II 

113TH CONGRESS 

1ST SESSION S. 1205 

To reduce energy waste, strengthen energy system resiliency, increase industrial competitiveness, and promote local economic development by helping 

public and private entities to assess and implement energy systems that 

recover and use waste heat and local renewable energy resources. 

IN THE SENATE OF THE UNITED STATES 

JUNE 20, 2013 

Mr. FRANKEN introduced the following bill; which was read twice and referred 

to the Committee on Energy and Natural Resources 

A BILL 

To reduce energy waste, strengthen energy system resiliency, 

increase industrial competitiveness, and promote local 

economic development by helping public and private entities to assess and implement energy systems that recover 

and use waste heat and local renewable energy resources. 

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 ‘‘Local Energy Supply 

5 and Resiliency Act of 2013’’. 

6 SEC. 2. FINDINGS AND PURPOSES. 

7 (a) FINDINGS.—Congress finds that— 

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1 (1) a quantity of energy that is more than— 

2 (A) 27 percent of the total energy con3 sumption in the United States is released from 

4 power plants in the form of waste heat; and 

5 (B) 36 percent of the total energy con6 sumption in the United States is released from 

7 power plants, industrial facilities, and other 

8 buildings in the form of waste heat; 

9 (2) waste heat can be— 

10 (A) recovered and distributed to meet 

11 building heating or industrial process heating 

12 requirements; 

13 (B) converted to chilled water for air con14 ditioning or industrial process cooling; or 

15 (C) converted to electricity; 

16 (3) renewable energy resources in communities 

17 in the United States can be used to meet local ther18 mal and electric energy requirements; 

19 (4) use of local energy resources and implemen20 tation of local energy infrastructure can strengthen 

21 the reliability and resiliency of energy supplies in the 

22 United States in response to extreme weather 

23 events, power grid failures, or interruptions in the 

24 supply of fossil fuels; 

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1 (5) use of local waste heat and renewable en2 ergy resources— 

3 (A) strengthens United States industrial 

4 competitiveness; 

5 (B) helps reduce reliance on fossil fuels 

6 and the associated emissions of air pollution 

7 and carbon dioxide; 

8 (C) increases energy supply resiliency and 

9 security; and 

10 (D) keeps more energy dollars in local 

11 economies, thereby creating jobs; 

12 (6) district energy systems represent a key op13 portunity to tap waste heat and renewable energy re14 sources; 

15 (7) district energy systems are important for 

16 expanding implementation of combined heat and 

17 power (CHP) systems because district energy sys18 tems provide infrastructure for delivering thermal 

19 energy from a CHP system to a substantial base of 

20 end users; 

21 (8) district energy systems serve colleges, uni22 versities, hospitals, airports, military bases, and 

23 downtown areas; 

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1 (9) district energy systems help cut peak power 

2 demand and reduce power transmission and distribu3 tion system constraints by— 

4 (A) shifting power demand through ther5 mal storage; 

6 (B) generating power near load centers 

7 with a CHP system; and 

8 (C) meeting air conditioning demand 

9 through the delivery of chilled water produced 

10 with heat generated by a CHP system or other 

11 energy sources; 

12 (10) evaluation and implementation of district 

13 energy systems— 

14 (A) is a complex undertaking involving a 

15 variety of technical, economic, legal, and insti16 tutional issues and barriers; and 

17 (B) often requires technical assistance to 

18 successfully navigate these barriers; and 

19 (11) a major constraint to the use of local 

20 waste heat and renewable energy resources is a lack 

21 of low-interest, long-term capital funding for imple22 mentation. 

23 (b) PURPOSES.—The purposes of this Act are— 

24 (1) to encourage the use and distribution of 

25 waste heat and renewable thermal energy— 

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1 (A) to reduce fossil fuel consumption; 

2 (B) to enhance energy supply resiliency, 

3 reliability, and security; 

4 (C) to reduce air pollution and greenhouse 

5 gas emissions; 

6 (D) to strengthen industrial competitive7 ness; and 

8 (E) to retain more energy dollars in local 

9 economies; and 

10 (2) to facilitate the implementation of a local 

11 energy infrastructure that accomplishes the goals de12 scribed in paragraph (1) by— 

13 (A) providing technical assistance to evalu14 ate, design, and develop projects to build local 

15 energy infrastructure; and 

16 (B) facilitating low-cost financing for the 

17 construction of local energy infrastructure 

18 through the issuance of loan guarantees. 

19 SEC. 3. DEFINITIONS. 

20 (1) COMBINED HEAT AND POWER SYSTEM.— 

21 The term ‘‘combined heat and power system’’ or 

22 ‘‘CHP system’’ means generation of electric energy 

23 and heat in a single, integrated system that meets 

24 the efficiency criteria in clauses (ii) and (iii) of sec25 tion 48(c)(3)(A) of the Internal Revenue Code of 

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1 1986, under which heat that is conventionally re2 jected is recovered and used to meet thermal energy 

3 requirements. 

4 (2) DISTRICT ENERGY SYSTEM.—The term 

5 ‘‘district energy system’’ means a system that pro6 vides thermal energy to buildings and other energy 

7 consumers from 1 or more plants to individual build8 ings to provide space heating, air conditioning, do9 mestic hot water, industrial process energy, and 

10 other end uses. 

11 (3) LOAN GUARANTEE PROGRAM.—The term 

12 ‘‘Loan Guarantee Program’’ means the Local En13 ergy Infrastructure Loan Guarantee Program estab14 lished under section 5. 

15 (4) LOCAL ENERGY INFRASTRUCTURE.—The 

16 term ‘‘local energy infrastructure’’ means a system 

17 that— 

18 (A) recovers or produces useful thermal or 

19 electric energy from waste energy or renewable 

20 energy resources; 

21 (B) generates electricity using a combined 

22 heat and power system; 

23 (C) distributes electricity in microgrids; 

24 (D) stores thermal energy; or 

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1 (E) distributes thermal energy or transfers 

2 thermal energy to building heating and cooling 

3 systems via a district energy system. 

4 (5) MICROGRID.—The term ‘‘microgrid’’ means 

5 a group of interconnected loads and distributed en6 ergy resources within clearly defined electrical 

7 boundaries that— 

8 (A) acts as a single controllable entity with 

9 respect to the grid; and 

10 (B) can connect and disconnect from the 

11 grid to enable the microgrid to operate in both 

12 grid-connected or island-mode. 

13 (6) RENEWABLE ENERGY RESOURCE.—The 

14 term ‘‘renewable energy resource’’ means— 

15 (A) closed-loop and open-loop biomass (as 

16 defined in paragraphs (2) and (3), respectively, 

17 of section 45(c) of the Internal Revenue Code 

18 of 1986); 

19 (B) gaseous or liquid fuels produced from 

20 the materials described in subparagraph (A); 

21 (C) geothermal energy (as defined in sec22 tion 45(c)(4) of such Code); 

23 (D) municipal solid waste (as defined in 

24 section 45(c)(6) of such Code); or 

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1 (E) solar energy (which is used, undefined, 

2 in section 45 of such Code). 

3 (7) RENEWABLE THERMAL ENERGY.—The term 

4 ‘‘renewable thermal energy’’ means— 

5 (A) heating or cooling energy derived from 

6 a renewable energy resource; 

7 (B) natural sources of cooling such as cold 

8 lake or ocean water; or 

9 (C) other renewable thermal energy 

10 sources, as determined by the Secretary. 

11 (8) SECRETARY.—The term ‘‘Secretary’’ means 

12 the Secretary of Energy. 

13 (9) THERMAL ENERGY.—The term ‘‘thermal 

14 energy’’ means— 

15 (A) heating energy in the form of hot 

16 water or steam that is used to provide space 

17 heating, domestic hot water, or process heat; or 

18 (B) cooling energy in the form of chilled 

19 water, ice or other media that is used to provide 

20 air conditioning, or process cooling. 

21 (10) WASTE ENERGY.—The term ‘‘waste en22 ergy’’ means energy that— 

23 (A) is contained in— 

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1 (i) exhaust gases, exhaust steam, con2 denser water, jacket cooling heat, or lubri3 cating oil in power generation systems; 

4 (ii) exhaust heat, hot liquids, or flared 

5 gas from any industrial process; 

6 (iii) waste gas or industrial tail gas 

7 that would otherwise be flared, incinerated, 

8 or vented; 

9 (iv) a pressure drop in any gas, ex10 cluding any pressure drop to a condenser 

11 that subsequently vents the resulting heat; 

12 (v) condenser water from chilled water 

13 or refrigeration plants; or 

14 (vi) any other form of waste energy, 

15 as determined by the Secretary; and 

16 (B)(i) in the case of an existing facility, is 

17 not being used; or 

18 (ii) in the case of a new facility, is not con19 ventionally used in comparable systems. 

20 SEC. 4. TECHNICAL ASSISTANCE PROGRAM. 

21 (a) ESTABLISHMENT.— 

22 (1) IN GENERAL.—The Secretary shall establish 

23 a program to disseminate information and provide 

24 technical assistance, directly or through grants pro25 vided so that recipients may contract to obtain techmstockstill on DSK4VPTVN1PROD with BILLS

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1 nical assistance, to assist eligible entities in identi2 fying, evaluating, planning, and designing local en3 ergy infrastructure. 

4 (2) TECHNICAL ASSISTANCE.—The technical 

5 assistance under paragraph (1) shall include assist6 ance with 1 or more of the following: 

7 (A) Identification of opportunities to use 

8 waste energy or renewable energy resources. 

9 (B) Assessment of technical and economic 

10 characteristics. 

11 (C) Utility interconnection. 

12 (D) Negotiation of power and fuel con13 tracts. 

14 (E) Permitting and siting issues. 

15 (F) Marketing and contract negotiations. 

16 (G) Business planning and financial anal17 ysis. 

18 (H) Engineering design. 

19 (3) INFORMATION DISSEMINATION.—The infor20 mation dissemination under paragraph (1) shall in21 clude— 

22 (A) information relating to the topics iden23 tified in paragraph (2), including case studies 

24 of successful examples; and 

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1 (B) computer software for assessment, de2 sign, and operation and maintenance of local 

3 energy infrastructure. 

4 (b) ELIGIBLE ENTITY.—Any nonprofit or for-profit 

5 entity shall be eligible to receive assistance under the pro6 gram established under subsection (a). 

7 (c) ELIGIBLE COSTS.—On application by an eligible 

8 entity, the Secretary may award grants to an eligible enti9 ty to provide funds to cover not more than— 

10 (1) 100 percent of the cost of initial assessment 

11 to identify local energy opportunities; 

12 (2) 75 percent of the cost of feasibility studies 

13 to assess the potential for the implementation of 

14 local energy infrastructure; 

15 (3) 60 percent of the cost of guidance on over16 coming barriers to the implementation of local en17 ergy infrastructure, including financial, contracting, 

18 siting, and permitting issues; and 

19 (4) 45 percent of the cost of detailed engineer20 ing of local energy infrastructure. 

21 (d) APPLICATIONS.— 

22 (1) IN GENERAL.—An eligible entity desiring 

23 technical assistance under this section shall submit 

24 an application to the Secretary at such time, in such 

25 manner, and containing such information as the Secmstockstill on DSK4VPTVN1PROD with BILLS

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1 retary may require under the rules and procedures 

2 adopted under subsection (f). 

3 (2) APPLICATION PROCESS.—The Secretary 

4 shall seek applications for technical assistance under 

5 this section— 

6 (A) on a competitive basis; and 

7 (B) on a periodic basis, but not less fre8 quently than once every 12 months. 

9 (e) PRIORITIES.—In evaluating projects, the Sec10 retary shall give priority to projects that have the greatest 

11 potential for— 

12 (1) maximizing elimination of fossil fuel use; 

13 (2) strengthening the reliability of local energy 

14 supplies and boosting the resiliency of energy infra15 structure to the impact of extreme weather events, 

16 power grid failures, and interruptions in supply of 

17 fossil fuels; 

18 (3) minimizing environmental impact, including 

19 regulated air pollutants, greenhouse gas emissions, 

20 and use of ozone-depleting refrigerants; 

21 (4) facilitating use of renewable energy re22 sources; 

23 (5) increasing industrial competitiveness; and 

24 (6) maximizing local job creation. 

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1 (f) RULES AND PROCEDURES.—Not later than 180 

2 days after the date of enactment of this Act, the Secretary 

3 shall adopt rules and procedures for the administration 

4 of the program established under this section, consistent 

5 with the provisions of this Act. 

6 (g) AUTHORIZATION OF APPROPRIATIONS.—There is 

7 authorized to be appropriated to carry out this section 

8 $150,000,000 for the period of fiscal years 2014 through 

9 2018, to remain available until expended. 

10 SEC. 5. LOAN GUARANTEES FOR LOCAL ENERGY INFRA11 STRUCTURE. 

12 (a) LOCAL ENERGY INFRASTRUCTURE LOAN GUAR13 ANTEE PROGRAM.— 

14 (1) IN GENERAL.—Title XVII of the Energy 

15 Policy Act of 2005 (42 U.S.C. 16511 et seq.) is 

16 amended by adding at the end the following: 

17 ‘‘SEC. 1706. LOCAL ENERGY INFRASTRUCTURE LOAN GUAR18 ANTEE PROGRAM. 

19 ‘‘(a) IN GENERAL.—The Secretary may make guar20 antees under this section for commercial or innovative 

21 projects defined as ‘local energy infrastructure’ in section 

22 3 of the Local Energy Supply and Resiliency Act of 2013. 

23 ‘‘(b) MODIFICATION OF EXISTING AUTHORITY.—The 

24 Secretary shall reserve $4,000,000,000 of the loan guarmstockstill on DSK4VPTVN1PROD with BILLS

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1 antee authority remaining under section 1703 to provide 

2 loan guarantees under this section. 

3 ‘‘(c) USE OF OTHER APPROPRIATED FUNDS.—To 

4 the maximum extent practicable, the Secretary shall use 

5 funds appropriated to carry out section 1703 that remain 

6 unobligated as of the date of enactment of this section 

7 for the cost of loan guarantees under this section.’’. 

8 (2) TABLE OF CONTENTS AMENDMENT.—The 

9 table of contents for the Energy Policy Act of 2005 

10 (42 U.S.C. 15801 et seq.) is amended by inserting 

11 after the item relating to section 1705 the following 

12 new item: 

‘‘Sec. 1706. Local energy infrastructure loan guarantee program.’’. 

13 SEC. 6. DEFINITION OF INVESTMENT AREA. 

14 Section 103(16) of the Community Development 

15 Banking and Financial Institutions Act of 1994 (12 

16 U.S.C. 4702(16)) is amended— 

17 (1) in subparagraph (A)(ii), by striking ‘‘or’’ at 

18 the end; 

19 (2) in subparagraph (B), by striking the period 

20 at the end and inserting ‘‘; or’’; and 

21 (3) by adding at the end the following: 

22 ‘‘(C) has the potential for implementation 

23 of local energy infrastructure as defined in the 

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1 Local Energy Supply and Resiliency Act of 

2 2013.’’. 

Æ 

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