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119-hr-2177119th CongressWALLET

Tradeable Energy Performance Standards Act

Sponsored By: Representative Casten, Sean [D-IL-6]

Introduced

Summary

This bill would create a national, output-based, tradable cap on carbon dioxide called the Tradeable Energy Performance Standards (TEPS) program. It would set facility-level output targets, require allowances equal to output times a CO2 target, and build a market with trading, alternative compliance payments, offsets, and penalties.

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  • Families and households could access grants from a Carbon Mitigation Fund to pay for energy-efficiency upgrades, replacing fossil-fuel appliances, electric-vehicle charging, and other electrification. Awards are prioritized by lowest dollars per ton and must show verifiable emissions avoided or CO2 sequestered.
  • Power and thermal facility operators would be covered if they meet thresholds: 2 megawatts electric or 50 MMBtu/hour thermal. Facilities receive allowances based on annual output and face annual output-based CO2 targets that generally tighten each year relative to a 2027 baseline.
  • Markets and regulators would get a tracked federal registry with weekly public price and volume summaries, position limits set with the Commodity Futures Trading Commission, and civil penalties equal to three times the prior year’s highest allowance price per missed allowance. Alternative compliance payments begin roughly $50–$70 per allowance in 2028–2038, then rise toward the Social Cost of Carbon by 2048 to fund the Offset Program. The bill also requires sequestration rules that align existing incentives and consultation with Interior and Agriculture and calls for Comptroller General reviews starting in 2029.

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Bill Overview

Analyzed Economic Effects

8 provisions identified: 3 benefits, 1 costs, 4 mixed.

Submit allowances by June or pay ACP

If enacted, starting in 2028, owners would submit one allowance per metric ton of last year’s CO2 by June 1 each year. An allowance could only cover its year or the next year; fractions would round to the nearest whole allowance. Instead of an allowance, owners could pay an Alternative Compliance Payment per ton: $50 in 2028 rising to $70 in 2038 (EPA would adjust for inflation), then increasing each year to reach the Social Cost of Carbon by 2048; from 2048 on it would equal that Social Cost. If an owner misses allowances, a civil penalty would be due immediately: three times the highest allowance price from the prior year times the missing allowances, and replacement allowances would be due by April 1 of the second following year.

How yearly allowances are given

If enacted, EPA would give allowances each year by March 1, based on last year’s output. Electric plants would get megawatt-hours times the year’s target; thermal plants would get useful thermal output (MMBtu) times the target; cogeneration plants would get both. In 2028, the target would match the 2027 baseline. After that, a formula would tighten targets each year using set percentage cuts and a national emissions adjustment, but not below zero.

Trading limits and public tracking

If enacted, EPA would cap how many allowances one entity can hold, with help from the CFTC, to prevent price manipulation and protect liquidity. Allowances would not be property rights, and the U.S. could limit or end trades. All transactions would need a certified representative and EPA recording; once submitted, an allowance could not be used again. EPA would run a tracking system and post weekly public data on prices, volumes, distributions, holdings, and submissions.

Grants for carbon cuts and storage

If enacted, Alternative Compliance Payments and penalties would fund a Carbon Mitigation Fund. EPA would award grants each year for projects that avoid emissions or permanently store CO2, like efficiency upgrades, grid upgrades, replacing gas gear with electric or low‑carbon options, and EV charging in underserved areas. Proposals would bid dollars per ton; EPA would fund the lowest bids first, with awards by August 1 as money allows. EPA would set rules for safe, permanent CO2 storage, consult Interior and Agriculture on natural storage, and apply a 200‑year permanence standard and risk accounting.

Rules for long purchase contracts

If enacted, 10‑year or longer deals made after the bill between an existing covered facility and a new low‑emission facility could shift allowances. For covered outputs, EPA would give allowances to the existing facility based on the agreed megawatt‑hours or MMBtu times the target, starting the first full year the new plant produces. Parties would need to file the contract and any changes within 30 days so allowances can be issued.

Two-year setup and watchdog reviews

If enacted, EPA would have up to 24 months to issue final program rules. The Comptroller General would report to Congress by January 1, 2029, and every two years after. Reports would review distribution efficiency, cost‑effectiveness, jobs and family transitions, clean tech progress, and market health, and could recommend changes.

Which power and thermal plants qualify

If enacted, large plants would be covered. Electric and cogeneration plants at 2 megawatts or more, and thermal plants at 50 MMBtu/hr (HHV) or more, would need to comply. Smaller plants could ask to opt in; EPA would decide within 90 days and could end it if the plant had no output last year. One allowance would equal 1 metric ton of CO2. "Permanently sequestered" would mean CO2 kept out of the air for at least 200 years, and some facilities that use carbon as an ingredient would be excluded.

No change to other Clean Air rules

If enacted, this title would not change rules in other parts of the Clean Air Act. Existing requirements under other titles would still apply.

Sponsors & CoSponsors

Sponsor

Casten, Sean [D-IL-6]

IL • D

Cosponsors

There are no cosponsors for this bill.

Roll Call Votes

No roll call votes available for this bill.

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