II 

116TH CONGRESS 

1ST SESSION S. 2288 

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

to establish a Federal energy efficiency resource standard for electricity 

and natural gas suppliers, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 25, 2019 

Ms. SMITH (for herself, Mr. KING, and Mr. MERKLEY) introduced the following bill; which was read twice and referred to the Committee on Energy and Natural Resources 

A BILL 

To amend title VI of the Public Utility Regulatory Policies 

Act of 1978 to establish a Federal energy efficiency 

resource standard for electricity and natural gas suppliers, 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 ‘‘American Energy Effi5 ciency Act of 2019’’. 


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1 SEC. 2. ENERGY EFFICIENCY RESOURCE STANDARD FOR 

2 RETAIL ELECTRICITY AND NATURAL GAS 

3 SUPPLIERS. 

4 (a) IN GENERAL.—Title VI of the Public Utility Reg5 ulatory Policies Act of 1978 is amended by adding after 

6 section 609 (7 U.S.C. 918c) the following: 

7 ‘‘SEC. 610. FEDERAL ENERGY EFFICIENCY RESOURCE 

8 STANDARD FOR RETAIL ELECTRICITY AND 

9 NATURAL GAS SUPPLIERS. 

10 ‘‘(a) DEFINITIONS.—In this section: 

11 ‘‘(1) ASHRAE; ANSI; IESNA.—The terms 

12 ‘ASHRAE’, ‘ANSI’, and ‘IESNA’ mean the Amer13 ican Society of Heating, Refrigerating and Air-Con14 ditioning Engineers, the American National Stand15 ards Institute, and the Illuminating Engineering So16 ciety of North America, respectively. 

17 ‘‘(2) BASE QUANTITY.— 

18 ‘‘(A) IN GENERAL.—The term ‘base quan19 tity’, with respect to a retail electricity supplier 

20 or retail natural gas supplier, means, for each 

21 calendar year for which a performance standard 

22 is established under subsection (c), the average 

23 annual quantity of electricity or natural gas de24 livered by the retail electricity supplier or retail 

25 natural gas supplier to retail customers during 

26 the 3 calendar years immediately preceding the 


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1 first year that compliance is required under 

2 subsection (c)(1). 

3 ‘‘(B) EXCLUSION.—The term ‘base quan4 tity’, with respect to a retail natural gas sup5 plier, does not include natural gas delivered for 

6 purposes of electricity generation. 

7 ‘‘(3) CHP SAVINGS.—The term ‘CHP savings’ 

8 means— 

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

10 heat and power system that commences oper11 ation after the date of enactment of this sec12 tion; and 

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

14 from upgrading or replacing, after the date of 

15 enactment of this section, a combined heat and 

16 power system that commenced operation on or 

17 before the date of enactment of this section. 

18 ‘‘(4) CHP SYSTEM SAVINGS.—The term ‘CHP 

19 system savings’ means the electric output, and the 

20 electricity saved due to the mechanical output, of a 

21 combined heat and power system, adjusted to reflect 

22 any increase in fuel consumption by that system as 

23 compared to the fuel that would have been required 

24 to produce an equivalent useful thermal energy out25 put in a separate thermal-only system, as deterVerDate Sep 11 2014 20:50 Jul 29, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2288.IS S2288

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1 mined in accordance with regulations promulgated 

2 by the Secretary. 

3 ‘‘(5) COMBINED HEAT AND POWER SYSTEM.— 

4 The term ‘combined heat and power system’ means 

5 a system that uses the same energy source for the 

6 generation of electrical or mechanical power and the 

7 production of steam or another form of useful ther8 mal energy, if— 

9 ‘‘(A) the system meets all applicable re10 quirements relating to efficiency and other op11 erating characteristics that the Secretary pro12 mulgates by regulation; and 

13 ‘‘(B) the net quantity of electricity sold 

14 wholesale by the facility using the system does 

15 not exceed 50 percent of the total quantity of 

16 electricity generated annually by the system. 

17 ‘‘(6) COST-EFFECTIVE.—The term ‘cost-effec18 tive’ means, with respect to an energy efficiency 

19 measure, that the measure achieves, directly to the 

20 energy consumer and to the economy, a net present 

21 value of economic benefits over the life of the meas22 ure that is greater than the net present value of the 

23 cost of the measure over the life of the measure, 

24 using a societal benefit-cost test calculated using the 

25 lower of— 


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1 ‘‘(A) a utility weighted average cost of cap2 ital; or 

3 ‘‘(B) a social discount rate of 3 percent. 

4 ‘‘(7) CUSTOMER FACILITY SAVINGS.—The term 

5 ‘customer facility savings’ means a reduction in end6 use electricity or natural gas consumption (including 

7 waste heat energy savings) at a facility of an end8 use consumer of electricity or natural gas served by 

9 a retail electricity supplier or natural gas supplier, 

10 as compared to— 

11 ‘‘(A) in the case of a new facility, con12 sumption at a reference facility of average effi13 ciency; 

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

15 consumption at the facility during a base period 

16 of not less than 1 year; 

17 ‘‘(C) in the case of new equipment that re18 places existing equipment at the end of the use19 ful life of the existing equipment, consumption 

20 by new equipment of average efficiency of the 

21 same equipment type, except that customer sav22 ings under this subparagraph shall not be 

23 counted towards customer savings under sub24 paragraph (A) or (B); and 


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1 ‘‘(D) in the case of new equipment that re2 places existing equipment with remaining useful 

3 life— 

4 ‘‘(i) consumption of the existing 

5 equipment for the remaining useful life of 

6 the equipment; and 

7 ‘‘(ii) thereafter, consumption of new 

8 equipment of average efficiency. 

9 ‘‘(8) ELECTRICITY SAVINGS.—The term ‘elec10 tricity savings’ means reductions in electricity con11 sumption achieved through measures implemented 

12 after the date of enactment of this section, as deter13 mined in accordance with regulations promulgated 

14 by the Secretary, that are limited to— 

15 ‘‘(A) customer facility savings of elec16 tricity, adjusted to reflect any associated in17 crease in fuel consumption at the facility; 

18 ‘‘(B) reductions in distribution system 

19 losses of electricity achieved by a retail elec20 tricity supplier, as compared to losses attrib21 utable to new or replacement distribution sys22 tem equipment of average efficiency, as defined 

23 in regulations promulgated by the Secretary; 

24 ‘‘(C) CHP savings; 


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1 ‘‘(D) State and local codes and standards 

2 savings of electricity; and 

3 ‘‘(E) fuel switching energy savings that re4 sults in net savings of source energy, as defined 

5 in regulations promulgated by the Secretary. 

6 ‘‘(9) FUEL SWITCHING ENERGY SAVINGS.— 

7 ‘‘(A) IN GENERAL.—The term ‘fuel-switch8 ing energy savings’ means net energy savings, 

9 calculated in accordance with subparagraph 

10 (B), from end-user switches from 1 energy 

11 source to another, as determined in accordance 

12 with regulations promulgated by the Secretary. 

13 ‘‘(B) CALCULATION.—For purposes of cal14 culating fuel-switching net energy savings— 

15 ‘‘(i) electricity use shall be evaluated 

16 based on the average quantity of fuel 

17 burned at a new power plant, taking into 

18 account existing and planned renewable en19 ergy generators to provide each kilowatt 

20 hour of electricity; 

21 ‘‘(ii) electricity and natural gas use 

22 shall include losses in the transmission and 

23 distribution system; and 


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1 ‘‘(iii) fuel-switching that is not cost-ef2 fective to the end-user shall not be count3 ed. 

4 ‘‘(10) NATURAL GAS SAVINGS.—The term ‘nat5 ural gas savings’ means reductions in natural gas 

6 consumption from measures implemented after the 

7 date of enactment of this section, as determined in 

8 accordance with regulations promulgated by the Sec9 retary, that are limited to— 

10 ‘‘(A) customer facility savings of natural 

11 gas, adjusted to reflect any associated increase 

12 in electricity consumption or consumption of 

13 other fuels at the facility; 

14 ‘‘(B) reductions in leakage, operational 

15 losses, and consumption of natural gas fuel to 

16 operate a gas distribution system, achieved by 

17 a retail natural gas supplier, as compared to 

18 similar leakage, losses, and consumption during 

19 a base period of not less than 1 year; 

20 ‘‘(C) State and local codes and standards 

21 savings of natural gas; and 

22 ‘‘(D) fuel switching energy savings that re23 sult in net savings of source energy, as defined 

24 in regulations promulgated by the Secretary. 


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1 ‘‘(11) REPORTING PERIOD.—The term ‘report2 ing period’ means— 

3 ‘‘(A) calendar year 2021; and 

4 ‘‘(B) each successive 2-calendar-year pe5 riod thereafter. 

6 ‘‘(12) RETAIL ELECTRICITY SUPPLIER.— 

7 ‘‘(A) IN GENERAL.—The term ‘retail elec8 tricity supplier’ means, for any given calendar 

9 year, an electric utility that delivers not less 

10 than 2,000,000 megawatt hours of electric en11 ergy to electric consumers for purposes other 

12 than resale during the preceding calendar year. 

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

14 purposes of determining whether an electric 

15 utility qualifies as a retail electricity supplier 

16 under subparagraph (A)— 

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

18 electric utility to electric consumers for 

19 purposes other than resale shall be consid20 ered to be deliveries by the electric utility; 

21 and 

22 ‘‘(ii) deliveries by any electric utility 

23 to a lessee, tenant, or affiliate of the elec24 tric utility shall not be considered to be de25 liveries to electric consumers. 


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1 ‘‘(13) RETAIL NATURAL GAS SUPPLIER.— 

2 ‘‘(A) IN GENERAL.—The term ‘retail nat3 ural gas supplier’ means, for any given calendar 

4 year, a local distribution company (as defined 

5 in section 2 of the Natural Gas Policy Act of 

6 1978 (15 U.S.C. 3301)), that delivered to nat7 ural gas consumers more than 5,000,000,000 

8 cubic feet of natural gas for purposes other 

9 than resale during the preceding calendar year. 

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

11 purposes of determining whether a person 

12 qualifies as a retail natural gas supplier under 

13 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 the 

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 considered to be 

22 deliveries to natural gas consumers. 

23 ‘‘(14) STATE AND LOCAL CODES AND STAND24 ARDS SAVINGS.— 


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1 ‘‘(A) IN GENERAL.—The term ‘State and 

2 local codes and standards savings’ means a re3 duction, due to the adoption and implementa4 tion, after the date of enactment of this section, 

5 of new or revised appliance and equipment effi6 ciency standards or building energy codes, in— 

7 ‘‘(i) end-use electricity consumption 

8 for a retail electricity supplier; or 

9 ‘‘(ii) natural gas consumption in the 

10 service territory of a retail natural gas 

11 supplier. 

12 ‘‘(B) BASELINES.—In calculating State 

13 and local codes and standards savings under 

14 subparagraph (A)— 

15 ‘‘(i) the baseline for calculating sav16 ings from a new or revised building code 

17 shall be the more stringent of— 

18 ‘‘(I)(aa) the 2015 International 

19 Energy Conservation Code for resi20 dential buildings; or 

21 ‘‘(bb) the ASHRAE/ANSI/ 

22 IESNA Standard 90.1–2013 for com23 mercial buildings; or 


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1 ‘‘(II) the applicable State build2 ing code in effect on the date of en3 actment of this section; and 

4 ‘‘(ii) the baseline for calculating sav5 ings from a new or revised appliance 

6 standard shall be the estimated average ef7 ficiency of new appliances in the applicable 

8 1 or more categories during the 1-year pe9 riod preceding the date on which the new 

10 or revised standard is adopted. 

11 ‘‘(15) THIRD-PARTY EFFICIENCY PROVIDER.— 

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

13 retailer, building owner, energy service company, fi14 nancial institution, or other commercial, industrial, 

15 or nonprofit entity that is capable of providing elec16 tricity savings or natural gas savings in accordance 

17 with any procedures, standards, and rules estab18 lished by the Secretary under subsections (b)(1)(D) 

19 and (d). 

20 ‘‘(16) WASTE HEAT ENERGY SAVINGS.—The 

21 term ‘waste heat energy savings’ means the mechan22 ical or thermal energy used at a facility or the elec23 tric output of a facility, adjusted to reflect any asso24 ciated increase in fuel consumption, that results 

25 from a modification of an industrial, commercial, or 


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1 institutional system that commenced operation be2 fore the date of enactment of this section, in order 

3 to recapture mechanical or thermal energy that 

4 would otherwise be wasted, as determined in accord5 ance with regulations promulgated by the Secretary. 

6 ‘‘(b) ESTABLISHMENT OF PROGRAM.— 

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

8 after the date of enactment of this section, the Sec9 retary shall, by regulation, establish a program to 

10 implement and enforce the requirements of this sec11 tion, including— 

12 ‘‘(A) by establishing evaluation, measure13 ment, and verification procedures and stand14 ards under subsection (d); 

15 ‘‘(B) by establishing requirements under 

16 which retail electricity suppliers and retail nat17 ural gas suppliers shall— 

18 ‘‘(i) demonstrate, document, and re19 port the compliance of the retail electricity 

20 suppliers and retail natural gas suppliers 

21 with the performance standards under sub22 section (c); and 

23 ‘‘(ii) estimate the impact of the stand24 ards on current and future electricity and 


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1 natural gas use in the service territories of 

2 the suppliers; 

3 ‘‘(C) by establishing requirements gov4 erning applications for, and implementation of, 

5 delegated State administration under subsection 

6 (f); and 

7 ‘‘(D) by establishing rules to govern trans8 fers of electricity or natural gas savings— 

9 ‘‘(i) between suppliers and third-party 

10 efficiency providers serving the same State; 

11 and 

12 ‘‘(ii) between suppliers and third13 party efficiency providers serving different 

14 States. 

15 ‘‘(2) NATIONAL ACADEMY OF SCIENCES

16 STUDY.—In establishing and implementing this sec17 tion, the Secretary shall take into consideration a re18 port published under subsection (d)(2)(C). 

19 ‘‘(3) COORDINATION WITH STATE PROGRAMS.— 

20 In establishing and implementing this section, the 

21 Secretary shall, to the maximum extent practicable, 

22 preserve the integrity and incorporate best practices 

23 of existing State energy efficiency programs. 

24 ‘‘(4) SAVINGS PROGRAMS FOR LOW-INCOME

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1 retary shall encourage retail electricity suppliers and 

2 retail natural gas suppliers to ensure that a portion 

3 of the customer facility savings achieved for a cal4 endar year shall result from programs that target 

5 households that are at or below 200 percent of the 

6 poverty line (as defined in section 673 of the Com7 munity Services Block Grant Act (42 U.S.C. 9902)). 

8 ‘‘(c) PERFORMANCE STANDARDS.— 

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

10 than May 1 of the calendar year immediately fol11 lowing each reporting period— 

12 ‘‘(A) each retail electricity supplier shall 

13 submit to the Secretary a report, in accordance 

14 with regulations promulgated by the Secretary, 

15 demonstrating that the retail electricity supplier 

16 has achieved cumulative consistent electricity 

17 savings (adjusted to account for any attrition of 

18 savings measures implemented in prior years) 

19 in each calendar year that are equal to the ap20 plicable percentage of the base quantity of the 

21 retail electricity supplier; and 

22 ‘‘(B) each retail natural gas supplier shall 

23 submit to the Secretary a report, in accordance 

24 with regulations promulgated by the Secretary, 

25 demonstrating that it has achieved cumulative 


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1 consistent natural gas savings (adjusted to ac2 count for any attrition of savings measures im3 plemented in prior years) in each calendar year 

4 that are equal to the applicable percentage of 

5 the base quantity of such retail natural gas 

6 supplier. 

7 ‘‘(2) STANDARDS FOR 2021 THROUGH 2035.— 

8 For each of calendar years 2021 through 2035, the 

9 applicable percentages are as follows: 

‘‘Calendar Year Cumulative Electricity 

Savings Percentage 

Cumulative Natural Gas 

Savings Percentage 

2021 1.00 0.50 

2022 2.00 1.25 

2023 3.00 2.00 

2024 4.25 3.00 

2025 5.50 4.00 

2026 7.00 5.00 

2027 8.50 6.00 

2028 10.00 7.00 

2029 11.50 8.00 

2030 13.00 9.00 

2031 14.75 10.00 

2032 16.50 11.00 

2033 18.25 12.00 

2034 20.00 13.00 

2035 22.00 14.00 

10 ‘‘(3) SUBSEQUENT YEARS.— 

11 ‘‘(A) CALENDAR YEARS 2036 THROUGH

12 2045.—Not later than December 31, 2030, the 


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1 Secretary shall promulgate regulations estab2 lishing performance standards (expressed as ap3 plicable percentages of base quantity for both 

4 cumulative electricity savings and cumulative 

5 natural gas savings) for each of calendar years 

6 2036 through 2045. 

7 ‘‘(B) REQUIREMENTS.—The Secretary 

8 shall establish standards under this paragraph 

9 at levels reflecting the maximum achievable 

10 level of cost-effective energy efficiency potential, 

11 taking into account— 

12 ‘‘(i) cost-effective energy savings 

13 achieved by leading retail electricity sup14 pliers and retail natural gas suppliers; 

15 ‘‘(ii) opportunities for new State and 

16 local codes and standards savings; 

17 ‘‘(iii) technology improvements; and 

18 ‘‘(iv) other indicators of cost-effective 

19 energy efficiency potential including dif20 ferences between States. 

21 ‘‘(C) MINIMUM PERCENTAGE.—In no case 

22 shall the applicable percentages for any cal23 endar year be less than the applicable percent24 ages for calendar year 2035. 


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1 ‘‘(4) DELAY OF SUBMISSION FOR FIRST RE2 PORTING PERIOD.— 

3 ‘‘(A) IN GENERAL.—Notwithstanding 

4 paragraphs (1) and (2), for the 2021 reporting 

5 period, the Secretary may accept a request from 

6 a retail electricity supplier or a retail natural 

7 gas supplier to delay the required submission of 

8 documentation of all or part of the required 

9 savings for up to 2 years. 

10 ‘‘(B) PLAN FOR COMPLIANCE.—The re11 quest for delay under subparagraph (A) shall 

12 include a plan for coming into full compliance 

13 by the end of the 2022–2023 reporting period. 

14 ‘‘(5) APPLYING UNUSED SAVINGS TO FUTURE

15 YEARS.—If savings achieved in a year exceed the 

16 performance standards specified in this subsection, 

17 any savings in excess of the performance standards 

18 may be applied toward performance standards speci19 fied for the first 3 years following the year in which 

20 the excess savings are achieved. 

21 ‘‘(d) EVALUATION, MEASUREMENT, AND

22 VERIFICATION OF SAVINGS.— 

23 ‘‘(1) REGULATIONS.—The regulations promul24 gated pursuant to subsection (b) shall— 

25 ‘‘(A) be based on— 


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1 ‘‘(i) the Uniform Methods Project of 

2 the Department of Energy; 

3 ‘‘(ii) the National Standard Practice 

4 Manual for Assessing the Cost-Effective5 ness of Energy Efficiency Resources, devel6 oped by the National Efficiency Screening 

7 Project; and 

8 ‘‘(iii) other best practices recognized 

9 in the energy efficiency industry; and 

10 ‘‘(B) include— 

11 ‘‘(i) procedures and standards for 

12 evaluating, measuring, and verifying elec13 tricity savings and natural gas savings that 

14 count towards the performance standards 

15 established under subsection (c) that— 

16 ‘‘(I) specify the types of energy 

17 efficiency and energy conservation 

18 measures that may be counted; 

19 ‘‘(II) require that energy con20 sumption estimates for customer fa21 cilities or portions of facilities in the 

22 applicable base and current years be 

23 adjusted, as appropriate, to account 

24 for changes in weather, level of pro25 duction, and building area; 


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1 ‘‘(III) do not prevent overall load 

2 growth due to beneficial electrifica3 tion; 

4 ‘‘(IV) account for the useful life 

5 of energy efficiency and energy con6 servation measures; 

7 ‘‘(V) allow for savings from a 

8 program to be estimated based on ex9 trapolation from a representative sam10 ple of participating customers; 

11 ‘‘(VI) include procedures for cal12 culating and documenting CHP sav13 ings, fuel-switching energy savings, 

14 and waste heat energy savings; 

15 ‘‘(VII) establish methods for cal16 culating codes and standards energy 

17 savings, including the use of verified 

18 compliance rates; 

19 ‘‘(VIII) include procedures for 

20 calculating and documenting— 

21 ‘‘(aa) customer facility sav22 ings and reductions in distribu23 tion system losses of electricity 

24 and natural gas that are achieved 

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1 ment, as described in section 

2 1301 of the Energy Independ3 ence and Security Act of 2007 

4 (42 U.S.C. 17381); and 

5 ‘‘(bb) reductions in natural 

6 gas distribution system losses at7 tributable to pipeline repair and 

8 replacement programs; 

9 ‘‘(IX) count only measures and 

10 savings that are additional to busi11 ness-as-usual customer purchase prac12 tices; 

13 ‘‘(X) ensure that the retail elec14 tricity supplier or retail natural gas 

15 supplier claiming the electricity sav16 ings or natural gas savings, including 

17 State and local codes and standards 

18 savings, has played a significant role 

19 in achieving the savings (including 

20 through the activities of a designated 

21 agent of the supplier or through the 

22 purchase of transferred electricity sav23 ings or natural gas savings); 


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1 ‘‘(XI) avoid double-counting of 

2 savings used for compliance with this 

3 section, including transferred savings; 

4 ‘‘(XII) include electricity savings 

5 or natural gas savings from programs 

6 administered by retail electricity sup7 pliers or natural gas suppliers that 

8 are funded by Federal, State, or other 

9 sources; 

10 ‘‘(XIII) credit large customer 

11 self-directed electricity savings or nat12 ural gas savings to the retail elec13 tricity supplier or retail natural gas 

14 supplier if the large customer receives 

15 incentives or rate reductions from the 

16 retail electricity supplier or retail nat17 ural gas supplier for self-directed en18 ergy efficiency improvements; 

19 ‘‘(XIV) include guidance, as ap20 propriate, for additional alternative 

21 approaches to evaluate electricity sav22 ings and natural gas savings for large 

23 commercial and industrial customers 

24 in energy-intensive industries that are 

25 subject to international competition; 


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1 ‘‘(XV) include procedures for 

2 counting electricity savings and nat3 ural gas savings achieved by solar 

4 heating and cooling technologies, solar 

5 light pipe technology, geothermal heat 

6 pumps, and other technologies uti7 lizing renewable resources that do not 

8 produce electricity or gaseous fuel and 

9 reduce on-site energy use; 

10 ‘‘(XVI) include procedures for 

11 counting electricity savings and nat12 ural gas savings achieved by weather13 ization measures, such as installing 

14 mechanical insulation, repairing or re15 placing heating and cooling systems, 

16 repairing or replacing windows and 

17 doors, performing air sealing, and re18 placing lights and appliances with 

19 more energy efficient models; 

20 ‘‘(XVII) include procedures for 

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1 dustrial, public, and nonprofit build2 ings and facilities; 

3 ‘‘(XVIII) in any State in which 

4 the State regulatory authority has 

5 designated 1 or more entities to ad6 minister electric ratepayer-funded effi7 ciency programs approved by the 

8 State regulatory authority, provide 

9 that electricity savings and natural 

10 gas savings achieved through those 

11 programs shall be distributed propor12 tionally among retail electricity sup13 pliers and retail natural gas suppliers; 

14 ‘‘(XIX) include guidance for re15 tail electricity suppliers and retail nat16 ural gas suppliers to calculate and 

17 document business-as-usual consump18 tion projections; 

19 ‘‘(XX) include guidance for esti20 mating savings using information 

21 from the database established under 

22 paragraph (3) based on similar meas23 ures and programs in other settings 

24 with appropriate adjustments, as nec25 essary; and 


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1 ‘‘(XXI) incorporate advances in 

2 the science of policy evaluation, such 

3 as the use of— 

4 ‘‘(aa) randomized control 

5 trials; 

6 ‘‘(bb) other experimental 

7 and quasi-experimental ap8 proaches; and 

9 ‘‘(cc) large data sets and 

10 machine learning techniques; and 

11 ‘‘(ii) procedures and standards for 

12 third-party verification of reported elec13 tricity savings or natural gas savings. 

14 ‘‘(2) NATIONAL ACADEMY OF SCIENCES

15 STUDY.—Not later than 180 days after the date of 

16 enactment of this section, the Secretary shall offer 

17 to enter into an agreement with the National Acad18 emy of Sciences, under which the Academy shall— 

19 ‘‘(A) evaluate existing state-of-the-art 

20 methods for evaluating energy efficiency policies 

21 and measures; 

22 ‘‘(B) identify approaches in program eval23 uation literature that may be brought into the 

24 energy efficiency domain, including— 


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1 ‘‘(i) randomized control trials and 

2 other experimental or quasi-experimental 

3 approaches; 

4 ‘‘(ii) control of confounding factors; 

5 ‘‘(iii) longitudinal studies; 

6 ‘‘(iv) assessments by neutral arbiters; 

7 and 

8 ‘‘(v) disclosure of data for replication; 

9 and 

10 ‘‘(C) not later than 18 months after the 

11 date of enactment of this section, publish a re12 port that includes— 

13 ‘‘(i) a description of the evaluation 

14 under subparagraph (A); 

15 ‘‘(ii) a description of the approaches 

16 identified under subparagraph (B); and 

17 ‘‘(iii) recommendations for advancing 

18 and adopting rigorous state-of-the-art 

19 methods for evaluating energy efficiency 

20 policies and measures. 

21 ‘‘(3) ENERGY EFFICIENCY PROGRAM EVALUA22 TION DATABASE.— 

23 ‘‘(A) IN GENERAL.—The Secretary shall 

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1 ment of Energy, that contains a list of random2 ized control trials and other experimental or 

3 quasi-experimental evaluations of energy effi4 ciency programs. 

5 ‘‘(B) REQUIREMENTS.—Each trial or eval6 uation on the list described in subparagraph 

7 (A) shall include, at a minimum— 

8 ‘‘(i) the State in which the trial or 

9 evaluation was conducted; 

10 ‘‘(ii) the type of trial or evaluation 

11 conducted; 

12 ‘‘(iii) the type of program evaluated; 

13 ‘‘(iv) an abstract or summary of the 

14 program evaluated; 

15 ‘‘(v) a summary of the trial or evalua16 tion methodology; 

17 ‘‘(vi) the revealed energy savings from 

18 the trial or evaluation; and 

19 ‘‘(vii) to the extent practicable, the 

20 underlying data used to conduct the trial 

21 or evaluation. 

22 ‘‘(e) ENFORCEMENT AND JUDICIAL REVIEW.— 

23 ‘‘(1) REVIEW OF RETAIL SUPPLIER REPORTS.— 

24 ‘‘(A) IN GENERAL.—The Secretary shall 

25 review each report submitted to the Secretary 


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1 by a retail electricity supplier or retail natural 

2 gas supplier under subsection (c) to verify that 

3 the applicable performance standards under 

4 subsection (c) have been met. 

5 ‘‘(B) EXCLUSION.—In determining compli6 ance with the applicable performance standards 

7 under subsection (c), the Secretary shall ex8 clude reported electricity savings or natural gas 

9 savings that are not adequately demonstrated 

10 and documented, in accordance with the regula11 tions promulgated under subsections (b) and 

12 (c). 

13 ‘‘(2) PENALTY FOR FAILURE TO DOCUMENT

14 ADEQUATE SAVINGS.—If a retail electricity supplier 

15 or a retail natural gas supplier fails to demonstrate 

16 compliance with an applicable performance standard 

17 under subsection (c), or to pay to the State an appli18 cable alternative compliance payment under sub19 section (f)(3), the Secretary shall assess against the 

20 retail electricity supplier or retail natural gas sup21 plier a civil penalty for each failure in an amount 

22 equal to, as adjusted for inflation in accordance with 

23 such regulations as the Secretary may promulgate— 

24 ‘‘(A) $100 per megawatt hour of electricity 

25 savings or alternative compliance payment that 


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1 the retail electricity supplier failed to achieve or 

2 make, respectively; or 

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

4 savings or alternative compliance payment that 

5 the retail natural gas supplier failed to achieve 

6 or make, respectively. 

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

8 Secretary shall reduce the amount of any penalty 

9 under paragraph (2) by the amount paid by the rel10 evant retail electricity supplier or retail natural gas 

11 supplier to a State for failure to comply with the re12 quirements of a State energy efficiency resource 

13 standard during the same compliance period. 

14 ‘‘(4) USE OF PAYMENTS.— 

15 ‘‘(A) DEFINITION OF COVERED RATE.—In 

16 this paragraph, the term ‘covered rate’ means 

17 the proportion that— 

18 ‘‘(i) the amount of penalty payments 

19 made by retail electricity suppliers and 

20 natural gas suppliers in a State under 

21 paragraph (2); bears to 

22 ‘‘(ii) the total amount of penalty pay23 ments collected by the Secretary under 

24 that paragraph. 


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1 ‘‘(B) USE OF PAYMENTS.—Penalty pay2 ments collected under paragraph (2) by the 

3 Secretary shall be— 

4 ‘‘(i) provided to each State at the cov5 ered rate for the State; and 

6 ‘‘(ii) used by the State to implement 

7 cost-effective energy efficiency programs 

8 that— 

9 ‘‘(I) to the maximum extent prac10 ticable, achieve electricity savings and 

11 natural gas savings in the State suffi12 cient to make up the deficit associated 

13 with the penalty payments; and 

14 ‘‘(II) can be measured and 

15 verified in accordance with the appli16 cable procedures and standards estab17 lished under subsection (d). 

18 ‘‘(5) ENFORCEMENT PROCEDURES.—The Sec19 retary shall assess a civil penalty, as provided under 

20 paragraph (2), in accordance with the procedures 

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

22 Conservation Act (42 U.S.C. 6303(d)). 

23 ‘‘(f) STATE ADMINISTRATION.— 

24 ‘‘(1) IN GENERAL.—On receipt of an applica25 tion from the Governor of a State (including the 


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1 Mayor of the District of Columbia), the Secretary 

2 may delegate to the State responsibility for admin3 istering this section within the territory of the State 

4 if the Secretary determines that the State will imple5 ment an energy efficiency program that meets or ex6 ceeds the requirements of this section. 

7 ‘‘(2) SECRETARIAL DETERMINATION.—Not 

8 later than 180 days after the date on which a com9 plete application is received by the Secretary, the 

10 Secretary shall make a substantive determination 

11 approving or disapproving a State application, after 

12 public notice and comment. 

13 ‘‘(3) ALTERNATIVE COMPLIANCE PAYMENTS.— 

14 ‘‘(A) IN GENERAL.—As part of an applica15 tion submitted under paragraph (1), a State 

16 may permit retail electricity suppliers or retail 

17 natural gas suppliers to pay to the State, by 

18 not later than May 1 of the calendar year im19 mediately following the applicable reporting pe20 riod, an alternative compliance payment in an 

21 amount equal to, as adjusted for inflation in ac22 cordance with such regulations as the Secretary 

23 may promulgate, not less than— 

24 ‘‘(i) $50 per megawatt hour of elec25 tricity savings needed to make up any defVerDate Sep 11 2014 20:50 Jul 29, 2019 Jkt 089200 PO 00000 Frm 00031 Fmt 6652 Sfmt 6201 E:\BILLS\S2288.IS S2288

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1 icit with regard to a compliance obligation 

2 under the applicable performance stand3 ard; or 

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

5 savings needed to make up any deficit with 

6 regard to a compliance obligation under 

7 the applicable performance standard. 

8 ‘‘(B) USE OF PAYMENTS.—Alternative 

9 compliance payments collected by a State under 

10 subparagraph (A) shall be used by the State to 

11 administer the delegated authority of the State 

12 under this section and to implement cost-effec13 tive energy efficiency programs that— 

14 ‘‘(i) to the maximum extent prac15 ticable, achieve electricity savings and nat16 ural gas savings in the State sufficient to 

17 make up the deficit associated with the al18 ternative compliance payments; and 

19 ‘‘(ii) can be measured and verified in 

20 accordance with the applicable procedures 

21 and standards established under subsection 

22 (d). 

23 ‘‘(4) REVIEW OF STATE IMPLEMENTATION.— 

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

25 the Secretary shall review State implementation 


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1 of this section for conformance with the requirements of this section in approximately 1 2 ⁄2

3 of the States that have received approval under 

4 this subsection to administer the program, so 

5 that each State shall be reviewed not less fre6 quently than once every 4 years. 

7 ‘‘(B) REPORT.—To facilitate the review 

8 under subparagraph (A), the Secretary may re9 quire the State to submit a report dem10 onstrating the conformance of the State with 

11 the requirements of this section. 

12 ‘‘(C) DEFICIENCIES.— 

13 ‘‘(i) IN GENERAL.—In completing a 

14 review under this paragraph, if the Sec15 retary finds deficiencies, the Secretary 

16 shall— 

17 ‘‘(I) notify the State of the defi18 ciencies; 

19 ‘‘(II) direct the State to correct 

20 the deficiencies; and 

21 ‘‘(III) require the State to report 

22 to the Secretary on progress made by 

23 not later than 180 days after the date 

24 on which the State receives notice 

25 under subclause (I). 


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1 ‘‘(ii) SUBSTANTIAL DEFICIENCIES.—If 

2 the deficiencies are substantial, the Sec3 retary shall— 

4 ‘‘(I) disallow the reported elec5 tricity savings or natural gas savings 

6 that the Secretary determines are not 

7 credible due to deficiencies; 

8 ‘‘(II) re-review the State not 

9 later than 2 years after the date on 

10 which the original review was com11 pleted; and 

12 ‘‘(III) if substantial deficiencies 

13 remain uncorrected after the review 

14 provided for under subclause (II), re15 voke the authority of the State to ad16 minister the program established 

17 under this section. 

18 ‘‘(5) COST RECOVERY, FIXED COST RECOVERY, 

19 AND SHAREHOLDER INCENTIVES.—The Secretary 

20 shall encourage State utility regulatory commissions 

21 to review the rules and regulations of the Commis22 sion to ensure that utilities under the jurisdiction of 

23 the Commission may— 

24 ‘‘(A) recover the direct costs of energy effi25 ciency programs; 


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1 ‘‘(B)(i) fully recover authorized fixed costs 

2 from customers, including recovery of revenue 

3 associated with fixed costs that was lost due to 

4 annual sales that were lower than forecasted; 

5 but 

6 ‘‘(ii) return to customers the revenue asso7 ciated with fixed costs collected in excess of the 

8 authorized amount under clause (i); and 

9 ‘‘(C) earn a performance-based incentive 

10 for shareholders for the achievement of energy 

11 efficiency standards. 

12 ‘‘(6) EVALUATION, MEASUREMENT, AND

13 VERIFICATION INCENTIVES.—The Secretary shall en14 courage States that have delegated authority to ad15 minister this section to provide incentives to retail 

16 electricity suppliers, retail natural gas suppliers, and 

17 third-party efficiency providers to use randomized 

18 control trials and other experimental or quasi-experi19 mental approaches to evaluate energy efficiency 

20 measures and programs within the State. 

21 ‘‘(g) INFORMATION AND REPORTS.—In accordance 

22 with section 13 of the Federal Energy Administration Act 

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

24 retail electricity supplier, retail natural gas supplier, third25 party efficiency provider, or any other entity that the SecVerDate Sep 11 2014 20:50 Jul 29, 2019 Jkt 089200 PO 00000 Frm 00035 Fmt 6652 Sfmt 6201 E:\BILLS\S2288.IS S2288

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1 retary determines appropriate, to provide any information 

2 the Secretary determines appropriate to carry out this sec3 tion. 

4 ‘‘(h) STATE LAW.—Nothing in this section dimin5 ishes or qualifies any authority of a State or political sub6 division of a State to adopt or enforce any law or regula7 tion respecting electricity savings or natural gas savings, 

8 including any law or regulation establishing energy effi9 ciency requirements that are more stringent than those 

10 under this section, except that no State law or regulation 

11 shall relieve any person of any requirement otherwise ap12 plicable under this section.’’. 

13 (b) CONFORMING AMENDMENT.—The table of con14 tents of the Public Utility Regulatory Policies Act of 1978 

15 (16 U.S.C. prec. 2601) is amended by adding at the end 

16 of the items relating to title VI the following: 

‘‘Sec. 609. Rural and remote communities electrification grants. 

‘‘Sec. 610. Federal energy efficiency resource standard for retail electricity and 

natural gas suppliers.’’. 

Æ 


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