I 

111TH CONGRESS 

1ST SESSION H. R. 889 

To amend title VI of the Public Utility Regulatory Policies Act of 1978 

to establish a Federal energy efficiency resource standard for retail 

electricity and natural gas distributors, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

FEBRUARY 4, 2009 

Mr. MARKEY of Massachusetts introduced the following bill; which was 

referred to the Committee on Energy and Commerce 

A BILL 

To amend title VI of the Public Utility Regulatory Policies 

Act of 1978 to establish a Federal energy efficiency 

resource standard for retail electricity and natural gas 

distributors, 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 ‘‘Save American Energy 

5 Act’’. 


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1 SEC. 2. ENERGY EFFICIENCY RESOURCE STANDARD FOR 

2 RETAIL ELECTRICITY AND NATURAL GAS DIS3 TRIBUTORS. 

4 (a) IN GENERAL.—Title VI of the Public Utility Reg5 ulatory Policies Act of 1978 (16 U.S.C. 2601 and fol6 lowing) is amended by adding at the end the following: 

7 ‘‘SEC. 610. FEDERAL ENERGY EFFICIENCY RESOURCE 

8 STANDARD FOR RETAIL ELECTRICITY AND 

9 NATURAL GAS DISTRIBUTORS. 

10 ‘‘(a) STATEMENT OF FEDERAL POLICY.—The Fed11 eral energy efficiency resource standard established by this 

12 section sets nationwide minimum levels of electricity and 

13 natural gas savings to be achieved through utility effi14 ciency programs, building energy codes, appliance stand15 ards, and related efficiency measures. In light of the cost16 effective energy efficiency opportunities that exist across 

17 the country in every sector of the economy, retail elec18 tricity distributors, retail natural gas distributors, and 

19 States should additionally consider energy efficiency as a 

20 resource in utility planning and procurement activities and 

21 should seek to achieve all energy efficiency that is avail22 able at lower cost than energy supply options. 

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

24 ‘‘(1) AFFILIATE.—The term ‘affiliate’ when 

25 used in relation to a person, means another person 

26 which owns or controls, is owned or controlled by, or 


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1 is under common ownership control with, such per2 son, as determined under regulations promulgated 

3 by the Secretary. 

4 ‘‘(2) ASHRAE, ANSI, AND IESNA.—The terms 

5 ‘ASHRAE’, ‘ANSI’, and ‘IESNA’ mean the Amer6 ican Society of Heating, Refrigerating and Air Con7 ditioning Engineers, the American National Stand8 ards Institute, and the Illuminating Engineering So9 ciety of North America, respectively. 

10 ‘‘(3) BASE QUANTITY.—The term ‘base quan11 tity’, with respect to a retail electricity distributor or 

12 retail natural gas distributor, means, for each year 

13 for which a performance standard is established 

14 under subsection (d), the average annual quantity of 

15 electricity or natural gas delivered by the retail elec16 tricity distributor or retail natural gas distributor to 

17 retail customers during the 2 calendar years imme18 diately preceding such year. In determining the base 

19 quantity of a retail natural gas distributor, natural 

20 gas delivered for purposes of electricity generation 

21 shall be excluded. 

22 ‘‘(4) CHP SAVINGS.—The term ‘CHP savings’ 

23 means— 

24 ‘‘(A) CHP system savings from a combined 

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1 ation after the date of enactment of this sec2 tion; and 

3 ‘‘(B) the increase in CHP system savings 

4 from upgrading or replacing, after the date of 

5 enactment of this section, a combined heat and 

6 power system that commenced operation on or 

7 before the date of enactment of this section. 

8 ‘‘(5) CHP SYSTEM SAVINGS.—The term ‘CHP 

9 system savings’ means the electric output, and the 

10 electricity saved due to the mechanical output, of a 

11 combined heat and power system, adjusted to reflect 

12 any increase in fuel consumption by that system as 

13 compared to the fuel that would have been required 

14 to produce an equivalent useful thermal energy out15 put in a separate thermal-only system, as deter16 mined in accordance with regulations promulgated 

17 by the Secretary. 

18 ‘‘(6) CODES AND STANDARDS SAVINGS.— 

19 ‘‘(A) IN GENERAL.—The term ‘codes and 

20 standards savings’ means a reduction in end21 use electricity or natural gas consumption in a 

22 retail electricity distributor or a retail natural 

23 gas distributor’s service territory as a result of 

24 the adoption and implementation, after the date 

25 of enactment of this section, of new or revised 


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1 appliance and equipment efficiency standards or 

2 building energy codes. 

3 ‘‘(B) BASELINES.—In calculating codes 

4 and standards savings— 

5 ‘‘(i) the baseline for calculating sav6 ings from building codes shall be the 2006 

7 International Energy Conservation Code 

8 for residential buildings and the ASHRAE/ 

9 ANSI/IESNA Standard 90.1–2004 for 

10 commercial buildings, or the relevant State 

11 building code in effect on date of enact12 ment of this section, whichever is more 

13 stringent; and 

14 ‘‘(ii) the baseline for calculating sav15 ings from appliance standards shall be the 

16 average efficiency of new appliances in the 

17 relevant category or categories prior to 

18 adoption and implementation of the new 

19 standard. 

20 ‘‘(7) COMBINED HEAT AND POWER SYSTEM.— 

21 The term ‘combined heat and power system’ means 

22 a system that uses the same energy source both for 

23 the generation of electrical or mechanical power and 

24 the production of steam or another form of useful 

25 thermal energy, provided that— 


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1 ‘‘(A) the system meets such requirements 

2 relating to efficiency and other operating char3 acteristics as the Secretary may promulgate by 

4 regulation; and 

5 ‘‘(B) the net wholesale sales of electricity 

6 by the facility will not exceed 50 percent of 

7 total annual electric generation by the facility. 

8 ‘‘(8) COST-EFFECTIVE.—The term ‘cost-effec9 tive’, with respect to an energy efficiency measure, 

10 means that the measure achieves a net present value 

11 of economic benefits over the life of the measure, 

12 both directly to the energy consumer and to the 

13 economy, that is greater than the net present value 

14 of the cost of the measure over the life of the meas15 ure, both directly to the energy consumer and to the 

16 economy. 

17 ‘‘(9) CUSTOMER FACILITY SAVINGS.—The term 

18 ‘customer facility savings’ means a reduction in end19 use electricity or natural gas consumption (including 

20 recycled energy savings) at a facility of an end-use 

21 consumer of electricity or natural gas served by a re22 tail electricity distributor or natural gas distributor, 

23 as compared to— 


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1 ‘‘(A) in the case of a new facility, con2 sumption at a reference facility of average effi3 ciency; 

4 ‘‘(B) in the case of an existing facility, 

5 consumption at such facility during a base pe6 riod (which shall not be less than 1 year); or 

7 ‘‘(C) in the case of new equipment, regard8 less of whether the new equipment replaces ex9 isting equipment at the end of the useful life of 

10 the existing equipment, consumption by new 

11 equipment of average efficiency of the same 

12 equipment type, provided that customer savings 

13 under this subparagraph shall not be counted 

14 towards customer savings under subparagraph 

15 (A) or (B). 

16 ‘‘(10) ELECTRICITY SAVINGS.—The term ‘elec17 tricity savings’ means reductions in electricity con18 sumption achieved through measures implemented 

19 after the date of enactment of this section, as deter20 mined in accordance with regulations promulgated 

21 by the Secretary, limited to— 

22 ‘‘(A) customer facility savings of elec23 tricity, adjusted to reflect any associated in24 crease in fuel consumption at the facility; 


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1 ‘‘(B) reductions in distribution system 

2 losses of electricity achieved by a retail elec3 tricity distributor, as compared to losses attrib4 utable to new or replacement distribution sys5 tem equipment of average efficiency (as defined 

6 in regulations to be promulgated by the Sec7 retary); 

8 ‘‘(C) CHP savings; and 

9 ‘‘(D) codes and standards savings of elec10 tricity. 

11 ‘‘(11) NATURAL GAS SAVINGS.—The term ‘nat12 ural gas savings’ means reductions in natural gas 

13 consumption from measures implemented after the 

14 date of enactment of this section, as determined in 

15 accordance with regulations promulgated by the Sec16 retary, limited to— 

17 ‘‘(A) customer facility savings of natural 

18 gas, adjusted to reflect any associated increase 

19 in electricity consumption or consumption of 

20 other fuels at the facility; 

21 ‘‘(B) reductions in leakage, operational 

22 losses, and consumption of natural gas fuel to 

23 operate a gas distribution system, achieved by 

24 a retail natural gas distributor, as compared to 

25 similar leakage, losses, and consumption during 


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1 a base period (which shall not be less than 1 

2 year); and 

3 ‘‘(C) codes and standards savings of nat4 ural gas. 

5 ‘‘(12) POWER POOL.—The term ‘power pool’ 

6 means an association of 2 or more interconnected 

7 electric systems that is recognized by the Commis8 sion as having an agreement to coordinate oper9 ations and planning for improved reliability and effi10 ciencies, including a Regional Transmission Organi11 zation or an Independent System Operator. 

12 ‘‘(13) RECYCLED ENERGY SAVINGS.—The term 

13 ‘recycled energy savings’ means a reduction in elec14 tricity or natural gas consumption that results from 

15 a modification of an industrial or commercial system 

16 that commenced operation before the date of enact17 ment of this section, in order to recapture electrical, 

18 mechanical, or thermal energy that would otherwise 

19 be wasted, as determined in accordance with regula20 tions promulgated by the Secretary. 

21 ‘‘(14) REPORTING PERIOD.—The term ‘report22 ing period’ means— 

23 ‘‘(A) calendar year 2012; and 

24 ‘‘(B) each successive 2-calendar-year pe25 riod thereafter. 


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1 ‘‘(15) RETAIL ELECTRICITY DISTRIBUTOR.— 

2 ‘‘(A) IN GENERAL.—The term ‘retail elec3 tricity distributor’ means, for any given cal4 endar year, an electric utility that owns or oper5 ates an electric distribution facility and, using 

6 the facility, delivered not less than 1,500,000 

7 megawatt-hours of electric energy to electric 

8 consumers for purposes other than resale dur9 ing the most recent 2-calendar-year period for 

10 which data are available. 

11 ‘‘(B) INCLUSIONS AND LIMITATIONS.—For 

12 purposes of determining whether an electric 

13 utility qualifies as a retail electricity distributor 

14 under subparagraph (A)— 

15 ‘‘(i) deliveries by any affiliate of an 

16 electric utility to electric consumers for 

17 purposes other than resale shall be consid18 ered to be deliveries by such electric utility; 

19 and 

20 ‘‘(ii) deliveries by any electric utility 

21 to a lessee, tenant, or affiliate of such elec22 tric utility shall not be treated as deliveries 

23 to electric consumers. 

24 ‘‘(16) RETAIL NATURAL GAS DISTRIBUTOR.— 


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1 ‘‘(A) IN GENERAL.—The term ‘retail nat2 ural gas distributor’ means, for any given cal3 endar year, a local distribution company, as 

4 that term is defined in section 2(17) of the 

5 Natural Gas Policy Act of 1978 (15 U.S.C. 

6 3301(17)), that delivered to natural gas con7 sumers more than 5,000,000,000 cubic feet of 

8 natural gas during the most recent 2-calendar9 year period for which data are available. 

10 ‘‘(B) INCLUSIONS AND LIMITATIONS.—For 

11 purposes of determining whether a person 

12 qualifies as a retail natural gas distributor 

13 under subparagraph (A)— 

14 ‘‘(i) deliveries of natural gas by any 

15 affiliate of a local distribution company to 

16 consumers for purposes other than resale 

17 shall be considered to be deliveries by such 

18 local distribution company; and 

19 ‘‘(ii) deliveries of natural gas to a les20 see, tenant, or affiliate of a local distribu21 tion company shall not be treated as deliv22 eries to natural gas consumers. 

23 ‘‘(17) THIRD-PARTY EFFICIENCY PROVIDER.— 

24 The term ‘third-party efficiency provider’ means any 

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1 nancial institution or other commercial, industrial or 

2 non-profit entity that is capable of providing elec3 tricity savings or natural gas savings in accordance 

4 with the requirements of subsections (e) and (f). 

5 ‘‘(c) ESTABLISHMENT OF PROGRAM.— 

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

7 after the date of enactment of this section, the Sec8 retary shall, by regulation, establish a program to 

9 implement and enforce the requirements of this sec10 tion, including— 

11 ‘‘(A) measurement and verification proce12 dures and standards under subsection (f); 

13 ‘‘(B) requirements by which retail elec14 tricity distributors and retail natural gas dis15 tributors shall demonstrate, document, and re16 port their compliance with the performance 

17 standards specified in subsection (d) and esti18 mate the impact of the standards on current 

19 and future electricity and natural gas use in 

20 such distributors’ service territories; and 

21 ‘‘(C) requirements governing applications 

22 for, and implementation of, delegated State ad23 ministration under subsection (h). 

24 ‘‘(2) COORDINATION WITH STATE PROGRAMS.— 

25 In establishing and implementing this program, the 


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1 Secretary shall, to the extent practicable, preserve 

2 the integrity, and incorporate best practices, of ex3 isting State energy efficiency programs. 

4 ‘‘(d) PERFORMANCE STANDARDS.— 

5 ‘‘(1) COMPLIANCE OBLIGATION.—Not later 

6 than April 1 of the calendar year immediately fol7 lowing each reporting period— 

8 ‘‘(A) each retail electricity distributor shall 

9 submit to the Secretary a report, in accordance 

10 with regulations issued by the Secretary, dem11 onstrating that it has achieved cumulative elec12 tricity savings (adjusted to account for any at13 trition of savings measures implemented in 

14 prior years) in each calendar year that are 

15 equal to the applicable percentage, established 

16 under paragraph (2), (3), or (4) of this sub17 section, of the base quantity of such retail elec18 tricity distributor; and 

19 ‘‘(B) each retail natural gas distributor 

20 shall submit to the Secretary a report, in ac21 cordance with regulations issued by the Sec22 retary, demonstrating that it has achieved cu23 mulative natural gas savings (adjusted to ac24 count for any attrition of savings measures im25 plemented in prior years) in each calendar year 


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1 that are equal to the applicable percentage, es2 tablished under paragraph (2), (3), or (4) of 

3 this subsection, of the base quantity of such re4 tail natural gas distributor. 

5 ‘‘(2) STANDARDS FOR 2012 THROUGH 2020.— 

6 For calendar years 2012 through 2020, the applica7 ble percentages are as follows: 

‘‘Calendar Year Cumulative Electricity 

Savings Percentage 

Cumulative Natural Gas 

Savings Percentage 

2012 1.00 0.75 

2013 2.00 1.50 

2014 3.25 2.50 

2015 4.50 3.50 

2016 6.00 4.75 

2017 7.50 6.00 

2018 10.00 7.25 

2019 12.50 8.50 

2020 15.00 10.00 

8 ‘‘(3) SUBSEQUENT YEARS.— 

9 ‘‘(A) CALENDAR YEARS 2021 THROUGH

10 2030.—Not later than December 31, 2018, the 

11 Secretary shall promulgate regulations estab12 lishing performance standards (expressed as ap13 plicable percentages of base quantity for both 

14 cumulative electricity savings and cumulative 

15 natural gas savings) for calendar years 2021 

16 through 2030. 


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1 ‘‘(B) SUBSEQUENT EXTENSIONS.—Except 

2 as provided in subparagraph (A), not later than 

3 December 31 of the penultimate reporting pe4 riod for which performance standards have been 

5 set under this paragraph, the Secretary shall 

6 promulgate regulations establishing perform7 ance standards (expressed as applicable per8 centages of base quantity for both cumulative 

9 electricity savings and cumulative natural gas 

10 savings) for the 10-calendar-year period fol11 lowing the last calendar year for which perform12 ance standards previously were set. 

13 ‘‘(C) REQUIREMENTS.—The Secretary 

14 shall set standards under this paragraph at lev15 els reflecting the maximum achievable level of 

16 cost-effective energy efficiency potential, taking 

17 into account cost-effective energy savings 

18 achieved by leading retail electricity distributors 

19 and retail natural gas distributors, opportuni20 ties for new codes and standard savings, tech21 nology improvements, and other indicators of 

22 cost-effective energy efficiency potential. In no 

23 case shall the applicable percentages for any 

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1 ard for calendar year 2020 pursuant to para2 graph (4)). 

3 ‘‘(4) MIDCOURSE REVIEW AND ADJUSTMENT OF

4 STANDARDS.—Not later than December 31, 2014, 

5 and at 10-year intervals thereafter, the Secretary 

6 shall review the most recent standards established 

7 under paragraph (2) or (3) and shall, by regulation, 

8 increase the standards if the Secretary determines 

9 that additional cost-effective energy efficiency poten10 tial is achievable, taking into account the factors 

11 identified in paragraph (3)(C). If the Secretary re12 vises standards pursuant to this paragraph, the reg13 ulations shall provide adequate lead time to ensure 

14 that compliance with the increased standards is fea15 sible. 

16 ‘‘(5) DELAY OF SUBMISSION FOR FIRST RE17 PORTING PERIOD.—Notwithstanding paragraphs (1) 

18 and (2), for the 2012 reporting period, the Secretary 

19 may accept a request from a retail electricity dis20 tributor or a retail natural gas distributor to delay 

21 the required submission of documentation of some or 

22 all of the required savings for up to 2 years. The re23 quest for delay shall include a plan for coming into 

24 full compliance by the end of the 2013–2014 report25 ing period. 


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1 ‘‘(e) TRANSFERS OF ELECTRICITY OR NATURAL GAS

2 SAVINGS.— 

3 ‘‘(1) BILATERAL CONTRACTS FOR SAVINGS

4 TRANSFERS.—Subject to the limitations of this para5 graph, a retail electricity distributor or retail natural 

6 gas distributor may use electricity savings or natural 

7 gas savings purchased, pursuant to a bilateral con8 tract, from another retail electricity distributor or 

9 retail natural gas distributor, a State, or a third10 party efficiency provider to meet the applicable per11 formance standard under subsection (d). 

12 ‘‘(2) REQUIREMENTS.—Electricity or natural 

13 gas savings purchased and used for compliance pur14 suant to this paragraph shall be— 

15 ‘‘(A) measured and verified in accordance 

16 with the procedures specified under subsection 

17 (f); 

18 ‘‘(B) reported in accordance with sub19 section (d); and 

20 ‘‘(C) achieved within the same State as is 

21 served by the retail electricity distributor or re22 tail natural gas distributor. 

23 ‘‘(3) EXCEPTION.—Notwithstanding paragraph 

24 (2)(C), a State regulatory authority may authorize a 

25 retail electricity distributor or a retail natural gas 


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1 distributor regulated by such State regulatory au2 thority to purchase savings achieved in a different 

3 State, provided that— 

4 ‘‘(A) such savings are achieved within the 

5 same power pool; and 

6 ‘‘(B) the State regulatory authority that 

7 regulates the purchaser oversees the measure8 ment and verification of the savings pursuant to 

9 the procedures and standards applicable in the 

10 purchaser’s State. 

11 ‘‘(4) REGULATORY APPROVAL.—Nothing in this 

12 paragraph shall limit or affect the authority of a 

13 State regulatory authority to require a retail elec14 tricity distributor or retail natural gas distributor 

15 that is regulated by such State regulatory authority 

16 to obtain such State regulatory authority’s author17 ization or approval of a contract for transfer of sav18 ings under this paragraph. 

19 ‘‘(5) LIMITATIONS.—In the interest of opti20 mizing achievement of cost-effective efficiency poten21 tial, the Secretary may prescribe such limitations as 

22 the Secretary determines appropriate with respect to 

23 the proportion of a retail electricity or natural gas 

24 distributor’s compliance obligation, under the appli25 cable performance standards under subsection (d), 


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1 that may be met using electricity or natural gas sav2 ings that are purchased under this paragraph. 

3 ‘‘(f) MEASUREMENT AND VERIFICATION OF SAV4 INGS.—The regulations promulgated pursuant to sub5 section (b) shall include— 

6 ‘‘(1) procedures and standards for defining and 

7 measuring electricity savings and natural gas sav8 ings that can be counted towards the performance 

9 standards set forth in subsection (d), which shall— 

10 ‘‘(A) specify the types of energy efficiency 

11 and energy conservation measures that can be 

12 counted; 

13 ‘‘(B) require that energy consumption esti14 mates for customer facilities or portions of fa15 cilities in the applicable base and current years 

16 be adjusted, as appropriate, to account for 

17 changes in weather, level of production, and 

18 building area; 

19 ‘‘(C) account for the useful life of meas20 ures; 

21 ‘‘(D) include deemed savings values for 

22 specific, commonly-used measures; 

23 ‘‘(E) allow for savings from a program to 

24 be estimated based on extrapolation from a rep25 resentative sample of participating customers; 


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1 ‘‘(F) include procedures for counting CHP 

2 savings and recycled energy savings; 

3 ‘‘(G) establish methods for calculating 

4 codes and standards energy savings, including 

5 the use of verified compliance rates; 

6 ‘‘(H) count only measures and savings that 

7 are additional to business-as-usual practices; 

8 ‘‘(I) except in the case of codes and stand9 ards savings, ensure that the retail electricity 

10 distributor or retail natural gas distributor 

11 claiming the savings played a significant role in 

12 achieving the savings (including through the ac13 tivities of a designated agent of the distributor 

14 or through the purchase of transferred savings); 

15 ‘‘(J) avoid double-counting of savings used 

16 for compliance with this section, including 

17 transferred savings; and 

18 ‘‘(K) include savings from programs ad19 ministered by the retail electric or natural gas 

20 distributor that are funded by State, Federal, 

21 or other sources; and 

22 ‘‘(2) procedures and standards for third-party 

23 verification of reported electricity savings or natural 

24 gas savings. 

25 ‘‘(g) ENFORCEMENT AND JUDICIAL REVIEW.— 


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1 ‘‘(1) REVIEW OF RETAIL DISTRIBUTOR RE2 PORTS.—The Secretary shall review each report sub3 mitted to the Secretary by a retail electricity dis4 tributor or retail natural gas distributor under sub5 section (d) to verify that the applicable performance 

6 standards under subsection (d) have been met. In 

7 determining compliance with the applicable perform8 ance standards, the Secretary shall exclude reported 

9 electricity savings or natural gas savings that are 

10 not adequately demonstrated and documented, in ac11 cordance with the regulations issued under sub12 sections (d), (e), and (f). 

13 ‘‘(2) PENALTY FOR FAILURE TO DOCUMENT

14 ADEQUATE SAVINGS.—If a retail electricity dis15 tributor or a retail natural gas distributor fails to 

16 demonstrate compliance with an applicable perform17 ance standard under subsection (d), or to pay to the 

18 State an applicable alternative compliance payment 

19 under subsection (h)(4), the Secretary shall assess 

20 against the retail electricity distributor or retail nat21 ural gas distributor a civil penalty for each such fail22 ure in an amount equal to, as adjusted for inflation 

23 in accordance with such regulations as the Secretary 

24 may promulgate–– 


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1 ‘‘(A) $100 per megawatt-hour of electricity 

2 savings or alternative compliance payment that 

3 the retail electricity distributor failed to achieve 

4 or make, respectively; or 

5 ‘‘(B) $10 per million Btu of natural gas 

6 savings or alternative compliance payment that 

7 the retail natural gas distributor failed to 

8 achieve or make, respectively. 

9 ‘‘(3) OFFSETTING STATE PENALTIES.—The 

10 Secretary shall reduce the amount of any penalty 

11 under paragraph (2) by the amount paid by the rel12 evant retail electricity distributor or retail natural 

13 gas distributor to a State for failure to comply with 

14 the requirements of a State energy efficiency re15 source standard during the same compliance period, 

16 provided that the State standard is comparable in 

17 type to the Federal standard established under this 

18 section and is more stringent than the applicable 

19 performance standards under subsection (d). 

20 ‘‘(4) ENFORCEMENT PROCEDURES.—The Sec21 retary shall assess a civil penalty, as provided under 

22 paragraph (1), in accordance with the procedures 

23 described in section 333(d) of the Energy Policy and 

24 Conservation Act of 1954 (42 U.S.C. 6303). 


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1 ‘‘(5) JUDICIAL REVIEW.—Any person who will 

2 be adversely affected by a final action taken by the 

3 Secretary under this section, other than the assess4 ment of a civil penalty, may use the procedures for 

5 review described in section 336(b) of the Energy 

6 Policy and Conservation Act (42 U.S.C. 6306). For 

7 purposes of this paragraph, references to a rule in 

8 section 336(b) of the Energy Policy and Conserva9 tion Act shall be deemed to refer also to all other 

10 final actions of the Secretary under this section 

11 other than the assessment of a civil penalty. 

12 ‘‘(h) STATE ADMINISTRATION.— 

13 ‘‘(1) IN GENERAL.—Upon receipt of an applica14 tion from the Governor of a State (including, for 

15 purposes of this subsection, the Mayor of the Dis16 trict of Columbia), the Secretary may delegate to the 

17 State the administration of this section within the 

18 State’s territory if the Secretary determines that the 

19 State will implement an energy efficiency program 

20 that meets or exceeds the requirements of this sec21 tion, including— 

22 ‘‘(A) achieving electricity savings and nat23 ural gas savings at least as great as those re24 quired under the applicable performance stand25 ards established under subsection (d); 


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1 ‘‘(B) reviewing reports and verifying elec2 tricity savings and natural gas savings achieved 

3 in the State (including savings transferred from 

4 outside the State); and 

5 ‘‘(C) collecting any alternative compliance 

6 payments under paragraph (4) of this sub7 section and using such payments to implement 

8 cost-effective efficiency programs. 

9 ‘‘(2) SECRETARIAL DETERMINATION.—The Sec10 retary shall make a substantive determination ap11 proving or disapproving a State application, after 

12 public notice and comment, within 180 days of re13 ceipt of a complete application. 

14 ‘‘(3) ALTERNATIVE MEASUREMENT AND

15 VERIFICATION PROCEDURES AND STANDARDS.—As 

16 part of an application submitted under paragraph 

17 (1), a State may request to use alternative measure18 ment and verification procedures and standards to 

19 those specified in subsection (f), provided the State 

20 demonstrates that such alternative procedures and 

21 standards provide a level of accuracy of measure22 ment and verification at least equivalent to the Fed23 eral procedures and standards promulgated under 

24 subsection (f). 

25 ‘‘(4) ALTERNATIVE COMPLIANCE PAYMENTS.— 


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1 ‘‘(A) IN GENERAL.—As part of an applica2 tion submitted under paragraph (1), a State 

3 may permit retail electricity distributors or re4 tail natural gas distributors to pay to the State, 

5 by not later than April 1 of the calendar year 

6 immediately following the relevant reporting pe7 riod, an alternative compliance payment in an 

8 amount equal to, as adjusted for inflation in ac9 cordance with such regulations as the Secretary 

10 may promulgate, not less than— 

11 ‘‘(i) $50 per megawatt-hour of elec12 tricity savings needed to make up any def13 icit with regard to a compliance obligation 

14 under the applicable performance stand15 ard; or 

16 ‘‘(ii) $5 per million Btu of natural gas 

17 savings needed to make up any deficit with 

18 regard to a compliance obligation under 

19 the applicable performance standard. 

20 ‘‘(B) USE OF PAYMENTS.—Alternative 

21 compliance payments collected by a State pur22 suant to paragraph (4) shall be used by the 

23 State to administer its delegated authority 

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1 tive energy efficiency programs. Such programs 

2 shall— 

3 ‘‘(i) to the extent feasible, achieve 

4 electricity savings and natural gas savings 

5 in the State sufficient to make up the def6 icit associated with the alternative compli7 ance payments; and 

8 ‘‘(ii) be measured and verified in ac9 cordance with the applicable procedures 

10 and standards under subsection (f) or 

11 paragraph (3) of this subsection, as the 

12 case may be. 

13 ‘‘(5) REVIEW OF STATE IMPLEMENTATION.— 

14 ‘‘(A) PERIODIC REVIEW.—Every 2 years, 

15 the Secretary shall review State implementation 

16 of this section for conformance with the re17 quirements of this section in approximately one18 half of the States that have received approval 

19 under this subsection to administer the pro20 gram, such that each State shall be reviewed at 

21 least every 4 years. To facilitate such review, 

22 the Secretary may require the State to submit 

23 a report demonstrating its conformance with 

24 the requirements of this section, including— 


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1 ‘‘(i) reports submitted by retail elec2 tricity distributors and retail natural gas 

3 distributors to the State demonstrating 

4 compliance with applicable performance 

5 standards; 

6 ‘‘(ii) the impact of such standards on 

7 projected electricity and natural gas de8 mand within the State; 

9 ‘‘(iii) an accounting of the State’s use 

10 of alternative compliance payments and the 

11 resulting electricity savings and natural 

12 gas savings achieved; and 

13 ‘‘(iv) such other information as the 

14 Secretary determines appropriate. 

15 ‘‘(B) REVIEW UPON PETITION.—Notwith16 standing subparagraph (A), upon receipt of a 

17 public petition containing credible allegation of 

18 substantial deficiencies, the Secretary shall 

19 promptly review a State’s implementation of 

20 delegated authority under this section. 

21 ‘‘(C) DEFICIENCIES.—If deficiencies are 

22 found in a review under this paragraph, the 

23 Secretary shall notify the State and direct it to 

24 correct such deficiencies and to report to the 

25 Secretary on progress within 180 days of the 


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1 receipt of review results. If the deficiencies are 

2 substantial, the Secretary shall— 

3 ‘‘(i) disallow such reported savings as 

4 the Secretary determines are not credible 

5 due to deficiencies; 

6 ‘‘(ii) re-review the State not later than 

7 2 years after the original review; and 

8 ‘‘(iii) if substantial deficiencies remain 

9 uncorrected after the review provided for 

10 under clause (ii), revoke the authority of 

11 such State to administer the program es12 tablished under this section. 

13 ‘‘(6) CALLS FOR REVISION OF STATE APPLICA14 TIONS.—As a condition of maintaining its delegated 

15 authority to administer this section, the Secretary 

16 may require a State to submit a revised application 

17 under paragraph (1) if the Secretary has— 

18 ‘‘(A) promulgated new or revised perform19 ance standards under subsection (d); 

20 ‘‘(B) promulgated new or substantially re21 vised measurement and verification procedures 

22 and standards under subsection (f); or 

23 ‘‘(C) otherwise substantially revised the 

24 program established under this section. 


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1 ‘‘(i) INFORMATION AND REPORTS.—In accordance 

2 with section 13 of the Federal Energy Administration Act 

3 of 1974 (15 U.S.C. 772), the Secretary may require any 

4 retail electricity distributor, any retail natural gas dis5 tributor, any third-party efficiency provider, or such other 

6 entities as the Secretary deems appropriate, to provide any 

7 information the Secretary determines appropriate to carry 

8 out this section. 

9 ‘‘(j) STATE LAW.—Nothing in this section shall di10 minish or qualify any authority of a State or political sub11 division of a State to adopt or enforce any law or regula12 tion respecting electricity savings or natural gas savings, 

13 including any law or regulation establishing energy effi14 ciency requirements more stringent than those under this 

15 section, provided that no such law or regulation may re16 lieve any person of any requirement otherwise applicable 

17 under this section. 

18 ‘‘(k) PROGRAM REVIEW.— 

19 ‘‘(1) NATIONAL ACADEMY OF SCIENCES RE20 VIEW.—The Secretary shall enter into a contract 

21 with the National Academy of Sciences under which 

22 the Academy shall, not later than July 1, 2017, and 

23 every 10 years thereafter, submit to the Secretary 

24 and to Congress a comprehensive evaluation of all 


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1 aspects of the program established under this sec2 tion, including— 

3 ‘‘(A) an evaluation of the effectiveness of 

4 the program, including its specific design ele5 ments, in increasing the efficiency of retail nat6 ural gas and electricity distribution and con7 sumption; 

8 ‘‘(B) the opportunities for additional tech9 nologies and sources of efficiency that have 

10 emerged since enactment of this section; 

11 ‘‘(C) the program’s impact on the reli12 ability of electricity and natural gas supply; 

13 ‘‘(D) the net benefits or costs of the pro14 gram to the national and State economies, in15 cluding effects on electricity and natural gas de16 mand and prices, economic development bene17 fits of investment, environmental benefits, and 

18 avoided costs related to environmental and con19 gestion mitigation investments that otherwise 

20 would have been required; 

21 ‘‘(E) an assessment of the benefits and 

22 costs of increasing the performance standards 

23 established under subsection (d) of this section; 

24 ‘‘(F) the feasibility, advantages, and dis25 advantages of alternative models for demVerDate Nov 24 2008 04:35 Feb 10, 2009 Jkt 079200 PO 00000 Frm 00030 Fmt 6652 Sfmt 6201 E:\BILLS\H889.IH H889

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1 onstrating compliance with a Federal energy ef2 ficiency resource standard, including estab3 lishing a national trading system for energy ef4 ficiency credits or demonstrating compliance 

5 through actual reductions in delivery or sales of 

6 electricity and natural gas, rather than on pro7 gram savings; and 

8 ‘‘(G) recommendations regarding potential 

9 changes to this section, to regulations and pro10 cedures for implementing this section, or to re11 lated public policies. 

12 ‘‘(2) RECOMMENDATIONS TO CONGRESS.—Not 

13 later than January 1, 2018, and every 10 years 

14 thereafter, the Secretary shall transmit to the Com15 mittee on Energy and Commerce of the United 

16 States House of Representatives and the Committee 

17 on Energy and Natural Resources of the United 

18 States Senate a report making recommendations for 

19 modifications and improvements to the program es20 tablished under this section and any related pro21 grams, including an explanation of the inconsist22 encies, if any, between the Secretary’s recommenda23 tions and those included in the National Academy of 

24 Sciences evaluation under paragraph (1).’’. 


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

2 of contents of the Public Utility Regulatory Policies Act 

3 of 1978 (16 U.S.C. 2601 and following) is amended by 

4 adding at the end of the items relating to title VI the fol5 lowing: 

‘‘Sec. 610. Federal energy efficiency resource standard.’’. 

Æ 


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