A bill to improve thermal energy efficiency and use, and for other purposes.

Summary: Thermal Energy Efficiency Act of 2009 - Establishes in the Treasury a Thermal Energy Efficiency Fund. Requires the Administrator of the Environmental Protection Agency (EPA) to: (1) allocate to the Fund 2% of the quantity of emission allowances established for any of calendar years 2012-2050 under any program for the regulation of greenhouse gas emissions that is established by federal law; (2) auction all of the emission allowances allocated to the Fund for a calendar year; and (3) deposit all proceeds of such auctions into the Fund.

Directs the Secretary of Energy (DOE), for each calendar year during which such a program is in effect, to use amounts in the Fund to make competitive grants to eligible entities (including state and local governments, commercial or industrial entities, and federal agencies) to carry out qualifying district energy, combined heat and power, or recoverable waste energy projects.

Establishes as a goal of the United States to meet 20% or more of total U.S. electrical power capacity through combined heat and power by calendar year 2030.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Thermal Energy Efficiency Act of 
2009''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) approximately 40 percent of the total quantity of 
        energy consumed in the United States is used in heating and air 
        conditioning buildings and industrial process heat;
            (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 or combined heat and power to multiple 
        buildings that range in size from campus applications to 
        systems heating entire towns or cities;
            (4) district energy systems provide several advantages that 
        support secure, affordable, renewable, and sustainable energy 
        for the United States, including--
                    (A) fuel flexibility to reduce fossil fuel 
                consumption and greenhouse gas emissions;
                    (B) use of local fuels that keep jobs and energy 
                dollars in local economies;
                    (C) stable, predictable energy costs for businesses 
                and industry; and
                    (D) reduction in reliance on fossil fuels;
            (5) district energy systems provide infrastructure to 
        produce and distribute thermal energy and use electric energy 
        from sources of industrial surplus heat and from renewable 
        sources, such as biomass, geothermal, and solar;
            (6) as of 2009, the United States had approximately 2,500 
        operating district energy systems;
            (7) 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; and
            (8) 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 
        on the date of enactment of this Act 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 \1/2\ of all United States passenger vehicles 
                off the road; and
                    (D) save hundreds of millions of barrels of oil 
                equivalent.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Administrator.--The term ``Administrator'' means the 
        Administrator of the Environmental Protection Agency.
            (2) Combined heat and power.--The term ``combined heat and 
        power'' means simultaneous generation of electric energy and 
        heat in a single, integrated system, with an overall efficiency 
        of 60 percent or higher based on a higher-heating value basis.
            (3) District energy system.--The term ``district energy 
        system'' means a system that provides thermal energy from 1 or 
        more central plants to at least 2 or more buildings through a 
        network of pipes to provide steam, hot water, or chilled water 
        to be used for space heating, air conditioning, domestic hot 
        water, compression, process energy, or other end uses for the 
        thermal energy.
            (4) Eligible entity.--The term ``eligible entity'' means--
                    (A) an institutional entity;
                    (B) a commercial or industrial entity; or
                    (C) a Federal agency or facility.
            (5) Fund.--The term ``Fund'' means the Thermal Energy 
        Efficiency Fund established by section 4(a).
            (6) Institutional entity.--The term ``institutional 
        entity'' means--
                    (A) an institution of higher education;
                    (B) a public school district;
                    (C) a local government;
                    (D) a State government;
                    (E) a tribal government;
                    (F) a municipal utility; or
                    (G) a nonprofit or public hospital; or
                    (H) a designee of 1 of the entities described in 
                subparagraphs (A) through (G).
            (7) Qualifying project.--The term ``qualifying project'' 
        means a district energy, combined heat and power, or 
        recoverable waste energy project that (in accordance with 
        guidance issued by the Secretary)--
                    (A) reduces or avoids greenhouse gas emissions; and
                    (B)(i) produces thermal energy from renewable 
                energy resources (such as biomass, geothermal, and 
                solar resources) and natural cooling sources (such as 
                cold lake or ocean water sources);
                    (ii) captures and productively uses thermal energy 
                from an existing electric generation facility;
                    (iii) provides for the capture and productive use 
                of thermal energy in a new electric generation 
                facility;
                    (iv) integrates new electricity generation into an 
                existing district energy system;
                    (v) captures and productively uses surplus thermal 
                energy from an industrial or municipal process (such as 
                wastewater treatment); or
                    (vi) distributes and transfers to buildings the 
                thermal energy from the energy sources described in 
                clauses (i) through (v).
            (8) Recoverable waste energy.--The term ``recoverable waste 
        energy'' means electrical, thermal, or mechanical energy that--
                    (A) may be recovered or generated through 
                modification of an existing facility or addition of a 
                new facility; and
                    (B) if not for that recovery, would be wasted.
            (9) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.

SEC. 4. THERMAL ENERGY EFFICIENCY FUND.

    (a) Establishment.--There is established in the Treasury a fund to 
be known as the ``Thermal Energy Efficiency Fund''.
    (b) Allocation.--If a program for the regulation of greenhouse gas 
emissions is established by Federal law (including regulations) for any 
of calendar years 2012 through 2050 and emission allowances are 
allocated under the program, the Administrator shall allocate to the 
Fund 2 percent of the quantity of emission allowances established for 
the calendar year.
    (c) Auctioning.--The Administrator shall auction all of the 
emission allowances allocated to the Fund for a calendar year under 
subsection (b).
    (d) Deposits.--The Administrator shall deposit all proceeds of 
auctions conducted pursuant to subsection (c), immediately on receipt 
of those proceeds, in the Fund.

SEC. 5. GRANTS FOR QUALIFYING PROJECTS.

    (a) In General.--For each calendar year during which a program 
described in section 4(b) is in effect, the Secretary shall use amounts 
in the Fund, without further appropriation, to make competitive grants 
to eligible entities to carry out qualifying projects in accordance 
with this section, as determined by the Secretary.
    (b) Use Allocation.--Of the amount of grants that are made 
available for each of calendar years 2012 through 2050 under this 
section, the Secretary shall use--
            (1) at least 75 percent of the amount to make grants to 
        support infrastructure construction and development for 
        qualifying projects;
            (2) at least 15 percent of the amount to make grants to 
        support planning, engineering, and feasibility studies for 
        qualifying projects; and
            (3) the remainder to make grants described in paragraph (1) 
        or (2), as determined by the Secretary.
    (c) Recipient Allocation.--Of the amount of grants that are made 
available for each of calendar years 2012 through 2050 under this 
section, the Secretary shall use--
            (1) at least 40 percent of the amount to make grants to 
        institutional entities to carry out qualifying projects;
            (2) at least 40 percent of the amount to make grants to 
        industrial and commercial entities to carry out qualifying 
        projects; and
            (3) the remainder to make grants described in paragraph (1) 
        or (2) or to fund qualifying projects carried out by Federal 
        agencies or facilities, as determined by the Secretary.
    (d) Matching Requirements.--To be eligible to obtain a grant, a 
recipient (other than a Federal agency or facility) shall provide 
matching funds in an amount equal to at least--
            (1) in the case of each of calendar years 2012 through 
        2017, 25 percent of the amount of the grant; and
            (2) in the case of each of calendar years 2018 through 
        2050, 50 percent of the amount of the grant.

SEC. 6. COMBINED HEAT AND POWER.

    It is the goal of the United States that by calendar year 2030, 20 
percent or more of the total electrical power capacity of the United 
States be met through combined heat and power.