Klobuchar Ethanol Bill

8/9/2019 Klobuchar Ethanol Bill

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Title: To promote the production and use of1

renewable energy, and for other purposes.23

4

Be it enacted by the Senate and House of Representatives of the5United States of America in Congress assembled,6

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.7

(a) In General.This Act may be cited as the Securing8

Americas Future with Energy and Sustainable Technologies Act.9

(b) Table of Contents.The table of contents of this Act is as10

follows:11

Sec.1.Short title; table of contents.12

Sec.2.Definition of Secretary.13

TITLE IRENEWABLE FUEL PROGRAM14

Sec.101.Definition of advanced biofuel.15

Sec.102.Biomass-based diesel.16

Sec.103.International indirect land use changes.17

Sec.104.Modification of definition of renewable biomass.18

TITLE IIPRODUCTION AND USE OF RENEWABLE19

FUEL20

Sec.201.Findings.21

Sec.202.Loan guarantees for projects to construct renewable fuel22

pipelines.23

Sec.203.Open fuel standard for transportation.24

Sec.204.Reducing barriers to supply chain manufacturing of25

renewable energy equipment.26

Sec.205.Tax incentives for qualified blender pumps.27

TITLE IIIRENEWABLE ELECTRICITY AND ENERGY28

EFFICIENCY RESOURCE STANDARDS29

Sec.301.Renewable electricity and energy efficiency resource30

standards.31

Sec.302.Energy efficiency resource standard for retail32

electricity and natural gas distributors.33

Sec.303.Voluntary renewable energy markets.34


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TITLE IVWIND ENERGY1

Sec.401.Wind energy systems.2

Sec.402.Wind energy development study.3

Sec.403.Removal of certain tax restrictions to promote expansion4

of capital for wind farm investment.5

TITLE VRENEWABLE ENERGY TAX EXTENSIONS6

Sec.501.Extension of provisions related to alcohol used as fuel.7

Sec.502.Extension of time for grants for specified energy8

property.9

TITLE VIRENEWABLE ELECTRICITY INTEGRATION10

CREDIT11

Sec.601.Renewable electricity integration credit.12

SEC. 2. DEFINITION OF SECRETARY.13

In this Act, the term Secretary means the Secretary of14

Energy.15

TITLE IRENEWABLE FUEL PROGRAM16

SEC. 101. DEFINITION OF ADVANCED BIOFUEL.17

Section 211(o)(1)(B) of the Clean Air Act (42 U.S.C.18

7545(o)(1)(B)) is amended19

(1) in clause (i), by striking , other than ethanol20

derived from corn starch,; and21

(2) in clause (ii)(II), by striking (other than corn22

starch).23

SEC. 102. BIOMASS-BASED DIESEL.24

Section 211(o)(2)(A) of the Clean Air Act (42 U.S.C.25

7545(o)(2)(A)) is amended by adding at the end the following:26

(v) GRANDFATHERING BIOMASS-BASED DIESEL.The Administrator27

shall promulgate regulations that exempt from the28lifecycle greenhouse gas requirements of subparagraphs29

(B) and (D) of paragraph (1) up to the greater of30

1,000,000,000 gallons or the volume mandate adopted31

pursuant to subparagraph (B)(ii), of biomass-based32

diesel annually from facilities that commenced33

construction before December 19, 2007..34


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SEC. 103. INTERNATIONAL INDIRECT LAND USE1

CHANGES.2

Section 211(o) of the Clean Air Act (42 U.S.C. 7545(o)) is3

amended by adding at the end the following:4

(13) INTERNATIONAL INDIRECT LAND USE CHANGES.5

(A) EXCLUSION FROM REGULATORY REQUIREMENTS REGARDING LIFECYCLE6

GREENHOUSE GAS EMISSIONS.Notwithstanding the definition of7

lifecycle greenhouse gas emissions in paragraph (1)(H),8

for purposes of determining whether a fuel meets a9

definition under paragraph (1) or complies with paragraph10

(2)(A)(i), the Administrator shall exclude emissions from11

indirect land use changes outside the country of origin of12

the feedstock of a renewable fuel.13

(B) NATIONAL ACADEMIES OF SCIENCE REPORT.14

(i) IN GENERAL.Not later than 180 days after the date15

of enactment of this paragraph, the Administrator and16

the Secretary of Agriculture shall jointly arrange for17

the National Academies of Science to review and report18

on specified issues relating to indirect greenhouse19

gas emissions relating to transportation fuels.20

(ii) MODELS AND METHODOLOGIES.The report shall evaluate21

and report on whether there are economic and22

environmental models and methodologies that23

individually, or as a system, can project with24

reliability, predictability, and confidence25

(I) for purposes of determining whether a fuel26

meets a definition under paragraph (1) or complies27

with paragraph (2)(A)(i), indirect land use changes28

that are related to the production of renewable29

fuels and that may occur outside the country in30

which the feedstocks are grown, and the impacts of31

those changes on greenhouse gas emissions; and32

(II) indirect effects, both domestic and33

international, related to the production and34

importation of nonrenewable transportation fuels35

that have significant greenhouse gas emissions, and36

the impact of those effects on greenhouse gas37

emissions.38

(iii) ADMINISTRATION.39

(I) IN GENERAL.The report shall40

(aa) include a review and assessment of all41


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pertinent scientific studies, methodologies, and1

data;2

(bb) evaluate potential methodologies for3

calculating emissions (including an evaluation4

of methods for annualizing emissions associated5

with forest degradation or land conversion); and6

(cc) make appropriate recommendations.7

(II) INDIRECT EFFECTS.The recommendations shall8

address indirect effects, both domestic and9

international, relating to the production and10

importation of nonrenewable transportation fuels11

that have significant greenhouse gas emissions.12

(III) VALIDATION.The report shall use appropriate13

validation procedures, including sensitivity14

analyses, to measure how results change as15

assumptions change.16

(IV) MODELS.The evaluation shall include a model,17

methodology, or system of models that assesses how18

reliably the models, methodologies, or systems19

(aa) track actual outcomes over historical20

periods using available historical data; and21

(bb) will project future outcomes.22

(iv) AVAILABILITY.The report shall23

(I) be publicly available; and24

(II) include sufficient information and data so25

that economists and other scientists with relevant26

expertise that are not on the National Academies of27

Science panel can fully evaluate the conclusions of28

the report.29

(v) DEADLINE.The report shall be completed not later30

than 3 years after the date of enactment of this31

paragraph.32

(C) DETERMINATION.33

(i) IN GENERAL.The Administrator and the Secretary of34

Agriculture shall, after notice and an opportunity for35

public comment, determine36

(I) whether, for purposes of determining37

compliance with the percent reductions in lifecycle38

greenhouse gas emissions specified in paragraph (1)39

for various renewable fuels, scientifically valid40

models and methodologies exist to project indirect41


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land use changes that are related to the production1

of renewable fuels and that occur outside the2

country in which the feedstocks are grown outside3

the country of origin of the feedstocks; and4

(II) the impact of those changes on greenhouse5

gas emissions.6

(ii) BASIS.7

(I) REPORT.The determination shall take into8

account the findings and recommendations of the9

report required under subparagraph (B), as well as10

other available scientific, economic, and other11

relevant information.12

(II) OTHER FEDERAL AGENCIES.The Administrator and13

the Secretary of Agriculture may also consider14

methods used by the Environmental Protection15

Agency, the Department of Agriculture, and other16Federal agencies to assess or guide related17

policies.18

(iii) PUBLICATION OF DETERMINATIONS.19

(I) IN GENERAL.The Administrator and the20

Secretary of Agriculture shall publish21

(aa) a proposed determination not later than22

4 years after the date of enactment of this23

paragraph; and24

(bb) a final determination not later than 525

years after the date of enactment of this26

paragraph.27

(II) EXPLANATION.An explanation and justification28

of the determination shall be included in the29

proposed and final actions, together with a30

response to comments received.31

(D) RESPONSE TO DETERMINATION.32

(i) POSITIVE DETERMINATION.33

(I) IN GENERAL.In the case of a positive34

determination under subparagraph (C), the35Administrator and the Secretary of Agriculture36

shall, after notice and an opportunity for public37

comment, by the same date jointly establish 1 or38

more methodologies to calculate greenhouse gas39

emissions from indirect land use changes that are40

attributable to the production of renewable fuels41

and that occur outside the country in which42


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feedstocks are grown outside the country of origin1

of the feedstock for purposes of calculating the2

lifecycle greenhouse gas emissions of a renewable3

fuel to determine whether the renewable fuel meets4

a definition under paragraph (1) or complies with5

paragraph (2)(A)(i).6

(II) ADMINISTRATION.In the calendar year following7

a positive determination under subparagraph (C)8

(aa) the exclusion under subparagraph (A)9

shall terminate; and10

(bb) the Administrator shall promulgate a11

regulation by the same date that shall include12

emissions from indirect land use changes outside13

the country of origin of a feedstock of a14

renewable fuel for purposes of calculating the15

lifecycle greenhouse gas emissions of the16

renewable fuel to determine whether the17

renewable fuel meets a definition under18

paragraph (1) or complies with paragraph19

(2)(A)(i) for renewable fuels sold in the20

calendar year.21

(III) EFFECTIVE DATE.The effective date of the22

regulation shall be 6 years after the date of23

enactment of this paragraph.24

(ii) NEGATIVE DETERMINATION.A negative determination25

under subparagraph (C) shall include a statement of26

the basis for the determination.27

(E) ACCOUNTABILITY.The joint duties and actions of the28

Administrator and the Secretary of Agriculture under this29

paragraph shall be subject to sections 304 and 307 as if30

the duties and actions were the duties and actions of the31

Administrator alone..32

SEC. 104. MODIFICATION OF DEFINITION OF33

RENEWABLE BIOMASS.34

(a) National Academy of Sciences Report.Not later than 1 year35

after the date of enactment of this Act, the Administrator of36

the Environmental Protection Agency, the Secretary of37

Agriculture, and the Federal Energy Regulatory Commission shall38

jointly enter into an arrangement with the National Academy of39

Sciences to evaluate how sources of renewable biomass contribute40

to the goals of increasing the energy independence of the United41

States, protecting the environment, and reducing global warming42

pollution.43


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(b) Modification.1

(1) EPA MODIFICATION AUTHORITY.After reviewing the report2

required by subsection (a), the Administrator of the3

Environmental Protection Agency, with the concurrence of the4

Secretary of Agriculture, may, by regulation and after public5

notice and comment, modify the non-Federal land portion of6the definition of renewable biomass in section 211(o)(1)(I)7

of the Clean Air Act (42 U.S.C. 7545(o)(1)(I)) and in section8

610 of the Public Utility Regulatory Policies Act of 1978 in9

order to advance the goals of increasing the energy10

independence of the United States, protecting the11

environment, and reducing global warming pollution.12

(2) FERC MODIFICATION AUTHORITY.After reviewing the report13

required by subsection (a), the Federal Energy Regulatory14

Commission, with the concurrence of the Secretary of15

Agriculture, may, by regulation and after public notice and16

comment, modify the non-Federal lands portion of the17definition of renewable biomass in section 610(a) of the18

Public Utility Regulatory Policies Act of 1978 in order to19

advance the goals of increasing the energy independence of20

the United States, protecting the environment, and reducing21

global warming pollution.22

(c) Federal Land.23

(1) SCIENTIFIC REVIEW.Not later than 1 year after the date of24

enactment of this Act, the Secretary of the Interior, the25

Secretary of Agriculture, and the Administrator of the26

Environmental Protection Agency shall conduct a joint27scientific review to evaluate how sources of biomass from28

Federal land could contribute to the goals of increasing the29

energy independence of the United States, protecting the30

environment, and reducing global warming pollution.31

(2) MODIFICATION AUTHORITY.Based on the scientific review, the32

agencies may, by rule, modify the definition of renewable33

biomass from Federal land in sections 211(o)(1)(I) of the34

Clean Air Act (42 U.S.C. 7545(o)(1)(I)) and section 610 of35

the Public Utility Regulatory Policies Act of 1978, as36

appropriate, to advance the goals of increasing the energy37

independence of the United States, protecting the38environment, and reducing global warming pollution.39

TITLE IIPRODUCTION AND USE OF RENEWABLE40

FUEL41

SEC. 201. FINDINGS.42


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Congress finds that1

(1) creating the appropriate infrastructure to move2

renewable fuels is a necessary energy and transportation3

objective for the United States;4

(2) more than 70 percent of the gasoline supply of the5

United States is delivered to local terminals through6

pipelines;7

(3) pipelines are the most cost-effective, efficient, and8

safe transportation mode in use today to deliver large9

volumes of liquid fuels;10

(4) renewable fuels are transported by truck, barge, and11

rail, and the volume requirements of the Energy Independence12

and Security Act of 2007 (42 U.S.C. 17001 et seq.) and13

amendments made by that Act may overwhelm the renewable fuels14

infrastructure, a problem that would be alleviated by the15

transportation of renewable fuels through pipelines; and16

(5) the production and use of renewable fuels is supported17

by Federal policy and a corresponding Federal policy is18

necessary to support the construction of an appropriate19

infrastructure to transport renewable fuels.20

SEC. 202. LOAN GUARANTEES FOR PROJECTS TO21

CONSTRUCT RENEWABLE FUEL PIPELINES.22

(a) Definitions.Section 1701 of the Energy Policy Act of 200523

(42 U.S.C. 16511) is amended by adding at the end the following:24

(6) RENEWABLE FUEL.The term renewable fuel has the meaning25

given the term in section 211(o)(1) of the Clean Air Act (4226

U.S.C. 7545(o)(1)), except that the term shall include all27

ethanol and biodiesel.28

(7) RENEWABLE FUEL PIPELINE.The term renewable fuel pipeline29

means a pipeline for transporting renewable fuel..30

(b) Amount.Section 1702(c) of the Energy Policy Act of 200531

(42 U.S.C. 16512(c)) is amended32

(1) by striking Unless otherwise and inserting the33

following:34

(1) IN GENERAL.Unless otherwise; and35

(2) by adding at the end the following:36

(2) RENEWABLE FUEL PIPELINES.A guarantee for a project37

described in section 1703(b)(11) shall be in an amount equal38

to 80 percent of the project cost of the facility that is the39

subject of the guarantee, as estimated at the time at which40


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the guarantee is issued..1

(c) Renewable Fuel Pipeline Eligibility.Section 1703(b) of the2

Energy Policy Act of 2005 (42 U.S.C. 16513(b)) is amended by3

adding at the end the following:4

(11) Renewable fuel pipelines..5

(d) Rapid Deployment of Renewable Fuel Pipelines.Section6

1705(a) of the Energy Policy Act of 2005 (42 U.S.C. 16516(a)) is7


(4) Installation of sufficient infrastructure to allow for9

the cost-effective deployment of clean energy technologies10

appropriate to each region of the United States, including11

the deployment of renewable fuel pipelines at a guarantee12

amount of 80 percent..13

SEC. 203. OPEN FUEL STANDARD FOR14

TRANSPORTATION.15

(a) In General.Chapter 329 of title 49, United States Code, is16


SEC. 32920. OPEN FUEL STANDARD FOR18

TRANSPORTATION.19

(a) Definitions.In this section:20

(1) E85.The term E85 means a fuel mixture containing 8521

percent ethanol and 15 percent gasoline by volume.22

(2) FLEXIBLE FUEL AUTOMOBILE.The term flexible fuel23

automobile means an automobile that has been warranted by24

its manufacturer to operate on gasoline, E85, and M85.25

(3) FUEL CHOICE-ENABLING AUTOMOBILE.The term fuel choice-26

enabling automobile means27

(A) a flexible fuel automobile;28

(B) an automobile that has been warranted by its29

manufacturer to operate on biodiesel;30

(C) an automobile that uses hydrogen fuel cell31

technology;32

(D) a hybrid automobile, or an automobile with any33

other technology, that uses at least34

(i) during the 10-year period beginning on the date35

of enactment of this section, 50 percent less fossil36

fuel per mile than the average of vehicles in the37

class of the hybrid automobile or an automobile with38


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any other technology (under the applicable corporate1

average fuel standard under section 32902 of title 49,2

United States Code); and3

(ii) effective beginning 10 years after the date of4

enactment of this section, 75 percent less fossil fuel5

per mile than the average of vehicles in the class of6the hybrid automobile or an automobile with any other7

technology (under the applicable corporate average8

fuel standard under section 32902 of title 49, United9

States Code); or10

(E) an automobile that only uses an electric motor to11

move the vehicle.12

(4) HYBRID AUTOMOBILE.The term hybrid automobile means a13

light-duty automobile that uses 2 or more distinct power14

sources to move the vehicle.15

(5) LIGHT-DUTY AUTOMOBILE.The term light-duty automobile16means a light-duty automobile (as defined in regulations17

promulgated by the Secretary of Transportation to establish18

corporate average fuel standards under section 32902 of title19

49, United States Code).20

(6) LIGHT-DUTY AUTOMOBILE MANUFACTURERS ANNUAL COVERED INVENTORY.The21

term light-duty automobile manufacturers annual covered22

inventory means the number of light-duty automobiles powered23

solely by an internal combustion engine that a manufacturer,24

during a given calendar year, manufactures in the United25

States or imports from outside of the United States for sale26

in the United States.27

(7) M85.The term M85 means a fuel mixture containing 8528

percent methanol and 15 percent gasoline by volume.29

(b) Open Fuel Standard for Transportation.30

(1) IN GENERAL.Except as provided in paragraph (2), each31

light-duty automobile manufacturers annual covered inventory32

shall be comprised of33

(A) not less than 30 percent fuel choice-enabling34

automobiles by model year 2013;35

(B) not less than 50 percent fuel choice-enabling36automobiles by model year 2015;37

(C) not less than 80 percent fuel choice-enabling38

automobiles by model year 2017;39

(D) not less than 100 percent of fuel choice-enabling40

automobiles by model year 2021 and each model year41

thereafter.42


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(2) TEMPORARY EXEMPTION FROM REQUIREMENTS.1

(A) APPLICATION.A manufacturer may request an exemption2

from the requirement described in paragraph (1) by3

submitting an application to the Secretary, at such time,4

in such manner, and containing such information as the5

Secretary may require by regulation. Each such application6shall specify the models, lines, and types of automobiles7

affected.8

(B) EVALUATION.After evaluating an application received9

from a manufacturer, the Secretary may at any time, under10

such terms and conditions, and to such extent as the11

Secretary considers appropriate, temporarily exempt, or12

renew the exemption of, a light-duty automobile from the13

requirement described in paragraph (1) if the Secretary14

determines that unavoidable events that are not under the15

control of the manufacturer prevent the manufacturer of16

such automobile from meeting its required production17volume of fuel choice-enabling automobiles, including18

(i) a disruption in the supply of any component19

required for compliance with the regulations;20

(ii) a disruption in the use and installation by the21

manufacturer of such component; or22

(iii) the failure for plug-in hybrid electric23

automobiles to meet State air quality requirements as24

a result of the requirement described in paragraph25

(1).26

(C) CONSOLIDATION.The Secretary may consolidate27

applications received from multiple manufactures under28

subparagraph (A) if they are of a similar nature.29

(D) NOTICE.The Secretary shall publish in the Federal30

Register31

(i) notice of each application received from a32

manufacturer;33

(ii) notice of each decision to grant or deny a34

temporary exemption; and35

(iii) the reasons for granting or denying such36exemptions.37

(c) Limited Liability Protection for Renewable Fuel and38

Ethanol Manufacture, Use, or Distribution.39

(1) IN GENERAL.Notwithstanding any other provision of40

Federal or State law, any fuel containing ethanol or a41

renewable fuel (as defined in section 211(o)(1) of the Clean42


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Air Act) that is used or intended to be used to operate an1

internal combustion engine shall not be deemed to be a2

defective product or subject to a failure to warn due to such3

ethanol or renewable fuel content unless such fuel violates a4

control or prohibition imposed by the Administrator under5

section 211 of the Clean Air Act (42 U.S.C. 7545).6

(2) SAVINGS PROVISION.Nothing in this subsection may be7

construed to affect the liability of any person other than8

liability based upon a claim of defective product and failure9

to warn described in paragraph (1).10

(d) Rulemaking.Not later than 1 year after the date of the11

enactment of this section, the Secretary of Transportation shall12

promulgate regulations to carry out this section in consultation13

with the Administrator and taking into consideration existing14

regulations..15

(b) Conforming Amendment.The analysis for chapter 329 of title16

49, United States Code, is amended by adding at the end the17

following:18

Sec.32920.Open fuel standard for transportation..19

SEC. 204. REDUCING BARRIERS TO SUPPLY CHAIN20

MANUFACTURING OF RENEWABLE ENERGY21

EQUIPMENT.22

(a) Authorization of Appropriations.There is authorized to be23

appropriated $50,000,000 for the Hollings Manufacturing24

Partnership Program, established under section 25 of the25National Institute of Standards and Technology Act (15 U.S.C.26

278k).27

(b) Use of Funds.Amounts appropriated pursuant to subsection28

(a) shall be used to implement a strategy for reducing barriers29

to supply chain manufacturing of renewable energy equipment.30

SEC. 205. TAX INCENTIVES FOR QUALIFIED31

BLENDER PUMPS.32

(a) Credit for Installation of Blender Pumps.Section 30C of33

the Internal Revenue Code of 1986 is amended by redesignating34

subsections (f) and (g) as subsections (g) and (h),35

respectively, and by inserting after subsection (e) the36

following new subsection:37

(f) Treatment of Blender Pumps as Qualified Alternative Fuel38

Vehicle Refueling Property.39

(1) IN GENERAL.A qualified blender pump shall be treated as40


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qualified alternative refueling property under this section.1

(2) QUALIFIED BLENDER PUMP.For purposes of this subsection,2

the term qualified blender pump means property (not3

including a building or its structural components)4

(A) which is subject to the allowance for depreciation5

or which is installed on property which is used as a6

principal residence,7

(B) the original use of which begins with the taxpayer,8

and9

(C) which is for the storage or dispensing of a10

qualified ethanol blend into the fuel tank of a motor11

vehicle (as defined in section 179A(e)(2)) propelled by12

such blend, but only if13

(i) the storage or dispensing is at the point where14

such fuel is delivered into the fuel tank of the motor15

vehicle, and16

(ii) such property is capable of dispensing17

qualified ethanol blends of not less than 3 different18

percentage volumes of ethanol which may be selected by19

the pump operator.20

(3) QUALIFIED ETHANOL BLEND.For purposes of this subsection,21

the term qualified ethanol blend means any fuel which is22

not less than 20 percent ethanol by volume and not more than23

85 percent ethanol by volume..24

(b) Effective Date.The amendment made by this subsection shall25

apply to property placed in service after the date of the26

enactment of this Act.27

TITLE IIIRENEWABLE ELECTRICITY AND ENERGY28

EFFICIENCY RESOURCE STANDARDS29

SEC. 301. RENEWABLE ELECTRICITY AND ENERGY30

EFFICIENCY RESOURCE STANDARDS.31

(a) In General.Title VI of the Public Utility Regulatory32

Policies Act of 1978 (16 U.S.C. 2601 et seq.) is amended by33

adding at the end the following:34

SEC. 610. RENEWABLE ELECTRICITY AND ENERGY35

EFFICIENCY RESOURCE STANDARDS.36


(1) BASE QUANTITY OF ELECTRICITY.38


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(A) IN GENERAL.The term base quantity of electricity1

means the total quantity of electricity sold by an2

electric utility to electric consumers in a calendar year.3

(B) EXCLUSIONS.The term base quantity of electricity4

does not include electricity generated by a hydroelectric5

facility (including a pumped storage facility but6excluding incremental hydropower).7

(2) DISTRIBUTED GENERATION FACILITY.The term distributed8

generation facility means a facility at a customer site.9

(3) GEOTHERMAL ENERGY.The term geothermal energy means10

energy derived from a geothermal deposit (within the meaning11

of section 613(e)(2) of the Internal Revenue Code of 1986).12

(4) INCREMENTAL GEOTHERMAL PRODUCTION.13

(A) IN GENERAL.The term incremental geothermal14

production means, for any year, the excess of15

(i) the total kilowatt hours of electricity produced16

from a facility (including a distributed generation17

facility) using geothermal energy; over18

(ii) the average number of kilowatt hours produced19

annually at the facility for 5 of the previous 720

calendar years before the date of enactment of this21

section after eliminating the highest and the lowest22

kilowatt hour production years in that 7-year period.23

(B) SPECIAL RULE.A facility described in subparagraph24

(A) that was placed in service at least 7 years before the25

date of enactment of this section shall, commencing with26

the year in which that date of enactment occurs, reduce27

the amount calculated under subparagraph (A)(ii) each28

year, on a cumulative basis, by the average percentage29

decrease in the annual kilowatt hour production for the 7-30

year period described in subparagraph (A)(ii) with such31

cumulative sum, but not to exceed 30 percent.32

(5) INCREMENTAL HYDROPOWER.33

(A) IN GENERAL.The term incremental hydropower means34

additional energy generated as a result of efficiency35

improvements or capacity additions made on or after36

(i) January 1, 2001; or37

(ii) the effective commencement date of an existing38

applicable State renewable portfolio standard program39

at a hydroelectric facility that was placed in service40

before that date.41


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(B) EXCLUSION.The term incremental hydropower does not1

include additional energy generated as a result of2

operational changes not directly associated with3

efficiency improvements or capacity additions.4

(C) MEASUREMENT AND CERTIFICATION.Efficiency improvements5

and capacity additions referred to in subparagraph (B)6shall be7

(i) measured on the basis of the same water flow8

information used to determine a historic average9

annual generation baseline for the hydroelectric10

facility; and11

(ii) certified by the Secretary or the Federal12

Energy Regulatory Commission.13

(6) OCEAN ENERGY.The term ocean energy includes current,14

wave, tidal, and thermal energy.15

(7) RENEWABLE BIOMASS.Subject to section 104(b) of the16

Securing Americas Future with Energy and Sustainable17

Technologies Act, the term renewable biomass means18

(A) materials, precommercial thinnings, or removed19

invasive species from National Forest System land and20

public lands (as defined in section 103 of the Federal21

Land Policy and Management Act of 1976 (43 U.S.C. 1702)),22

including those that are byproducts of preventive23

treatments (such as trees, wood, brush, thinnings, chips,24

and slash), that are removed as part of a federally25

recognized timber sale, or that are removed to reduce26

hazardous fuels, to reduce or contain disease or insect27

infestation, or to restore ecosystem health, and that are28

(i) not from components of29

(I) a component of the National Wild and Scenic30

Rivers System;31

(II) a component of the National Wilderness32

Preservation System;33

(III) a National Monument;34

(IV) any part of the National Landscape35

Conservation System;36

(V) a designated wilderness study area or other37

areas managed for wilderness characteristics;38

(VI) an inventoried roadless area within the39

National Forest System;40

(VII) an old growth stand (as defined by the41


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applicable land management plan);1

(VIII) a late-successional stand (except for2

dead, severely damaged, or badly infested trees)3

(as defined by the applicable land management4

plan); or5

(IX) a designated primitive area;6

(ii) harvested in environmentally sustainable7

quantities, as determined by the appropriate Federal8

land manager; and9

(iii) harvested in accordance with applicable law10

and land management plans;11

(B) any organic matter that is available on a renewable12

or recurring basis from non-Federal land or land belonging13

to an Indian or Indian tribe that is held in trust by the14

United States or subject to a restriction against15

alienation imposed by the United States, including16

(i) renewable plant material, including17

(I) feed grains;18

(II) other agricultural commodities;19

(III) other plants and trees; and20

(IV) algae; and21

(ii) waste material (other than commonly recycled22

paper), including23

(I) crop residue;24

(II) other vegetative waste material (including25

wood waste and wood residues);26

(III) animal waste and byproducts (including27

fats, oils, greases, and manure);28

(IV) construction waste;29

(V) food waste and yard waste; and30

(VI) waste from single or multi-cellular31

organisms; and32

(C) residues and byproducts from wood, pulp, or paper33

products facilities.34

(8) RENEWABLE ENERGY.The term renewable energy means35

electric energy generated at a facility (including a36

distributed generation facility) from37

(A) solar, wind, geothermal, or ocean energy;38


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(B) renewable biomass;1

(C) landfill gas;2

(D) municipal solid waste;3

(E) incremental hydropower; or4

(F) hydropower that has been certified by the Low5

Impact Hydropower Institute.6

(b) Renewable Electricity Requirement.7

(1) REQUIREMENT.8

(A) IN GENERAL.Subject to subparagraph (B), each9

electric utility that sells electricity to electric10

consumers shall obtain a percentage of the base quantity11

of electricity the electric utility sells to electric12

consumers in any calendar year through the means of13

compliance identified in paragraph (2).14

(B) PERCENTAGE.The percentage obtained in a calendar15

year under subparagraph (A) shall not be less than the16

amount specified in the following table:17

18

Minimum annual19

Calendar years:20

percentage:21

201322

1023

201424

1125

201526

1227

201628

1329

201730

1431

201832

1533

201934

1635


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20201

172

20213

184

20225

196

20237

218

20249

2310

202511

2512

(2) MEANS OF COMPLIANCE.Not later than 60 days after the end13

of each calendar year, an electric utility shall meet the14

requirements of paragraph (1) by15

(A) submitting to the Secretary renewable energy16

credits issued under subsection (c);17

(B) making alternative compliance payments to the18

Secretary at the rate of 4 cents per kilowatt hour (as19

adjusted for inflation under subsection (g));20

(C) submitting to the Secretary energy efficiency21

credits established under section 611(k) in a quantity22

that shall not exceed 15 percent of the minimum percentage23

required in each calendar year under subparagraph (B); or24

(D) conducting a combination of activities described in25

subparagraphs (A), (B), and (C).26

(3) CLEAN ENERGY JOBS.In carrying out this title, the27

Secretary shall, to the maximum extent practicable, encourage28

electric utilities, in meeting the requirements of paragraph29

(1), also30

(A) to create jobs that pay a living wage that supports31

a family;32(B) to provide health insurance benefits to employees;33

and34

(C) to comply with all Federal labor and environmental35

laws (including regulations).36

(c) Renewable Energy Credit Trading Program.37


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(1) IN GENERAL.Not later than December 31, 2011, the1

Secretary, in consultation with the Administrator, shall2

establish a renewable energy credit trading program under3

which electric utilities shall submit to the Secretary4

renewable energy credits to certify the compliance of the5

electric utilities with respect to obligations under6

subsection (b)(1).7

(2) ADMINISTRATION.As part of the program, the Secretary8

shall9

(A) issue renewable energy credits to generators of10

electric energy from new renewable energy;11

(B) issue renewable energy credits to electric12

utilities associated with State renewable portfolio13

standard compliance mechanisms pursuant to subsection (h);14

(C) subject to subparagraph (D), ensure that a kilowatt15

hour, including the associated renewable energy credit,16shall be used only once for purposes of compliance with17

this section;18

(D) allow double credits for generation from facilities19

on Indian land and brownfield sites, and triple credits20

for generation from small renewable distributed generators21

(meaning those no larger than 1 megawatt);22

(E) ensure that, with respect to a purchaser that, as23

of the date of enactment of this section, has a purchase24

agreement from a renewable energy facility placed in25

service before that date (other than a biomass energy26

facility), the credit associated with the generation of27

renewable energy under the contract is issued to the28

purchaser of the electric energy; and29

(F) not allow energy efficiency credits established30

under section 611(k) to be traded.31

(3) DURATION.A credit described in paragraph (2)(A) may32

only be used for compliance with this section during the 3-33

year period beginning on the date of issuance of the credit.34

(4) TRANSFERS.An electric utility that holds credits in35

excess of the quantity of credits needed to comply with36subsection (b) may transfer the credits to another electric37

utility.38

(5) DELEGATION OF MARKET FUNCTION.The Secretary may delegate to39

an appropriate entity that establishes markets the40

administration of a national tradeable renewable energy41

credit market for purposes of creating a transparent national42

market for the sale or trade of renewable energy credits.43


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(d) Enforcement.1

(1) CIVIL PENALTIES.Any electric utility that fails to meet2

the compliance requirements of subsection (b) shall be3

subject to a civil penalty.4

(2) AMOUNT OF PENALTY.Subject to paragraph (3), the amount of5

the civil penalty shall be equal to the product obtained by6

multiplying7

(A) the number of kilowatt-hours of electric energy8

sold to electric consumers in violation of subsection (b);9

by10

(B) the greater of11

(i) 2 cents (adjusted for inflation under subsection12

(g)); or13

(ii) 200 percent of the average market value of14

renewable energy credits during the year in which the15violation occurred.16

(3) MITIGATION OR WAIVER.17

(A) IN GENERAL.The Secretary may mitigate or waive a18

civil penalty under this subsection if the electric19

utility is unable to comply with subsection (b) due to a20

reason outside of the reasonable control of the electric21

utility.22

(B) REDUCTION.The Secretary shall reduce the amount of23

any penalty determined under paragraph (2) by an amount24

paid by the electric utility to a State for failure to25comply with the requirement of a State renewable energy26

program if the State requirement is greater than the27

applicable requirement of subsection (b).28

(4) PROCEDURE FOR ASSESSING PENALTY.The Secretary shall assess a29

civil penalty under this subsection in accordance with the30

procedures prescribed by section 333(d) of the Energy Policy31

and Conservation Act (42 U.S.C. 6303(d)).32

(e) State Renewable Energy Account Program.33

(1) IN GENERAL.There is established in the Treasury a State34

renewable energy account program.35

(2) DEPOSITS.All money collected by the Secretary from36

alternative compliance payments and the assessment of civil37

penalties under this section shall be deposited into the38

renewable energy account established pursuant to this39

subsection.40

(3) USE.Proceeds deposited in the State renewable energy41


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account shall be used by the Secretary to carry out a program1

to provide grants to the State agency responsible for2

developing State energy conservation plans under section 3623

of the Energy Policy and Conservation Act (42 U.S.C. 6322)4

for the purposes of promoting renewable energy production,5

including programs that promote technologies that reduce the6

use of electricity at customer sites, such as solar water7

heating.8

(4) ADMINISTRATION.The Secretary may issue guidelines and9

criteria for grants awarded under this subsection.10

(5) RECORDS.State energy offices receiving grants under11

this section shall maintain such records and evidence of12

compliance as the Secretary may require.13

(6) PREFERENCE.In allocating funds under this subsection,14

the Secretary shall give preference15

(A) to States in regions that have a disproportionately16small share of economically sustainable renewable energy17

generation capacity; and18

(B) to State programs to stimulate or enhance19

innovative renewable energy technologies.20

(f) Exemptions.During any calendar year, this section shall21

not apply to an electric utility that sold less than 4,000,00022

megawatt-hours of electric energy to electric consumers during23

the preceding calendar year.24

(g) Inflation Adjustment.Not later than December 31 of each25

year beginning in 2011, the Secretary shall adjust for United26States dollar inflation from January 1, 2011 (as measured by the27

Consumer Price Index)28

(1) the price of a renewable energy credit under29

subsection (c)(2); and30

(2) the amount of the civil penalty per kilowatt-hour31

under subsection (d)(2).32

(h) State Programs.33

(1) IN GENERAL.Subject to paragraph (2), nothing in this34

section diminishes any authority of a State or political35

subdivision of a State to adopt or enforce any law or36

regulation respecting renewable energy.37

(2) COMPLIANCE.Except as provided in subsection (d)(3), no38

such law or regulation shall relieve any person of any39

requirement otherwise applicable under this section.40

(3) COORDINATION.The Secretary, in consultation with States41


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having such renewable energy programs, shall, to the maximum1

extent practicable, facilitate coordination between the2

Federal program and State programs.3

(4) REGULATIONS.4

(A) IN GENERAL.The Secretary, in consultation with5

States, shall promulgate regulations to ensure that an6

electric utility subject to the requirements of this7

section that is also subject to a State renewable energy8

standard receives renewable energy credits in relation to9

equivalent quantities of renewable energy associated with10

compliance mechanisms, other than the generation or11

purchase of renewable energy by the electric utility,12

including the acquisition of certificates or credits and13

the payment of taxes, fees, surcharges, or other financial14

compliance mechanisms by the electric utility or a15

customer of the electric utility, directly associated with16

the generation or purchase of renewable energy.17

(B) PROHIBITION ON DOUBLE COUNTING.The regulations18

promulgated under this paragraph shall ensure that a19

kilowatt hour associated with a renewable energy credit20

issued pursuant to this subsection shall not be used for21

compliance with this section more than once.22

(i) Recovery of Costs.23

(1) IN GENERAL.The Commission shall promulgate and enforce24

such regulations as are necessary to ensure that an electric25

utility recovers all prudently incurred costs associated with26

compliance with this section.27

(2) APPLICABLE LAW.A regulation under paragraph (1) shall be28

enforceable in accordance with the provisions of law29

applicable to enforcement of regulations under the Federal30

Power Act (16 U.S.C. 791a et seq.).31

(j) Regulations.32

(1) IN GENERAL.Not later than 18 months after the date of33

enactment of this title, the Secretary, in consultation with34

the leaders of relevant Federal agencies, shall promulgate35

regulations to carry out this title.36

(2) PRIORITIES.The regulations promulgated under paragraph37

(1) shall prioritize the use of components and products38

produced in the United States, without placing constraints39

that prevent compliance under this title, for new renewable40

energy facilities eligible to participate in activities under41

this title.42

(k) Termination of Authority.This section and the authority43


23/48

provided by this section terminate on December 31, 2040..1

(b) Table of Contents Amendment.The table of contents of the2

Public Utility Regulatory Policies Act of 1978 (16 U.S.C. prec.3

2601) is amended by adding at the end of the items relating to4

title VI the following:5

Sec.609.Rural and remote communities electrification grants.6

Sec.610.Renewable electricity and energy efficiency resource7

standards..8

SEC. 302. ENERGY EFFICIENCY RESOURCE9

STANDARD FOR RETAIL ELECTRICITY AND NATURAL10

GAS DISTRIBUTORS.11

(a) In General.Title VI of the Public Utility Regulatory12

Policies Act of 1978 (16 U.S.C. 2601 et seq.) (as amended by13

section 301(a)) is amended by adding at the end the following:14

SEC. 611. ENERGY EFFICIENCY RESOURCE15

STANDARD FOR RETAIL ELECTRICITY AND NATURAL16

GAS DISTRIBUTORS.17


(1) ADMINISTRATOR.The term Administrator means the19

Administrator of the Environmental Protection Agency.20

(2) AFFILIATE.The term affiliate, when used with respect21

to a person, means another person that owns or controls, is22owned or controlled by, or is under common ownership control23

with, the person, as determined under regulations promulgated24

by the Secretary.25

(3) ANSI.The term ANSI means the American National26

Standards Institute.27

(4) ASHRAE.The term ASHRAE means the American Society28

of Heating, Refrigerating, and Air Conditioning Engineers.29

(5) BASE QUANTITY.30

(A) IN GENERAL.The term base quantity, when used with31

respect to a retail electricity distributor or retail32

natural gas distributor, means the average annual quantity33

of electricity or natural gas delivered by the retail34

electricity distributor or retail natural gas distributor35

to retail customers during the 5 calendar years36

immediately preceding the date of enactment of this37

section.38


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(B) EXCLUSION.The term base quantity, when used to1

determine the base quantity of a retail natural gas2

distributor, does not include natural gas delivered for3

purposes of electricity generation.4

(6) CODES AND STANDARDS SAVINGS.5

(A) IN GENERAL.The term codes and standards savings6

means a reduction in end-use electricity or natural gas7

consumption in the service territory of a retail8

electricity distributor or a retail natural gas9

distributor as a result of the adoption and10

implementation, after the date of enactment of this11

section, of new or revised appliance and equipment12

efficiency standards or building energy codes.13

(B) BASELINES.In calculating codes and standards14

savings15

(i) the baseline for calculating savings from16building codes shall be the more stringent of17

(I) the 2006 International Energy Conservation18

Code for residential buildings and the19

ASHRAE/ANSI/IESNA Standard 90.1 (2004) for20

commercial buildings;21

(II) the applicable State building code in22

effect on the date of enactment of this section; or23

(III) a baseline determined by the Secretary;24

and25

(ii) the baseline for calculating savings from26

appliance standards shall be the average efficiency of27

new appliances in the applicable 1 or more categories28

prior to adoption and implementation of the new29

standard.30

(7) COST-EFFECTIVE.The term cost-effective, when used with31

respect to an energy efficiency measure, means that the32

measure achieves a net present value of economic benefits33

over the life of the measure, both directly to the energy34

consumer and to the economy, that is greater than the net35

present value of the cost of the measure over the life of the36measure, both directly to the energy consumer and to the37

economy.38

(8) CUSTOMER FACILITY SAVINGS.The term customer facility39

savings means a reduction in end-use electricity or natural40

gas consumption (including recycled energy savings) at a41

facility of an end-use consumer of electricity or natural gas42

served by a retail electricity distributor or natural gas43


25/48

distributor, as compared to1

(A) in the case of new equipment that replaces existing2

equipment at the end of the useful life of the existing3

equipment, consumption by new equipment of average4

efficiency;5

(B) in the case of new equipment that replaces existing6

equipment with remaining useful life7

(i) consumption of the existing equipment for the8

remaining useful life of the equipment; and9

(ii) after that useful life, consumption of new10

equipment of average efficiency;11

(C) in the case of a new facility, consumption at a12

reference facility of average efficiency; or13

(D) in the case of energy savings measures at a14

facility not covered by subparagraphs (A) through (C),15consumption at the facility during a base year.16

(9) ELECTRICITY SAVINGS.The term electricity savings means17

reductions in electricity consumption achieved through18

measures implemented after the date of enactment of this19

section, as determined in accordance with regulations20

promulgated by the Secretary, through21

(A) customer facility savings of electricity, adjusted22

to reflect any associated increase in fuel consumption at23

the facility;24

(B) reductions in distribution system losses of25electricity achieved by a retail electricity distributor,26

as compared to losses attributable to new or replacement27

distribution system equipment of average efficiency (as28

defined in regulations promulgated by the Secretary); and29

(C) codes and standards savings of electricity.30

(10) IESNA.The term IESNA mean the Illuminating31

Engineering Society of North America.32

(11) NATURAL GAS SAVINGS.The term natural gas savings means33

reductions in natural gas consumption from measures34

implemented after the date of enactment of this section, as35determined in accordance with regulations promulgated by the36

Secretary, through37

(A) customer facility savings of natural gas, adjusted38

to reflect any associated increase in electricity39

consumption or consumption of other fuels at the facility;40

(B) reductions in leakage, operational losses, and41


26/48

consumption of natural gas fuel to operate a gas1

distribution system, achieved by a retail natural gas2

distributor, as compared to similar leakage, losses, and3

consumption during a base period (which shall not be less4

than 1 year); and5

(C) codes and standards savings of natural gas.6

(12) POWER POOL.The term power pool means an association7

of 2 or more interconnected electric systems that is8

recognized by the Commission as having an agreement to9

coordinate operations and planning for improved reliability10

and efficiencies, including a Regional Transmission11

Organization or an Independent System Operator.12

(13) RECYCLED ENERGY SAVINGS.The term recycled energy13

savings means a reduction in electricity or natural gas14

consumption that results from a modification of an industrial15

or commercial system that commenced operation before the date16

of enactment of this section, in order to recapture17

electrical, mechanical, or thermal energy that would18

otherwise be wasted, as determined in accordance with19

regulations promulgated by the Secretary.20

(14) REPORTING PERIOD.The term reporting period means21

(A) calendar year 2013; and22

(B) each successive calendar year thereafter.23

(15) RETAIL ELECTRICITY DISTRIBUTOR.24

(A) IN GENERAL

.The term retail electricity distributor25

means, for any calendar year, an electric utility that26

owns or operates an electric distribution facility and,27

using the facility, delivered not less than 4,000,00028

megawatt-hours of electric energy to electric consumers29

for purposes other than resale during the most recent 2-30

calendar-year period for which data are available.31

(B) ADMINISTRATION.For purposes of determining whether an32

electric utility qualifies as a retail electricity33

distributor under subparagraph (A)34

(i) deliveries by any affiliate of an electric35

utility to electric consumers for purposes other than36resale shall be considered to be deliveries by the37

electric utility; and38

(ii) deliveries by any electric utility to a lessee,39

tenant, or affiliate of the electric utility shall not40

be treated as deliveries to electric consumers.41

(16) RETAIL NATURAL GAS DISTRIBUTOR.42


27/48

(A) IN GENERAL.The term retail natural gas distributor1

means, for any given calendar year, a local distribution2

company (as defined in section 2 of the Natural Gas Policy3

Act of 1978 (15 U.S.C. 3301)), that delivered to natural4

gas consumers more than 5,000,000,000 cubic feet of5

natural gas during the most recent 2-calendar-year period6

for which data are available.7

(B) ADMINISTRATION.For purposes of determining whether a8

person qualifies as a retail natural gas distributor under9

subparagraph (A)10

(i) deliveries of natural gas by any affiliate of a11

local distribution company to consumers for purposes12

other than resale shall be considered to be deliveries13

by the local distribution company; and14

(ii) deliveries of natural gas to a lessee, tenant,15

or affiliate of a local distribution company shall not16

be treated as deliveries to natural gas consumers.17

(17) THIRD-PARTY EFFICIENCY PROVIDER.The term third-party18

efficiency provider means any retailer, building owner,19

energy service company, financial institution or other20

commercial, industrial or nonprofit entity that is capable of21

providing electricity savings or natural gas savings in22

accordance with subsections (e) and (f).23

(b) Establishment of Program.Not later than 18 months after24

the date of enactment of this section, the Secretary shall, by25

regulation, establish a program to implement and enforce this26

section, including27

(1) measurement and verification procedures and standards28

under subsection (f);29

(2) requirements under which retail electricity30

distributors and retail natural gas distributors shall31

(A) demonstrate, document, and report compliance with32

the performance standards established under subsection33

(d); and34

(B) estimate the impact of the standards on current and35

future electricity and natural gas use in the service36territories of the retail electricity distributors and37

retail natural gas distributors, respectively; and38

(3) requirements governing applications for, and39

implementation of, delegated State administration under40

subsection (h).41

(c) Coordination With State Programs.In establishing and42


28/48

implementing the program established under this section, the1

Secretary, in coordination with the Administrator, shall, to the2

maximum extent practicable, preserve the integrity, and3

incorporate the best practices, of existing State energy4

efficiency programs.5

(d) Performance Standards.6

(1) COMPLIANCE OBLIGATION.Not later than April 1 of the7

calendar year immediately following each reporting period8

(A) each retail electricity distributor shall submit to9

the Secretary a report, in accordance with regulations10

promulgated by the Secretary, demonstrating that the11

retail electricity distributor has achieved cumulative12

electricity savings (adjusted to account for any attrition13

of savings measures implemented in prior years) in each14

calendar year that are least equal to the applicable15

percentage, established under paragraph (2), (3), or (4),16

of the base quantity of the retail electricity17

distributor; and18

(B) each retail natural gas distributor shall submit to19

the Secretary a report, in accordance with regulations20

promulgated by the Secretary, demonstrating that the21

retail natural gas distributor has achieved cumulative22

natural gas savings (adjusted to account for any attrition23

of savings measures implemented in prior years) in each24

calendar year compared to the base quantity of the retail25

natural gas distributor.26

(2) STANDARDS FOR 2012 THROUGH 2020.For purposes of paragraph27

(1), for each of calendar years 2012 through 2020, the28

applicable percentages shall be as follows:29

30

Cumulative Electricity31

Calendar years:32

Savings Percentage:33

201234

1.535

201336

2.537

201438

4.039

201540


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5.01

20162

6.03

20174

7.05

20186

8.07

20198

9.09

202010

10.011

(3) SUBSEQUENT YEARS.12

(A) CALENDAR YEARS 2021 THROUGH 2030.Not later than13

December 31, 2015, the Secretary shall promulgate14

regulations establishing performance standards (expressed15

as applicable percentages of base quantity for both16

cumulative electricity savings and cumulative natural gas17

savings) for each of calendar years 2021 through 2030.18

(B) SUBSEQUENT EXTENSIONS.Except as provided in19

subparagraph (A), not later than December 31 of the20

penultimate reporting period for which performance21

standards have been established under this paragraph, the22

Secretary shall promulgate regulations establishing23performance standards (expressed as applicable percentages24

of base quantity for both cumulative electricity savings25

and cumulative natural gas savings) for the 10-calendar-26

year period following the last calendar year for which27

performance standards previously were established.28

(C) REQUIREMENTS.29

(i) IN GENERAL.Subject to clause (ii), the Secretary30

shall establish standards under this paragraph at31

levels that reflect the maximum achievable level of32

cost-effective energy efficiency potential, taking33

into account34

(I) cost-effective energy savings achieved by35

leading retail electricity distributors and retail36

natural gas distributors;37

(II) opportunities for new codes and standard38

savings;39


30/48

(III) technology improvements; and1

(IV) other indicators of cost-effective energy2

efficiency potential.3

(ii) MINIMUM PERCENTAGE.In no case shall the4

applicable percentages for any calendar year be lower5

than the applicable percentage for calendar year 20206

(including any increase in the standard for calendar7

year 2020 pursuant to paragraph (4)).8

(4) MIDCOURSE REVIEW AND ADJUSTMENT OF STANDARDS.9

(A) IN GENERAL.Not later than December 31, 2014, and at10

10-year intervals thereafter, the Secretary shall11

(i) review the most recent standards established12

under paragraph (2) or (3); and13

(ii) by regulation, increase the standards if the14

Secretary determines that additional cost-effective15energy efficiency potential is achievable, taking into16

account the factors described in paragraph (3)(C).17

(B) LEAD TIME.If the Secretary revises standards under18

this paragraph, the regulations shall provide adequate19

lead time to ensure that compliance with the increased20

standards is feasible.21

(5) DELAY OF SUBMISSION FOR FIRST REPORTING PERIOD.22

(A) IN GENERAL.Notwithstanding paragraphs (1) and (2),23

for the 2013 reporting period, the Secretary may accept a24

request from a retail electricity distributor or a retail25natural gas distributor to delay the required submission26

of documentation of part or all of the required savings27

for up to 2 years.28

(B) PLAN.The request for delay shall include a plan for29

coming into full compliance by the end of the 2013 through30

2014 reporting period.31

(e) Transfers of Electricity or Natural Gas Savings.32

(1) BILATERAL CONTRACTS FOR SAVINGS TRANSFERS.Subject to the other33

provisions of this section, a retail electricity distributor34

or retail natural gas distributor may use electricity savings35or natural gas savings purchased, pursuant to a bilateral36

contract, from another retail electricity distributor or37

retail natural gas distributor, a State, or a third-party38

efficiency provider to meet the applicable performance39

standard under subsection (d).40

(2) REQUIREMENTS.Electricity or natural gas savings41


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purchased and used for compliance pursuant to this subsection1

shall be2

(A) measured and verified in accordance with subsection3

(f);4

(B) reported in accordance with subsection (d); and5

(C) achieved within the same State as is served by the6

retail electricity distributor or retail natural gas7

distributor.8

(3) EXCEPTION.Notwithstanding paragraph (2)(C), a State9

regulatory authority may authorize a retail electricity10

distributor or a retail natural gas distributor regulated by11

the State regulatory authority to purchase savings achieved12

in a different State, if13

(A) the savings are achieved within the same power14

pool; and15

(B) the State regulatory authority that regulates the16

purchaser oversees the measurement and verification of the17

savings pursuant to the procedures and standards18

applicable in the State of the purchaser.19

(4) REGULATORY APPROVAL.Nothing in this subsection limits or20

affects the authority of a State regulatory authority to21

require a retail electricity distributor or retail natural22

gas distributor that is regulated by the State regulatory23

authority to obtain the authorization or approval of the24

State regulatory authority for a contract for transfer of25

savings under this subsection.26

(5) LIMITATIONS.In the interest of optimizing achievement of27

cost-effective efficiency potential, the Secretary may28

prescribe such limitations as the Secretary determines to be29

appropriate with respect to the proportion of the compliance30

obligation of a retail electricity or natural gas31

distributor, under the applicable performance standards under32

subsection (d), that may be met using electricity or natural33

gas savings that are purchased under this subsection.34

(f) Measurement and Verification of Savings.The regulations35

promulgated under subsection (b) shall include36(1) procedures and standards for defining and measuring37

electricity savings and natural gas savings that can be38

counted towards the performance standards established under39

subsection (d), which shall40

(A) specify the types of energy efficiency and energy41

conservation measures that can be counted;42


32/48

(B) require that energy consumption estimates for1

customer facilities or parts of facilities in the2

applicable base and current years be adjusted, as3

appropriate, to account for changes in weather, level of4

production, and building area;5

(C) account for the useful life of measures;6

(D) include considered savings values for specific,7

commonly used measures;8

(E) allow for savings from a program to be estimated9

based on extrapolation from a representative sample of10

participating customers;11

(F) include procedures for counting combined heat and12

power savings and recycled energy savings;13

(G) establish methods for calculating codes and14

standards savings, including the use of verified15

compliance rates;16

(H) count only measures and savings that are additional17

to business-as-usual practices;18

(I) except in the case of codes and standards savings,19

ensure that the retail electricity distributor or retail20

natural gas distributor claiming the savings played a21

significant role in achieving the savings (including22

through the activities of a designated agent of the23

distributor or through the purchase of transferred24

savings);25

(J) avoid double-counting of savings used for26

compliance with this section and section 610, including27

transferred savings; and28

(K) include savings from programs administered by the29

retail electric or natural gas distributor that are funded30

by Federal, State, or other sources; and31

(2) procedures and standards for third-party verification32

of reported electricity savings or natural gas savings.33

(g) Enforcement and Judicial Review.34

(1) REVIEW OF RETAIL DISTRIBUTOR REPORTS.35

(A) IN GENERAL.The Secretary shall review each report36

submitted to the Secretary by a retail electricity37

distributor or retail natural gas distributor under38

subsection (d) to verify that the applicable performance39

standards under that subsection have been met.40

(B) EXCLUSIONS.In determining compliance with the41


33/48

applicable performance standards, the Secretary shall1

exclude reported electricity savings or natural gas2

savings that are not adequately demonstrated and3

documented, in accordance with the regulations promulgated4

under subsections (d), (e), and (f).5

(2) PENALTY FOR FAILURE TO DOCUMENT ADEQUATE SAVINGS.If a retail6electricity distributor or a retail natural gas distributor7

fails to demonstrate compliance with an applicable8

performance standard under subsection (d) or to pay to the9

State an applicable alternative compliance payment under10

subsection (h)(4), the Secretary shall assess against the11

retail electricity distributor or retail natural gas12

distributor a civil penalty for each such failure in an13

amount equal to, as adjusted for inflation in accordance with14

such regulations as the Secretary may promulgate15

(A) $100 per megawatt-hour of electricity savings or16

alternative compliance payment that the retail electricity17distributor failed to achieve or make, respectively; or18

(B) $10 per million Btu of natural gas savings or19

alternative compliance payment that the retail natural gas20

distributor failed to achieve or make, respectively.21

(3) OFFSETTING STATE PENALTIES.The Secretary shall reduce the22

amount of any penalty under paragraph (2) by the amount paid23

by the applicable retail electricity distributor or retail24

natural gas distributor to a State for failure to comply with25

the requirements of a State energy efficiency resource26

standard during the same compliance period, if the State27standard is28

(A) comparable in type to the Federal standard29

established under this section; and30

(B) more stringent than the applicable performance31

standards under subsection (d).32

(4) ENFORCEMENT PROCEDURES.The Secretary shall assess a civil33

penalty, as provided under paragraph (2), in accordance with34

the procedures described in section 333(d) of the Energy35

Policy and Conservation Act (42 U.S.C. 6303(d)).36

(5) JUDICIAL REVIEW.37

(A) IN GENERAL.Any person that will be adversely38

affected by a final action taken by the Secretary under39

this section, other than the assessment of a civil40

penalty, may use the procedures for review described in41

section 336(b) of the Energy Policy and Conservation Act42

(42 U.S.C. 6306(b)).43


34/48

(B) ADMINISTRATION.For purposes of this paragraph,1

references to a rule in section 336(b) of the Energy2

Policy and Conservation Act (42 U.S.C. 6306(b)) shall be3

considered to refer also to all other final actions of the4

Secretary under this section other than the assessment of5

a civil penalty.6

(h) State Administration.7

(1) IN GENERAL.On receipt of an application from the8

Governor of a State (including, for purposes of this9

subsection, the Mayor of the District of Columbia), the10

Secretary may delegate to the State the administration of11

this section within the territory of the State if the12

Secretary determines that the State will implement an energy13

efficiency program that meets or exceeds the requirements of14

this section, including15

(A) achieving electricity savings and natural gas16

savings at least as great as the savings required under17

the applicable performance standards established under18

subsection (d);19

(B) reviewing reports and verifying electricity savings20

and natural gas savings achieved in the State (including21

savings transferred from outside the State); and22

(C) collecting any alternative compliance payments23

under paragraph (4) and using the payments to implement24

cost-effective efficiency programs.25

(2) SECRETARIAL DETERMINATION.The Secretary shall make a26

substantive determination approving or disapproving a State27

application, after public notice and comment, not later than28

180 days after the date of receipt of a complete application.29

(3) ALTERNATIVE MEASUREMENT AND VERIFICATION PROCEDURES AND STANDARDS.30

As part of an application submitted under paragraph (1), a31

State may request to use alternative measurement and32

verification procedures and standards to the procedures and33

standards established under subsection (f), if the State34

demonstrates that the alternative procedures and standards35

provide a level of accuracy of measurement and verification36

that is at least equivalent to the Federal procedures and37standards promulgated under subsection (f).38

(4) ALTERNATIVE COMPLIANCE PAYMENTS.39

(A) IN GENERAL.As part of an application submitted under40

paragraph (1), a State may permit retail electricity41

distributors or retail natural gas distributors to pay to42

the State, by not later than April 1 of the calendar year43


35/48

immediately following the applicable reporting period, an1

alternative compliance payment in an amount equal to, as2

adjusted for inflation in accordance with such regulations3

as the Secretary may promulgate, not less than4

(i) $50 per megawatt-hour of electricity savings5

needed to make up any deficit with regard to a6compliance obligation under the applicable performance7

standard; or8

(ii) $5 per million Btu of natural gas savings9

needed to make up any deficit with regard to a10

compliance obligation under the applicable performance11

standard.12

(B) USE OF PAYMENTS.13

(i) IN GENERAL.Alternative compliance payments14

collected by a State pursuant to subparagraph (A)15

shall be used by the State to administer the delegated16authority of the State under this section and to17

implement cost-effective energy efficiency programs.18

(ii) PROGRAMS.The programs shall19

(I) to the maximum extent practicable, achieve20

electricity savings and natural gas savings in the21

State sufficient to make up the deficit associated22

with the alternative compliance payments; and23

(II) be measured and verified in accordance with24

the applicable procedures and standards under25

subsection (f) or paragraph (3), as the case may26be.27

(5) REVIEW OF STATE IMPLEMENTATION.28

(A) PERIODIC REVIEW.Every 2 years, the Secretary shall29

review State implementation of this section for30

conformance with the requirements of this section in31

approximately \1/2\ of the States that have received32

approval under this subsection to administer the program,33

so that each State shall be reviewed at least once every 434

years.35

(B) REPORT.To facilitate the review, the Secretary may36require the State to submit a report demonstrating the37

compliance of the State with the requirements of this38

section, including39

(i) reports submitted by retail electricity40

distributors and retail natural gas distributors to41

the State demonstrating compliance with applicable42


36/48

performance standards;1

(ii) the impact of the standards on projected2

electricity and natural gas demand within the State;3

(iii) an accounting of the use of alternative4

compliance payments by the State and the resulting5

electricity savings and natural gas savings achieved;6

and7

(iv) such other information as the Secretary8

determines appropriate.9

(C) REVIEW ON PETITION.Notwithstanding subparagraph (A),10

on the receipt of a public petition containing a credible11

allegation of substantial deficiencies, the Secretary12

shall promptly review the implementation by the State of13

delegated authority under this section.14

(D) DEFICIENCIES.15

(i) IN GENERAL.If deficiencies are found in a review16

under this paragraph, the Secretary shall17

(I) notify the State; and18

(II) direct the State to correct the19

deficiencies and to report to the Secretary on20

progress not later than 180 days after the date of21

the receipt of review results.22

(ii) SUBSTANTIAL DEFICIENCIES.If the deficiencies are23

substantial, the Secretary shall24

(I) disallow such reported savings as the25

Secretary determines are not credible due to26

deficiencies;27

(II) re-review the State not later than 2 years28

after the date of the original review; and29

(III) if substantial deficiencies remain30

uncorrected after the review provided for under31

subclause (II), revoke the authority of the State32

to administer the program established under this33

section.34

(6) CALLS FOR REVISION OF STATE APPLICATIONS.As a condition of35

maintaining the delegated authority of a State to administer36

this section, the Secretary may require the State to submit a37

revised application under paragraph (1) if the Secretary has38

(A) promulgated new or revised performance standards39

under subsection (d);40

(B) promulgated new or substantially revised41


37/48

measurement and verification procedures and standards1

under subsection (f); or2

(C) otherwise substantially revised the program3

established under this section.4

(i) Information and Reports.In accordance with section 13 of5

the Federal Energy Administration Act of 1974 (15 U.S.C. 772),6

the Secretary may require any retail electricity distributor,7

any retail natural gas distributor, any third-party efficiency8

provider, or such other entities as the Secretary considers9

appropriate, to provide any information the Secretary determines10

appropriate to carry out this section.11

(j) State Law.Nothing in this section diminishes or qualifies12

any authority of a State or political subdivision of a State to13

adopt or enforce any law (including a regulation) respecting14

electricity savings or natural gas savings, including any law15

(including a regulation) establishing energy efficiency16

requirements that are more stringent than the requirements17

established under this section, except that no such law or18

regulation may relieve any person of any requirement otherwise19

applicable under this section.20

(k) Energy Efficiency Credits.The Secretary shall issue21

energy efficiency credits at the end of each calendar year to22

eligible retail electricity distributor for each kilowatt hour23

of electricity savings above the applicable percentage,24

established under paragraph (2), (3), or (4) of subsection (d),25

of the base quantity of the retail electricity distributor in a26

quantity that shall not exceed 15 percent of the minimum27percentage required in each calendar year under section28

610(b)(1)(B)..29

(b) Table of Contents Amendment.The table of contents of the30

Public Utility Regulatory Policies Act of 1978 (16 U.S.C. prec.31

2601) (as amended by section 301(b)) is amended by adding at the32

end of the items relating to title VI the following:33

Sec.611.Energy efficiency resource standard for retail34

electricity and natural gas distributors..35

SEC. 303. VOLUNTARY RENEWABLE ENERGY36

MARKETS.37

(a) In General.It is the policy of the United States to38

support the continued growth of voluntary renewable energy39

markets.40

(b) Administration.Nothing in this Act or the amendments made41

by this Act is intended to interfere with or prevent the42


38/48

continued operation and growth of the voluntary renewable energy1

market.2

(c) Report on Efficacy of Voluntary Renewable Energy Market.3

Not later than 2 years after the date of enactment of this Act,4

the Comptroller General of the United States shall submit to5

Congress a report describing the efficacy of the voluntary6renewable energy market in the context of the pollution7

reduction and investment programs under this Act and the8

amendments made by this Act, including9

(1) whether meaningful reductions in carbon dioxide10

emissions have occurred in response to investments in the11

voluntary renewable energy market;12

(2) whether the voluntary market continues to grow; and13

(3) a list of recommended strategies for ensuring that14

(A) meaningful emissions reductions may occur; and15

(B) the voluntary renewable energy market may continue16

to grow.17

TITLE IVWIND ENERGY18

SEC. 401. WIND ENERGY SYSTEMS.19

Section 14 of the Wind Energy Systems Act of 1980 (42 U.S.C.20

9213) is amended to read as follows:21

SEC. 14. AUTHORIZATION OF APPROPRIATIONS.22

(a) In General.There are authorized to be appropriated to the23

Secretary to carry out wind energy research, development, and24

deployment through the Energy Efficiency and Renewable Energy25

Office of the Department of Energy in accordance with this26

section27

(1) $275,000,000 for fiscal year 2011;28

(2) $446,000,000 for fiscal year 2012;29

(3) $602,000,000 for fiscal year 2013;30

(4) $698,000,000 for fiscal year 2014; and31

(5) $794,500,000 for fiscal year 2015.32

(b) Wind Turbine Technology and Reliability.Of amounts made33

available under subsection (a), the Secretary shall use for34

land-based wind turbine technology and reliability35

(1) $30,000,000 for fiscal year 2011;36

(2) $50,000,000 for fiscal year 2012;37


39/48

(3) $70,000,000 for fiscal year 2013;1


(5) $100,000,000 for fiscal year 2015.3

(c) Wind Energy System Integration and Transmission4

Development.Of amounts made available under subsection (a), the5Secretary shall use for wind energy system integration and6

transmission development7

(1) $20,000,000 for fiscal year 2011;8

(2) $25,000,000 for fiscal year 2012;9

(3) $30,000,000 for fiscal year 2013;10


(5) $40,000,000 for fiscal year 2015.12

(d) Advanced Wind Energy Blades.Of amounts made available13

under subsection (a), the Secretary shall use for advanced wind14

blade design, materials, and manufacturing processes15

(1) $50,000,000 for fiscal year 2011;16

(2) $65,000,000 for fiscal year 2012;17

(3) $75,000,000 for fiscal year 2013;18


(5) $85,000,000 for fiscal year 2015.20

(e) Offshore Wind.Of amounts made available under subsection21

(a), the Secretary shall use for accelerating the design,22

development, testing, and deployment of advanced offshore wind23

technology and supporting construction, operations, and24

maintenance infrastructure25

(1) $100,000,000 for fiscal year 2011;26

(2) $200,000,000 for fiscal year 2012;27

(3) $300,000,000 for fiscal year 2013;28


(5) $400,000,000 for fiscal year 2015.30

(f) Wind Powering America Program.Of the amounts made31available under subsection (a), the Secretary shall use for and32

support the Wind Powering America program outreach and technical33

assistance activities34

(1) $15,000,000 for fiscal year 2011;35

(2) $25,000,000 for fiscal year 2012;36

(3) $35,000,000 for fiscal year 2013;37


40/48


(5) $45,000,000 for fiscal year 2015.2

(g) Wind Energy Technical Training and Workforce Development.3

Of the amounts made available under subsection (a), the4

Secretary shall use for and support the establishment of5

technical training programs with community colleges and6

technical schools7

(1) $40,000,000 for fiscal year 2011;8

(2) $55,000,000 for fiscal year 2012;9

(3) $60,000,000 for fiscal year 2013;10


(5) $80,000,000 for fiscal year 2015.12

(h) Wind Resource Modeling and Wind Farm Efficiency13

Assessment.Of amounts made available under subsection (a), the14Secretary shall use for wind resource modeling and wind farm15

efficiency assessment16

(1) $5,000,000 for fiscal year 2011;17

(2) $6,000,000 for fiscal year 2012;18

(3) $7,000,000 for fiscal year 2013;19


(5) $10,000,000 for fiscal year 2015.21

(i) Wind Energy Siting.Of amounts made available under22

subsection (a), the Secretary shall use for wind energy siting,23

including funding for public education on siting issues, studies24

on sound emissions and health effects, enhanced ground data25

modeling verification, and the creation of a national wind26

siting database27

(1) $6,000,000 for fiscal year 2011;28

(2) $8,000,000 for fiscal year 2012;29

(3) $10,000,000 for fiscal year 2013;30


(5) $16,000,000 for fiscal year 2015.32

(j) Small Wind Energy Systems.Of amounts made available under33

subsection (a), the Secretary shall use for testing,34

demonstrating, and deploying small wind energy systems in rural35

school applications36

(1) $5,000,000 for fiscal year 2011;37


41/48

(2) $7,000,000 for fiscal year 2012;1

(3) $9,000,000 for fiscal year 2013;2


(5) $10,500,000 for fiscal year 2015..4

SEC. 402. WIND ENERGY DEVELOPMENT STUDY.5

The Secretary, in consultation with appropriate Federal and6

State agencies, shall conduct, and submit to Congress a report7

describing the results of, a study on methods to increase8

transmission line capacity for wind energy development.9

SEC. 403. REMOVAL OF CERTAIN TAX10

RESTRICTIONS TO PROMOTE EXPANSION OF11

CAPITAL FOR WIND FARM INVESTMENT.12

(a) Exemption From Passive Loss Rules.13

(1) IN GENERAL.Section 469(c) of the Internal Revenue Code14

of 1986 (defining passive activity) is amended by adding at15

the end the following new paragraph:16

(8) CERTAIN RENEWABLE ENERGY FACILITIES.The term passive17

activity shall not include any trade or business involving18

ownership of 1 or more facilities described in section19

45(d)(1)..20

(2) EFFECTIVE DATE.The amendment made by this subsection21

shall apply to taxable years beginning after December 31,22

2010.23

(b) Application of At-risk Rules.24

(1) IN GENERAL.Section 465(b)(6) of the Internal Revenue25

Code of 1986 (relating to qualified nonrecourse financing26

treated as amount at risk) is amended27

(A) by inserting or renewable energy property after28

real property each place it appears in subparagraphs (A)29

and (B)(i), and30

(B) by adding at the end the following new subparagraph:31

(F) RENEWABLE ENERGY PROPERTY.The term renewable energy32

property means property described in section 45(d)(1)..33

(2) EFFECTIVE DATE.The amendments made by this subsection34

shall apply to losses incurred after December 31, 2010, with35

respect to property placed in service by the taxpayer after36

such date.37

(c) Treatment of Income and Gains From Wind Energy as38

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