Commercial Truck Highway Safety Demonstration Program Act of 2003

Madam President, I rise in support of the Efficient Energy through Certified Technologies Act which I have cosponsored along with Senator Olympia Snowe of Maine.

The EFFECT Act will provide tax incentives to encourage homeowners and businesses to improve the energy efficiency of their buildings and equipment. This legislation will stimulate the economy, cut energy bills, reduce energy usage, and reduce pollution.

This bill was originally introduced in the 107th Congress to address the Western energy crisis which, as we all know, created exorbitantly high prices for power and rolling blackouts. This legislation incorporates improvements based on last year's Senate energy tax bill.

While conditions in the West have improved because there are more plants coming online and families and businesses have reduced their energy usage, it is important to take steps to continue to increase our energy efficiency and reduce energy consumption.

Simply put, there are only two things one can do when there is not enough power to go around: increase supply or decrease demand.

Without a doubt, the quickest way to address future demand and supply imbalances is to provide incentives to increase energy efficiency to reduce demand.

This bill creates economic incentives for Americans to increase energy efficiency by establishing the following tax deductions and tax credits for commercial and residential properties using specific energy efficient technologies:

A tax deduction of $2.25 per square foot for newly constructed or remodeled commercial buildings, including schools and other public buildings as well as rental housing, that achieve a 50-percent reduction in total annual energy costs, compared to existing national standards.

A $2,000 tax credit to builders of new homes that use 50 percent less energy than a national model standard.

A performance-based tax credit of as much as $6,000 for installing solar technology.

A tax credit of as much as $300 if businesses install a super- efficient, new electric heat pump, a new central air-conditioner, or a new gas or electric water heater.

A tax credit of as much as $500 if homeowners, tenants, or landlords retrofit their homes to achieve a 30 percent or 50 percent reduction in annual energy costs.

The benefits of increasing energy efficiency are immense.

First, increasing energy efficiency will cut heating, cooling, and electricity costs. Homeowners and businesses spend over $250 billion each year on heat, air-conditioning, and related energy costs for their businesses and homes. If we can reduce energy costs by increasing energy efficiency, money will be freed to fuel the economy in other areas and create new jobs. Furthermore, increasing energy efficiency will reduce the impact of future energy price spikes that harm families and businesses. And the incentives will cause businesses to invest in producing more efficient equipment and services beginning immediately after the bill is enacted.

Second, increasing energy efficiency will reduce air pollution. Energy generation to heat, cool, and light our homes and offices produces 35 percent of the air pollution emitted nationwide. If we increase efficiency, then less energy will be needed to power our buildings, and consequently, we will be able to reduce emissions from powerplants.

Third, increasing energy efficiency will help maintain the reliability of our Nation's electricity supply. Since most of our peak electricity demand comes from heating, cooling, or lighting needs, increasing energy efficiency will lower the probability of blackouts or brownouts.

In fact, with this legislation in place, peak electricity demand in the summer would be reduced by tens of thousands of negawatts nationwide after a decade--or the equivalent output produced by hundreds of large powerplants.

This could result in over 10,000 MW of savings over the summer just in our State and much more on the Western grid that California shares with neighboring States.

Meanwhile, this legislation will also create a market for firms to develop more energy-efficient products, such as air-conditioners, heat pumps, lighting equipment, windows, insulation, water heaters, and solar panels.

Just think how conditions could have improved in California during the Western energy crisis if we had been able to reduce our energy consumption instead of purchasing power at exorbitant rates from out- of-State suppliers.

According to the Department of Energy, California is already one of the most energy-efficient States in the Nation--ranking fourth in overall energy efficiency and second in electricity efficiency.

Nevertheless, Californians responded to the crisis and further increased their energy efficiency. This legislation will take energy efficiency to the next level and create the opportunity for all families and businesses nationwide to make energy efficient improvements.

Instead of waiting for the next energy emergency to occur, we should take steps now to reduce energy consumption across the board.

The bill introduced in the 107th Congress had the support of California Governor Gray Davis, the California Energy Commission, the Sacramento Municipal Utility District, the Natural Resources Defense Council, Union of Concerned Scientists, the California Building Industry Association, most California utilities and many other organizations and businesses. We expect similar widespread support for the bill we are reintroducing today.

This bill is an important step to help reduce demand. It provides financial incentives to offset some of the costs of building new energy-efficient buildings and homes, and improving existing structures to make them more energy efficient.

I urge my colleagues to support this important legislation.

Madam President, yesterday the State of California submitted a filing to the Federal Energy Regulatory Commission which provides a wholesale indictment of energy companies and shows how a number of energy firms engaged in deceptive trading practices to drive up prices in the Western Energy Market. I have called on FERC to make this evidence public

and I want to reiterate my request again.

I am also introducing a bill with Senators Fitzgerald, Harkin, Lugar, Cantwell, Wyden, and Leahy to close a loophole which allows energy trades to take place electronically, in private, with no transparency, record, audit trail or any oversight to guard against fraud and manipulation.

But before I reintroduce this bill, I want to reiterate the important revelations that have been uncovered in the past year and detail what we know about yesterday's filing at FERC.

Last week I came to the floor to update the Senate on recent evidence of fraud and manipulation in the energy sector. Today I want to pick up where I left off and introduce the Energy Market Oversight Act.

Mr. President, I draw my colleagues' attention to a filing made at FERC. This ``Public Version'' is a 27-page summary of the filing with confidential information removed, but it provides a detailed overview of the fraud and manipulation carried out by energy companies during the Western energy crisis.

In addition to testimony by expert witnesses, 348 exhibits, transcripts of depositions, tapes of trader telephone conversations, emails, and other data, the California parties submitted a 161-page brief to FERC. The document I have inserted into the Record includes the Table of Contents, the Introduction and Overview, and the Conclusion of this 161-page document. To be clear, it is part, but not all of the brief filed by the State of California.

Mr. President, the filing submitted by the State of California yesterday shows that there was an extensive and coordinated attempt by energy companies to engage in the following schemes to drive up prices in the Western Energy Market:

1. Withholding of Power--driving up prices by creating

false shortages;

2. Bidding to Exercise Market Power--suppliers bid higher

after the California ISO declared emergencies, knowing the

State would need power and be willing to pay any price to get

it;

3. Scheduling of Bogus Load, aka ``Fat Boy'' or ``Inc-

ing''--suppliers submitted false load schedules to increase

prices;

4. Export-Import Games, aka ``Ricochet or ``Megawatt

Laundering''--suppliers exported power out of California and

imported it back into the State in an attempt to sell power

at inflated prices;

5. Congestion Games, aka ``Death Star''--suppliers created

false congestion and were then paid for relieving congestion

without moving any power;

6. Double-Selling--suppliers sold reserves, but then failed

to keep those reserves available for the ISO;

7. Selling of Non-Existent Ancillary Services, aka ``Get

Shorty''--suppliers sold resources that were either already

committed to other sales or incapable of being provided;

8. Sharing of Non-Public Generation Outage Information--the

largest suppliers in California shared information from a

company called Industrial Information Resources that provided

sellers detailed, non-public information on daily plant

outages;

9. Collusion Among Sellers--sellers were jointly

implementing or facilitating Enron-type trading strategies;

10. Manipulation of the Nitrous Oxide (NOX)

Emission Market--sellers manipulated the market for

NOX emissions in the South Coast Air Quality

Management District through a series of wash trades that

created the appearance of a dramatic price increase that may

have been fabricated. For example, Dynegy, together with AES

and others, entered into a series of trades of NOx

credits in July and August of 2000 by which Dynegy would sell

a large quality of credits and then simultaneously buy back a

smaller quantity of credits at a higher per credit price.

We can assume that the thousands of pages filed by the California parties at FERC detail these examples of market abuse. At this point we cannot know all of the instances because the specifics remain confidential, but we have plenty to go on.

Yesterday I wrote another letter to FERC Chairman Pat Wood asking the Commission to lift its ``Protective Order'' to make this information public so that families and businesses harmed during the Western Energy Crisis can know the extent of fraud and manipulation that occurred.

I believe the filing yesterday presents a key decision for FERC. Clearly the Commission cannot ignore this mountain of new evidence submitted--especially since it comes at a time when other disclosures have been made to show pervasive fraud and manipulation in the Western Energy Market.

Last month Jeffrey Richter, the former head of Enron's Short-Term California energy trading desk, pled guilty to conspiracy to commit fraud as part of Enron's well known schemes to manipulate Western energy markets. Richter's plea follows that of head Enron trader Tim Belden in the fall of 2002. Belden admitted that he schemed to defraud California during the Western energy crisis and also plead guilty to conspiracy to commit wire fraud.

The Enron plea came on the heels of FERC's release of transcripts from Reliant Energy that reveal how their traders intentionally withheld power from the California market in an attempt to increase prices. This is one of the most egregious examples of manipulation and it is clear and convincing evidence of coordinated schemes to defraud consumers.

Let me read just one part of the transcript to demonstrate the greed behind the market abuse by Reliant and its traders.

On June 20, 2000 two Reliant employees had the following conversation that reveals the company withheld power from the California market to drive prices up:

Reliant Operations Manager 1: ``I don't necessarily foresee

those units being run the remainder of this week. In fact you

will probably see, in fact I know, tomorrow we have all the

units at Coolwater off.'' (The Coolwater plant is a 526

Megawatt plant.)

Reliant Plant Operator 2: ``Really?''

Reliant Operations Manager 1: ``Potentially. Even number

four. More due to some market manipulation attempts on our

part. And so, on number four it probably wouldn't last long.

It would probably be back on the next day, if not the day

after that. Trying to uh . . .''

Reliant Plant Operator 2: ``Trying to shorten supply, uh?

That way the price on demand goes up.''

Reliant Operations Manager 1: ``Well, we'll see.''

Reliant Plant Operator 2: ``I can understand. That's

cool.''

Reliant Operations Manager 1: ``We've got some term

positions that, you know, that would benefit.''

Six months after this incident, as the Senate Energy Committee was attempting to get to the bottom of why energy prices were soaring in the West, the President and CEO of Reliant testified before Congress that the State of California ``has focused on an inaccurate perception of market manipulation.''

Reliant's President and CEO went on to say, ``We are proud of our contributions to keep generation running to try to meet the demand for power in California. Reliant Energy's plant and technical staffs have worked hard to maximize the performance of our generation.''

These transcripts prove otherwise and reveal the truth about market manipulation in the energy sector.

Despite this clear and convincing evidence of fraud, on January 31 of this year, the Federal Energy Regulatory Commission chose to only give Reliant a slap on the wrist for this behavior. The company paid only $13.8 million to sweep this criminal behavior under the rug and settle with FERC.

Let me turn to some other recent examples that demonstrate how other energy companies manipulated the Western Energy Market as Reliant did. On December 11th, FERC finally released audio tapes that show how traders at Williams conspired with AES Energy plant operators to keep power offline and drive prices up.

The tapes depict how on April 27, 2000, Williams outage coordinator Rhonda Morgan encouraged an AES operator at the company's Alamitos plant to extend a plant outage because the California grid operator was paying ``a premium'' for power at the time. The Williams employee stated, ``that's one reason it wouldn't hurt Williams' feelings if the outage ran long.''

Later that day, Eric Pendergraft, a high-ranking AES employee called to confirm with Ms. Morgan that Williams wanted the plant to stay offline by saying, ``you guys were saying that it might not be such a bad thing if it took us a little while longer to do our work?'' ``I don't want to do something underhanded,'' Ms. Morgan responded, ``but if there is work you can continue to do . . .'' At this point Mr. Pendergraft interrupted to cut off their suspicious conversation, saying, ``I understand. You don't have to talk anymore.''

Clearly, this is evidence of a calculated intent to withhold power to raise prices. I find it unconscionable.

Let's turn to some other examples.

On January 27, 2003, Michelle Marie Valencia, a 32-year-old former senior energy trader for Dynegy was arrested on charges that she reported fictitious natural gas transactions to an industry publication.

On December 5, 2002, Todd Geiger, a former vice president on the Canadian natural gas trading desk for El Paso Merchant Energy, was charged with wire fraud and filing a false report after allegedly telling a trade publication about the prices for 48 natural gas trades that he never made in an effort to boost prices and company profit.

These indictments are just the latest examples of how energy firms reported inaccurate prices to trade publications to drive energy prices higher.

Industry publications claimed they could not be fooled by false prices because deviant prices are rejected, but this claim was predicated on the fact that everyone was reporting honestly--which we now know they weren't doing.

CMS Energy, Williams, American Electric Power Company, and Dynegy have each acknowledged that its employees gave inaccurate price data to industry participants. On December 19th Dynegy agreed to pay a $5 million fine for its actions.

In September an Administrative Law Judge at FERC issued a landmark ruling concluding that El Paso Corporation withheld natural gas from California and recommended penalty proceedings against the company. Since the El Paso Pipeline carries most of the natural gas to Southern California, this ruling has tremendous implications. The FERC Commissioners are expected to take up this case for a final judgement soon.

These have been the latest revelations in a series of energy disclosure bombshells that began on Monday, May 6th when the Federal Energy Regulatory Commission posted a series of documents on their website that revealed Enron manipulated the Western Energy Market by engaging in a number of suspect trading strategies.

These memos revealed for the first time how Enron used schemes called ``Death Star,'' ``Get Shorty,'' ``Fat Boy,'' and ``Ricochet'' to fleece families and businesses in the West.

The filing made yesterday to FERC shows how other companies did engage in these Enron-type trading strategies. The brief submitted by the State of California and others states that suppliers ``were jointly implementing or facilitating Enron-type trading strategies.''

Let us turn to other types of fraudulent trades that many energy firms have admitted to.

Dynegy, Duke Energy, El Paso, Reliant Resources Inc., CMS Energy Corp., and Williams Cos. all admitted engaging in false ``round-trip `` or ``wash trades.''

What is a ``round-trip'' trade, one might ask?

``Round-trip'' trades occur when one firm sells energy to another and then the second firm simultaneously sells the same amount of energy back to the first company at exactly the same price. No commodity ever actually changes hands, but when done on an exchange, these transactions send a price signal to the market and they artificially boost revenue for the company.

How widespread are ``round-trip'' trades? Well, the Congressional Research Service looked at trading patterns in the energy sector over the last few years and reported, ``this pattern of trading suggests a market environment in which a significant volume of fictitious trading could have taken place.''

Yet, since most of the energy trading market is unregulated by the government, we have only a slim idea of the illusions being perpetrated in the energy sector.

Consider the following recent confessions from energy firms about ``round-trip'' trades:

Reliant admitted 10 percent of its trading revenues came

from ``round-trip'' trades. The announcement forced the

company's President and head of wholesale trading to both

step down.

CMS Energy announced 80 percent of its trades in 2001 were

``round-trip'' trades.

Remember, these trades are sham deals where nothing was exchanged, yet the company booked revenues from the trades.

Duke Energy disclosed that 1.1 billion dollars-worth of

trades were ``round-trip'' since 1999--roughly two-thirds of

these were done on InterContinental Exchange, which means

that thousands of subscribes would have seen these false

price signals.

A lawyer for J.P. Morgan Chase admitted the bank engineered

a series of ``round-trip'' trades with Enron.

Dynegy and Williams have also admitted to this round-trip

trading.

And although these trades mostly occurred with electricity,

there is evidence to suggest that ``round-trip'' trades were

made in natural gas and even broadband.

By exchanging the same amount of a commodity at the same price, I believe these companies have not engaged in meaningful transactions, but deceptive practices to fool investors and possibly drive energy prices up for consumers.

It is therefore imperative that the Department of Justice, FERC, the SEC, the Commodities Futures Trading Commission and every other oversight agency conduct an aggressive and vigorous investigation into all of the energy companies who participated in Western Energy Market.

Beyond that I believe Congress must re-examine what tools the government needs to keep a better watch over these volatile markets that are little understood. In the absence of vigilant government oversight of the energy sector, firms have the incentive to create the appearance of a mature, liquid, and well-functioning market, but it is unclear whether such a market exists.

The ``round-trip'' trades, the Enron memos, and the filing at FERC raise questions about illusions in the energy market.

To this end, I believe it is critical for the Senate to act soon on the legislation I offered last April to regulate online energy trading.

I am re-introducing this legislation to subject electronic exchanges like Enron On-Line to the same oversight, reporting and capital requirements as other commodity exchanges like the Chicago Mercantile Exchange, the New York Mercantile Exchange and the Chicago Board of Trade.

I am pleased Senator Fitzgerald, Senator Harkin, Senator Lugar, Senator Cantwell, Senator Wyden, and Senator Leahy have again signed on to this legislation. I am proud of the work we did in the 107th Congress and I hope we can complete action on this bill soon.

Without this type of legislation, there is insufficient authority to investigate and prevent fraud and price manipulation since parties making the trade are not required to keep a record.

Right now, energy transactions are regulated by the Federal Energy Regulatory Commission (FERC) when there is actual delivery.

For example, if I buy natural gas from you, and you deliver that natural gas to me, FERC has the authority to ensure that this transaction is transparent and reasonably priced.

However, many energy transactions no longer result in delivery. A giant loophole has opened where there is no government oversight when these transactions are done on internet exchanges.

In 2000, Congress passed the Commodity Futures Modernization Act in 2000 which exempted energy and metals trading from regulatory oversight and excluded it completely if the trade was done electronically.

So today, as long as there is no delivery, there is no price transparency. Again, this lack of transparency and oversight only applies to energy. It does not apply if you are selling wheat or pork bellies or any other tangible commodity.

And it did not take long for Enron Online, and others in the energy sector, to take advantage of this new freedom by trading energy derivatives absent any regulatory oversight.

Thus, after the 2000 legislation was enacted, Enron OnLine began to trade energy derivatives bilaterally without being subject to proper regulatory oversight. It should not surprise anyone that without the transparency, prices soared.

Just yesterday Warren Buffett published a warning in Fortune Magazine saying that ``Derivatives are financial weapons of mass destruction.'' In his annual warning letter to shareholders about what worries him about the financial markets, Warren Buffett called derivatives and the trading activities that go with them ``time bombs.''

In the letter, Warren Buffett states, ``In recent years some huge- scale frauds and near-frauds have been facilitated by derivatives trades. In the energy and electric utility sectors, for example, companies used derivatives and

trading activities to report great `earnings'--until the roof fell in when they actually tried to convert the derivatives-related receivables on their balance sheets into cash.''

We clearly saw this with Enron.

Was Enron and its energy derivative trading arm, Enron-On-Line the sole reason California and the West had an energy crisis? No.

Was it a contributing factor to the crisis? I certainly believe that it was. Unfortunately, because of the energy exemptions in the 2000 CFMA, which took away the CFTC's authority to investigate, we may never know for sure.

In the 107th Congress, this legislation was debated during consideration of the Senate Energy Bill and it was the subject of a hearing in the Agriculture Committee, but time ran out before the legislation could be marked up and passed.

Since that time, Senators Lugar and Harkin have made significant improvements to the legislation and we have added stronger penalties for market abuse and wrongdoing.

Today I am pleased to note that the following companies and organizations are supporting this legislation:

The National Rural Electric Cooperative Association,

The Derivatives Study Center,

The American Public Gas Association,

The American Public Power Association,

The California Municipal Utilities Association,

The Southern California Public Power Authority,

The Transmission Access Policy Study Group,

The U.S. Public Interest Research Group,

The Consumers Union,

The Consumers Federation of America,

Calpine,

Southern California Edison,

Pacific Gas and Electric, and

FERC Chairman Pat Wood.

I ask unanimous consent that the letters of support from these organizations and companies be printed in the Record.

Mr. President, here is an explanation of what this bill does: It applies anti-fraud and anti-manipulation authority to all exempt commodity transactions--an exempt commodity is a commodity which is not financial and not agricultural and mainly includes energy and metals.

The bill sets up two classes of swaps. For those made between ``sophisticated persons,'' basically institutions and wealthy individuals, that are not entered into on a ``trading facility''--for example, an exchange--anti-fraud and anti-manipulation provisions apply and wash trades are prohibited.

The following regulations would apply to all swaps made on an ``electronic trading facility'' and a ``dealer market'', which includes dealers who buy and sell swaps in exempt commodities, and the entity on which the swap takes place: anti-fraud and anti-manipulation provisions and the prohibition of wash trades apply; if the entity on which the swap takes place serves a pricing or price discovery function, increased notice, reporting, bookkeeping, and other transparency requirements; and the requirement to maintain sufficient capital commensurate with the risk associated with the swap;

Except for the anti-fraud and anti-manipulation provisions, the CFTC has the discretion to tailor the above requirements to fit the character and financial risk involved with the swap or entity. While the CFTC could require daily public disclosure of trading data like open and closing prices, similar to the requirements of futures exchanges, it could not require real-time publication of proprietary trading information or prohibit an entity from selling their data.

The CFTC may allow entities to meet certain self-regulatory responsibilities- as provided in a list of ``core principles.'' If an entity chose to become a

self-regulator, these core principles would obligate the entity to monitor trading to prevent fraud and manipulation as well as assure that its other regulatory obligations are met.

The penalties for manipulation are greatly increased. The civil monetary penalty for manipulation is increased from $100,000 to $1 million. Wash trades are subject to the monetary civil penalty for each violation, and imprisonment up to 10 years.

The FERC is required to improve communications with other Federal regulatory agencies. A shortcoming in the main anti-fraud provision of the CEA is also corrected by allowing CFTC enforcement of fraud to apply to instances of either defrauding a person for oneself or on behalf of others.

It requires the FERC and the CFTC to meet quarterly and discuss how energy derivative markets are functioning and affecting energy deliveries.

It grants the FERC the authority to use monetary penalties on companies that don't comply with requests for information. It is essentially the same authority that the SEC has.

It makes it easier for FERC to hire the necessary outside help they need including accountants, lawyers, and investigators for investigative purposes.

It eliminates the requirement that FERC receive approval from the Office of Management and Budget before launching an investigation or price discovery of electricity or natural gas markets involving more than 10 companies.

It increases the penalty amounts to $1 million instead of the current $5,000 for violations of the Federal Power Act and the Natural Gas Act; five years instead of the current two for violations of the statute; and, $50,000 per violation per day instead of the current $500 for violations of rules or orders under the Federal Power Act and Natural Gas Act.

The Commission's authority to impose civil penalties is broadened to all sections of Part II of the Federal Power Act and the penalty amount is increased from $10,000 to $50,000 per violation per day.

It modifies Section 206 of the Federal Power Act to allow for an earlier refund effective date to increase the opportunity for refunds as a deterrent to fraudulent and manipulative behavior in the energy markets.

This legislation is not going to do anything to change what happened in California and the West. But it does provide the necessary authority for the CFTC and FERC which will help protect against another energy crisis.

When regulatory agencies have the will but not the authority to regulate, Congress must step in and ensure that our regulators have the necessary tools. Unfortunately, sometimes an agency has neither. In this case I am glad to have the support of FERC and I hope that the CFTC will reconsider and support this legislation.

Madam President, I rise today to introduce the EFFECT Act, the Energy Efficiency through Certified Technologies Act, which has bipartisan support as I am pleased to be joined by cosponsors Senator Feinstein of California, Senator McCain of Arizona, Senator Kerry of Massachusetts, Senator Gordon Smith of Oregon, and Senator Reid of Nevada.

As a member of the Finance Committee, I strongly believe that we must develop responsible tax credit incentive policies that will increase the efficiencies of the homes we build and live in and the buildings in which we work. We did an admirable job last year providing sound tax incentives in the omnibus energy bill, and it is regrettable that bill did not get out of conference and these incentives are not available for our consumers to use. That is especially true as the storm clouds gather in the Middle East and the price of oil, for instance, reaches $40 a barrel.

This bill provides tax incentives for advanced levels of energy efficiency and peak power saving technologies in the buildings in which we live, work, and learn. Buildings consume some 35 percent of energy nationwide and are responsible for the emissions of a comparable percentage of pollution; importantly, they account for more than one- half of the Nation's energy costs.

Incentives provided through the tax system are necessary to complement existing energy efficiency policies at the Federal and State levels. The issue is, incentive programs already being operated cannot provide multiyear commitments of money. Such commitments are absolutely vital in inducing industries to invest in these technologies. The 1- year commitments that are offered by many current programs are insufficient to promote dramatic new energy efficiency technologies even when they are very cost effective.

Our goal in introducing the legislation is to accelerate the commercial success of technologies that are already cost effective but are currently impeded by market barriers. These barriers can be overcome by financial incentives. Savings of up to 50 percent add up to reductions in climate pollution emissions of 65 million metric tons of carbon annually after 10 years, accompanied by consumer energy bill reductions of $30 billion per year and the creation of almost 500,000 new jobs as well as stimulation in the growth of small businesses.

The bill provides for a 6-year--and, in some cases, 3-year--sunset for the incentive. Incentives are provided for commercial buildings both new and remodeled, including schools and other public buildings and rental housing; for air-conditioning, heating, and water heating equipment which can reduce peak power demand quickly; for new homes and the retrofitting of existing homes; and for solar electricity.

The incentives provided for in this legislation are based on three principles: One, independent third-party certification is required so that energy savings are certified and the Government is getting real energy savings for the tax money invested; two, the incentives are workable, not bureaucratic, and are built on programs that have already been shown to work with minimal bureaucratic intervention or effort; and, three, the incentives sunset in order to provide a transition to a market system that already promotes energy efficiency.

The incentives are performance-based so that the consumer and producer have the motivation to reduce costs and to introduce new technologies to achieve energy goals in more cost-effective ways than existing technologies. The documentation required for certification has value in the marketplace in allowing property markets to reflect enhanced property values based on energy efficiency.

Many American homes, for instance, were built years before energy- efficient technologies were developed. This is certainly true in an older State such as

my home State of Maine and an incentive for a retrofit such as simply putting in certifiable high-energy-efficient doors and windows, such a low-emissivity glass, will save a great deal of energy loss because of the huge amount of seepage that now occurs through the existing windows.

This bill will also leverage cost-effective investments in saving peak powers as well as energy--110,000 megawatts after 10 years. It is one of the few public policies that can be enacted that can help avert peak power shortages in the next 4 or 5 years. It will lower energy costs for consumers and businesses and promote competition and innovation.

The bottom line is, we have the opportunity to raise the bar for our future domestic energy systems. Solutions exist in available technologies, and most of all in the entrepreneurial spirit of the American people. I look forward to working with the chairmen of the Finance Committee, as I did last year, to mark up tax incentives that reflect the provisions of this legislation, and with the Energy Committee chairmen to further our Nation's energy efficiency goals that will save on our energy usage--and this will be reflected in the energy bills consumers must pay--and thus allow us to use less electricity, and less oil and natural gas to produce that energy.

I am pleased to be joined by Senators representing States throughout the country and urge others to seriously consider this legislation and join us in working towards our goal for achieving greater energy efficiency in the near future.

Mr. President, I rise today, along with my colleague Senator Collins, to introduce legislation, the Commercial Truck Highway Safety Demonstration Program Act, to create a safety pilot program for commercial trucks.

This bill would authorize a safety demonstration program in my home State of Maine that could be a model for other States. I have been working closely with the Maine Department of Transportation, communities in my State, and others to address statewide concerns about the existing Federal interstate truck weight limit of 80,000 pounds.

I believe that safety must be the No. 1 priority on our roads and highways, and I am very concerned that the existing interstate weight limit has the perverse impact of forcing commercial trucks onto State and local secondary roads that were never designed to handle heavy commercial trucks safely. We are talking about narrow roads, lanes, and rotaries, with frequent pedestrian crossings and school zones.

I have been working to address this concern for many years. During the 105th Congress, for example, I authored a provision providing a waiver from Federal weight limits on the Maine Turnpike, the 100-mile section of Maine's interstate in the southern portion of the State, and it was signed into law as part of TEA-21. I have also shared my concerns with the Department of Transportation and the Senate Environment and Public Works Committee to urge them to work with me in an effort to address this challenge.

In addition, the Main Department of Transportation is in the process of conducting a study of the truck weight limit waiver on the Maine Turnpike, and I have been working closely with the State in the hopes of expanding this study, which will focus on the safety impact of higher limits, infrastructure issues, air quality issues, and economic issues as well, in order to secure the data necessary to ensure that commercial trucks operate in the safest possible manner.

Federal law attempts to provide uniform truck weight limits, 80,000 pounds, on the Interstate System, but the fact is there are a myriad of exemptions and grandfathering provisions. Furthermore, interstate highways have safety features specifically designed for heavy truck traffic, whereas the narrow, winding State and local roads don't.

The legislation I am submitting today would simply direct the Secretary of Transportation to establish a 3-year pilot program to improve commercial motor vehicle safety in the State of Maine. Specifically, the measure would direct the Secretary, during this period, to waive Federal vehicle weight limitations on certain commercial vehicles weighing over 80,000 pounds using the Interstate System within Maine, permitting the State to set the weight limit. In addition, it would provide for the waiver to become permanent unless the Secretary determines it has resulted in an adverse impact on highway safety.

I believe this is a measured, responsible approach to a very serious public safety issue. I hope to work with all of those with a stake in this issue, safety advocates, truckers, States, and communities, to address this matter in the most effective possible way, and I hope that my colleagues will join me in this effort.

Madam President, I rise today to introduce the CLEAR ACT, which is short for the Clean Efficient Automobiles Resulting from Advanced Car Technologies Act of 2003.

Joining me in this effort are Senators John Rockefeller and Jim Jeffords, who have been my partners in this legislation and its earlier versions since the 106th Congress. We are also being joined by an impressive and bipartisan lineup of original cosponsors, which includes Senators Olympia Snowe, John Kerry, Gordon Smith, Joe Lieberman, John Ensign, Hillary Clinton, Mike Crapo, Byron Dorgan, Susan Collins, and Lincoln Chafee.

I believe the CLEAR ACT is the most comprehensive and effective plan we have seen in this country to accelerate the transformation of the automotive marketplace toward the widespread use of fuel cell vehicles. And it does so without any new Federal mandates. Instead, it offers powerful market incentives to promote the combination of advances we must have in technology, in infrastructure, and in alternative fuels if our goal of bringing fuel cell vehicles to the mass market is to become a reality.

As many of my colleagues know, fuel cell vehicles are the most promising long-term automotive technology, offering breakthrough fuel economy of up to three times today's levels with zero emissions. For a variety of reasons, the commercial production of fuel cell vehicles is a number of years away. Many things need to change in the automotive marketplace before

widespread use of these vehicles of the future becomes a reality. With the CLEAR ACT, we can achieve this goal much faster, while in the meantime we can reap the benefits of cleaner air and a reduced dependency on foreign oil.

Bridging the gap between today's conventional vehicles and the day when all of us will be driving fuel cell vehicles are alternative fuel and advanced technology vehicles, such as hybrid electrics. These vehicles are available today, but not yet widely accepted in the marketplace.

Currently, consumers face three basic obstacles to accepting the use of these alternative fueled and advanced technology vehicles. These obstacles are the higher cost of these vehicles as compared with their conventional counterparts, the cost of the alternative fuel, and the lack of an adequate infrastructure of alternative fueling stations. Mr. President, the CLEAR ACT would lower all three of these barriers.

First, we provide a tax credit of 50 cents per gasoline-gallon equivalent for the purchase of alternative fuel at retail. This would bring the price of these cleaner fuels much closer in line with conventional automotive fuels. And, to give customers better access to alternative fuel, we extend an existing deduction for the capital costs of installing alternative fueling stations. We also provide a 50- percent credit for the installation costs of retail and residential refueling stations.

Finally, we offer CLEAR ACT credits to consumers who purchase alternative fuel and advanced technology vehicles. These credits would lower the price gap between these cleaner and more efficient vehicles and conventionally fueled vehicles of the same type. To make certain that the tax benefit we provide translates into a corresponding benefit to the environment, we split the vehicle tax credit into two. The amount the consumer receives in a CLEAR ACT credit would depend, first, on the level of technology used in the vehicle and, second, on the fuel efficiency and emissions reduction of the vehicle. In this way, we are confident that the CLEAR ACT will create the greatest social benefit possible for every tax dollar.

The transportation sector in the U.S. accounts for nearly two-thirds of all oil consumption, and we are 97-percent dependent on petroleum for our transportation needs. Is it any wonder that 50 percent of our urban smog is caused by mobile sources? If we want to clean our air and address our Nation's energy dependency, we must focus on the transportation sector. And we must focus first on those technologies and alternative fuels that are already available and abundant domestically. The CLEAR ACT is the shortest path to achieving these goals.

Air pollution and energy independence are issues of critical concern in my home State of Utah. According to a study by Utah's Division of Air Quality, on-road vehicles in Utah account for 22 percent of particulate matter. This particulate matter can be harmful to citizens who suffer from chronic respiratory or heart disease, influenza, or asthma. Automobiles also contribute significantly to hydrocarbon and nitrogen oxide emissions in my State. These two pollutants react in sunlight to form ozone, which in turn reduces lung function in humans and hurts our resistance to colds and asthma. In addition, vehicles account for as much as 87 percent of carbon monoxide emissions. Carbon monoxide can be harmful to persons with heart, respiratory, or circulatory ailments.

While Utah has made important strides in improving air quality, it is a fact that each year more vehicular miles are driven in our State. It is clear that if we are to have cleaner air, we must encourage the use of alternative fuels and technologies to reduce vehicle emissions.

Another key aim of the CLEAR ACT is greater energy independence. Whether during the energy crisis in the 1970s, during the Persian Gulf war, or during our current energy challenge, every American has felt the sting of our dependence on foreign oil. And I might add that our dependency on foreign oil has steadily increased to the point where we now depend on foreign sources for about 60 percent of our oil. When enacted, the CLEAR ACT will play a key role in helping our Nation improve its energy security by increasing the diversity of our fuel options and decreasing our dependency on gasoline.

Our Nation's energy strategy will not be complete without an incentive to increase the use of alternative fuels and advanced car technologies. In the future we will not use gasoline-fueled vehicles to the same extent we do today. The technology is here today to help transform us to the benefits of the future much sooner. We just need to find a way to lower those barriers to widespread consumer acceptance, which will in turn put the power of mass production to work to lower the incremental cost of this technology. In short, our legislation would bring the benefits of cleaner air and energy independence to our citizens sooner.

I am very proud to offer this groundbreaking and bipartisan legislation. It represents the input and hard work of a very powerful and effective coalition the CLEAR ACT Coalition. This coalition includes the Union of Concerned Scientists, Ford Motor Company, the Natural Resource Defense Council, Toyota, Environmental Defense, Honda, the Alliance to Save Energy, the Natural Gas Vehicle Coalition, the Propane Vehicle Council, the Methanol Institute, and others. The CLEAR ACT reflects the untiring effort and expertise of the members of this coalition, and for this we owe them our gratitude.

I urge my colleagues in the Senate to join me, the CLEAR ACT's cosponsors, and this coalition in this forward-looking approach to cleaner air and increased energy independence.

I ask unanimous consent that a summary of the CLEAR ACT be inserted in the Record.

Madam President, today I am introducing legislation that would dramatically improve the safety of food served in our Nation's schools. This bill, known as the Safe School Food Act, would fill gaps in the inspection, testing, procurement and preparation of food served to our schoolchildren, and provide school officials with the necessary tools and information to help them prevent food-borne illness among our most vulnerable population.

Each day, more than 27 million children eat meals provided through the National School Lunch Act. Despite increased attention in recent years to the safety of food provided to schoolchildren, there is evidence of serious problems with our school lunch system--between 1990 and 2000, there were nearly 100 reported outbreaks of food-borne illness in our schools affecting thousands of children, with several outbreaks resulting in significant health consequences. Since food- borne illness is preventable, these statistics indicate we are not doing enough to protect our children's health when they consume food served at our schools.

Currently, 17 percent of the food served in schools is donated by the Federal Government and undergoes stringent U.S. Department of Agriculture food-safety standards for inspections and pathogen testing. Suppliers' food safety records also are reviewed before they are granted contracts to provide food to the USDA donated commodity program. However, the remaining 83 percent of food consumed at schools is purchased locally and is not subject to these more stringent USDA donated commodity standards. State education officials also do not have access to the safety records of food suppliers to make the same informed decisions as their counterparts at the Federal level.

If a tainted product enters the food supply, it is often difficult for local education officials to quickly determine if they have that food in their schools' kitchens due to a complex web of food manufacturers, distributors, and brokers who deal with schools. A food producer's tainted food may be repackaged by a distributor, leaving a school unaware it is serving the product. And many Americans may be surprised to discover that our Federal food agencies do not even have the authority to mandate the recall of contaminated food in schools. Such recalls are currently voluntary.

The Safe School Food Act would address these gaps in our School Lunch Program and provide schools with the tools and information on how to more safely purchase and prepare food served to our children.

Improving Inspections: This legislation will ensure stringent inspection and pathogen testing for USDA meat, poultry, seafood, eggs, and produce donated to the School Lunch Program, and gives the USDA Secretary the authority to require similar pathogen testing as necessary for foods purchased directly by the schools. Cafeterias also would be inspected more frequently, inspection exemptions would be eliminated, and those inspection reports would be made available to the public.

Purchasing Safe Food: By incorporating USDA food safety guidelines in their procurement contracts to the maximum extent possible, schools will have the tools to help ensure the safety of the food they serve. And by providing State education officials with food-safety histories of the companies they purchase from, schools can make more informed decisions in the purchasing process.

Planning and Serving Safe Meals: The USDA will provide training and assistance to schools in the preparation of required plans to address the food-safety risks of meals they prepare.

Providing Notice and Recalling Unsafe Food: Each State will have an up-to-date list of the vendors and suppliers who provide food to their schools to enable easier tracking of food that may be tainted. If a food product that has been distributed to schools is found to be unsafe, the USDA Secretary will have the authority to require a mandatory recall of the product if voluntary efforts are unsuccessful. Designated food safety coordinators in each State will assist with recalls, as well as safety training and information-sharing issues.

Mr. President, I urge my colleagues to join me in this effort to improve the safety of the food served in our schools. The health of our schoolchildren is at stake.

I ask unanimous consent that a copy of the legislation be printed in the Record.

Mr. President, I rise to join with my senior colleague from Maine in sponsoring the Commercial Truck Highway Safety Demonstration Program Act, an important bill that addresses a significant safety problem in our State.

Under current law, trucks weighing as much as 100,000 pounds are allowed to travel on Interstate 95 from Maine's border with New Hampshire to Augusta, our capital city. At Augusta, trucks weighing more than 80,000 pounds are forced off Interstate 95, which proceeds north to Houlton. Heavy trucks are forced onto smaller, secondary roads that pass through cities, towns, and villages.

Trucks weighing up to 100,000 pounds are permitted on interstate highways in New Hampshire, Massachusetts, and New York as well as the Canadian provinces of New Brunswick and Quebec. The weight limit disparity on various segments of Maine's Interstate Highway System forces trucks traveling to and from destinations in these States and provinces to use Maine's State and local roads, nearly all of which have two lanes, rather than four. Consequently, many Maine communities along the interstate see substantially more truck traffic than would otherwise be the case if the weight limit were 100,000 pounds for all of Maine's interstate highways.

The problem Maine faces because of the disparity in truck weight limit is perhaps most pronounced in our State capital. Augusta is the Maine Turnpike's northern terminus where heavy trucks that are prohibited from traveling along the northern segment of Interstate 95 enter and exit the turnpike. The high number of trucks that must traverse Augusta's local roads, and particularly its two rotaries, creates a hazard for those who live and work in as well as visit the city.

The Maine Department of Transportation estimates that the truck weight disparity sends 310 vehicles in excess of 80,000 pounds through Augusta every day. These vehicles, which are sometimes transporting hazardous materials, must pass through Cony Circle, one of the State's most dangerous traffic circles and the scene of 130 accidents per year. The fact that the circle

is named for the 1,200 student high school that it abuts adds to the severity of the problem.

A uniform truck weight limit of 100,000 pounds on Maine's interstate highways would reduce the highway miles and travel times necessary to transport freight through Maine, resulting in economic and environmental benefits. Moreover, Maine's extensive network and local roads will be better preserved without the wear and tear of heavy truck traffic. Most important, however, a uniform truck weight limit will keep trucks on the interstate where they belong, rather than on roads and highways that pass through Maine's cities, towns, and neighborhoods.

The legislation that Senator Snowe and I are introducing addresses the safety issues we face in Maine because of the disparities in truck weight limits. The legislation directs the Secretary of Transportation to establish a commercial truck safety pilot program in Maine. Under the pilot program, the truck weight limit on all Maine highways that are part of the Interstate Highway System would be set at 100,000 pounds for 3 years. During the waiver period, the Secretary would study the impact of the pilot program on safety, and would receive the input of a panel that would include State officials, safety organizations, municipalities, and the commercial trucking industry. The waiver would become permanent if the panel determined that motorists were safer as a result of a uniform truck weight limit on Maine's Interstate Highway System.

Maine's citizens and motorists are needlessly at risk because too many heavy trucks are forced off the interstate and on to local roads. The legislation Senator Snowe and I are introducing is a commonsense approach to a significant safety problem in my State. I hope my colleagues will support passage of this important legislation.