I 

113TH CONGRESS 

1ST SESSION H. R. 2685 

To incorporate smart grid capability into the Energy Star Program, to reduce 

peak electric demand, to reauthorize a energy efficiency public information program to include Smart Grid information, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 11, 2013 

Mr. MCNERNEY (for himself and Mr. CARTWRIGHT) introduced the following 

bill; which was referred to the Committee on Energy and Commerce 

A BILL 

To incorporate smart grid capability into the Energy Star 

Program, to reduce peak electric demand, to reauthorize 

a energy efficiency public information program to include 

Smart Grid information, 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 ‘‘Smart Grid Advance5 ment Act of 2013’’. 

6 SEC. 2. DEFINITIONS. 

7 In this Act: 


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1 (1) ADMINISTRATOR.—The term ‘‘Adminis2 trator’’ means the Administrator of the Environ3 mental Protection Agency. 

4 (2) APPLICABLE BASELINE.—The term ‘‘appli5 cable baseline’’ means the average of the highest 

6 three annual peak demands a load-serving entity has 

7 experienced during the 5 years immediately prior to 

8 the date of enactment of this Act. 

9 (3) COMMISSION.—The term ‘‘Commission’’ 

10 means the Federal Energy Regulatory Commission. 

11 (4) LOAD-SERVING ENTITY.—The term ‘‘load12 serving entity’’ means an entity that provides elec13 tricity directly to retail consumers with the responsi14 bility to assure power quality and reliability, includ15 ing such entities that are investor-owned, publicly 

16 owned, owned by rural electric cooperatives, or other 

17 entities. 

18 (5) PEAK DEMAND.—The term ‘‘peak demand’’ 

19 means the highest point of electricity demand, net of 

20 any distributed electricity generation or storage from 

21 sources on the load-serving entity’s customers’ prem22 ises, during any hour on the system of a load-serving 

23 entity during a calendar year, expressed in mega24 watts (MW), or more than one such high point as 

25 a function of seasonal demand changes. 


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1 (6) PEAK DEMAND REDUCTION.—The term 

2 ‘‘peak demand reduction’’ means the reduction in 

3 annual peak demand as compared to a previous 

4 baseline year or period, expressed in megawatts 

5 (MW), whether accomplished by— 

6 (A) diminishing the end-use requirements 

7 for electricity; 

8 (B) use of locally stored energy or gen9 erated electricity to meet those requirements 

10 from distributed resources on the load-serving 

11 entity’s customers’ premises and without use of 

12 high-voltage transmission; or 

13 (C) energy savings from efficient operation 

14 of the distribution grid resulting from the use 

15 of a Smart Grid. 

16 (7) PEAK DEMAND REDUCTION PLAN.—The 

17 term ‘‘peak demand reduction plan’’ means a plan 

18 developed by or for a load-serving entity that it will 

19 implement to meet its peak demand reduction goals. 

20 (8) PEAK PERIOD.—The term ‘‘peak period’’ 

21 means the time period on the system of a load-serv22 ing entity relative to peak demand that may warrant 

23 special measures or electricity resources to maintain 

24 system reliability while meeting peak demand. 


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1 (9) SECRETARY.—The term ‘‘Secretary’’ means 

2 the Secretary of Energy. 

3 (10) SMART GRID.—The term ‘‘Smart Grid’’ 

4 has the meaning provided by section 1301 of the 

5 Energy Independence and Security Act of 2007 (42 

6 U.S.C. 17381). 

7 SEC. 3. ASSESSMENT OF SMART GRID COST EFFECTIVE8 NESS IN PRODUCTS. 

9 (a) ASSESSMENT.—Not later than 1 year after the 

10 date of enactment of this Act, the Secretary and the Ad11 ministrator shall each assess the potential for cost-effec12 tive integration of Smart Grid technologies and capabili13 ties in all products that are reviewed by the Department 

14 of Energy and the Environmental Protection Agency, re15 spectively, for potential designation as Energy Star prod16 ucts. 

17 (b) ANALYSIS.—(1) Not later than 2 years after the 

18 date of enactment of this Act, the Secretary and the Ad19 ministrator shall each prepare an analysis of the potential 

20 energy savings, greenhouse gas emission reductions, and 

21 electricity cost savings that could accrue for each of the 

22 products identified by the assessment in subsection (a) in 

23 the following optimal circumstances: 


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1 (A) The products possessed Smart Grid capa2 bility and interoperability that is tested and proven 

3 reliable. 

4 (B) The products were utilized in an electricity 

5 utility service area which had Smart Grid capability 

6 and offered customers rate or program incentives to 

7 use the products. 

8 (C) The utility’s rates reflected national average 

9 costs, including average peak and valley seasonal 

10 and daily electricity costs. 

11 (D) Consumers using such products took full 

12 advantage of such capability. 

13 (E) The utility avoided incremental investments 

14 and rate increases related to such savings. 

15 (2) The analysis under paragraph (1) shall be consid16 ered the ‘‘best case’’ Smart Grid analysis. On the basis 

17 of such an analysis for each product, the Secretary and 

18 the Administrator shall determine whether the installation 

19 of Smart Grid capability for such a product would be cost 

20 effective. For purposes of this paragraph, the term ‘‘cost 

21 effective’’ means that the cumulative savings from using 

22 the product under the best case Smart Grid circumstances 

23 for a period of one-half of the product’s expected useful 

24 life will be greater than the incremental cost of the Smart 

25 Grid features included in the product. 


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1 (3) To the extent that including Smart Grid capa2 bility in any products analyzed under paragraph (2) is 

3 found to be cost effective in the best case, the Secretary 

4 and the Administrator shall, not later than 3 years after 

5 the date of enactment of this Act take each of the fol6 lowing actions: 

7 (A) Inform the manufacturer of such product of 

8 such finding of cost effectiveness. 

9 (B) Assess the potential contributions the devel10 opment and use of products with Smart Grid tech11 nologies bring to reducing peak demand and pro12 moting grid stability. 

13 (C) Assess the potential national energy savings 

14 and electricity cost savings that could be realized if 

15 Smart Grid potential were installed in the relevant 

16 products reviewed by the Energy Star program. 

17 (D) Assess and identify options for providing 

18 consumers information on products with Smart Grid 

19 capabilities, including the necessary conditions for 

20 cost-effective savings. 

21 (E) Submit a report to Congress summarizing 

22 the results of the assessment for each class of prod23 ucts, and presenting the potential energy and green24 house gas savings that could result if Smart Grid 


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1 capability were installed and utilized on such prod2 ucts. 

3 SEC. 4. INCLUSIONS OF SMART GRID CAPABILITY ON AP4 PLIANCE ENERGY GUIDE LABELS. 

5 Section 324(a)(2) of the Energy Policy and Conserva6 tion Act (42 U.S.C. 6294(a)(2)) is amended by adding the 

7 following at the end: 

8 ‘‘(J)(i) Not later than 1 year after the date 

9 of enactment of this subparagraph, the Federal 

10 Trade Commission shall initiate a rulemaking 

11 to consider making a special note in a promi12 nent manner on any ENERGY GUIDE label 

13 for any product actually including Smart Grid 

14 capability that— 

15 ‘‘(I) Smart Grid capability is a fea16 ture of that product; 

17 ‘‘(II) the use and value of that feature 

18 depended on the Smart Grid capability of 

19 the utility system in which the product was 

20 installed and the active utilization of that 

21 feature by the customer; and 

22 ‘‘(III) on a utility system with Smart 

23 Grid capability, the use of the product’s 

24 Smart Grid capability could reduce the 

25 customer’s cost of the product’s annual opVerDate Mar 15 2010 23:33 Jul 12, 2013 Jkt 029200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2685.IH H2685

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1 eration by an estimated dollar amount 

2 range representing the result of incre3 mental energy and electricity cost savings 

4 that would result from the customer taking 

5 full advantage of such Smart Grid capa6 bility. 

7 ‘‘(ii) Not later than 3 years after the date 

8 of enactment of this subparagraph, the Com9 mission shall complete the rulemaking initiated 

10 under clause (i).’’. 

11 SEC. 5. SMART GRID PEAK DEMAND REDUCTION GOALS. 

12 (a) GOALS.—Not later than 1 year after the date of 

13 enactment of this section, each load-serving entity, or, at 

14 the option of the State, each State with respect to load15 serving entities that the State regulates, shall determine 

16 and publish peak demand reduction goals for any load17 serving entities that have an applicable baseline in excess 

18 of 250 megawatts. 

19 (b) BASELINES.—(1) The Commission, in consulta20 tion with the Secretary and the Administrator, shall de21 velop and publish, after an opportunity for public com22 ment, but not later than 180 days after the date of enact23 ment of this section, a methodology to provide for adjust24 ments or normalization to a load-serving entity’s applica25 ble baseline over time to reflect changes in the number 


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1 of customers served, weather conditions, general economic 

2 conditions, and any other appropriate factors external to 

3 peak demand management, as determined by the Commis4 sion. 

5 (2) The Commission shall support load-serving enti6 ties (including any load-serving entities with an applicable 

7 baseline of less than 250 megawatts that volunteer to par8 ticipate) in determining their applicable baselines and in 

9 developing their peak demand reduction goals. 

10 (3) The Secretary, in consultation with the Commis11 sion, the Administrator, and the North American Electric 

12 Reliability Corporation, shall develop a system and rules 

13 for measurement and verification of demand reductions. 

14 (c) PEAK DEMAND REDUCTION GOALS.—(1) Peak 

15 demand reduction goals may be established for an indi16 vidual load-serving entity, or, at the determination of a 

17 State, tribal, or regional entity, by that State, tribal, or 

18 regional entity for a larger region that shares a common 

19 system peak demand and for which peak demand reduc20 tion measures would offer regional benefit. 

21 (2) A State or regional entity establishing peak de22 mand reduction goals shall cooperate, as necessary and 

23 appropriate, with the Commission, the Secretary, State 

24 regulatory commissions, State energy offices, the North 


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1 American Electric Reliability Corporation, and other rel2 evant authorities. 

3 (3) In determining the applicable peak demand reduc4 tion goals— 

5 (A) States and other jurisdictional entities may 

6 utilize the results of the 2009 National Assessment 

7 of Demand Response Potential, as authorized by 

8 section 571 of the National Energy Conservation 

9 Policy Act (42 U.S.C. 8279); and 

10 (B) the relative economics of peak demand re11 duction and generation required to meet peak de12 mand shall be evaluated in a neutral and objective 

13 manner. 

14 (4) The applicable peak demand reduction goals shall 

15 provide that— 

16 (A) load-serving entities will reduce or mitigate 

17 peak demand by a minimum percentage amount 

18 from the applicable baseline to a lower peak demand 

19 during calendar year 2015; 

20 (B) load-serving entities will reduce or mitigate 

21 peak demand by a minimum percentage greater 

22 amount from the applicable baseline to a lower peak 

23 demand during calendar year 2018; and 

24 (C) the minimum percentage reductions estab25 lished as peak demand reduction goals shall be the 


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1 maximum reductions that are realistically achievable 

2 with an aggressive effort to deploy Smart Grid and 

3 peak demand reduction technologies and methods, 

4 including those listed in subsection (d). 

5 (d) PLAN.—Each load-serving entity shall prepare a 

6 peak demand reduction plan that demonstrates its ability 

7 to meet each applicable goal by any or a combination of 

8 the following options: 

9 (1) Direct reduction in megawatts of peak de10 mand through— 

11 (A) energy efficiency measures (including 

12 efficient transmission wire technologies which 

13 significantly reduce line loss compared to tradi14 tional wire technology) with reliable and contin15 ued application during peak demand periods; or 

16 (B) use of a Smart Grid. 

17 (2) Demonstration that an amount of 

18 megawatts equal to a stated portion of the applicable 

19 goal is contractually committed to be available for 

20 peak reduction through one or more of the following: 

21 (A) Megawatts enrolled in demand re22 sponse programs. 

23 (B) Megawatts subject to the ability of a 

24 load-serving entity to call on demand response 

25 programs, smart appliances, smart electricity or 


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1 energy storage devices, distributed generation 

2 resources on the entity’s customers’ premises, 

3 or other measures directly capable of actively, 

4 controllably, reliably, and dynamically reducing 

5 peak demand (‘‘dynamic peak management con6 trol’’). 

7 (C) Megawatts available from distributed 

8 dynamic electricity or energy storage under 

9 agreement with the owner of that storage. 

10 (D) Megawatts committed from dispatch11 able distributed generation demonstrated to be 

12 reliable under peak period conditions and in 

13 compliance with air quality regulations. 

14 (E) Megawatts available from smart appli15 ances and equipment with Smart Grid capa16 bility available for direct control by the utility 

17 through agreement with the customer owning 

18 the appliances or equipment or with a third 

19 party pursuant to such agreements. 

20 (F) Megawatts from a demonstrated and 

21 assured minimum of distributed solar electric 

22 generation capacity in instances where peak pe23 riod and peak demand conditions are directly 

24 related to solar radiation and accompanying 

25 heat. 


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1 (3) If any of the methods listed in subpara2 graph (C), (D), or (E) of paragraph (2) are relied 

3 upon to meet its peak demand reduction goals, the 

4 load-serving entity must demonstrate this capability 

5 by operating a test during the applicable calendar 

6 year. 

7 (4) Nothing in this section shall require the 

8 publication in peak demand reduction goals or in 

9 any peak demand reduction plan of any information 

10 that is confidential for competitive or other reasons 

11 or that identifies individual customers. 

12 (e) EXISTING AUTHORITY AND REQUIREMENTS.— 

13 Nothing in this section diminishes or supersedes any au14 thority of a State or political subdivision of a State to 

15 adopt or enforce any law or regulation respecting peak de16 mand management, demand response, distributed energy 

17 storage, use of distributed generation, or the regulation 

18 of load-serving entities. The Commission, in consultation 

19 with States and Indian tribes having such peak demand 

20 management, demand response, and distributed energy 

21 storage programs, shall to the extent practicable, facilitate 

22 coordination between the Federal program and such State 

23 and tribal programs. 


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1 (f) RELIEF.—The Commission may, for good cause, 

2 grant relief to load-serving entities from the requirements 

3 of this section. 

4 (g) OTHER LAWS.—Except as provided in sub5 sections (e) and (f), no law or regulation shall relieve any 

6 person of any requirement otherwise applicable under this 

7 section. 

8 (h) COMPLIANCE.—(1) The Commission shall, not 

9 later than 1 year after the date of enactment of this Act, 

10 establish a public Web site where the Commission shall 

11 provide information and data demonstrating compliance 

12 by States, Indian tribes, regional entities, and load-serving 

13 entities with this section, including the success of load14 serving entities in meeting applicable peak demand reduc15 tion goals. 

16 (2) The Commission shall, by April 1 of each year 

17 beginning in 2015, provide a report to Congress on com18 pliance with this section and success in meeting applicable 

19 peak demand reduction goals and, as appropriate, shall 

20 make recommendations as to how to increase peak de21 mand reduction efforts. 

22 (3) The Commission shall note in each such report 

23 any State, political subdivision of a State, or load-serving 

24 entity that has failed to comply with this section, or is 


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1 not a part of any region or group of load-serving entities 

2 serving a region that has complied with this section. 

3 (4) The Commission shall have and exercise the au4 thority to take reasonable steps to modify the process of 

5 establishing peak demand reduction goals and to accept 

6 adjustments to them as appropriate when sought by load7 serving entities. 

8 (i) ASSISTANCE AND FUNDING.— 

9 (1) ASSISTANCE.—The Secretary may make 

10 grants to States and to other entities with respon11 sibilities to be carried out under the Act to offset 

12 any documented costs of carrying out such respon13 sibilities to the extent such costs are deemed burden14 some or extraordinary by the Secretary. 

15 (2) FUNDING.—There are authorized to be ap16 propriated such sums as may be necessary to the 

17 Commission, the Secretary, and the Administrator to 

18 carry out the provisions of this Act. 

19 SEC. 6. REAUTHORIZATION OF ENERGY EFFICIENCY PUB20 LIC INFORMATION PROGRAM TO INCLUDE 

21 SMART GRID INFORMATION. 

22 (a) IN GENERAL.—Section 134 of the Energy Policy 

23 Act of 2005 (42 U.S.C. 15832) is amended as follows: 


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1 (1) By amending the section heading to read as 

2 follows: ‘‘ENERGY EFFICIENCY AND SMART GRID

3 PUBLIC INFORMATION INITIATIVE’’. 

4 (2) In paragraph (1) of subsection (a), by strik5 ing ‘‘reduce energy consumption during the 4-year 

6 period beginning on the date of enactment of this 

7 Act’’ and inserting ‘‘increase energy efficiency and 

8 to adopt Smart Grid technology and practices’’. 

9 (3) In paragraph (2) of subsection (a), by strik10 ing ‘‘benefits to consumers of reducing’’ and insert11 ing ‘‘economic and environmental benefits to con12 sumers and the United States of optimizing’’. 

13 (4) In subsection (a), by inserting at the begin14 ning of paragraph (3) ‘‘the effect of energy effi15 ciency and Smart Grid capability in reducing energy 

16 and electricity prices throughout the economy, to17 gether with’’. 

18 (5) In subsection (a)(4), by redesignating sub19 paragraph (D) as subparagraph (E), by striking 

20 ‘‘and’’ at the end of subparagraph (C), and by in21 serting after subparagraph (C) the following: 

22 ‘‘(D) purchasing and utilizing equipment 

23 that includes Smart Grid features and capa24 bility; and’’. 


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1 (6) In subsection (c), by striking ‘‘Not later 

2 than July 1, 2009,’’ and inserting, ‘‘For each year 

3 when appropriations pursuant to the authorization 

4 in this section exceed $10,000,000,’’. 

5 (7) In subsection (d) by striking ‘‘2010’’ and 

6 inserting ‘‘2022’’. 

7 (8) In subsection (e) by striking ‘‘2010’’ and in8 serting ‘‘2022’’. 

9 (b) TABLE OF CONTENTS.—The item relating to sec10 tion 134 in the table of contents for the Energy Policy 

11 Act of 2005 (42 U.S.C. 15801 and following) is amended 

12 to read as follows: 

‘‘Sec. 134. Energy efficiency and Smart Grid public information initiative.’’. 

13 SEC. 7. INCLUSION OF SMART GRID FEATURES IN APPLI14 ANCE REBATE PROGRAM. 

15 (a) AMENDMENTS.—Section 124 of the Energy Pol16 icy Act of 2005 (42 U.S.C. 15821) is amended as follows: 

17 (1) By amending the section heading to read as 

18 follows: ‘‘ENERGY EFFICIENT AND SMART AP19 PLIANCE REBATE PROGRAM.’’. 

20 (2) By redesignating paragraphs (4) and (5) of 

21 subsection (a) as paragraphs (5) and (6), respec22 tively, and inserting after paragraph (3) the fol23 lowing: 

24 ‘‘(4) SMART APPLIANCE.—The term ‘smart ap25 pliance’ means a product that the Administrator of 


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1 the Environmental Protection Agency or the Sec2 retary of Energy has determined qualifies for such 

3 a designation in the Energy Star program pursuant 

4 to section 3 of the Smart Grid Advancement Act of 

5 2013, or that the Secretary or the Administrator has 

6 separately determined includes the relevant Smart 

7 Grid capabilities listed in section 1301 of the Energy 

8 Independence and Security Act of 2007 (42 U.S.C. 

9 17381).’’. 

10 (3) In subsection (b)(1) by inserting ‘‘and 

11 smart’’ after ‘‘efficient’’ and by inserting after 

12 ‘‘products’’ the first place it appears ‘‘, including 

13 products designated as being smart appliances’’. 

14 (4) In subsection (b)(3), by inserting ‘‘the ad15 ministration of’’ after ‘‘carry out’’. 

16 (5) In subsection (d), by inserting ‘‘the admin17 istration of’’ after ‘‘carrying out’’ and by inserting 

18 ‘‘, and up to 100 percent of the value of the rebates 

19 provided pursuant to this section’’ before the period 

20 at the end. 

21 (6) In subsection (e)(3), by inserting ‘‘, with 

22 separate consideration as applicable if the product is 

23 also a smart appliance,’’ after ‘‘Energy Star prod24 uct’’ the first place it appears and by inserting ‘‘or 

25 smart appliance’’ before the period at the end. 


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1 (7) In subsection (f), by striking 

2 ‘‘$50,000,000’’ through the period at the end and 

3 inserting ‘‘$100,000,000 for each fiscal year from 

4 2014 through 2019.’’. 

5 (b) TABLE OF CONTENTS.—The item relating to sec6 tion 124 in the table of contents for the Energy Policy 

7 Act of 2005 (42 U.S.C. 15801 and following) is amended 

8 to read as follows: 

‘‘Sec. 124. Energy efficient and smart appliance rebate program.’’. 

Æ 


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