II 

111TH CONGRESS 

2D SESSION S. 20 

To amend the Public Utility Regulatory Policies Act of 1978 to establish 

a Federal clean energy standard. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 29, 2010 

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

to the Committee on Energy and Natural Resources 

A BILL 

To amend the Public Utility Regulatory Policies Act of 1978 

to establish a Federal clean energy standard. 

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 ‘‘Clean Energy Stand5 ard Act of 2010’’. 

6 SEC. 2. SENSE OF CONGRESS ON CLEAN ENERGY AND EN7 ERGY EFFICIENCY. 

8 It is the sense of Congress that the Federal Govern9 ment should continue to support the use and expansion 

10 of clean energy and energy efficiency in— 


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1 (1) the production and use of energy; 

2 (2) the reduction of greenhouse gas emissions; 

3 and 

4 (3) the reduction of dependence on foreign oil. 

5 SEC. 3. FEDERAL CLEAN ENERGY STANDARD. 

6 (a) IN GENERAL.—Title VI of the Public Utility Reg7 ulatory Policies Act of 1978 (16 U.S.C. 2601 et seq.) is 

8 amended by adding at the end the following: 

9 ‘‘SEC. 610. FEDERAL CLEAN ENERGY STANDARD. 

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

11 ‘‘(1) ADVANCED COAL GENERATION.—The term 

12 ‘advanced coal generation’ means the generation of 

13 electricity produced from coal by a new or existing 

14 coal generating facility that captures and perma15 nently sequesters or stores at least 65 percent of 

16 greenhouse gases produced by the facility. 

17 ‘‘(2) AFFILIATE.—The term ‘affiliate’ when 

18 used with respect to a person, means another person 

19 that directly or indirectly owns or controls, is owned 

20 or controlled by, or is under common ownership or 

21 control with, such person, as determined under regu22 lations issued by the Secretary. 

23 ‘‘(3) BASE QUANTITY OF ELECTRICITY.— 

24 ‘‘(A) IN GENERAL.—The term ‘base quan25 tity of electricity’ means the total quantity of 


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1 electricity sold by an electric utility to electric 

2 consumers in a calendar year. 

3 ‘‘(B) EXCLUSIONS.—The term ‘base quan4 tity of electricity’ does not include— 

5 ‘‘(i) electricity generated by a hydro6 electric facility (including a pumped stor7 age facility but excluding qualified hydro8 power) owned by an electric utility or sold 

9 under contract or rate order to an electric 

10 utility to meet the needs of the retail cus11 tomers of the utility; or 

12 ‘‘(ii) electricity generated through the 

13 incineration of municipal solid waste owned 

14 by an electric utility or sold under contract 

15 or rate order to an electric utility to meet 

16 the needs of the retail customers of the 

17 utility. 

18 ‘‘(4) BIOMASS.—The term ‘biomass’ means— 

19 ‘‘(A) materials, precommercial thinnings, 

20 or invasive species from National Forest Sys21 tem land and public lands (as defined in section 

22 103 of the Federal Land Policy and Manage23 ment Act of 1976 (43 U.S.C. 1702)) that— 

24 ‘‘(i) are byproducts of preventive 

25 treatments that are removed— 


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1 ‘‘(I) to reduce hazardous fuels; 

2 ‘‘(II) to reduce or contain disease 

3 or insect infestation; or 

4 ‘‘(III) to restore ecosystem 

5 health; 

6 ‘‘(ii) would not otherwise be used for 

7 higher-value products; and 

8 ‘‘(iii) are harvested in accordance 

9 with— 

10 ‘‘(I) applicable law and land 

11 management plans; and 

12 ‘‘(II) the requirements for— 

13 ‘‘(aa) old-growth mainte14 nance, restoration, and manage15 ment direction of paragraphs (2), 

16 (3), and (4) of subsection (e) of 

17 section 102 of the Healthy For18 ests Restoration Act of 2003 (16 

19 U.S.C. 6512); and 

20 ‘‘(bb) large-tree retention of 

21 subsection (f) of that section; or 

22 ‘‘(B) any organic matter that is available 

23 on a renewable or recurring basis from non24 Federal land or land belonging to an Indian or 

25 Indian tribe that is held in trust by the United 


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1 States or subject to a restriction against alien2 ation imposed by the United States, including— 

3 ‘‘(i) renewable plant material, includ4 ing— 

5 ‘‘(I) feed grains; 

6 ‘‘(II) other agricultural commod7 ities; 

8 ‘‘(III) other plants and trees; and 

9 ‘‘(IV) algae; and 

10 ‘‘(ii) waste material, other than paper 

11 commonly recycled, including— 

12 ‘‘(I) crop residue; 

13 ‘‘(II) other vegetative waste ma14 terial (including wood waste and wood 

15 residues); 

16 ‘‘(III) animal waste and byprod17 ucts (including fats, oils, greases, and 

18 manure); and 

19 ‘‘(IV) food waste and yard waste; 

20 and 

21 ‘‘(C) residues and byproducts from wood, 

22 pulp, or paper products facilities. 

23 ‘‘(5) CLEAN ENERGY.—The term ‘clean energy’ 

24 means electric energy generated at a facility (includ25 ing a distributed generation facility) from— 


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1 ‘‘(A) solar, wind, geothermal, or ocean en2 ergy; 

3 ‘‘(B) biomass; 

4 ‘‘(C) landfill gas; 

5 ‘‘(D) qualified hydropower; 

6 ‘‘(E) marine and hydrokinetic renewable 

7 energy (as defined in section 632 of the Energy 

8 Independence and Security Act of 2007 (42 

9 U.S.C. 17211)); 

10 ‘‘(F) incremental geothermal production; 

11 ‘‘(G) coal-mined methane; 

12 ‘‘(H) qualified waste-to-energy; 

13 ‘‘(I) qualified nuclear energy; 

14 ‘‘(J) advanced coal generation; 

15 ‘‘(K) eligible retired fossil fuel generation; 

16 or 

17 ‘‘(L) another clean energy source based on 

18 innovative technology, as determined by the 

19 Secretary through rulemaking. 

20 ‘‘(6) DISTRIBUTED GENERATION FACILITY.— 

21 The term ‘distributed generation facility’ means a 

22 facility at or near a customer site that provides elec23 tric energy to 1 or more customers for purposes 

24 other than resale other than to a utility through a 

25 net metering arrangement. 


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1 ‘‘(7) ELIGIBLE RETIRED FOSSIL FUEL GENERA2 TION.—The term ‘eligible retired fossil fuel genera3 tion’ means the generation of electricity from any 

4 fossil fuel that is— 

5 ‘‘(A) produced by a fossil fuel generating 

6 facility (including any petroleum coke or oil7 fired steam unit or peaking facility) that had 

8 average carbon dioxide emissions during the 3- 

9 year period ending on the date of retirement in 

10 excess of 2,250 pounds per megawatt hour of 

11 generation; and 

12 ‘‘(B) permanently retired during the period 

13 beginning on the date of enactment of this sec14 tion and ending on January 1, 2015. 

15 ‘‘(8) GEOTHERMAL ENERGY.—The term ‘geo16 thermal energy’ means energy derived from a geo17 thermal deposit (within the meaning of section 

18 613(e)(2) of the Internal Revenue Code of 1986). 

19 ‘‘(9) INCREMENTAL COST OF COMPLIANCE.— 

20 ‘‘(A) IN GENERAL.—The term ‘incremental 

21 cost of compliance’ means— 

22 ‘‘(i) the costs attributable to all retail 

23 sales of electricity incurred in a year by an 

24 electric utility to— 


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1 ‘‘(I) generate clean energy eligi2 ble for Federal clean energy credits; 

3 ‘‘(II) acquire Federal clean en4 ergy credits; or 

5 ‘‘(III) make alternative compli6 ance payments in order to comply 

7 with the requirements of subsection 

8 (b); less 

9 ‘‘(ii)(I) the costs the electric utility 

10 would have incurred to serve all of the re11 tail customers of that electric utility in 

12 that year to generate or acquire additional 

13 electricity not eligible for clean energy 

14 credits if the requirements of subsection 

15 (b) did not apply to the electric utility; and 

16 ‘‘(II) the costs of compliance with any 

17 comparable State clean energy require18 ment. 

19 ‘‘(B) COST OF ELECTRICITY.—In calcu20 lating the incremental cost of compliance of an 

21 electric utility under this section, the Secretary 

22 shall take into account the reduction, if any, in 

23 the cost of electricity generated with fossil fuels 

24 associated with increased reliance on clean en25 ergy generation. 


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1 ‘‘(10) INCREMENTAL FOSSIL FUEL PRODUC2 TION.—The term ‘incremental fossil fuel production’ 

3 means the incremental quantity of electricity gen4 erated at an existing fossil fuel generation facility 

5 over the average quantity of electricity generated at 

6 the facility during the preceding 3-year period that 

7 is attributable to permanent efficiency improvements 

8 or capacity additions made on or after the date of 

9 enactment of this section, if there is no increase in 

10 greenhouse gas emissions associated with the effi11 ciency improvements or capacity additions when 

12 compared to the average greenhouse gas emissions 

13 during the preceding 3-year period. 

14 ‘‘(11) INCREMENTAL GEOTHERMAL PRODUC15 TION.— 

16 ‘‘(A) IN GENERAL.—The term ‘incremental 

17 geothermal production’ means, for any year, the 

18 excess of— 

19 ‘‘(i) the total kilowatt hours of elec20 tricity produced from a facility (including a 

21 distributed generation facility) using geo22 thermal energy; over 

23 ‘‘(ii) the average number of kilowatt 

24 hours produced annually at the facility for 

25 5 of the previous 7 calendar years before 


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1 the date of enactment of this section after 

2 eliminating the highest and the lowest kilo3 watt hour production years in that 7-year 

4 period. 

5 ‘‘(B) SPECIAL RULE.—A facility described 

6 in subparagraph (A) that was placed in service 

7 at least 7 years before the date of enactment of 

8 this section shall, commencing with the year in 

9 which that date of enactment occurs, reduce the 

10 amount calculated under subparagraph (A)(ii) 

11 each year, on a cumulative basis, by the average 

12 percentage decrease in the annual kilowatt hour 

13 production for the 7-year period described in 

14 subparagraph (A)(ii) with such cumulative sum, 

15 but not to exceed 30 percent. 

16 ‘‘(12) INCREMENTAL HYDROPOWER.— 

17 ‘‘(A) IN GENERAL.—The term ‘incremental 

18 hydropower’ means additional energy generated 

19 as a result of efficiency improvements or capac20 ity additions made on or after January 1, 1992. 

21 ‘‘(B) EXCLUSION.—The term ‘incremental 

22 hydropower’ does not include additional energy 

23 generated as a result of operational changes not 

24 directly associated with efficiency improvements 

25 or capacity additions. 


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1 ‘‘(C) MEASUREMENT AND CERTIFI2 CATION.—Efficiency improvements and capacity 

3 additions referred to in subparagraph (A) shall 

4 be— 

5 ‘‘(i) measured on the basis of the 

6 same water flow information used to deter7 mine a historic average annual generation 

8 baseline for the hydroelectric facility; and 

9 ‘‘(ii) certified by the Secretary or the 

10 Federal Energy Regulatory Commission. 

11 ‘‘(13) INCREMENTAL NUCLEAR PRODUCTION.— 

12 The term ‘incremental nuclear production’ means 

13 the incremental quantity of energy generated by an 

14 existing nuclear facility over the average quantity of 

15 energy generated at the facility during the preceding 

16 3-year period that is attributable to permanent effi17 ciency improvements or capacity additions made on 

18 or after the date of enactment of this section. 

19 ‘‘(14) INDIAN LAND.—The term ‘Indian land’ 

20 has the meaning given the term in section 2601 of 

21 the Energy Policy Act of 1992 (25 U.S.C. 3501). 

22 ‘‘(15) QUALIFIED HYDROPOWER.— 

23 ‘‘(A) IN GENERAL.—The term ‘qualified 

24 hydropower’ means— 

25 ‘‘(i) incremental hydropower; 


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1 ‘‘(ii) additions of capacity made on or 

2 after January 1, 2001, or the effective 

3 commencement date of an existing applica4 ble State clean or renewable electricity 

5 standard program at an existing nonhydro6 electric dam, if— 

7 ‘‘(I) the hydroelectric project in8 stalled on the nonhydroelectric dam— 

9 ‘‘(aa) is licensed by the Fed10 eral Energy Regulatory Commis11 sion, or is exempt from licensing, 

12 and is in compliance with the 

13 terms and conditions of the li14 cense or exemption; and 

15 ‘‘(bb) meets all other appli16 cable environmental, licensing, 

17 and regulatory requirements, in18 cluding applicable fish passage 

19 requirements; 

20 ‘‘(II) the nonhydroelectric dam— 

21 ‘‘(aa) was placed in service 

22 before the date of enactment of 

23 this section; 


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1 ‘‘(bb) was operated for flood 

2 control, navigation, or water sup3 ply purposes; and 

4 ‘‘(cc) did not produce hydro5 electric power as of the date of 

6 enactment of this section; and 

7 ‘‘(III) the hydroelectric project is 

8 operated so that the water surface ele9 vation at any given location and time 

10 that would have occurred in the ab11 sence of the hydroelectric project is 

12 maintained, subject to any license re13 quirements imposed under applicable 

14 law that change the water surface ele15 vation for the purpose of improving 

16 the environmental quality of the af17 fected waterway, as certified by the 

18 Federal Energy Regulatory Commis19 sion; and 

20 ‘‘(iii) in the case of the State of Alas21 ka— 

22 ‘‘(I) energy generated by a small 

23 hydroelectric facility that produces 

24 less than 50 megawatts; 


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1 ‘‘(II) energy from pumped stor2 age; and 

3 ‘‘(III) energy from a lake tap. 

4 ‘‘(B) STANDARDS.—Nothing in this para5 graph or the application of this paragraph shall 

6 affect the standards under which the Federal 

7 Energy Regulatory Commission issues licenses 

8 for and regulates hydropower projects under 

9 part I of the Federal Power Act (16 U.S.C. 

10 791a et seq.). 

11 ‘‘(16) QUALIFIED NUCLEAR ENERGY.—The 

12 term ‘qualified nuclear energy’ means energy from a 

13 nuclear generating unit placed in service on or after 

14 the date of enactment of this section. 

15 ‘‘(17) QUALIFIED WASTE-TO-ENERGY.—The 

16 term ‘qualified waste-to-energy’ means energy from 

17 the combustion of post-recycled municipal solid 

18 waste, or from the gasification or pyrolization of 

19 such waste and the combustion of the resulting gas 

20 at the same facility, if the owner or operator of the 

21 facility generating electricity from the energy pro22 vides to the Secretary, on an annual basis— 

23 ‘‘(A) a certification that the facility is in 

24 compliance with all applicable Federal and 

25 State environmental permits; 


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1 ‘‘(B) in the case of a facility that com2 mences operation before the date of enactment 

3 of this section, a certification that the facility 

4 meets emissions standards promulgated under 

5 section 112 or 129 of the Clean Air Act (42 

6 U.S.C. 7412, 7429) that apply as of the date 

7 of enactment of this section to new facilities 

8 within the relevant source category; and 

9 ‘‘(C) in the case of the combustion, 

10 pyrolization, or gasification of municipal solid 

11 waste, a certification that each local govern12 ment unit from which such waste originates op13 erates, participates in the operation of, con14 tracts for, or otherwise provides for, recycling 

15 services for residents of the local government 

16 unit. 

17 ‘‘(b) CLEAN ENERGY AND ENERGY EFFICIENCY RE18 QUIREMENT.— 

19 ‘‘(1) REQUIREMENT.— 

20 ‘‘(A) IN GENERAL.—Subject to subpara21 graph (B), each electric utility that sells elec22 tricity to electric consumers for a purpose other 

23 than resale shall obtain a percentage of the 

24 base quantity of electricity the electric utility 


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1 sells to electric consumers in any calendar year 

2 from clean energy or energy efficiency. 

3 ‘‘(B) PERCENTAGE.—Except as provided 

4 in section 611, the percentage obtained in a cal5 endar year under subparagraph (A) shall not be 

6 less than the amount specified in the following 

7 table: 

‘‘Calendar year: Minimum annual 

percentage: 

2013 and 2014 ....................................................... 13 

2015 through 2019 ................................................ 15 

2020 through 2024 ................................................ 20 

2025 through 2029 ................................................ 25 

2030 through 2034 ................................................ 30 

2035 through 2039 ................................................ 35 

2040 through 2044 ................................................ 40 

2045 through 2049 ................................................ 45 

2050 ....................................................................... 50. 

8 ‘‘(2) MEANS OF COMPLIANCE.—An electric util9 ity shall meet the requirements of paragraph (1) 

10 by— 

11 ‘‘(A) submitting to the Secretary clean en12 ergy credits issued under subsection (c); 

13 ‘‘(B) submitting Federal energy efficiency 

14 credits issued under subsection (i), except that 

15 those credits may not be used to meet more 

16 than 25 percent of the requirements under 

17 paragraph (1) in any calendar year; 

18 ‘‘(C) making alternative compliance pay19 ments to the Secretary at the rate of 3.5 cents 

20 per kilowatt hour (as adjusted for inflation 


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1 under subsection (g)) if the electric utility does 

2 not elect to petition the Secretary to waive the 

3 requirements under subsection (d)(3)(C); or 

4 ‘‘(D) a combination of activities described 

5 in subparagraphs (A), (B), and (C). 

6 ‘‘(3) PHASE-IN.—The Secretary shall prescribe, 

7 by regulation, a reasonable phase-in of the require8 ments of paragraph (1) as the requirements apply to 

9 an electric utility that becomes subject to this sec10 tion on or after January 1, 2013. 

11 ‘‘(c) FEDERAL CLEAN ENERGY AND ENERGY EFFI12 CIENCY CREDIT TRADING PROGRAMS.— 

13 ‘‘(1) IN GENERAL.—Not later than January 1, 

14 2011, the Secretary shall establish a Federal clean 

15 energy credit trading program, and a Federal energy 

16 efficiency credit trading program, under which elec17 tric utilities shall submit to the Secretary Federal 

18 clean energy credits and Federal energy efficiency 

19 credits to certify the compliance of the electric utili20 ties with subsection (b)(1). 

21 ‘‘(2) ADMINISTRATION.—As part of the pro22 gram, the Secretary shall— 

23 ‘‘(A) issue clean energy credits to genera24 tors of electric energy from clean energy, re25 gardless of whether the energy is transmitted 


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1 over the national interstate transmission sys2 tem; 

3 ‘‘(B) to the extent that clean sources of 

4 electricity are used in combination with other 

5 sources of energy, issue credits only to the ex6 tent that the electricity generated is from clean 

7 energy resources; 

8 ‘‘(C) issue clean energy credits to electric 

9 utilities associated with State clean energy 

10 standard compliance mechanisms pursuant to 

11 subsection (h); 

12 ‘‘(D) issue energy efficiency credits pursu13 ant to subsection (i); 

14 ‘‘(E) subject to subparagraph (F), ensure 

15 that a kilowatt hour, including the associated 

16 clean energy credit or energy efficiency credit, 

17 shall be used only once for purposes of compli18 ance with this Act; 

19 ‘‘(F) allow double credits for generation 

20 from facilities on Indian land, and triple credits 

21 for generation from small clean energy distrib22 uted generators no larger than 1 megawatt, ex23 cept that no distributed clean energy generation 

24 facilities on Indian land shall receive a greater 

25 number of credits than triple credits; 


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1 ‘‘(G) ensure that, with respect to a pur2 chaser that, as of the date of enactment of this 

3 section, has a purchase agreement from a clean 

4 energy facility placed in service before that 

5 date, the credit associated with the generation 

6 of clean energy under the contract is issued to 

7 the purchaser of the electric energy to the ex8 tent that the contract does not already provide 

9 for the allocation of the Federal credit; 

10 ‘‘(H) in the case of eligible retired fossil 

11 fuel generation, issue 0.25 credits per kilowatt 

12 hour during the 3 year-period beginning on the 

13 date of retirement based on the average annual 

14 quantity of electricity generated by eligible re15 tired fossil fuel generation during the final 3 

16 years of operation of the facility; 

17 ‘‘(I) calculate the quantity of clean energy 

18 credits issued for advanced coal generation, 

19 which shall be equal to the product obtained by 

20 multiplying— 

21 ‘‘(i) the kilowatt hours of electricity 

22 generated by a facility and supplied to the 

23 grid during the prior year; by 

24 ‘‘(ii) during the same year, the ratio 

25 of— 


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1 ‘‘(I) the quantity of carbon diox2 ide captured from the facility and se3 questered; bears to 

4 ‘‘(II) the sum of— 

5 ‘‘(aa) the quantity of carbon 

6 dioxide captured from the facility 

7 and sequestered; and 

8 ‘‘(bb) the quantity of carbon 

9 dioxide emitted from the facility; 

10 ‘‘(J) issue double clean energy credits in 

11 the case of the first 5 new advanced coal gen12 eration facilities that permanently sequester a 

13 minimum of 1,000,000 tons per year of carbon 

14 dioxide into deep geologic formations; 

15 ‘‘(K) issue double credits in the case of the 

16 first 5 retrofitted coal plants that are advanced 

17 coal generators, if the retrofitted facilities cap18 ture at least 200 MWe equivalent of flue gas 

19 and sequester carbon dioxide into deep geologic 

20 formations; 

21 ‘‘(L) in the case of credits issued under 

22 subparagraphs (J) and (K), if the qualifying 

23 project uses captured carbon dioxide for pur24 poses of enhanced hydrocarbon recovery, reduce 

25 the credits by .25; and 


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1 ‘‘(M) issue clean energy credits for the 

2 useful electric and thermal output from a facil3 ity that produces the output from biomass, 

4 using a system under which— 

5 ‘‘(i) in the case of efficiency that is 

6 less than 50 percent, 1 clean energy credit 

7 is awarded; 

8 ‘‘(ii) in the case of efficiency that is 

9 50 percent or more but less than 70 per10 cent, 1.1 clean energy credits are awarded 

11 for the same unit output; 

12 ‘‘(iii) in the case of efficiency that is 

13 70 percent or more but less than 90 per14 cent, 1.25 clean energy credits are awarded 

15 for the same unit output; and 

16 ‘‘(iv) in the case of efficiency that is 

17 90 percent or more, 1.5 clean energy cred18 its are awarded for the same unit output. 

19 ‘‘(3) CLEAN ENERGY CREDIT BORROWING.—At 

20 any time before the end of calendar year 2015 and 

21 any subsequent calendar year, an electric utility that 

22 has reason to believe the electric utility will not have 

23 sufficient clean energy credits to comply with sub24 section (b) may— 


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1 ‘‘(A) submit to the Secretary a plan that 

2 demonstrates that the electric utility, as a con3 sequence of having facilities under construction 

4 at the time the plan is submitted, will earn suf5 ficient clean energy credits during the subse6 quent 3 calendar years to meet the require7 ments of subsection (b) for calendar year 2015 

8 and the subsequent calendar years affected; and 

9 ‘‘(B) on approval of the plan by the Sec10 retary, apply clean energy credits that the plan 

11 demonstrates will be earned during the subse12 quent 3 calendar years to meet the require13 ments of subsection (b) for each calendar year 

14 affected. 

15 ‘‘(4) CREDIT TRADING AND BANKING.— 

16 ‘‘(A) IN GENERAL.—An electric utility that 

17 holds clean energy credits in excess of the quan18 tity of credits needed to comply with subsection 

19 (b) may transfer the credits to another electric 

20 utility in the same utility holding company sys21 tem or sell the credits to another electric utility. 

22 ‘‘(B) CARRYING FORWARD.—A clean en23 ergy credit for any year that is not used to sat24 isfy the minimum clean energy requirements of 


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1 subsection (b) for that year may be carried for2 ward for use in any subsequent year. 

3 ‘‘(5) DELEGATION OF MARKET FUNCTION.— 

4 ‘‘(A) IN GENERAL.—The Secretary may 

5 delegate to— 

6 ‘‘(i) an appropriate market-making 

7 entity the administration of a national 

8 clean energy credit market and a national 

9 energy efficiency credit market for pur10 poses of creating a transparent national 

11 market for the sale or trade of clean en12 ergy credits and energy efficiency credits; 

13 and 

14 ‘‘(ii) regional entities the tracking of 

15 dispatch of clean energy generation. 

16 ‘‘(B) ADMINISTRATION.—Any delegation 

17 under subparagraph (A) shall ensure that the 

18 tracking and reporting of information con19 cerning the dispatch of clean energy generation 

20 is transparent, verifiable, and independent of 

21 any generation or load interests with obligations 

22 under this section. 

23 ‘‘(d) ENFORCEMENT.— 


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1 ‘‘(1) CIVIL PENALTIES.—Any electric utility 

2 that fails to meet the requirements of subsection (b) 

3 shall be subject to a civil penalty. 

4 ‘‘(2) AMOUNT OF PENALTY.—The amount of 

5 the civil penalty shall be equal to the product ob6 tained by multiplying— 

7 ‘‘(A) the number of kilowatt hours of elec8 tric energy sold to electric consumers in viola9 tion of subsection (b); by 

10 ‘‘(B) 200 percent of the value of the alter11 native compliance payment, as adjusted for in12 flation under subsection (g). 

13 ‘‘(3) MITIGATION OR WAIVER.— 

14 ‘‘(A) PENALTY.— 

15 ‘‘(i) IN GENERAL.—The Secretary 

16 shall mitigate or waive a civil penalty 

17 under this subsection if the electric utility 

18 is unable to comply with subsection (b) due 

19 to a reason outside of the reasonable con20 trol of the electric utility. 

21 ‘‘(ii) AMOUNT.—The Secretary shall 

22 reduce the amount of any penalty deter23 mined under paragraph (2) by the amount 

24 paid by the electric utility to a State for 

25 failure to comply with the requirement of 


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1 a State clean or renewable energy program 

2 if the State requirement is greater than 

3 the applicable requirement of subsection 

4 (b). 

5 ‘‘(B) REQUIREMENT.—The Secretary may 

6 waive the requirements of subsection (b) for a 

7 period of up to 5 years with respect to an elec8 tric utility if the Secretary determines that the 

9 electric utility cannot meet the requirements 

10 due to a hurricane, tornado, fire, flood, earth11 quake, ice storm, or other natural disaster or 

12 act of God beyond the reasonable control of the 

13 utility. 

14 ‘‘(C) RATEPAYER PROTECTION.— 

15 ‘‘(i) IN GENERAL.—Subject to clause 

16 (ii), effective beginning June 1, 2013, and 

17 not later than June 1 of each year there18 after, an electric utility may petition the 

19 Secretary to waive, for the following com20 pliance year, all or part of the require21 ments of subsection (b) in order to limit 

22 the rate impact of the incremental cost of 

23 compliance of the electric utility to not 

24 more than 4 percent per retail customer in 

25 any year. 


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1 ‘‘(ii) REQUIREMENTS.— 

2 ‘‘(I) EXHAUSTION OF OPPORTU3 NITIES.—The Secretary may waive all 

4 or part of the requirements of sub5 section (b) only on a demonstration by 

6 the petitioner that the petitioner has 

7 exhausted all opportunities under this 

8 section to comply with the require9 ments of subsection (b). 

10 ‘‘(II) LIMITATIONS.—Any waiver 

11 granted by the Secretary under this 

12 subparagraph shall be limited to the 

13 maximum extent practicable while en14 suring that the increased cost of com15 pliance does not exceed 4 percent per 

16 retail customer for any year. 

17 ‘‘(D) VARIANCE.—A State public utility 

18 commission or electric utility may submit an 

19 application to the Secretary that requests a 

20 variance from the requirements of subsection 

21 (b) for 1 or more calendar years (including sus22 pension or reduction of the requirements) on 

23 the basis of transmission constraints preventing 

24 delivery of clean energy. 


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1 ‘‘(4) PROCEDURE FOR ASSESSING PENALTY.— 

2 The Secretary shall assess a civil penalty under this 

3 subsection in accordance with the procedures pre4 scribed by section 333(d) of the Energy Policy and 

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

6 ‘‘(e) ALTERNATIVE COMPLIANCE PAYMENTS.— 

7 ‘‘(1) IN GENERAL.—An electric utility may sat8 isfy the requirements of subsection (b), in whole or 

9 in part, by submitting in accordance with this sub10 section, in lieu of each Federal clean energy credit 

11 or megawatt hour of demonstrated total annual elec12 tricity savings that would otherwise be due, a pay13 ment equal to the amount required under subsection 

14 (b) in accordance with such regulations as the Sec15 retary may promulgate. 

16 ‘‘(2) PAYMENT TO STATE FUNDS.—Payments 

17 made under this subsection shall be made directly to 

18 the 1 or more States in which the electric utility is 

19 located, in proportion to the base quantity of a retail 

20 electric supplier that is within each applicable State, 

21 if the payments are deposited directly into a fund 

22 within the treasury of the State for use in accord23 ance with paragraph (3). 


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1 ‘‘(3) USE OF GRANTS.—The Governor of any 

2 State may expend amounts in a State clean energy 

3 escrow account solely for purposes of— 

4 ‘‘(A) increasing the quantity of electric en5 ergy produced from a clean energy source in the 

6 State, including nuclear and advanced coal 

7 technologies for carbon capture and sequestra8 tion; 

9 ‘‘(B) promoting the deployment and use of 

10 electric drive vehicles in the State, including the 

11 development of electric drive vehicles and bat12 teries; and 

13 ‘‘(C) offsetting the costs of carrying out 

14 this section paid by electric consumers in the 

15 State through— 

16 ‘‘(i) direct grants to electric con17 sumers; or 

18 ‘‘(ii) energy efficiency investments. 

19 ‘‘(4) INFORMATION AND REPORTS.—As a condi20 tion of providing payments to a State under this 

21 subsection, the Secretary may require the Governor 

22 to keep such accounts or records, and furnish such 

23 information and reports, as the Secretary determines 

24 are necessary and appropriate for determining com25 pliance with this subsection. 


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1 ‘‘(f) EXEMPTIONS.— 

2 ‘‘(1) IN GENERAL.—During any calendar year, 

3 this section shall not apply to an electric utility— 

4 ‘‘(A) that sold less than 4,000,000 mega5 watt hours of electric energy to electric con6 sumers during the preceding calendar year, ex7 cept that sales to an affiliate, lessee, or tenant 

8 of the electric utility shall not be treated as 

9 sales to electric consumers under this para10 graph; or 

11 ‘‘(B) in Hawaii. 

12 ‘‘(2) ADMINISTRATION.— 

13 ‘‘(A) VOLUNTARY COVERAGE.—Paragraph 

14 (1) shall not apply to an electric utility de15 scribed in paragraph (1) that voluntary elects 

16 to be covered by this section. 

17 ‘‘(B) SALE OF CLEAN ENERGY CREDITS.— 

18 An electric utility that is not covered by this 

19 section and has not elected to be covered by 

20 this section shall not be eligible to sell any cred21 its generated pursuant to this section to any 

22 other person. 

23 ‘‘(g) INFLATION ADJUSTMENT.—Not later than De24 cember 31 of each year beginning in 2011, the Secretary 


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1 shall adjust for inflation the rate of the alternative compli2 ance payment under subsection (b)(2)(C). 

3 ‘‘(h) STATE PROGRAMS.— 

4 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

5 nothing in this section diminishes any authority of 

6 a State or political subdivision of a State to adopt 

7 or enforce any law or regulation respecting clean en8 ergy or energy efficiency, or the regulation of electric 

9 utilities. 

10 ‘‘(2) COMPLIANCE.—Except as provided in sub11 section (d)(3), no such law or regulation shall relieve 

12 any person of any requirement otherwise applicable 

13 under this section. 

14 ‘‘(3) COORDINATION.—The Secretary, in con15 sultation with States having such clean energy and 

16 energy efficiency programs, shall, to the maximum 

17 extent practicable, facilitate coordination between 

18 the Federal program and State programs. 

19 ‘‘(4) REGULATIONS.— 

20 ‘‘(A) IN GENERAL.—The Secretary, in con21 sultation with States, shall promulgate regula22 tions to ensure that an electric utility that is 

23 subject to the requirements of this section and 

24 is subject to a State renewable energy or clean 


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1 energy standard receives clean energy credits 

2 if— 

3 ‘‘(i) the electric utility complies with 

4 the State standard by generating or pur5 chasing clean energy or renewable energy 

6 certificates or credits representing clean 

7 energy; or 

8 ‘‘(ii) the State imposes or allows other 

9 mechanisms for achieving the State stand10 ard, including the payment of taxes, fees, 

11 surcharges, or other financial obligations. 

12 ‘‘(B) AMOUNT OF CREDITS.—The amount 

13 of credits received by an electric utility under 

14 this subsection shall equal— 

15 ‘‘(i) in the case of subparagraph 

16 (A)(i), the quantity of clean energy result17 ing from the generation or purchase by the 

18 electric utility of clean energy; and 

19 ‘‘(ii) in the case of subparagraph 

20 (A)(ii), the pro rata share of the electric 

21 utility, based on the contributions to the 

22 mechanism made by the electric utility or 

23 customers of the electric utility, in the 

24 State, of the quantity of clean energy re25 sulting from those mechanisms. 


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1 ‘‘(C) PROHIBITION ON DOUBLE COUNT2 ING.—The regulations promulgated under this 

3 paragraph shall ensure that a kilowatt hour as4 sociated with a clean energy credit issued pur5 suant to this subsection shall not be used for 

6 compliance with this section more than once. 

7 ‘‘(i) ENERGY EFFICIENCY CREDITS.— 

8 ‘‘(1) DEFINITIONS.—In this subsection: 

9 ‘‘(A) CUSTOMER FACILITY SAVINGS.—The 

10 term ‘customer facility savings’ means a reduc11 tion in the consumption of end-use electricity at 

12 a facility of an end-use consumer of electricity 

13 served by an electric utility, as compared to— 

14 ‘‘(i) consumption at the facility during 

15 a base year, taking into account reductions 

16 attributable to causes other than energy ef17 ficiency investments (such as economic 

18 downturns, reductions in customer base, 

19 favorable weather conditions, or other such 

20 causes); or 

21 ‘‘(ii) in the case of new equipment (re22 gardless of whether the new equipment re23 places existing equipment at the end of the 

24 useful life of the existing equipment), con25 sumption by similar equipment of average 


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1 efficiency available for purchase at the 

2 time that new equipment is acquired. 

3 ‘‘(B) ELECTRICITY SAVINGS.—The term 

4 ‘electricity savings’ means— 

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

7 associated increase in fuel consumption at 

8 the facility; 

9 ‘‘(ii) reductions in distribution system 

10 losses of electricity achieved by a retail 

11 electricity distributor, as compared to 

12 losses attributable to new or replacement 

13 distribution system equipment of average 

14 efficiency (as defined by the Secretary by 

15 regulation); and 

16 ‘‘(iii) the output of new combined heat 

17 and power systems, to the extent provided 

18 under paragraph (5). 

19 ‘‘(C) QUALIFIED ELECTRICITY SAVINGS.— 

20 The term ‘qualified electricity savings’ means 

21 electricity saving that meet the measurement 

22 and verification requirements of paragraph (4). 

23 ‘‘(2) PETITION.—On petition by the Governor 

24 of a State or, in the case of the power service area 

25 of the Tennessee Valley Authority, the Board of DiVerDate Mar 15 2010 04:19 Oct 05, 2010 Jkt 099200 PO 00000 Frm 00033 Fmt 6652 Sfmt 6201 E:\BILLS\S20.IS S20

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1 rectors of the Tennessee Valley Authority, the Sec2 retary shall allow up to 25 percent of the require3 ments of an electric utility under subsection (b)(1) 

4 associated with the sales of electricity of the utility 

5 in the State to be met by submitting Federal energy 

6 efficiency credits issued pursuant to this subsection. 

7 ‘‘(3) ISSUANCE OF ENERGY EFFICIENCY CRED8 ITS.— 

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

10 issue energy efficiency credits for qualified elec11 tricity savings achieved in States described in 

12 paragraph (2) in accordance with this sub13 section. 

14 ‘‘(B) QUALIFIED ELECTRICITY SAVINGS.— 

15 Subject to subparagraph (C), in accordance 

16 with regulations promulgated by the Secretary, 

17 the Secretary shall issue credits for— 

18 ‘‘(i) qualified electricity savings 

19 achieved by an electric utility on or after 

20 the date of enactment of this section; and 

21 ‘‘(ii) qualified electricity savings 

22 achieved by other entities (including State 

23 agencies) on or after the date of enactment 

24 of this section if— 


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1 ‘‘(I) the measures used to achieve 

2 the qualified electricity savings were 

3 installed or placed in operation by the 

4 entity seeking the credit; and 

5 ‘‘(II) an electric utility eligible to 

6 receive efficiency credits did not pay a 

7 substantial portion of the cost of 

8 achieving the qualified electricity sav9 ings (unless the utility has waived any 

10 entitlement to the credit). 

11 ‘‘(C) STANDARDS.—No credits shall be 

12 issued for electricity savings achieved as a re13 sult of compliance with a national, State, or 

14 local building, equipment, or appliance effi15 ciency standard. 

16 ‘‘(4) MEASUREMENT AND VERIFICATION OF

17 ELECTRICITY SAVINGS.—Not later than January 

18 2012, the Secretary shall promulgate regulations re19 garding the measurement and verification of elec20 tricity savings under this subsection, including regu21 lations covering— 

22 ‘‘(A) procedures and standards for defining 

23 and measuring electricity savings that will be 

24 eligible to receive credits under paragraph (3), 

25 which shall— 


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1 ‘‘(i) specify the types of energy effi2 ciency and energy conservation that will be 

3 eligible for the credits; 

4 ‘‘(ii) require that energy consumption 

5 for customer facilities or portions of facili6 ties in the applicable base and current 

7 years be adjusted, as appropriate, to ac8 count for changes in weather, level of pro9 duction, and building area; 

10 ‘‘(iii) account for the useful life of 

11 electricity savings measures; 

12 ‘‘(iv) include specified electricity sav13 ings values for specific, commonly-used ef14 ficiency measures; and 

15 ‘‘(v) exclude electricity savings that— 

16 ‘‘(I) are not properly attributable 

17 to measures carried out by the entity 

18 seeking the credit; 

19 ‘‘(II) have already been credited 

20 under this section to another entity; 

21 or 

22 ‘‘(III) do not result from actions 

23 not intended to achieve electricity sav24 ings; 


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1 ‘‘(B) procedures and standards for third 

2 party verification of reported electricity savings; 

3 and 

4 ‘‘(C) such requirements for information, 

5 reports, and access to facilities as may be nec6 essary to carry out this subsection. 

7 ‘‘(5) COMBINED HEAT AND POWER.— 

8 ‘‘(A) IN GENERAL.—Under regulations 

9 promulgated by the Secretary, the increment of 

10 electricity output of a new combined heat and 

11 power system that is attributable to the higher 

12 efficiency of the combined system (as compared 

13 to the efficiency of separate production of the 

14 electric and thermal outputs), shall be consid15 ered electricity savings under this subsection. 

16 ‘‘(B) EXISTING SYSTEMS.—In addition to 

17 subparagraph (A), the regulations shall apply to 

18 the increment of electricity output of an exist19 ing combined heat and power system that is at20 tributable to permanent efficiency improve21 ments or capacity additions. 

22 ‘‘(6) INCREMENTAL NUCLEAR AND INCRE23 MENTAL FOSSIL FUEL PRODUCTION.— 

24 ‘‘(A) IN GENERAL.—Subject to subpara25 graph (B), under regulations promulgated by 


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1 the Secretary, the increment of electricity out2 put attributable to incremental nuclear produc3 tion and incremental fossil fuel production shall 

4 be considered electricity savings under this sub5 section. 

6 ‘‘(B) LIMITATION.—The increment of elec7 tricity output described in subparagraph (A) 

8 shall meet not more than 10 percent of the 

9 total obligation of an electric utility under sub10 section (b). 

11 ‘‘(j) BIOMASS HARVESTING AND SUSTAINABILITY.— 

12 The provisions of this section relating to biomass shall be 

13 administered in accordance with section 203(e) of the En14 ergy Policy Act of 2005 (42 U.S.C. 15852(e)). 

15 ‘‘(k) LOANS FOR PROJECTS TO COMPLY WITH FED16 ERAL CLEAN ENERGY STANDARD.— 

17 ‘‘(1) PURPOSES.—The purposes of this sub18 section are— 

19 ‘‘(A) to reduce the cost incurred by electric 

20 utilities in complying with the requirements of 

21 this section; and 

22 ‘‘(B) to minimize the impact of the re23 quirements on electricity rates for consumers. 

24 ‘‘(2) LOANS.—The Secretary shall make loans 

25 available to electric utilities to carry out qualified 


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1 projects approved by the Secretary to comply with 

2 the requirements of this section. 

3 ‘‘(3) QUALIFIED PROJECTS.— 

4 ‘‘(A) IN GENERAL.—A loan may be made 

5 under this subsection for a project— 

6 ‘‘(i) to construct a clean energy gen7 eration facility; 

8 ‘‘(ii) to install an energy efficiency or 

9 electricity demand reduction technology; or 

10 ‘‘(iii) to carry out any other project 

11 approved by the Secretary that the Sec12 retary determines is consistent with the 

13 purposes of this subsection. 

14 ‘‘(B) DISAPPROVAL.—The Secretary may 

15 disapprove an application for a loan for a 

16 project under this subsection if the Secretary 

17 determines that— 

18 ‘‘(i) the revenues generated under the 

19 project are unlikely to be sufficient to 

20 cover the repayment obligations of the pro21 posed loan; or 

22 ‘‘(ii) the project is not otherwise con23 sistent with the purposes of this sub24 section. 


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1 ‘‘(4) TERMS.—A loan made by the Secretary to 

2 an electric utility under this subsection shall— 

3 ‘‘(A) be for a term of not to exceed 30 

4 years; and 

5 ‘‘(B) bear an annual interest rate that is 

6 50 basis points more than the Federal funds 

7 rate established by the Board of Governors of 

8 the Federal Reserve System. 

9 ‘‘(5) PRIORITY.—Notwithstanding any other 

10 provision of law, the debt to the Federal Government 

11 under a loan made to an electric utility under this 

12 subsection shall have priority in any case in which 

13 the electric utility files for bankruptcy protection 

14 under title 11, United States Code. 

15 ‘‘(6) AUTHORIZATION OF APPROPRIATIONS.— 

16 There are authorized to be appropriated such sums 

17 as are necessary to carry out this subsection. 

18 ‘‘(l) RECONSIDERATION.— 

19 ‘‘(1) REVIEW.— 

20 ‘‘(A) IN GENERAL.—Not later than Janu21 ary 15, 2017, and every 5 years thereafter, the 

22 Secretary shall review and make recommenda23 tions to Congress on the program established 

24 under this section. 


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1 ‘‘(B) ANALYSIS.—The review shall analyze 

2 whether— 

3 ‘‘(i) the program established under 

4 this section has contributed to an economi5 cally harmful increase in electricity rates in 

6 regions of the United States; 

7 ‘‘(ii) the program has resulted in net 

8 economic benefits for the United States; 

9 and 

10 ‘‘(iii) new technologies and clean en11 ergy sources will advance the purposes of 

12 this section. 

13 ‘‘(2) RECOMMENDATIONS.—The Secretary shall 

14 submit to Congress recommendations on whether— 

15 ‘‘(A) the percentage of energy efficiency 

16 credits eligible to be submitted under subsection 

17 (b)(1) should be increased or decreased; 

18 ‘‘(B) the percentage of clean energy elec19 tricity required under subsection (b)(1) should 

20 be increased or decreased; and 

21 ‘‘(C) the definition of ‘clean energy’ should 

22 be expanded to reflect advances in technology 

23 or previously unavailable sources of clean or re24 newable energy. 


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1 ‘‘(3) REPORT.—Not later than January 15, 

2 2017, the Secretary shall submit to Congress a re3 port that describes any recommendations of the Sec4 retary on changes to the program established under 

5 this section. 

6 ‘‘(m) REGULATIONS.—Not later than 1 year after the 

7 date of enactment of this section, the Secretary shall pro8 mulgate regulations implementing this section. 

9 ‘‘(n) TERMINATION OF AUTHORITY.—This section 

10 and the authority provided by this section terminate on 

11 December 31, 2050.’’. 

12 (b) TABLE OF CONTENTS AMENDMENT.—The table 

13 of contents of the Public Utility Regulatory Policies Act 

14 of 1978 (16 U.S.C. prec. 2601) is amended by adding at 

15 the end of the items relating to title VI the following: 

‘‘Sec. 610. Federal clean energy standard.’’. 

Æ 


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