I 

111TH CONGRESS 

2D SESSION H. R. 5805 

To encourage the implementation of thermal energy infrastructure, and for 

other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 21, 2010 

Ms. MCCOLLUM (for herself, Mr. INSLEE, and Mr. TONKO) introduced the following bill; which was referred to the Committee on Energy and Commerce, and in addition to the Committees on Ways and Means and Oversight and Government Reform, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions 

as fall within the jurisdiction of the committee concerned 

A BILL 

To encourage the implementation of thermal energy 

infrastructure, 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; TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Thermal Renewable Energy and Efficiency Act of 2010’’. 

6 (b) TABLE OF CONTENTS.—The table of contents of 

7 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Findings. 

Sec. 3. Purpose. 


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Sec. 4. Statement of policy. 

TITLE I—MODIFICATION OF CREDIT FOR ELECTRICITY 

PRODUCED FROM CERTAIN RENEWABLE SOURCES 

Sec. 101. Extension of renewable electricity credit to thermal energy. 

Sec. 102. Federal purchase requirement amendments. 

TITLE II—EXEMPT FACILITY BONDS 

Sec. 201. Exempt facility bonds. 

TITLE III—ENERGY SUSTAINABILITY AND EFFICIENCY GRANTS 

FOR INSTITUTIONS 

Sec. 301. Definition of institutional entity. 

Sec. 302. Availability of grants. 

Sec. 303. Authorization of appropriations for grants. 

1 SEC. 2. FINDINGS. 

2 Congress finds that— 

3 (1) approximately 30 percent of the total quan4 tity of energy consumed in the United States is used 

5 to provide thermal energy for heating and cooling 

6 building space, domestic hot water, and industrial 

7 processes; 

8 (2) thermal energy is an essential, but often 

9 overlooked, segment of the national energy mix; 

10 (3) district energy systems use 1 or more cen11 tral plants to provide thermal energy to multiple 

12 buildings that range in size from campus applica13 tions to systems heating entire towns or cities; 

14 (4) district energy systems provide sustainable 

15 thermal energy infrastructure by producing and dis16 tributing thermal energy from combined heat power, 

17 sources of industrial or municipal surplus heat, and 


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1 from renewable sources such as biomass, geothermal, 

2 and solar energy; 

3 (5) as of 2009, the United States had approxi4 mately 2,500 operating district energy systems; 

5 (6) district energy systems provide advantages 

6 that support secure, affordable, renewable, and sus7 tainable energy for the United States, including— 

8 (A) use of local fuels or waste heat sources 

9 that keep jobs and energy dollars in local econo10 mies; 

11 (B) stable, predictable energy costs for 

12 businesses and industry; 

13 (C) reduction in reliance on fossil fuels; 

14 (D) reduction in emissions of greenhouse 

15 gases; and 

16 (E) flexibility to modify fuel sources in re17 sponse to future changes in fuel availability and 

18 prices and development of new technologies; 

19 (7) district energy helps cut peak power de20 mand and reduce power transmission and distribu21 tion system constraints by— 

22 (A) meeting air conditioning demand 

23 through delivery of chilled water produced with 

24 heat from combined heat and power or other 

25 energy sources; and 


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1 (B) shifting power demand through ther2 mal storage and, with combined heat and 

3 power, generating power near load centers; 

4 (8) combined heat and power systems increase 

5 energy efficiency of power plants by capturing ther6 mal energy and using the thermal energy to provide 

7 heating and cooling, more than doubling the effi8 ciency of conventional power plants; 

9 (9) according to the Oak Ridge National Lab10 oratory, if the United States was able to increase 

11 combined heat and power from approximately 9 per12 cent of total electric generation capacity to 20 per13 cent by 2030, the increase would— 

14 (A) save as much energy as half of all 

15 household energy consumption; 

16 (B) create approximately 1,000,000 new 

17 jobs; 

18 (C) avoid more than 800,000,000 metric 

19 tons of carbon dioxide emissions annually, 

20 which is equivalent to taking half of all United 

21 States passenger vehicles off the road; and 

22 (D) save hundreds of millions of barrels of 

23 oil equivalent; and 

24 (10) constraints to significant expansion of dis25 trict energy and combined heat and power include— 


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1 (A) the lack of economic value in the en2 ergy marketplace for the environmental, grid 

3 support, energy security, and local economic de4 velopment benefits of district energy systems; 

5 (B) relatively high project development 

6 costs due to the variety of institutional, legal, 

7 and technical issues that must be addressed; 

8 and 

9 (C) the high costs of debt service, particu10 larly in the early years of systems development 

11 before a broad base of customers has connected. 

12 SEC. 3. PURPOSE. 

13 The purpose of this Act is to encourage the imple14 mentation of thermal energy infrastructure order to— 

15 (1) increase energy efficiency; 

16 (2) increase use of renewable energy resources; 

17 (3) revitalize the infrastructure of the cities and 

18 institutions of the United States; 

19 (4) reduce local and regional air pollution; 

20 (5) reduce emissions of greenhouse gases; 

21 (6) reduce emissions of ozone-depleting refrig22 erants; and 

23 (7) enhance power grid reliability and overall 

24 energy supply reliability and energy security. 


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1 SEC. 4. STATEMENT OF POLICY. 

2 It is the policy of the United States that, in energy 

3 policy development and program implementation, the fol4 lowing factors should be considered: 

5 (1) Thermal energy represents a significant 

6 part of the energy requirements of the United 

7 States, providing building heating and cooling, do8 mestic hot water, and industrial process energy. 

9 (2) There are many opportunities for meeting 

10 thermal energy requirements directly through renew11 able energy sources or recycled energy (such as re12 covered waste heat), without generation of elec13 tricity. 

14 (3) Policies and incentives for encouraging re15 newable energy and energy efficiency should address 

16 thermal energy as well as electricity. 

17 (4) District energy systems provide an impor18 tant means of delivering sustainable thermal energy 

19 to consumers, and provide energy security benefits, 

20 by— 

21 (A) cutting peak power demand; 

22 (B) reducing power transmission and dis23 tribution system constraints; and 

24 (C) providing flexibility to modify fuel 

25 sources in response to future changes in fuel 


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1 availabilities and prices and development of new 

2 technologies. 

3 TITLE I—MODIFICATION OF 

4 CREDIT FOR ELECTRICITY 

5 PRODUCED FROM CERTAIN 

6 RENEWABLE SOURCES 

7 SEC. 101. EXTENSION OF RENEWABLE ELECTRICITY CRED8 IT TO THERMAL ENERGY. 

9 (a) CREDIT TO INCLUDE PRODUCTION OF THERMAL

10 ENERGY.—Section 45 of the Internal Revenue Code of 

11 1986 is amended by adding at the end the following new 

12 subsection: 

13 ‘‘(f) CREDIT FOR PRODUCTION OF THERMAL EN14 ERGY.— 

15 ‘‘(1) IN GENERAL.—In the case of a taxpayer 

16 who— 

17 ‘‘(A) produces thermal energy from a 

18 qualified energy resource described in subpara19 graph (B), (C), (D), (G), (I), or (J) of sub20 section (c)(1) at a qualified facility described in 

21 paragraph (2), (3), (4), (6), (7), (11), or (12) 

22 of subsection (d), and 

23 ‘‘(B) makes an election under this sub24 section with respect to such facility, 


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1 subsection (a) shall be applied by substituting ‘each 

2 3,412 Btus of thermal energy (or fraction thereof)’ 

3 for ‘the kilowatt hours of electricity’ in paragraph 

4 (2) thereof. 

5 ‘‘(2) THERMAL ENERGY.—For purposes of this 

6 section, the term ‘thermal energy’ means heat (in 

7 the form of hot water or steam) or cooling (in the 

8 form of chilled water or ice). 

9 ‘‘(3) ADDITIONAL QUALIFICATIONS.— 

10 ‘‘(A) COMBINED HEAT AND POWER FACIL11 ITY.—In the case of a facility producing both 

12 electricity and thermal energy, such facility 

13 shall not be treated as a qualified facility unless 

14 such facility— 

15 ‘‘(i) meets the requirements of section 

16 48(c)(3)(A) (without regard to clause (iv) 

17 thereof); and 

18 ‘‘(ii) was originally placed in service 

19 after the date of the enactment of the 

20 Thermal Renewable Energy and Efficiency 

21 Act of 2010, and before the date which is 

22 5 years after such date. 

23 ‘‘(B) THERMAL FACILITY.—In the case of 

24 a facility producing only thermal energy, such 


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1 facility shall not be treated as a qualified facil2 ity unless such facility— 

3 ‘‘(i) has an energy efficiency percent4 age (as determined under section 

5 48(c)(3)(C)) in excess of 60 percent; and 

6 ‘‘(ii) was originally placed in service 

7 after the date of the enactment of the 

8 Thermal Renewable Energy and Efficiency 

9 Act of 2010, and before the date which is 

10 5 years after such date. 

11 ‘‘(4) DENIAL OF DOUBLE BENEFIT.—If an elec12 tion under this subsection is in effect with respect 

13 to any facility, no credit shall be allowed under sub14 section (a) with respect to the production of elec15 tricity at such facility. 

16 ‘‘(5) ELECTION.— 

17 ‘‘(A) IN GENERAL.—An election under this 

18 subsection shall specify the facility to which the 

19 election applies and shall be in such manner as 

20 the Secretary may by regulations prescribe. 

21 ‘‘(B) ELECTION IRREVOCABLE.—Any elec22 tion made under this subsection may not be re23 voked except with the consent of the Sec24 retary.’’. 


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1 (b) NATURALLY OCCURRING COLD WATER SOURCES

2 TREATED AS QUALIFIED ENERGY RESOURCE.—Para3 graph (1) of section 45(c) of the Internal Revenue Code 

4 of 1986 is amended— 

5 (1) by striking ‘‘and’’ at the end of subpara6 graph (H), 

7 (2) by striking the period at the end of sub8 paragraph (I) and inserting ‘‘, and’’, and 

9 (3) by adding at the end the following new sub10 paragraph: 

11 ‘‘(J) naturally occurring cold water sources 

12 which are used to provide thermal energy for 

13 air conditioning.’’. 

14 (c) QUALIFIED FACILITIES.—Section 45(d) of the In15 ternal Revenue Code of 1986 is amended by adding at the 

16 end the following new paragraph: 

17 ‘‘(12) NATURAL AIR CONDITIONING SYSTEM FA18 CILITY.—In the case of a facility providing thermal 

19 energy for air conditioning from naturally occurring 

20 cold water sources, the term ‘qualified facility’ 

21 means any facility owned by the taxpayer which is 

22 originally placed in service after the date of the en23 actment of the Thermal Renewable Energy and Effi24 ciency Act of 2010, and before the date which is 5 

25 years after such date.’’. 


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1 (d) CONFORMING AMENDMENTS.— 

2 (1) Section 45(b)(4)(A) of the Internal Revenue 

3 Code of 1986 is amended by inserting ‘‘or thermal 

4 energy’’ after ‘‘electricity’’. 

5 (2) Section 45(c)(2) of such Code is amended 

6 by inserting ‘‘or thermal energy’’ after ‘‘electricity’’. 

7 (3) Section 45(d) of such Code is amended by 

8 inserting ‘‘or thermal energy’’ after ‘‘electricity’’ 

9 each place it appears in paragraphs (2), (3), (4), 

10 (6), (7), and (11). 

11 (4) Section 45(e) of such Code is amended by 

12 inserting ‘‘or thermal energy’’ after ‘‘electricity’’ 

13 each place it appears in paragraphs (1), (4), and 

14 (9). 

15 (5) The heading of section 45 of such Code is 

16 amended by inserting ‘‘AND THERMAL ENERGY’’ 

17 after ‘‘ELECTRICITY’’. 

18 (6) The item relating to section 45 in the table 

19 of sections for subpart D of part IV of subchapter 

20 A of chapter 1 of such Code is amended by inserting 

21 ‘‘and thermal energy’’ after ‘‘Electricity’’. 

22 (e) MODIFICATION OF DEFINITION OF OPEN-LOOP

23 BIOMASS.— 

24 (1) IN GENERAL.—Paragraph (3) of section 

25 45(c) of the Internal Revenue Code of 1986 is 


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1 amended by adding at the end the following new 

2 subparagraph: 

3 ‘‘(C) SPECIAL RULE FOR THERMAL FACILI4 TIES.—In the case of a qualified facility which 

5 produces thermal energy with respect to which 

6 the taxpayer makes an election under sub7 section (f), the term ‘open-loop biomass’ has the 

8 meaning given the term in section 203(b) of the 

9 Energy Policy Act of 2005, as amended.’’. 

10 (2) CONFORMING AMENDMENT.—Subparagraph 

11 (A) of section 45(c)(3) of such Code is amended by 

12 striking ‘‘The’’ and inserting ‘‘Except as provided in 

13 subparagraph (C), the’’. 

14 (f) EFFECTIVE DATE.—The amendments made by 

15 this section shall apply to energy produced and sold after 

16 the date of the enactment of this Act. 

17 SEC. 102. FEDERAL PURCHASE REQUIREMENT AMEND18 MENTS. 

19 Section 203 of the Energy Policy Act of 2005 (42 

20 U.S.C. 15852) is amended by striking subsection (b) and 

21 inserting the following: 

22 ‘‘(b) DEFINITIONS.—In this section: 

23 ‘‘(1) BIOMASS.—The term ‘biomass’ means the 

24 following types of nonhazardous organic materials: 


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1 ‘‘(A) Residues and byproducts from milled 

2 logs. 

3 ‘‘(B) Wood, paper products that are not 

4 commonly recyclable, and vegetation (including 

5 trees and trimmings, yard waste, pallets, rail6 road ties, crates, and solid-wood manufacturing 

7 and construction debris), if diverted from or 

8 separated from other waste out of a municipal 

9 waste stream. 

10 ‘‘(C) Hazard trees, trimmings, and brush 

11 that are necessary to remove in order to main12 tain a utility right-of-way or a public road (not 

13 including any unpaved road on Federal land). 

14 ‘‘(D) Trees, trimmings, and brush har15 vested from the immediate vicinity of any build16 ing, campground, or other structure in wildfire 

17 prone areas to reduce the risk to the structure 

18 or campground or to human life from wildfires. 

19 ‘‘(E) Invasive species (as defined in Execu20 tive Order 13112 (42 U.S.C. 4321 note; relat21 ing to invasive species)) removed to control or 

22 eradicate the invasive species. 

23 ‘‘(F) Animal waste and animal byproducts 

24 (including biogas and any solid produced by 

25 micro-organisms). 


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1 ‘‘(G) Food waste. 

2 ‘‘(H) Algae. 

3 ‘‘(I) Slash, brush, trees, and other vegeta4 tion that is harvested from non-Federal land or 

5 Indian land— 

6 ‘‘(i) that is, at the time of harvest— 

7 ‘‘(I) naturally regenerated forest 

8 land; 

9 ‘‘(II) forest land that was planted 

10 for the purpose of restoring land to a 

11 naturally regenerated forest; or 

12 ‘‘(III) if harvested in quantities 

13 and through practices that maintain 

14 or contribute toward the restoration 

15 of the species, ecological systems, and 

16 ecological communities for which the 

17 conservation forest land was identi18 fied, conservation forest land; or 

19 ‘‘(ii) that is— 

20 ‘‘(I) at the time of harvest, plant21 ed forest land; and 

22 ‘‘(II) on the date of enactment of 

23 the Thermal Renewable Energy and 

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1 cluding fallow land), pastureland, or 

2 planted forest land. 

3 ‘‘(J) Crops, crop byproducts, and crop resi4 dues from non-Federal land or Indian land that 

5 is— 

6 ‘‘(i) at the time of harvest, not forest 

7 land; and 

8 ‘‘(ii) on the date of enactment of the 

9 Thermal Renewable Energy and Efficiency 

10 Act of 2010— 

11 ‘‘(I) cropland (including fallow 

12 land and not including planted forest 

13 land); or 

14 ‘‘(II) pastureland. 

15 ‘‘(K) If harvested from Federal land in ac16 cordance with applicable law and land manage17 ment plans and in quantities and through prac18 tices that maintain or contribute toward the 

19 restoration of ecological sustainability— 

20 ‘‘(i) slash; and 

21 ‘‘(ii) brush and trees that are byprod22 ucts of ecological restoration, disease or in23 sect infestation control, or hazardous fuels 

24 reduction treatments and— 

25 ‘‘(I) are from stands that— 


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1 ‘‘(aa) were killed by an in2 sect or disease epidemic or a nat3 ural disaster; and 

4 ‘‘(bb) do not meet the utili5 zation standards for sawtimber; 

6 or 

7 ‘‘(II) do not exceed the minimum 

8 size standards for sawtimber. 

9 ‘‘(2) CONSERVATION FOREST LAND.— 

10 ‘‘(A) IN GENERAL.—The term ‘conserva11 tion forest land’ means forest land that con12 tains a species, or includes all or part of an eco13 logical system or community, that is at risk of 

14 extinction or elimination within a State or glob15 ally. 

16 ‘‘(B) IDENTIFICATION.—Conservation for17 est land shall be identified based on the best 

18 available science and data by any of— 

19 ‘‘(i) the State in which the land is lo20 cated, unless the land is under the jurisdic21 tion of an Indian tribe; 

22 ‘‘(ii) an Indian tribe with jurisdiction 

23 over the land; or 


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1 ‘‘(iii) in consultation with the State in 

2 which the land is located or the Indian 

3 tribe with jurisdiction over the land— 

4 ‘‘(I) the Secretary of Agriculture; 

5 or 

6 ‘‘(II) the Secretary of the Inte7 rior. 

8 ‘‘(C) EXCEPTIONS.—A tract of conserva9 tion forest land may not be removed from con10 servation forest land status under this section 

11 as a result of land management practices on the 

12 tract that— 

13 ‘‘(i) occurred on or after the Thermal 

14 Renewable Energy and Efficiency Act of 

15 2010; and 

16 ‘‘(ii) contributed toward the elimi17 nation of the species, or all or part of an 

18 ecological system or ecological community 

19 for which the land was identified as con20 servation forest land. 

21 ‘‘(3) FEDERAL LAND.— 

22 ‘‘(A) IN GENERAL.—The term ‘Federal 

23 land’ means— 

24 ‘‘(i) National Forest System land; and 


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1 ‘‘(ii) public lands (as defined in sec2 tion 103 of the Federal Land Policy and 

3 Management Act of 1976 (43 U.S.C. 

4 1702)). 

5 ‘‘(B) EXCLUSIONS.— 

6 ‘‘(i) IN GENERAL.—The term ‘Federal 

7 land’ does not include— 

8 ‘‘(I) any area designated by Con9 gress to be administered for conserva10 tion purposes; or 

11 ‘‘(II) a National Monument pro12 claimed by the President. 

13 ‘‘(ii) OLD GROWTH OR LATE SUCCES14 SIONAL FOREST STANDS.—The term ‘Fed15 eral land’ does not include an old growth 

16 or late successional forest stand unless bio17 mass from the stand does not exceed the 

18 minimum size standards for sawtimber and 

19 is a byproduct of an ecological restoration 

20 treatment that fully maintains, or contrib21 utes toward the restoration of, the struc22 ture and composition of an old growth for23 est stand in accordance with the old 

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1 est type and retains the large trees con2 tributing to old growth structure. 

3 ‘‘(4) INDIAN LAND.—The term ‘Indian land’ 

4 has the meaning given the term ‘Indian country’ in 

5 section 1151 of title 18, United States Code. 

6 ‘‘(5) INDIAN TRIBE.—The term ‘Indian tribe’ 

7 has the meaning given the term in section 4 of the 

8 Indian Self-Determination and Education Assistance 

9 Act (25 U.S.C. 450b). 

10 ‘‘(6) NON-FEDERAL LAND.—The term ‘non11 Federal land’ means land that is not owned by the 

12 Federal Government. 

13 ‘‘(7) RENEWABLE ENERGY.—The term ‘renew14 able energy’ means energy generated from solar, 

15 wind, biomass, landfill gas, ocean (including tidal, 

16 wave, current, and thermal), geothermal, municipal 

17 solid waste, or new hydroelectric generation capacity 

18 achieved from increased efficiency or additions of 

19 new capacity at an existing hydroelectric project. 

20 ‘‘(8) SECRETARY CONCERNED.—The term ‘Sec21 retary concerned’ means— 

22 ‘‘(A) the Secretary of Agriculture, with re23 gard to— 

24 ‘‘(i) National Forest System land; and 


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1 ‘‘(ii) except as provided by subpara2 graph (B), non-Federal land; and 

3 ‘‘(B) the Secretary of the Interior, with re4 gard to— 

5 ‘‘(i) public lands (as defined in section 

6 103 of the Federal Land Policy and Man7 agement Act of 1976 (43 U.S.C. 1702)); 

8 and 

9 ‘‘(ii) Indian land.’’. 

10 TITLE II—EXEMPT FACILITY 

11 BONDS 

12 SEC. 201. EXEMPT FACILITY BONDS. 

13 (a) DEFINITION OF LOCAL DISTRICT HEATING AND

14 COOLING FACILITIES.—Subparagraph (A) of section 

15 142(g)(2) of the Internal Revenue Code of 1986 is amend16 ed by striking ‘‘a pipeline or network (which may be con17 nected to a heating or cooling source) providing hot water, 

18 chilled water, or steam’’ and inserting ‘‘equipment for pro19 ducing thermal energy in the form of hot water, chilled 

20 water or steam, distributing that thermal energy in pipe21 lines and transferring the thermal energy’’. 

22 (b) PUBLIC USE REQUIREMENT.—The Secretary 

23 shall promulgate regulations establishing that a local dis24 trict heating or cooling facility will be treated in all events 


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1 as serving a general public use for purposes of the Internal 

2 Revenue Code of 1986. 

3 TITLE III—ENERGY SUSTAIN4 ABILITY AND EFFICIENCY 

5 GRANTS FOR INSTITUTIONS 

6 SEC. 301. DEFINITION OF INSTITUTIONAL ENTITY. 

7 Section 399A(a)(5) of the Energy Policy and Con8 servation Act (42 U.S.C. 6371h–1(a)(5)) is amended by 

9 inserting ‘‘a not-for-profit district energy system,’’ after 

10 ‘‘utility,’’. 

11 SEC. 302. AVAILABILITY OF GRANTS. 

12 Section 399A(f) of the Energy Policy and Conserva13 tion Act (42 U.S.C. 6371h–1(f)) is amended— 

14 (1) in paragraph (2)— 

15 (A) in subparagraph (A)(i), by striking 

16 ‘‘$50,000’’ and inserting ‘‘$90,000’’; 

17 (B) in subparagraph (B)(i), by striking 

18 ‘‘$90,000’’ and inserting ‘‘$150,000’’; and 

19 (C) in subparagraph (C)(i), by striking 

20 ‘‘$250,000’’ and inserting ‘‘$600,000’’; and 

21 (2) in paragraph (3)— 

22 (A) in subparagraph (A), by striking 

23 ‘‘$1,000,000’’ and inserting ‘‘$20,000,000’’; 

24 and 


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1 (B) in subparagraph (B), by striking ‘‘60 

2 percent’’ and inserting ‘‘30 percent’’. 

3 SEC. 303. AUTHORIZATION OF APPROPRIATIONS FOR 

4 GRANTS. 

5 Section 399A(i)(1) of the Energy Policy and Con6 servation Act (42 U.S.C. 6371h–1(i)(1)) is amended by 

7 striking ‘‘$250,000,000 for each of fiscal years 2009 

8 through 2013’’ and inserting ‘‘$500,000,000 for each of 

9 fiscal years 2011 through 2015’’. 

Æ 


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