II 

110TH CONGRESS 

1ST SESSION S. 1567 

To amend the Public Utility Regulatory Policies Act of 1978 to provide 

a renewable portfolio standard, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 7, 2007 

Ms. KLOBUCHAR introduced the following bill; which was read twice and 

referred to the Committee on Energy and Natural Resources 

A BILL 

To amend the Public Utility Regulatory Policies Act of 1978 

to provide a renewable portfolio standard, 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. RENEWABLE PORTFOLIO STANDARD. 

4 (a) IN GENERAL.—Title VI of the Public Utility Reg5 ulatory Policies Act of 1978 (16 U.S.C. 2601 et seq.) is 

6 amended by adding at the end the following: 

7 ‘‘SEC. 610. FEDERAL RENEWABLE PORTFOLIO STANDARD. 

8 ‘‘(a) RENEWABLE ENERGY REQUIREMENT.— 

9 ‘‘(1) IN GENERAL.—Each electric utility that 

10 sells electricity to electric consumers shall obtain a 


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1 percentage of the base amount of electricity it sells 

2 to electric consumers in any calendar year from new 

3 renewable energy or existing renewable energy. The 

4 percentage obtained in a calendar year shall not be 

5 less than the amount specified in the following table: 

‘‘Calendar year: Minimum annual 

percentage:

2010 ....................................................................... 1

2011 ....................................................................... 2

2012 ....................................................................... 4

2013 ....................................................................... 6

2014 ....................................................................... 8

2015 ....................................................................... 10

2016 ....................................................................... 12

2017 ....................................................................... 14

2018 ....................................................................... 16

2019 ....................................................................... 18

2020 ....................................................................... 20

2021 ....................................................................... 21

2022 ....................................................................... 22

2023 ....................................................................... 23

2024 ....................................................................... 24

2025 ....................................................................... 25. 

6 ‘‘(2) MEANS OF COMPLIANCE.—An electric util7 ity shall meet the requirements of paragraph (1) 

8 by— 

9 ‘‘(A) submitting to the Secretary renewable 

10 energy credits issued under subsection (b); 

11 ‘‘(B) making alternative compliance pay12 ments to the Secretary at the rate of 2 cents 

13 per kilowatt hour (as adjusted for inflation 

14 under subsection (g)); or 

15 ‘‘(C) a combination of activities described 

16 in subparagraphs (A) and (B). 


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1 ‘‘(b) RENEWABLE ENERGY CREDIT TRADING PRO2 GRAM.— 

3 ‘‘(1) IN GENERAL.—Not later than July 1, 

4 2009, the Secretary shall establish a renewable en5 ergy credit trading program under which electric 

6 utilities shall submit to the Secretary renewable en7 ergy credits to certify the compliance of the electric 

8 utilities with respect to obligations under subsection 

9 (a)(1). 

10 ‘‘(2) ADMINISTRATION.—As part of the pro11 gram, the Secretary shall— 

12 ‘‘(A) issue tradeable renewable energy 

13 credits to generators of electric energy from 

14 new renewable energy; 

15 ‘‘(B) issue nontradeable renewable energy 

16 credits to generators of electric energy from ex17 isting renewable energy; 

18 ‘‘(C) issue renewable energy credits to elec19 tric utilities associated with State renewable 

20 portfolio standard compliance mechanisms pur21 suant to subsection (h); 

22 ‘‘(D) ensure that a kilowatt hour, including 

23 the associated renewable energy credit, shall be 

24 used only once for purposes of compliance with 

25 this Act; 


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1 ‘‘(E) allow double credits for generation 

2 from facilities on Indian land, and triple credits 

3 for generation from small renewable distributed 

4 generators (meaning those no larger than 1 

5 megawatt); and 

6 ‘‘(F) ensure that, with respect to a pur7 chaser that, as of the date of enactment of this 

8 section, has a purchase agreement from a re9 newable energy facility placed in service before 

10 that date, the credit associated with the genera11 tion of renewable energy under the contract is 

12 issued to the purchaser of the electric energy. 

13 ‘‘(3) DURATION.—A credit described in sub14 paragraph (A) or (B) of paragraph (2) may only be 

15 used for compliance with this section during the 3- 

16 year period beginning on the date of issuance of the 

17 credit. 

18 ‘‘(4) TRANSFERS.—An electric utility that holds 

19 credits in excess of the quantity of credits needed to 

20 comply with subsection (a) may transfer the credits 

21 to another electric utility in the same utility holding 

22 company system. 

23 ‘‘(5) DELEGATION OF MARKET FUNCTION.— 

24 The Secretary may delegate to an appropriate mar25 ket-making entity the administration of a national 


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1 tradeable renewable energy credit market for pur2 poses of creating a transparent national market for 

3 the sale or trade of renewable energy credits. 

4 ‘‘(c) ENFORCEMENT.— 

5 ‘‘(1) CIVIL PENALTIES.—Any electric utility 

6 that fails to meet the compliance requirements of 

7 subsection (a) shall be subject to a civil penalty. 

8 ‘‘(2) AMOUNT OF PENALTY.—The amount of 

9 the civil penalty shall be determined by multiplying 

10 the number of kilowatt-hours of electric energy sold 

11 to electric consumers in violation of subsection (a) 

12 by the greater of 2 cents (adjusted for inflation 

13 under subsection (g)) or 200 percent of the average 

14 market value of renewable energy credits during the 

15 year in which the violation occurred. 

16 ‘‘(3) MITIGATION OR WAIVER.—The Secretary 

17 may mitigate or waive a civil penalty under this sub18 section if the electric utility was unable to comply 

19 with subsection (a) for reasons outside of the rea20 sonable control of the utility. The Secretary shall re21 duce the amount of any penalty determined under 

22 paragraph (2) by an amount paid by the electric 

23 utility to a State for failure to comply with the re24 quirement of a State renewable energy program if 


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1 the State requirement is greater than the applicable 

2 requirement of subsection (a). 

3 ‘‘(4) PROCEDURE FOR ASSESSING PENALTY.— 

4 The Secretary shall assess a civil penalty under this 

5 subsection in accordance with the procedures pre6 scribed by section 333(d) of the Energy Policy and 

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

8 ‘‘(d) STATE RENEWABLE ENERGY ACCOUNT PRO9 GRAM.— 

10 ‘‘(1) IN GENERAL.—The Secretary shall estab11 lish, not later than December 31, 2008, a State re12 newable energy account program. 

13 ‘‘(2) DEPOSITS.—All money collected by the 

14 Secretary from alternative compliance payments and 

15 the assessment of civil penalties under this section 

16 shall be deposited into the renewable energy account 

17 established pursuant to this subsection. The State 

18 renewable energy account shall be held by the Sec19 retary and shall not be transferred to the Treasury 

20 Department. 

21 ‘‘(3) USE.—Proceeds deposited in the State re22 newable energy account shall be used by the Sec23 retary, subject to appropriations, for a program to 

24 provide grants to the State agency responsible for 

25 developing State energy conservation plans under 


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1 section 362 of the Energy Policy and Conservation 

2 Act (42 U.S.C. 6322) for the purposes of promoting 

3 renewable energy production, including programs 

4 that promote technologies that reduce the use of 

5 electricity at customer sites such as solar water 

6 heating. 

7 ‘‘(4) ADMINISTRATION.—The Secretary may 

8 issue guidelines and criteria for grants awarded 

9 under this subsection. State energy offices receiving 

10 grants under this section shall maintain such 

11 records and evidence of compliance as the Secretary 

12 may require. 

13 ‘‘(5) PREFERENCE.—In allocating funds under 

14 this program, the Secretary shall give preference— 

15 ‘‘(A) to States in regions which have a dis16 proportionately small share of economically sus17 tainable renewable energy generation capacity; 

18 and 

19 ‘‘(B) to State programs to stimulate or en20 hance innovative renewable energy technologies. 

21 ‘‘(e) RULES.—The Secretary shall issue rules imple22 menting this section not later than 1 year after the date 

23 of enactment of this section. 

24 ‘‘(f) EXEMPTIONS.—This section shall not apply in 

25 any calendar year to an electric utility— 


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1 ‘‘(1) that sold less than 4,000,000 megawatt2 hours of electric energy to electric consumers during 

3 the preceding calendar year; or 

4 ‘‘(2) in Hawaii. 

5 ‘‘(g) INFLATION ADJUSTMENT.—Not later than De6 cember 31 of each year beginning in 2008, the Secretary 

7 shall adjust for inflation the price of a renewable energy 

8 credit under subsection (b)(2) and the amount of the civil 

9 penalty per kilowatt-hour under subsection (c)(2). 

10 ‘‘(h) STATE PROGRAMS.— 

11 ‘‘(1) IN GENERAL.—Nothing in this section di12 minishes any authority of a State or political sub13 division of a State to adopt or enforce any law or 

14 regulation respecting renewable energy, but, except 

15 as provided in subsection (c)(3), no such law or reg16 ulation shall relieve any person of any requirement 

17 otherwise applicable under this section. The Sec18 retary, in consultation with States having such re19 newable energy programs, shall, to the maximum ex20 tent practicable, facilitate coordination between the 

21 Federal program and State programs. 

22 ‘‘(2) REGULATIONS.— 

23 ‘‘(A) IN GENERAL.—The Secretary, in con24 sultation with States, shall promulgate regula25 tions to ensure that an electric utility subject to 


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1 the requirements of this section that is also 

2 subject to a State renewable energy standard 

3 receives renewable energy credits in relation to 

4 equivalent quantities of renewable energy asso5 ciated with compliance mechanisms, other than 

6 the generation or purchase of renewable energy 

7 by the electric utility, including the acquisition 

8 of certificates or credits and the payment of 

9 taxes, fees, surcharges, or other financial com10 pliance mechanisms by the electric utility or a 

11 customer of the electric utility, directly associ12 ated with the generation or purchase of renew13 able energy. 

14 ‘‘(B) PROHIBITION ON DOUBLE COUNT15 ING.—The regulations promulgated under this 

16 paragraph shall ensure that a kilowatt hour as17 sociated with a renewable energy credit issued 

18 pursuant to this subsection shall not be used 

19 for compliance with this section more than 

20 once. 

21 ‘‘(i) RECOVERY OF COSTS.— 

22 ‘‘(1) IN GENERAL.—The Commission shall issue 

23 and enforce such regulations as are necessary to en24 sure that an electric utility recovers all prudently inVerDate Aug 31 2005 22:47 Jun 08, 2007 Jkt 059196 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1567.IS S1567

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1 curred costs associated with compliance with this 

2 section. 

3 ‘‘(2) APPLICABLE LAW.—A regulation under 

4 paragraph (1) shall be enforceable in accordance 

5 with the provisions of law applicable to enforcement 

6 of regulations under the Federal Power Act (16 

7 U.S.C. 791a et seq.). 

8 ‘‘(j) WIND ENERGY DEVELOPMENT STUDY.—The 

9 Secretary, in consultation with appropriate Federal and 

10 State agencies, shall conduct, and submit to Congress a 

11 report describing the results of, a study on methods to 

12 increase transmission line capacity for wind energy devel13 opment. 

14 ‘‘(k) DEFINITIONS.—In this section: 

15 ‘‘(1) BASE AMOUNT OF ELECTRICITY.—The 

16 term ‘base amount of electricity’ means the total 

17 amount of electricity sold by an electric utility to 

18 electric consumers in a calendar year, excluding mu19 nicipal waste and electricity generated by a hydro20 electric facility (including a pumped storage facility, 

21 but excluding incremental hydropower). 

22 ‘‘(2) DISTRIBUTED GENERATION FACILITY.— 

23 The term ‘distributed generation facility’ means a 

24 facility at a customer site. 


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1 ‘‘(3) EXISTING RENEWABLE ENERGY.—The 

2 term ‘existing renewable energy’ means, except as 

3 provided in paragraph (7)(B), electric energy gen4 erated at a facility (including a distributed genera5 tion facility) placed in service prior to January 1, 

6 2001, from solar, wind, or geothermal energy, ocean 

7 energy, biomass (as defined in section 203(a) of the 

8 Energy Policy Act of 2005), or landfill gas. 

9 ‘‘(4) GEOTHERMAL ENERGY.—The term ‘geo10 thermal energy’ means energy derived from a geo11 thermal deposit (within the meaning of section 

12 613(e)(2) of the Internal Revenue Code of 1986). 

13 ‘‘(5) INCREMENTAL GEOTHERMAL PRODUC14 TION.— 

15 ‘‘(A) IN GENERAL.—The term ‘incremental 

16 geothermal production’ means for any year the 

17 excess of— 

18 ‘‘(i) the total kilowatt hours of elec19 tricity produced from a facility (including a 

20 distributed generation facility) using geo21 thermal energy; over 

22 ‘‘(ii) the average annual kilowatt 

23 hours produced at such facility for 5 of the 

24 previous 7 calendar years before the date 

25 of enactment of this section after elimiVerDate Aug 31 2005 22:47 Jun 08, 2007 Jkt 059196 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S1567.IS S1567

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1 nating the highest and the lowest kilowatt 

2 hour production years in such 7-year pe3 riod. 

4 ‘‘(B) SPECIAL RULE.—A facility described 

5 in subparagraph (A) that was placed in service 

6 at least 7 years before the date of enactment of 

7 this section shall, commencing with the year in 

8 which such date of enactment occurs, reduce 

9 the amount calculated under subparagraph 

10 (A)(ii) each year, on a cumulative basis, by the 

11 average percentage decrease in the annual kilo12 watt hour production for the 7-year period de13 scribed in subparagraph (A)(ii) with such cu14 mulative sum not to exceed 30 percent. 

15 ‘‘(6) INCREMENTAL HYDROPOWER.—The term 

16 ‘incremental hydropower’ means additional energy 

17 generated as a result of efficiency improvements or 

18 capacity additions made on or after January 1, 

19 2001, or the effective date of an existing applicable 

20 State renewable portfolio standard program at a hy21 droelectric facility that was placed in service before 

22 that date. The term does not include additional en23 ergy generated as a result of operational changes not 

24 directly associated with efficiency improvements or 

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1 pacity additions shall be measured on the basis of 

2 the same water flow information used to determine 

3 a historic average annual generation baseline for the 

4 hydroelectric facility and certified by the Secretary 

5 or the Federal Energy Regulatory Commission. 

6 ‘‘(7) NEW RENEWABLE ENERGY.—The term 

7 ‘new renewable energy’ means— 

8 ‘‘(A) electric energy generated at a facility 

9 (including a distributed generation facility) 

10 placed in service on or after January 1, 2001, 

11 from— 

12 ‘‘(i) solar, wind, or geothermal energy 

13 or ocean energy; 

14 ‘‘(ii) biomass (as defined in section 

15 203(b) of the Energy Policy Act of 2005 

16 (42 U.S.C. 15852(b)); 

17 ‘‘(iii) landfill gas; or 

18 ‘‘(iv) incremental hydropower; and 

19 ‘‘(B) for electric energy generated at a fa20 cility (including a distributed generation facil21 ity) placed in service prior to the date of enact22 ment of this section— 

23 ‘‘(i) the additional energy above the 

24 average generation in the 3 years preVerDate Aug 31 2005 22:47 Jun 08, 2007 Jkt 059196 PO 00000 Frm 00013 Fmt 6652 Sfmt 6201 E:\BILLS\S1567.IS S1567

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1 ceding the date of enactment of this sec2 tion at the facility from— 

3 ‘‘(I) solar or wind energy or 

4 ocean energy; 

5 ‘‘(II) biomass (as defined in sec6 tion 203(b) of the Energy Policy Act 

7 of 2005 (42 U.S.C. 15852(b)); 

8 ‘‘(III) landfill gas; or 

9 ‘‘(IV) incremental hydropower. 

10 ‘‘(ii) incremental geothermal produc11 tion. 

12 ‘‘(8) OCEAN ENERGY.—The term ‘ocean energy’ 

13 includes current, wave, tidal, and thermal energy. 

14 ‘‘(l) SUNSET.—This section expires on December 31, 

15 2040.’’. 

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

17 of contents of the Public Utility Regulatory Policies Act 

18 of 1978 (16 U.S.C. prec. 2601) is amended by adding at 

19 the end of the items relating to title VI the following: 

‘‘Sec. 610. Federal renewable portfolio standard.’’. 

Æ 


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