A bill to encourage the implementation of thermal energy infrastructure, and for other purposes.

Summary: Thermal Renewable Energy and Efficiency Act of 2010 - Amends the Internal Revenue Code to extend the tax credit for the production of electricity from renewable resources to the production of thermal energy and to include a naturally occurring cold water source as a qualified energy resource and a natural air conditioning system facility as a qualified facility for purposes of such credit.

Modifies the definition of "local heating and cooling facilities" for purposes of tax-exempt facility bonds to include equipment for producing thermal energy in the form of hot water, chilled water, or steam, distributing that thermal energy in pipelines, and transferring the thermal energy. Defines "thermal energy" as heat (in the form of hot water or steam) or cooling (in the form of chilled water or ice).

Amends the Energy Policy and Conservation Act, with respect to the energy sustainability and efficiency grant and loan program for institutions, to: (1) include a not-for-profit district energy system as an institutional entity for purposes of such grant program; (2) increase the amounts of technical assistance grants and grants for efficiency improvement and energy sustainability; and (3) extend the authorization of appropriations for such grant program through FY2015.

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Thermal Renewable 
Energy and Efficiency Act of 2010''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Purpose.
Sec. 4. Statement of policy.
 TITLE I--MODIFICATION OF CREDIT FOR ELECTRICITY PRODUCED FROM CERTAIN 
                           RENEWABLE SOURCES

Sec. 101. Extension of renewable electricity credit to thermal energy.
                    TITLE II--EXEMPT FACILITY BONDS

Sec. 201. Exempt facility bonds.
TITLE III--ENERGY SUSTAINABILITY AND EFFICIENCY GRANTS FOR INSTITUTIONS

Sec. 301. Definition of institutional entity.
Sec. 302. Availability of grants.
Sec. 303. Authorization of appropriations for grants.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) approximately 30 percent of the total quantity of 
        energy consumed in the United States is used to provide thermal 
        energy for heating and cooling building space, domestic hot 
        water, and industrial processes;
            (2) thermal energy is an essential, but often overlooked, 
        segment of the national energy mix;
            (3) district energy systems use 1 or more central plants to 
        provide thermal energy to multiple buildings that range in size 
        from campus applications to systems heating entire towns or 
        cities;
            (4) district energy systems provide sustainable thermal 
        energy infrastructure by producing and distributing thermal 
        energy from combined heat power, sources of industrial or 
        municipal surplus heat, and from renewable sources such as 
        biomass, geothermal, and solar energy;
            (5) as of 2009, the United States had approximately 2,500 
        operating district energy systems;
            (6) district energy systems provide advantages that support 
        secure, affordable, renewable, and sustainable energy for the 
        United States, including--
                    (A) use of local fuels or waste heat sources that 
                keep jobs and energy dollars in local economies;
                    (B) stable, predictable energy costs for businesses 
                and industry;
                    (C) reduction in reliance on fossil fuels;
                    (D) reduction in emissions of greenhouse gases; and
                    (E) flexibility to modify fuel sources in response 
                to future changes in fuel availability and prices and 
                development of new technologies;
            (7) district energy helps cut peak power demand and reduce 
        power transmission and distribution system constraints by--
                    (A) meeting air conditioning demand through 
                delivery of chilled water produced with heat from 
                combined heat and power or other energy sources; and
                    (B) shifting power demand through thermal storage 
                and, with combined heat and power, generating power 
                near load centers;
            (8) combined heat and power systems increase energy 
        efficiency of power plants by capturing thermal energy and 
        using the thermal energy to provide heating and cooling, more 
        than doubling the efficiency of conventional power plants;
            (9) according to the Oak Ridge National Laboratory, if the 
        United States was able to increase combined heat and power from 
        approximately 9 percent of total electric generation capacity 
        to 20 percent by 2030, the increase would--
                    (A) save as much energy as half of all household 
                energy consumption;
                    (B) create approximately 1,000,000 new jobs;
                    (C) avoid more than 800,000,000 metric tons of 
                carbon dioxide emissions annually, which is equivalent 
                to taking half of all United States passenger vehicles 
                off the road; and
                    (D) save hundreds of millions of barrels of oil 
                equivalent; and
            (10) constraints to significant expansion of district 
        energy and combined heat and power include--
                    (A) the lack of economic value in the energy 
                marketplace for the environmental, grid support, energy 
                security, and local economic development benefits of 
                district energy systems;
                    (B) relatively high project development costs due 
                to the variety of institutional, legal, and technical 
                issues that must be addressed; and
                    (C) the high costs of debt service, particularly in 
                the early years of systems development before a broad 
                base of customers has connected.

SEC. 3. PURPOSE.

    The purpose of this Act is to encourage the implementation of 
thermal energy infrastructure order to--
            (1) increase energy efficiency;
            (2) increase use of renewable energy resources;
            (3) revitalize the infrastructure of the cities and 
        institutions of the United States;
            (4) reduce local and regional air pollution;
            (5) reduce emissions of greenhouse gases;
            (6) reduce emissions of ozone-depleting refrigerants; and
            (7) enhance power grid reliability and overall energy 
        supply reliability and energy security.

SEC. 4. STATEMENT OF POLICY.

    It is the policy of the United States that, in energy policy 
development and program implementation, the following factors should be 
considered:
            (1) Thermal energy represents a significant part of the 
        energy requirements of the United States, providing building 
        heating and cooling, domestic hot water, and industrial process 
        energy.
            (2) There are many opportunities for meeting thermal energy 
        requirements directly through renewable energy sources or 
        recycled energy (such as recovered waste heat), without 
        generation of electricity.
            (3) Policies and incentives for encouraging renewable 
        energy and energy efficiency should address thermal energy as 
        well as electricity.
            (4) District energy systems provide an important means of 
        delivering sustainable thermal energy to consumers, and provide 
        energy security benefits, by--
                    (A) cutting peak power demand;
                    (B) reducing power transmission and distribution 
                system constraints; and
                    (C) providing flexibility to modify fuel sources in 
                response to future changes in fuel availabilities and 
                prices and development of new technologies.

 TITLE I--MODIFICATION OF CREDIT FOR ELECTRICITY PRODUCED FROM CERTAIN 
                           RENEWABLE SOURCES

SEC. 101. EXTENSION OF RENEWABLE ELECTRICITY CREDIT TO THERMAL ENERGY.

    (a) Credit To Include Production of Thermal Energy.--Section 45 of 
the Internal Revenue Code of 1986 is amended by adding at the end the 
following new subsection:
    ``(f) Credit for Production of Thermal Energy.--
            ``(1) In general.--In the case of a taxpayer who--
                    ``(A) produces thermal energy from a qualified 
                energy resource described in subparagraph (B), (C), 
                (D), (G), (I), or (J) of subsection (c)(1) at a 
                qualified facility described in paragraph (2), (3), 
                (4), (6), (7), (11), or (12) of subsection (d), and
                    ``(B) makes an election under this subsection with 
                respect to such facility,
        subsection (a) shall be applied by substituting `each 3,412 
        Btus of thermal energy (or fraction thereof)' for `the kilowatt 
        hours of electricity' in paragraph (2) thereof.
            ``(2) Thermal energy.--For purposes of this section, the 
        term `thermal energy' means heat (in the form of hot water or 
        steam) or cooling (in the form of chilled water or ice).
            ``(3) Additional qualifications.--
                    ``(A) Combined heat and power facility.--In the 
                case of a facility producing both electricity and 
                thermal energy, such facility shall not be treated as a 
                qualified facility unless such facility--
                            ``(i) meets the requirements of section 
                        48(c)(3)(A) (without regard to clause (iv) 
                        thereof), and
                            ``(ii) was originally placed in service 
                        after the date of the enactment of the Thermal 
                        Renewable Energy and Efficiency Act of 2010, 
                        and before the date which is 5 years after such 
                        date.
                    ``(B) Thermal facility.--In the case of a facility 
                producing only thermal energy, such facility shall not 
                be treated as a qualified facility unless such 
                facility--
                            ``(i) has an energy efficiency percentage 
                        (as determined under section 48(c)(3)(C)) in 
                        excess of 60 percent, and
                            ``(ii) was originally placed in service 
                        after the date of the enactment of the Thermal 
                        Renewable Energy and Efficiency Act of 2010, 
                        and before the date which is 5 years after such 
                        date.
            ``(4) Denial of double benefit.--If an election under this 
        subsection is in effect with respect to any facility, no credit 
        shall be allowed under subsection (a) with respect to the 
        production of electricity at such facility.
            ``(5) Election.--
                    ``(A) In general.--An election under this 
                subsection shall specify the facility to which the 
                election applies and shall be in such manner as the 
                Secretary may by regulations prescribe.
                    ``(B) Election irrevocable.--Any election made 
                under this subsection may not be revoked except with 
                the consent of the Secretary.''.
    (b) Naturally Occurring Cold Water Sources Treated as Qualified 
Energy Resource.--Paragraph (1) of section 45(c) of the Internal 
Revenue Code of 1986 is amended--
            (1) by striking ``and'' at the end of subparagraph (H),
            (2) by striking the period at the end of subparagraph (I) 
        and inserting ``, and'', and
            (3) by adding at the end the following new subparagraph:
                    ``(J) naturally occurring cold water sources which 
                are used to provide thermal energy for air 
                conditioning.''.
    (c) Qualified Facilities.--Section 45(d) of the Internal Revenue 
Code of 1986 is amended by adding at the end the following new 
paragraph:
            ``(12) Natural air conditioning system facility.--In the 
        case of a facility providing thermal energy for air 
        conditioning from naturally occurring cold water sources, the 
        term `qualified facility' means any facility owned by the 
        taxpayer which is originally placed in service after the date 
        of the enactment of the Thermal Renewable Energy and Efficiency 
        Act of 2010, and before the date which is 5 years after such 
        date.''.
    (d) Conforming Amendments.--
            (1) Section 45(b)(4)(A) of the Internal Revenue Code of 
        1986 is amended by inserting ``or thermal energy'' after 
        ``electricity''.
            (2) Section 45(c)(2) of such Code is amended by inserting 
        ``or thermal energy'' after ``electricity''.
            (3) Section 45(d) of such Code is amended by inserting ``or 
        thermal energy'' after ``electricity'' each place it appears in 
        paragraphs (2), (3), (4), (6), (7), and (11).
            (4) Section 45(e) of such Code is amended by inserting ``or 
        thermal energy'' after ``electricity'' each place it appears in 
        paragraphs (1), (4), and (9).
            (5) The heading of section 45 of such Code is amended by 
        inserting ``and thermal energy'' after ``electricity''.
            (6) The item relating to section 45 in the table of 
        sections for subpart D of part IV of subchapter A of chapter 1 
        of such Code is amended by inserting ``and thermal energy'' 
        after ``Electricity''.
    (e) Effective Date.--The amendments made by this section shall 
apply to energy produced and sold after the date of the enactment of 
this Act.

                    TITLE II--EXEMPT FACILITY BONDS

SEC. 201. EXEMPT FACILITY BONDS.

    (a) Definition of Local District Heating and Cooling Facilities.--
Subparagraph (A) of section 142(g)(2) of the Internal Revenue Code of 
1986 is amended by striking ``a pipeline or network (which may be 
connected to a heating or cooling source) providing hot water, chilled 
water, or steam'' and inserting ``equipment for producing thermal 
energy in the form of hot water, chilled water or steam, distributing 
that thermal energy in pipelines and transferring the thermal energy''.
    (b) Public Use Requirement.--The Secretary shall promulgate 
regulations establishing that a local district heating or cooling 
facility will be treated in all events as serving a general public use 
for purposes of the Internal Revenue Code of 1986.

TITLE III--ENERGY SUSTAINABILITY AND EFFICIENCY GRANTS FOR INSTITUTIONS

SEC. 301. DEFINITION OF INSTITUTIONAL ENTITY.

    Section 399A(a)(5) of the Energy Policy and Conservation Act (42 
U.S.C. 6371h-1(a)(5)) is amended by inserting a ``not-for-profit 
district energy system,'' after ``utility,''.

SEC. 302. AVAILABILITY OF GRANTS.

    Section 399A(f) of the Energy Policy and Conservation Act (42 
U.S.C. 6371h-1(f)) is amended--
            (1) in paragraph (2)--
                    (A) in subparagraph (A)(i), by striking ``$50,000'' 
                and inserting ``$90,000'';
                    (B) in subparagraph (B)(i), by striking ``$90,000'' 
                and inserting ``$150,000''; and
                    (C) in subparagraph (C)(i), by striking 
                ``$250,000'' and inserting ``$600,000''; and
            (2) in paragraph (3)--
                    (A) in subparagraph (A), by striking ``$1,000,000'' 
                and inserting ``$20,000,000''; and
                    (B) in subparagraph (B), by striking ``60 percent'' 
                and inserting ``30 percent''.

SEC. 303. AUTHORIZATION OF APPROPRIATIONS FOR GRANTS.

    Section 399A(i)(1) of the Energy Policy and Conservation Act (42 
U.S.C. 6371h-1(i)(1)) is amended by striking ``$250,000,000 for each of 
fiscal years 2009 through 2013'' and inserting ``$500,000,000 for each 
of fiscal years 2011 through 2015''.