II 

118TH CONGRESS 

2D SESSION S. 4615 

To amend title VI of the Public Utility Regulatory Policies Act of 1978 

to establish a Federal energy efficiency resource standard for electricity 

and natural gas suppliers, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 20, 2024 

Ms. SMITH (for herself, Mr. WELCH, Mr. BOOKER, Mr. LUJA ́N, Mrs. SHAHEEN, and Mr. VAN HOLLEN) introduced the following bill; which was 

read twice and referred to the Committee on Energy and Natural Resources 

A BILL 

To amend title VI of the Public Utility Regulatory Policies 

Act of 1978 to establish a Federal energy efficiency 

resource standard for electricity and natural gas suppliers, 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 ‘‘American Energy Effi5 ciency Act of 2024’’. 


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1 SEC. 2. ENERGY EFFICIENCY RESOURCE STANDARD FOR 

2 RETAIL ELECTRICITY AND NATURAL GAS 

3 SUPPLIERS. 

4 (a) IN GENERAL.—Title VI of the Public Utility Reg5 ulatory Policies Act of 1978 is amended by adding after 

6 section 609 (7 U.S.C. 918c) the following: 

7 ‘‘SEC. 610. FEDERAL ENERGY EFFICIENCY RESOURCE 

8 STANDARD FOR RETAIL ELECTRICITY AND 

9 NATURAL GAS SUPPLIERS. 

10 ‘‘(a) DEFINITIONS.—In this section: 

11 ‘‘(1) AFFILIATE.—The term ‘affiliate’, when 

12 used in relation to a person (including an electric 

13 utility and a local distribution company), means an14 other person that owns or controls, is owned or con15 trolled by, or is under common ownership or control 

16 with, that person, as determined under regulations 

17 promulgated by the Secretary. 

18 ‘‘(2) ASHRAE; ANSI; IESNA.—The terms 

19 ‘ASHRAE’, ‘ANSI’, and ‘IESNA’ mean the Amer20 ican Society of Heating, Refrigerating and Air-Con21 ditioning Engineers, the American National Stand22 ards Institute, and the Illuminating Engineering So23 ciety of North America, respectively. 

24 ‘‘(3) BASE QUANTITY.— 

25 ‘‘(A) IN GENERAL.—The term ‘base quan26 tity’, with respect to a retail electricity supplier 


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1 or retail natural gas supplier, means, for each 

2 calendar year for which a performance standard 

3 is established under subsection (c), the average 

4 annual quantity of electricity or natural gas de5 livered by the retail electricity supplier or retail 

6 natural gas supplier to retail customers during 

7 the 3 calendar years immediately preceding the 

8 first year that compliance is required under 

9 subsection (c)(1). 

10 ‘‘(B) EXCLUSION.—The term ‘base quan11 tity’, with respect to a retail natural gas sup12 plier, does not include natural gas delivered for 

13 purposes of electricity generation. 

14 ‘‘(4) CHP SAVINGS.—The term ‘CHP savings’ 

15 means— 

16 ‘‘(A) CHP system savings from a combined 

17 heat and power system that commences oper18 ation after the date of enactment of this sec19 tion; and 

20 ‘‘(B) the increase in CHP system savings 

21 from upgrading or replacing, after the date of 

22 enactment of this section, a combined heat and 

23 power system that commenced operation on or 

24 before the date of enactment of this section. 


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1 ‘‘(5) CHP SYSTEM SAVINGS.—The term ‘CHP 

2 system savings’ means the electric output, and the 

3 electricity saved due to the mechanical output, of a 

4 combined heat and power system, adjusted to reflect 

5 any increase in fuel consumption by that system as 

6 compared to the fuel that would have been required 

7 to produce an equivalent useful thermal energy out8 put in a separate thermal-only system, as deter9 mined in accordance with regulations promulgated 

10 by the Secretary. 

11 ‘‘(6) COMBINED HEAT AND POWER SYSTEM.— 

12 The term ‘combined heat and power system’ means 

13 a system that uses the same energy source for the 

14 generation of electrical or mechanical power and the 

15 production of steam or another form of useful ther16 mal energy, if— 

17 ‘‘(A) the system meets all applicable re18 quirements relating to efficiency and other op19 erating characteristics that the Secretary pro20 mulgates by regulation; and 

21 ‘‘(B) the net quantity of electricity sold 

22 wholesale by the facility using the system does 

23 not exceed 50 percent of the total quantity of 

24 electricity generated annually by the system. 


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1 ‘‘(7) COST-EFFECTIVE.—The term ‘cost-effec2 tive’ means, with respect to an energy efficiency 

3 measure, that the measure achieves, directly to the 

4 energy consumer and to the economy, a net present 

5 value of economic benefits over the life of the meas6 ure that is greater than the net present value of the 

7 cost of the measure over the life of the measure, 

8 using a societal benefit-cost test calculated using the 

9 lower of— 

10 ‘‘(A) a utility weighted average cost of cap11 ital; or 

12 ‘‘(B) a social discount rate of 3 percent. 

13 ‘‘(8) CUSTOMER FACILITY SAVINGS.—The term 

14 ‘customer facility savings’ means a reduction in end15 use electricity or natural gas consumption (including 

16 waste heat energy savings) at a facility of an end17 use consumer of electricity or natural gas served by 

18 a retail electricity supplier or retail natural gas sup19 plier, as compared to— 

20 ‘‘(A) in the case of a new facility, con21 sumption at a reference facility of average effi22 ciency; 

23 ‘‘(B) in the case of an existing facility, 

24 consumption at the facility during a base period 

25 of not less than 1 year; 


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1 ‘‘(C) in the case of new equipment that re2 places existing equipment at the end of the use3 ful life of the existing equipment, consumption 

4 by new equipment of average efficiency of the 

5 same equipment type, except that customer sav6 ings under this subparagraph shall not be 

7 counted toward customer savings under sub8 paragraph (A) or (B); and 

9 ‘‘(D) in the case of new equipment that re10 places existing equipment with remaining useful 

11 life— 

12 ‘‘(i) consumption by the existing 

13 equipment for the remaining useful life of 

14 the equipment; and 

15 ‘‘(ii) thereafter, consumption by new 

16 equipment of average efficiency of the 

17 same equipment type. 

18 ‘‘(9) ELECTRICITY SAVINGS.—The term ‘elec19 tricity savings’ means reductions in electricity con20 sumption or losses achieved through measures imple21 mented after the date of enactment of this section, 

22 as determined in accordance with regulations pro23 mulgated by the Secretary, that— 


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1 ‘‘(A) occur in the service territory of the 

2 retail electricity supplier claiming or transfer3 ring the electricity savings; and 

4 ‘‘(B) are limited to— 

5 ‘‘(i) customer facility savings of elec6 tricity, adjusted to reflect any associated 

7 increase in fuel consumption at the facility; 

8 ‘‘(ii) reductions in distribution system 

9 losses of electricity achieved by a retail 

10 electricity supplier, as compared to losses 

11 attributable to new or replacement dis12 tribution system equipment of average effi13 ciency, as defined in regulations promul14 gated by the Secretary; 

15 ‘‘(iii) CHP savings; 

16 ‘‘(iv) State and local codes and stand17 ards savings of electricity; and 

18 ‘‘(v) fuel-switching energy savings 

19 that result in net savings of source energy, 

20 as defined in regulations promulgated by 

21 the Secretary. 

22 ‘‘(10) FUEL-SWITCHING ENERGY SAVINGS.— 

23 ‘‘(A) IN GENERAL.—The term ‘fuel-switch24 ing energy savings’ means net energy savings, 

25 calculated in accordance with subparagraph 


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1 (B), from end-user switches from 1 energy 

2 source to another, as determined in accordance 

3 with regulations promulgated by the Secretary. 

4 ‘‘(B) CALCULATION.—For purposes of cal5 culating fuel-switching net energy savings— 

6 ‘‘(i) electricity use shall be evaluated 

7 based on the average quantity of fuel 

8 burned at a new power plant, taking into 

9 account existing and planned renewable en10 ergy generators to provide each kilowatt 

11 hour of electricity; 

12 ‘‘(ii) electricity and natural gas use 

13 shall include losses in the transmission and 

14 distribution system; and 

15 ‘‘(iii) fuel-switching that is not cost-ef16 fective to the end-user shall not be count17 ed. 

18 ‘‘(11) LOCAL DISTRIBUTION COMPANY.—The 

19 term ‘local distribution company’ has the meaning 

20 given the term in section 2 of the Natural Gas Pol21 icy Act of 1978 (15 U.S.C. 3301). 

22 ‘‘(12) NATURAL GAS SAVINGS.—The term ‘nat23 ural gas savings’ means reductions in natural gas 

24 consumption, leakage, or operational losses from 

25 measures implemented after the date of enactment 


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1 of this section, as determined in accordance with 

2 regulations promulgated by the Secretary, that— 

3 ‘‘(A) occur in the service territory of the 

4 retail natural gas supplier claiming or transfer5 ring the natural gas savings; and 

6 ‘‘(B) are limited to— 

7 ‘‘(i) customer facility savings of nat8 ural gas, adjusted to reflect any associated 

9 increase in electricity consumption or con10 sumption of other fuels at the facility; 

11 ‘‘(ii) reductions in leakage, operational 

12 losses, and consumption of natural gas fuel 

13 to operate a gas distribution system, 

14 achieved by a retail natural gas supplier, 

15 as compared to similar leakage, losses, and 

16 consumption during a base period of not 

17 less than 1 year; 

18 ‘‘(iii) State and local codes and stand19 ards savings of natural gas; and 

20 ‘‘(iv) fuel-switching energy savings 

21 that result in net savings of source energy, 

22 as defined in regulations promulgated by 

23 the Secretary. 

24 ‘‘(13) PERFORMANCE STANDARD.— 


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1 ‘‘(A) IN GENERAL.—The term ‘perform2 ance standard’ means a standard established 

3 for a calendar year for cumulative electricity 

4 savings or cumulative natural gas savings that 

5 is expressed as a percentage of base quantity. 

6 ‘‘(B) CALENDAR YEARS 2025 THROUGH

7 2039.—For each of calendar years 2025 through 

8 2039, the term ‘performance standard’ means 

9 the percentage labeled as cumulative electricity 

10 savings percentage or cumulative natural gas 

11 savings percentage, as applicable, in the table in 

12 subsection (c)(2) for the applicable calendar 

13 year. 

14 ‘‘(14) POWER POOL.— 

15 ‘‘(A) IN GENERAL.—The term ‘power pool’ 

16 means an association of 2 or more inter17 connected electric systems that have entered 

18 into an agreement to coordinate operations and 

19 planning for improved reliability and effi20 ciencies, as determined by the Secretary. 

21 ‘‘(B) INCLUSIONS.—The term ‘power pool’ 

22 includes a Regional Transmission Organization 

23 (as defined in section 3 of the Federal Power 

24 Act (16 U.S.C. 796)) and an Independent Sys25 tem Operator (as defined in that section). 


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1 ‘‘(15) REPORTING PERIOD.—The term ‘report2 ing period’ means— 

3 ‘‘(A) calendar year 2025; and 

4 ‘‘(B) each successive 2-calendar-year pe5 riod thereafter. 

6 ‘‘(16) RETAIL ELECTRICITY SUPPLIER.— 

7 ‘‘(A) IN GENERAL.—The term ‘retail elec8 tricity supplier’ means, for any given calendar 

9 year, an electric utility that delivers not less 

10 than 2,000,000 megawatt hours of electric en11 ergy to electric consumers for purposes other 

12 than resale during the preceding calendar year. 

13 ‘‘(B) INCLUSIONS AND LIMITATIONS.—For 

14 purposes of determining whether an electric 

15 utility qualifies as a retail electricity supplier 

16 under subparagraph (A)— 

17 ‘‘(i) deliveries by any affiliate of an 

18 electric utility to electric consumers for 

19 purposes other than resale shall be consid20 ered to be deliveries by the electric utility; 

21 and 

22 ‘‘(ii) deliveries by any electric utility 

23 to a lessee, tenant, or affiliate of the elec24 tric utility shall not be considered to be de25 liveries to electric consumers. 


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1 ‘‘(17) RETAIL NATURAL GAS SUPPLIER.— 

2 ‘‘(A) IN GENERAL.—The term ‘retail nat3 ural gas supplier’ means, for any given calendar 

4 year, a local distribution company that delivered 

5 to natural gas consumers more than 

6 5,000,000,000 cubic feet of natural gas for pur7 poses other than resale during the preceding 

8 calendar year. 

9 ‘‘(B) INCLUSIONS AND LIMITATIONS.—For 

10 purposes of determining whether an entity 

11 qualifies as a retail natural gas supplier under 

12 subparagraph (A)— 

13 ‘‘(i) deliveries of natural gas by any 

14 affiliate of a local distribution company to 

15 consumers for purposes other than resale 

16 shall be considered to be deliveries by the 

17 local distribution company; and 

18 ‘‘(ii) deliveries of natural gas to a les19 see, tenant, or affiliate of a local distribu20 tion company shall not be considered to be 

21 deliveries to natural gas consumers. 

22 ‘‘(18) STATE AND LOCAL CODES AND STAND23 ARDS SAVINGS.— 

24 ‘‘(A) IN GENERAL.—The term ‘State and 

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1 duction, due to the adoption and implementa2 tion, after the date of enactment of this section, 

3 of new or revised appliance and equipment effi4 ciency standards or building energy codes, in— 

5 ‘‘(i) end-use electricity consumption 

6 for a retail electricity supplier; or 

7 ‘‘(ii) natural gas consumption in the 

8 service territory of a retail natural gas 

9 supplier. 

10 ‘‘(B) BASELINES.—In calculating State 

11 and local codes and standards savings under 

12 subparagraph (A)— 

13 ‘‘(i) the baseline for calculating sav14 ings from a new or revised building code 

15 shall be the more stringent of— 

16 ‘‘(I)(aa) the 2021 International 

17 Energy Conservation Code for resi18 dential buildings; or 

19 ‘‘(bb) the ASHRAE/ANSI/ 

20 IESNA Standard 90.1–2019 for com21 mercial buildings; or 

22 ‘‘(II) the applicable State build23 ing code in effect on the date of en24 actment of this section; and 


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1 ‘‘(ii) the baseline for calculating sav2 ings from a new or revised appliance 

3 standard shall be the estimated average ef4 ficiency of new appliances in the applicable 

5 1 or more categories during the 1-year pe6 riod preceding the date on which the new 

7 or revised standard is adopted. 

8 ‘‘(19) THIRD-PARTY EFFICIENCY PROVIDER.— 

9 The term ‘third-party efficiency provider’ means any 

10 retailer, building owner, energy service company, fi11 nancial institution, or other commercial, industrial, 

12 or nonprofit entity that is capable of providing elec13 tricity savings or natural gas savings in accordance 

14 with any procedures, standards, and rules estab15 lished by the Secretary under subsections (b)(1)(D) 

16 and (e). 

17 ‘‘(20) WASTE HEAT ENERGY SAVINGS.—The 

18 term ‘waste heat energy savings’ means a reduction 

19 in the mechanical or thermal energy used at a facil20 ity or the electric output of a facility, adjusted to re21 flect any associated increase in fuel consumption, 

22 that results from a modification of an industrial, 

23 commercial, or institutional system that commenced 

24 operation before the date of enactment of this sec25 tion, in order to recapture electrical, mechanical, or 


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1 thermal energy that would otherwise be wasted, such 

2 as through exhaust or dissipation to the environ3 ment, and productively use that recaptured energy, 

4 represented as a reduction in net electricity or nat5 ural gas consumption, as determined in accordance 

6 with regulations promulgated by the Secretary. 

7 ‘‘(b) ESTABLISHMENT OF PROGRAM.— 

8 ‘‘(1) REGULATIONS.—Not later than 1 year 

9 after the date of enactment of this section, the Sec10 retary shall, by regulation, establish a program to 

11 implement and enforce the requirements of this sec12 tion, including— 

13 ‘‘(A) by establishing evaluation, measure14 ment, and verification procedures and stand15 ards under subsection (e); 

16 ‘‘(B) by establishing requirements under 

17 which retail electricity suppliers and retail nat18 ural gas suppliers shall— 

19 ‘‘(i) demonstrate, document, and re20 port the compliance of the retail electricity 

21 suppliers and retail natural gas suppliers 

22 with the performance standards under sub23 section (c); and 

24 ‘‘(ii) estimate the impact of the stand25 ards on current and future electricity and 


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1 natural gas use in the service territories of 

2 the suppliers; 

3 ‘‘(C) by establishing requirements gov4 erning applications for, and implementation of, 

5 delegated State administration under subsection 

6 (g); and 

7 ‘‘(D) by establishing rules to govern trans8 fers of electricity savings and natural gas sav9 ings— 

10 ‘‘(i) between suppliers and third-party 

11 efficiency providers serving the same State; 

12 and 

13 ‘‘(ii) between suppliers and third14 party efficiency providers serving different 

15 States. 

16 ‘‘(2) NATIONAL ACADEMY OF SCIENCES

17 STUDY.—In establishing and implementing the pro18 gram under this section, the Secretary shall take 

19 into consideration a report published under sub20 section (e)(2)(C). 

21 ‘‘(3) COORDINATION WITH STATE PROGRAMS.— 

22 In establishing and implementing the program under 

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1 porate best practices of existing State energy effi2 ciency programs. 

3 ‘‘(4) SAVINGS PROGRAMS FOR LOW-INCOME

4 CUSTOMERS.—In implementing this section, the Sec5 retary shall encourage retail electricity suppliers and 

6 retail natural gas suppliers to ensure that a portion 

7 of the customer facility savings achieved for a cal8 endar year shall result from programs that target 

9 households that are at or below 200 percent of the 

10 poverty line (as defined in section 673 of the Com11 munity Services Block Grant Act (42 U.S.C. 9902)). 

12 ‘‘(c) PERFORMANCE STANDARDS.— 

13 ‘‘(1) COMPLIANCE OBLIGATION.—Not later 

14 than May 1 of the calendar year immediately fol15 lowing each reporting period— 

16 ‘‘(A) each retail electricity supplier shall 

17 submit to the Secretary a report, in accordance 

18 with regulations promulgated by the Secretary, 

19 demonstrating that the retail electricity supplier 

20 has achieved cumulative consistent electricity 

21 savings (adjusted to account for any attrition of 

22 savings measures implemented in prior years) 

23 in each calendar year that are equal to the ap24 plicable percentage of the base quantity of the 

25 retail electricity supplier; and 


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1 ‘‘(B) each retail natural gas supplier shall 

2 submit to the Secretary a report, in accordance 

3 with regulations promulgated by the Secretary, 

4 demonstrating that the retail natural gas sup5 plier has achieved cumulative consistent natural 

6 gas savings (adjusted to account for any attri7 tion of savings measures implemented in prior 

8 years) in each calendar year that are equal to 

9 the applicable percentage of the base quantity 

10 of the retail natural gas supplier. 

11 ‘‘(2) STANDARDS FOR 2025 THROUGH 2039.— 

12 For each of calendar years 2025 through 2039, the 

13 applicable percentages are as follows: 

‘‘Calendar Year Cumulative Electricity 

Savings Percentage 

Cumulative Natural Gas 

Savings Percentage 

2025 1.00 0.50 

2026 2.00 1.25 

2027 3.00 2.00 

2028 4.25 3.00 

2029 5.50 4.00 

2030 7.00 5.00 

2031 8.50 6.00 

2032 10.00 7.00 

2033 11.50 8.00 

2034 13.00 9.00 

2035 14.75 10.00 

2036 16.50 11.00 

2037 18.25 12.00 

2038 20.00 13.00 


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‘‘Calendar Year Cumulative Electricity 

Savings Percentage 

Cumulative Natural Gas 

Savings Percentage 

2039 22.00 14.00 

1 ‘‘(3) SUBSEQUENT YEARS.— 

2 ‘‘(A) CALENDAR YEARS 2040 THROUGH

3 2049.—Not later than December 31, 2034, the 

4 Secretary shall promulgate regulations estab5 lishing performance standards (expressed as ap6 plicable percentages of base quantity for both 

7 cumulative electricity savings and cumulative 

8 natural gas savings) for each of calendar years 

9 2040 through 2049. 

10 ‘‘(B) REQUIREMENTS.—The Secretary 

11 shall establish standards under this paragraph 

12 at levels reflecting the maximum achievable 

13 level of cost-effective energy efficiency potential, 

14 taking into account— 

15 ‘‘(i) cost-effective energy savings 

16 achieved by leading retail electricity sup17 pliers and retail natural gas suppliers; 

18 ‘‘(ii) opportunities for new State and 

19 local codes and standards savings; 

20 ‘‘(iii) technology improvements; and 

21 ‘‘(iv) other indicators of cost-effective 

22 energy efficiency potential, including dif23 ferences between States. 


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1 ‘‘(C) MINIMUM PERCENTAGE.—In no case 

2 shall the applicable percentages for any cal3 endar year after calendar year 2039 be less 

4 than the applicable percentages for calendar 

5 year 2039. 

6 ‘‘(4) MIDCOURSE REVIEW AND ADJUSTMENT OF

7 PERFORMANCE STANDARDS.— 

8 ‘‘(A) IN GENERAL.—Not later than De9 cember 31, 2033, and at 10-year intervals 

10 thereafter, the Secretary shall— 

11 ‘‘(i) review the most recent perform12 ance standards established under para13 graph (2) or (3), as applicable; and 

14 ‘‘(ii) increase the performance stand15 ards by regulation if the Secretary deter16 mines that additional cost-effective energy 

17 efficiency potential is achievable, taking 

18 into account the requirement described in 

19 paragraph (3)(C). 

20 ‘‘(B) LEAD TIME.—If the Secretary revises 

21 performance standards under this paragraph, 

22 the applicable regulations shall provide ade23 quate lead time to ensure that compliance with 

24 the increased performance standards is feasible. 


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1 ‘‘(5) DELAY OF SUBMISSION FOR FIRST RE2 PORTING PERIOD.— 

3 ‘‘(A) IN GENERAL.—Notwithstanding 

4 paragraphs (1) and (2), for the first reporting 

5 period after the date of enactment of this sec6 tion, the Secretary may accept a request from 

7 a retail electricity supplier or a retail natural 

8 gas supplier to delay the required submission of 

9 documentation of all or part of the required 

10 savings for up to 2 years. 

11 ‘‘(B) PLAN FOR COMPLIANCE.—The re12 quest for delay under subparagraph (A) shall 

13 include a plan for coming into full compliance 

14 by the end of the second reporting period after 

15 the date of enactment of this section. 

16 ‘‘(6) APPLYING UNUSED SAVINGS TO FUTURE

17 YEARS.—If savings achieved in a year exceed the 

18 performance standards specified in this subsection, 

19 any savings in excess of the performance standards 

20 may be applied toward performance standards speci21 fied for the first 3 years following the year in which 

22 the excess savings are achieved. 

23 ‘‘(d) TRANSFERS OF ELECTRICITY SAVINGS AND

24 NATURAL GAS SAVINGS.— 


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1 ‘‘(1) BILATERAL CONTRACTS FOR SAVINGS

2 TRANSFERS.—Subject to the limitations of this sub3 section, a retail electricity supplier or retail natural 

4 gas supplier may use electricity savings or natural 

5 gas savings purchased pursuant to a bilateral con6 tract from another retail electricity supplier or retail 

7 natural gas supplier, a State, or a third-party effi8 ciency provider to meet the applicable performance 

9 standard under subsection (c). 

10 ‘‘(2) REQUIREMENTS.—Electricity savings or 

11 natural gas savings purchased and used for compli12 ance under this subsection shall be— 

13 ‘‘(A) measured and verified in accordance 

14 with subsection (e); 

15 ‘‘(B) reported in accordance with sub16 section (c); and 

17 ‘‘(C) achieved within the same power pool 

18 as is served by the applicable retail electricity 

19 supplier or retail natural gas supplier. 

20 ‘‘(3) REGULATORY APPROVAL.—Nothing in this 

21 subsection limits or affects the authority of a State 

22 regulatory authority to require a retail electricity 

23 supplier or retail natural gas supplier that is regu24 lated by the State regulatory authority to obtain the 

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1 thority of a contract for transfer of electricity sav2 ings or natural gas savings under this subsection. 

3 ‘‘(4) LIMITATIONS.—To optimize the achieve4 ment of cost-effective energy efficiency potential, the 

5 Secretary may prescribe such limitations as the Sec6 retary determines appropriate with respect to the 

7 proportion of the compliance obligation of a retail 

8 electricity supplier or retail natural gas supplier 

9 under the applicable performance standards under 

10 subsection (c) that may be met using electricity sav11 ings or natural gas savings that are purchased under 

12 this subsection. 

13 ‘‘(e) EVALUATION, MEASUREMENT, AND

14 VERIFICATION OF SAVINGS.— 

15 ‘‘(1) REGULATIONS.—The regulations promul16 gated pursuant to subsection (b) shall— 

17 ‘‘(A) be based on— 

18 ‘‘(i) the Uniform Methods Project of 

19 the Department of Energy; 

20 ‘‘(ii) the National Standard Practice 

21 Manual for Assessing the Cost-Effective22 ness of Energy Efficiency Resources, devel23 oped by the National Efficiency Screening 

24 Project; and 


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1 ‘‘(iii) other best practices recognized 

2 in the energy efficiency industry; and 

3 ‘‘(B) include— 

4 ‘‘(i) procedures and standards for 

5 evaluating, measuring, and verifying elec6 tricity savings and natural gas savings that 

7 count toward the performance standards 

8 established under subsection (c) that— 

9 ‘‘(I) specify the types of energy 

10 efficiency and energy conservation 

11 measures that may be counted; 

12 ‘‘(II) require that energy con13 sumption estimates for customer fa14 cilities or portions of facilities in the 

15 applicable base and current years be 

16 adjusted, as appropriate, to account 

17 for changes in weather, level of pro18 duction, seasonal patterns, and build19 ing area; 

20 ‘‘(III) for new customer facilities, 

21 establish a standardized method for 

22 calculating average efficiency that ac23 counts for factors such as weather, 

24 level of production, seasonal patterns, 

25 and building area; 


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1 ‘‘(IV) do not prevent overall load 

2 growth due to beneficial electrifica3 tion; 

4 ‘‘(V) account for the useful life of 

5 energy efficiency and energy conserva6 tion measures; 

7 ‘‘(VI) allow for savings from a 

8 program to be estimated based on ex9 trapolation from a representative sam10 ple of participating customers; 

11 ‘‘(VII) include procedures for cal12 culating and documenting CHP sav13 ings, fuel-switching energy savings, 

14 and waste heat energy savings; 

15 ‘‘(VIII) establish methods for cal16 culating State and local codes and 

17 standards savings, including the use 

18 of verified compliance rates; 

19 ‘‘(IX) include procedures for cal20 culating and documenting— 

21 ‘‘(aa) customer facility sav22 ings and reductions in distribu23 tion system losses of electricity 

24 and natural gas that are achieved 

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1 ment, as described in section 

2 1301 of the Energy Independ3 ence and Security Act of 2007 

4 (42 U.S.C. 17381), or the siting 

5 of new generation capacity closer 

6 to the end-use customer; and 

7 ‘‘(bb) reductions in natural 

8 gas distribution system losses at9 tributable to pipeline repair and 

10 replacement programs; 

11 ‘‘(X) count only measures and 

12 savings that are additional to busi13 ness-as-usual customer purchase prac14 tices; 

15 ‘‘(XI) ensure that the retail elec16 tricity supplier or retail natural gas 

17 supplier claiming the electricity sav18 ings or natural gas savings, including 

19 State and local codes and standards 

20 savings, has played a significant role 

21 in achieving the savings (including 

22 through the activities of a designated 

23 agent of the supplier or through the 

24 purchase of transferred electricity sav25 ings or natural gas savings); 


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1 ‘‘(XII) avoid double-counting of 

2 savings used for compliance with this 

3 section, including transferred savings; 

4 ‘‘(XIII) include electricity savings 

5 or natural gas savings from programs 

6 administered by retail electricity sup7 pliers or retail natural gas suppliers 

8 that are funded by Federal, State, or 

9 other sources, unless the funding 

10 source specifies otherwise; 

11 ‘‘(XIV) credit large customer 

12 self-directed electricity savings or nat13 ural gas savings to the retail elec14 tricity supplier or retail natural gas 

15 supplier if the large customer receives 

16 incentives or rate reductions from the 

17 retail electricity supplier or retail nat18 ural gas supplier for self-directed en19 ergy efficiency improvements; 

20 ‘‘(XV) include guidance, as ap21 propriate, for additional alternative 

22 approaches to evaluate electricity sav23 ings and natural gas savings for large 

24 commercial and industrial customers 


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1 in energy-intensive industries that are 

2 subject to international competition; 

3 ‘‘(XVI) include procedures for 

4 counting electricity savings and nat5 ural gas savings achieved by solar 

6 heating and cooling technologies, solar 

7 light pipe technology, geothermal heat 

8 pumps, and other technologies uti9 lizing renewable resources that do not 

10 produce electricity or gaseous fuel and 

11 reduce on-site energy use; 

12 ‘‘(XVII) include procedures for 

13 counting electricity savings and nat14 ural gas savings achieved by weather15 ization measures, such as installing 

16 mechanical insulation, repairing or re17 placing heating and cooling systems, 

18 repairing or replacing windows and 

19 doors, performing air sealing, and re20 placing lights and appliances with 

21 more energy efficient models; 

22 ‘‘(XVIII) include procedures for 

23 counting electricity savings and nat24 ural gas savings achieved from in25 creased utilization of mechanical insuVerDate Sep 11 2014 21:33 Aug 08, 2024 Jkt 049200 PO 00000 Frm 00028 Fmt 6652 Sfmt 6201 E:\BILLS\S4615.IS S4615

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1 lation for new, retrofit, and mainte2 nance construction for commercial, in3 dustrial, public, and nonprofit build4 ings and facilities; 

5 ‘‘(XIX) in any State in which the 

6 State regulatory authority has des7 ignated 1 or more entities to admin8 ister electric ratepayer-funded effi9 ciency programs approved by the 

10 State regulatory authority, provide 

11 that electricity savings and natural 

12 gas savings achieved through those 

13 programs shall be distributed propor14 tionally among retail electricity sup15 pliers and retail natural gas suppliers; 

16 ‘‘(XX) include guidance for retail 

17 electricity suppliers and retail natural 

18 gas suppliers to calculate and docu19 ment business-as-usual consumption 

20 projections; 

21 ‘‘(XXI) include guidance for esti22 mating savings using information 

23 from the database established under 

24 paragraph (3) based on similar meas25 ures and programs in other settings 


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1 with appropriate adjustments, as nec2 essary; and 

3 ‘‘(XXII) incorporate advances in 

4 the science of policy evaluation, such 

5 as the use of— 

6 ‘‘(aa) randomized control 

7 trials; 

8 ‘‘(bb) other experimental 

9 and quasi-experimental ap10 proaches; and 

11 ‘‘(cc) large data sets and 

12 machine learning techniques; and 

13 ‘‘(ii) procedures and standards for 

14 third-party verification of reported elec15 tricity savings or natural gas savings. 

16 ‘‘(2) NATIONAL ACADEMY OF SCIENCES

17 STUDY.—Not later than 180 days after the date of 

18 enactment of this section, the Secretary shall seek to 

19 enter into an agreement with the National Academy 

20 of Sciences, under which the Academy shall— 

21 ‘‘(A) evaluate existing state-of-the-art 

22 methods for evaluating energy efficiency policies 

23 and measures; 


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1 ‘‘(B) identify approaches in program eval2 uation literature that may be brought into the 

3 energy efficiency domain, including— 

4 ‘‘(i) randomized control trials and 

5 other experimental or quasi-experimental 

6 approaches; 

7 ‘‘(ii) control of confounding factors; 

8 ‘‘(iii) longitudinal studies; 

9 ‘‘(iv) assessments by neutral arbiters; 

10 and 

11 ‘‘(v) disclosure of data for replication; 

12 and 

13 ‘‘(C) not later than 18 months after the 

14 date of enactment of this section, publish a re15 port that includes— 

16 ‘‘(i) a description of the evaluation 

17 under subparagraph (A); 

18 ‘‘(ii) a description of the approaches 

19 identified under subparagraph (B); and 

20 ‘‘(iii) recommendations for advancing 

21 and adopting rigorous state-of-the-art 

22 methods for evaluating energy efficiency 

23 policies and measures. 

24 ‘‘(3) ENERGY EFFICIENCY PROGRAM EVALUA25 TION DATABASE.— 


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1 ‘‘(A) IN GENERAL.—The Secretary shall 

2 establish and maintain a searchable public data3 base, accessible on the website of the Depart4 ment of Energy, that contains a list of random5 ized control trials and other experimental or 

6 quasi-experimental evaluations of energy effi7 ciency programs. 

8 ‘‘(B) REQUIREMENTS.—Each trial or eval9 uation on the list described in subparagraph 

10 (A) shall include, at a minimum— 

11 ‘‘(i) the State in which the trial or 

12 evaluation was conducted; 

13 ‘‘(ii) the type of trial or evaluation 

14 conducted; 

15 ‘‘(iii) the type of program evaluated; 

16 ‘‘(iv) an abstract or summary of the 

17 program evaluated; 

18 ‘‘(v) a summary of the trial or evalua19 tion methodology; 

20 ‘‘(vi) the revealed energy savings from 

21 the trial or evaluation; and 

22 ‘‘(vii) to the extent practicable, the 

23 underlying data used to conduct the trial 

24 or evaluation. 

25 ‘‘(f) ENFORCEMENT AND JUDICIAL REVIEW.— 


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1 ‘‘(1) REVIEW OF RETAIL SUPPLIER REPORTS.— 

2 ‘‘(A) IN GENERAL.—The Secretary shall 

3 review each report submitted to the Secretary 

4 by a retail electricity supplier or retail natural 

5 gas supplier under subsection (c) to verify that 

6 the applicable performance standards under 

7 subsection (c) have been met. 

8 ‘‘(B) EXCLUSION.—In determining compli9 ance with the applicable performance standards 

10 under subsection (c), the Secretary shall ex11 clude reported electricity savings or natural gas 

12 savings that are not adequately demonstrated 

13 and documented, in accordance with the regula14 tions promulgated under subsections (b) and 

15 (c). 

16 ‘‘(2) PENALTY FOR FAILURE TO DOCUMENT

17 ADEQUATE SAVINGS.—If a retail electricity supplier 

18 or a retail natural gas supplier fails to demonstrate 

19 compliance with an applicable performance standard 

20 under subsection (c), or to pay to the State an appli21 cable alternative compliance payment under sub22 section (g)(4), the Secretary shall assess against the 

23 retail electricity supplier or retail natural gas sup24 plier a civil penalty for each failure in an amount 


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1 equal to, as adjusted for inflation in accordance with 

2 such regulations as the Secretary may promulgate— 

3 ‘‘(A) $100 per megawatt hour of electricity 

4 savings or alternative compliance payment that 

5 the retail electricity supplier failed to achieve or 

6 make, respectively; or 

7 ‘‘(B) $10 per million Btu of natural gas 

8 savings or alternative compliance payment that 

9 the retail natural gas supplier failed to achieve 

10 or make, respectively. 

11 ‘‘(3) OFFSETTING STATE PENALTIES.—The 

12 Secretary shall reduce the amount of any penalty 

13 under paragraph (2) by the amount paid by the rel14 evant retail electricity supplier or retail natural gas 

15 supplier to a State for failure to comply with the re16 quirements of a State energy efficiency resource 

17 standard during the same compliance period. 

18 ‘‘(4) USE OF PAYMENTS.— 

19 ‘‘(A) DEFINITION OF COVERED RATE.—In 

20 this paragraph, the term ‘covered rate’ means 

21 the proportion that— 

22 ‘‘(i) the amount of penalty payments 

23 made by retail electricity suppliers and re24 tail natural gas suppliers in a State under 

25 paragraph (2); bears to 


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1 ‘‘(ii) the total amount of penalty pay2 ments collected by the Secretary under 

3 that paragraph. 

4 ‘‘(B) USE OF PAYMENTS.—Penalty pay5 ments collected under paragraph (2) by the 

6 Secretary shall be— 

7 ‘‘(i) provided to each State at the cov8 ered rate for the State; and 

9 ‘‘(ii) used by the State to implement 

10 cost-effective energy efficiency programs 

11 that— 

12 ‘‘(I) to the maximum extent prac13 ticable, achieve electricity savings and 

14 natural gas savings in the State suffi15 cient to make up the deficit associated 

16 with the penalty payments; and 

17 ‘‘(II) can be measured and 

18 verified in accordance with the appli19 cable procedures and standards estab20 lished under subsection (e). 

21 ‘‘(5) ENFORCEMENT PROCEDURES.—The Sec22 retary shall assess a civil penalty, as provided under 

23 paragraph (2), in accordance with the procedures 

24 described in section 333(d) of the Energy Policy and 

25 Conservation Act (42 U.S.C. 6303(d)). 


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1 ‘‘(6) JUDICIAL REVIEW.— 

2 ‘‘(A) IN GENERAL.—Any person adversely 

3 affected by a final action taken by the Sec4 retary under this section, other than the assess5 ment of a civil penalty, may use the procedures 

6 for review described in section 336(b) of the 

7 Energy Policy and Conservation Act (42 U.S.C. 

8 6306(b)). 

9 ‘‘(B) REFERENCES.—For purposes of sub10 paragraph (A)— 

11 ‘‘(i) any reference in section 336(b) of 

12 the Energy Policy and Conservation Act 

13 (42 U.S.C. 6306(b)) to a rule shall be con14 sidered to be a reference to a final action 

15 taken by the Secretary under this section 

16 (including the promulgation of a regula17 tion, if applicable), other than the assess18 ment of a civil penalty; and 

19 ‘‘(ii) any reference in that section to 

20 the date on which a rule is prescribed shall 

21 be considered to be a reference to the date 

22 on which the applicable final action was 

23 taken. 

24 ‘‘(g) STATE ADMINISTRATION.— 


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1 ‘‘(1) IN GENERAL.—On receipt of an applica2 tion from the Governor of a State (including the 

3 Mayor of the District of Columbia), the Secretary 

4 may delegate to the State responsibility for admin5 istering this section within the territory of the State 

6 if the Secretary determines that the State will imple7 ment an energy efficiency program that meets or ex8 ceeds the requirements of this section. 

9 ‘‘(2) SECRETARIAL DETERMINATION.—Not 

10 later than 180 days after the date on which a com11 plete application described in paragraph (1) is re12 ceived by the Secretary, the Secretary shall make a 

13 substantive determination approving or disapproving 

14 the application, after public notice and comment. 

15 ‘‘(3) ALTERNATIVE MEASUREMENT AND

16 VERIFICATION PROCEDURES AND STANDARDS.—As 

17 part of an application submitted under paragraph 

18 (1), a State may request to use alternative measure19 ment and verification procedures and standards to 

20 the procedures and standards described in sub21 section (e), if the State demonstrates that the alter22 native procedures and standards provide a level of 

23 accuracy of measurement and verification that are at 

24 least equivalent to the Federal procedures and 

25 standards under that subsection. 


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1 ‘‘(4) ALTERNATIVE COMPLIANCE PAYMENTS.— 

2 ‘‘(A) IN GENERAL.—As part of an applica3 tion submitted under paragraph (1), a State 

4 may permit retail electricity suppliers or retail 

5 natural gas suppliers to pay to the State, by 

6 not later than May 1 of the calendar year im7 mediately following the applicable reporting pe8 riod, an alternative compliance payment in an 

9 amount equal to, as adjusted for inflation in ac10 cordance with such regulations as the Secretary 

11 may promulgate, not less than— 

12 ‘‘(i) $50 per megawatt hour of elec13 tricity savings needed to make up any def14 icit with regard to a compliance obligation 

15 under the applicable performance stand16 ard; or 

17 ‘‘(ii) $5 per million Btu of natural gas 

18 savings needed to make up any deficit with 

19 regard to a compliance obligation under 

20 the applicable performance standard. 

21 ‘‘(B) USE OF PAYMENTS.—Alternative 

22 compliance payments collected by a State under 

23 subparagraph (A) shall be used by the State to 

24 administer the delegated authority of the State 


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1 under this subsection and to implement cost-ef2 fective energy efficiency programs that— 

3 ‘‘(i) to the maximum extent prac4 ticable, achieve electricity savings and nat5 ural gas savings in the State sufficient to 

6 make up the deficit associated with the al7 ternative compliance payments; and 

8 ‘‘(ii) can be measured and verified in 

9 accordance with the applicable procedures 

10 and standards established under subsection 

11 (e). 

12 ‘‘(5) REVIEW OF STATE ADMINISTRATION.— 

13 ‘‘(A) PERIODIC REVIEW.—Every 2 years, 

14 the Secretary shall review State administration 

15 of this section for conformance with the requirements of this section in approximately 1 16 ⁄2

17 of the States that have received approval under 

18 this subsection to administer this section, so 

19 that each State shall be reviewed not less fre20 quently than once every 4 years. 

21 ‘‘(B) REPORT.—To facilitate the review 

22 under subparagraph (A), the Secretary may re23 quire the State to submit a report dem24 onstrating the conformance of the State with 

25 the requirements of this section, including— 


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1 ‘‘(i) reports submitted by retail elec2 tricity suppliers and retail natural gas sup3 pliers to the State demonstrating compli4 ance with applicable requirements; 

5 ‘‘(ii) the impact of applicable require6 ments on projected electricity and natural 

7 gas demand in the State; 

8 ‘‘(iii) an accounting of the use of al9 ternative compliance payments by the 

10 State and the resulting electricity savings 

11 and natural gas savings achieved; and 

12 ‘‘(iv) any other information that the 

13 Secretary determines appropriate. 

14 ‘‘(C) REVIEW ON PETITION.—Notwith15 standing subparagraph (A), on receipt of a pub16 lic petition containing a credible allegation of a 

17 substantial deficiency of a State energy effi18 ciency program authorized under this sub19 section, the Secretary shall promptly re-review 

20 the State energy efficiency program. 

21 ‘‘(D) DEFICIENCIES.— 

22 ‘‘(i) IN GENERAL.—In completing a 

23 review under this paragraph, if the Sec24 retary finds deficiencies, the Secretary 

25 shall— 


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1 ‘‘(I) notify the State of the defi2 ciencies; 

3 ‘‘(II) direct the State to correct 

4 the deficiencies; and 

5 ‘‘(III) require the State to report 

6 to the Secretary on progress made by 

7 not later than 180 days after the date 

8 on which the State receives notice 

9 under subclause (I). 

10 ‘‘(ii) SUBSTANTIAL DEFICIENCIES.—If 

11 the deficiencies are substantial, the Sec12 retary shall— 

13 ‘‘(I) disallow the reported elec14 tricity savings or natural gas savings 

15 that the Secretary determines are not 

16 credible due to deficiencies; 

17 ‘‘(II) re-review the State not 

18 later than 2 years after the date on 

19 which the original review was com20 pleted; and 

21 ‘‘(III) if substantial deficiencies 

22 remain uncorrected after the review 

23 provided for under subclause (II), re24 voke the authority of the State to ad25 minister this section. 


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1 ‘‘(6) CALLS FOR REVISION OF STATE APPLICA2 TIONS.—As a condition of maintaining the delegated 

3 authority to administer this section, the Secretary 

4 may require a State to submit a revised application 

5 under paragraph (1) if the Secretary has— 

6 ‘‘(A) established new or revised perform7 ance standards under subsection (c); 

8 ‘‘(B) promulgated new or substantially re9 vised measurement and verification procedures 

10 and standards under subsection (e); or 

11 ‘‘(C) otherwise substantially revised the 

12 Federal program established under this section. 

13 ‘‘(7) COST RECOVERY, FIXED COST RECOVERY, 

14 AND SHAREHOLDER INCENTIVES.—The Secretary 

15 shall encourage State utility regulatory commissions 

16 to review the rules and regulations of the Commis17 sion to ensure that utilities under the jurisdiction of 

18 the Commission may— 

19 ‘‘(A) recover the direct costs of energy effi20 ciency programs; 

21 ‘‘(B)(i) fully recover authorized fixed costs 

22 from customers, including recovery of revenue 

23 associated with fixed costs that was lost due to 

24 annual sales that were lower than forecasted; 

25 but 


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1 ‘‘(ii) return to customers the revenue asso2 ciated with fixed costs collected in excess of the 

3 authorized amount under clause (i); and 

4 ‘‘(C) earn a performance-based incentive 

5 for shareholders for the achievement of energy 

6 efficiency standards. 

7 ‘‘(8) EVALUATION, MEASUREMENT, AND

8 VERIFICATION INCENTIVES.—The Secretary shall en9 courage States that have delegated authority to ad10 minister this section to provide incentives to retail 

11 electricity suppliers, retail natural gas suppliers, and 

12 third-party efficiency providers to use randomized 

13 control trials and other experimental or quasi-experi14 mental approaches to evaluate energy efficiency 

15 measures and programs within the State. 

16 ‘‘(h) INFORMATION AND REPORTS.—In accordance 

17 with section 13 of the Federal Energy Administration Act 

18 of 1974 (15 U.S.C. 772), the Secretary may require any 

19 retail electricity supplier, retail natural gas supplier, third20 party efficiency provider, or any other entity that the Sec21 retary determines appropriate, to provide any information 

22 the Secretary determines appropriate to carry out this sec23 tion. 

24 ‘‘(i) STATE LAW.—Nothing in this section diminishes 

25 or qualifies any authority of a State or political subdivision 


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1 of a State to adopt or enforce any law or regulation re2 specting electricity savings or natural gas savings, includ3 ing any law or regulation establishing energy efficiency re4 quirements that are more stringent than those under this 

5 section, except that no State law or regulation shall relieve 

6 any person of any requirement otherwise applicable under 

7 this section.’’. 

8 (b) CONFORMING AMENDMENT.—The table of con9 tents in section 1(b) of the Public Utility Regulatory Poli10 cies Act of 1978 (Public Law 95–617; 92 Stat. 3118) is 

11 amended by adding at the end of the items relating to 

12 title VI the following: 

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

‘‘Sec. 610. Federal energy efficiency resource standard for retail electricity and 

natural gas suppliers.’’. 

Æ 


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