This bill, titled the "Tradeable Energy Performance Standards Act," amends the Clean Air Act to establish a comprehensive tradeable energy performance standard for large electricity generators and thermal energy users. Its core purpose is to reduce carbon dioxide emissions from these significant sources by introducing a new cap-and-trade-like system. Starting in 2028, covered facilities must submit one emission allowance for each metric ton of carbon dioxide released annually. These allowances, representing authorization to emit CO2, can be acquired through distribution from the Administrator or via market trading.

The Administrator distributes allowances to covered electric, thermal, and cogeneration facilities based on their previous year's output and an annually declining Output-Based CO2 Emissions Target. This target is initially set to the 2027 baseline and is designed to promote continuous emission reductions over time. Facilities unable to submit sufficient allowances can opt for an Alternative Compliance Payment, which starts at $50 in 2028 and escalates to the "Social Cost of Carbon" by 2048. This escalating payment mechanism provides a strong financial incentive for facilities to reduce emissions or acquire allowances.

To foster investment in cleaner technologies, the bill allows for bilateral purchase agreements between existing covered facilities and newly constructed low-emission facilities. These agreements enable existing facilities to purchase allowances from new, cleaner sources, influencing allowance distribution and effectively subsidizing new clean energy production. The Administrator is also tasked with establishing an emission allowance tracking system to ensure market transparency, monitoring transactions, prices, and holdings, and publishing weekly summaries. Smaller electricity or thermal energy facilities can voluntarily opt into the program, expanding its reach.

A dedicated Carbon Mitigation Fund is created, financed by Alternative Compliance Payments and civil penalties for non-compliance. This fund supports an Offset Program, which awards grants for activities that avoid greenhouse gas emissions or permanently sequester carbon dioxide. Eligible activities include improvements to energy efficiency, upgrades to the electrical grid, and the electrification of appliances and vehicles. Grants are awarded based on cost-effectiveness and adherence to rigorous criteria, including verifiable emission reductions and permanence.

Non-compliance with allowance submission requirements incurs a substantial civil penalty, calculated as three times the highest allowance price from the previous year per unsubmitted allowance. Additionally, non-compliant facilities must submit replacement allowances by a specified deadline. The Administrator is mandated to issue final regulations within 24 months of enactment to fully implement these provisions and ensure an orderly market.