II 

112TH CONGRESS 

1ST SESSION S. 1291 

To amend the Internal Revenue Code of 1986 to provide a renewable electricity integration credit for a utility that purchases or produces renewable power. 

IN THE SENATE OF THE UNITED STATES 

JUNE 28, 2011 

Ms. KLOBUCHAR (for herself and Mr. JOHNSON of South Dakota) introduced 

the following bill; which was read twice and referred to the Committee 

on Finance 

A BILL 

To amend the Internal Revenue Code of 1986 to provide 

a renewable electricity integration credit for a utility 

that purchases or produces renewable power. 

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

3 SECTION 1. RENEWABLE ELECTRICITY INTEGRATION 

4 CREDIT. 

5 (a) BUSINESS CREDIT.— 

6 (1) IN GENERAL.—Subpart D of part IV of 

7 subchapter A of chapter 1 of the Internal Revenue 

8 Code of 1986 is amended by adding at the end the 

9 following new section: 


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•S 1291 IS

1 ‘‘SEC. 45S. RENEWABLE ELECTRICITY INTEGRATION CRED2 IT. 

3 ‘‘(a) GENERAL RULE.—For purposes of section 38, 

4 in the case of an eligible taxpayer, the renewable electricity 

5 integration credit for any taxable year is an amount equal 

6 to the product of— 

7 ‘‘(1) the intermittent renewable portfolio factor 

8 of such eligible taxpayer, and 

9 ‘‘(2) the number of kilowatt hours of renewable 

10 electricity— 

11 ‘‘(A) purchased or produced by such tax12 payer, and 

13 ‘‘(B) sold by such taxpayer to a retail cus14 tomer during the taxable year. 

15 ‘‘(b) INTERMITTENT RENEWABLE PORTFOLIO FAC16 TOR.— 

17 ‘‘(1) YEARS BEFORE 2017.—In the case of tax18 able years beginning before January 1, 2017, the 

19 intermittent renewable portfolio factor for an eligible 

20 taxpayer shall be determined as follows: 

‘‘In the case of an 

eligible taxpayer 

whose intermittent 

renewable electricity percentage 

is: 

For taxable years 

beginning before 

2012, the intermittent renewable 

portfolio factor is: 

For taxable years 

beginning in or 

after 2012, the 

intermittent renewable portfolio factor is: 

Less than 4 percent ....... zero cents zero cents 

At least 4 percent but 

less than 8 percent ..... 0.1 cents zero cents 

At least 8 percent but 

less than 12 percent ... 0.2 cents 0.2 cents 


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‘‘In the case of an 

eligible taxpayer 

whose intermittent 

renewable electricity percentage 

is: 

For taxable years 

beginning before 

2012, the intermittent renewable 

portfolio factor is: 

For taxable years 

beginning in or 

after 2012, the 

intermittent renewable portfolio factor is: 

At least 12 percent but 

less than 16 percent ... 0.3 cents 0.3 cents 

At least 16 percent but 

less than 20 percent ... 0.4 cents 0.4 cents 

At least 20 percent but 

less than 24 percent ... 0.5 cents 0.5 cents 

Equal to or greater than 

24 percent .................. 0.6 cents 0.6 cents. 

1 ‘‘(2) YEARS AFTER 2016.—In the case of tax2 able years beginning after December 31, 2016, the 

3 intermittent renewable portfolio factor for an eligible 

4 taxpayer shall be determined as follows: 

‘‘In the case of an 

eligible taxpayer 

whose intermittent 

renewable electricity percentage 

is: 

For taxable years 

beginning before 

2019, the intermittent renewable 

portfolio factor is: 

For taxable years 

beginning in or 

after 2019, the 

intermittent renewable portfolio factor is: 

Less than 10 percent ..... zero cents zero cents 

At least 10 percent but 

less than 12 percent ... 0.2 cents zero cents 

At least 12 percent but 

less than 16 percent ... 0.3 cents 0.15 cents 

At least 16 percent but 

less than 20 percent ... 0.4 cents 0.4 cents 

At least 20 percent but 

less than 24 percent ... 0.5 cents 0.5 cents 

Equal to or greater than 

24 percent .................. 0.6 cents 0.6 cents. 

5 ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur6 poses of this section— 

7 ‘‘(1) ELIGIBLE TAXPAYER.—The term ‘eligible 

8 taxpayer’ means an electric utility (as defined in sec9 tion 3(22) of the Federal Power Act, 16 U.S.C. 

10 796(22)). 


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•S 1291 IS

1 ‘‘(2) RENEWABLE ELECTRICITY.—The term ‘re2 newable electricity’ means electricity generated by— 

3 ‘‘(A) any facility using wind to generate 

4 such electricity, 

5 ‘‘(B) any facility using solar energy to gen6 erate such electricity, or 

7 ‘‘(C) any facility using any other intermit8 tent renewable energy source which the Sec9 retary of Energy determines has a capacity fac10 tor of less than 50 percent on an annual basis. 

11 ‘‘(3) INTERMITTENT RENEWABLE ELECTRICITY

12 PERCENTAGE.—The term ‘intermittent renewable 

13 electricity percentage’ means the percentage of an el14 igible taxpayer’s total sales of electricity to retail 

15 customers that is derived from renewable electricity 

16 (determine without regard to whether such elec17 tricity was produced by the taxpayer). 

18 ‘‘(4) APPLICATION OF OTHER RULES.—For 

19 purposes of this section, rules similar to the rules of 

20 paragraphs (1), (3), and (5) of section 45(e) shall 

21 apply. 

22 ‘‘(5) CREDIT ALLOWED ONLY WITH RESPECT

23 TO 1 ELIGIBLE ENTITY.—No credit shall be allowed 

24 under subsection (a) with respect to renewable elec25 tricity purchased from another eligible entity if a 


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1 credit has been allowed under this section or a pay2 ment has been made under section 6433 to such 

3 other eligible entity. 

4 ‘‘(d) CREDIT DISALLOWED UNLESS CREDIT PASSED

5 TO THIRD PARTY GENERATORS CHARGED FOR INTEGRA6 TION COSTS.— 

7 ‘‘(1) IN GENERAL.—In the case of renewable 

8 electricity eligible for the credit under subsection (a) 

9 that is purchased and not produced by an eligible 

10 taxpayer, no credit shall be allowed unless any 

11 charge the taxpayer has assessed the seller to re12 cover the integration costs associated with such elec13 tricity has been reduced (but not below zero) to the 

14 extent of the credit received under subsection (a) as15 sociated with such electricity. 

16 ‘‘(2) DEFINITIONS.—For purposes of paragraph 

17 (1), charges intended to recover integration costs do 

18 not include amounts paid by the producer of the 

19 electricity for interconnection facilities, distribution 

20 upgrades, network upgrades, or stand alone network 

21 upgrades as those terms have been defined by the 

22 Federal Energy Regulatory Commission in its 

23 Standard Interconnection Procedures. 

24 ‘‘(e) COORDINATION WITH PAYMENTS.—The amount 

25 of the credit determined under this section with respect 


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•S 1291 IS

1 to any electricity shall be reduced to take into account any 

2 payment provided with respect to such electricity solely by 

3 reason of the application of section 6433.’’. 

4 (2) CREDIT MADE PART OF GENERAL BUSINESS

5 CREDIT.—Subsection (b) of section 38 of the Inter6 nal Revenue Code of 1986 is amended by striking 

7 ‘‘plus’’ at the end of paragraph (35), by striking the 

8 period at the end of paragraph (36) and inserting ‘‘, 

9 plus’’, and by adding at the end the following new 

10 paragraph: 

11 ‘‘(37) the renewable electricity integration cred12 it determined under section 45S(a).’’. 

13 (3) SPECIFIED CREDIT.—Subparagraph (B) of 

14 section 38(c)(4) of the Internal Revenue Code of 

15 1986 is amended by redesignating clauses (vii) 

16 through (ix) as clauses (viii) through (x), respec17 tively, and by inserting after clause (v) the following 

18 new clause: 

19 ‘‘(vi) the credit determined under sec20 tion 45S.’’. 

21 (4) CLERICAL AMENDMENT.—The table of sec22 tions for subpart D of part IV of subchapter A of 

23 chapter 1 of the Internal Revenue Code of 1986 is 

24 amended by adding at the end the following new 

25 item: 

‘‘Sec. 45S. Renewable electricity integration credit.’’. 


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1 (b) PAYMENTS IN LIEU OF CREDIT.— 

2 (1) IN GENERAL.—Subchapter B of chapter 65 

3 of the Internal Revenue Code of 1986 is amended by 

4 adding at the end the following new section: 

5 ‘‘SEC. 6433. RENEWABLE ELECTRICITY INTEGRATION PAY6 MENTS. 

7 ‘‘(a) IN GENERAL.—If any eligible person sells re8 newable electricity to a retail customer, the Secretary shall 

9 pay (without interest) to any such person who elects to 

10 receive a payment an amount equal to the product of— 

11 ‘‘(1) the intermittent renewable portfolio factor 

12 of such eligible person, and 

13 ‘‘(2) the number of kilowatt hours of renewable 

14 electricity— 

15 ‘‘(A) purchased or produced by such per16 son, and 

17 ‘‘(B) sold by such person in the trade or 

18 business of such person to a retail customer. 

19 ‘‘(b) TIMING OF PAYMENTS.— 

20 ‘‘(1) IN GENERAL.—Except as provided in para21 graph (2), rules similar to the rules of section 

22 6427(i)(1) shall apply for purposes of this section. 

23 ‘‘(2) QUARTERLY PAYMENTS.— 

24 ‘‘(A) IN GENERAL.—If, at the close of any 

25 quarter of the taxable year of any person, at 


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1 least $750 is payable in the aggregate under 

2 subsection (a), to such person with respect to 

3 electricity purchased or produced during— 

4 ‘‘(i) such quarter, or 

5 ‘‘(ii) any prior quarter (for which no 

6 other claim has been filed) during such 

7 taxable year, 

8 a claim may be filed under this section with re9 spect to such electricity. 

10 ‘‘(B) TIME FOR FILING CLAIM.—No claim 

11 filed under this paragraph shall be allowed un12 less filed on or before the last day of the first 

13 quarter following the earliest quarter included 

14 in the claim. 

15 ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur16 poses of this section— 

17 ‘‘(1) ELIGIBLE PERSON.—The term ‘eligible 

18 person’ means an electric utility (as defined in sec19 tion 3(22) of the Federal Power Act, 16 U.S.C. 

20 796(22)). 

21 ‘‘(2) OTHER DEFINITIONS.—Any term used in 

22 this section which is also used in section 45S shall 

23 have the meaning given such term under section 

24 45S. 


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1 ‘‘(3) APPLICATION OF OTHER RULES.—For 

2 purposes of this section, rules similar to the rules of 

3 paragraphs (1) and (3) of section 45(e) shall apply. 

4 ‘‘(d) PAYMENT DISALLOWED UNLESS AMOUNT

5 PASSED TO THIRD PARTY GENERATORS CHARGED FOR

6 INTEGRATION COSTS.— 

7 ‘‘(1) IN GENERAL.—In the case of renewable 

8 electricity eligible for the payment under subsection 

9 (a) that is purchased and not produced by an eligi10 ble person, no payment shall be made under this sec11 tion unless any charge the eligible person has as12 sessed the seller to recover the integration costs as13 sociated with such electricity has been reduced (but 

14 not below zero) to the extent of the payment re15 ceived under subsection (a) associated with such 

16 electricity. 

17 ‘‘(2) DEFINITIONS.—For purposes of paragraph 

18 (1), charges intended to recover integration costs do 

19 not include amounts paid by the producer of the 

20 electricity for interconnection facilities, distribution 

21 upgrades, network upgrades, or stand alone network 

22 upgrades as those terms have been defined by the 

23 Federal Energy Regulatory Commission in its 

24 Standard Interconnection Procedures.’’. 


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•S 1291 IS

1 (2) CLERICAL AMENDMENT.—The table of sec2 tions for subpart B of chapter 65 of the Internal 

3 Revenue Code of 1986 is amended by adding at the 

4 end the following new item: 

‘‘Sec. 6433. Renewable electricity integration payments.’’. 

5 (c) EFFECTIVE DATE.—The amendments made by 

6 this section shall apply to electricity produced or pur7 chased after December 31, 2009. 

Æ 


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