal effort.

Equally important, and unfortunately not well understood or communicated, is the expectation that key elements widely perceived as missing in the legislation – such as effective leverage of energy efficiency – are expected to be incorporated from other legislation in the Senate. Although this is fairly common practice for the Senate, where multiple committees have jurisdiction over elements of wide-ranging legislation, the fact that this was not made clear left many supporters of comprehensive legislation on the sidelines while they debated whether the bill had enough to merit their support.

The American Power Act calls for a cap on carbon emissions with a limited and highly-regulated trading system. It directs most of the proceeds back to consumers, directly or indirectly, with the balance spread to encourage a range of market barriers and technologies. Some of the areas targeted by the bill are controversial in the climate change and energy community. Among the areas addressed (and targeted with some of this funding) are:

• Domestic Nuclear Power generation
• Offshore Oil & Gas
• Carbon Capture and Sequestration
• Clean Transportation

Among the more controversial provisions is the complete pre-emption of EPA regulation of carbon and of state actions to see higher standards. While widely viewed as a necessary part of any final legislation, this has struck many supporters of comprehensive legislation as relinquishing valuable leverage too early in the process. The bill provides financial support for those states that have already taken action (e.g., the RGGI initiative).