I 

111TH CONGRESS 

1ST SESSION H. R. 1774 

To incorporate smart grid capability into the Energy Star Program, to reduce 

peak electric demand, to reauthorize energy efficiency public information 

program to include Smart Grid information, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 30, 2009 

Mr. MCNERNEY introduced the following bill; which was referred to the 

Committee on Energy and Commerce 

A BILL 

To incorporate smart grid capability into the Energy Star 

Program, to reduce peak electric demand, to reauthorize 

energy efficiency public information program to include 

Smart Grid information, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Smart Grid Advance5 ment Act’’. 

6 SEC. 2. DEFINITIONS. 

7 For purposes of this Act, the terms: 

8 (1) ‘‘Secretary’’ means the Secretary of Energy. 


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1 (2) ‘‘Administrator’’ means the Administrator 

2 of the Environmental Protection Agency. 

3 (3) ‘‘Commission’’ means Federal Energy Reg4 ulatory Commission. 

5 (4) ‘‘Smart grid’’ has the meaning provided by 

6 section 1301 of the Energy Independence and Secu7 rity Act of 2007 (15 U.S.C. 17381). 

8 (5) ‘‘Peak demand reduction’’ means the reduc9 tion in annual peak demand as compared to a pre10 vious baseline year or period, expressed in 

11 Megawatts (MW). 

12 (6) ‘‘Peak demand’’ shall mean the highest 

13 point of electricity demand during any hour on the 

14 system of a load serving entity during a annual cal15 endar year, expressed in megawatts, or more than 

16 one such high point of electricity demand as a func17 tion of seasonal demand changes. 

18 (7) ‘‘Peak period’’ shall mean the time period 

19 on the system of a load serving entity relative to 

20 peak demand that may warrant special measures or 

21 electricity resources to maintain system reliability 

22 while meeting peak demand. 

23 (8) ‘‘Load serving entity’’ means an entity that 

24 provides electricity directly to retail consumers with 

25 the responsibility to assure power quality and reliVerDate Nov 24 2008 00:08 Apr 01, 2009 Jkt 079200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1774.IH H1774

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1 ability, including such entities that are investor2 owned, publicly owned, owned by rural electric co3 operatives, or other entities. 

4 (9) ‘‘Applicable baseline’’ shall mean the aver5 age of the highest three annual peak demands a load 

6 serving entity has experienced during the 5 years 

7 immediately prior to the date of enactment of this 

8 Act. 

9 (10) ‘‘Peak load reduction plan’’ means a plan 

10 developed by or for a load serving entity that it will 

11 implement to meet its peak demand management 

12 goals. 

13 SEC. 3. INCORPORATION OF SMART GRID CAPABILITY IN 

14 ENERGY STAR PROGRAM. 

15 (a) ASSESSMENT.—Within one year after the date of 

16 enactment of this Act, the Secretary and the Adminis17 trator shall each assess the potential for cost-effective in18 tegration of Smart Grid technologies and capabilities in 

19 all products that are reviewed by the Department of En20 ergy and the Environmental Protection Agency, respec21 tively, for potential designation as Energy Star products. 

22 (b) ANALYSIS.—(1) Within 2 years after the date of 

23 enactment of this Act, the Secretary and the Adminis24 trator shall each prepare an analysis of the potential en25 ergy savings and electricity cost savings that could accrue 


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1 for each of the products referred to in subsection (a) in 

2 the following optimal circumstances: 

3 (A) The products possessed full Smart 

4 Grid capability. 

5 (B) The products were utilized in an elec6 tricity utility service area which had Smart Grid 

7 capability and time-of-use electric rates. 

8 (C) The time-of-use rates reflected national 

9 average utility rates including average peak and 

10 valley daily electricity costs to the utility. 

11 (D) Consumers using such products took 

12 full advantage of such capability. 

13 (2) The analysis under paragraph (1) shall be consid14 ered the ‘‘best case’’ Smart Grid analysis. On the basis 

15 of such an analysis for each product, the Secretary and 

16 the Administrator shall determine whether the installation 

17 of Smart Grid capability for such a product would be cost 

18 effective. For purposes of this paragraph, the term ‘‘cost 

19 effective’’ means that the cumulative savings from using 

20 the product under the ‘‘best case’’ Smart Grid cir21 cumstances for a period of 5 years will be greater than 

22 the incremental cost of the Smart Grid features included 

23 in the product. 

24 (3) To the extent that including Smart Grid capa25 bility in any products analyzed under paragraph (2) yieldVerDate Nov 24 2008 00:08 Apr 01, 2009 Jkt 079200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1774.IH H1774

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1 ed a finding that doing so was cost effective in the best 

2 case, the Secretary and the Administrator shall, not later 

3 than 3 years after the date of enactment of this Act take 

4 each of the following actions: 

5 (A) Inform the manufacturer of such product of 

6 such finding. 

7 (B) Make special note in a prominent manner 

8 on any Energy Star label for any product actually 

9 including Smart Grid capability that— 

10 (i) Smart Grid capability is a feature of 

11 that product; 

12 (ii) the use and value of those features de13 pended on the Smart Grid capability of the util14 ity system in which the product was installed 

15 and the use of those features by the customer; 

16 and 

17 (iii) on a utility system with Smart Grid 

18 capability, the use of the product’s Smart Grid 

19 capability could potentially reduce the cost of 

20 the product’s annual operation by an estimated 

21 dollar amount representing the result of incre22 mental energy and electricity cost savings that 

23 would result from the Smart Grid best case for 

24 that product. 


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1 (C) Submit a report to Congress summarizing 

2 the results of the analyses for each class of products, 

3 and presenting the potential national energy and 

4 electricity cost savings that could be realized if cost5 effective Smart Grid capability were installed in the 

6 relevant products reviewed by the Energy Star pro7 gram. 

8 SEC. 4. SMART GRID PEAK DEMAND REDUCTION GOALS. 

9 (a) GOALS.—Not later than one year after the date 

10 of enactment of this Act, load serving entities, or States, 

11 shall determine and publish peak demand reduction goals 

12 for any load serving entities that have an applicable base13 line in excess of 250 megawatts. 

14 (b) BASELINES.—(1) The Commission, in consulta15 tion with the Secretary, shall develop and publish, after 

16 an opportunity for public comment, a methodology to pro17 vide for adjustments or normalization to a load serving 

18 entity’s applicable baseline over time to reflect changes in 

19 the number of customers served, weather conditions, gen20 eral economic conditions, and any other appropriate fac21 tors external to peak load management, as determined by 

22 the Commission. 

23 (2) The Commission shall support load serving enti24 ties in determining their applicable baselines, and in devel25 oping their peak demand reduction goals, including any 


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1 load serving entity with an applicable baseline of less than 

2 250 megawatts that volunteers to participate in achieving 

3 the purposes of this Act. 

4 (3) The Secretary, in consultation with the Commis5 sion and the National Electric Reliability Corporation, 

6 shall develop a system and rules for measurement and 

7 verification of demand reductions. 

8 (c) PEAK DEMAND REDUCTION GOALS.—(1) Peak 

9 demand reduction goals may be established for an indi10 vidual load serving entity, or, at the determination of a 

11 State or regional entity, by that State or regional entity 

12 for a larger region that shares a common system peak de13 mand and for which peak demand reduction measures 

14 would offer regional benefit. 

15 (2) A State or regional entity establishing peak de16 mand reduction goals shall cooperate, as necessary and 

17 appropriate, with the Commission, the Secretary, State 

18 regulatory commissions, State energy offices, the National 

19 Electric Reliability Corporation, and other relevant au20 thorities. 

21 (3) In determining the applicable peak demand reduc22 tion goals, States and other jurisdictional entities may uti23 lize the results of the 2009 National Demand Response 

24 Potential Assessment, as authorized by section 529 of the 

25 Energy Independence and Security Act of 2007. 


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1 (4) The applicable peak demand reduction goals shall 

2 provide that— 

3 (A) load serving entities will reduce or mitigate 

4 peak demand by a minimum percentage amount 

5 from the applicable baseline to a lower peak demand 

6 during calendar year 2012; 

7 (B) load serving entities will reduce or mitigate 

8 peak demand by a minimum percentage greater 

9 amount from the applicable baseline to a lower peak 

10 demand during calendar year 2015; and 

11 (C) the minimum percentage reductions selected 

12 are the percentage reductions that are realistically 

13 achievable with an aggressive effort to deploy smart 

14 grid and peak demand reduction technologies and 

15 methods, including but not limited to those listed in 

16 subsection (d). 

17 (d) PLAN.—Each load serving entity shall prepare a 

18 peak load reduction plan that demonstrates its ability to 

19 meet each applicable goal by any or a combination of the 

20 following options: 

21 (1) Direct reduction in megawatts of peak de22 mand through energy efficiency measures with reli23 able and continued application during peak demand 

24 periods. 


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1 (2) Demonstration that an amount of 

2 megawatts equal to a stated portion of the applicable 

3 goal is contractually committed to be available for 

4 peak reduction through one or more of the following: 

5 (A) Megawatts enrolled in demand re6 sponse programs. 

7 (B) Megawatts subject to the ability of a 

8 load serving entity to call on demand response 

9 programs, smart appliances, smart electricity 

10 storage devices, distributed generation resources 

11 on the entity’s customers’ premises, or other 

12 measures directly capable of actively, 

13 controllably, reliably, and dynamically reducing 

14 peak demand (‘‘dynamic peak management con15 trol’’). 

16 (C) Megawatts available from distributed 

17 dynamic electricity storage under agreement 

18 with the owner of that storage. 

19 (D) Megawatts committed from 

20 dispatchable distributed generation dem21 onstrated to be reliable under peak period con22 ditions. 

23 (E) Megawatts available from smart appli24 ances and equipment with smart grid capability 

25 available for direct control by the utility 


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1 through agreement with the customer owning 

2 the appliances or equipment. 

3 (F) Megawatts from a demonstrated and 

4 assured minimum of distributed solar electric 

5 generation capacity in instances where peak pe6 riod and peak load conditions are directly re7 lated to solar radiation and accompanying heat. 

8 (3) If any of the methods listed in subpara9 graph (C), (D), or (E) of paragraph (2) are relied 

10 upon to meet its peak demand reduction goals, the 

11 load serving entity must demonstrate this capability 

12 by operating a test during the applicable calendar 

13 year. 

14 (4) Nothing in this Act shall require the publi15 cation in peak demand reduction goals or in any 

16 peak demand reduction plan of any information that 

17 is confidential for competitive or other reasons or 

18 that identifies individual customers. 

19 (e) EXISTING AUTHORITY AND REQUIREMENTS.— 

20 Nothing in this Act diminishes or supersedes any author21 ity of a State or political subdivision of a State to adopt 

22 or enforce any law or regulation respecting peak load man23 agement, demand response, distributed storage, use of dis24 tributed generation, or the regulation of load serving enti25 ties. The Commission, in consultation with States having 


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1 such peak management, demand response and distributed 

2 storage programs, shall to the maximum extent prac3 ticable, facilitate coordination between the Federal pro4 gram and such State programs. 

5 (f) RELIEF.—The Commission may, for good cause, 

6 grant relief to load serving entities from the requirements 

7 of this section. 

8 (g) OTHER LAWS.—Except as provided in sub9 sections (e) and (f), no law or regulation shall relieve any 

10 person of any requirement otherwise applicable under this 

11 section. 

12 (h) COMPLIANCE.—(1) The Commission shall within 

13 one year after the enactment of this Act establish a public 

14 domain website where the Commission will provide infor15 mation and data demonstrating compliance by States, re16 gional entities, and load serving entities with this Act, in17 cluding the success of load serving entities in meeting ap18 plicable peak demand reduction goals. 

19 (2) The Commission shall, by April 1 of each year 

20 beginning in 2012, provide a report to Congress on com21 pliance with this Act and success in meeting applicable 

22 peak demand reduction goals and, as appropriate, shall 

23 make recommendations as to how to increase peak de24 mand reduction efforts. 


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1 (3) The Commission shall note in each such report 

2 any State, political subdivision of a State, or load serving 

3 entity that has failed to comply with this Act, or is not 

4 a part of any region or group of load serving entities serv5 ing a region that has complied with this Act. 

6 (4) The Commission shall have and exercise the au7 thority to take reasonable steps to modify the process of 

8 establishing peak demand reduction goals and to accept 

9 adjustments to them as appropriate when sought by load 

10 serving entities. 

11 (i) ASSISTANCE AND FUNDING.— 

12 (1) ASSISTANCE.—The Secretary may make 

13 grants to States and to other entities with respon14 sibilities to be carried out under the Act to offset 

15 any documented costs of carrying out such respon16 sibilities to the extent such costs are deemed burden17 some or extraordinary by the Secretary. 

18 (2) FUNDING.—There are authorized to be ap19 propriated sums as may be necessary to the Com20 mission, the Secretary, and the Administrator to 

21 carry out the provisions of this Act. 


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1 SEC. 5. REAUTHORIZATION OF ENERGY EFFICIENCY PUB2 LIC INFORMATION PROGRAM TO INCLUDE 

3 SMART GRID INFORMATION. 

4 Section 134 of the Energy Policy Act of 2005 (42 

5 U.S.C. 15832) is amended as follows: 

6 (1) By amending the title heading to read 

7 ‘‘ENERGY EFFICIENCY AND SMART 

8 GRID PUBLIC INFORMATION INITIA9 TIVE.’’. 

10 (2) In subsection (a)(1) by striking ‘‘reduce en11 ergy consumption during the 4-year period beginning 

12 on the date of enactment of this Act’’ and inserting 

13 ‘‘increase energy efficiency and to adopt Smart Grid 

14 technology and practices’’. 

15 (3) In subsection (a)(2) by striking ‘‘benefits to 

16 consumers of reducing’’ and inserting ‘‘economic and 

17 environmental benefits to consumers and the United 

18 States of optimizing’’. 

19 (4) In subsection (a)(3) by inserting at the be20 ginning of that subsection ‘‘the effect of energy effi21 ciency and Smart Grid capability in reducing energy 

22 and electricity prices throughout the economy, to23 gether with’’. 

24 (5) In subsection (a)(4) by redesignating sub25 paragraph (D) as (E), by striking ‘‘and’’ at the end 


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1 of subparagraph (C), and by inserting after subpara2 graph (C) the following: 

3 ‘‘(D) purchasing and utilizing equipment 

4 that includes smart grid features and capa5 bility; and’’. 

6 (6) In subsection (c), by striking ‘‘Not later 

7 than July 1, 2009,’’ and inserting, ‘‘For each year 

8 when appropriations pursuant to the authorization 

9 in this section exceed $10,000,000,’’. 

10 (7) In subsection (d) by striking ‘‘2010’’ and 

11 inserting ‘‘2020’’. 

12 (8) In subsection (e) by striking ‘‘2010’’ and in13 serting ‘‘2020’’. 

14 SEC. 6. INCLUSION OF SMART GRID FEATURES IN APPLI15 ANCE REBATE PROGRAM. 

16 (a) AMENDMENT.—Section 124 of the Energy Policy 

17 Act of 2005 (42 U.S.C. 15821) is amended as follows: 

18 (1) By amending the section heading to read 

19 ‘‘ENERGY EFFICIENT AND SMART APPLIANCE

20 REBATE PROGRAM.’’. 

21 (2) By redesignating paragraphs (4) and (5) as 

22 (5) and (6) and inserting after paragraph (3) the 

23 following: 

24 ‘‘(4) SMART APPLIANCE.—The term ‘smart ap25 pliance’ means a product that the Administrator of 


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1 the Environmental Protection Agency or the sec2 retary of Energy has determined qualifies for such 

3 a designation in the Energy Star program pursuant 

4 to section 213 of the Smart Grid Advancement Act 

5 or that the Secretary or the Administrator has sepa6 rately determined includes the relevant Smart Grid 

7 capabilities listed in section 1301 of the Energy 

8 Independence and Security Act of 2007 (15 U.S.C. 

9 17381).’’. 

10 (3) In subsection (b)(1) by inserting ‘‘and 

11 smart’’ after ‘‘efficient’’ and by inserting after 

12 ‘‘products’’ the first place it appears ‘‘, including 

13 products designated as being smart appliances,’’. 

14 (4) In subsection (b)(3), by inserting ‘‘the ad15 ministration of’’ after ‘‘carry out’’. 

16 (5) In subsection (d), by inserting ‘‘the admin17 istration of’’ after ‘‘carrying out’’ and by inserting 

18 ‘‘, and up to 100 percent of the value of the rebates 

19 provided pursuant to this section’’ before the period 

20 at the end. 

21 (6) In subsection (e)(3), by inserting ‘‘with sep22 arate consideration as applicable if the product is 

23 also a smart appliance,’’ after ‘‘Energy Star prod24 uct’’ the first place it appears and by inserting ‘‘or 

25 smart appliance’’ before the period at the end. 


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1 (7) In subsection (f), by striking 

2 ‘‘$50,000,000’’ through the period at the end and 

3 inserting ‘‘such sums as may be necessary for each 

4 fiscal year from 2010 through 2015.’’. 

5 (b) TABLE OF CONTENTS.—The item relating to sec6 tion 124 in the table of contents for the Energy Policy 

7 Act of 2005 (42 U.S.C. 15801 and following) is amended 

8 to read as follows: 

‘‘Sec. 124. Energy efficient and smart appliance rebate program.’’. 

Æ 


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