SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Renewable Energy Investment Act of 
2005''.

SEC. 2. RENEWABLE PORTFOLIO STANDARD.

    Title VI of the Public Utility Regulatory Policies Act of 1978 (16 
U.S.C. 2601 et seq.) is amended by adding at the end the following:

``SEC. 606. FEDERAL RENEWABLE PORTFOLIO STANDARD.

    ``(a) Definitions.--In this section:
            ``(1) Biomass.--
                    ``(A) In general.--The term `biomass' means--
                            ``(i) organic material from a plant that is 
                        planted for the purpose of being used to 
                        produce energy;
                            ``(ii) nonhazardous, cellulosic or 
                        agricultural waste material that is segregated 
                        from other waste materials and is derived 
                        from--
                                    ``(I) a forest-related resource, 
                                including--
                                            ``(aa) mill and harvesting 
                                        residue;
                                            ``(bb) precommercial 
                                        thinnings;
                                            ``(cc) slash; and
                                            ``(dd) brush;
                                    ``(II) agricultural resources, 
                                including--
                                            ``(aa) orchard tree crops;
                                            ``(bb) vineyards;
                                            ``(cc) grains;
                                            ``(dd) legumes;
                                            ``(ee) sugar; and
                                            ``(ff) other crop by-
                                        products or residues; or
                                    ``(III) miscellaneous waste such 
                                as--
                                            ``(aa) waste pallet;
                                            ``(bb) crate; and
                                            ``(cc) landscape or right-
                                        of-way tree trimmings; and
                            ``(iii) animal waste that is converted to a 
                        fuel rather than directly combusted, the 
                        residue of which is converted to a biological 
                        fertilizer, oil, or activated carbon.
                    ``(B) Exclusions.--The term `biomass' shall not 
                include--
                            ``(i) municipal solid waste that is 
                        incinerated;
                            ``(ii) recyclable post-consumer waste 
                        paper;
                            ``(iii) painted, treated, or pressurized 
                        wood;
                            ``(iv) wood contaminated with plastics or 
                        metals; or
                            ``(v) tires.
            ``(2) Distributed generation.--The term `distributed 
        generation' means reduced electricity consumption from the 
        electric grid due to use by a customer of renewable energy 
        generated at a customer site.
            ``(3) Incremental hydropower.--The term `incremental 
        hydropower' means additional generation achieved from increased 
        efficiency after January 1, 2005, at a hydroelectric dam that 
        was placed in service before January 1, 2005.
            ``(4) Landfill gas.--The term `landfill gas' means gas 
        generated from the decomposition of household solid waste, 
        commercial solid waste, and industrial solid waste disposed of 
        in a municipal solid waste landfill unit (as those terms are 
        defined in regulations promulgated under subtitle D of the 
        Solid Waste Disposal Act (42 U.S.C. 6941 et seq.)).
            ``(5) Renewable energy.--The term `renewable energy' means 
        electricity generated from
                    ``(A) a renewable energy source; or
                    ``(B) hydrogen that is produced from a renewable 
                energy source.
            ``(6) Renewable energy source.--The term `renewable energy 
        source' means--
                    ``(A) wind;
                    ``(B) ocean waves;
                    ``(C) biomass;
                    ``(D) solar;
                    ``(E) landfill gas;
                    ``(F) incremental hydropower; or
                    ``(G) geothermal.
            ``(7) Retail electric supplier.--The term `retail electric 
        supplier' means a person or entity that sells retail 
        electricity to consumers, and which sold not less than 500,000 
        megawatt-hours of electric energy to consumers for purposes 
        other than resale during the preceding calendar year.
            ``(8) Secretary.--The term `Secretary' means the Secretary 
        of Energy.
    ``(b) Renewable Energy Requirements.--
            ``(1) In general.--For each calendar year beginning in 
        Calendar year 2006, each retail electric supplier shall submit 
        to the Secretary, not later than April 30 of each year, 
        renewable energy credits in an amount equal to the required 
        annual percentage of the retail electric supplier's total 
        amount of kilowatt-hours of non-hydropower (excluding 
        incremental hydropower) electricity sold to retail consumers 
        during the previous calendar year.
            ``(2) Carryover.--A renewable energy credit for any year 
        that is not used to satisfy the minimum requirement for that 
        year may be carried over for use within the next two years.
    ``(c) Required Annual Percentage.--Of the total amount of non-
hydropower (excluding incremental hydropower) electricity sold by each 
retail electric supplier during a calendar year, the amount generated 
by renewable energy sources shall be not less than the percentage 
specified below:

                                                          Percentage of
                                                       Renewable energy
``Calendar years:                                            Each year:
    2006-2009.....................................                   5 
    2010-2014.....................................                  10 
    2015-2019.....................................                  15 
    2020 and subsequent years.....................                  20.
    ``(d) Submission of Renewable Energy Credits.--
            ``(1) In general.--To meet the requirements under 
        subsection (b), a retail electric supplier shall submit to the 
        Secretary either--
                    ``(A) renewable energy credits issued to the retail 
                electric supplier under subsection (f);
                    ``(B) renewable energy credits obtained by purchase 
                or exchange under subsection (g);
                    ``(C) renewable energy credits purchased from the 
                United States under subsection (h); or
                    ``(D) any combination of credits under subsections 
                (f), (g) or (h).
            ``(2) Prohibition on double counting.--A credit may be 
        counted toward compliance with subsection (b) only once.
    ``(e) Renewable Energy Credit Program.--The Secretary shall 
establish, not later than 1 year after the date of enactment of this 
Act, a program to issue, monitor the sale or exchange of, and track, 
renewable energy credits.
    ``(f) Issuance of Renewable Energy Credits.--
            ``(1) In general.--Under the program established in 
        subsection (e), an entity that generates electric energy 
        through the use of a renewable energy resource may apply to the 
        Secretary for the issuance of renewable energy credits.
            ``(2) Application.--An application for the issuance of 
        renewable energy credits shall indicate--
                    ``(A) the type of renewable energy resource used to 
                produce the electric energy;
                    ``(B) the State in which the electric energy was 
                produced; and
                    ``(C) any other information the Secretary 
                determines appropriate.
            ``(3) Credit value.--Except as provided in subparagraph 
        (4), the Secretary shall issue to an entity applying under this 
        subsection 1 renewable energy credit for each kilowatt-hour of 
        renewable energy generated in any State from the date of 
        enactment of this Act and in each subsequent calendar year.
            ``(4) Credit value for distributed generation.--The 
        Secretary shall issue 3 renewable energy credits for each 
        kilowatt-hour of distributed generation.
            ``(5) Vesting.--A renewable energy credit will vest with 
        the owner of the system or facility that generates the 
        renewable energy unless such owner explicitly transfers the 
        credit.
            ``(6) Credit eligibility.--To be eligible for a renewable 
        energy credit, the unit of electricity generated through the 
        use of a renewable energy resource shall be sold for retail 
        consumption or used by the generator. If both a renewable 
        energy resource and a non-renewable energy resource are used to 
        generate the electric energy, the Secretary shall issue 
        renewable energy credits based on the proportion of the 
        renewable energy resource used.
            ``(7) Identifying credits.--The Secretary shall identify 
        renewable energy credits by the type and date of generation.
            ``(8) Sale under purpa contract.--When a generator sells 
        electric energy generated through the use of a renewable energy 
        resource to a retail electric supplier under a contract subject 
        to section 210 of the Public Utilities Regulatory Policies Act 
        of 1978 (16 U.S.C. 824a-3), the retail electric supplier is 
        treated as the generator of the electric energy for the 
        purposes of this Act for the duration of the contract.
    ``(g) Sale or Exchange of Renewable Energy Credits.--A renewable 
energy credit may be sold or exchanged by the entity issued the 
renewable energy credit or by any other entity that acquires the 
renewable energy credit. Credits may be sold or exchanged in any manner 
not in conflict with existing law, including on the spot market or by 
contractual arrangements of any duration.
    ``(h) Purchase From the United States.--The Secretary shall offer 
renewable energy credits for sale at the lesser of three cents per 
kilowatt-hour or 110 percent of the average market value of credits for 
the applicable compliance period. On January 1 of each year following 
calendar year 2006, the Secretary shall adjust for inflation the price 
charged per credit for such calendar year.
    ``(i) State Programs.--Nothing in this section shall preclude any 
State from requiring additional renewable energy generation in the 
State under any renewable energy program conducted by the State.
    ``(j) Consumer Allocation.--The rates charged to classes of 
consumers by a retail electric supplier shall reflect a proportional 
percentage of the cost of generating or acquiring the required annual 
percentage of renewable energy under subsection (b). A retail electric 
supplier shall not represent to any customer or prospective customer 
that any product contains more than the percentage of eligible 
resources if the additional amount of eligible resources is being used 
to satisfy the renewable generation requirement under subsection (b).
    ``(k) Enforcement.--A retail electric supplier that does not submit 
renewable energy credits as required under subsection (b) shall be 
liable for the payment of a civil penalty. That penalty shall be 
calculated on the basis of the number of renewable energy credits not 
submitted, multiplied by the lesser of 4.5 cents or 300 percent of the 
average market value of credits for the compliance period.
    ``(l) Information Collection.--The Secretary may collect the 
information necessary to verify and audit--
            ``(1) the annual electric energy generation and renewable 
        energy generation of any entity applying for renewable energy 
        credits under this section;
            ``(2) the validity of renewable energy credits submitted by 
        a retail electric supplier to the Secretary; and
            ``(3) the quantity of electricity sales of all retail 
        electric suppliers.
    ``(m) Voluntary Participation.--The Secretary may issue a renewable 
energy credit pursuant to subsection (f) to any entity not subject to 
the requirements of this Act only if the entity applying for such 
credit meets the terms and conditions of this Act to the same extent as 
entities subject to this Act.
    ``(n) State Renewable Energy Grant Program.--
            ``(1) Distribution to states.--The Secretary shall 
        distribute amounts received from sales under subsection (h) and 
        from amounts received under subsection (k) to States to be used 
        for the purposes of this section.
            ``(2) Regional equity program.--
                    ``(A) Establishment of program.--Within 1 year from 
                the date of enactment of this Act, the Secretary shall 
                establish a program to promote renewable energy 
                production and use consistent with the purposes of this 
                section.
                    ``(B) Eligibility.--The Secretary shall make funds 
                available under this section to State energy agencies 
                for grant programs for--
                            ``(i) renewable energy research and 
                        development;
                            ``(ii) loan guarantees to encourage 
                        construction of renewable energy facilities;
                            ``(iii) consumer rebate or other programs 
                        to offset costs of small residential or small 
                        commercial renewable energy systems including 
                        solar hot water; or
                            ``(iv) promoting distributed generation.
            ``(3) Allocation preferences.--In allocating funds under 
        the program, the Secretary shall give preference to--
                    ``(A) States in regions which have a 
                disproportionately small share of economically 
                sustainable renewable energy generation capacity; and
                    ``(B) State grant programs most likely to stimulate 
                or enhance innovative renewable energy technologies.''.
Renewable Energy Investment Act of 2005 - Amends the Public Utility Regulatory Policies Act of 1978 to require retail electric suppliers to submit to the Secretary of Energy renewable energy credits in an amount equal to the required annual percentage of the retail electric supplier's total amount of kilowatt-hours of non-hydropower electricity sold to retail consumers during the previous calendar year (excluding incremental hydropower).

States that a renewable energy credit that is not used to satisfy the minimum requirement for that year may be carried over for use within the next two years.

Specifies a schedule of the minimum percentage of renewable energy sources that must be used to generate the total amount of non-hydropower electricity sold by each retail electric supplier during a calendar year (excluding incremental hydropower).

Directs the Secretary to: (1) establish a program to issue, monitor the sale or exchange of, and track renewable energy credits; and (2) make funds available under this Act to State energy agencies for grant programs for renewable energy research and development, and for loan guarantees to encourage construction of renewable energy facilities.
A bill to amend the Public Utility Regulatory Policies Act of 1978 to provide for a Federal renewable portfolio standard.