Rep. Rick Boucher of Virginia, one of the moderate Democrats on the House Energy and Commerce Committee who had several concerns with the climate change bill, Thursday said he will vote for the legislation in mark-up next week after reaching an accord with Committee Chairman Henry Waxman (D-CA) and Rep. Edward Markey (D-MA) on key matters.

Following more than a month of “intensive negotiations, we have achieved agreement on most key matters of concern to me…I intend to vote ‘yes’ at mark-up” on the legislation, which begins next Monday, Boucher said during a joint press briefing with Waxman and Markey on Capitol Hill. But he said he reserved the right to work for “further improvements [on the bill] in later stages in the legislative process.”

The agreement calls for electric utilities to be allocated 35% of all emission credit allowances for free, which is 90% of the allowances that they will need to satisfy their compliance obligations, Boucher said. This “will largely prevent the allocation process for emission allowances from resulting in electricity price increases,” he noted.

The House energy panel’s climate change legislation, which was authored by Waxman and Markey (se Daily GPI, April 2), would cap carbon emissions from various polluting industries. Companies that could not comply with the cap would be able to purchase and trade emission credits. Democrats on the committee have been at odds over whether emission credits should be auctioned or allocated for free, at least initially.

A final draft of the climate change bill was expected to be issued Thursday, but a committee spokeswoman told NGI that the release might not occur until Friday.

As part of the new draft, Boucher said Democratic lawmakers also agreed to provide bonus allowances of $75-100 billion to encourage the use of carbon capture and sequestration (CCS) technologies by electric utilities. The agreement requires that new coal plants use CCS technology when it becomes available.

Moreover, it would reduce the floor price for auction of allowances from the Strategic Allowance Reserve to 160% of the three-year average price. The bill previously set the percentage at 200%.

The agreement did not resolve all of his concerns, Boucher said. “I do have remaining concerns about the bill.” For instance, while the carbon-reduction target for 2020 has been trimmed to 17% from 20%, he said he believes a 14% reduction target is “more appropriate and more achievable.” The target for reduction of carbon emissions by 2050 still remains at 83%.

And he said he is concerned about the timing of the phaseout of the free allocations, now set to occur between 2025 and 2030. “A longer phaseout period…is more appropriate,” Boucher noted.

Waxman and Markey also agreed to a request for 15% of emission credit allowances to be allocated for free to energy-intensive, trade-exposed manufacturing industries, such as steel, aluminum and paper, in 2014. These industries would receive free allowances through 2025, at which time the president would determine whether they still are needed.

The automotive industry would receive 3% of emission credit allowances for free between 2012 and 2017, after which they will get 1% of allowances through 2025. Democrats hope this will provide sufficient incentive to automakers to manufacture electric and advanced technology vehicles.

Rep. Gene Green (D-TX) was “still in negotiations” with Waxman and Markey to obtain 5% of emission credit allowances for free for oil refineries, a Green spokeswoman said Thursday.

Waxman had signaled that he hopes to pass the bill out of committee by the Memorial Day recess. This “is tight, but still doable,” said energy analyst Christine Tezak of Robert W. Baird & Co. “After House Energy and Commerce completes its work, the bill’s fate lies in how fast other committees with jurisdiction, such as House Ways and Means, can wrap up their contributions.” House Democratic leaders want to have the bill on the House floor before the August recess.

Republicans on the House energy panel are opposed to the climate change legislation. But because there are far more Democrats than Republicans on the committee, Waxman is likely to get the bill passed even without Republican support. However, the lack of Republican supporters could pose problems when the bill reaches the House floor and in the Senate.

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