II 

114TH CONGRESS 

1ST SESSION S. 1258 

To require the Secretary of Energy to establish a distributed energy loan 

program and technical assistance and grant program, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

MAY 7, 2015 

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

to the Committee on Energy and Natural Resources 

A BILL 

To require the Secretary of Energy to establish a distributed 

energy loan program and technical assistance and grant 

program, 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 ‘‘Local Energy Supply 

5 and Resiliency Act of 2015’’. 

6 SEC. 2. DEFINITIONS. 

7 In this Act: 

8 (1) COMBINED HEAT AND POWER SYSTEM.— 

9 The term ‘‘combined heat and power system’’ means 

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1 tegrated system that meets the efficiency criteria in 

2 clauses (ii) and (iii) of section 48(c)(3)(A) of the In3 ternal Revenue Code of 1986, under which heat that 

4 is conventionally rejected is recovered and used to 

5 meet thermal energy requirements. 

6 (2) DEMAND RESPONSE.—The term ‘‘demand 

7 response’’ means changes in electric usage by elec8 tric utility customers from the normal consumption 

9 patterns of the customers in response to— 

10 (A) changes in the price of electricity over 

11 time; or 

12 (B) incentive payments designed to induce 

13 lower electricity use at times of high wholesale 

14 market prices or when system reliability is jeop15 ardized. 

16 (3) DISTRIBUTED ENERGY.—The term ‘‘distrib17 uted energy’’ means energy sources and systems 

18 that— 

19 (A) produce electric or thermal energy 

20 close to the point of use using renewable energy 

21 resources or waste thermal energy; 

22 (B) generate electricity using a combined 

23 heat and power system; 

24 (C) distribute electricity in microgrids; 

25 (D) store electric or thermal energy; or 


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1 (E) distribute thermal energy or transfer 

2 thermal energy to building heating and cooling 

3 systems through a district energy system. 

4 (4) 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 (5) ISLANDING.—The term ‘‘islanding’’ means 

12 a distributed generator or energy storage device con13 tinuing to power a location in the absence of electric 

14 power from the primary source. 

15 (6) LOAN.—The term ‘‘loan’’ has the meaning 

16 given the term ‘‘direct loan’’ in section 502 of the 

17 Federal Credit Reform Act of 1990 (2 U.S.C. 661a). 

18 (7) MICROGRID.—The term ‘‘microgrid’’ means 

19 an integrated energy system consisting of inter20 connected loads and distributed energy resources, in21 cluding generators and energy storage devices, with22 in clearly defined electrical boundaries that— 

23 (A) acts as a single controllable entity with 

24 respect to the grid; and 


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1 (B) can connect and disconnect from the 

2 grid to operate in both grid-connected mode 

3 and island mode. 

4 (8) RENEWABLE ENERGY SOURCE.—The term 

5 ‘‘renewable energy source’’ includes— 

6 (A) biomass; 

7 (B) geothermal energy; 

8 (C) hydropower; 

9 (D) landfill gas; 

10 (E) municipal solid waste; 

11 (F) ocean (including tidal, wave, current, 

12 and thermal) energy; 

13 (G) organic waste; 

14 (H) photosynthetic processes; 

15 (I) photovoltaic energy; 

16 (J) solar energy; and 

17 (K) wind. 

18 (9) RENEWABLE THERMAL ENERGY.—The term 

19 ‘‘renewable thermal energy’’ means heating or cool20 ing energy derived from a renewable energy re21 source. 

22 (10) SECRETARY.—The term ‘‘Secretary’’ 

23 means the Secretary of Energy. 

24 (11) THERMAL ENERGY.—The term ‘‘thermal 

25 energy’’ means— 


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1 (A) heating energy in the form of hot 

2 water or steam that is used to provide space 

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

4 (B) cooling energy in the form of chilled 

5 water, ice, or other media that is used to pro6 vide air conditioning, or process cooling. 

7 (12) WASTE THERMAL ENERGY.—The term 

8 ‘‘waste thermal energy’’ means energy that— 

9 (A) is contained in— 

10 (i) exhaust gases, exhaust steam, con11 denser water, jacket cooling heat, or lubri12 cating oil in power generation systems; 

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

14 gas from any industrial process; 

15 (iii) waste gas or industrial tail gas 

16 that would otherwise be flared, incinerated, 

17 or vented; 

18 (iv) a pressure drop in any gas, ex19 cluding any pressure drop to a condenser 

20 that subsequently vents the resulting heat; 

21 (v) condenser water from chilled water 

22 or refrigeration plants; or 

23 (vi) any other form of waste energy, 

24 as determined by the Secretary; and 


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

2 not being used; or 

3 (ii) in the case of a new facility, is not con4 ventionally used in comparable systems. 

5 SEC. 3. DISTRIBUTED ENERGY LOAN PROGRAM. 

6 (a) LOAN PROGRAM.— 

7 (1) IN GENERAL.—Subject to the provisions of 

8 this subsection and subsections (b) and (c), the Sec9 retary shall establish a program to provide to eligible 

10 entities— 

11 (A) loans for the deployment of distributed 

12 energy systems in a specific project; and 

13 (B) loans to provide funding for programs 

14 to finance the deployment of multiple distrib15 uted energy systems through a revolving loan 

16 fund, credit enhancement program, or other fi17 nancial assistance program. 

18 (2) ELIGIBILITY.—Entities eligible to receive a 

19 loan under paragraph (1) include— 

20 (A) a State, territory, or possession of the 

21 United States; 

22 (B) a State energy office; 

23 (C) a tribal organization (as defined in sec24 tion 4 of the Indian Self-Determination and 

25 Education Assistance Act (25 U.S.C. 450b)); 


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1 (D) an institution of higher education (as 

2 defined in section 101 of the Higher Education 

3 Act of 1965 (20 U.S.C. 1001)); and 

4 (E) an electric utility, including— 

5 (i) a rural electric cooperative; 

6 (ii) a municipally owned electric util7 ity; and 

8 (iii) an investor-owned utility. 

9 (3) SELECTION REQUIREMENTS.—In selecting 

10 eligible entities to receive loans under this section, 

11 the Secretary shall, to the maximum extent prac12 ticable, ensure— 

13 (A) regional diversity among eligible enti14 ties to receive loans under this section, includ15 ing participation by rural States and small 

16 States; and 

17 (B) that specific projects selected for 

18 loans— 

19 (i) expand on the existing technology 

20 deployment program of the Department of 

21 Energy; and 

22 (ii) are designed to achieve 1 or more 

23 of the objectives described in paragraph 

24 (4). 


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1 (4) OBJECTIVES.—Each deployment selected 

2 for a loan under paragraph (1) shall include 1 or 

3 more of the following objectives: 

4 (A) Improved security and resiliency of en5 ergy supply in the event of disruptions caused 

6 by extreme weather events, grid equipment or 

7 software failure, or terrorist acts. 

8 (B) Implementation of distributed energy 

9 in order to increase use of local renewable en10 ergy resources and waste thermal energy 

11 sources. 

12 (C) Enhanced feasibility of microgrids, de13 mand response, or islanding; 

14 (D) Enhanced management of peak loads 

15 for consumers and the grid. 

16 (E) Enhanced reliability in rural areas, in17 cluding high energy cost rural areas. 

18 (5) RESTRICTION ON USE OF FUNDS.—Any eli19 gible entity that receives a loan under paragraph (1) 

20 may only use the loan to fund programs relating to 

21 the deployment of distributed energy systems. 

22 (b) LOAN TERMS AND CONDITIONS.— 

23 (1) TERMS AND CONDITIONS.—Notwithstanding 

24 any other provision of law, in providing a loan under 

25 this section, the Secretary shall provide the loan on 


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1 such terms and conditions as the Secretary deter2 mines, after consultation with the Secretary of the 

3 Treasury, in accordance with this section. 

4 (2) SPECIFIC APPROPRIATION.—No loan shall 

5 be made unless an appropriation for the full amount 

6 of the loan has been specifically provided for that 

7 purpose. 

8 (3) REPAYMENT.—No loan shall be made un9 less the Secretary determines that there is reason10 able prospect of repayment of the principal and in11 terest by the borrower of the loan. 

12 (4) INTEREST RATE.—A loan provided under 

13 this section shall bear interest at a fixed rate that 

14 is equal or approximately equal, in the determination 

15 of the Secretary, to the interest rate for Treasury 

16 securities of comparable maturity. 

17 (5) TERM.—The term of the loan shall require 

18 full repayment over a period not to exceed the lesser 

19 of— 

20 (A) 20 years; or 

21 (B) 90 percent of the projected useful life 

22 of the physical asset to be financed by the loan 

23 (as determined by the Secretary). 

24 (6) USE OF PAYMENTS.—Payments of principal 

25 and interest on the loan shall— 


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1 (A) be retained by the Secretary to support 

2 energy research and development activities; and 

3 (B) remain available until expended, sub4 ject to such conditions as are contained in an5 nual appropriations Acts. 

6 (7) NO PENALTY ON EARLY REPAYMENT.—The 

7 Secretary may not assess any penalty for early re8 payment of a loan provided under this section. 

9 (8) RETURN OF UNUSED PORTION.—In order to 

10 receive a loan under this section, an eligible entity 

11 shall agree to return to the general fund of the 

12 Treasury any portion of the loan amount that is un13 used by the eligible entity within a reasonable period 

14 of time after the date of the disbursement of the 

15 loan, as determined by the Secretary. 

16 (9) COMPARABLE WAGE RATES.—Each laborer 

17 and mechanic employed by a contractor or subcon18 tractor in performance of construction work fi19 nanced, in whole or in part, by the loan shall be paid 

20 wages at rates not less than the rates prevailing on 

21 similar construction in the locality as determined by 

22 the Secretary of Labor in accordance with sub23 chapter IV of chapter 31 of title 40, United States 

24 Code. 


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1 (c) RULES AND PROCEDURES; DISBURSEMENT OF

2 LOANS.— 

3 (1) RULES AND PROCEDURES.—Not later than 

4 180 days after the date of enactment of this Act, the 

5 Secretary shall adopt rules and procedures for car6 rying out the loan program under subsection (a). 

7 (2) DISBURSEMENT OF LOANS.—Not later than 

8 1 year after the date on which the rules and proce9 dures under paragraph (1) are established, the Sec10 retary shall disburse the initial loans provided under 

11 this section. 

12 (d) REPORTS.—Not later than 2 years after the date 

13 of receipt of the loan, and annually thereafter for the term 

14 of the loan, an eligible entity that receives a loan under 

15 this section shall submit to the Secretary a report describ16 ing the performance of each program and activity carried 

17 out using the loan, including itemized loan performance 

18 data. 

19 (e) AUTHORIZATION OF APPROPRIATIONS.—There 

20 are authorized to be appropriated to carry out this section 

21 such sums as are necessary. 

22 SEC. 4. TECHNICAL ASSISTANCE AND GRANT PROGRAM. 

23 (a) ESTABLISHMENT.— 


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

2 a technical assistance and grant program (referred 

3 to in this section as the ‘‘program’’)— 

4 (A) to disseminate information and provide 

5 technical assistance directly to eligible entities 

6 so the eligible entities can identify, evaluate, 

7 plan, and design distributed energy systems; 

8 and 

9 (B) to make grants to eligible entities so 

10 that the eligible entities may contract to obtain 

11 technical assistance to identify, evaluate, plan, 

12 and design distributed energy systems. 

13 (2) TECHNICAL ASSISTANCE.—The technical 

14 assistance described in paragraph (1) shall include 

15 assistance with 1 or more of the following activities 

16 relating to distributed energy systems: 

17 (A) Identification of opportunities to use 

18 distributed energy systems. 

19 (B) Assessment of technical and economic 

20 characteristics. 

21 (C) Utility interconnection. 

22 (D) Permitting and siting issues. 

23 (E) Business planning and financial anal24 ysis. 

25 (F) Engineering design. 


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1 (3) INFORMATION DISSEMINATION.—The infor2 mation disseminated under paragraph (1)(A) shall 

3 include— 

4 (A) information relating to the topics de5 scribed in paragraph (2), including case studies 

6 of successful examples; 

7 (B) computer software and databases for 

8 assessment, design, and operation and mainte9 nance of distributed energy systems; and 

10 (C) public databases that track the oper11 ation and deployment of existing and planned 

12 distributed energy systems. 

13 (b) ELIGIBILITY.—Any nonprofit or for-profit entity 

14 shall be eligible to receive technical assistance and grants 

15 under the program. 

16 (c) APPLICATIONS.— 

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

18 technical assistance or grants under the program 

19 shall submit to the Secretary an application at such 

20 time, in such manner, and containing such informa21 tion as the Secretary may require. 

22 (2) APPLICATION PROCESS.—The Secretary 

23 shall seek applications for technical assistance and 

24 grants under the program— 

25 (A) on a competitive basis; and 


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1 (B) on a periodic basis, but not less fre2 quently than once every 12 months. 

3 (3) PRIORITIES.—In selecting eligible entities 

4 for technical assistance and grants under the pro5 gram, the Secretary shall give priority to eligible en6 tities with projects that have the greatest potential 

7 for— 

8 (A) facilitating the use of renewable energy 

9 resources; 

10 (B) strengthening the reliability and resil11 iency of energy infrastructure to the impact of 

12 extreme weather events, power grid failures, 

13 and interruptions in supply of fossil fuels; 

14 (C) improving the feasibility of microgrids 

15 or islanding, particularly in rural areas, includ16 ing high energy cost rural areas; 

17 (D) minimizing environmental impact, in18 cluding regulated air pollutants and greenhouse 

19 gas emissions; and 

20 (E) maximizing local job creation. 

21 (d) GRANTS.—On application by an eligible entity, 

22 the Secretary may award grants to the eligible entity to 

23 provide funds to cover not more than— 

24 (1) 100 percent of the costs of the initial as25 sessment to identify opportunities; 


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1 (2) 75 percent of the cost of feasibility studies 

2 to assess the potential for the implementation; 

3 (3) 60 percent of the cost of guidance on over4 coming barriers to implementation, including finan5 cial, contracting, siting, and permitting issues; and 

6 (4) 45 percent of the cost of detailed engineer7 ing. 

8 (e) RULES AND PROCEDURES.— 

9 (1) RULES.—Not later than 180 days after the 

10 date of enactment of this Act, the Secretary shall 

11 adopt rules and procedures for carrying out the pro12 gram. 

13 (2) GRANTS.—Not later than 120 days after 

14 the date of issuance of the rules and procedures for 

15 the program, the Secretary shall issue grants under 

16 this Act. 

17 (f) REPORTS.—The Secretary shall submit to Con18 gress and make available to the public— 

19 (1) not less frequently than once every 2 years, 

20 a report describing the performance of the program 

21 under this section, including a synthesis and analysis 

22 of the information provided in the reports submitted 

23 to the Secretary under section 2(c); and 

24 (2) on termination of the program under this 

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1 cation provided by, the measures carried out by eli2 gible entities during the term of the program. 

3 (g) AUTHORIZATION OF APPROPRIATIONS.—There is 

4 authorized to be appropriated to carry out this section 

5 $250,000,000 for the period of fiscal years 2016 through 

6 2020, to remain available until expended. 

Æ 


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