II 

111TH CONGRESS 

2D SESSION S. 3576 

To promote the production and use of renewable energy, and for other 

purposes. 

IN THE SENATE OF THE UNITED STATES 

JULY 13, 2010 

Ms. KLOBUCHAR (for herself and Mr. JOHNSON) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL 

To promote the production and use of renewable energy, 

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; TABLE OF CONTENTS. 

4 (a) IN GENERAL.—This Act may be cited as the ‘‘Se5 curing America’s Future with Energy and Sustainable 

6 Technologies Act’’. 

7 (b) TABLE OF CONTENTS.—The table of contents of 

8 this Act is as follows: 

Sec. 1. Short title; table of contents. 

Sec. 2. Definition of Secretary. 

TITLE I—RENEWABLE FUEL PROGRAM 


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Sec. 101. Definition of advanced biofuel. 

Sec. 102. Biomass-based diesel. 

Sec. 103. International indirect land use changes. 

Sec. 104. Modification of definition of renewable biomass. 

TITLE II—PRODUCTION AND USE OF RENEWABLE FUEL 

Sec. 201. Findings. 

Sec. 202. Loan guarantees for projects to construct renewable fuel pipelines. 

Sec. 203. Open fuel standard for transportation. 

Sec. 204. Reducing barriers to supply chain manufacturing of renewable energy 

equipment. 

Sec. 205. Tax incentives for qualified blender pumps. 

TITLE III—RENEWABLE ELECTRICITY AND ENERGY EFFICIENCY 

RESOURCE STANDARDS 

Sec. 301. Renewable electricity and energy efficiency resource standards. 

Sec. 302. Energy efficiency resource standard for retail electricity and natural 

gas distributors. 

Sec. 303. Voluntary renewable energy markets. 

TITLE IV—WIND ENERGY 

Sec. 401. Wind energy systems. 

Sec. 402. Wind energy development study. 

Sec. 403. Removal of certain tax restrictions to promote expansion of capital 

for wind farm investment. 

TITLE V—RENEWABLE ENERGY TAX EXTENSIONS 

Sec. 501. Extension of provisions related to alcohol used as fuel. 

Sec. 502. Extension of time for grants for specified energy property. 

Sec. 503. Incentives for biodiesel and renewable diesel. 

TITLE VI—RENEWABLE ELECTRICITY INTEGRATION CREDIT 

Sec. 601. Renewable electricity integration credit. 

1 SEC. 2. DEFINITION OF SECRETARY. 

2 In this Act, the term ‘‘Secretary’’ means the Sec3 retary of Energy. 

4 TITLE I—RENEWABLE FUEL 

5 PROGRAM 

6 SEC. 101. DEFINITION OF ADVANCED BIOFUEL. 

7 Section 211(o)(1)(B) of the Clean Air Act (42 U.S.C. 

8 7545(o)(1)(B)) is amended— 


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1 (1) in clause (i), by striking ‘‘, other than eth2 anol derived from corn starch,’’; and 

3 (2) in clause (ii)(II), by striking ‘‘(other than 

4 corn starch)’’. 

5 SEC. 102. BIOMASS-BASED DIESEL. 

6 Section 211(o)(2)(A) of the Clean Air Act (42 U.S.C. 

7 7545(o)(2)(A)) is amended by adding at the end the fol8 lowing: 

9 ‘‘(v) GRANDFATHERING BIOMASS10 BASED DIESEL.—The Administrator shall 

11 promulgate regulations that exempt from 

12 the lifecycle greenhouse gas requirements 

13 of subparagraphs (B) and (D) of para14 graph (1) up to the greater of 

15 1,000,000,000 gallons or the volume man16 date adopted pursuant to subparagraph 

17 (B)(ii), of biomass-based diesel annually 

18 from facilities that commenced construc19 tion before December 19, 2007.’’. 

20 SEC. 103. INTERNATIONAL INDIRECT LAND USE CHANGES. 

21 Section 211(o) of the Clean Air Act (42 U.S.C. 

22 7545(o)) is amended by adding at the end the following: 

23 ‘‘(13) INTERNATIONAL INDIRECT LAND USE

24 CHANGES.— 


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1 ‘‘(A) EXCLUSION FROM REGULATORY RE2 QUIREMENTS REGARDING LIFECYCLE GREEN3 HOUSE GAS EMISSIONS.—Notwithstanding the 

4 definition of ‘lifecycle greenhouse gas emissions’ 

5 in paragraph (1)(H), for purposes of deter6 mining whether a fuel meets a definition under 

7 paragraph (1) or complies with paragraph 

8 (2)(A)(i), the Administrator shall exclude emis9 sions from indirect land use changes outside the 

10 country of origin of the feedstock of a renew11 able fuel. 

12 ‘‘(B) NATIONAL ACADEMIES OF SCIENCE

13 REPORT.— 

14 ‘‘(i) IN GENERAL.—Not later than 

15 180 days after the date of enactment of 

16 this paragraph, the Administrator and the 

17 Secretary of Agriculture shall jointly ar18 range for the National Academies of 

19 Science to review and report on specified 

20 issues relating to indirect greenhouse gas 

21 emissions relating to transportation fuels. 

22 ‘‘(ii) MODELS AND METHODOLO23 GIES.—The report shall evaluate and re24 port on whether there are economic and 

25 environmental models and methodologies 


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1 that individually, or as a system, can 

2 project with reliability, predictability, and 

3 confidence— 

4 ‘‘(I) for purposes of determining 

5 whether a fuel meets a definition 

6 under paragraph (1) or complies with 

7 paragraph (2)(A)(i), indirect land use 

8 changes that are related to the pro9 duction of renewable fuels and that 

10 may occur outside the country in 

11 which the feedstocks are grown, and 

12 the impacts of those changes on 

13 greenhouse gas emissions; and 

14 ‘‘(II) indirect effects, both do15 mestic and international, related to 

16 the production and importation of 

17 nonrenewable transportation fuels 

18 that have significant greenhouse gas 

19 emissions, and the impact of those ef20 fects on greenhouse gas emissions. 

21 ‘‘(iii) ADMINISTRATION.— 

22 ‘‘(I) IN GENERAL.—The report 

23 shall— 

24 ‘‘(aa) include a review and 

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1 entific studies, methodologies, 

2 and data; 

3 ‘‘(bb) evaluate potential 

4 methodologies for calculating 

5 emissions (including an evalua6 tion of methods for annualizing 

7 emissions associated with forest 

8 degradation or land conversion); 

9 and 

10 ‘‘(cc) make appropriate rec11 ommendations. 

12 ‘‘(II) INDIRECT EFFECTS.—The 

13 recommendations shall address indi14 rect effects, both domestic and inter15 national, relating to the production 

16 and importation of nonrenewable 

17 transportation fuels that have signifi18 cant greenhouse gas emissions. 

19 ‘‘(III) VALIDATION.—The report 

20 shall use appropriate validation proce21 dures, including sensitivity analyses, 

22 to measure how results change as as23 sumptions change. 

24 ‘‘(IV) MODELS.—The evaluation 

25 shall include a model, methodology, or 


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1 system of models that assesses how 

2 reliably the models, methodologies, or 

3 systems— 

4 ‘‘(aa) track actual outcomes 

5 over historical periods using 

6 available historical data; and 

7 ‘‘(bb) will project future out8 comes. 

9 ‘‘(iv) AVAILABILITY.—The report 

10 shall— 

11 ‘‘(I) be publicly available; and 

12 ‘‘(II) include sufficient informa13 tion and data so that economists and 

14 other scientists with relevant expertise 

15 that are not on the National Acad16 emies of Science panel can fully evalu17 ate the conclusions of the report. 

18 ‘‘(v) DEADLINE.—The report shall be 

19 completed not later than 3 years after the 

20 date of enactment of this paragraph. 

21 ‘‘(C) DETERMINATION.— 

22 ‘‘(i) IN GENERAL.—The Administrator 

23 and the Secretary of Agriculture shall, 

24 after notice and an opportunity for public 

25 comment, determine— 


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1 ‘‘(I) whether, for purposes of de2 termining compliance with the percent 

3 reductions in lifecycle greenhouse gas 

4 emissions specified in paragraph (1) 

5 for various renewable fuels, scientif6 ically valid models and methodologies 

7 exist to project indirect land use 

8 changes that are related to the pro9 duction of renewable fuels and that 

10 occur outside the country in which the 

11 feedstocks are grown outside the 

12 country of origin of the feedstocks; 

13 and 

14 ‘‘(II) the impact of those changes 

15 on greenhouse gas emissions. 

16 ‘‘(ii) BASIS.— 

17 ‘‘(I) REPORT.—The determina18 tion shall take into account the find19 ings and recommendations of the re20 port required under subparagraph 

21 (B), as well as other available sci22 entific, economic, and other relevant 

23 information. 

24 ‘‘(II) OTHER FEDERAL AGEN25 CIES.—The Administrator and the 


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1 Secretary of Agriculture may also con2 sider methods used by the Environ3 mental Protection Agency, the De4 partment of Agriculture, and other 

5 Federal agencies to assess or guide re6 lated policies. 

7 ‘‘(iii) PUBLICATION OF DETERMINA8 TIONS.— 

9 ‘‘(I) IN GENERAL.—The Admin10 istrator and the Secretary of Agri11 culture shall publish— 

12 ‘‘(aa) a proposed determina13 tion not later than 4 years after 

14 the date of enactment of this 

15 paragraph; and 

16 ‘‘(bb) a final determination 

17 not later than 5 years after the 

18 date of enactment of this para19 graph. 

20 ‘‘(II) EXPLANATION.—An expla21 nation and justification of the deter22 mination shall be included in the pro23 posed and final actions, together with 

24 a response to comments received. 

25 ‘‘(D) RESPONSE TO DETERMINATION.— 


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1 ‘‘(i) POSITIVE DETERMINATION.— 

2 ‘‘(I) IN GENERAL.—In the case 

3 of a positive determination under sub4 paragraph (C), the Administrator and 

5 the Secretary of Agriculture shall, 

6 after notice and an opportunity for 

7 public comment, by the same date 

8 jointly establish 1 or more methodolo9 gies to calculate greenhouse gas emis10 sions from indirect land use changes 

11 that are attributable to the production 

12 of renewable fuels and that occur out13 side the country in which feedstocks 

14 are grown outside the country of ori15 gin of the feedstock for purposes of 

16 calculating the lifecycle greenhouse 

17 gas emissions of a renewable fuel to 

18 determine whether the renewable fuel 

19 meets a definition under paragraph 

20 (1) or complies with paragraph 

21 (2)(A)(i). 

22 ‘‘(II) ADMINISTRATION.—In the 

23 calendar year following a positive de24 termination under subparagraph 

25 (C)— 


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1 ‘‘(aa) the exclusion under 

2 subparagraph (A) shall termi3 nate; and 

4 ‘‘(bb) the Administrator 

5 shall promulgate a regulation by 

6 the same date that shall include 

7 emissions from indirect land use 

8 changes outside the country of 

9 origin of a feedstock of a renew10 able fuel for purposes of calcu11 lating the lifecycle greenhouse 

12 gas emissions of the renewable 

13 fuel to determine whether the re14 newable fuel meets a definition 

15 under paragraph (1) or complies 

16 with paragraph (2)(A)(i) for re17 newable fuels sold in the calendar 

18 year. 

19 ‘‘(III) EFFECTIVE DATE.—The 

20 effective date of the regulation shall 

21 be 6 years after the date of enactment 

22 of this paragraph. 

23 ‘‘(ii) NEGATIVE DETERMINATION.—A 

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1 graph (C) shall include a statement of the 

2 basis for the determination. 

3 ‘‘(E) ACCOUNTABILITY.—The joint duties 

4 and actions of the Administrator and the Sec5 retary of Agriculture under this paragraph shall 

6 be subject to sections 304 and 307 as if the du7 ties and actions were the duties and actions of 

8 the Administrator alone.’’. 

9 SEC. 104. MODIFICATION OF DEFINITION OF RENEWABLE 

10 BIOMASS. 

11 (a) NATIONAL ACADEMY OF SCIENCES REPORT.— 

12 Not later than 1 year after the date of enactment of this 

13 Act, the Administrator of the Environmental Protection 

14 Agency, the Secretary of Agriculture, and the Federal En15 ergy Regulatory Commission shall jointly enter into an ar16 rangement with the National Academy of Sciences to 

17 evaluate how sources of renewable biomass contribute to 

18 the goals of increasing the energy independence of the 

19 United States, protecting the environment, and reducing 

20 global warming pollution. 

21 (b) MODIFICATION.— 

22 (1) EPA MODIFICATION AUTHORITY.—After re23 viewing the report required by subsection (a), the 

24 Administrator of the Environmental Protection 

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1 riculture, may, by regulation and after public notice 

2 and comment, modify the non-Federal land portion 

3 of the definition of ‘‘renewable biomass’’ in section 

4 211(o)(1)(I) of the Clean Air Act (42 U.S.C. 

5 7545(o)(1)(I)) and in section 610 of the Public Util6 ity Regulatory Policies Act of 1978 in order to ad7 vance the goals of increasing the energy independ8 ence of the United States, protecting the environ9 ment, and reducing global warming pollution. 

10 (2) FERC MODIFICATION AUTHORITY.—After 

11 reviewing the report required by subsection (a), the 

12 Federal Energy Regulatory Commission, with the 

13 concurrence of the Secretary of Agriculture, may, by 

14 regulation and after public notice and comment, 

15 modify the non-Federal lands portion of the defini16 tion of ‘‘renewable biomass’’ in section 610(a) of the 

17 Public Utility Regulatory Policies Act of 1978 in 

18 order to advance the goals of increasing the energy 

19 independence of the United States, protecting the 

20 environment, and reducing global warming pollution. 

21 (c) FEDERAL LAND.— 

22 (1) SCIENTIFIC REVIEW.—Not later than 1 year 

23 after the date of enactment of this Act, the Sec24 retary of the Interior, the Secretary of Agriculture, 

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1 tion Agency shall conduct a joint scientific review to 

2 evaluate how sources of biomass from Federal land 

3 could contribute to the goals of increasing the en4 ergy independence of the United States, protecting 

5 the environment, and reducing global warming pollu6 tion. 

7 (2) MODIFICATION AUTHORITY.—Based on the 

8 scientific review, the agencies may, by rule, modify 

9 the definition of ‘‘renewable biomass’’ from Federal 

10 land in sections 211(o)(1)(I) of the Clean Air Act 

11 (42 U.S.C. 7545(o)(1)(I)) and section 610 of the 

12 Public Utility Regulatory Policies Act of 1978, as 

13 appropriate, to advance the goals of increasing the 

14 energy independence of the United States, protecting 

15 the environment, and reducing global warming pollu16 tion. 

17 TITLE II—PRODUCTION AND USE 

18 OF RENEWABLE FUEL 

19 SEC. 201. FINDINGS. 

20 Congress finds that— 

21 (1) creating the appropriate infrastructure to 

22 move renewable fuels is a necessary energy and 

23 transportation objective for the United States; 


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1 (2) more than 70 percent of the gasoline supply 

2 of the United States is delivered to local terminals 

3 through pipelines; 

4 (3) pipelines are the most cost-effective, effi5 cient, and safe transportation mode in use today to 

6 deliver large volumes of liquid fuels; 

7 (4) renewable fuels are transported by truck, 

8 barge, and rail, and the volume requirements of the 

9 Energy Independence and Security Act of 2007 (42 

10 U.S.C. 17001 et seq.) and amendments made by 

11 that Act may overwhelm the renewable fuels infra12 structure, a problem that would be alleviated by the 

13 transportation of renewable fuels through pipelines; 

14 and 

15 (5) the production and use of renewable fuels is 

16 supported by Federal policy and a corresponding 

17 Federal policy is necessary to support the construc18 tion of an appropriate infrastructure to transport re19 newable fuels. 

20 SEC. 202. LOAN GUARANTEES FOR PROJECTS TO CON21 STRUCT RENEWABLE FUEL PIPELINES. 

22 (a) DEFINITIONS.—Section 1701 of the Energy Pol23 icy Act of 2005 (42 U.S.C. 16511) is amended by adding 

24 at the end the following: 


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1 ‘‘(6) RENEWABLE FUEL.—The term ‘renewable 

2 fuel’ has the meaning given the term in section 

3 211(o)(1) of the Clean Air Act (42 U.S.C. 

4 7545(o)(1)), except that the term shall include all 

5 ethanol and biodiesel. 

6 ‘‘(7) RENEWABLE FUEL PIPELINE.—The term 

7 ‘renewable fuel pipeline’ means a pipeline for trans8 porting renewable fuel.’’. 

9 (b) AMOUNT.—Section 1702(c) of the Energy Policy 

10 Act of 2005 (42 U.S.C. 16512(c)) is amended— 

11 (1) by striking ‘‘Unless otherwise’’ and insert12 ing the following: 

13 ‘‘(1) IN GENERAL.—Unless otherwise’’; and 

14 (2) by adding at the end the following: 

15 ‘‘(2) RENEWABLE FUEL PIPELINES.—A guar16 antee for a project described in section 1703(b)(11) 

17 shall be in an amount equal to 80 percent of the 

18 project cost of the facility that is the subject of the 

19 guarantee, as estimated at the time at which the 

20 guarantee is issued.’’. 

21 (c) RENEWABLE FUEL PIPELINE ELIGIBILITY.— 

22 Section 1703(b) of the Energy Policy Act of 2005 (42 

23 U.S.C. 16513(b)) is amended by adding at the end the 

24 following: 

25 ‘‘(11) Renewable fuel pipelines.’’. 


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1 (d) RAPID DEPLOYMENT OF RENEWABLE FUEL

2 PIPELINES.—Section 1705(a) of the Energy Policy Act of 

3 2005 (42 U.S.C. 16516(a)) is amended by adding at the 

4 end the following: 

5 ‘‘(4) Installation of sufficient infrastructure to 

6 allow for the cost-effective deployment of clean en7 ergy technologies appropriate to each region of the 

8 United States, including the deployment of renew9 able fuel pipelines at a guarantee amount of 80 per10 cent.’’. 

11 SEC. 203. OPEN FUEL STANDARD FOR TRANSPORTATION. 

12 (a) IN GENERAL.—Chapter 329 of title 49, United 

13 States Code, is amended by adding at the end the fol14 lowing: 

15 ‘‘SEC. 32920. OPEN FUEL STANDARD FOR TRANSPOR16 TATION. 

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

18 ‘‘(1) E85.—The term ‘E85’ means a fuel mix19 ture containing 85 percent ethanol and 15 percent 

20 gasoline by volume. 

21 ‘‘(2) FLEXIBLE FUEL AUTOMOBILE.—The term 

22 ‘flexible fuel automobile’ means an automobile that 

23 has been warranted by its manufacturer to operate 

24 on gasoline, E85, and M85. 


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1 ‘‘(3) FUEL CHOICE-ENABLING AUTOMOBILE.— 

2 The term ‘fuel choice-enabling automobile’ means— 

3 ‘‘(A) a flexible fuel automobile; 

4 ‘‘(B) an automobile that has been war5 ranted by its manufacturer to operate on bio6 diesel; 

7 ‘‘(C) an automobile that uses hydrogen 

8 fuel cell technology; 

9 ‘‘(D) a hybrid automobile, or an auto10 mobile with any other technology, that uses at 

11 least— 

12 ‘‘(i) during the 10-year period begin13 ning on the date of enactment of this sec14 tion, 50 percent less fossil fuel per mile 

15 than the average of vehicles in the class of 

16 the hybrid automobile or an automobile 

17 with any other technology (under the appli18 cable corporate average fuel standard 

19 under section 32902 of title 49, United 

20 States Code); and 

21 ‘‘(ii) effective beginning 10 years after 

22 the date of enactment of this section, 75 

23 percent less fossil fuel per mile than the 

24 average of vehicles in the class of the hy25 brid automobile or an automobile with any 


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1 other technology (under the applicable cor2 porate average fuel standard under section 

3 32902 of title 49, United States Code); or 

4 ‘‘(E) an automobile that only uses an elec5 tric motor to move the vehicle. 

6 ‘‘(4) HYBRID AUTOMOBILE.—The term ‘hybrid 

7 automobile’ means a light-duty automobile that uses 

8 2 or more distinct power sources to move the vehicle. 

9 ‘‘(5) LIGHT-DUTY AUTOMOBILE.—The term 

10 ‘light-duty automobile’ means a light-duty auto11 mobile (as defined in regulations promulgated by the 

12 Secretary of Transportation to establish corporate 

13 average fuel standards under section 32902 of title 

14 49, United States Code). 

15 ‘‘(6) LIGHT-DUTY AUTOMOBILE MANUFAC16 TURER’S ANNUAL COVERED INVENTORY.—The term 

17 ‘light-duty automobile manufacturer’s annual cov18 ered inventory’ means the number of light-duty 

19 automobiles powered solely by an internal combus20 tion engine that a manufacturer, during a given cal21 endar year, manufactures in the United States or 

22 imports from outside of the United States for sale 

23 in the United States. 


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1 ‘‘(7) M85.—The term ‘M85’ means a fuel mix2 ture containing 85 percent methanol and 15 percent 

3 gasoline by volume. 

4 ‘‘(b) OPEN FUEL STANDARD FOR TRANSPOR5 TATION.— 

6 ‘‘(1) IN GENERAL.—Except as provided in para7 graph (2), each light-duty automobile manufactur8 er’s annual covered inventory shall be comprised 

9 of— 

10 ‘‘(A) not less than 30 percent fuel choice11 enabling automobiles by model year 2013; 

12 ‘‘(B) not less than 50 percent fuel choice13 enabling automobiles by model year 2015; 

14 ‘‘(C) not less than 80 percent fuel choice15 enabling automobiles by model year 2017; and 

16 ‘‘(D) not less than 100 percent of fuel 

17 choice-enabling automobiles by model year 2021 

18 and each model year thereafter. 

19 ‘‘(2) TEMPORARY EXEMPTION FROM REQUIRE20 MENTS.— 

21 ‘‘(A) APPLICATION.—A manufacturer may 

22 request an exemption from the requirement de23 scribed in paragraph (1) by submitting an ap24 plication to the Secretary, at such time, in such 

25 manner, and containing such information as the 


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1 Secretary may require by regulation. Each such 

2 application shall specify the models, lines, and 

3 types of automobiles affected. 

4 ‘‘(B) EVALUATION.—After evaluating an 

5 application received from a manufacturer, the 

6 Secretary may at any time, under such terms 

7 and conditions, and to such extent as the Sec8 retary considers appropriate, temporarily ex9 empt, or renew the exemption of, a light-duty 

10 automobile from the requirement described in 

11 paragraph (1) if the Secretary determines that 

12 unavoidable events that are not under the con13 trol of the manufacturer prevent the manufac14 turer of such automobile from meeting its re15 quired production volume of fuel choice-ena16 bling automobiles, including— 

17 ‘‘(i) a disruption in the supply of any 

18 component required for compliance with 

19 the regulations; 

20 ‘‘(ii) a disruption in the use and in21 stallation by the manufacturer of such 

22 component; or 

23 ‘‘(iii) the failure for plug-in hybrid 

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1 ity requirements as a result of the require2 ment described in paragraph (1). 

3 ‘‘(C) CONSOLIDATION.—The Secretary 

4 may consolidate applications received from mul5 tiple manufactures under subparagraph (A) if 

6 they are of a similar nature. 

7 ‘‘(D) NOTICE.—The Secretary shall pub8 lish in the Federal Register— 

9 ‘‘(i) notice of each application received 

10 from a manufacturer; 

11 ‘‘(ii) notice of each decision to grant 

12 or deny a temporary exemption; and 

13 ‘‘(iii) the reasons for granting or de14 nying such exemptions. 

15 ‘‘(c) LIMITED LIABILITY PROTECTION FOR RENEW16 ABLE FUEL AND ETHANOL MANUFACTURE, USE, OR DIS17 TRIBUTION.— 

18 ‘‘(1) IN GENERAL.—Notwithstanding any other 

19 provision of Federal or State law, any fuel con20 taining ethanol or a renewable fuel (as defined in 

21 section 211(o)(1) of the Clean Air Act) that is used 

22 or intended to be used to operate an internal com23 bustion engine shall not be deemed to be a defective 

24 product or subject to a failure to warn due to such 

25 ethanol or renewable fuel content unless such fuel 


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1 violates a control or prohibition imposed by the Ad2 ministrator under section 211 of the Clean Air Act 

3 (42 U.S.C. 7545). 

4 ‘‘(2) SAVINGS PROVISION.—Nothing in this sub5 section may be construed to affect the liability of 

6 any person other than liability based upon a claim 

7 of defective product and failure to warn described in 

8 paragraph (1). 

9 ‘‘(d) RULEMAKING.—Not later than 1 year after the 

10 date of the enactment of this section, the Secretary of 

11 Transportation shall promulgate regulations to carry out 

12 this section in consultation with the Administrator and 

13 taking into consideration existing regulations.’’. 

14 (b) CONFORMING AMENDMENT.—The analysis for 

15 chapter 329 of title 49, United States Code, is amended 

16 by adding at the end the following: 

‘‘Sec. 32920. Open fuel standard for transportation.’’. 

17 SEC. 204. REDUCING BARRIERS TO SUPPLY CHAIN MANU18 FACTURING OF RENEWABLE ENERGY EQUIP19 MENT. 

20 (a) AUTHORIZATION OF APPROPRIATIONS.—There is 

21 authorized to be appropriated $50,000,000 for the Hol22 lings Manufacturing Partnership Program, established 

23 under section 25 of the National Institute of Standards 

24 and Technology Act (15 U.S.C. 278k). 


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1 (b) USE OF FUNDS.—Amounts appropriated pursu2 ant to subsection (a) shall be used to implement a strategy 

3 for reducing barriers to supply chain manufacturing of re4 newable energy equipment. 

5 SEC. 205. TAX INCENTIVES FOR QUALIFIED BLENDER 

6 PUMPS. 

7 (a) CREDIT FOR INSTALLATION OF BLENDER

8 PUMPS.—Section 30C of the Internal Revenue Code of 

9 1986 is amended by redesignating subsections (f) and (g) 

10 as subsections (g) and (h), respectively, and by inserting 

11 after subsection (e) the following new subsection: 

12 ‘‘(f) TREATMENT OF BLENDER PUMPS AS QUALI13 FIED ALTERNATIVE FUEL VEHICLE REFUELING PROP14 ERTY.— 

15 ‘‘(1) IN GENERAL.—A qualified blender pump 

16 shall be treated as qualified alternative refueling 

17 property under this section. 

18 ‘‘(2) QUALIFIED BLENDER PUMP.—For pur19 poses of this subsection, the term ‘qualified blender 

20 pump’ means property (not including a building or 

21 its structural components)— 

22 ‘‘(A) which is subject to the allowance for 

23 depreciation or which is installed on property 

24 which is used as a principal residence, 


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1 ‘‘(B) the original use of which begins with 

2 the taxpayer, and 

3 ‘‘(C) which is for the storage or dispensing 

4 of a qualified ethanol blend into the fuel tank 

5 of a motor vehicle (as defined in section 

6 179A(e)(2)) propelled by such blend, but only 

7 if— 

8 ‘‘(i) the storage or dispensing is at the 

9 point where such fuel is delivered into the 

10 fuel tank of the motor vehicle, and 

11 ‘‘(ii) such property is capable of dis12 pensing qualified ethanol blends of not less 

13 than 3 different percentage volumes of eth14 anol which may be selected by the pump 

15 operator. 

16 ‘‘(3) QUALIFIED ETHANOL BLEND.—For pur17 poses of this subsection, the term ‘qualified ethanol 

18 blend’ means any fuel which is not less than 20 per19 cent ethanol by volume and not more than 85 per20 cent ethanol by volume.’’. 

21 (b) EFFECTIVE DATE.—The amendment made by 

22 this subsection shall apply to property placed in service 

23 after the date of the enactment of this Act. 


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1 TITLE III—RENEWABLE ELEC2 TRICITY AND ENERGY EFFI3 CIENCY RESOURCE STAND4 ARDS 

5 SEC. 301. RENEWABLE ELECTRICITY AND ENERGY EFFI6 CIENCY RESOURCE STANDARDS. 

7 (a) IN GENERAL.—Title VI of the Public Utility Reg8 ulatory Policies Act of 1978 (16 U.S.C. 2601 et seq.) is 

9 amended by adding at the end the following: 

10 ‘‘SEC. 610. RENEWABLE ELECTRICITY AND ENERGY EFFI11 CIENCY RESOURCE STANDARDS. 

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

13 ‘‘(1) BASE QUANTITY OF ELECTRICITY.— 

14 ‘‘(A) IN GENERAL.—The term ‘base quan15 tity of electricity’ means the total quantity of 

16 electricity sold by an electric utility to electric 

17 consumers in a calendar year. 

18 ‘‘(B) EXCLUSIONS.—The term ‘base quan19 tity of electricity’ does not include electricity 

20 generated by a hydroelectric facility (including 

21 a pumped storage facility but excluding incre22 mental hydropower). 

23 ‘‘(2) DISTRIBUTED GENERATION FACILITY.— 

24 The term ‘distributed generation facility’ means a 

25 facility at a customer site. 


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1 ‘‘(3) GEOTHERMAL ENERGY.—The term ‘geo2 thermal energy’ means energy derived from a geo3 thermal deposit (within the meaning of section 

4 613(e)(2) of the Internal Revenue Code of 1986). 

5 ‘‘(4) INCREMENTAL GEOTHERMAL PRODUC6 TION.— 

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

8 geothermal production’ means, for any year, the 

9 excess of— 

10 ‘‘(i) the total kilowatt hours of elec11 tricity produced from a facility (including a 

12 distributed generation facility) using geo13 thermal energy; over 

14 ‘‘(ii) the average number of kilowatt 

15 hours produced annually at the facility for 

16 5 of the previous 7 calendar years before 

17 the date of enactment of this section after 

18 eliminating the highest and the lowest kilo19 watt hour production years in that 7-year 

20 period. 

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

22 in subparagraph (A) that was placed in service 

23 at least 7 years before the date of enactment of 

24 this section shall, commencing with the year in 

25 which that date of enactment occurs, reduce the 


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1 amount calculated under subparagraph (A)(ii) 

2 each year, on a cumulative basis, by the average 

3 percentage decrease in the annual kilowatt hour 

4 production for the 7-year period described in 

5 subparagraph (A)(ii) with such cumulative sum, 

6 but not to exceed 30 percent. 

7 ‘‘(5) INCREMENTAL HYDROPOWER.— 

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

9 hydropower’ means additional energy generated 

10 as a result of efficiency improvements or capac11 ity additions made on or after— 

12 ‘‘(i) January 1, 2001; or 

13 ‘‘(ii) the effective commencement date 

14 of an existing applicable State renewable 

15 portfolio standard program at a hydro16 electric facility that was placed in service 

17 before that date. 

18 ‘‘(B) EXCLUSION.—The term ‘incremental 

19 hydropower’ does not include additional energy 

20 generated as a result of operational changes not 

21 directly associated with efficiency improvements 

22 or capacity additions. 

23 ‘‘(C) MEASUREMENT AND CERTIFI24 CATION.—Efficiency improvements and capacity 


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1 additions referred to in subparagraph (B) shall 

2 be— 

3 ‘‘(i) measured on the basis of the 

4 same water flow information used to deter5 mine a historic average annual generation 

6 baseline for the hydroelectric facility; and 

7 ‘‘(ii) certified by the Secretary or the 

8 Federal Energy Regulatory Commission. 

9 ‘‘(6) OCEAN ENERGY.—The term ‘ocean energy’ 

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

11 ‘‘(7) RENEWABLE BIOMASS.—Subject to section 

12 104(b) of the Securing America’s Future with En13 ergy and Sustainable Technologies Act, the term ‘re14 newable biomass’ means— 

15 ‘‘(A) materials, precommercial thinnings, 

16 or removed invasive species from National For17 est System land and public lands (as defined in 

18 section 103 of the Federal Land Policy and 

19 Management Act of 1976 (43 U.S.C. 1702)), 

20 including those that are byproducts of preven21 tive treatments (such as trees, wood, brush, 

22 thinnings, chips, and slash), that are removed 

23 as part of a federally recognized timber sale, or 

24 that are removed to reduce hazardous fuels, to 


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1 reduce or contain disease or insect infestation, 

2 or to restore ecosystem health, and that are— 

3 ‘‘(i) not from components of— 

4 ‘‘(I) a component of the National 

5 Wild and Scenic Rivers System; 

6 ‘‘(II) a component of the Na7 tional Wilderness Preservation Sys8 tem; 

9 ‘‘(III) a National Monument; 

10 ‘‘(IV) any part of the National 

11 Landscape Conservation System; 

12 ‘‘(V) a designated wilderness 

13 study area or other areas managed for 

14 wilderness characteristics; 

15 ‘‘(VI) an inventoried roadless 

16 area within the National Forest Sys17 tem; 

18 ‘‘(VII) an old growth stand (as 

19 defined by the applicable land man20 agement plan); 

21 ‘‘(VIII) a late-successional stand 

22 (except for dead, severely damaged, or 

23 badly infested trees) (as defined by 

24 the applicable land management 

25 plan); or 


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1 ‘‘(IX) a designated primitive 

2 area; 

3 ‘‘(ii) harvested in environmentally sus4 tainable quantities, as determined by the 

5 appropriate Federal land manager; and 

6 ‘‘(iii) harvested in accordance with ap7 plicable law and land management plans; 

8 ‘‘(B) any organic matter that is available 

9 on a renewable or recurring basis from non10 Federal land or land belonging to an Indian or 

11 Indian tribe that is held in trust by the United 

12 States or subject to a restriction against alien13 ation imposed by the United States, including— 

14 ‘‘(i) renewable plant material, includ15 ing— 

16 ‘‘(I) feed grains; 

17 ‘‘(II) other agricultural commod18 ities; 

19 ‘‘(III) other plants and trees; and 

20 ‘‘(IV) algae; and 

21 ‘‘(ii) waste material (other than com22 monly recycled paper), including— 

23 ‘‘(I) crop residue; 


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1 ‘‘(II) other vegetative waste ma2 terial (including wood waste and wood 

3 residues); 

4 ‘‘(III) animal waste and byprod5 ucts (including fats, oils, greases, and 

6 manure); 

7 ‘‘(IV) construction waste; 

8 ‘‘(V) food waste and yard waste; 

9 and 

10 ‘‘(VI) waste from single or multi11 cellular organisms; and 

12 ‘‘(C) residues and byproducts from wood, 

13 pulp, or paper products facilities. 

14 ‘‘(8) RENEWABLE ENERGY.—The term ‘renew15 able energy’ means electric energy generated at a fa16 cility (including a distributed generation facility) 

17 from— 

18 ‘‘(A) solar, wind, geothermal, or ocean en19 ergy; 

20 ‘‘(B) renewable biomass; 

21 ‘‘(C) landfill gas; 

22 ‘‘(D) municipal solid waste; 

23 ‘‘(E) incremental hydropower; or 

24 ‘‘(F) hydropower that has been certified by 

25 the Low Impact Hydropower Institute. 


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1 ‘‘(b) RENEWABLE ELECTRICITY REQUIREMENT.— 

2 ‘‘(1) REQUIREMENT.— 

3 ‘‘(A) IN GENERAL.—Subject to subpara4 graph (B), each electric utility that sells elec5 tricity to electric consumers shall obtain a per6 centage of the base quantity of electricity the 

7 electric utility sells to electric consumers in any 

8 calendar year through the means of compliance 

9 identified in paragraph (2). 

10 ‘‘(B) PERCENTAGE.—The percentage ob11 tained in a calendar year under subparagraph 

12 (A) shall not be less than the amount specified 

13 in the following table: 

Minimum annual 

‘‘Calendar years: percentage: 

2013 ................................................................................................... 10 

2014 ................................................................................................... 11 

2015 ................................................................................................... 12 

2016 ................................................................................................... 13 

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

2018 ................................................................................................... 15 

2019 ................................................................................................... 16 

2020 ................................................................................................... 17 

2021 ................................................................................................... 18 

2022 ................................................................................................... 19 

2023 ................................................................................................... 21 

2024 ................................................................................................... 23 

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

14 ‘‘(2) MEANS OF COMPLIANCE.—Not later than 

15 60 days after the end of each calendar year, an elec16 tric utility shall meet the requirements of paragraph 

17 (1) by— 


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1 ‘‘(A) submitting to the Secretary renewable 

2 energy credits issued under subsection (c); 

3 ‘‘(B) making alternative compliance pay4 ments to the Secretary at the rate of 4 cents 

5 per kilowatt hour (as adjusted for inflation 

6 under subsection (g)); 

7 ‘‘(C) submitting to the Secretary energy 

8 efficiency credits established under section 

9 611(k) in a quantity that shall not exceed 15 

10 percent of the minimum percentage required in 

11 each calendar year under subparagraph (B); or 

12 ‘‘(D) conducting a combination of activities 

13 described in subparagraphs (A), (B), and (C). 

14 ‘‘(3) CLEAN ENERGY JOBS.—In carrying out 

15 this title, the Secretary shall, to the maximum ex16 tent practicable, encourage electric utilities, in meet17 ing the requirements of paragraph (1), also— 

18 ‘‘(A) to create jobs that pay a living wage 

19 that supports a family; 

20 ‘‘(B) to provide health insurance benefits 

21 to employees; and 

22 ‘‘(C) to comply with all Federal labor and 

23 environmental laws (including regulations). 

24 ‘‘(c) RENEWABLE ENERGY CREDIT TRADING PRO25 GRAM.— 


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1 ‘‘(1) IN GENERAL.—Not later than December 

2 31, 2011, the Secretary, in consultation with the Ad3 ministrator, shall establish a renewable energy credit 

4 trading program under which electric utilities shall 

5 submit to the Secretary renewable energy credits to 

6 certify the compliance of the electric utilities with re7 spect to obligations under subsection (b)(1). 

8 ‘‘(2) ADMINISTRATION.—As part of the pro9 gram, the Secretary shall— 

10 ‘‘(A) issue renewable energy credits to gen11 erators of electric energy from new renewable 

12 energy; 

13 ‘‘(B) issue renewable energy credits to 

14 electric utilities associated with State renewable 

15 portfolio standard compliance mechanisms pur16 suant to subsection (h); 

17 ‘‘(C) subject to subparagraph (D), ensure 

18 that a kilowatt hour, including the associated 

19 renewable energy credit, shall be used only once 

20 for purposes of compliance with this section; 

21 ‘‘(D) allow double credits for generation 

22 from facilities on Indian land and brownfield 

23 sites, and triple credits for generation from 

24 small renewable distributed generators (mean25 ing those no larger than 1 megawatt); 


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1 ‘‘(E) ensure that, with respect to a pur2 chaser that, as of the date of enactment of this 

3 section, has a purchase agreement from a re4 newable energy facility placed in service before 

5 that date (other than a biomass energy facility), 

6 the credit associated with the generation of re7 newable energy under the contract is issued to 

8 the purchaser of the electric energy; and 

9 ‘‘(F) not allow energy efficiency credits es10 tablished under section 611(k) to be traded. 

11 ‘‘(3) DURATION.—A credit described in para12 graph (2)(A) may only be used for compliance with 

13 this section during the 3-year period beginning on 

14 the date of issuance of the credit. 

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

16 credits in excess of the quantity of credits needed to 

17 comply with subsection (b) may transfer the credits 

18 to another electric utility. 

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

20 The Secretary may delegate to an appropriate entity 

21 that establishes markets the administration of a na22 tional tradeable renewable energy credit market for 

23 purposes of creating a transparent national market 

24 for the sale or trade of renewable energy credits. 

25 ‘‘(d) ENFORCEMENT.— 


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

2 that fails to meet the compliance requirements of 

3 subsection (b) shall be subject to a civil penalty. 

4 ‘‘(2) AMOUNT OF PENALTY.—Subject to para5 graph (3), the amount of the civil penalty shall be 

6 equal to the product obtained by multiplying— 

7 ‘‘(A) the number of kilowatt-hours of elec8 tric energy sold to electric consumers in viola9 tion of subsection (b); by 

10 ‘‘(B) the greater of— 

11 ‘‘(i) 2 cents (adjusted for inflation 

12 under subsection (g)); or 

13 ‘‘(ii) 200 percent of the average mar14 ket value of renewable energy credits dur15 ing the year in which the violation oc16 curred. 

17 ‘‘(3) MITIGATION OR WAIVER.— 

18 ‘‘(A) IN GENERAL.—The Secretary may 

19 mitigate or waive a civil penalty under this sub20 section if the electric utility is unable to comply 

21 with subsection (b) due to a reason outside of 

22 the reasonable control of the electric utility. 

23 ‘‘(B) REDUCTION.—The Secretary shall re24 duce the amount of any penalty determined 

25 under paragraph (2) by an amount paid by the 


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1 electric utility to a State for failure to comply 

2 with the requirement of a State renewable en3 ergy program if the State requirement is great4 er than the applicable requirement of subsection 

5 (b). 

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

7 The Secretary shall assess a civil penalty under this 

8 subsection in accordance with the procedures pre9 scribed by section 333(d) of the Energy Policy and 

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

11 ‘‘(e) STATE RENEWABLE ENERGY ACCOUNT PRO12 GRAM.— 

13 ‘‘(1) IN GENERAL.—There is established in the 

14 Treasury a State renewable energy account program. 

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

16 Secretary from alternative compliance payments and 

17 the assessment of civil penalties under this section 

18 shall be deposited into the renewable energy account 

19 established pursuant to this subsection. 

20 ‘‘(3) USE.—Proceeds deposited in the State re21 newable energy account shall be used by the Sec22 retary to carry out a program to provide grants to 

23 the State agency responsible for developing State en24 ergy conservation plans under section 362 of the En25 ergy Policy and Conservation Act (42 U.S.C. 6322) 


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1 for the purposes of promoting renewable energy pro2 duction, including programs that promote tech3 nologies that reduce the use of electricity at cus4 tomer sites, such as solar water heating. 

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

6 issue guidelines and criteria for grants awarded 

7 under this subsection. 

8 ‘‘(5) RECORDS.—State energy offices receiving 

9 grants under this section shall maintain such 

10 records and evidence of compliance as the Secretary 

11 may require. 

12 ‘‘(6) PREFERENCE.—In allocating funds under 

13 this subsection, the Secretary shall give preference— 

14 ‘‘(A) to States in regions that have a dis15 proportionately small share of economically sus16 tainable renewable energy generation capacity; 

17 and 

18 ‘‘(B) to State programs to stimulate or en19 hance innovative renewable energy technologies. 

20 ‘‘(f) EXEMPTIONS.—During any calendar year, this 

21 section shall not apply to an electric utility that sold less 

22 than 4,000,000 megawatt-hours of electric energy to elec23 tric consumers during the preceding calendar year. 

24 ‘‘(g) INFLATION ADJUSTMENT.—Not later than De25 cember 31 of each year beginning in 2011, the Secretary 


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1 shall adjust for United States dollar inflation from Janu2 ary 1, 2011 (as measured by the Consumer Price Index)— 

3 ‘‘(1) the price of a renewable energy credit 

4 under subsection (c)(2); and 

5 ‘‘(2) the amount of the civil penalty per kilo6 watt-hour under subsection (d)(2). 

7 ‘‘(h) STATE PROGRAMS.— 

8 ‘‘(1) IN GENERAL.—Subject to paragraph (2), 

9 nothing in this section diminishes any authority of 

10 a State or political subdivision of a State to adopt 

11 or enforce any law or regulation respecting renew12 able energy. 

13 ‘‘(2) COMPLIANCE.—Except as provided in sub14 section (d)(3), no such law or regulation shall relieve 

15 any person of any requirement otherwise applicable 

16 under this section. 

17 ‘‘(3) COORDINATION.—The Secretary, in con18 sultation with States having such renewable energy 

19 programs, shall, to the maximum extent practicable, 

20 facilitate coordination between the Federal program 

21 and State programs. 

22 ‘‘(4) 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 pro23 mulgate and enforce such regulations as are nec24 essary to ensure that an electric utility recovers all 


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1 prudently incurred costs associated with compliance 

2 with this 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) REGULATIONS.— 

9 ‘‘(1) IN GENERAL.—Not later than 18 months 

10 after the date of enactment of this title, the Sec11 retary, in consultation with the leaders of relevant 

12 Federal agencies, shall promulgate regulations to 

13 carry out this title. 

14 ‘‘(2) PRIORITIES.—The regulations promul15 gated under paragraph (1) shall prioritize the use of 

16 components and products produced in the United 

17 States, without placing constraints that prevent 

18 compliance under this title, for new renewable en19 ergy facilities eligible to participate in activities 

20 under this title. 

21 ‘‘(k) TERMINATION OF AUTHORITY.—This section 

22 and the authority provided by this section terminate on 

23 December 31, 2040.’’. 

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

25 of contents of the Public Utility Regulatory Policies Act 


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

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

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

‘‘Sec. 610. Renewable electricity and energy efficiency resource standards.’’. 

3 SEC. 302. ENERGY EFFICIENCY RESOURCE STANDARD FOR 

4 RETAIL ELECTRICITY AND NATURAL GAS DIS5 TRIBUTORS. 

6 (a) IN GENERAL.—Title VI of the Public Utility Reg7 ulatory Policies Act of 1978 (16 U.S.C. 2601 et seq.) (as 

8 amended by section 301(a)) is amended by adding at the 

9 end the following: 

10 ‘‘SEC. 611. ENERGY EFFICIENCY RESOURCE STANDARD FOR 

11 RETAIL ELECTRICITY AND NATURAL GAS DIS12 TRIBUTORS. 

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

14 ‘‘(1) ADMINISTRATOR.—The term ‘Adminis15 trator’ means the Administrator of the Environ16 mental Protection Agency. 

17 ‘‘(2) AFFILIATE.—The term ‘affiliate’, when 

18 used with respect to a person, means another person 

19 that owns or controls, is owned or controlled by, or 

20 is under common ownership control with, the person, 

21 as determined under regulations promulgated by the 

22 Secretary. 

23 ‘‘(3) ANSI.—The term ‘ANSI’ means the 

24 American National Standards Institute. 


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1 ‘‘(4) ASHRAE.—The term ‘ASHRAE’ means 

2 the American Society of Heating, Refrigerating, and 

3 Air Conditioning Engineers. 

4 ‘‘(5) BASE QUANTITY.— 

5 ‘‘(A) IN GENERAL.—The term ‘base quan6 tity’, when used with respect to a retail elec7 tricity distributor or retail natural gas dis8 tributor, means the average annual quantity of 

9 electricity or natural gas delivered by the retail 

10 electricity distributor or retail natural gas dis11 tributor to retail customers during the 5 cal12 endar years immediately preceding the date of 

13 enactment of this section. 

14 ‘‘(B) EXCLUSION.—The term ‘base quan15 tity’, when used to determine the base quantity 

16 of a retail natural gas distributor, does not in17 clude natural gas delivered for purposes of elec18 tricity generation. 

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

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

21 standards savings’ means a reduction in end22 use electricity or natural gas consumption in 

23 the service territory of a retail electricity dis24 tributor or a retail natural gas distributor as a 

25 result of the adoption and implementation, after 


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1 the date of enactment of this section, of new or 

2 revised appliance and equipment efficiency 

3 standards or building energy codes. 

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

5 and standards savings— 

6 ‘‘(i) the baseline for calculating sav7 ings from building codes shall be the more 

8 stringent of— 

9 ‘‘(I) the 2006 International En10 ergy Conservation Code for residential 

11 buildings and the ASHRAE/ANSI/ 

12 IESNA Standard 90.1 (2004) for 

13 commercial buildings; 

14 ‘‘(II) the applicable State build15 ing code in effect on the date of en16 actment of this section; or 

17 ‘‘(III) a baseline determined by 

18 the Secretary; and 

19 ‘‘(ii) the baseline for calculating sav20 ings from appliance standards shall be the 

21 average efficiency of new appliances in the 

22 applicable 1 or more categories prior to 

23 adoption and implementation of the new 

24 standard. 


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1 ‘‘(7) COST-EFFECTIVE.—The term ‘cost-effec2 tive’, when used with respect to an energy efficiency 

3 measure, means that the measure achieves a net 

4 present value of economic benefits over the life of 

5 the measure, both directly to the energy consumer 

6 and to the economy, that is greater than the net 

7 present value of the cost of the measure over the life 

8 of the measure, both directly to the energy consumer 

9 and to the economy. 

10 ‘‘(8) CUSTOMER FACILITY SAVINGS.—The term 

11 ‘customer facility savings’ means a reduction in end12 use electricity or natural gas consumption (including 

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

14 consumer of electricity or natural gas served by a re15 tail electricity distributor or natural gas distributor, 

16 as compared to— 

17 ‘‘(A) 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; 

21 ‘‘(B) in the case of new equipment that re22 places existing equipment with remaining useful 

23 life— 


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1 ‘‘(i) consumption of the existing 

2 equipment for the remaining useful life of 

3 the equipment; and 

4 ‘‘(ii) after that useful life, consump5 tion of new equipment of average effi6 ciency; 

7 ‘‘(C) in the case of a new facility, con8 sumption at a reference facility of average effi9 ciency; or 

10 ‘‘(D) in the case of energy savings meas11 ures at a facility not covered by subparagraphs 

12 (A) through (C), consumption at the facility 

13 during a base year. 

14 ‘‘(9) ELECTRICITY SAVINGS.—The term ‘elec15 tricity savings’ means reductions in electricity con16 sumption achieved through measures implemented 

17 after the date of enactment of this section, as deter18 mined in accordance with regulations promulgated 

19 by the Secretary, through— 

20 ‘‘(A) customer facility savings of elec21 tricity, adjusted to reflect any associated in22 crease in fuel consumption at the facility; 

23 ‘‘(B) reductions in distribution system 

24 losses of electricity achieved by a retail elec25 tricity distributor, as compared to losses attribVerDate Mar 15 2010 00:49 Jul 14, 2010 Jkt 089200 PO 00000 Frm 00047 Fmt 6652 Sfmt 6201 E:\BILLS\S3576.IS S3576

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1 utable to new or replacement distribution sys2 tem equipment of average efficiency (as defined 

3 in regulations promulgated by the Secretary); 

4 and 

5 ‘‘(C) codes and standards savings of elec6 tricity. 

7 ‘‘(10) IESNA.—The term ‘IESNA’ mean the 

8 Illuminating Engineering Society of North America. 

9 ‘‘(11) NATURAL GAS SAVINGS.—The term ‘nat10 ural gas savings’ means reductions in natural gas 

11 consumption from measures implemented after the 

12 date of enactment of this section, as determined in 

13 accordance with regulations promulgated by the Sec14 retary, through— 

15 ‘‘(A) customer facility savings of natural 

16 gas, adjusted to reflect any associated increase 

17 in electricity consumption or consumption of 

18 other fuels at the facility; 

19 ‘‘(B) reductions in leakage, operational 

20 losses, and consumption of natural gas fuel to 

21 operate a gas distribution system, achieved by 

22 a retail natural gas distributor, as compared to 

23 similar leakage, losses, and consumption during 

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

25 year); and 


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1 ‘‘(C) codes and standards savings of nat2 ural gas. 

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

4 means an association of 2 or more interconnected 

5 electric systems that is recognized by the Commis6 sion as having an agreement to coordinate oper7 ations and planning for improved reliability and effi8 ciencies, including a Regional Transmission Organi9 zation or an Independent System Operator. 

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

11 ‘recycled energy savings’ means a reduction in elec12 tricity or natural gas consumption that results from 

13 a modification of an industrial or commercial system 

14 that commenced operation before the date of enact15 ment of this section, in order to recapture electrical, 

16 mechanical, or thermal energy that would otherwise 

17 be wasted, as determined in accordance with regula18 tions promulgated by the Secretary. 

19 ‘‘(14) REPORTING PERIOD.—The term ‘report20 ing period’ means— 

21 ‘‘(A) calendar year 2013; and 

22 ‘‘(B) each successive calendar year there23 after. 

24 ‘‘(15) RETAIL ELECTRICITY DISTRIBUTOR.— 


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1 ‘‘(A) IN GENERAL.—The term ‘retail elec2 tricity distributor’ means, for any calendar 

3 year, an electric utility that owns or operates an 

4 electric distribution facility and, using the facil5 ity, delivered not less than 4,000,000 mega6 watt-hours of electric energy to electric con7 sumers for purposes other than resale during 

8 the most recent 2-calendar-year period for 

9 which data are available. 

10 ‘‘(B) ADMINISTRATION.—For purposes of 

11 determining whether an electric utility qualifies 

12 as a retail electricity distributor under subpara13 graph (A)— 

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

15 electric utility to electric consumers for 

16 purposes other than resale shall be consid17 ered to be deliveries by the electric utility; 

18 and 

19 ‘‘(ii) deliveries by any electric utility 

20 to a lessee, tenant, or affiliate of the elec21 tric utility shall not be treated as deliveries 

22 to electric consumers. 

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

24 ‘‘(A) IN GENERAL.—The term ‘retail nat25 ural gas distributor’ means, for any given calVerDate Mar 15 2010 00:49 Jul 14, 2010 Jkt 089200 PO 00000 Frm 00050 Fmt 6652 Sfmt 6201 E:\BILLS\S3576.IS S3576

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1 endar year, a local distribution company (as de2 fined in section 2 of the Natural Gas Policy Act 

3 of 1978 (15 U.S.C. 3301)), that delivered to 

4 natural gas consumers more than 

5 5,000,000,000 cubic feet of natural gas during 

6 the most recent 2-calendar-year period for 

7 which data are available. 

8 ‘‘(B) ADMINISTRATION.—For purposes of 

9 determining whether a person qualifies as a re10 tail natural gas distributor under subparagraph 

11 (A)— 

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

13 affiliate of a local distribution company to 

14 consumers for purposes other than resale 

15 shall be considered to be deliveries by the 

16 local distribution company; and 

17 ‘‘(ii) deliveries of natural gas to a les18 see, tenant, or affiliate of a local distribu19 tion company shall not be treated as deliv20 eries to natural gas consumers. 

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

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

23 retailer, building owner, energy service company, fi24 nancial institution or other commercial, industrial or 

25 nonprofit entity that is capable of providing elecVerDate Mar 15 2010 00:49 Jul 14, 2010 Jkt 089200 PO 00000 Frm 00051 Fmt 6652 Sfmt 6201 E:\BILLS\S3576.IS S3576

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1 tricity savings or natural gas savings in accordance 

2 with subsections (e) and (f). 

3 ‘‘(b) ESTABLISHMENT OF PROGRAM.—Not later than 

4 18 months after the date of enactment of this section, the 

5 Secretary shall, by regulation, establish a program to im6 plement and enforce this section, including— 

7 ‘‘(1) measurement and verification procedures 

8 and standards under subsection (f); 

9 ‘‘(2) requirements under which retail electricity 

10 distributors and retail natural gas distributors 

11 shall— 

12 ‘‘(A) demonstrate, document, and report 

13 compliance with the performance standards es14 tablished under subsection (d); and 

15 ‘‘(B) estimate the impact of the standards 

16 on current and future electricity and natural 

17 gas use in the service territories of the retail 

18 electricity distributors and retail natural gas 

19 distributors, respectively; and 

20 ‘‘(3) requirements governing applications for, 

21 and implementation of, delegated State administra22 tion under subsection (h). 

23 ‘‘(c) COORDINATION WITH STATE PROGRAMS.—In 

24 establishing and implementing the program established 

25 under this section, the Secretary, in coordination with the 


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1 Administrator, shall, to the maximum extent practicable, 

2 preserve the integrity, and incorporate the best practices, 

3 of existing 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 promulgated by the Secretary, 

11 demonstrating that the retail electricity dis12 tributor has achieved cumulative electricity sav13 ings (adjusted to account for any attrition of 

14 savings measures implemented in prior years) 

15 in each calendar year that are least equal to the 

16 applicable percentage, established under para17 graph (2), (3), or (4), of the base quantity of 

18 the retail electricity distributor; and 

19 ‘‘(B) each retail natural gas distributor 

20 shall submit to the Secretary a report, in ac21 cordance with regulations promulgated by the 

22 Secretary, demonstrating that the retail natural 

23 gas distributor has achieved cumulative natural 

24 gas savings (adjusted to account for any attri25 tion of savings measures implemented in prior 


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1 years) in each calendar year compared to the 

2 base quantity of the retail natural gas dis3 tributor. 

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

5 For purposes of paragraph (1), for each of calendar 

6 years 2012 through 2020, the applicable percentages 

7 shall be as follows: 

Cumulative Electricity 

‘‘Calendar years: Savings Percentage: 

2012 ................................................................................................... 1.5 

2013 ................................................................................................... 2.5 

2014 ................................................................................................... 3.5 

2015 ................................................................................................... 4.5 

2016 ................................................................................................... 5.5 

2017 ................................................................................................... 6.5 

2018 ................................................................................................... 7.5 

2019 ................................................................................................... 8.5 

2020 ................................................................................................... 9.5 

8 ‘‘(3) SUBSEQUENT YEARS.— 

9 ‘‘(A) CALENDAR YEARS 2021 THROUGH

10 2030.—Not later than December 31, 2015, 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 each of calendar years 

16 2021 through 2030. 

17 ‘‘(B) SUBSEQUENT EXTENSIONS.—Except 

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

19 December 31 of the penultimate reporting pe20 riod for which performance standards have been 


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1 established under this paragraph, the Secretary 

2 shall promulgate regulations establishing per3 formance standards (expressed as applicable 

4 percentages of base quantity for both cumu5 lative electricity savings and cumulative natural 

6 gas savings) for the 10-calendar-year period fol7 lowing the last calendar year for which perform8 ance standards previously were established. 

9 ‘‘(C) REQUIREMENTS.— 

10 ‘‘(i) IN GENERAL.—Subject to clause 

11 (ii), the Secretary shall establish standards 

12 under this paragraph at levels that reflect 

13 the maximum achievable level of cost-effec14 tive energy efficiency potential, taking into 

15 account— 

16 ‘‘(I) cost-effective energy savings 

17 achieved by leading retail electricity 

18 distributors and retail natural gas dis19 tributors; 

20 ‘‘(II) opportunities for new codes 

21 and standard savings; 

22 ‘‘(III) technology improvements; 

23 and 

24 ‘‘(IV) other indicators of cost-ef25 fective energy efficiency potential. 


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1 ‘‘(ii) MINIMUM PERCENTAGE.—In no 

2 case shall the applicable percentages for 

3 any calendar year be lower than the appli4 cable percentage for calendar year 2020 

5 (including any increase in the standard for 

6 calendar year 2020 pursuant to paragraph 

7 (4)). 

8 ‘‘(4) MIDCOURSE REVIEW AND ADJUSTMENT OF

9 STANDARDS.— 

10 ‘‘(A) IN GENERAL.—Not later than De11 cember 31, 2014, and at 10-year intervals 

12 thereafter, the Secretary shall— 

13 ‘‘(i) review the most recent standards 

14 established under paragraph (2) or (3); 

15 and 

16 ‘‘(ii) by regulation, increase the stand17 ards if the Secretary determines that addi18 tional cost-effective energy efficiency po19 tential is achievable, taking into account 

20 the factors described in paragraph (3)(C). 

21 ‘‘(B) LEAD TIME.—If the Secretary revises 

22 standards under this paragraph, the regulations 

23 shall provide adequate lead time to ensure that 

24 compliance with the increased standards is fea25 sible. 


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

3 ‘‘(A) IN GENERAL.—Notwithstanding 

4 paragraphs (1) and (2), for the 2013 reporting 

5 period, the Secretary may accept a request from 

6 a retail electricity distributor or a retail natural 

7 gas distributor to delay the required submission 

8 of documentation of part or all of the required 

9 savings for up to 2 years. 

10 ‘‘(B) PLAN.—The request for delay shall 

11 include a plan for coming into full compliance 

12 by the end of the 2013 through 2014 reporting 

13 period. 

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

15 SAVINGS.— 

16 ‘‘(1) BILATERAL CONTRACTS FOR SAVINGS

17 TRANSFERS.—Subject to the other provisions of this 

18 section, a retail electricity distributor or retail nat19 ural gas distributor may use electricity savings or 

20 natural gas savings purchased, pursuant to a bilat21 eral contract, from another retail electricity dis22 tributor or retail natural gas distributor, a State, or 

23 a third-party efficiency provider to meet the applica24 ble performance standard under subsection (d). 


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

2 gas savings purchased and used for compliance pur3 suant to this subsection shall be— 

4 ‘‘(A) measured and verified in accordance 

5 with subsection (f); 

6 ‘‘(B) reported in accordance with sub7 section (d); and 

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

9 served by the retail electricity distributor or re10 tail natural gas distributor. 

11 ‘‘(3) EXCEPTION.—Notwithstanding paragraph 

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

13 retail electricity distributor or a retail natural gas 

14 distributor regulated by the State regulatory author15 ity to purchase savings achieved in a different State, 

16 if— 

17 ‘‘(A) the savings are achieved within the 

18 same power pool; and 

19 ‘‘(B) the State regulatory authority that 

20 regulates the purchaser oversees the measure21 ment and verification of the savings pursuant to 

22 the procedures and standards applicable in the 

23 State of the purchaser. 

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

25 subsection limits or affects the authority of a State 


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1 regulatory authority to require a retail electricity 

2 distributor or retail natural gas distributor that is 

3 regulated by the State regulatory authority to obtain 

4 the authorization or approval of the State regulatory 

5 authority for a contract for transfer of savings 

6 under this subsection. 

7 ‘‘(5) LIMITATIONS.—In the interest of opti8 mizing achievement of cost-effective efficiency poten9 tial, the Secretary may prescribe such limitations as 

10 the Secretary determines to be appropriate with re11 spect to the proportion of the compliance obligation 

12 of a retail electricity or natural gas distributor, 

13 under the applicable performance standards under 

14 subsection (d), that may be met using electricity or 

15 natural gas savings that are purchased under this 

16 subsection. 

17 ‘‘(f) MEASUREMENT AND VERIFICATION OF SAV18 INGS.—The regulations promulgated under subsection (b) 

19 shall include— 

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

21 measuring electricity savings and natural gas sav22 ings that can be counted towards the performance 

23 standards established under subsection (d), which 

24 shall— 


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

2 and energy conservation measures that can be 

3 counted; 

4 ‘‘(B) require that energy consumption esti5 mates for customer facilities or parts of facili6 ties in the applicable base and current years be 

7 adjusted, as appropriate, to account for changes 

8 in weather, level of production, and building 

9 area; 

10 ‘‘(C) account for the useful life of meas11 ures; 

12 ‘‘(D) include considered savings values for 

13 specific, commonly used measures; 

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

15 be estimated based on extrapolation from a rep16 resentative sample of participating customers; 

17 ‘‘(F) include procedures for counting com18 bined heat and power savings and recycled en19 ergy savings; 

20 ‘‘(G) establish methods for calculating 

21 codes and standards savings, including the use 

22 of verified compliance rates; 

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

24 are additional to business-as-usual practices; 


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1 ‘‘(I) except in the case of codes and stand2 ards savings, ensure that the retail electricity 

3 distributor or retail natural gas distributor 

4 claiming the savings played a significant role in 

5 achieving the savings (including through the ac6 tivities of a designated agent of the distributor 

7 or through the purchase of transferred savings); 

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

9 for compliance with this section and section 

10 610, including transferred savings; and 

11 ‘‘(K) include savings from programs ad12 ministered by the retail electric or natural gas 

13 distributor that are funded by Federal, State, 

14 or other sources; and 

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

16 verification of reported electricity savings or natural 

17 gas savings. 

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

19 ‘‘(1) REVIEW OF RETAIL DISTRIBUTOR RE20 PORTS.— 

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

22 review each report submitted to the Secretary 

23 by a retail electricity distributor or retail nat24 ural gas distributor under subsection (d) to 


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1 verify that the applicable performance stand2 ards under that subsection have been met. 

3 ‘‘(B) EXCLUSIONS.—In determining com4 pliance with the applicable performance stand5 ards, the Secretary shall exclude reported elec6 tricity savings or natural gas savings that are 

7 not adequately demonstrated and documented, 

8 in accordance with the regulations promulgated 

9 under subsections (d), (e), and (f). 

10 ‘‘(2) PENALTY FOR FAILURE TO DOCUMENT

11 ADEQUATE SAVINGS.—If a retail electricity dis12 tributor or a retail natural gas distributor fails to 

13 demonstrate compliance with an applicable perform14 ance standard under subsection (d) or to pay to the 

15 State an applicable alternative compliance payment 

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

17 against the retail electricity distributor or retail nat18 ural gas distributor a civil penalty for each such fail19 ure in an amount equal to, as adjusted for inflation 

20 in accordance with such regulations as the Secretary 

21 may promulgate— 

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

23 savings or alternative compliance payment that 

24 the retail electricity distributor failed to achieve 

25 or make, respectively; or 


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

2 savings or alternative compliance payment that 

3 the retail natural gas distributor failed to 

4 achieve or make, respectively. 

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

6 Secretary shall reduce the amount of any penalty 

7 under paragraph (2) by the amount paid by the ap8 plicable retail electricity distributor or retail natural 

9 gas distributor to a State for failure to comply with 

10 the requirements of a State energy efficiency re11 source standard during the same compliance period, 

12 if the State standard is— 

13 ‘‘(A) comparable in type to the Federal 

14 standard established under this section; and 

15 ‘‘(B) more stringent than the applicable 

16 performance standards under subsection (d). 

17 ‘‘(4) ENFORCEMENT PROCEDURES.—The Sec18 retary shall assess a civil penalty, as provided under 

19 paragraph (2), in accordance with the procedures 

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

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

22 ‘‘(5) JUDICIAL REVIEW.— 

23 ‘‘(A) IN GENERAL.—Any person that will 

24 be adversely affected by a final action taken by 

25 the Secretary under this section, other than the 


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1 assessment of a civil penalty, may use the pro2 cedures for review described in section 336(b) 

3 of the Energy Policy and Conservation Act (42 

4 U.S.C. 6306(b)). 

5 ‘‘(B) ADMINISTRATION.—For purposes of 

6 this paragraph, references to a rule in section 

7 336(b) of the Energy Policy and Conservation 

8 Act (42 U.S.C. 6306(b)) shall be considered to 

9 refer also to all other final actions of the Sec10 retary under this section other than the assess11 ment of a civil penalty. 

12 ‘‘(h) STATE ADMINISTRATION.— 

13 ‘‘(1) IN GENERAL.—On 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 territory of the State if the Secretary determines 

19 that the State will implement an energy efficiency 

20 program that meets or exceeds the requirements of 

21 this section, including— 

22 ‘‘(A) achieving electricity savings and nat23 ural gas savings at least as great as the savings 

24 required under the applicable performance 

25 standards 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) and using the 

7 payments to implement cost-effective efficiency 

8 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, not later than 180 days 

13 after the date of receipt 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 the procedures and standards established under sub20 section (f), if the State demonstrates that the alter21 native procedures and standards provide a level of 

22 accuracy of measurement and verification that is at 

23 least equivalent to the Federal procedures and 

24 standards promulgated under 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 applicable reporting 

7 period, 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.— 

21 ‘‘(i) IN GENERAL.—Alternative com22 pliance payments collected by a State pur23 suant to subparagraph (A) shall be used 

24 by the State to administer the delegated 

25 authority of the State under this section 


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1 and to implement cost-effective energy effi2 ciency programs. 

3 ‘‘(ii) PROGRAMS.—The programs 

4 shall— 

5 ‘‘(I) to the maximum extent prac6 ticable, achieve electricity savings and 

7 natural gas savings in the State suffi8 cient to make up the deficit associated 

9 with the alternative compliance pay10 ments; and 

11 ‘‘(II) be measured and verified in 

12 accordance with the applicable proce13 dures and standards under subsection 

14 (f) or paragraph (3), as the case may 

15 be. 

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

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

18 the Secretary shall review State implementation 

19 of this section for conformance with the requirements of this section in approximately 1 20 ⁄2

21 of the States that have received approval under 

22 this subsection to administer the program, so 

23 that each State shall be reviewed at least once 

24 every 4 years. 


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1 ‘‘(B) REPORT.—To facilitate the review, 

2 the Secretary may require the State to submit 

3 a report demonstrating the compliance of the 

4 State with the requirements of this section, in5 cluding— 

6 ‘‘(i) reports submitted by retail elec7 tricity distributors and retail natural gas 

8 distributors to the State demonstrating 

9 compliance with applicable performance 

10 standards; 

11 ‘‘(ii) the impact of the standards on 

12 projected electricity and natural gas de13 mand within the State; 

14 ‘‘(iii) an accounting of the use of al15 ternative compliance payments by the 

16 State and the resulting electricity savings 

17 and natural gas savings achieved; and 

18 ‘‘(iv) such other information as the 

19 Secretary determines appropriate. 

20 ‘‘(C) REVIEW ON PETITION.—Notwith21 standing subparagraph (A), on the receipt of a 

22 public petition containing a credible allegation 

23 of substantial deficiencies, the Secretary shall 

24 promptly review the implementation by the 

25 State of delegated authority under this section. 


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1 ‘‘(D) DEFICIENCIES.— 

2 ‘‘(i) IN GENERAL.—If deficiencies are 

3 found in a review under this paragraph, 

4 the Secretary shall— 

5 ‘‘(I) notify the State; and 

6 ‘‘(II) direct the State to correct 

7 the deficiencies and to report to the 

8 Secretary on progress not later than 

9 180 days after the date of the receipt 

10 of review results. 

11 ‘‘(ii) SUBSTANTIAL DEFICIENCIES.—If 

12 the deficiencies are substantial, the Sec13 retary shall— 

14 ‘‘(I) disallow such reported sav15 ings as the Secretary determines are 

16 not credible due to deficiencies; 

17 ‘‘(II) re-review the State not 

18 later than 2 years after the date of 

19 the original review; and 

20 ‘‘(III) if substantial deficiencies 

21 remain uncorrected after the review 

22 provided for under subclause (II), re23 voke the authority of the State to ad24 minister the program established 

25 under this section. 


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1 ‘‘(6) CALLS FOR REVISION OF STATE APPLICA2 TIONS.—As a condition of maintaining the delegated 

3 authority of a State to administer this section, the 

4 Secretary may require the State to submit a revised 

5 application under paragraph (1) if the Secretary 

6 has— 

7 ‘‘(A) promulgated new or revised perform8 ance standards under subsection (d); 

9 ‘‘(B) promulgated new or substantially re10 vised measurement and verification procedures 

11 and standards under subsection (f); or 

12 ‘‘(C) otherwise substantially revised the 

13 program established under this section. 

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

15 with section 13 of the Federal Energy Administration Act 

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

17 retail electricity distributor, any retail natural gas dis18 tributor, any third-party efficiency provider, or such other 

19 entities as the Secretary considers appropriate, to provide 

20 any information the Secretary determines appropriate to 

21 carry out this section. 

22 ‘‘(j) STATE LAW.—Nothing in this section diminishes 

23 or qualifies any authority of a State or political subdivision 

24 of a State to adopt or enforce any law (including a regula25 tion) respecting electricity savings or natural gas savings, 


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1 including any law (including a regulation) establishing en2 ergy efficiency requirements that are more stringent than 

3 the requirements established under this section, except 

4 that no such law or regulation may relieve any person of 

5 any requirement otherwise applicable under this section. 

6 ‘‘(k) ENERGY EFFICIENCY CREDITS.—The Secretary 

7 shall issue energy efficiency credits at the end of each cal8 endar year to eligible retail electricity distributor for each 

9 kilowatt hour of electricity savings above the applicable 

10 percentage, established under paragraph (2), (3), or (4) 

11 of subsection (d), of the base quantity of the retail elec12 tricity distributor in a quantity that shall not exceed 15 

13 percent of the minimum percentage required in each cal14 endar year under section 610(b)(1)(B).’’. 

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

16 of contents of the Public Utility Regulatory Policies Act 

17 of 1978 (16 U.S.C. prec. 2601) (as amended by section 

18 301(b)) is amended by adding at the end of the items re19 lating to title VI the following: 

‘‘Sec. 611. Energy efficiency resource standard for retail electricity and natural 

gas distributors.’’. 

20 SEC. 303. VOLUNTARY RENEWABLE ENERGY MARKETS. 

21 (a) IN GENERAL.—It is the policy of the United 

22 States to support the continued growth of voluntary re23 newable energy markets. 


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1 (b) ADMINISTRATION.—Nothing in this Act or the 

2 amendments made by this Act is intended to interfere with 

3 or prevent the continued operation and growth of the vol4 untary renewable energy market. 

5 (c) REPORT ON EFFICACY OF VOLUNTARY RENEW6 ABLE ENERGY MARKET.—Not later than 2 years after the 

7 date of enactment of this Act, the Comptroller General 

8 of the United States shall submit to Congress a report 

9 describing the efficacy of the voluntary renewable energy 

10 market in the context of the pollution reduction and in11 vestment programs under this Act and the amendments 

12 made by this Act, including— 

13 (1) whether meaningful reductions in carbon di14 oxide emissions have occurred in response to invest15 ments in the voluntary renewable energy market; 

16 (2) whether the voluntary market continues to 

17 grow; and 

18 (3) a list of recommended strategies for ensur19 ing that— 

20 (A) meaningful emissions reductions may 

21 occur; and 

22 (B) the voluntary renewable energy market 

23 may continue to grow. 


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1 TITLE IV—WIND ENERGY 

2 SEC. 401. WIND ENERGY SYSTEMS. 

3 Section 14 of the Wind Energy Systems Act of 1980 

4 (42 U.S.C. 9213) is amended to read as follows: 

5 ‘‘SEC. 14. AUTHORIZATION OF APPROPRIATIONS. 

6 ‘‘(a) IN GENERAL.—There are authorized to be ap7 propriated to the Secretary to carry out wind energy re8 search, development, and deployment through the Energy 

9 Efficiency and Renewable Energy Office of the Depart10 ment of Energy in accordance with this section— 

11 ‘‘(1) $275,000,000 for fiscal year 2011; 

12 ‘‘(2) $446,000,000 for fiscal year 2012; 

13 ‘‘(3) $602,000,000 for fiscal year 2013; 

14 ‘‘(4) $698,000,000 for fiscal year 2014; and 

15 ‘‘(5) $794,500,000 for fiscal year 2015. 

16 ‘‘(b) WIND TURBINE TECHNOLOGY AND RELI17 ABILITY.—Of amounts made available under subsection 

18 (a), the Secretary shall use for land-based wind turbine 

19 technology and reliability— 

20 ‘‘(1) $30,000,000 for fiscal year 2011; 

21 ‘‘(2) $50,000,000 for fiscal year 2012; 

22 ‘‘(3) $70,000,000 for fiscal year 2013; 

23 ‘‘(4) $80,000,000 for fiscal year 2014; and 

24 ‘‘(5) $100,000,000 for fiscal year 2015. 


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1 ‘‘(c) WIND ENERGY SYSTEM INTEGRATION AND

2 TRANSMISSION DEVELOPMENT.—Of amounts made avail3 able under subsection (a), the Secretary shall use for wind 

4 energy system integration and transmission develop5 ment— 

6 ‘‘(1) $20,000,000 for fiscal year 2011; 

7 ‘‘(2) $25,000,000 for fiscal year 2012; 

8 ‘‘(3) $30,000,000 for fiscal year 2013; 

9 ‘‘(4) $35,000,000 for fiscal year 2014; and 

10 ‘‘(5) $40,000,000 for fiscal year 2015. 

11 ‘‘(d) ADVANCED WIND ENERGY BLADES.—Of 

12 amounts made available under subsection (a), the Sec13 retary shall use for advanced wind blade design, materials, 

14 and manufacturing processes— 

15 ‘‘(1) $50,000,000 for fiscal year 2011; 

16 ‘‘(2) $65,000,000 for fiscal year 2012; 

17 ‘‘(3) $75,000,000 for fiscal year 2013; 

18 ‘‘(4) $80,000,000 for fiscal year 2014; and 

19 ‘‘(5) $85,000,000 for fiscal year 2015. 

20 ‘‘(e) OFFSHORE WIND.—Of amounts made available 

21 under subsection (a), the Secretary shall use for accel22 erating the design, development, testing, and deployment 

23 of advanced offshore wind technology and supporting con24 struction, operations, and maintenance infrastructure— 

25 ‘‘(1) $100,000,000 for fiscal year 2011; 


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1 ‘‘(2) $200,000,000 for fiscal year 2012; 

2 ‘‘(3) $300,000,000 for fiscal year 2013; 

3 ‘‘(4) $350,000,000 for fiscal year 2014; and 

4 ‘‘(5) $400,000,000 for fiscal year 2015. 

5 ‘‘(f) WIND POWERING AMERICA PROGRAM.—Of the 

6 amounts made available under subsection (a), the Sec7 retary shall use for and support the Wind Powering Amer8 ica program outreach and technical assistance activities— 

9 ‘‘(1) $15,000,000 for fiscal year 2011; 

10 ‘‘(2) $25,000,000 for fiscal year 2012; 

11 ‘‘(3) $35,000,000 for fiscal year 2013; 

12 ‘‘(4) $40,000,000 for fiscal year 2014; and 

13 ‘‘(5) $45,000,000 for fiscal year 2015. 

14 ‘‘(g) WIND ENERGY TECHNICAL TRAINING AND

15 WORKFORCE DEVELOPMENT.—Of the amounts made 

16 available under subsection (a), the Secretary shall use for 

17 and support the establishment of technical training pro18 grams with community colleges and technical schools— 

19 ‘‘(1) $40,000,000 for fiscal year 2011; 

20 ‘‘(2) $55,000,000 for fiscal year 2012; 

21 ‘‘(3) $60,000,000 for fiscal year 2013; 

22 ‘‘(4) $75,000,000 for fiscal year 2014; and 

23 ‘‘(5) $80,000,000 for fiscal year 2015. 

24 ‘‘(h) WIND RESOURCE MODELING AND WIND FARM

25 EFFICIENCY ASSESSMENT.—Of amounts made available 


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1 under subsection (a), the Secretary shall use for wind re2 source modeling and wind farm efficiency assessment— 

3 ‘‘(1) $5,000,000 for fiscal year 2011; 

4 ‘‘(2) $6,000,000 for fiscal year 2012; 

5 ‘‘(3) $7,000,000 for fiscal year 2013; 

6 ‘‘(4) $8,000,000 for fiscal year 2014; and 

7 ‘‘(5) $10,000,000 for fiscal year 2015. 

8 ‘‘(i) WIND ENERGY SITING.—Of amounts made 

9 available under subsection (a), the Secretary shall use for 

10 wind energy siting, including funding for public education 

11 on siting issues, studies on sound emissions and health 

12 effects, enhanced ground data modeling verification, and 

13 the creation of a national wind siting database— 

14 ‘‘(1) $6,000,000 for fiscal year 2011; 

15 ‘‘(2) $8,000,000 for fiscal year 2012; 

16 ‘‘(3) $10,000,000 for fiscal year 2013; 

17 ‘‘(4) $13,000,000 for fiscal year 2014; and 

18 ‘‘(5) $16,000,000 for fiscal year 2015. 

19 ‘‘(j) SMALL WIND ENERGY SYSTEMS.—Of amounts 

20 made available under subsection (a), the Secretary shall 

21 use for testing, demonstrating, and deploying small wind 

22 energy systems in rural school applications— 

23 ‘‘(1) $5,000,000 for fiscal year 2011; 

24 ‘‘(2) $7,000,000 for fiscal year 2012; 

25 ‘‘(3) $9,000,000 for fiscal year 2013; 


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1 ‘‘(4) $10,000,000 for fiscal year 2014; and 

2 ‘‘(5) $10,500,000 for fiscal year 2015.’’. 

3 SEC. 402. WIND ENERGY DEVELOPMENT STUDY. 

4 The Secretary, in consultation with appropriate Fed5 eral and State agencies, shall conduct, and submit to Con6 gress a report describing the results of, a study on meth7 ods to increase transmission line capacity for wind energy 

8 development. 

9 SEC. 403. REMOVAL OF CERTAIN TAX RESTRICTIONS TO 

10 PROMOTE EXPANSION OF CAPITAL FOR WIND 

11 FARM INVESTMENT. 

12 (a) EXEMPTION FROM PASSIVE LOSS RULES.— 

13 (1) IN GENERAL.—Section 469(c) of the Inter14 nal Revenue Code of 1986 (defining passive activity) 

15 is amended by adding at the end the following new 

16 paragraph: 

17 ‘‘(8) CERTAIN RENEWABLE ENERGY FACILI18 TIES.—The term ‘passive activity’ shall not include 

19 any trade or business involving ownership of 1 or 

20 more facilities described in section 45(d)(1).’’. 

21 (2) EFFECTIVE DATE.—The amendment made 

22 by this subsection shall apply to taxable years begin23 ning after December 31, 2010. 

24 (b) APPLICATION OF AT-RISK RULES.— 


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1 (1) IN GENERAL.—Section 465(b)(6) of the In2 ternal Revenue Code of 1986 (relating to qualified 

3 nonrecourse financing treated as amount at risk) is 

4 amended— 

5 (A) by inserting ‘‘or renewable energy 

6 property’’ after ‘‘real property’’ each place it 

7 appears in subparagraphs (A) and (B)(i), and 

8 (B) by adding at the end the following new 

9 subparagraph: 

10 ‘‘(F) RENEWABLE ENERGY PROPERTY.— 

11 The term ‘renewable energy property’ means 

12 property described in section 45(d)(1).’’. 

13 (2) EFFECTIVE DATE.—The amendments made 

14 by this subsection shall apply to losses incurred after 

15 December 31, 2010, with respect to property placed 

16 in service by the taxpayer after such date. 

17 (c) TREATMENT OF INCOME AND GAINS FROM WIND

18 ENERGY AS QUALIFYING INCOME FOR PUBLICLY TRADED

19 PARTNERSHIPS.— 

20 (1) IN GENERAL.—Section 7704(d) of the In21 ternal Revenue Code of 1986 (defining qualifying in22 come) is amended— 

23 (A) by inserting ‘‘wind energy,’’ after ‘‘fer24 tilizer,’’ in paragraph (1)(E), and 


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1 (B) by adding at the end the following new 

2 paragraph: 

3 ‘‘(6) WIND ENERGY.—For purposes of para4 graph (1)(E), income and gains from wind energy 

5 include amounts realized from the sale of renewable 

6 energy credits, pollution allowances, and other envi7 ronmental attributes.’’. 

8 (2) EFFECTIVE DATE.—The amendments made 

9 by this subsection shall apply on the date of enact10 ment of this Act. 

11 (d) ANTI-ABUSE RULES.—The Secretary of Treasury 

12 or the Secretary’s designee shall prescribe such rules as 

13 are necessary to prevent the abuse of the purposes of the 

14 amendments made by this section. 

15 TITLE V—RENEWABLE ENERGY 

16 TAX EXTENSIONS 

17 SEC. 501. EXTENSION OF PROVISIONS RELATED TO ALCO18 HOL USED AS FUEL. 

19 (a) EXTENSION OF INCOME TAX CREDIT FOR ALCO20 HOL USED AS FUEL.— 

21 (1) IN GENERAL.—Paragraph (1) of section 

22 40(e) of the Internal Revenue Code of 1986 is 

23 amended— 


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1 (A) by striking ‘‘December 31, 2010’’ in 

2 subparagraph (A) and inserting ‘‘December 31, 

3 2015’’, and 

4 (B) by striking ‘‘January 1, 2011’’ in sub5 paragraph (B) and inserting ‘‘January 1, 

6 2016’’. 

7 (2) CELLULOSIC BIOFUEL.—Subparagraph (H) 

8 of section 40(b)(6) of such Code is amended by 

9 striking ‘‘January 1, 2013’’ and inserting ‘‘January 

10 1, 2016’’. 

11 (3) REDUCED AMOUNT FOR ETHANOL BLEND12 ERS.—Paragraph (2) of section 40(h) of such Code 

13 is amended by striking ‘‘2010’’ and inserting 

14 ‘‘2015’’. 

15 (4) EFFECTIVE DATE.—The amendments made 

16 by this subsection shall take effect on the date of the 

17 enactment of this Act. 

18 (b) EXTENSION OF EXCISE TAX CREDIT FOR ALCO19 HOL USED AS FUEL.— 

20 (1) IN GENERAL.—Paragraph (6) of section 

21 6426(b) of the Internal Revenue Code of 1986 is 

22 amended by striking ‘‘December 31, 2010’’ and in23 serting ‘‘December 31, 2015’’. 


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1 (2) EFFECTIVE DATE.—The amendment made 

2 by this subsection shall take effect on the date of the 

3 enactment of this Act. 

4 (c) EXTENSION OF ADDITIONAL DUTIES ON ETH5 ANOL.—Headings 9901.00.50 and 9901.00.52 of the Har6 monized Tariff Schedule of the United States are each 

7 amended in the effective period column by striking ‘‘1/1/ 

8 2011’’ and inserting ‘‘1/1/2016’’. 

9 SEC. 502. EXTENSION OF TIME FOR GRANTS FOR SPECI10 FIED ENERGY PROPERTY. 

11 (a) IN GENERAL.—Paragraph (2) of section 1603(a) 

12 of division B of the American Recovery and Reinvestment 

13 Act of 2009 is amended by striking ‘‘began during 2009 

14 or 2010’’ and inserting ‘‘begins before 2013’’. 

15 (b) APPLICATION DEADLINE.—Subsection (j) of sec16 tion 1603(a) of division B of such Act is amended by strik17 ing ‘‘October 1, 2011’’ and inserting ‘‘December 31, 

18 2012’’. 

19 SEC. 503. INCENTIVES FOR BIODIESEL AND RENEWABLE 

20 DIESEL. 

21 (a) CREDITS FOR BIODIESEL AND RENEWABLE DIE22 SEL USED AS FUEL.—Subsection (g) of section 40A of 

23 the Internal Revenue Code of 1986 is amended by striking 

24 ‘‘December 31, 2009’’ and inserting ‘‘December 31, 

25 2012’’. 


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1 (b) EXCISE TAX CREDITS AND OUTLAY PAYMENTS

2 FOR BIODIESEL AND RENEWABLE DIESEL FUEL MIX3 TURES.— 

4 (1) Paragraph (6) of section 6426(c) of the In5 ternal Revenue Code of 1986 is amended by striking 

6 ‘‘December 31, 2009’’ and inserting ‘‘December 31, 

7 2012’’. 

8 (2) Subparagraph (B) of section 6427(e)(6) of 

9 the Internal Revenue Code of 1986 is amended by 

10 striking ‘‘December 31, 2009’’ and inserting ‘‘De11 cember 31, 2012’’. 

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

13 this section shall apply to fuel sold or used after December 

14 31, 2009. 

15 TITLE VI—RENEWABLE ELEC16 TRICITY INTEGRATION CRED17 IT 

18 SEC. 601. RENEWABLE ELECTRICITY INTEGRATION CREDIT. 

19 (a) BUSINESS CREDIT.— 

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

21 subchapter A of chapter 1 of the Internal Revenue 

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

23 following new section: 


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1 ‘‘SEC. 45S. RENEWABLE ELECTRICITY INTEGRATION CRED2 IT. 

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

4 in the case of an eligible taxpayer, the renewable electricity 

5 integration credit for any taxable year is an amount equal 

6 to the product of— 

7 ‘‘(1) the intermittent renewable portfolio factor 

8 of such eligible taxpayer, and 

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

10 electricity— 

11 ‘‘(A) purchased or produced by such tax12 payer, and 

13 ‘‘(B) sold by such taxpayer to a retail cus14 tomer during the taxable year. 

15 ‘‘(b) INTERMITTENT RENEWABLE PORTFOLIO FAC16 TOR.— 

17 ‘‘(1) YEARS BEFORE 2017.—In the case of tax18 able years beginning before January 1, 2017, the 

19 intermittent renewable portfolio factor for an eligible 

20 taxpayer shall be determined as follows: 

‘‘In the case of an 

eligible taxpayer 

whose intermittent 

renewable electricity percentage 

is: 

For taxable years 

beginning before 

2012, the intermittent renewable 

portfolio factor is: 

For taxable years 

beginning in or 

after 2012, the 

intermittent renewable portfolio factor is: 

Less than 4 percent ....... zero cents zero cents 

At least 4 percent but 

less than 8 percent ..... 0.1 cents zero cents 

At least 8 percent but 

less than 12 percent ... 0.2 cents 0.2 cents 


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‘‘In the case of an 

eligible taxpayer 

whose intermittent 

renewable electricity percentage 

is: 

For taxable years 

beginning before 

2012, the intermittent renewable 

portfolio factor is: 

For taxable years 

beginning in or 

after 2012, the 

intermittent renewable portfolio factor is: 

At least 12 percent but 

less than 16 percent ... 0.3 cents 0.3 cents 

At least 16 percent but 

less than 20 percent ... 0.4 cents 0.4 cents 

At least 20 percent but 

less than 24 percent ... 0.5 cents 0.5 cents 

Equal to or greater than 

24 percent .................. 0.6 cents 0.6 cents 

1 ‘‘(2) YEARS AFTER 2016.—In the case of tax2 able years beginning after December 31, 2016, the 

3 intermittent renewable portfolio factor for an eligible 

4 taxpayer shall be determined as follows: 

‘‘In the case of an 

eligible taxpayer 

whose intermittent 

renewable electricity percentage 

is: 

For taxable years 

beginning before 

2019, the intermittent renewable 

portfolio factor is: 

For taxable years 

beginning in or 

after 2019, the 

intermittent renewable portfolio factor is: 

Less than 10 percent ..... zero cents zero cents 

At least 10 percent but 

less than 12 percent ... 0.2 cents zero cents 

At least 12 percent but 

less than 16 percent ... 0.3 cents 0.15 cents 

At least 16 percent but 

less than 20 percent ... 0.4 cents 0.4 cents 

At least 20 percent but 

less than 24 percent ... 0.5 cents 0.5 cents 

Equal to or greater than 

24 percent .................. 0.6 cents 0.6 cents 

5 ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur6 poses of this section— 

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

8 taxpayer’ means an electric utility (as defined in sec9 tion 3(22) of the Federal Power Act, (16 U.S.C. 

10 796(22)). 


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1 ‘‘(2) RENEWABLE ELECTRICITY.—The term ‘re2 newable electricity’ means electricity generated by— 

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

4 such electricity; 

5 ‘‘(B) any facility using solar energy to gen6 erate such electricity; or 

7 ‘‘(C) any facility using any other intermit8 tent renewable energy source which the Sec9 retary of Energy determines has a capacity fac10 tor of less than 50 percent on an annual basis. 

11 ‘‘(3) INTERMITTENT RENEWABLE ELECTRICITY

12 PERCENTAGE.—The term ‘intermittent renewable 

13 electricity percentage’ means the percentage of an el14 igible taxpayer’s total sales of electricity to retail 

15 customers that is derived from renewable electricity 

16 (determine without regard to whether such elec17 tricity was produced by the taxpayer). 

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

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

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

21 apply. 

22 ‘‘(5) CREDIT ALLOWED ONLY WITH RESPECT

23 TO 1 ELIGIBLE ENTITY.—No credit shall be allowed 

24 under subsection (a) with respect to renewable elec25 tricity purchased from another eligible entity if a 


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1 credit has been allowed under this section or a pay2 ment has been made under section 6433 to such 

3 other eligible entity. 

4 ‘‘(d) CREDIT DISALLOWED UNLESS CREDIT PASSED

5 TO THIRD PARTY GENERATORS CHARGED FOR INTEGRA6 TION COSTS.— 

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

8 electricity eligible for the credit under subsection (a) 

9 that is purchased and not produced by an eligible 

10 taxpayer, no credit shall be allowed unless any 

11 charge the taxpayer has assessed the seller to re12 cover the integration costs associated with such elec13 tricity has been reduced (but not below zero) to the 

14 extent of the credit received under subsection (a) as15 sociated with such electricity. 

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

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

18 not include amounts paid by the producer of the 

19 electricity for interconnection facilities, distribution 

20 upgrades, network upgrades, or stand alone network 

21 upgrades as those terms have been defined by the 

22 Federal Energy Regulatory Commission in its 

23 Standard Interconnection Procedures. 

24 ‘‘(e) COORDINATION WITH PAYMENTS.—The amount 

25 of the credit determined under this section with respect 


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

2 payment provided with respect to such electricity solely by 

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

4 (2) CREDIT MADE PART OF GENERAL BUSINESS

5 CREDIT.—Subsection (b) of section 38 of the Inter6 nal Revenue Code of 1986 is amended by striking 

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

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

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

10 paragraph: 

11 ‘‘(37) the renewable electricity integration cred12 it determined under section 45S(a).’’. 

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

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

15 1986 is amended by redesignating clauses (vii) 

16 through (ix) as clauses (viii) through (x), respec17 tively, and by inserting after clause (v) the following 

18 new clause: 

19 ‘‘(vi) the credit determined under sec20 tion 45S.’’. 

21 (4) CLERICAL AMENDMENT.—The table of sec22 tions for subpart D of part IV of subchapter A of 

23 chapter 1 of the Internal Revenue Code of 1986 is 

24 amended by adding at the end the following new 

25 item: 

‘‘Sec. 45S. Renewable electricity integration credit.’’. 


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1 (b) PAYMENTS IN LIEU OF CREDIT.— 

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

3 of the Internal Revenue Code of 1986 is amended by 

4 adding at the end the following new section: 

5 ‘‘SEC. 6433. RENEWABLE ELECTRICITY INTEGRATION PAY6 MENTS. 

7 ‘‘(a) IN GENERAL.—If any eligible person sells re8 newable electricity to a retail customer, the Secretary shall 

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

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

11 ‘‘(1) the intermittent renewable portfolio factor 

12 of such eligible person; and 

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

14 electricity— 

15 ‘‘(A) purchased or produced by such per16 son; and 

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

18 business of such person to a retail customer. 

19 ‘‘(b) TIMING OF PAYMENTS.— 

20 ‘‘(1) IN GENERAL.—Except as provided in para21 graph (2), rules similar to the rules of section 

22 6427(i)(1) shall apply for purposes of this section. 

23 ‘‘(2) QUARTERLY PAYMENTS.— 

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

25 quarter of the taxable year of any person, at 


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1 least $750 is payable in the aggregate under 

2 subsection (a), to such person with respect to 

3 electricity purchased or produced during— 

4 ‘‘(i) such quarter; or 

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

6 other claim has been filed) during such 

7 taxable year, a claim may be filed under 

8 this section with respect to such electricity. 

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

10 filed under this paragraph shall be allowed un11 less filed on or before the last day of the first 

12 quarter following the earliest quarter included 

13 in the claim. 

14 ‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur15 poses of this section: 

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

17 person’ means an electric utility (as defined in sec18 tion 3(22) of the Federal Power Act, (16 U.S.C. 

19 796(22)). 

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

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

22 have the meaning given such term under section 

23 45S. 


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

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

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

4 ‘‘(d) PAYMENT DISALLOWED UNLESS AMOUNT

5 PASSED TO THIRD PARTY GENERATORS CHARGED FOR

6 INTEGRATION COSTS.— 

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

8 electricity eligible for the payment under subsection 

9 (a) that is purchased and not produced by an eligi10 ble person, no payment shall be made under this sec11 tion unless any charge the eligible person has as12 sessed the seller to recover the integration costs as13 sociated with such electricity has been reduced (but 

14 not below zero) to the extent of the payment re15 ceived under subsection (a) associated with such 

16 electricity. 

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

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

19 not include amounts paid by the producer of the 

20 electricity for interconnection facilities, distribution 

21 upgrades, network upgrades, or stand alone network 

22 upgrades as those terms have been defined by the 

23 Federal Energy Regulatory Commission in its 

24 Standard Interconnection Procedures.’’. 


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1 (2) CLERICAL AMENDMENT.—The table of sec2 tions for subpart B of chapter 65 of the Internal 

3 Revenue Code of 1986 is amended by adding at the 

4 end the following new item: 

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

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

6 this section shall apply to electricity produced or pur7 chased after December 31, 2009. 

Æ 


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