II 

113TH CONGRESS 

2D SESSION S. 1899 

To amend the Internal Revenue Code of 1986 to provide a consumer renewable credit for a utility that sells renewable power, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JANUARY 9, 2014 

Ms. KLOBUCHAR (for herself, Mr. HOEVEN, 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 consumer renewable credit for a utility that sells renewable power, 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. CONSUMER RENEWABLE CREDIT. 

4 (a) BUSINESS CREDIT.— 

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

6 subchapter A of chapter 1 of the Internal Revenue 

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

8 following new section: 


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1 ‘‘SEC. 45S. CONSUMER RENEWABLE CREDIT. 

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

3 in the case of an eligible taxpayer, the consumer renewable 

4 credit for any taxable year is an amount equal to the prod5 uct of— 

6 ‘‘(1) the renewable portfolio factor of such eligi7 ble taxpayer, and 

8 ‘‘(2) subject to subsection (e), the number of 

9 kilowatt hours of renewable electricity— 

10 ‘‘(A) purchased or produced by such tax11 payer, and 

12 ‘‘(B) sold by such taxpayer to a retail cus13 tomer during the taxable year. 

14 ‘‘(b) RENEWABLE PORTFOLIO FACTOR.—In the case 

15 of taxable years beginning before January 1, 2019, the 

16 renewable portfolio factor for an eligible taxpayer shall be 

17 determined as follows: 

‘‘Renewable electricity

percentage: 

Renewable 

portfolio factor: 

Less than 6 percent .......................................................... zero cents

At least 6 percent but less than 8 percent ....................... 0.1 cents

At least 8 percent but less than 12 percent ..................... 0.2 cents

At least 12 percent but less than 16 percent ................... 0.3 cents

At least 16 percent but less than 20 percent ................... 0.4 cents

At least 20 percent but less than 24 percent ................... 0.5 cents

Equal to or greater than 24 percent ................................ 0.6 cents. 

18 ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur19 poses of this section— 


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

2 taxpayer’ means an electric utility, as defined in sec3 tion 3(22) of the Federal Power Act (16 U.S.C. 

4 796(22)). 

5 ‘‘(2) RENEWABLE ELECTRICITY.—The term ‘re6 newable electricity’ means electricity generated by 

7 any facility using wind or solar energy to generate 

8 such electricity. 

9 ‘‘(3) RENEWABLE ELECTRICITY PERCENT10 AGE.—The term ‘renewable electricity percentage’ 

11 means the percentage of an eligible taxpayer’s total 

12 sales of electricity to retail customers which is de13 rived from renewable electricity (determined without 

14 regard to whether such electricity was produced by 

15 the taxpayer). 

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

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

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

19 apply. 

20 ‘‘(5) CREDIT ALLOWED ONLY WITH RESPECT

21 TO ONE ELIGIBLE ENTITY.—No credit shall be al22 lowed under subsection (a) with respect to renewable 

23 electricity purchased from another eligible entity if a 

24 credit has been allowed under this section to such 

25 other eligible entity. 


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1 ‘‘(d) COORDINATION WITH PAYMENTS.—The amount 

2 of the credit determined under this section with respect 

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

4 payment provided with respect to such electricity solely by 

5 reason of the application of section 6433. 

6 ‘‘(e) RENEWABLE ELECTRICITY ENHANCEMENT.— 

7 ‘‘(1) NATIVE AMERICAN WIND AND SOLAR.—In 

8 the case of renewable electricity generated by a wind 

9 or solar energy facility which is located on an Indian 

10 reservation (as defined in section 168(j)(6)), the 

11 number of kilowatt hours of such renewable elec12 tricity shall, for purposes of subsection (a)(2), be 

13 equal to 200 percent of the kilowatt hours of such 

14 renewable electricity actually purchased or produced 

15 and sold during the taxable year. 

16 ‘‘(2) ELECTRIC COOPERATIVE WIND AND

17 SOLAR.—In the case of renewable electricity gen18 erated by a wind or solar energy facility which is 

19 wholly owned by a mutual or cooperative electric 

20 company (as described in section 501(c)(12) or 

21 1381(a)(2)(C)), the number of kilowatt hours of 

22 such renewable electricity shall, for purposes of sub23 section (a)(2), be equal to 150 percent of the kilo24 watt hours of such renewable electricity actually purVerDate Mar 15 2010 01:55 Jan 10, 2014 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1899.IS S1899

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1 chased or produced and sold during the taxable 

2 year.’’. 

3 (2) CREDIT MADE PART OF GENERAL BUSINESS

4 CREDIT.—Subsection (b) of section 38 of the Inter5 nal Revenue Code of 1986 is amended by striking 

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

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

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

9 paragraph: 

10 ‘‘(37) the consumer renewable credit deter11 mined under section 45S(a).’’. 

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

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

14 1986 is amended by redesignating clauses (vii) 

15 through (ix) as clauses (viii) through (x), respec16 tively, and by inserting after clause (v) the following 

17 new clause: 

18 ‘‘(vi) the credit determined under sec19 tion 45S.’’. 

20 (4) CLERICAL AMENDMENT.—The table of sec21 tions for subpart D of part IV of subchapter A of 

22 chapter 1 of the Internal Revenue Code of 1986 is 

23 amended by adding at the end the following new 

24 item: 

‘‘Sec. 45S. Consumer renewable credit.’’. 

25 (b) PAYMENTS IN LIEU OF CREDIT.— 


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

2 of the Internal Revenue Code of 1986 is amended by 

3 adding at the end the following new section: 

4 ‘‘SEC. 6433. CONSUMER RENEWABLE CREDIT PAYMENTS. 

5 ‘‘(a) IN GENERAL.—If any eligible person sells re6 newable electricity to a retail customer, the Secretary shall 

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

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

9 ‘‘(1) the intermittent renewable portfolio factor 

10 of such eligible person, and 

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

12 electricity— 

13 ‘‘(A) purchased or produced by such per14 son, and 

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

16 business of such person to a retail customer. 

17 ‘‘(b) TIMING OF PAYMENTS.— 

18 ‘‘(1) IN GENERAL.—Except as provided in para19 graph (2), rules similar to the rules of section 

20 6427(i)(1) shall apply for purposes of this section. 

21 ‘‘(2) QUARTERLY PAYMENTS.— 

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

23 quarter of the taxable year of any person (or, 

24 in the case of an eligible person that does not 

25 have a taxable year, the close of any quarter of 


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1 the fiscal year), at least $750 is payable in the 

2 aggregate under subsection (a), to such person 

3 with respect to electricity purchased or pro4 duced during— 

5 ‘‘(i) such quarter, or 

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

7 other claim has been filed) during such 

8 year, 

9 a claim may be filed under this section with re10 spect to such electricity. 

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

12 filed under this paragraph shall be allowed un13 less filed on or before the last day of the first 

14 quarter following the earliest quarter included 

15 in the claim. 

16 ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur17 poses of this section— 

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

19 person’ means— 

20 ‘‘(A) an electric utility, as defined in sec21 tion 3(22) of the Federal Power Act (16 U.S.C. 

22 796(22)), or 

23 ‘‘(B) a Federal power marketing agency, 

24 as defined in section 3(19) of such Act (16 

25 U.S.C. 796(19)). 


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

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

3 have the meaning given such term under section 

4 45S. 

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

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

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

8 ‘‘(d) PAYMENT DISALLOWED UNLESS AMOUNT

9 PASSED TO THIRD-PARTY GENERATORS CHARGED FOR

10 INTEGRATION COSTS.— 

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

12 electricity eligible for the payment under subsection 

13 (a) that is purchased and not produced by an eligi14 ble person, no payment shall be made under this sec15 tion unless any charge the eligible person has as16 sessed the seller to recover the integration costs as17 sociated with such electricity has been reduced (but 

18 not below zero) to the extent of the payment re19 ceived under subsection (a) associated with such 

20 electricity. 

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

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

23 not include amounts paid by the producer of the 

24 electricity for interconnection facilities, distribution 

25 upgrades, network upgrades, or stand alone network 


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1 upgrades as those terms have been defined by the 

2 Federal Energy Regulatory Commission in its 

3 Standard Interconnection Procedures. 

4 ‘‘(e) PAYMENT ALLOWED FOR SPECIAL GENERATING

5 AND TRANSMITTING ENTITIES.— 

6 ‘‘(1) IN GENERAL.—Notwithstanding subsection 

7 (a)(2), a special generating and transmitting entity 

8 shall be eligible for payment under subsection (a) 

9 based on the number of kilowatt hours of renewable 

10 electricity transmitted, regardless of whether such 

11 entity purchased or sold such electricity to retail 

12 customers. 

13 ‘‘(2) DEFINITION.—For purposes of this sub14 section, the term ‘special generating and transmit15 ting entity’ means— 

16 ‘‘(A) an entity which is— 

17 ‘‘(i) primarily engaged in marketing 

18 electricity, 

19 ‘‘(ii) provides transmissions services 

20 for greater than 4,000 megawatts of re21 newable electricity generating facilities, as 

22 determined by reference to the machine or 

23 nameplate capacity thereof, and 


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1 ‘‘(iii) transmits the majority of such 

2 renewable electricity to customers located 

3 outside of the region that it serves, or 

4 ‘‘(B) a generation and transmission coop5 erative which engages primarily in providing 

6 wholesale electric services to its members (gen7 erally consisting of distribution cooperatives).’’. 

8 (2) CLERICAL AMENDMENT.—The table of sec9 tions for subpart B of chapter 65 of the Internal 

10 Revenue Code of 1986 is amended by adding at the 

11 end the following new item: 

‘‘Sec. 6433. Consumer renewable credit payments.’’. 

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

13 this section shall apply to electricity produced or pur14 chased and sold after December 31, 2013, and before Jan15 uary 1, 2019. 

16 SEC. 2. DELAY IN APPLICATION OF WORLDWIDE INTEREST. 

17 (a) IN GENERAL.—Paragraphs (5)(D) and (6) of sec18 tion 864(f) of the Internal Revenue Code of 1986 are each 

19 amended by striking ‘‘December 31, 2020’’ and inserting 

20 ‘‘December 31, 2022’’. 

21 (b) EFFECTIVE DATE.—The amendments made by 

22 this section shall take effect on the date of the enactment 

23 of this Act. 

Æ 


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