‘‘(5) JUDICIAL REVIEW.— 
‘‘(A) IN GENERAL.—Any person adversely 
affected by a final action taken by the Sec-
retary under this section, other than the assess-
ment of a civil penalty, may use the procedures 
for review described in section 336(b) of the 
Energy Policy and Conservation Act (42 U.S.C. 
6306(b)). 
‘‘(B) REFERENCE.—In this paragraph, 
references to a rule in section 336(b) of the En-
ergy Policy and Conservation Act (42 U.S.C. 
6306(b)) shall be considered to refer also to all 
other final actions of the Secretary under this 
section other than the assessment of a civil pen-
alty. 
‘‘(h) STATE ADMINISTRATION.— 
‘‘(1) IN GENERAL.—Upon receipt of an applica-
tion from the Governor of a State (including the 
Mayor of the District of Columbia), the Secretary 
may delegate to the State responsibility for admin-
istering this section within the territory of the State 
if the Secretary determines that the State will imple-
ment an energy efficiency program that meets or ex-
ceeds the requirements of this section, including— 
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‘‘(A) achieving electricity savings and nat-
ural gas savings that are at least as great as 
those required under the applicable performance 
standards established under subsection (d); 
‘‘(B) reviewing reports and verifying elec-
tricity savings and natural gas savings achieved 
in the State (including savings transferred from 
outside the State); and 
‘‘(C) collecting any alternative compliance 
payments under paragraph (4) and using the 
payments to implement cost-effective efficiency 
programs. 
‘‘(2) 
SECRETARIAL
DETERMINATION.—Not 
later than 180 days after the date on which a com-
plete application is received by the Secretary, the 
Secretary shall make a substantive determination 
approving or disapproving a State application, after 
public notice and comment. 
‘‘(3) 
ALTERNATIVE
MEASUREMENT
AND 
VERIFICATION PROCEDURES AND STANDARDS.—As 
part of an application submitted under paragraph 
(1), a State may request to use alternative measure-
ment and verification procedures and standards 
from the procedures and standards described in sub-
section (f), if the State demonstrates that the alter-
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native procedures and standards provide a level of 
accuracy of measurement and verification that are at 
least equivalent to the Federal procedures and 
standards under subsection (f). 
‘‘(4) ALTERNATIVE COMPLIANCE PAYMENTS.— 
‘‘(A) IN GENERAL.—As part of an applica-
tion submitted under paragraph (1), a State 
may permit retail electricity suppliers or retail 
natural gas suppliers to pay to the State, by 
not later than April 1 of the calendar year im-
mediately following the applicable reporting pe-
riod, an alternative compliance payment in an 
amount equal to, as adjusted for inflation in ac-
cordance with such regulations as the Secretary 
may promulgate, not less than— 
‘‘(i) $50 per megawatt hour of elec-
tricity savings needed to make up any def-
icit with regard to a compliance obligation 
under the applicable performance stand-
ard; or 
‘‘(ii) $5 per million Btu of natural gas 
savings needed to make up any deficit with 
regard to a compliance obligation under 
the applicable performance standard. 
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‘‘(B) USE
OF
PAYMENTS.—Alternative 
compliance payments collected by a State under 
subparagraph (A) shall be used by the State to 
administer the delegated authority of the State 
under this section and to implement cost-effec-
tive energy efficiency programs that— 
‘‘(i) to the maximum extent prac-
ticable, achieve electricity savings and nat-
ural gas savings in the State sufficient to 
make up the deficit associated with the al-
ternative compliance payments; and 
‘‘(ii) can be measured and verified in 
accordance with the applicable procedures 
and standards under subsection (f) or 
paragraph (3), as applicable. 
‘‘(5) REVIEW OF STATE IMPLEMENTATION.— 
‘‘(A) PERIODIC REVIEW.—Every 2 years, 
the Secretary shall review State implementation 
of this section for conformance with the re-
quirements of this section in approximately 1⁄2 
of the States that have received approval under 
this subsection to administer the program, so 
that each State shall be reviewed at least every 
4 years. 
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‘‘(B) REPORT.—To facilitate the review 
under subparagraph (A), the Secretary may re-
quire the State to submit a report dem-
onstrating the conformance of the State with 
the requirements of this section, including— 
‘‘(i) reports submitted by retail elec-
tricity suppliers and retail natural gas sup-
pliers to the State demonstrating compli-
ance with applicable performance stand-
ards; 
‘‘(ii) the impact of the standards on 
projected electricity and natural gas de-
mand within the State; 
‘‘(iii) an accounting of the use of al-
ternative compliance payments by the 
State and the resulting electricity savings 
and natural gas savings achieved; and 
‘‘(iv) any other information that the 
Secretary determines appropriate. 
‘‘(C) REVIEW UPON PETITION.—Notwith-
standing subparagraph (A), upon receipt of a 
public petition containing credible allegation of 
substantial deficiencies, the Secretary shall 
promptly review the State implementation of 
delegated authority under this section. 
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‘‘(D) DEFICIENCIES.— 
‘‘(i) IN
GENERAL.—In completing a 
review under this paragraph, if the Sec-
retary finds deficiencies, the Secretary 
shall— 
‘‘(I) notify the State of the defi-
ciencies; 
‘‘(II) direct the State to correct 
the deficiencies; and 
‘‘(III) require the State to report 
to the Secretary on progress made by 
not later than 180 days after the date 
on which the State receives notice 
under subclause (I). 
‘‘(ii) SUBSTANTIAL DEFICIENCIES.—If 
the deficiencies are substantial, the Sec-
retary shall— 
‘‘(I) disallow the reported elec-
tricity savings or natural gas savings 
that the Secretary determines are not 
credible due to deficiencies; 
‘‘(II) re-review the State not 
later than 2 years after the date on 
which the original review was com-
pleted; and 
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‘‘(III) if substantial deficiencies 
remain uncorrected after the review 
provided for under subclause (II), re-
voke the authority of the State to ad-
minister 
the 
program 
established 
under this section. 
‘‘(6) CALLS FOR REVISION OF STATE APPLICA-
TIONS.—As a condition of maintaining the delegated 
authority of a State to administer this section, the 
Secretary may require a State to submit a revised 
application under paragraph (1) if the Secretary 
has— 
‘‘(A) promulgated new or revised perform-
ance standards under subsection (d); 
‘‘(B) promulgated new or substantially re-
vised measurement and verification procedures 
and standards under subsection (f); or 
‘‘(C) otherwise substantially revised the 
program established under this section. 
‘‘(7) COST RECOVERY, FIXED COST RECOVERY 
AND SHAREHOLDER INCENTIVES.—State utility reg-
ulatory commissions are encouraged to review the 
rules and regulations of the commission to ensure 
that utilities under the jurisdiction of the commis-
sion can— 
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‘‘(A) recover the direct costs of energy effi-
ciency programs; 
‘‘(B) fully recover authorized fixed costs, 
including lost margins from lower annual sales 
due to energy efficiency programs; and 
‘‘(C) earn an incentive for shareholders if 
the energy efficiency standards are achieved. 
‘‘(i) INFORMATION AND REPORTS.—In accordance 
with section 13 of the Federal Energy Administration Act 
of 1974 (15 U.S.C. 772), the Secretary may require any 
retail electricity supplier, retail natural gas supplier, third- 
party efficiency provider, or any other entity that the Sec-
retary determines appropriate, to provide any information 
the Secretary determines appropriate to carry out this sec-
tion. 
‘‘(j) STATE LAW.—Nothing in this section diminishes 
or qualifies any authority of a State or political subdivision 
of a State to adopt or enforce any law or regulation re-
specting electricity savings or natural gas savings, includ-
ing any law or regulation establishing energy efficiency re-
quirements that are more stringent than those under this 
section, except that no State law or regulation shall relieve 
any person of any requirement otherwise applicable under 
this section.’’. 
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SEC. 6. PROGRAM REVIEW. 
(a) NATIONAL ACADEMY OF SCIENCES REVIEW.— 
The Secretary of Energy shall enter into a contract with 
the National Academy of Sciences under which the Acad-
emy shall, not later than July 1, 2019, and every 10 years 
thereafter, submit to Congress, the Federal Energy Regu-
latory Commission, and the Secretary of Energy a com-
prehensive evaluation of all aspects of the programs estab-
lished under this Act and under sections 610 and 611 of 
the Public Utility Regulatory Policies Act of 1978 (as 
added by this Act), including— 
(1) an evaluation of the effectiveness of the pro-
grams, including the specific design elements of the 
programs, in increasing the efficiency of retail nat-
ural gas and electricity distribution and consumption 
and increasing the deployment of renewable elec-
tricity capacity; 
(2) the opportunities for additional technologies 
and sources of efficiency and renewable electricity 
that have emerged since the date of enactment of 
this Act; 
(3) the impact of the programs on the reli-
ability of electricity and natural gas supply; 
(4) the net benefits or costs of the programs to 
the United States and the States, including— 
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(A) the effects on electricity and natural 
gas demand and prices; 
(B) the economic development benefits of 
investment; 
(C) environmental costs and benefits; 
(D) the impacts on public health and 
health care costs; and 
(E) avoided costs related to environmental 
and congestion mitigation investments that oth-
erwise would have been required; 
(5) an assessment of the benefits and costs of 
increasing the performance standards established 
under section 611(d) of the Public Utility Regu-
latory Policies Act of 1978 (as added by this Act); 
(6) the feasibility, advantages, and disadvan-
tages of alternative models for demonstrating com-
pliance with a Federal energy efficiency resource 
standard, including— 
(A) establishing a national trading system 
for energy efficiency credits; or 
(B) demonstrating compliance through ac-
tual reductions in delivery or sales of electricity 
and natural gas, rather than on program sav-
ings; and 
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(7) 
recommendations 
regarding 
potential 
changes to this section, to regulations and proce-
dures for implementing this section, or to related 
public policies. 
(b) RECOMMENDATIONS TO CONGRESS.—Not later 
than January 1, 2020, and every 10 years thereafter, the 
Secretary of Energy shall submit to the Committee on En-
ergy and Commerce of the House of Representatives and 
the Committee on Energy and Natural Resources of the 
Senate a report making recommendations for modifica-
tions and improvements to the programs established under 
this Act and under sections 610 and 611 of the Public 
Utility Regulatory Policies Act of 1978 (as added by this 
Act), including an explanation of the inconsistencies, if 
any, between the recommendations of the Secretary of En-
ergy and the recommendations included in the evaluation 
of the National Academy of Sciences under paragraph (1). 
SEC. 7. 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: 
‘‘Sec. 609. Rural and remote communities electrification grants. 
‘‘Sec. 610. Federal renewable electricity standard. 
‘‘Sec. 611. Federal energy efficiency resource standard for retail electricity and 
natural gas suppliers.’’. 
Æ 
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