I 

113TH CONGRESS 

2D SESSION H. R. 3838 

To amend the Internal Revenue Code of 1986 to provide a consumer 

renewable credit for utilities that sell intermittent renewable power. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 9, 2014 

Mr. PAULSEN (for himself and Mr. KIND) introduced the following bill; which 

was referred to the Committee on Ways and Means, and in addition to 

the Committee on Energy and Commerce, 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 amend the Internal Revenue Code of 1986 to provide 

a consumer renewable credit for utilities that sell intermittent renewable power. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. CONSUMER RENEWABLE CREDIT. 

4 (a) BUSINESS CREDIT.— 

5 (1) IN GENERAL.—Subpart D of part IV of 

6 subchapter A of chapter 1 of the Internal Revenue 

7 Code of 1986 is amended by adding at the end the 

8 following new section: 


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1 ‘‘SEC. 45S. CONSUMER RENEWABLE CREDIT. 

2 ‘‘(a) GENERAL RULE.—For purposes of section 38, 

3 in the case of an eligible taxpayer, the consumer renewable 

4 credit for any taxable year is an amount equal to the prod5 uct of— 

6 ‘‘(1) the renewable portfolio factor of such eligi7 ble taxpayer, and 

8 ‘‘(2) the number of kilowatt hours of renewable 

9 electricity— 

10 ‘‘(A) purchased or produced by such tax11 payer, and 

12 ‘‘(B) sold by such taxpayer to a retail cus13 tomer during the taxable year and before Janu14 ary 1, 2020. 

15 ‘‘(b) RENEWABLE PORTFOLIO FACTOR.—The renew16 able portfolio factor for an eligible taxpayer for any tax17 able year shall be determined in accordance with the fol18 lowing table: 

‘‘In the case of a renewable electricity percentage of: 

The 

renewable 

portfolio 

factor is: 

Less than 6 percent ........................................................................ zero cents

At least 6 percent but less than 8 percent ..................................... 0.1 cents

At least 8 percent but less than 12 percent ................................... 0.2 cents

At least 12 percent but less than 16 percent ................................. 0.3 cents

At least 16 percent but less than 20 percent ................................. 0.4 cents

At least 20 percent but less than 24 percent ................................. 0.5 cents

Equal to or greater than 24 percent .............................................. 0.6 cents. 


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1 ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur2 poses of this section— 

3 ‘‘(1) ELIGIBLE TAXPAYER.—The term ‘eligible 

4 taxpayer’ means an electric utility (as defined in sec5 tion 3(22) of the Federal Power Act, 16 U.S.C. 

6 796(22)). 

7 ‘‘(2) RENEWABLE ELECTRICITY.—The term ‘re8 newable electricity’ means electricity generated by— 

9 ‘‘(A) any facility using wind to generate 

10 such electricity, or 

11 ‘‘(B) any facility using solar energy to gen12 erate such electricity. 

13 ‘‘(3) RENEWABLE ELECTRICITY PERCENT14 AGE.—The term ‘renewable electricity percentage’ 

15 means, with respect to any taxable year, the percent16 age of an eligible taxpayer’s total sales of electricity 

17 to retail customers that is derived from renewable 

18 electricity (determined without regard to whether 

19 such electricity was produced by the taxpayer). 

20 ‘‘(4) APPLICATION OF OTHER RULES.—For 

21 purposes of this section, rules similar to the rules of 

22 paragraphs (1), (3), and (5) of section 45(e) shall 

23 apply. 

24 ‘‘(5) CREDIT ALLOWED ONLY WITH RESPECT

25 TO ONE ELIGIBLE ENTITY.—No credit shall be alVerDate Mar 15 2010 20:59 Jan 13, 2014 Jkt 039200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3838.IH H3838

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1 lowed under subsection (a) with respect to renewable 

2 electricity purchased from another eligible entity if a 

3 credit has been allowed under this section or a pay4 ment has been made under section 6433 to such 

5 other eligible entity. 

6 ‘‘(6) CREDIT AND RENEWABLE ELECTRICITY

7 PERCENTAGE ENHANCEMENT.— 

8 ‘‘(A) NATIVE AMERICAN WIND AND

9 SOLAR.—Any renewable electricity generated 

10 from a wind or solar energy facility located on 

11 Indian land, as defined in section 2601 of the 

12 Energy Policy Act of 1992 (25 U.S.C. 3501), 

13 shall for purposes of this section be considered 

14 as twice the electricity production as is actually 

15 produced from such facility. 

16 ‘‘(B) ELECTRIC COOPERATIVE WIND AND

17 SOLAR.—Any renewable electricity generated 

18 from a wind or solar energy facility owned en19 tirely by a mutual or cooperative electric com20 pany, as defined in section 501(c)(12), or sec21 tion 1381(a)(2)(C), shall for purposes of this 

22 section be considered as one and one-half times 

23 the electricity production as is actually pro24 duced from such facility. 


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1 ‘‘(d) COORDINATION WITH PAYMENTS.—The amount 

2 of the credit determined under this section with respect 

3 to any electricity shall be reduced to take into account any 

4 payment provided with respect to such electricity solely by 

5 reason of the application of section 6433.’’. 

6 (2) CREDIT MADE PART OF GENERAL BUSINESS

7 CREDIT.—Subsection (b) of section 38 of the Inter8 nal Revenue Code of 1986 is amended by striking 

9 ‘‘plus’’ at the end of paragraph (35), by striking the 

10 period at the end of paragraph (36) and inserting ‘‘, 

11 plus’’, and by adding at the end the following new 

12 paragraph: 

13 ‘‘(37) the consumer renewable credit deter14 mined under section 45S(a).’’. 

15 (3) SPECIFIED CREDIT.—Subparagraph (B) of 

16 section 38(c)(4) of the Internal Revenue Code of 

17 1986 is amended by redesignating clauses (vii) 

18 through (ix) as clauses (viii) through (x), respec19 tively, and by inserting after clause (v) the following 

20 new clause: 

21 ‘‘(vi) the credit determined under sec22 tion 45S.’’. 

23 (4) CLERICAL AMENDMENT.—The table of sec24 tions for subpart D of part IV of subchapter A of 

25 chapter 1 of the Internal Revenue Code of 1986 is 


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1 amended by adding at the end the following new 

2 item: 

‘‘Sec. 45S. Consumer renewable credit.’’. 

3 (b) PAYMENTS IN LIEU OF CREDIT.— 

4 (1) IN GENERAL.—Subchapter B of chapter 65 

5 of the Internal Revenue Code of 1986 is amended by 

6 adding at the end the following new section: 

7 ‘‘SEC. 6433. CONSUMER RENEWABLE CREDIT PAYMENTS. 

8 ‘‘(a) IN GENERAL.—If any eligible person sells re9 newable electricity to a retail customer, the Secretary shall 

10 pay (without interest) to any such person who elects to 

11 receive a payment an amount equal to the product of— 

12 ‘‘(1) the renewable portfolio factor of such eligi13 ble person, and 

14 ‘‘(2) the number of kilowatt hours of renewable 

15 electricity— 

16 ‘‘(A) purchased or produced by such per17 son, and 

18 ‘‘(B) sold by such person in the trade or 

19 business of such person to a retail customer be20 fore January 1, 2020. 

21 ‘‘(b) TIMING OF PAYMENTS.— 

22 ‘‘(1) IN GENERAL.—Except as provided in para23 graph (2), rules similar to the rules of section 

24 6427(i)(1) shall apply for purposes of this section. 

25 ‘‘(2) QUARTERLY PAYMENTS.— 


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1 ‘‘(A) IN GENERAL.—If, at the close of any 

2 quarter of the taxable year of any person (or 

3 fiscal year in the case of an eligible person that 

4 does not have a taxable year), at least $750 is 

5 payable in the aggregate under subsection (a), 

6 to such person with respect to electricity pur7 chased or produced during— 

8 ‘‘(i) such quarter, or 

9 ‘‘(ii) any prior quarter (for which no 

10 other claim has been filed) during such 

11 year, 

12 a claim may be filed under this section with re13 spect to such electricity. 

14 ‘‘(B) TIME FOR FILING CLAIM.—No claim 

15 filed under this paragraph shall be allowed un16 less filed on or before the last day of the first 

17 quarter following the earliest quarter included 

18 in the claim. 

19 ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur20 poses of this section— 

21 ‘‘(1) ELIGIBLE PERSON.—The term ‘eligible 

22 person’ means an electric utility (as defined in sec23 tion 3(22) of the Federal Power Act, 16 U.S.C. 

24 796(22)) or a Federal power marketing agency as 

25 defined in section 3(19) of the Federal Power Act. 


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1 ‘‘(2) OTHER DEFINITIONS.—Any term used in 

2 this section which is also used in section 45S shall 

3 have the meaning given such term under section 

4 45S. 

5 ‘‘(3) APPLICATION OF OTHER RULES.—For 

6 purposes of this section, rules similar to the rules of 

7 paragraphs (1) and (3) of section 45(e) shall apply. 

8 ‘‘(d) PAYMENT DISALLOWED UNLESS AMOUNT

9 PASSED TO THIRD-PARTY GENERATORS CHARGED FOR

10 INTEGRATION COSTS.— 

11 ‘‘(1) IN GENERAL.—In the case of renewable 

12 electricity eligible for the payment under subsection 

13 (a) that is purchased and not produced by an eligi14 ble person, no payment shall be made under this sec15 tion unless any charge the eligible person has as16 sessed the seller to recover the integration costs as17 sociated with such electricity has been reduced (but 

18 not below zero) to the extent of the payment re19 ceived under subsection (a) associated with such 

20 electricity. 

21 ‘‘(2) DEFINITIONS.—For purposes of paragraph 

22 (1), charges intended to recover integration costs do 

23 not include amounts paid by the producer of the 

24 electricity for interconnection facilities, distribution 

25 upgrades, network upgrades, or stand-alone network 


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1 upgrades as those terms have been defined by the 

2 Federal Energy Regulatory Commission in its 

3 Standard Interconnection Procedures. 

4 ‘‘(e) PAYMENT ALLOWED FOR SPECIAL GENERATING

5 AND TRANSMITTING ENTITIES.— 

6 ‘‘(1) IN GENERAL.—Notwithstanding subsection 

7 (a)(1)(B), an entity that is a special generating and 

8 transmitting entity shall be eligible for a payment 

9 under this section for renewable electricity it trans10 mits, regardless of whether such utility purchased or 

11 sold such electricity for its customers. 

12 ‘‘(2) DEFINITIONS.—For purposes of this sub13 section, the term ‘special generating and transmit14 ting entity’ means— 

15 ‘‘(A) an entity that is primarily engaged in 

16 marketing electricity and— 

17 ‘‘(i) provides transmission service for 

18 over four thousand megawatts of renewable 

19 generating facilities, as determined by ref20 erence to the machine or nameplate capac21 ity thereof, and 

22 ‘‘(ii) transmits the majority of its re23 newable electricity transmitted to cus24 tomers located outside the region it serves, 

25 or 


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1 ‘‘(B) an entity that is a generation and 

2 transmission cooperative, which engages pri3 marily in providing wholesale electric service to 

4 its members, generally consisting of distribution 

5 cooperatives.’’. 

6 (2) CLERICAL AMENDMENT.—The table of sec7 tions for subpart B of chapter 65 of the Internal 

8 Revenue Code of 1986 is amended by adding at the 

9 end the following new item: 

‘‘Sec. 6433. Renewable electricity integration payments.’’. 

10 (c) EFFECTIVE DATE.—The amendments made by 

11 this section shall apply to electricity sold to retail cus12 tomers after the date of the enactment of this Act. 

Æ 


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