The Clean Electricity Performance Program (CEPP): In Brief

The Clean Electricity Performance Program (CEPP): In Brief

The Clean Electricity Performance Program
October 7, 2021
(CEPP): In Brief
Ashley J. Lawson
The Clean Electricity Performance Program (CEPP) is a policy aimed at reducing greenhouse gas
Analyst in Energy Policy
emissions (GHG) in the electric power sector. Details of the program were included in House

Committee on Energy and Commerce budget reconciliation legislative recommendations (House
E&C text) pursuant to its directives in the FY2022 budget resolution (S.Con.Res. 14). The House

E&C text forms the basis of this analysis. Details could change as Congress continues to consider
the proposal.
Under the proposed CEPP, the U.S. Department of Energy (DOE) would issue grants to electric utilities that achieve
designated annual clean electricity targets and collect payments from electric utilities that underachieve targets. The targets
would cover calendar years 2023-2030 and apply to all electric utilities in the United States.
Each electric utility would have an initial target reflecting its 2019-2020 average share of clean energy used for electricity
generation (i.e., clean electricity). The House E&C text defines clean electricity as that produced by a generator with a carbon
intensity of not more than 0.1 metric tons carbon dioxide equivalent per megawatt -hour (tCO2e/MWh). Generally, this
definition would include most renewable energy and nuclear energy, and exclude fossil fuel.
Each utility’s target would increase four percentage points annually (e.g., from 25% to 29%). For context, the nationwide
increase in clean electricity has been one percentage point on average over the last 10 years.
In general, utilities that achieve their annual target would receive grants from the federal government equal to $150 for every
MWh greater than 1.5% above the prior year’s clean electricity sales. In other words, the first 1.5% increase in clean
electricity in a year would not be eligible for payment, but all increases above that level would be eligible for payments
(provided the utility increases by at least four percentage points annually). Utilities that do not achieve their annual targ et
would owe payments to the federal government equal to $40 for every MWh “shortfall,” the difference between a four
percentage point increase and the utility’s actual clean electricity share for the year.
Some aspects of the CEPP mirror a clean energy standard (CES), a policy with similar GHG reduction goals to which the
CEPP is frequently compared. One chief difference between the CEPP and a CES is the expected budgetary impact. A CES
generally would be expected to put compliance costs largely on electricity customers. In contrast, the CEPP would shift some
compliance costs to federal taxpayers. According to some press sources, the CEPP is estimated to increase the federal deficit
by $150 billion over the next 10 years.
The financial grants and payments in the CEPP could encourage the increased use of clean electricity and achieve reductions
in electricity sector emissions; however, the CEPP provisions do not guarantee reductions. Electric utilities may face cost o r
other constraints (e.g., siting challenges, state and local regulatory requirements, reliability risks) on achieving CEPP targets.
In such cases, the CEPP grant and penalty incentives may not be sufficiently large to overcome other hurdles to achieving
four percentage point annual growth in clean electricity.
Questions remain regarding how the CEPP would interact with existing state clean electricity requirements and voluntary
utility clean electricity goals. Some utilities with existing plans to achieve or exceed the CEPP targets might receive
“windfall” payments under the CEPP whereby their customers pay less than currently anticipated for the same electricity
generation mix (the House E&C text restricts use of grants “exclusively for the benefit of the ratepayers,” so any financial
payment would not accrue to the electric utility). Combined, state targets and utility goals with comparable targets as the
CEPP cover 69% of total U.S. electricity sales, though few existing policies would achieve their targets by 2030 (the final
year of the CEPP).
As debate continues on the CEPP, Congress could choose to evaluate these and other policy considerations and options to
address them. Were the CEPP to remain a priority—and be deemed in compliance with procedural rules such as the Senate’s
Byrd rule—Congress might consider how to address policy considerations within the constraints of budget reconciliation.
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Contents
Clean Electricity Performance Program Overview................................................................ 1
Legislative Actions.......................................................................................................... 3
Selected Policy Considerations.......................................................................................... 4
Greenhouse Gas Emissions Reductions ......................................................................... 4
What Is Clean?.......................................................................................................... 5
Costs to Consumers ................................................................................................... 5
Electric Reliability ..................................................................................................... 6
Community Impacts................................................................................................... 6
Interaction with State Programs and Voluntary Efforts ..................................................... 6
Options for Congress ....................................................................................................... 7

Contacts
Author Information ......................................................................................................... 7

Congressional Research Service

The Clean Electricity Performance Program (CEPP): In Brief

he Clean Electricity Performance Program (CEPP) has been proposed in the 117th
Congress as a policy aimed at reducing greenhouse gas emissions (GHG) in the electric
T power sector.1 The CEPP sometimes is referred to as a clean energy standard (CES),
although the CEPP and a CES general y are seen as different policies.2
This analysis summarizes the key elements of the proposed CEPP included in House Committee
on Energy and Commerce (House E&C) budget reconciliation legislative recommendations
(hereinafter, House E&C text).3 This analysis also identifies some potential considerations for
lawmakers.
Clean Electricity Performance Program Overview
The CEPP is designed as a grant program combined with financial penalties. Electric utilities that
achieve designated clean electricity targets would be eligible for payments from the federal
government, and utilities that underachieve targets would be assessed a penalty.4 The House E&C
text does not specify how any federal revenue collected from penalties would be used. The CEPP
would be administered by the U.S. Department of Energy (DOE) and be in effect from calendar
year 2023 to 2030.
Each electric utility would have an initial target reflecting its current share of clean energy used
for electricity generation (i.e., clean electricity). The House E&C text defines clean electricity as
that produced by a generator with a carbon intensity of not more than 0.1 metric tons carbon
dioxide equivalent per megawatt-hour (tCO2e/MWh). General y, this definition would include
most renewable energy, nuclear energy, and potential y some fossil fuel-fired generators using

1 T he Clean Electricity Performance Program (CEPP) sometimes is referred to as the Clean Electricity Payment
Program.
2 A clean energy standard (CES), sometimes called a clean electricity standard, is a requirement on electric utilities to
procure defined amounts of electricity from eligible “clean” energy sources by a defined date. A key feature is the use
of tradeable credits to demonstrate compliance. T he credits have value as a commodity, creating a potential additional
revenue source for eligible “clean” generators and thus incentivizing their deployment . For background information
about a CES, see CRS Report R45913, Electricity Portfolio Standards: Background, Design Elem ents, and Policy
Considerations, by Ashley J. Lawson. For information about CES proposals in the 117 th Congress, see CRS Report
R46691, Clean Energy Standards: Selected Issues for the 117th Congress, by Ashley J. Lawson.
3 House Committee on Energy and Commerce (House E&C), “Press Release: Pallone Announces Full Committee
Markup of Build Back Better Act,” September 9, 2021, at https://energycommerce.house.gov/newsroom/press-releases/
pallone-announces-full-committee-markup-of-build-back-better-act. T he website provides links to download the
committee prints, final legislative recommendations, support documents, and other relat ed material. T he proposed
CEPP text is in “Subtitle D: Budget Reconciliation Legislative Recommendations Relating to Energy” and is available
at http://docs.house.gov/meetings/IF/IF00/20210913/114039/BILLS-117-D-P000034-Amdt-1.pdf. See the “ Legislative
Action” section for additional information.
4 T he proposed CEPP has similarities to feebate programs, which have been proposed in the past to, for example,
reduce greenhouse gas emissions from passenger cars. In many feebate programs, the level of fees assessed can be
adjusted to fully cover the cost of any rebates. As a result, feebates can be, in theory, budget neutral. In contrast , the
CEPP generally would be expected have a budget impact . For background on feebates, see, for example, International
Council on Clean T ransportation, Feebate Review and Assessm ent: Best Practices for Feebate Program Design and
Im plem entation, April 2010.
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The Clean Electricity Performance Program (CEPP): In Brief

carbon capture and storage (CCS) equipment.5 The definition would exclude fossil fuel in general
and potential y exclude biomass, subject to a determination by DOE.6
In the first year, each utility’s target would increase four percentage points from its 2019-2020
average. For example, a utility with a 2019-2020 average of 50% clean electricity would have a
2023 target of 54%, while a utility with a 2019-2020 average of 25% clean electricity would have
a 2023 target of 29%. For context, the nationwide increase in clean electricity (per the House
E&C definition) has been one percentage point on average over the last 10 years.7
The relative stringency of the program (i.e., the percent increase required) differs by utility, based
on their 2019-2020 average. For example, increasing from 50% clean electricity to 54% is an 8%
change, while increasing from 25% to 29% is a 16% change.
Annual targets in subsequent years would be four percentage points above the previous year’s
performance. If a utility achieved its 2023 target of 54%, its 2024 target would be 58%. If,
however, that utility achieved 52% in 2023 (missing its target), its 2024 target would be 56% (i.e.,
four percentage points above its actual performance in 2023). Utilities would have different final
targets in 2030 based on their 2019-2020 baseline. Once a utility reaches 85% clean electricity, it
would no longer face a penalty payment for missing a four percentage point annual growth in
clean electricity, so long as its clean electricity does not decrease year-over-year.8
In general, utilities that achieve their annual target would receive grants from the federal
government equal to $150 for every MWh greater than 1.5% above the prior year’s clean
electricity sales.9 In other words, the first 1.5% increase in clean electricity in a year is not
eligible for payment, but al increases above that level are eligible for payments (provided the
utility increases by at least four percentage points annual y).10 The House E&C text limits use of
funds “exclusively for the benefit of the ratepayers of the eligible electricity supplier, including
direct bil assistance to ratepayers, investments in qualified clean electricity and energy efficiency,

5 Carbon capture and storage (CCS) is not always designed to reduce generator carbon intensity as low as 0.1 metric
tons carbon dioxide equivalent per megawatt -hour (tCO2e/MWh), so not all CCS would qualify as clean electricity
under the definition in the budget reconciliat ion legislative recommendations of the House E&C. Unlike some CES
proposals in the 117th Congress, which would give partial credit to generators based on their carbon intensity (and thus
allow most CCS to qualify, at least partially), the House E&C text do es not allow for partial crediting.
6 T he House E&C text defines carbon intensity as “the carbon dioxide equivalent emissions released into the
atmosphere from the generation of 1 megawatt -hour of electricity by an electric generating unit, as determined by the
Secretary [of Energy].” T he U.S. Department of Energy (DOE) potentially could determine biomass to be ineligible as
clean electricity because emissions are released when it is burned to generate electricity. Alternatively, DOE potentially
could determine that carbon reductions associated with biomass growth offset emissions during electricity generation.
Likewise, DOE potentially could consider upstream greenhouse emissions in its determination of carbon intensity.
Such an action potentially could raise hurdles for generators to qualify as clean electricity, depending on their energy
source.
7 T he national clean electricity share increased from 30% in 2011 to 38% in 2020, with an average annual increase of
one percentage point. Analysis based on data from U.S. Energy Information Administration, August 2021 Monthly
Energy Review, August 2021. T his analysis does not include generation from small-scale solar (e.g., rooftop solar).
Small-scale generation generally would not count toward CEPP targets because the targets are based on utility load
(i.e., sales), not total generation or total consumption.
8 If a utility with a clean electricity share at 85% or above were to decrease its share in a year, it would be subject to
penalty payments. T he level of payment would be calculated in the same way as for utilities with less than 85% clean
electricity, namely, based on the amount of electricity necessary to achieve a four percentage point increase in clean
electricity.
9 T he House E&C text would apply special conditions for grant eligibility in the year following a year in which a utility
owes a payment, and following a year in which a utility opts to defer a grant or payment.
10 In the first year of the program, only clean electricity increases above 2.5% of sales would be eligible for payments.
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The Clean Electricity Performance Program (CEPP): In Brief

and worker retention.” Utilities must further provide written assurance regarding labor conditions
associated with their clean electricity, in accordance with 42 U.S.C. §17282(b)(3).11
Utilities that do not achieve their annual target would owe payments to the federal government
equal to $40 for every MWh “shortfal ,” the difference between a four percentage point increase
and the utility’s actual clean electricity share for the year. For example, if a utility’s target was
29% but it achieved 28%, the penalty would be $40 times the number of MWh between 28% and
29%. The House E&C text restricts utility recovery of penalty costs: “An eligible electricity
supplier may not recover the cost of a payment submitted under this section from any person
other than the shareholders or owners of the eligible electricity supplier.”12
The House E&C text provides some amount of compliance flexibility, though less than provided
in some CES proposals introduced in the 117th Congress. The House E&C text would al ow
utilities to defer grants and payments for up to two years, after notifying DOE. Following a
deferral year(s), DOE would issue grants or collect payments based on the clean electricity
performance in al deferred years. For example, if a utility had 50% clean electricity in one year
and 53% clean electricity the following year, it could defer one year (rather than make a payment
because it missed its target of 54%). If the utility then had 58% clean electricity in the following
year, it would not owe any payments because its performance overal would have met the
required increase of four percentage points per year for two years despite missing the required
increase for one year. Such deferrals could al ow utilities to avoid payments in cases where
planned new clean electricity generation is delayed or when existing generation underperforms
(as might happen for hydropower during a drought, for example).
The House E&C text would provide DOE $250 mil ion for administrative expenses (e.g., staff to
monitor compliance) and “such sums as are necessary” for grant payments through the end of
FY2030. Al electric utilities would be covered by the program regardless of size, ownership
(e.g., investor-owned or publicly owned), or other characteristics. Utilities would have to report
their clean electricity performance to DOE annual y “using such methods and subject to such
audit provisions as the Secretary determines appropriate.”13 The House E&C text would al ow
DOE to establish requirements ensuring the “financial integrity” of grants and payments.
Legislative Actions
House E&C included the proposed CEPP in its reconciliation recommendations pursuant to its
directives in the FY2022 budget resolution (S.Con.Res. 14).14 The committee marked up budget

11 T he labor requirements in the House E&C text are included in a renewable energy construction grant program
established by §803 of the Energy Independence and Security Act of 2007 (EISA; P.L. 110-140).
12 Many publicly owned utilities (e.g., municipal power departments, rural electric cooperatives) have little distinction
between owners and customers. Investor-owned utilities, on the other hand, can raise revenue from either customers or
shareholders. T he House E&C text restricting penalty cost recovery applies to all covered utilities, regardless of
ownership model.
13 DOE could potentially adopt tradeable credits as the method for reporting: the definition of clean electricity
percentage in the E&C text includes the provision that the utility “ holds the exclusive rights to the qualifying
attributes.” In existing state renewable portfolio standard (RPS) and CES programs, tradeable credits represent the
renewable or clean “attributes” of eligible electricity. See U.S. Environmental Protection Agency, “Renewable Energy
Certificates (RECs),” at https://www.epa.gov/greenpower/renewable-energy-certificates-recs.
14 T he Senate Committee on Energy and Natural Resources similarly had directives related to the proposed CEPP, but
the Senate committee has yet to take action. For additional inf ormation on the FY2022 budget resolution, see CRS
Report R46893, S.Con.Res. 14: The Budget Resolution for FY2022 , by Megan S. Lynch. For general information on the
budget reconciliation process, see CRS Report R44058, The Budget Reconciliation Process: Stages of Consideration ,
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The Clean Electricity Performance Program (CEPP): In Brief

reconciliation recommendations from September 13 to September 15, 2021. Subtitle D of the text
covered provisions related to energy, including the CEPP. Subtitle D, as amended, was advanced
to the House Committee on Budget by a roll cal vote of 30-27.15
During debate on Subtitle D, House E&C considered amendments, including three that were
specific to the CEPP. None of the three amendments was adopted.16 One would have struck the
CEPP from the subtitle; one addressed potential transmission capacity constraints; and one
addressed potential impacts on deployment of advanced nuclear technology. Debate on the CEPP
centered on issues associated with increased use of wind and solar energy (including global
supply chains for associated components), potential effects on electricity prices, and potential
climate benefits.
Selected Policy Considerations
Some aspects of the CEPP mirror a CES, so similar considerations arise. These are summarized
below. Other aspects of the CEPP differ from a CES, chiefly the budgetary impact. A CES
general y would be expected to have a de minimis impact on the federal budget (instead, putting
any compliance costs entirely on electric utilities and, therefore, on electricity customers).
However, some press sources report that the CEPP is estimated to increase the federal deficit by
$150 bil ion over the next 10 years.17
Greenhouse Gas Emissions Reductions
The financial grants and payments in the CEPP could encourage the increased use of clean
electricity and achieve reductions in electricity sector emissions; however, the CEPP provisions
do not guarantee reductions. Utilities with CEPP compliance costs greater than the penalty could
choose the lower-cost option of paying the penalty. In such cases, the penalty would potential y
set an upper limit on CEPP outcomes for each utility. In other words, utilities may add clean
electricity only to the extent that associated clean electricity costs (including necessary system
support costs such as transmission system upgrades) are less than the penalty payment. Some
utilities also might choose to pay the penalty if they face non-cost hurdles to meeting CEPP
targets, such as siting chal enges with construction of clean electricity generators.
Additional y, provisions within budget reconciliation legislation that aim to increase the use of
electricity for energy services (e.g., transportation, building heating) could interact with the
CEPP, were they to al be enacted. Utilities that experience an increase in sales due to greater use
of electricity might find it more chal enging to meet CEPP targets because a greater number of
MWh would be needed to meet the required annual increase if electricity sales increase at the

by Megan S. Lynch and James V. Saturno .
15 U.S. Congress, House Committee on Energy and Commerce, Roll Call Vote #79, 117th Cong., 1st sess., September
14, 2021, at http://docs.house.gov/meetings/IF/IF00/20210913/114039/CRPT -117-IF00-Vote079-20210913.pdf.
16 Debate on the energy subtitle began around hour seven of the second part of the first day of the markup and
continued into the first part of the second day of the markup. Recordings are available on the E&C website at
https://energycommerce.house.gov/committee-activity/markups/markup-of-the-build-back-better-act-full-committee-
september-13-2021.
17 See, for example, Nick Sobczyk, “Will Waxman-Markey’s Lessons Guide Greens in Climate Fight?,” E&E News,
August 23, 2021; and Rebecca Leber, “T he U.S. Is Inching Closer to Passing a Game-Changing Climate Policy,” Vox,
August 25, 2021.
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The Clean Electricity Performance Program (CEPP): In Brief

same time.18 The combined impact of proposed climate and energy policies, and the potential
interactions between them, are currently unclear.
What Is Clean?
Different views exist on what counts as clean energy and, therefore, which energy sources should
benefit from the policy. Some stakeholders support a relatively narrow definition of clean energy
that includes only renewable energy sources.19 They often assert that greater use of these sources
(which currently make up about 20% of total U.S. electricity generation)20 addresses multiple
environmental issues, such as air and water emissions from fossil fuel infrastructure, and
associated public health impacts. Many studies find broader definitions, which include nuclear
power, fossil fuels using CCS, and some natural gas without CCS, tend to result in greater GHG
reductions (or similar reductions at lower cost), al else being equal.21 However, providing policy
support to these sources may not address other environmental and public health concerns.
In addition to environmental concerns, the choice of clean energy would determine which
industries benefit from the policy. These industries, including their supply chains, may be located
domestical y or abroad. Electricity generating equipment and related infrastructure general y
would need to be instal ed and operated in the United States, regardless of where they are
manufactured.
Costs to Consumers
Electricity consumers ultimately bear most costs of any electricity policy. Some groups of
electricity consumers, such as industrial facilities and low-income households, are especial y
sensitive to cost increases. Studies of CES policies that are comparable to the CEPP (i.e., those
with targets in the range of 80%-100%) general y find that total electricity system costs wil
increase over time, though the amount of increase depends on policy details and assumptions
about changes in the U.S. energy system.22
As proposed, the CEPP would shift some compliance costs from electric utility customers to
federal taxpayers. Additional y, clean energy tax incentives proposed for budget reconciliation
could further shift costs from electricity customers to the federal budget. Potential changes in
electricity consumer costs under the proposed CEPP currently are unclear and depend, in part, on
utility-specific factors, such as current energy mix and existing plans for deploying new clean
electricity. Some utilities with existing plans to achieve or exceed the CEPP targets might receive
“windfal ” payments under the CEPP whereby their customers pay less than currently anticipated
for the same electricity generation mix.

18 At the same time, CEPP targets might be easier to meet if total sales stay the same or decrease. T his provides one
mechanism by which the CEPP might incentivize utility investments in end user efficiency.
19 See example statements in Rachel Frazin, “Progressives Launch Campaign to Exclude Gas From Congress’s Clean
Electricity Program,” The Hill, September 1, 2021.
20 U.S. Energy Information Administration, “What Is U.S. Electricity Generation by Energy Source?,”
https://www.eia.gov/tools/faqs/faq.php?id=427&t=3.
21 See, for example, “What is a Clean Energy Standard” in Kathryne Cleary, Karen Palmer, and Kevin Rennert, Clean
Energy Standards, Resources for the Future, Issue Brief 18-03, January 24, 2019; and comparison of 100% renewables
and renewable-constrained scenarios (E+RE+ and E+RE-, respectively) in Princeton University, Net-Zero Am erica:
Potential Pathways, Infrastructure, and Im pacts, December 15, 2020.
22 A list of CES studies, and their estimates for electricity system costs, is provided in CRS Report R46691, Clean
Energy Standards: Selected Issues for the 117th Congress, by Ashley J. Lawson. Some studies also estimate monetary
benefits from CES policies, such as those arising from reduced climate change impacts and improved air quality.
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The Clean Electricity Performance Program (CEPP): In Brief

Utilities general y must have investment decisions (including power plant retirements) approved
by state or local regulators. Cost impacts for consumers typical y have a strong weight in utility
regulators’ decisions. Utility regulators might deny investments necessary to achieve CEPP
targets for a variety of reasons, such as cost or reliability concerns.
Electric Reliability
Congress has increased its longstanding interest in electric reliability following power outages in
recent years. Electricity supply (i.e., power plants) is one aspect of electric reliability, and the
CEPP aims to change this supply by encouraging the buildout of clean electricity generators.
This, in turn, could lead to the retirement of some existing power plants that do not meet the
definition of “clean.” Some power plants that could be defined as clean (e.g., those using wind or
solar energy) have distinct operating characteristics that potential y increase reliability risks in
some cases.23 The extent to which the proposed CEPP would address potential reliability concerns
is unknown and would depend in part upon utilities’ compliance actions. Provisions in the
Infrastructure Investment and Jobs Act (H.R. 3684) and proposed for inclusion in budget
reconciliation would aim to address some reliability concerns (e.g., by incentivizing investment in
energy storage and the electricity transmission and distribution systems). The extent to which
these provisions could potential y interact with the CEPP is unclear, though they could potential y
reduce reliability concerns with wind and solar.
Community Impacts
Electricity infrastructure, such as power plants, can affect surrounding communities in positive
(e.g., employment) and negative (e.g., air pollution) ways. These communities can be
disproportionately impacted by changes in the U.S. electricity system, such as those the CEPP
aims to achieve. The extent of these impacts depends in part on which compliance pathways
utilities might choose, were the CEPP enacted. For example, utilities might be able to achieve the
same target by using more renewable energy, retrofitting existing power plants with eligible CCS,
or increasing efficiency among consumers. These different pathways could lead to different
outcomes for communities near power plants.
Interaction with State Programs and Voluntary Efforts
Nine states and the District of Columbia currently have policies requiring 100% clean electricity,
though with different dates for achieving this goal and different definitions of clean.24 An
additional eight states have nonbinding goals for 100% clean electricity, and many utilities have
announced goals for at least 80% clean electricity.25 Combined, these state targets for 100% and
utility goals for at least 80% cover 69% of total U.S. electricity sales.26 Questions remain
regarding how the CEPP would interact with these state and utility goals. If the CEPP targets

23 For background, see CRS In Focus IF11257, Variable Renewable Energy: An Introduction, by Ashley J. Lawson.
24 N.C. Clean Energy T echnology Center Database of State Incentives for Renewables & Efficiency, Renewable &
Clean Energy Standards, September 2020.
25 T he Clean Energy States Alliance maintains a list of states (including the District of Columbia and Puerto Rico) with
100% clean electricity goals at https://www.cesa.org/projects/100-clean-energy-collaborative/guide/table-of-100-clean-
energy-states/. T he Smart Electric Power Alliance maintains a list of electric utilities with carbon reduction targets at
https://sepapower.org/utility-transformation-challenge/utility-carbon-reduction-tracker/.
26 Methodology for this estimate is provided in CRS Report R46691, Clean Energy Standards: Selected Issues for the
117th Congress, by Ashley J. Lawson.
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The Clean Electricity Performance Program (CEPP): In Brief

were more stringent than existing targets in a given year, the CEPP might effectively preempt
state policies. It is also unknown how the CEPP might interact with utility plans to achieve 100%
clean electricity goals, including how utility investments and profits might be affected.27
Options for Congress
The 117th Congress is weighing multiple options to reduce GHG emissions.28 Several of these are
being debated as part of the FY2022 budget reconciliation process. The recent legislative action
as part of House E&C’s reconciliation recommendations poses opportunities and risks. The
reconciliation process can facilitate the coordination and expedited consideration of certain
legislative changes that affect the federal budget. The process, however, includes certain
procedural rules, particularly the Senate’s Byrd rule, that may prohibit some legislative changes
included in the reconciliation legislation.29
As debate continues on the CEPP, Congress might evaluate how that program’s goals compare
with other issue areas being considered under reconciliation. Were the CEPP to remain a
priority—and be deemed in compliance with the Senate’s Byrd rule—Congress might consider
how to address some of the above policy considerations within the constraints of budget
reconciliation. Some previous CES proposals provide examples of options for addressing these
considerations, though these rely upon CES-specific design details. For example, preferred
investments can be incentivized by providing extra credits (“multipliers”) under a CES. The
CEPP could potential y use analogous policy design, though the extent to which such features
might comply with budget reconciliation rules is unclear.
Were the CEPP enacted, program implementation and oversight could potential y raise additional
considerations for Congress. Were the CEPP not enacted (because of budget reconciliation rules
or otherwise), Congress might continue to consider CES proposals, such as the four bil s
introduced to date in the 117th Congress.30

Author Information

Ashley J. Lawson

Analyst in Energy Policy

27 Some discussion of potential impact on utility profits, and other issues, is in Myles McCormick, “Electric Utility
Groups are Wary of Democrats’ Clean Power Ambitions,” Financial Times, September 2, 2021.
28 For a general overview of options, see CRS In Focus IF11791, Mitigating Greenhouse Gas Emissions: Selected
Policy Options, by Jonathan L. Ramseur et al.
29 For further discussion, see CRS Report RL30862, The Budget Reconciliation Process: The Senate’s “Byrd Rule”, by
Bill Heniff Jr. T he CEPP is reportedly designed to comply with the Byrd rule and other budget reconciliation
constraints. See, for example, Clean Air T ask Force, Clean Electricity Paym ent Program : A Budget-Based Alternative
to a Federal Clean Electricity Standard, August 2021. T he Congressional Research Service is not aware that the Senate
Parliamentarian has made a determination about whether the CEPP complies with the Byrd rule.
30 An updated list of CES bills is provided in CRS Report R46691, Clean Energy Standards: Selected Issues for the
117th Congress, by Ashley J. Lawson.
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The Clean Electricity Performance Program (CEPP): In Brief

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