H.R. 2177 — Tradeable Energy Performance Standards Act

This section establishes Title VII of the Clean Air Act (42 U.S.C. 7401 et seq.) creating tradeable energy performance standards for covered facilities, which include electric generating facilities and cogeneration facilities with rated electric capacity of 2 megawatts or greater and thermal facilities with rated fuel-based capacity of at least 50 million British thermal units per hour (higher heating value basis), excluding those providing carbon as a chemical ingredient for manufacturing. Covered facilities must submit emission allowances (each authorizing emission of 1 metric ton of carbon dioxide) equal to their emissions, with allowances distributed by EPA based on output-based CO2 emissions targets calculated against a 2027 baseline of average emissions intensity across all such facilities (i.e., total annual CO2 emissions divided by total electricity in megawatt-hours or useful thermal output in millions of British thermal units). (1) Allowances may be traded, obtained via offsets, or substituted with alternative compliance payments; (2) existing covered facilities may enter bilateral purchase agreements (minimum 10-year term) to buy allowances from newly constructed low-emission covered facilities (i.e., those with below-average emissions intensity in their first full year); (3) participation is voluntary for facilities below specified thresholds upon EPA approval; (4) EPA must establish an allowance tracking system; (5) noncompliance incurs penalties; and (6) the Comptroller General must report on the program, with EPA to issue final regulations and savings provisions preserved.