U.S. lawmakers approved late on Wednesday an amendment to a controversial climate change bill that would give federal regulators greater authority to combat manipulation in natural gas and carbon markets.
The measure would allow the Federal Energy Regulatory Commission to issue cease and desist orders to stop manipulation schemes as they happen, instead of waiting for court action.
FERC's new power would extend not only to carbon pollution permit markets created by the pending climate change legislation, but also to existing natural gas markets.
Democratic Representative Bart Stupak, who offered the amendment, said the cease-and-desist authority is already available to the Securities and Exchange Commission and Commodity Futures Trading Commission.
Some lawmakers questioned whether FERC's new authority was too broad.
That is very troubling that we're about to give FERC the cease-and-desist orders based on their judgment or their intuition that somebody might be about violate a provision of this act, Republican Representative Joe Barton said.
The House Energy and Commerce Committee debated the nearly 1,000-page climate change bill sponsored by Representatives Henry Waxman and Edward Markey late into Wednesday night.
The sweeping bill seeks to cut greenhouse gas emissions 17 percent below 2005 levels by 2020, setting up a system limiting carbon dioxide and other pollutants by gradually reducing the amount of greenhouse gases that utilities, steelmakers, oil refineries and other companies can emit.
Lawmakers voted down a Republican amendment that would have excluded all nuclear power from measurements of utilities' base production for the bill's renewable energy standard, therefore effectively lowering the amount of electricity power plants must generate from renewable sources under the bill.
The legislation, which mandates that utilities generate 15 percent of power from sources such as wind and solar by 2020, now only excludes new nuclear plants.
The committee also rejected a measure offered by Republican Representative Phil Gingrey that would have required companies to purchase all permits required by the legislation's cap and trade system for carbon emissions. The Obama administration had supported 100 percent auction of carbon permits, which would have required polluters to immediately pay for emissions.
Committee Democrats, however, negotiated a system where initially about 85 percent of the permits would be given away to industries.
Republicans have blasted the legislation, warning it would make U.S. companies less competitive internationally with countries such as China and India that will likely not have strong climate change regulations.
A majority of Democrats, 30 of the 59 on the committee, told Reuters they either would definitely vote for the bill or were likely to support it.
Barton predicted, however, that the Waxman-Markey bill would not make it into law.
This cap and trade exercise that we're about to engage in, is an exercise in futility on their side. Even if they muscle it out of committee, it's not going anywhere, he told reporters on the sidelines of the hearing.
The committee plans to vote on the entire bill by the end of the week.
(Additional reporting by Tom Doggett, Richard Cowan; Editing by Marguerita Choy)