II 

109TH CONGRESS 

1ST SESSION S. 427 

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

for a Federal renewable portfolio standard. 

IN THE SENATE OF THE UNITED STATES 

FEBRUARY 17, 2005 

Mr. JEFFORDS (for himself, Ms. SNOWE, Ms. CANTWELL, Mrs. FEINSTEIN, 

Mr. DURBIN, Mr. KENNEDY, Mr. REED, Mr. KERRY, Mr. DODD, Mrs. 

BOXER, and Mr. LAUTENBERG) 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 for a Federal renewable portfolio standard. 

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 ‘‘Renewable Energy In5 vestment Act of 2005’’. 

6 SEC. 2. RENEWABLE PORTFOLIO STANDARD. 

7 Title VI of the Public Utility Regulatory Policies Act 

8 of 1978 (16 U.S.C. 2601 et seq.) is amended by adding 

9 at the end the following: 
2 

•S 427 IS 

1 ‘‘SEC. 606. FEDERAL RENEWABLE PORTFOLIO STANDARD. 

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

3 ‘‘(1) BIOMASS.— 

4 ‘‘(A) IN GENERAL.—The term ‘biomass’ 

5 means— 

6 ‘‘(i) organic material from a plant 

7 that is planted for the purpose of being 

8 used to produce energy; 

9 ‘‘(ii) nonhazardous, cellulosic or agri10 cultural waste material that is segregated 

11 from other waste materials and is derived 

12 from— 

13 ‘‘(I) a forest-related resource, in14 cluding— 

15 ‘‘(aa) mill and harvesting 

16 residue; 

17 ‘‘(bb) precommercial 

18 thinnings; 

19 ‘‘(cc) slash; and 

20 ‘‘(dd) brush; 

21 ‘‘(II) agricultural resources, in22 cluding— 

23 ‘‘(aa) orchard tree crops; 

24 ‘‘(bb) vineyards; 

25 ‘‘(cc) grains; 

26 ‘‘(dd) legumes; 
3 

•S 427 IS 

1 ‘‘(ee) sugar; and 

2 ‘‘(ff) other crop by-products 

3 or residues; or 

4 ‘‘(III) miscellaneous waste such 

5 as— 

6 ‘‘(aa) waste pallet; 

7 ‘‘(bb) crate; and 

8 ‘‘(cc) landscape or right-of9 way tree trimmings; and 

10 ‘‘(iii) animal waste that is converted 

11 to a fuel rather than directly combusted, 

12 the residue of which is converted to a bio13 logical fertilizer, oil, or activated carbon. 

14 ‘‘(B) EXCLUSIONS.—The term ‘biomass’ 

15 shall not include— 

16 ‘‘(i) municipal solid waste that is in17 cinerated; 

18 ‘‘(ii) recyclable post-consumer waste 

19 paper; 

20 ‘‘(iii) painted, treated, or pressurized 

21 wood; 

22 ‘‘(iv) wood contaminated with plastics 

23 or metals; or 

24 ‘‘(v) tires. 
4 

•S 427 IS 

1 ‘‘(2) DISTRIBUTED GENERATION.—The term 

2 ‘distributed generation’ means reduced electricity 

3 consumption from the electric grid due to use by a 

4 customer of renewable energy generated at a cus5 tomer site. 

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

7 ‘incremental hydropower’ means additional genera8 tion achieved from increased efficiency after January 

9 1, 2005, at a hydroelectric dam that was placed in 

10 service before January 1, 2005. 

11 ‘‘(4) LANDFILL GAS.—The term ‘landfill gas’ 

12 means gas generated from the decomposition of 

13 household solid waste, commercial solid waste, and 

14 industrial solid waste disposed of in a municipal 

15 solid waste landfill unit (as those terms are defined 

16 in regulations promulgated under subtitle D of the 

17 Solid Waste Disposal Act (42 U.S.C. 6941 et seq.)). 

18 ‘‘(5) RENEWABLE ENERGY.—The term ‘renew19 able energy’ means electricity generated from 

20 ‘‘(A) a renewable energy source; or 

21 ‘‘(B) hydrogen that is produced from a re22 newable energy source. 

23 ‘‘(6) RENEWABLE ENERGY SOURCE.—The term 

24 ‘renewable energy source’ means— 

25 ‘‘(A) wind; 
5 

•S 427 IS 

1 ‘‘(B) ocean waves; 

2 ‘‘(C) biomass; 

3 ‘‘(D) solar; 

4 ‘‘(E) landfill gas; 

5 ‘‘(F) incremental hydropower; or 

6 ‘‘(G) geothermal. 

7 ‘‘(7) RETAIL ELECTRIC SUPPLIER.—The term 

8 ‘retail electric supplier’ means a person or entity 

9 that sells retail electricity to consumers, and which 

10 sold not less than 500,000 megawatt-hours of elec11 tric energy to consumers for purposes other than re12 sale during the preceding calendar year. 

13 ‘‘(8) SECRETARY.—The term ‘Secretary’ means 

14 the Secretary of Energy. 

15 ‘‘(b) RENEWABLE ENERGY REQUIREMENTS.— 

16 ‘‘(1) IN GENERAL.—For each calendar year be17 ginning in Calendar year 2006, each retail electric 

18 supplier shall submit to the Secretary, not later than 

19 April 30 of each year, renewable energy credits in an 

20 amount equal to the required annual percentage of 

21 the retail electric supplier’s total amount of kilowatt22 hours of non-hydropower (excluding incremental hy23 dropower) electricity sold to retail consumers during 

24 the previous calendar year. 
6 

•S 427 IS 

1 ‘‘(2) CARRYOVER.—A renewable energy credit 

2 for any year that is not used to satisfy the minimum 

3 requirement for that year may be carried over for 

4 use within the next two years. 

5 ‘‘(c) REQUIRED ANNUAL PERCENTAGE.—Of the total 

6 amount of non-hydropower (excluding incremental hydro7 power) electricity sold by each retail electric supplier dur8 ing a calendar year, the amount generated by renewable 

9 energy sources shall be not less than the percentage speci10 fied below: 

Percentage of 

Renewable energy 

‘‘Calendar years: Each year: 

2006–2009 ............................................................................... 5

2010–2014 ............................................................................... 10

2015–2019 ............................................................................... 15

2020 and subsequent years ...................................................... 20. 

11 ‘‘(d) SUBMISSION OF RENEWABLE ENERGY CRED12 ITS.— 

13 ‘‘(1) IN GENERAL.—To meet the requirements 

14 under subsection (b), a retail electric supplier shall 

15 submit to the Secretary either— 

16 ‘‘(A) renewable energy credits issued to the 

17 retail electric supplier under subsection (f); 

18 ‘‘(B) renewable energy credits obtained by 

19 purchase or exchange under subsection (g); 

20 ‘‘(C) renewable energy credits purchased 

21 from the United States under subsection (h); or 
7 

•S 427 IS 

1 ‘‘(D) any combination of credits under 

2 subsections (f), (g) or (h). 

3 ‘‘(2) PROHIBITION ON DOUBLE COUNTING.—A 

4 credit may be counted toward compliance with sub5 section (b) only once. 

6 ‘‘(e) RENEWABLE ENERGY CREDIT PROGRAM.—The 

7 Secretary shall establish, not later than 1 year after the 

8 date of enactment of this Act, a program to issue, monitor 

9 the sale or exchange of, and track, renewable energy cred10 its. 

11 ‘‘(f) ISSUANCE OF RENEWABLE ENERGY CREDITS.— 

12 ‘‘(1) IN GENERAL.—Under the program estab13 lished in subsection (e), an entity that generates 

14 electric energy through the use of a renewable en15 ergy resource may apply to the Secretary for the 

16 issuance of renewable energy credits. 

17 ‘‘(2) APPLICATION.—An application for the 

18 issuance of renewable energy credits shall indicate— 

19 ‘‘(A) the type of renewable energy resource 

20 used to produce the electric energy; 

21 ‘‘(B) the State in which the electric energy 

22 was produced; and 

23 ‘‘(C) any other information the Secretary 

24 determines appropriate. 
8 

•S 427 IS 

1 ‘‘(3) CREDIT VALUE.—Except as provided in 

2 subparagraph (4), the Secretary shall issue to an en3 tity applying under this subsection 1 renewable en4 ergy credit for each kilowatt-hour of renewable en5 ergy generated in any State from the date of enact6 ment of this Act and in each subsequent calendar 

7 year. 

8 ‘‘(4) CREDIT VALUE FOR DISTRIBUTED GEN9 ERATION.—The Secretary shall issue 3 renewable 

10 energy credits for each kilowatt-hour of distributed 

11 generation. 

12 ‘‘(5) VESTING.—A renewable energy credit will 

13 vest with the owner of the system or facility that 

14 generates the renewable energy unless such owner 

15 explicitly transfers the credit. 

16 ‘‘(6) CREDIT ELIGIBILITY.—To be eligible for a 

17 renewable energy credit, the unit of electricity gen18 erated through the use of a renewable energy re19 source shall be sold for retail consumption or used 

20 by the generator. If both a renewable energy re21 source and a non-renewable energy resource are 

22 used to generate the electric energy, the Secretary 

23 shall issue renewable energy credits based on the 

24 proportion of the renewable energy resource used. 
9 

•S 427 IS 

1 ‘‘(7) IDENTIFYING CREDITS.—The Secretary 

2 shall identify renewable energy credits by the type 

3 and date of generation. 

4 ‘‘(8) SALE UNDER PURPA CONTRACT.—When a 

5 generator sells electric energy generated through the 

6 use of a renewable energy resource to a retail elec7 tric supplier under a contract subject to section 210 

8 of the Public Utilities Regulatory Policies Act of 

9 1978 (16 U.S.C. 824a–3), the retail electric supplier 

10 is treated as the generator of the electric energy for 

11 the purposes of this Act for the duration of the con12 tract. 

13 ‘‘(g) SALE OR EXCHANGE OF RENEWABLE ENERGY

14 CREDITS.—A renewable energy credit may be sold or ex15 changed by the entity issued the renewable energy credit 

16 or by any other entity that acquires the renewable energy 

17 credit. Credits may be sold or exchanged in any manner 

18 not in conflict with existing law, including on the spot 

19 market or by contractual arrangements of any duration. 

20 ‘‘(h) PURCHASE FROM THE UNITED STATES.—The 

21 Secretary shall offer renewable energy credits for sale at 

22 the lesser of three cents per kilowatt-hour or 110 percent 

23 of the average market value of credits for the applicable 

24 compliance period. On January 1 of each year following 
10 

•S 427 IS 

1 calendar year 2006, the Secretary shall adjust for inflation 

2 the price charged per credit for such calendar year. 

3 ‘‘(i) STATE PROGRAMS.—Nothing in this section shall 

4 preclude any State from requiring additional renewable 

5 energy generation in the State under any renewable en6 ergy program conducted by the State. 

7 ‘‘(j) CONSUMER ALLOCATION.—The rates charged to 

8 classes of consumers by a retail electric supplier shall re9 flect a proportional percentage of the cost of generating 

10 or acquiring the required annual percentage of renewable 

11 energy under subsection (b). A retail electric supplier shall 

12 not represent to any customer or prospective customer 

13 that any product contains more than the percentage of 

14 eligible resources if the additional amount of eligible re15 sources is being used to satisfy the renewable generation 

16 requirement under subsection (b). 

17 ‘‘(k) ENFORCEMENT.—A retail electric supplier that 

18 does not submit renewable energy credits as required 

19 under subsection (b) shall be liable for the payment of a 

20 civil penalty. That penalty shall be calculated on the basis 

21 of the number of renewable energy credits not submitted, 

22 multiplied by the lesser of 4.5 cents or 300 percent of the 

23 average market value of credits for the compliance period. 
11 

•S 427 IS 

1 ‘‘(l) INFORMATION COLLECTION.—The Secretary 

2 may collect the information necessary to verify and 

3 audit— 

4 ‘‘(1) the annual electric energy generation and 

5 renewable energy generation of any entity applying 

6 for renewable energy credits under this section; 

7 ‘‘(2) the validity of renewable energy credits 

8 submitted by a retail electric supplier to the Sec9 retary; and 

10 ‘‘(3) the quantity of electricity sales of all retail 

11 electric suppliers. 

12 ‘‘(m) VOLUNTARY PARTICIPATION.—The Secretary 

13 may issue a renewable energy credit pursuant to sub14 section (f) to any entity not subject to the requirements 

15 of this Act only if the entity applying for such credit meets 

16 the terms and conditions of this Act to the same extent 

17 as entities subject to this Act. 

18 ‘‘(n) STATE RENEWABLE ENERGY GRANT PRO19 GRAM.— 

20 ‘‘(1) DISTRIBUTION TO STATES.—The Sec21 retary shall distribute amounts received from sales 

22 under subsection (h) and from amounts received 

23 under subsection (k) to States to be used for the 

24 purposes of this section. 

25 ‘‘(2) REGIONAL EQUITY PROGRAM.— 
12 

•S 427 IS 

1 ‘‘(A) ESTABLISHMENT OF PROGRAM.— 

2 Within 1 year from the date of enactment of 

3 this Act, the Secretary shall establish a pro4 gram to promote renewable energy production 

5 and use consistent with the purposes of this 

6 section. 

7 ‘‘(B) ELIGIBILITY.—The Secretary shall 

8 make funds available under this section to State 

9 energy agencies for grant programs for— 

10 ‘‘(i) renewable energy research and 

11 development; 

12 ‘‘(ii) loan guarantees to encourage 

13 construction of renewable energy facilities; 

14 ‘‘(iii) consumer rebate or other pro15 grams to offset costs of small residential or 

16 small commercial renewable energy sys17 tems including solar hot water; or 

18 ‘‘(iv) promoting distributed genera19 tion. 

20 ‘‘(3) ALLOCATION PREFERENCES.—In allo21 cating funds under the program, the Secretary shall 

22 give preference to— 

23 ‘‘(A) States in regions which have a dis24 proportionately small share of economically sus-
13 

•S 427 IS 

1 tainable renewable energy generation capacity; 

2 and 

3 ‘‘(B) State grant programs most likely to 

4 stimulate or enhance innovative renewable en5 ergy technologies.’’. 

Æ