```

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 1359 Introduced in Senate (IS)]

<DOC>

116th CONGRESS
  1st Session
                                S. 1359

    To amend the Public Utility Regulatory Policies Act of 1978 to 
    establish a market-oriented standard for clean electric energy 
                  generation, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                              May 8, 2019

 Ms. Smith (for herself, Mr. Heinrich, Mr. Kaine, Mr. Whitehouse, and 
  Mr. Schatz) introduced the following bill; which was read twice and 
       referred to the Committee on Energy and Natural Resources

_______________________________________________________________________

                                 A BILL

 
    To amend the Public Utility Regulatory Policies Act of 1978 to 
    establish a market-oriented standard for clean electric energy 
                  generation, and for other purposes.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Clean Energy Standard Act of 2019''.

SEC. 2. FEDERAL CLEAN ENERGY STANDARD.

    (a) In General.--Title VI of the Public Utility Regulatory Policies 
Act of 1978 (16 U.S.C. 2601 et seq.) is amended by adding at the end 
the following:

``SEC. 610. FEDERAL CLEAN ENERGY STANDARD.

    ``(a) Purpose.--The purpose of this section is to establish a 
technology-neutral, market-oriented standard for electric energy 
generation that--
            ``(1) stimulates clean energy innovation and allows the 
        United States to achieve a net-zero emission electric sector at 
        the lowest cost;
            ``(2) will guide power sector investment and provide 
        regulatory certainty, while helping to ensure that the United 
        States is the leader and dominant competitor in the global 
        clean energy transition; and
            ``(3) will result in--
                    ``(A) hundreds of billions of dollars in domestic 
                health and environmental benefits by the mid-21st 
                century; and
                    ``(B) save tens of thousands of lives in the United 
                States.
    ``(b) Definitions.--In this section:
            ``(1) Applicable carbon intensity.--The term `applicable 
        carbon intensity' means 0.4 metric tons of carbon dioxide 
        equivalent per megawatt-hour.
            ``(2) Applicable clean energy percentage.--The term 
        `applicable clean energy percentage', with respect to a retail 
        electricity supplier, means the clean energy percentage 
        applicable to the retail electricity supplier for the relevant 
        calendar year under subsection (c).
            ``(3) Base quantity.--
                    ``(A) In general.--The term `base quantity', with 
                respect to a retail electricity supplier for a calendar 
                year, means the total quantity of electric energy 
                consumed by electric customers of the retail 
                electricity supplier, expressed in megawatt-hours, 
                during the calendar year, including--
                            ``(i) the quantity of electric energy sold 
                        by the retail electricity supplier to electric 
                        customers for purposes other than resale; and
                            ``(ii) the quantity of behind-the-meter 
                        generation consumed by electric consumers 
                        served by the retail electricity supplier.
                    ``(B) Determination.--For purposes of subparagraph 
                (A), not later than 180 days after the date of 
                enactment of this section, the Secretary shall develop 
                appropriate processes for determining the quantity of 
                behind-the-meter generation consumed by electric 
                consumers served by a retail electricity supplier, 
                including by requiring from the retail electricity 
                supplier relevant documentation of behind-the-meter 
                electric energy consumption, such as records associated 
                with net-metering.
            ``(4) Baseline percentage.--The term `baseline percentage' 
        means--
                    ``(A) for a retail electricity supplier in 
                operation on the date of enactment of this section, the 
                clean energy percentage of the retail electricity 
                supplier calculated for the calendar year in which this 
                section is enacted; and
                    ``(B) for a retail electricity supplier that 
                commences operation after the date of enactment of this 
                section, such clean energy percentage as the Secretary 
                determines to be appropriate.
            ``(5) Behind-the-meter generation.--The term `behind-the-
        meter generation' means the generation of clean energy using a 
        system that operates on the customer side of the applicable 
        utility meter, subject to the condition that the retail 
        electricity supplier serving the generator shall submit to the 
        Secretary, not less frequently than annually, verification of 
        the quantity of that generation in such form, in such manner, 
        and containing such information as the Secretary may require.
            ``(6) Carbon dioxide equivalent.--
                    ``(A) In general.--The term `carbon dioxide 
                equivalent' means the number of metric tons of carbon 
                dioxide emissions with the same global warming 
                potential over a 100-year period as 1 metric ton of 
                another greenhouse gas.
                    ``(B) Global warming potential.--For purposes of 
                subparagraph (A), global warming potential shall be 
                determined in accordance with the Fifth Assessment 
                Report of the Intergovernmental Panel on Climate 
                Change.
            ``(7) Carbon intensity.--The term `carbon intensity' means 
        the carbon dioxide equivalent emissions associated with the 
        generation of 1 megawatt-hour of electric energy by a 
        generator.
            ``(8) Clean energy.--The term `clean energy' means electric 
        energy that is--
                    ``(A) generated at a facility using--
                            ``(i) renewable energy;
                            ``(ii) qualified renewable biomass;
                            ``(iii) hydropower;
                            ``(iv) nuclear power;
                            ``(v) qualified waste-to-energy;
                            ``(vi) qualified low-carbon fuels;
                            ``(vii) a qualified combined heat and power 
                        system; or
                            ``(viii) any other source of energy in a 
                        manner that ensures that the facility does not 
                        exceed the applicable carbon intensity;
                    ``(B) generated at a facility that--
                            ``(i) captures the carbon dioxide from--
                                    ``(I) a waste stream of the 
                                facility;
                                    ``(II) another waste stream; or
                                    ``(III) the atmosphere directly; 
                                and
                            ``(ii) prevents the release of the captured 
                        carbon dioxide into the atmosphere; or
                    ``(C) dispatched from a qualified energy storage 
                system.
            ``(9) Clean energy percentage.--
                    ``(A) In general.--The term `clean energy 
                percentage' means the percentage of clean energy 
                consumed by all electric consumers of a retail 
                electricity supplier.
                    ``(B) Calculation.--For purposes of subparagraph 
                (A), the clean energy percentage of a retail 
                electricity supplier shall be equal to the quotient 
                obtained by dividing--
                            ``(i) the sum of--
                                    ``(I) the quantity of clean energy 
                                sold by the retail electricity supplier 
                                to electric consumers; and
                                    ``(II) the quantity of behind-the-
                                meter generation consumed by electric 
                                consumers served by the retail 
                                electricity supplier; by
                            ``(ii) the base quantity of the retail 
                        electricity supplier.
                    ``(C) Determination.--
                            ``(i) In general.--For purposes of 
                        subparagraph (B), not later than 180 days after 
                        the date of enactment of this section, the 
                        Secretary shall develop a process for 
                        determining the quantities of--
                                    ``(I) clean energy sold by a retail 
                                electricity supplier to electric 
                                consumers, taking into account--
                                            ``(aa) the need to 
                                        quantify, without double 
                                        counting, appropriate 
                                        quantities of clean energy--

                                                    ``(AA) owned by the 
                                                retail electricity 
                                                supplier;

                                                    ``(BB) obtained by 
                                                the retail electricity 
                                                supplier through power 
                                                purchase agreements;

                                                    ``(CC) imported by 
                                                the retail electricity 
                                                supplier;

                                                    ``(DD) purchased by 
                                                the retail electricity 
                                                supplier from wholesale 
                                                markets; and

                                                    ``(EE) purchased by 
                                                the retail electricity 
                                                supplier through 
                                                existing renewable or 
                                                clean energy credits 
                                                and certificates; and

                                            ``(bb) appropriate 
                                        differences between--

                                                    ``(AA) retailers 
                                                operating in organized 
                                                wholesale markets; and

                                                    ``(BB) retailers 
                                                operating in vertically 
                                                integrated market 
                                                contexts; and

                                    ``(II) behind-the-meter generation 
                                consumed by electric consumers served 
                                by a retail electricity supplier, 
                                including by requiring from the retail 
                                electricity supplier relevant 
                                documentation of behind-the-meter 
                                electric energy consumption, such as 
                                records associated with net-metering.
                            ``(ii) Quantifying clean energy.--For 
                        purposes of quantifying clean energy and 
                        behind-the-meter generation under clause (i), 
                        the Secretary shall use the methods used to 
                        assign a quantity of credits to generators 
                        under subsection (f).
            ``(10) Dispatchable low-emission technology.--The term 
        `dispatchable low-emission technology' means a generator that 
        uses a technology or combination of technologies that--
                    ``(A) has a carbon intensity of not more than 0.05 
                metric tons of carbon dioxide equivalent per megawatt-
                hour;
                    ``(B) has the ability, at any time, to start, 
                increase, decrease, and stop energy production on 
                demand;
                    ``(C) is placed into service after the date of 
                enactment of this section; and
                    ``(D) is not a dispatchable zero-emission 
                technology.
            ``(11) Dispatchable zero-emission technology.--The term 
        `dispatchable zero-emission technology' means a generator that 
        uses a technology or combination of technologies that--
                    ``(A) has a carbon intensity of zero;
                    ``(B) has the ability, at any time, to start, 
                increase, decrease, and stop energy production on 
                demand; and
                    ``(C) is placed into service after the date of 
                enactment of this section.
            ``(12) Energy storage system.--The term `energy storage 
        system' means any equipment or facility relating to the 
        electric grid that--
                    ``(A) is capable of absorbing energy, storing the 
                energy for a period of time, and dispatching the energy 
                as electric energy; and
                    ``(B) uses mechanical, electrochemical, 
                biochemical, or thermal processes--
                            ``(i) to store energy generated at an 
                        earlier time for use at a later time; or
                            ``(ii) to store energy generated from a 
                        mechanical process that would otherwise be 
                        wasted for delivery at a later time.
            ``(13) Federal clean energy credit.--The term `Federal 
        clean energy credit' means a credit issued pursuant to 
        subsection (e).
            ``(14) Generator.--The term `generator' means a unit or 
        system of units that--
                    ``(A) generates not fewer than 20 megawatt-hours of 
                electric energy per calendar year;
                    ``(B) delivers electric energy to the grid; and
                    ``(C) is located in the United States.
            ``(15) Lifecycle greenhouse gas emissions.--The term 
        `lifecycle greenhouse gas emissions' means the aggregate 
        quantity of carbon dioxide equivalent emissions relating to the 
        full lifecycle of electric energy production, including--
                    ``(A) extraction, production, and distribution of 
                fuels and materials for physical capital;
                    ``(B) power generation and transmission; and
                    ``(C) handling and disposal of waste, byproducts, 
                and end-of-life materials.
            ``(16) Qualified combined heat and power system.--The term 
        `qualified combined heat and power system' means a system 
        that--
                    ``(A) uses the same energy source for the 
                simultaneous or sequential generation of electrical 
                energy and thermal energy;
                    ``(B) produces at least--
                            ``(i) 20 percent of the useful energy of 
                        the system in the form of electricity; and
                            ``(ii) 20 percent of the useful energy in 
                        the form of useful thermal energy;
                    ``(C) to the extent that the system uses biomass, 
                uses only qualified renewable biomass; and
                    ``(D) operates with an energy efficiency 
                percentage, as determined in accordance with section 
                48(c)(3)(C)(i) of the Internal Revenue Code of 1986, of 
                greater than 50 percent.
            ``(17) Qualified dispatchable.--
                    ``(A) In general.--The term `qualified 
                dispatchable' means--
                            ``(i) with respect to a dispatchable low-
                        emission technology, a dispatchable low-
                        emission technology that--
                                    ``(I) is 1 of the first 5 original 
                                demonstrations in the United States of 
                                a particular innovative technology 
                                providing not less than 20 megawatts of 
                                electric energy generation capacity;
                                    ``(II) generates revenue from the 
                                sale of electric energy; and
                                    ``(III) is placed into service 
                                before January 1, 2030; and
                            ``(ii) with respect to a dispatchable zero-
                        emission technology, means a dispatchable zero-
                        emission technology that--
                                    ``(I) is 1 of the first 5 original 
                                demonstrations in the United States of 
                                a particular innovative technology 
                                providing not less than 20 megawatts of 
                                electric energy generation capacity;
                                    ``(II) generates revenue from the 
                                sale of electric energy; and
                                    ``(III) is placed into service 
                                before January 1, 2040.
                    ``(B) Determination.--For purposes of determining 
                whether a dispatchable low-emission technology or 
                dispatchable zero-emission technology is an original 
                demonstration of an innovative technology under clause 
                (i)(I) or (ii)(I), respectively, of subparagraph (A), 
                the Secretary shall--
                            ``(i) develop a process that--
                                    ``(I) ensures that each innovative 
                                technology exhibits a significant 
                                technical or economic advancement, as 
                                compared to existing technologies; and
                                    ``(II) includes consideration of an 
                                application submitted to the Secretary 
                                by the owner of the dispatchable low-
                                emission technology or dispatchable 
                                zero-emission technology;
                            ``(ii) not later than 90 days after the 
                        date of submission of an application under 
                        clause (i)(II), make a determination regarding 
                        whether to approve the application; and
                            ``(iii) subject to subparagraph (C), 
                        provide to each owner, the application of which 
                        is approved under clause (ii), a 
                        certification--
                                    ``(I) that the applicable generator 
                                is a qualified dispatchable low-
                                emission technology or dispatchable 
                                zero-emission technology; and
                                    ``(II) that shall be surrendered to 
                                earn Federal clean energy credits under 
                                subsection (f)(10).
                    ``(C) Termination of certification.--Except as 
                otherwise provided by the Secretary, a certification 
                provided under subparagraph (B)(iii) shall cease to 
                have any force or effect if the Secretary determines 
                that construction of the applicable generator--
                            ``(i) does not commence by the date that is 
                        2 years after the date of certification; or
                            ``(ii) has been suspended indefinitely.
            ``(18) Qualified energy storage system.--The term 
        `qualified energy storage system' means an energy storage 
        system that stores clean energy--
                    ``(A) that would otherwise be wasted or curtailed;
                    ``(B) with verifiable carbon intensity that does 
                not exceed the applicable carbon intensity; and
                    ``(C) for which no Federal clean energy credit is 
                issued.
            ``(19) Qualified generation.--The term `qualified 
        generation' means the number of megawatt-hours of electric 
        energy that a generator--
                    ``(A)(i) generates; or
                    ``(ii) generates and stores using a connected 
                energy storage system; and
                    ``(B)(i) sells for resale;
                    ``(ii) if the generator is owned by a retail 
                electricity supplier, sells to electric consumers; or
                    ``(iii) if the generator is a behind-the-meter 
                generation system, consumes onsite for a useful 
                purpose.
            ``(20) Qualified low-carbon fuel.--
                    ``(A) In general.--The term `qualified low-carbon 
                fuel' means a fuel used to generate electric energy 
                that--
                            ``(i) is produced through any process (but 
                        not including any processes that use electric 
                        energy as an input) that significantly limits 
                        or avoids greenhouse gas emissions; and
                            ``(ii) does not release greenhouse gas or 
                        other pollutant emissions during combustion.
                    ``(B) Inclusion.--The term `qualified low-carbon 
                fuel' includes--
                            ``(i) ammonia; and
                            ``(ii) hydrogen.
            ``(21) Qualified renewable biomass.--The term `qualified 
        renewable biomass' means--
                    ``(A) any crop byproduct or crop residue harvested 
                from actively managed or fallow agricultural land that 
                is cleared before the date of enactment of this 
                section, if the harvesting of the residue does not lead 
                to a net decline in soil organic matter for the 
                applicable land;
                    ``(B) any planted tree, brush, slash, or residue 
                from an actively managed tree farm dedicated to energy 
                crop production and located on forest land established 
                for planted tree crop production before the date of 
                enactment of this section;
                    ``(C) any brush, slash, or residue from an actively 
                managed forest that is certified to achieve compliance 
                with applicable--
                            ``(i) sustainability standards of the 
                        Forest Stewardship Council; or
                            ``(ii) standards endorsed by the Programme 
                        for the Endorsement of Forest Certification, 
                        including--
                                    ``(I) the Sustainable Forestry 
                                Initiative; and
                                    ``(II) the American Tree Farm 
                                System;
                    ``(D) algae;
                    ``(E) nonhazardous plant matter derived from 
                landscape right-of-way trimmings; and
                    ``(F) vegetative matter removed from an area 
                located not more than 200 yards from a building, 
                residence, or campground for the purpose of hazardous 
                fuels management.
            ``(22) Qualified waste-to-energy.--The term `qualified 
        waste-to-energy' means energy produced--
                    ``(A) from the combustion of--
                            ``(i) post-recycled municipal solid waste;
                            ``(ii) gas produced from the gasification 
                        or pyrolization of post-recycled municipal 
                        solid waste;
                            ``(iii) biogas;
                            ``(iv) landfill methane;
                            ``(v) animal waste or animal byproducts;
                            ``(vi) food waste;
                            ``(vii) wood, paper products that are not 
                        commonly recyclable, and vegetation (including 
                        trees and trimmings, yard waste, pallets, 
                        railroad ties, crates, and solid-wood 
                        manufacturing and construction debris), if 
                        diverted from or separated from other waste out 
                        of a municipal waste stream; or
                            ``(viii) any byproduct of a wood or paper 
                        mill operation, including lignin in spent 
                        pulping liquors; and
                    ``(B) at a facility that the Secretary has 
                certified, on an annual basis, is in compliance with 
                all applicable Federal and State environmental permits, 
                including--
                            ``(i) in the case of a facility that 
                        commences operation before the date of 
                        enactment of this section, compliance with 
                        emission standards under sections 112 and, as 
                        applicable, 129 of the Clean Air Act (42 U.S.C. 
                        7412, 7429) that apply as of the date of 
                        enactment of this section to new facilities 
                        within the applicable source category; and
                            ``(ii) in the case of a facility that 
                        produces electric or thermal energy from the 
                        combustion, pyrolization, or gasification of 
                        municipal solid waste, certification that each 
                        local government unit from which the waste 
                        originates operates, participates in the 
                        operation of, contracts for, or otherwise 
                        provides for recycling services for residents 
                        of the local government unit.
            ``(23) Renewable energy.--The term `renewable energy' means 
        solar, wind, ocean, current, wave, tidal, or geothermal energy.
            ``(24) Retail electricity supplier.--
                    ``(A) In general.--The term `retail electricity 
                supplier', as determined for each calendar year, means 
                an entity in the United States that sold not fewer than 
                20 megawatt-hours of electric energy to electric 
                consumers for purposes other than resale during the 
                preceding calendar year.
                    ``(B) Inclusions and limitations.--For purposes of 
                making a determination under subparagraph (A) with 
                respect to an entity--
                            ``(i) any sale of electric energy made by 
                        an affiliate of the entity to an electric 
                        consumer (other than to a lessee or tenant of 
                        the affiliate) for purposes other than resale 
                        may be considered to be a sale made by the 
                        entity; and
                            ``(ii) any sale of electric energy made by 
                        the entity to an affiliate, lessee, or tenant 
                        of the entity shall not be considered to be a 
                        sale to an electric consumer.
                    ``(C) Affiliate.--For purposes of subparagraph (B), 
                the term `affiliate', with respect to an entity, means 
                an individual or entity that directly or indirectly 
                owns or controls, is owned or controlled by, or is 
                under common ownership or control with, the entity, as 
                determined in accordance with applicable regulations of 
                the Secretary.
    ``(c) Clean Energy Requirement.--
            ``(1) In general.--Beginning in the second full calendar 
        year beginning after the date of enactment of this section, and 
        each calendar year thereafter, each retail electricity supplier 
        shall sell a quantity of clean energy equal to the product 
        obtained by multiplying--
                    ``(A) the applicable clean energy percentage 
                determined for the retail electricity supplier for the 
                calendar year under paragraph (2); and
                    ``(B) the base quantity of the retail electricity 
                supplier for the applicable calendar year.
            ``(2) Determination of applicable clean energy 
        percentages.--
                    ``(A) Initial percentage.--
                            ``(i) Use of baseline percentage.--For 
                        purposes of the determinations required under 
                        subparagraphs (B) and (C), the applicable clean 
                        energy percentage for a retail electricity 
                        supplier for the calendar year during which 
                        this section is enacted shall be the baseline 
                        percentage of the retail electricity supplier.
                            ``(ii) New retail electricity suppliers.--
                        For purposes of the determinations required 
                        under subparagraphs (B) and (C), for a retail 
                        electricity supplier that is established after 
                        the date of enactment of this section, the 
                        Secretary shall determine the appropriate 
                        applicable clean energy percentage for the 
                        first calendar year beginning after the date on 
                        which the retail electricity supplier commences 
                        operation.
                    ``(B) Subsequent determinations.--Subject to 
                paragraph (3), for the first calendar year beginning 
                after the date of enactment of this section and each 
                calendar year thereafter until the calendar year for 
                which the applicable clean energy percentage for a 
                retail electricity supplier is 90 percent, the 
                applicable clean energy percentage for the retail 
                electricity supplier under paragraph (1) shall be--
                            ``(i) in the case of a retail electricity 
                        supplier with not less than 2,000,000 megawatt-
                        hours of retail electric energy sales during 
                        the calendar year in which this section is 
                        enacted, or a retail electricity supplier with 
                        less than 2,000,000 megawatt-hours of retail 
                        electric energy sales during that calendar year 
                        but more than 2,000,000 megawatt-hours of 
                        retail electric energy sales during a 
                        subsequent calendar year due to a merger or the 
                        acquisition of additional territory, the 
                        applicable clean energy percentage for the 
                        retail electricity supplier for the preceding 
                        calendar year, as increased--
                                    ``(I) for any calendar year for 
                                which the applicable clean energy 
                                percentage of the retail electricity 
                                supplier is not more than 60 percent, 
                                by the fast growth rate for the 
                                calendar year, as determined under 
                                paragraph (3)(B); and
                                    ``(II) for any calendar year for 
                                which the applicable clean energy 
                                percentage of the retail electricity 
                                supplier is more than 60 percent, by 
                                the slow growth rate for the calendar 
                                year, as determined under paragraph 
                                (3)(C), up to a maximum of 90 percent; 
                                and
                            ``(ii) in the case of a retail electricity 
                        supplier not described in clause (i), the 
                        applicable clean energy percentage for the 
                        retail electricity supplier for the preceding 
                        calendar year, as increased by the small growth 
                        rate for the calendar year, as determined under 
                        paragraph (3)(D), up to a maximum of 90 
                        percent.
                    ``(C) Final target percentage.--Effective beginning 
                in calendar year 2040, for each calendar year beginning 
                after the first calendar year for which the applicable 
                clean energy percentage of a retail electricity 
                supplier under subparagraph (B) is 90 percent, the 
                applicable clean energy percentage for the retail 
                electricity supplier under paragraph (1) shall be 
                increased by 1 percentage point, up to a maximum of 100 
                percent.
            ``(3) Rate increase adjustments.--
                    ``(A) Definitions.--In this paragraph:
                            ``(i) Rate decrease-adjusted calendar 
                        year.--The term `rate decrease-adjusted 
                        calendar year' means any calendar year 
                        beginning after a calendar year for which 
                        alternative compliance payments accounted for 
                        greater than 10 percent of total compliance 
                        obligations of all retail electricity providers 
                        under subsection (d) for that calendar year.
                            ``(ii) Rate increase-adjusted calendar 
                        year.--The term `rate increase-adjusted 
                        calendar year' means any calendar year 
                        beginning after a 2-consecutive calendar year 
                        period during which, for each of those 2 
                        consecutive calendar years, the average price 
                        of a Federal clean energy credit for the 3 
                        preceding calendar years was below the rate-
                        increased floor price.
                            ``(iii) Rate-increased floor price.--The 
                        term `rate-increased floor price' means the 
                        difference between--
                                    ``(I) the alternative compliance 
                                payment for the applicable calendar 
                                year; and
                                    ``(II)(aa) during the period 
                                beginning on the date of enactment of 
                                this section and ending on December 31 
                                of the second full calendar year 
                                beginning after that date of enactment, 
                                a rate of 1.5 cents per kilowatt-hour; 
                                and
                                    ``(bb) for each calendar year 
                                thereafter, the rate described in item 
                                (aa) for the preceding calendar year--
                                            ``(AA) increased by 3 
                                        percent; and
                                            ``(BB) adjusted for 
                                        inflation, as the Secretary 
                                        determines to be necessary.
                    ``(B) Fast growth rate.--For purposes of paragraph 
                (2)(B)(i)(I), the fast growth rate shall be--
                            ``(i) for the calendar year in which this 
                        section is enacted, 2.75 percentage points;
                            ``(ii) for the first calendar year 
                        beginning after the date of enactment of this 
                        section and each calendar year thereafter that 
                        is not a rate increase-adjusted calendar year 
                        or a rate decrease-adjusted calendar year, the 
                        fast growth rate for the preceding calendar 
                        year;
                            ``(iii) for a rate increase-adjusted 
                        calendar year, the fast growth rate for the 
                        preceding calendar year, increased by 0.5 
                        percentage points; and
                            ``(iv) for a rate decrease-adjusted 
                        calendar year, the fast growth rate for the 
                        preceding calendar year, decreased by 0.25 
                        percentage points, down to a minimum of 2.75 
                        percentage points.
                    ``(C) Slow growth rate.--For purposes of paragraph 
                (2)(B)(i)(II), the slow growth rate shall be--
                            ``(i) for the calendar year in which this 
                        section is enacted, 1.75 percentage points;
                            ``(ii) for the first calendar year 
                        beginning after the date of enactment of this 
                        section and each calendar year thereafter that 
                        is not a rate increase-adjusted calendar year 
                        or a rate decrease-adjusted calendar year, the 
                        slow growth rate for the preceding calendar 
                        year;
                            ``(iii) for a rate increase-adjusted 
                        calendar year, the slow growth rate for the 
                        preceding calendar year, increased by 0.5 
                        percentage points; and
                            ``(iv) for a rate decrease-adjusted 
                        calendar year, the slow growth rate for the 
                        preceding calendar year, decreased by 0.25 
                        percentage points, down to a minimum of 1.75 
                        percentage points.
                    ``(D) Small growth rate.--For purposes of paragraph 
                (2)(B)(ii), the small growth rate shall be--
                            ``(i) for the calendar year in which this 
                        section is enacted, 1.5 percentage points;
                            ``(ii) for the first calendar year 
                        beginning after the date of enactment of this 
                        section and each calendar year thereafter that 
                        is not a rate increase-adjusted calendar year 
                        or a rate decrease-adjusted calendar year, the 
                        small growth rate for the preceding calendar 
                        year;
                            ``(iii) for a rate increase-adjusted 
                        calendar year, the small growth rate for the 
                        preceding calendar year, increased by 0.5 
                        percentage points; and
                            ``(iv) for a rate decrease-adjusted 
                        calendar year, the small growth rate for the 
                        preceding calendar year, decreased by 0.25 
                        percentage points, down to a minimum of 1.5 
                        percentage points.
    ``(d) Means of Compliance.--
            ``(1) In general.--A retail electricity supplier shall 
        annually achieve compliance with subsection (c) by--
                    ``(A) submitting to the Secretary Federal clean 
                energy credits;
                    ``(B) submitting to the Secretary documentation of 
                the quantity of behind-the-meter generation consumed by 
                electric consumers served by the retail electricity 
                supplier;
                    ``(C) making alternative compliance payments of 3 
                cents per kilowatt-hour in accordance with subsection 
                (i); or
                    ``(D) taking a combination of actions described in 
                subparagraphs (A) through (C).
            ``(2) Failure to establish federal clean energy credit 
        trading program.--If the Secretary does not establish a Federal 
        clean energy credit trading program under subsection (e), a 
        retail electricity supplier shall achieve compliance with 
        subsection (c) by--
                    ``(A) submitting to the Secretary documentation of 
                the clean energy percentage of the retail electricity 
                supplier;
                    ``(B) making alternative compliance payments of 3 
                cents per kilowatt-hour in accordance with subsection 
                (i); or
                    ``(C) taking a combination of actions described in 
                subparagraphs (A) and (B).
    ``(e) Federal Clean Energy Credit Trading Program.--
            ``(1) Establishment.--Not later than 1 year after the date 
        of enactment of this section, the Secretary shall establish a 
        Federal clean energy credit trading program under which--
                    ``(A) 1 Federal clean energy credit represents 1 
                megawatt-hour of clean energy generated by a generator;
                    ``(B) retail electricity suppliers may submit to 
                the Secretary Federal clean energy credits to certify 
                compliance by the retail electricity suppliers with 
                subsection (c); and
                    ``(C) those Federal clean energy credits are 
                issued, recorded, tracked, and transferred.
            ``(2) Clean energy credits.--Except as provided in 
        subparagraphs (B) and (C) of paragraph (3), the Secretary shall 
        issue to each generator and qualified energy storage system a 
        quantity of Federal clean energy credits determined in 
        accordance with subsections (f) and (g).
            ``(3) Administration.--In carrying out the program under 
        this subsection, the Secretary shall ensure that--
                    ``(A) a Federal clean energy credit may be--
                            ``(i) used only once for purposes of 
                        compliance with this section; and
                            ``(ii) purchased only by a retail 
                        electricity supplier;
                    ``(B) a Federal clean energy credit issued for 
                clean energy generated and sold for resale under a 
                contract in effect on the date of enactment of this 
                section shall be issued to the purchasing retail 
                electricity supplier, unless otherwise provided by the 
                contract; and
                    ``(C) with respect to clean energy generated in a 
                facility outside of the United States, a Federal clean 
                energy credit may be issued only--
                            ``(i) if the clean energy is sold for 
                        resale in the United States; and
                            ``(ii) to the purchasing retail electricity 
                        supplier.
            ``(4) Delegation of market function.--
                    ``(A) In general.--In carrying out the program 
                under this subsection, the Secretary may delegate--
                            ``(i) to 1 or more appropriate entities 
                        (including any Federal entity in existence on 
                        the date of enactment of this section), the 
                        administration of a national Federal clean 
                        energy credit market for purposes of 
                        establishing a transparent national market for 
                        the sale or trade of Federal clean energy 
                        credits; and
                            ``(ii) to appropriate entities, the 
                        tracking of dispatch of clean energy 
                        generation.
                    ``(B) Administration.--In making a delegation under 
                subparagraph (A)(ii), the Secretary shall ensure that 
                the tracking and reporting of information concerning 
                the dispatch of clean energy generation is transparent, 
                verifiable, and independent of any generation or load 
                interests subject to an obligation under this section.
            ``(5) Banking of federal clean energy credits.--
                    ``(A) In general.--Subject to subparagraph (B), for 
                purposes of achieving compliance with subsection (c), a 
                Federal clean energy credit shall be valid for--
                            ``(i) the calendar year during which the 
                        Federal clean energy credit is issued; or
                            ``(ii) either of the 2 subsequent calendar 
                        years.
                    ``(B) Adjustments.--
                            ``(i) Calendar years 2040 through 2049.--
                        For each of calendar years 2040 through 2049, a 
                        Federal clean energy credit shall be valid 
                        for--
                                    ``(I) the calendar year during 
                                which the Federal clean energy credit 
                                is issued; or
                                    ``(II) the subsequent calendar 
                                year.
                            ``(ii) Calendar year 2050 and thereafter.--
                        Beginning in calendar year 2050, a Federal 
                        clean energy credit shall be valid only for the 
                        calendar year during which the Federal clean 
                        energy credit is issued.
    ``(f) Determination of Quantity of Credits.--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the quantity of Federal clean energy credits issued 
        to a generator of clean energy shall be equal to the product 
        obtained by multiplying--
                    ``(A) the qualified generation of the generator; 
                and
                    ``(B) the difference between--
                            ``(i) 1.0; and
                            ``(ii) the quotient obtained by dividing--
                                    ``(I) the carbon intensity of the 
                                generator, as determined in accordance 
                                with subsection (g) (expressed in 
                                metric tons per megawatt-hour); by
                                    ``(II) the applicable carbon 
                                intensity.
            ``(2) Qualified combined heat and power systems.--
                    ``(A) In general.--The quantity of Federal clean 
                energy credits issued to a generator that is a 
                qualified combined heat and power system shall be equal 
                to the difference between--
                            ``(i) the product obtained by multiplying--
                                    ``(I) the number of megawatt-hours 
                                of electric energy generated by the 
                                qualified combined heat and power 
                                system; and
                                    ``(II) the difference between--
                                            ``(aa) 1.0; and
                                            ``(bb) the quotient 
                                        obtained by dividing--

                                                    ``(AA) the carbon 
                                                intensity of the 
                                                generator, as 
                                                determined in 
                                                accordance with 
                                                subsection (g) 
                                                (expressed in metric 
                                                tons per megawatt-
                                                hour); by

                                                    ``(BB) the 
                                                applicable carbon 
                                                intensity; and

                            ``(ii) the product obtained by 
                        multiplying--
                                    ``(I) the number of megawatt-hours 
                                of electric energy generated by the 
                                qualified combined heat and power 
                                system that are consumed onsite; and
                                    ``(II) the national weighted 
                                average of the applicable clean energy 
                                percentage required for the calendar 
                                year under subsection (c), as 
                                determined by the Secretary.
                    ``(B) Additional credits.--In addition to Federal 
                clean energy credits issued under subparagraph (A), the 
                Secretary shall issue Federal clean energy credits to a 
                generator that is a qualified combined heat and power 
                system for greenhouse gas emissions avoided as a result 
                of the use of the qualified combined heat and power 
                system, rather than a separate thermal source, to meet 
                the onsite thermal needs of the generator.
            ``(3) Qualified renewable biomass.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                quantity of Federal clean energy credits issued to each 
                generator of clean energy using qualified renewable 
                biomass shall be equal to the product obtained by 
                multiplying--
                            ``(i) the qualified generation of the 
                        generator using qualified renewable biomass; 
                        and
                            ``(ii) the qualified renewable biomass 
                        credit value determined under subsection 
                        (g)(4)(B)(iii).
                    ``(B) Existing generators.--For generators placed 
                into service before the date of enactment of this 
                section, the quantity of Federal clean energy credits 
                issued to each generator of energy using qualified 
                renewable biomass shall be equal to the greater of--
                            ``(i) the product obtained by multiplying--
                                    ``(I) the qualified generation of 
                                the generator, not to exceed the 
                                generation capacity of the generator on 
                                the date of enactment of this section; 
                                and
                                    ``(II) 0.5; and
                            ``(ii) the quantity of credits determined 
                        under subparagraph (A).
            ``(4) Qualified waste-to-energy.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                quantity of Federal clean energy credits issued to a 
                generator that is a qualified waste-to-energy facility 
                shall be equal to the product obtained by multiplying--
                            ``(i) the qualified generation of the 
                        generator using qualified waste-to-energy; and
                            ``(ii) the qualified waste-to-energy credit 
                        value determined under subsection 
                        (g)(4)(B)(iii).
                    ``(B) Existing generators.--For generators placed 
                into service before the date of enactment of this 
                section, the quantity of Federal clean energy credits 
                issued to each generator of energy that is a qualified 
                waste-to-energy facility shall be equal to the greater 
                of--
                            ``(i) the qualified generation of the 
                        generator, not to exceed the generation 
                        capacity of the generator on the date of 
                        enactment of this section; and
                            ``(ii) the quantity of credits determined 
                        under subparagraph (A).
            ``(5) Qualified low-carbon fuels.--The quantity of Federal 
        clean energy credits issued to a generator using qualified low-
        carbon fuels shall be equal to the product obtained by 
        multiplying--
                    ``(A) the qualified generation of the generator 
                using qualified low-carbon-fuels; and
                    ``(B) the qualified low-carbon fuel credit value 
                determined under subsection (g)(4)(B)(iii).
            ``(6) Carbon capture, storage, and utilization.--
                    ``(A) Definitions.--In this paragraph, the terms 
                `qualified carbon oxide', `qualified enhanced oil or 
                natural gas recovery project', and `tertiary injectant' 
                have the meanings given those terms in section 45Q of 
                the Internal Revenue Code of 1986.
                    ``(B) Quantity of credits.--Except as otherwise 
                provided in this subsection, the quantity of Federal 
                clean energy credits issued to each generator of clean 
                energy through the capture and storage or utilization 
                of qualified carbon oxide from a waste stream of the 
                generator shall be equal to the product obtained by 
                multiplying--
                            ``(i) the qualified generation of the 
                        generator; and
                            ``(ii) the difference between--
                                    ``(I) 1.0; and
                                    ``(II) the quotient obtained by 
                                dividing--
                                            ``(aa) the carbon intensity 
                                        of the generator, as determined 
                                        in accordance with subsection 
                                        (g) (expressed in metric tons 
                                        per megawatt-hour); by
                                            ``(bb) the applicable 
                                        carbon intensity.
                    ``(C) Additional credits.--In addition to Federal 
                clean energy credits issued under subparagraph (B), the 
                Secretary shall issue Federal clean energy credits to 
                each generator of clean energy through the capture and 
                storage or utilization of qualified carbon oxide from a 
                waste stream other than the waste stream of the 
                generator, or from the atmosphere directly, in a 
                quantity equal to the quotient obtained by dividing--
                            ``(i) the number of metric tons of 
                        qualified carbon oxide captured and stored or 
                        utilized; by
                            ``(ii) the carbon intensity of the 
                        generator, as determined in accordance with 
                        subsection (g) (expressed in metric tons per 
                        megawatt-hour).
                    ``(D) Special rules.--
                            ``(i) Regulations.--
                                    ``(I) In general.--Subject to 
                                subclause (III), not later than 1 year 
                                after the date of enactment of this 
                                section, the Secretary, in consultation 
                                with the Administrator of the 
                                Environmental Protection Agency, shall 
                                promulgate regulations establishing--
                                            ``(aa) the conditions under 
                                        which qualified carbon oxide 
                                        may be safely and permanently 
                                        stored for purposes of issuing 
                                        Federal clean energy credits to 
                                        a generator under this 
                                        paragraph; and
                                            ``(bb) in accordance with 
                                        subclause (II), the methods and 
                                        processes by which qualified 
                                        carbon oxide may be utilized in 
                                        a manner that ensures the 
                                        removal of the qualified carbon 
                                        oxide safely and permanently 
                                        from the atmosphere.
                                    ``(II) Requirements.--For purposes 
                                of subclause (I)(bb)--
                                            ``(aa) utilization of 
                                        qualified carbon oxide may 
                                        include the production of 
                                        substances, such as plastics 
                                        and chemicals; and
                                            ``(bb) the regulations 
                                        promulgated pursuant to that 
                                        subclause shall minimize the 
                                        escape or further emission of 
                                        qualified carbon oxide into the 
                                        atmosphere.
                                    ``(III) Existing requirements.--In 
                                promulgating regulations pursuant to 
                                this clause, the Secretary shall 
                                incorporate any existing Federal 
                                requirements for the permanent geologic 
                                storage of carbon oxides, including any 
                                requirements under section 45Q of the 
                                Internal Revenue Code of 1986.
                            ``(ii) Adjusted quantity.--
                                    ``(I) In general.--Notwithstanding 
                                subparagraphs (B) and (C), except as 
                                provided in subclause (II), the 
                                quantity of Federal clean energy 
                                credits issued under this paragraph to 
                                a generator at which qualified carbon 
                                oxide is captured and used as a 
                                tertiary injectant in a qualified 
                                enhanced oil or natural gas recovery 
                                project shall be reduced by 50 percent.
                                    ``(II) No reduction.--If the 
                                qualified carbon oxide captured and 
                                used as a tertiary injectant in a 
                                qualified enhanced oil or natural gas 
                                recovery project by a generator 
                                achieves compliance with the conditions 
                                established pursuant to clause 
                                (i)(I)(aa), the quantity of Federal 
                                clean energy credits issued to the 
                                generator shall not be reduced.
            ``(7) Qualified energy storage systems.--The quantity of 
        Federal clean energy credits issued to each qualified energy 
        storage system shall be equal to the product obtained by 
        multiplying--
                    ``(A) the electric energy dispatched and sold by 
                the qualified energy storage system (expressed in 
                megawatt-hours); and
                    ``(B) the difference between--
                            ``(i) 1.0; and
                            ``(ii) the quotient obtained by dividing--
                                    ``(I) the average carbon intensity 
                                of the clean energy stored in the 
                                qualified energy storage system, as 
                                determined in accordance with 
                                subsection (g) (expressed in metric 
                                tons per megawatt-hour); by
                                    ``(II) the applicable carbon 
                                intensity.
            ``(8) Negative credits.--Notwithstanding any other 
        provision of this subsection, the Secretary shall not issue a 
        negative quantity of Federal clean energy credits to any 
        generator.
            ``(9) Maximum quantity of credits.--Notwithstanding 
        paragraphs (1) through (6), the total quantity of Federal clean 
        energy credits issued under those paragraphs to a generator for 
        a calendar year shall not exceed the number of megawatt-hours 
        of the applicable annual qualified generation of the generator.
            ``(10) Innovation multiplier.--
                    ``(A) In general.--Notwithstanding paragraphs (1) 
                through (6), until the applicable date described in 
                subparagraph (C), the quantity of Federal clean energy 
                credits issued under this section to--
                            ``(i) a generator that is a qualified 
                        dispatchable low-emission technology or a 
                        qualified dispatchable zero-emission technology 
                        shall be equal to the product obtained by 
                        multiplying--
                                    ``(I) the qualified generation of 
                                that generator;
                                    ``(II) the difference between--
                                            ``(aa) 1.0; and
                                            ``(bb) the quotient 
                                        obtained by dividing--

                                                    ``(AA) the carbon 
                                                intensity of the 
                                                generator, as 
                                                determined in 
                                                accordance with 
                                                subsection (g) 
                                                (expressed in metric 
                                                tons per megawatt-
                                                hour); by

                                                    ``(BB) the 
                                                applicable carbon 
                                                intensity; and

                                    ``(III) 1.5;
                            ``(ii) a generator that is a dispatchable 
                        zero-emission technology that is not issued 
                        Federal clean energy credits under clause (i) 
                        shall be equal to the product obtained by 
                        multiplying--
                                    ``(I) the qualified generation of 
                                that generator;
                                    ``(II) the difference between--
                                            ``(aa) 1.0; and
                                            ``(bb) the quotient 
                                        obtained by dividing--

                                                    ``(AA) the carbon 
                                                intensity of the 
                                                generator, as 
                                                determined in 
                                                accordance with 
                                                subsection (g) 
                                                (expressed in metric 
                                                tons per megawatt-
                                                hour); by

                                                    ``(BB) the 
                                                applicable carbon 
                                                intensity; and

                                    ``(III) the appropriate multiplier, 
                                as determined under subparagraph 
                                (B)(i); and
                            ``(iii) a generator that is a dispatchable 
                        low-emission technology that is not issued 
                        Federal clean energy credits under clause (i) 
                        shall be equal to the product obtained by 
                        multiplying--
                                    ``(I) the qualified generation of 
                                that generator;
                                    ``(II) the difference between--
                                            ``(aa) 1.0; and
                                            ``(bb) the quotient 
                                        obtained by dividing--

                                                    ``(AA) the carbon 
                                                intensity of the 
                                                generator, as 
                                                determined in 
                                                accordance with 
                                                subsection (g) 
                                                (expressed in metric 
                                                tons per megawatt-
                                                hour); by

                                                    ``(BB) the 
                                                applicable carbon 
                                                intensity; and

                                    ``(III) the appropriate multiplier, 
                                as determined under subparagraph 
                                (B)(ii).
                    ``(B) Multipliers.--The multipliers referred to in 
                clauses (ii)(III) and (iii)(III) of subparagraph (A) 
                are--
                            ``(i) for a dispatchable zero-emission 
                        technology described in subparagraph (A)(ii)--
                                    ``(I) for the period beginning on 
                                the date of enactment of this section 
                                and ending on the date on which the 
                                total capacity of dispatchable zero-
                                emission technologies in the United 
                                States is greater than 5 gigawatts, as 
                                determined by the Secretary, 1.25;
                                    ``(II) for the period beginning on 
                                the day after the date of expiration of 
                                the period described in subclause (I) 
                                and ending on the date on which the 
                                total capacity of dispatchable zero-
                                emission technologies in the United 
                                States is greater than 10 gigawatts, as 
                                determined by the Secretary, 1.2;
                                    ``(III) for the period beginning on 
                                the day after the date of expiration of 
                                the period described in subclause (II) 
                                and ending on the date on which the 
                                total capacity of dispatchable zero-
                                emission technologies in the United 
                                States is greater than 15 gigawatts, as 
                                determined by the Secretary, 1.15; and
                                    ``(IV) for the period beginning on 
                                the day after the date of expiration of 
                                the period described in subclause (III) 
                                and ending on the date on which the 
                                total capacity of dispatchable zero-
                                emission technologies in the United 
                                States is greater than 20 gigawatts, as 
                                determined by the Secretary, 1.1; and
                            ``(ii) for a dispatchable low-emission 
                        technology described in subparagraph (A)(iii)--
                                    ``(I) for the period beginning on 
                                the date of enactment of this section 
                                and ending on the date on which the 
                                total capacity of dispatchable low-
                                emission technologies and dispatchable 
                                zero-emission technologies in the 
                                United States is greater than 5 
                                gigawatts, as determined by the 
                                Secretary, 1.25;
                                    ``(II) for the period beginning on 
                                the day after the date of expiration of 
                                the period described in subclause (I) 
                                and ending on the date on which the 
                                total capacity of dispatchable low-
                                emission technologies and dispatchable 
                                zero-emission technologies in the 
                                United States is greater than 10 
                                gigawatts, as determined by the 
                                Secretary, 1.2;
                                    ``(III) for the period beginning on 
                                the day after the date of expiration of 
                                the period described in subclause (II) 
                                and ending on the date on which the 
                                total capacity of dispatchable low-
                                emission technologies and dispatchable 
                                zero-emission technologies in the 
                                United States is greater than 15 
                                gigawatts, as determined by the 
                                Secretary, 1.15; and
                                    ``(IV) for the period beginning on 
                                the day after the date of expiration of 
                                the period described in subclause (III) 
                                and ending on the date on which the 
                                total capacity of dispatchable low-
                                emission technologies and dispatchable 
                                zero-emission technologies in the 
                                United States is greater than 20 
                                gigawatts, as determined by the 
                                Secretary, 1.1.
                    ``(C) Phase-out.--The quantity of Federal clean 
                energy credits issued under this section to--
                            ``(i) a generator described in subparagraph 
                        (A)(i) that is--
                                    ``(I) a qualified dispatchable low-
                                emission technology shall be determined 
                                in accordance with subparagraph 
                                (A)(iii), effective beginning on the 
                                earlier of--
                                            ``(aa) the date on which 
                                        the qualified dispatchable low-
                                        emission technology has been in 
                                        service for 10 years; and
                                            ``(bb) January 1, 2035; and
                                    ``(II) a qualified dispatchable 
                                zero-emission technology shall be 
                                determined in accordance with 
                                subparagraph (A)(ii), effective 
                                beginning on the date on which the 
                                qualified dispatchable zero-emission 
                                technology has been in service for 10 
                                years;
                            ``(ii) a generator described in 
                        subparagraph (A)(ii) shall be determined in 
                        accordance with paragraphs (1) through (6), 
                        effective beginning on January 1, 2050; and
                            ``(iii) a generator described in 
                        subparagraph (A)(iii) shall be determined in 
                        accordance with paragraphs (1) through (6), 
                        effective beginning on January 1, 2040.
                    ``(D) Prohibition on double receipts.--A generator 
                that receives Federal clean energy credits under 
                subparagraph (A) may not receive any additional Federal 
                clean energy credit under any of paragraphs (1) through 
                (6).
    ``(g) Determination of Carbon Intensity and Credit Value.--
            ``(1) In general.--For purposes of determining the quantity 
        of Federal clean energy credits under subsection (f), except as 
        otherwise provided in this subsection, the Secretary shall 
        determine the carbon intensity of each generator using data and 
        methods from the Air Emission Measurement Center of the 
        Environmental Protection Agency for emission testing and 
        monitoring, including--
                    ``(A) Continuous Emission Monitoring Systems; and
                    ``(B) Predictive Emission Monitoring Systems.
            ``(2) Natural gas adjustment.--Except as provided in 
        paragraph (4), the Secretary shall adjust the carbon intensity 
        determined under paragraph (1) for each generator using natural 
        gas by applying the methane leakage rates assumed in the 9-
        region MARKAL Database of the Environmental Protection Agency 
        (commonly known as the `EPAUS9R database').
            ``(3) Nonemitting generators.--Except as provided in 
        paragraph (4), the Secretary shall assign a carbon intensity of 
        zero for any generator that does not produce emissions on 
        electric energy generation, including any generator that uses 
        renewable energy, hydropower, or nuclear power.
            ``(4) Determination and national academy of sciences 
        study.--The Secretary shall--
                    ``(A) not later than 180 days after the date of 
                enactment of this section, enter into an agreement with 
                the National Academy of Sciences, under which the 
                Academy shall--
                            ``(i) evaluate data, models, and 
                        methodologies for quantifying lifecycle 
                        greenhouse gas emissions associated with 
                        generating electric energy from each type of 
                        significant source of clean energy, including 
                        the sources described in subparagraphs (A) and 
                        (B) of subsection (b)(8);
                            ``(ii) evaluate data, models, and 
                        methodologies for determining the appropriate 
                        credit value for use in the quantification of 
                        Federal clean energy credits under subsection 
                        (f) for--
                                    ``(I) qualified renewable biomass, 
                                taking into consideration total 
                                lifecycle carbon dynamics, including--
                                            ``(aa) carbon absorbed 
                                        through the regrowth of 
                                        vegetation;
                                            ``(bb) avoided 
                                        decomposition relating to the 
                                        full fuel lifecycle;
                                            ``(cc) carbon sink value 
                                        from land use changes and 
                                        temporal changes in forest 
                                        carbon sequestration; and
                                            ``(dd) lifecycle greenhouse 
                                        gas emissions, including--

                                                    ``(AA) direct 
                                                greenhouse gas 
                                                emissions; and

                                                    ``(BB) significant 
                                                indirect greenhouse gas 
                                                emissions, including 
                                                all stages of fuel and 
                                                feedstock production 
                                                and distribution and 
                                                feedstock generation or 
                                                extraction through the 
                                                distribution and 
                                                delivery of the 
                                                finished fuel to 
                                                electric consumers;

                                    ``(II) qualified waste-to-energy, 
                                taking into consideration total 
                                lifecycle carbon dynamics, including--
                                            ``(aa) avoided 
                                        decomposition relating to the 
                                        feedstock lifecycle; and
                                            ``(bb) lifecycle greenhouse 
                                        gas emissions, including--

                                                    ``(AA) direct 
                                                greenhouse gas 
                                                emissions; and

                                                    ``(BB) indirect 
                                                greenhouse gas 
                                                emissions; and

                                    ``(III) qualified low-carbon fuels, 
                                taking into consideration lifecycle 
                                greenhouse gas emissions, including--
                                            ``(aa) direct greenhouse 
                                        gas emissions; and
                                            ``(bb) significant indirect 
                                        greenhouse gas emissions, 
                                        including--

                                                    ``(AA) all stages 
                                                of fuel and feedstock 
                                                production and 
                                                distribution; and

                                                    ``(BB) feedstock 
                                                generation or 
                                                extraction through the 
                                                distribution and 
                                                delivery of the 
                                                finished fuel to 
                                                electric consumers;

                            ``(iii) evaluate the appropriateness of the 
                        definitions contained in subsection (b) of the 
                        terms--
                                    ``(I) `qualified renewable 
                                biomass', taking into consideration 
                                whether the definition should be 
                                expanded or contracted;
                                    ``(II) `qualified waste-to-energy'; 
                                and
                                    ``(III) `qualified low-carbon 
                                fuel';
                            ``(iv) if it is determined under clause 
                        (iii)(I) that the definition of the term 
                        `qualified renewable biomass' should be 
                        expanded, evaluate tools for determining the 
                        allowable carbon stock removal levels during 
                        defined forest management operations; and
                            ``(v) not later than 540 days after the 
                        date of enactment of this section, publish a 
                        report that includes--
                                    ``(I) a description of the 
                                evaluations under clauses (i) through 
                                (iv); and
                                    ``(II) recommendations for--
                                            ``(aa) determining the 
                                        carbon intensity, accounting 
                                        for lifecycle greenhouse gas 
                                        emissions, of electric energy 
                                        generated from each type of 
                                        significant source of clean 
                                        energy evaluated under clause 
                                        (i);
                                            ``(bb) determining the 
                                        credit value of electric energy 
                                        generated from qualified 
                                        renewable biomass, qualified 
                                        waste-to-energy, and qualified 
                                        low-carbon fuels;
                                            ``(cc) if applicable, 
                                        changes to the definitions of 
                                        the terms `qualified renewable 
                                        biomass', `qualified waste-to-
                                        energy', and `qualified low-
                                        carbon fuel'; and
                                            ``(dd) if applicable, 
                                        determining the allowable 
                                        carbon stock removal levels 
                                        during defined forest 
                                        management operations;
                    ``(B) not later than 1 year after the date of 
                publication of the report under subparagraph (A)(v), 
                after providing notice an opportunity for public 
                comment, promulgate regulations, taking into 
                consideration the report, for--
                            ``(i) calculating lifecycle greenhouse gas 
                        emissions of electric energy generated from 
                        each type of significant source of clean energy 
                        evaluated under subparagraph (A)(i);
                            ``(ii) determining the carbon intensity of 
                        electric energy generated from each type of 
                        significant source of clean energy evaluated 
                        under subparagraph (A)(i); and
                            ``(iii) determining the credit value of 
                        electric energy generated from qualified 
                        renewable biomass, qualified waste-to-energy, 
                        and qualified low-carbon fuels; and
                    ``(C) if recommended in the report under 
                subparagraph (A)(v)(II)(cc), submit to Congress 
                recommendations relating to changes to the definitions 
                of the terms `qualified renewable biomass', `qualified 
                waste-to-energy', and `qualified low-carbon fuel' for 
                purposes of this section.
            ``(5) Consultation.--The Secretary shall consult with--
                    ``(A) in determining carbon intensities of 
                generators pursuant to paragraph (1) and making 
                adjustments pursuant to paragraph (2), the 
                Administrator of the Environmental Protection Agency;
                    ``(B) in promulgating regulations for calculating 
                lifecycle greenhouse gas emissions pursuant to 
                paragraph (4)(B)(i) and determining carbon intensities 
                pursuant to paragraph (4)(B)(ii), the Administrator of 
                the Environmental Protection Agency;
                    ``(C) in promulgating regulations for determining 
                appropriate credit values pursuant to paragraph 
                (4)(B)(iii)--
                            ``(i) the Administrator of the 
                        Environmental Protection Agency;
                            ``(ii) the Secretary of Agriculture; and
                            ``(iii) the Secretary of the Interior; and
                    ``(D) in making recommendations to Congress under 
                paragraph (4)(C), the Administrator of the 
                Environmental Protection Agency, acting in consultation 
                with the Scientific Advisory Board of the Environmental 
                Protection Agency.
    ``(h) Civil Penalties.--
            ``(1) In general.--Subject to paragraph (2), a retail 
        electricity supplier that fails to meet the requirements of 
        this section shall be subject to a civil penalty in an amount 
        equal to the product obtained by multiplying--
                    ``(A) the number of kilowatt-hours of electric 
                energy sold by the retail electricity supplier to 
                electric consumers in violation of subsection (c); and
                    ``(B) 200 percent of the value of the alternative 
                compliance payment, as adjusted under subsection 
                (i)(2).
            ``(2) Waivers and mitigation.--
                    ``(A) Force majeure.--The Secretary may mitigate or 
                waive a civil penalty under paragraph (1) if the 
                applicable retail electricity supplier was unable to 
                comply with an applicable requirement of this section 
                for reasons outside of the reasonable control of the 
                retail electricity supplier.
                    ``(B) Reduction for state penalties.--The Secretary 
                shall reduce the amount of a penalty determined under 
                paragraph (1) by the amount paid by the applicable 
                retail electricity supplier to a State for failure to 
                comply with the requirement of a State renewable energy 
                program, if the State requirement is more stringent 
                than the applicable requirement of this section.
            ``(3) Procedure for assessing penalty.--The Secretary shall 
        assess a civil penalty under this subsection in accordance with 
        section 333(d) of the Energy Policy and Conservation Act (42 
        U.S.C. 6303(d)).
    ``(i) Alternative Compliance Payments.--
            ``(1) In general.--A retail electricity supplier may 
        satisfy the requirements of subsection (c), in whole or in 
        part, by submitting, in lieu of Federal clean energy credits 
        issued under this section, a payment equal to the amount 
        required under subsection (d)(1)(C), in accordance with such 
        regulations as the Secretary may promulgate, subject to 
        paragraph (2).
            ``(2) Adjustment.--Not later than December 1 of the second 
        full calendar year beginning after the date of enactment of 
        this section, and annually thereafter, the Secretary shall--
                    ``(A) increase the rate of the alternative 
                compliance payment under subsection (d)(1)(C) by--
                            ``(i) during the period beginning on the 
                        date of enactment of this section and ending on 
                        December 31, 2029, 3 percent; and
                            ``(ii) beginning on January 1, 2030, 5 
                        percent; and
                    ``(B) additionally adjust that rate for inflation, 
                as the Secretary determines to be necessary.
    ``(j) State Energy Efficiency, Clean Energy Deployment, and 
Electric Consumer Bill Reduction Program.--
            ``(1) Establishment.--Not later than December 1 of the 
        first calendar year beginning after the date of enactment of 
        this section, the Secretary shall establish a State energy 
        efficiency, clean energy deployment, and electric consumer bill 
        reduction program.
            ``(2) Funding.--All funds collected by the Secretary as 
        alternative compliance payments under subsection (i), or as 
        civil penalties under subsection (h), shall be used solely to 
        carry out the program under this subsection.
            ``(3) Distribution to states.--
                    ``(A) In general.--Of the funds described in 
                paragraph (2), an amount equal to 75 percent shall be 
                used by the Secretary, without further appropriation or 
                fiscal year limitation, to provide funds to States, in 
                an amount determined proportionally based on the 
                amounts collected from each State--
                            ``(i) for the implementation of State 
                        energy efficiency plans under section 362 of 
                        the Energy Policy and Conservation Act (42 
                        U.S.C. 6322);
                            ``(ii) for the conduct of clean energy 
                        programs in the State; and
                            ``(iii) to carry out activities to reduce 
                        the amount of electricity bills for households 
                        in the State below 300 percent of the poverty 
                        line (as defined in section 673 of the 
                        Community Services Block Grant Act (42 U.S.C. 
                        9902)).
                    ``(B) Action by states.--A State that receives 
                funds under this paragraph shall maintain such records 
                and evidence of compliance as the Secretary may 
                require.
            ``(4) Guidelines and criteria.--
                    ``(A) Buy american compliance.--The funds made 
                available under the program established under this 
                subsection shall not be used for a project unless the 
                project achieves compliance with all applicable 
                requirements of chapter 83 of title 41, United States 
                Code (formerly known as the `Buy American Act').
                    ``(B) Davis-bacon compliance.--
                            ``(i) In general.--All laborers and 
                        mechanics employed on projects funded directly, 
                        or assisted in whole or in part, by this 
                        section shall be paid wages at rates not less 
                        than those prevailing on projects of a 
                        character similar in the locality as determined 
                        by the Secretary of Labor in accordance with 
                        subchapter IV of chapter 31 of part A of 
                        subtitle II of title 40, United States Code 
                        (commonly referred to as the `Davis-Bacon 
                        Act').
                            ``(ii) Authority.--With respect to the 
                        labor standards specified in this subparagraph, 
                        the Secretary of Labor shall have the authority 
                        and functions set forth in Reorganization Plan 
                        Numbered 14 of 1950 (64 Stat. 1267; 5 U.S.C. 
                        App.) and section 3145 of title 40, United 
                        States Code.
                    ``(C) Additional guidelines and criteria.--The 
                Secretary may issue such additional guidelines and 
                criteria for the program under this subsection as the 
                Secretary determines to be appropriate.
    ``(k) State Programs.--
            ``(1) Savings provision.--
                    ``(A) In general.--Subject to subparagraph (B), 
                nothing in this section affects the authority of a 
                State or a political subdivision of a State to adopt or 
                enforce any law or regulation relating to--
                            ``(i) clean or renewable energy; or
                            ``(ii) the regulation of any retail 
                        electricity supplier.
                    ``(B) Federal law.--No law or regulation of a State 
                or a political subdivision of a State may relieve a 
                retail electricity supplier from the obligation to 
                comply with an applicable requirement of this section.
            ``(2) Coordination.--The Secretary, in consultation with 
        States that have clean and renewable energy programs in effect, 
        shall facilitate, to the maximum extent practicable, 
        coordination between the Federal clean energy program under 
        this section and the relevant State clean and renewable energy 
        programs.
    ``(l) Information Collection.--
            ``(1) In general.--The Secretary may require any retail 
        electricity supplier, generator, or any other entity that the 
        Secretary determines appropriate to submit to the Secretary any 
        information the Secretary determines to be appropriate to carry 
        out this section.
            ``(2) Failure to submit; false or misleading information.--
        An entity required to submit information pursuant to paragraph 
        (1) that fails to submit the information, or submits false or 
        misleading information, shall be in violation of this section.
    ``(m) Report on Clean Energy Resources That Do Not Generate 
Electric Energy.--
            ``(1) In general.--Not later than 3 years after the date of 
        enactment of this section, the Secretary shall submit to 
        Congress a report examining mechanisms to supplement the 
        standard under this section by addressing clean energy 
        resources that do not generate electric energy but that may 
        substantially reduce overall energy emissions, including energy 
        efficiency, demand response, flexible load, beneficial 
        electrification, microgrids, biomass converted to thermal 
        energy, geothermal energy collected using heat pumps, thermal 
        energy delivered through district heating systems, and waste 
        heat used as industrial process heat.
            ``(2) Potential integration.--The report under paragraph 
        (1) shall examine the benefits and challenges of integrating 
        the additional clean energy resources into the standard 
        established by this section, including--
                    ``(A) the extent to which such an integration would 
                achieve the purposes of this section;
                    ``(B) the manner in which a baseline describing the 
                use of the resources could be developed that would 
                ensure that only incremental action that increased the 
                use of the resources received credit; and
                    ``(C) the challenges of crediting the resources, 
                alone or in combination with other resources, in a 
                comparable manner between organized markets and 
                vertically integrated markets to incentivize sufficient 
                deployment of those resources to support efficient 
                integration into the standard.
            ``(3) Complementary policies.--The report under paragraph 
        (1) shall examine the benefits and challenges of using 
        complementary policies or standards, other than the standard 
        established under this section, to provide effective incentives 
        for using the additional clean energy resources.
            ``(4) Legislative recommendations.--As part of the report 
        under paragraph (1), the Secretary shall provide legislative 
        recommendations for changes to the standard established under 
        this section or new complementary policies that would provide 
        effective incentives for using the additional clean energy 
        resources.
    ``(n) Periodic Review and Adjustments.--
            ``(1) National academy of sciences review.--The Secretary 
        shall enter into an agreement with the National Academy of 
        Sciences under which the Academy shall, not later than July 1, 
        2028, and every 10 years thereafter, submit to Congress and the 
        Secretary a comprehensive evaluation of all aspects of the 
        standard established under this section, including--
                    ``(A) an evaluation of the effectiveness of the 
                standard in decreasing the aggregate net carbon dioxide 
                equivalent emissions in the electric sector, 
                including--
                            ``(i) a comparison of--
                                    ``(I) the actual carbon dioxide 
                                equivalent emissions associated with 
                                the electric sector for the preceding 
                                calendar year; and
                                    ``(II)(aa) for the initial review, 
                                900,000,000 metric tons of carbon 
                                dioxide equivalent;
                                    ``(bb) for the review conducted 
                                with respect to calendar year 2038, 
                                600,000,000 metric tons of carbon 
                                dioxide equivalent; or
                                    ``(cc) if the Academy determines 
                                that an emissions value described in 
                                item (aa) or (bb) is inappropriate 
                                after taking into consideration changes 
                                in electric energy consumption, and in 
                                emissions relating to energy use 
                                outside of the electric sector, such 
                                emissions as the Academy determines to 
                                be appropriate for the applicable 
                                review year; and
                            ``(ii) an evaluation of the methods by 
                        which the quantity of Federal clean energy 
                        credits is determined, including--
                                    ``(I) alternative methods of 
                                quantifying credits for clean energy 
                                resources eligible to receive Federal 
                                clean energy credits under this section 
                                that may be more effective, such as--
                                            ``(aa) issuing credits 
                                        based on the difference between 
                                        the carbon intensity of a 
                                        generator and the marginal 
                                        emissions rate in a given hour 
                                        and balancing area; and
                                            ``(bb) adjusting the 
                                        innovation multipliers; and
                                    ``(II) potential methods of 
                                crediting other clean energy resources 
                                not already addressed in the report 
                                under subsection (m);
                    ``(B) the impact of the standard on the 
                reliability, resilience, security, and safety of 
                electricity generation, transmission, and distribution;
                    ``(C) the impact of the standard on the function of 
                regulated and deregulated electricity markets;
                    ``(D) the net benefits or costs of the standard to 
                the United States and the States, including--
                            ``(i) the effects on electricity demand and 
                        prices;
                            ``(ii) the economic development benefits of 
                        investment;
                            ``(iii) lifecycle environmental and safety 
                        costs and benefits;
                            ``(iv) the impacts on public health and 
                        health care costs; and
                            ``(v) avoided costs relating to 
                        environmental damages and adaptation 
                        investments that otherwise would have been 
                        required;
                    ``(E) the impact of the standard on the emissions 
                of behind-the-meter and off-grid electricity 
                generation;
                    ``(F) recommendations regarding potential changes 
                to the standard, such as--
                            ``(i) to regulations and procedures for 
                        implementing the standard;
                            ``(ii) to the structure and specific design 
                        elements of the standard, such as--
                                    ``(I) if the comparison of 
                                emissions under paragraph (1)(A)(i) 
                                reveals that actual emissions for the 
                                electric sector are greater than the 
                                required emissions under paragraph 
                                (1)(A)(i)(II), changes to the values of 
                                the growth rates, the applicable carbon 
                                intensity, and alternative compliance 
                                payment to eliminate the gap between 
                                actual and required emissions;
                                    ``(II) the quantification of 
                                Federal clean energy credits; and
                                    ``(III) the value of and 
                                eligibility for the innovation 
                                multiplier; and
                            ``(iii) to the structure and administration 
                        of the Federal clean energy credit trading 
                        program; and
                    ``(G) recommendations regarding potential changes 
                to related public policies or creation of new 
                complementary policies.
            ``(2) Recommendations to congress.--Not later than January 
        1, 2029, and not less frequently than once every 10 years 
        thereafter, the Secretary shall submit to the Committee on 
        Energy and Natural Resources of the Senate and the Committee on 
        Energy and Commerce of the House of Representatives a report 
        including recommendations for modifications and improvements to 
        the standard established under this section, including an 
        explanation of the inconsistencies, if any, between--
                    ``(A) the recommendations of the Secretary; and
                    ``(B) the recommendations included in the 
                evaluation of the National Academy of Sciences under 
                paragraph (1).
            ``(3) Congressional action.--Not later than January 1, 
        2030, and not less frequently than once every 10 years 
        thereafter, Congress shall enact legislation that amends this 
        section or establishes new policies based on the 
        recommendations submitted by the Secretary under paragraph (2).
            ``(4) Adjustments upon failure of congressional action.--
                    ``(A) In general.--If Congress fails to enact 
                legislation under paragraph (3) by an applicable 
                deadline, the Secretary--
                            ``(i) shall, in any case in which the 
                        comparison of emissions under paragraph 
                        (1)(A)(i) reveals that actual emissions for the 
                        electric sector are greater than the required 
                        emissions under paragraph (1)(A)(i)(II), make 
                        such compensatory adjustments to the standard 
                        established under this section as the Secretary 
                        considers to be necessary, based on, and 
                        consistent with, the findings and 
                        recommendations of the National Academy of 
                        Sciences under paragraph (1)(F)(ii)(I), to 
                        eliminate the gap between actual and required 
                        emissions by not later than 3 years after the 
                        date of the applicable deadline by--
                                    ``(I) increasing the fast growth 
                                rate;
                                    ``(II) increasing the slow growth 
                                rate;
                                    ``(III) increasing the small growth 
                                rate;
                                    ``(IV) decreasing the applicable 
                                carbon intensity;
                                    ``(V) increasing the alternative 
                                compliance payment under subsection 
                                (d)(1)(C); or
                                    ``(VI) taking a combination of 
                                actions described in subclauses (I) 
                                through (V); and
                            ``(ii) if the evaluation of the crediting 
                        system under paragraph (1)(A)(ii) describes a 
                        more-effective method of issuing Federal clean 
                        energy credits to clean energy resources, may 
                        make other modifications and improvements to 
                        the standard based on, and consistent with, the 
                        recommendations under paragraph (1)(F)(ii) that 
                        would have the effect of decreasing economy-
                        wide emissions.
                    ``(B) Requirement.--In making the compensatory 
                adjustments under subparagraph (A)(i), the Secretary 
                shall ensure that retail electricity suppliers that 
                have exceeded the proportionate share of the reductions 
                of the retail electricity suppliers required under 
                paragraph (1)(A)(i)(II) shall not bear significant 
                additional costs under this paragraph.
    ``(o) Regulations.--Not later than 1 year after the date of 
enactment of this section, the Secretary shall promulgate regulations 
to implement this section.''.
    (b) Conforming Amendment.--The table of contents of the Public 
Utility Regulatory Policies Act of 1978 (16 U.S.C. prec. 2601) is 
amended by adding at the end of the items relating to title VI the 
following:

``609. Rural and remote communities electrification grants.
``610. Federal clean energy standard.''.

SEC. 3. CLEAN ENERGY RESEARCH, DEVELOPMENT, DEMONSTRATION, AND 
              DEPLOYMENT PROGRAM.

    (a) Establishment.--The Secretary of Energy shall establish a 
cross-cutting national program within the Department of Energy for the 
research, development, demonstration, and deployment of clean energy 
technologies and portfolios for the purpose of meeting the requirements 
established under section 610 of the Public Utility Regulatory Policies 
Act of 1978 (as added by section 2(a)).
    (b) Requirements.--In establishing the program under subsection 
(a), the Secretary of Energy shall--
            (1) identify and coordinate, across all relevant program 
        offices throughout the Department of Energy, key areas of 
        existing and future research with respect to a portfolio of 
        technologies and approaches;
            (2) with respect to dispatchable low-emission technologies 
        and dispatchable zero-emission technologies (as defined in 
        sections 610(b) of the Public Utility Regulatory Policies Act 
        of 1978 (as added by section 2(a))--
                    (A) prioritize programs that would accelerate the 
                research, development, demonstration, and deployment of 
                technologies by--
                            (i) identifying specific applications of 
                        those technologies;
                            (ii) cataloguing existing Department of 
                        Energy programs and research to advance the 
                        specific applications; and
                            (iii) establishing a center within the 
                        Department of Energy to coordinate research 
                        priorities and demonstration programs for the 
                        specific applications;
                    (B) adopt long-term cost, performance, and 
                deployment targets for the specific applications 
                identified under subparagraph (A)(i), including a goal 
                of conducting not fewer than 5 technology 
                demonstrations in the United States by December 31, 
                2030;
                    (C) identify opportunities to work with States and 
                the private sector for technology demonstration; and
                    (D) identify barriers to the demonstration and 
                deployment of those technologies;
            (3) identify approaches to expedite deployment of clean 
        energy technologies by evaluating and avoiding or minimizing 
        potential impacts to natural communities, ecological resources, 
        and high-quality working land; and
            (4) recommend to Congress any additional funding needs or 
        policy changes necessary to implement the program.
    (c) Funding.--Subject to the availability of appropriations, the 
Secretary of Energy may use amounts available to the Secretary to carry 
out this section.
                                 <all>
```