I 
111TH CONGRESS 
1ST SESSION H. R. 2998 
To create clean energy jobs, achieve energy independence, reduce global 
warming pollution and transition to a clean energy economy. 
IN THE HOUSE OF REPRESENTATIVES 
JUNE 23, 2009 
Mr. WAXMAN (for himself and Mr. MARKEY of Massachusetts) introduced the 
following bill; which was referred to the Committee on Energy and Com-
merce, and in addition to the Committees on Foreign Affairs, Ways and 
Means, Financial Services, Education and Labor, Science and Tech-
nology, Transportation and Infrastructure, Natural Resources, Agri-
culture, Oversight and Government Reform, and the Judiciary, for a pe-
riod to be subsequently determined by the Speaker, in each case for con-
sideration of such provisions as fall within the jurisdiction of the com-
mittee concerned 
A BILL 
To create clean energy jobs, achieve energy independence, 
reduce global warming pollution and transition to a clean 
energy economy. 
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Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘American Clean Energy and Security Act of 2009’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Definitions. 
Sec. 3. International participation. 
TITLE I—CLEAN ENERGY 
Subtitle A—Combined Efficiency and Renewable Electricity Standard 
Sec. 101. Combined efficiency and renewable electricity standard. 
Sec. 102. Clarifying State authority to adopt renewable energy incentives. 
Subtitle B—Carbon Capture and Sequestration 
Sec. 111. National strategy. 
Sec. 112. Regulations for geologic sequestration sites. 
‘‘Sec. 813. Geologic sequestration sites. 
Sec. 113. Studies and reports. 
Sec. 114. Carbon capture and sequestration demonstration and early deploy-
ment program. 
Sec. 115. Commercial deployment of carbon capture and sequestration tech-
nologies. 
‘‘Sec. 786. Commercial deployment of carbon capture and sequestration 
technologies. 
Sec. 116. Performance standards for coal-fueled power plants. 
‘‘Sec. 812. Performance standards for new coal-fired power plants. 
Subtitle C—Clean Transportation 
Sec. 121. Electric vehicle infrastructure. 
Sec. 122. Large-scale vehicle electrification program. 
Sec. 123. Plug-in electric drive vehicle manufacturing. 
Sec. 124. Investment in clean vehicles. 
Sec. 125. Advanced technology vehicle manufacturing incentive loans. 
Sec. 126. Amendment to renewable fuels standard. 
Sec. 127. Open fuel standard. 
Sec. 128. Diesel emissions reduction. 
Sec. 129. Loan guarantees for projects to construct renewable fuel pipelines. 
Subtitle D—State Energy and Environment Development Accounts 
Sec. 131. Establishment of SEED Accounts. 
Sec. 132. Support of State renewable energy and energy efficiency programs. 
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Sec. 133. Support of Indian renewable energy and energy efficiency programs. 
Subtitle E—Smart Grid Advancement 
Sec. 141. Definitions. 
Sec. 142.
Assessment of Smart Grid cost effectiveness in products. 
Sec. 143. Inclusions of Smart Grid capability on appliance ENERGY GUIDE 
labels. 
Sec. 144. Smart Grid peak demand reduction goals. 
Sec. 145.
Reauthorization of energy efficiency public information program to 
include Smart Grid information. 
Sec. 146. Inclusion of Smart Grid features in appliance rebate program. 
Subtitle F—Transmission Planning 
Sec. 151. Transmission planning. 
Sec. 152. Net metering for Federal agencies. 
Sec. 153. Support for qualified advanced electric transmission manufacturing 
plants, qualified high efficiency transmission property, and 
qualified advanced electric transmission property. 
Subtitle G—Technical Corrections to Energy Laws 
Sec. 161. Technical corrections to Energy Independence and Security Act of 
2007. 
Sec. 162. Technical corrections to Energy Policy Act of 2005. 
Subtitle H—Energy and Efficiency Centers and Research 
Sec. 171. Energy Innovation Hubs. 
Sec. 172. Advanced energy research. 
Sec. 173. Building Assessment Centers. 
Sec. 174. Centers for Energy and Environmental Knowledge and Outreach. 
Subtitle I—Nuclear and Advanced Technologies 
Sec. 181. Revisions to loan guarantee program authority. 
Sec. 182. Purpose. 
Sec. 183. Definitions. 
Sec. 184. Clean energy investment fund. 
Sec. 185. Energy technology deployment goals. 
Sec. 186. Clean energy deployment administration. 
Sec. 187. Direct support. 
Sec. 188. Indirect support. 
Sec. 189. Federal credit authority. 
Sec. 190. General provisions. 
Sec. 191. Conforming amendments. 
Subtitle J—Miscellaneous 
Sec. 195. Increased hydroelectric generation at existing Federal facilities. 
Sec. 196. Clean technology business competition grant program. 
Sec. 197. National Bioenergy Partnership. 
Sec. 198. Office of Consumer Advocacy. 
TITLE II—ENERGY EFFICIENCY 
Subtitle A—Building Energy Efficiency Programs 
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Sec. 201. Greater energy efficiency in building codes. 
Sec. 202. Building retrofit program. 
Sec. 203. Energy efficient manufactured homes. 
Sec. 204. Building energy performance labeling program. 
Sec. 205. Tree planting programs. 
Sec. 206. Energy efficiency for data center buildings. 
Subtitle B—Lighting and Appliance Energy Efficiency Programs 
Sec. 211. Lighting efficiency standards. 
Sec. 212. Other appliance efficiency standards. 
Sec. 213. Appliance efficiency determinations and procedures. 
Sec. 214. Best-in-Class Appliances Deployment Program. 
Sec. 215. WaterSense. 
Sec. 216. Federal procurement of water efficient products. 
Sec. 217. Water efficient product rebate programs. 
Sec. 218. Certified stoves program. 
Sec. 219. Energy Star standards. 
Subtitle C—Transportation Efficiency 
Sec. 221. Emissions standards. 
‘‘PART B—MOBILE SOURCES 
‘‘Sec. 821. Greenhouse gas emission standards for mobile sources. 
Sec. 222. Greenhouse gas emissions reductions through transportation effi-
ciency. 
‘‘PART D—TRANSPORTATION EMISSIONS 
‘‘Sec. 841. Greenhouse gas emissions reductions through transportation ef-
ficiency. 
Sec. 223. SmartWay transportation efficiency program. 
‘‘Sec. 822. SmartWay transportation efficiency program. 
Sec. 224. State vehicle fleets. 
Subtitle D—Industrial Energy Efficiency Programs 
Sec. 241. Industrial plant energy efficiency standards. 
Sec. 242. Electric and thermal waste energy recovery award program. 
Sec. 243. Clarifying election of waste heat recovery financial incentives. 
Sec. 244. Motor market assessment and commercial awareness program. 
Sec. 245. Motor efficiency rebate program. 
Subtitle E—Improvements in Energy Savings Performance Contracting 
Sec. 251. Energy savings performance contracts. 
Subtitle F—Public Institutions 
Sec. 261. Public institutions. 
Sec. 262. Community energy efficiency flexibility. 
Sec. 263. Small community joint participation. 
Sec. 264. Low income community energy efficiency program. 
Subtitle G—Miscellaneous 
Sec. 271. Energy efficient information and communications technologies. 
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Sec. 272. National energy efficiency goals. 
Sec. 273. Affiliated island energy independence team. 
Sec. 274. Product carbon disclosure program. 
TITLE III—REDUCING GLOBAL WARMING POLLUTION 
Sec. 301. Short title. 
Subtitle A—Reducing Global Warming Pollution 
Sec. 311. Reducing global warming pollution. 
‘‘TITLE VII—GLOBAL WARMING POLLUTION REDUCTION 
PROGRAM 
‘‘PART A—GLOBAL WARMING POLLUTION REDUCTION GOALS AND TARGETS 
‘‘Sec. 701. Findings and purpose. 
‘‘Sec. 702. Economy-wide reduction goals. 
‘‘Sec. 703. Reduction targets for specified sources. 
‘‘Sec. 704. Supplemental pollution reductions. 
‘‘Sec. 705. Review and program recommendations. 
‘‘Sec. 706. National Academy review. 
‘‘Sec. 707. Presidential response and recommendations. 
‘‘PART B—DESIGNATION AND REGISTRATION OF GREENHOUSE GASES 
‘‘Sec. 711. Designation of greenhouse gases. 
‘‘Sec. 712. Carbon dioxide equivalent value of greenhouse gases. 
‘‘Sec. 713. Greenhouse gas registry. 
‘‘PART C—PROGRAM RULES 
‘‘Sec. 721. Emission allowances. 
‘‘Sec. 722. Prohibition of excess emissions. 
‘‘Sec. 723. Penalty for noncompliance. 
‘‘Sec. 724. Trading. 
‘‘Sec. 725. Banking and borrowing. 
‘‘Sec. 726. Strategic reserve. 
‘‘Sec. 727. Permits. 
‘‘Sec. 728. International emission allowances. 
‘‘PART D—OFFSETS 
‘‘Sec. 731. Offsets Integrity Advisory Board. 
‘‘Sec. 732. Establishment of offsets program. 
‘‘Sec. 733. Eligible project types. 
‘‘Sec. 734. Requirements for offset projects. 
‘‘Sec. 735. Approval of offset projects. 
‘‘Sec. 736. Verification of offset projects. 
‘‘Sec. 737. Issuance of offset credits. 
‘‘Sec. 738. Audits. 
‘‘Sec. 739. Program review and revision. 
‘‘Sec. 740. Early offset supply. 
‘‘Sec. 741. Environmental considerations. 
‘‘Sec. 742. Trading. 
‘‘Sec. 743. International offset credits. 
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‘‘PART E—SUPPLEMENTAL EMISSIONS REDUCTIONS FROM REDUCED 
DEFORESTATION 
‘‘Sec. 751. Definitions. 
‘‘Sec. 752. Findings. 
‘‘Sec. 753. Supplemental emissions reductions through reduced deforest-
ation. 
‘‘Sec. 754. Requirements for international deforestation reduction pro-
gram. 
‘‘Sec. 755. Reports and reviews. 
‘‘Sec. 756. Legal effect of part. 
Sec. 312. Definitions. 
‘‘Sec. 700. Definitions. 
Subtitle B—Disposition of Allowances 
Sec. 321. Disposition of allowances for global warming pollution reduction pro-
gram. 
‘‘PART H—DISPOSITION OF ALLOWANCES 
‘‘Sec. 781. Allocation of allowances for supplemental reductions. 
‘‘Sec. 782. Allocation of emission allowances. 
‘‘Sec. 783. Electricity consumers. 
‘‘Sec. 784. Natural gas consumers. 
‘‘Sec. 785. Home heating oil, propane, and kerosene consumers. 
‘‘Sec. 787. Allocations to refineries. 
‘‘Sec. 788. øSECTION RESERVED¿. 
‘‘Sec. 789. Climate change consumer refunds. 
‘‘Sec. 790. Exchange for State-issued allowances. 
‘‘Sec. 791. Auction procedures. 
‘‘Sec. 792. Auctioning allowances for other entities. 
‘‘Sec. 793. Establishment of funds. 
‘‘Sec. 794. Oversight of allocations. 
Subtitle C—Additional Greenhouse Gas Standards 
Sec. 331. Greenhouse gas standards. 
‘‘TITLE VIII—ADDITIONAL GREENHOUSE GAS STANDARDS 
‘‘Sec. 801. Definitions. 
‘‘PART A—STATIONARY SOURCE STANDARDS 
‘‘Sec. 811. Standards of performance. 
‘‘PART C—EXEMPTIONS FROM OTHER PROGRAMS 
‘‘Sec. 831. Criteria pollutants. 
‘‘Sec. 832. International air pollution. 
‘‘Sec. 833. Hazardous air pollutants. 
‘‘Sec. 834. New source review. 
‘‘Sec. 835. Title V permits. 
Sec. 332. HFC Regulation. 
Sec. 333. Black carbon. 
‘‘PART E—BLACK CARBON 
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‘‘Sec. 851. Black carbon. 
Sec. 334. States. 
Sec. 335. State programs. 
‘‘PART F—MISCELLANEOUS 
‘‘Sec. 861. State programs. 
‘‘Sec. 862. Grants for support of air pollution control programs. 
Sec. 336. Enforcement. 
Sec. 337. Conforming amendments. 
Sec. 338. Davis-Bacon compliance. 
Sec. 339. National strategy for domestic biological carbon sequestration. 
Subtitle D—Carbon Market Assurance 
Sec. 341. Carbon market assurance. 
Subtitle E—Additional Market Assurance 
Sec. 351. Regulation of certain transactions in derivatives involving energy 
commodities. 
Sec. 352. No effect on authority of the Federal Energy Regulatory Commission. 
Sec. 353. Inspector General of the Commodity Futures Trading Commission. 
Sec. 354. Settlement and clearing through registered derivatives clearing orga-
nizations. 
Sec. 355. Limitation on eligibility to purchase a credit default swap. 
Sec. 356. Transaction fees. 
Sec. 357. No effect on antitrust law or authority of the Federal Trade Commis-
sion. 
Sec. 358. Regulation of carbon derivatives markets. 
Sec. 359. Cease-and-desist authority. 
TITLE IV—TRANSITIONING TO A CLEAN ENERGY ECONOMY 
Subtitle A—Ensuring Real Reductions in Industrial Emissions 
Sec. 401. Ensuring real reductions in industrial emissions. 
‘‘PART F—ENSURING REAL REDUCTIONS IN INDUSTRIAL EMISSIONS 
‘‘Sec. 761. Purposes. 
‘‘Sec. 762. International negotiations. 
‘‘Sec. 763. Definitions. 
‘‘SUBPART 1—EMISSION ALLOWANCE REBATE PROGRAM 
‘‘Sec. 764. Eligible industrial sectors. 
‘‘Sec. 765. Distribution of emission allowance rebates. 
‘‘SUBPART 2—INTERNATIONAL RESERVE ALLOWANCE PROGRAM 
‘‘Sec. 766. International reserve allowance program. 
‘‘SUBPART 3—PRESIDENTIAL DETERMINATION 
‘‘Sec. 767. Presidential reports and determinations. 
Subtitle B—Green Jobs and Worker Transition 
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PART 1—GREEN JOBS 
Sec. 421. Clean energy curriculum development grants. 
Sec. 422. Increased funding for energy worker training program. 
PART 2—CLIMATE CHANGE WORKER ADJUSTMENT ASSISTANCE 
Sec. 425. Petitions, eligibility requirements, and determinations. 
Sec. 426. Program benefits. 
Sec. 427. General provisions. 
Subtitle C—Consumer Assistance 
Sec. 431. Energy refund program. 
Sec. 432. Modification of earned income credit amount for individuals with no 
qualifying children. 
Sec. 433. Protection of Social Security and Medicare trust funds. 
Subtitle D—Exporting Clean Technology 
Sec. 441. Findings and purposes. 
Sec. 442. Definitions. 
Sec. 443. Governance. 
Sec. 444. Determination of eligible countries. 
Sec. 445. Qualifying activities. 
Sec. 446. Assistance. 
Subtitle E—Adapting to Climate Change 
PART 1—DOMESTIC ADAPTATION 
SUBPART A—NATIONAL CLIMATE CHANGE ADAPTATION PROGRAM 
Sec. 451. Global change research and data management. 
Sec. 452. National Climate Service. 
Sec. 453. State programs to build resilience to climate change impacts. 
SUBPART B—PUBLIC HEALTH AND CLIMATE CHANGE 
Sec. 461. Sense of Congress on public health and climate change. 
Sec. 462. Relationship to other laws. 
Sec. 463. National strategic action plan. 
Sec. 464. Advisory board. 
Sec. 465. Reports. 
Sec. 466. Definitions. 
Sec. 467. Climate Change Health Protection and Promotion Fund. 
SUBPART C—NATURAL RESOURCE ADAPTATION 
Sec. 471. Purposes. 
Sec. 472. Natural resources climate change adaptation policy. 
Sec. 473. Definitions. 
Sec. 474. Council on Environmental Quality. 
Sec. 475. Natural Resources Climate Change Adaptation Panel. 
Sec. 476. Natural Resources Climate Change Adaptation Strategy. 
Sec. 477. Natural resources adaptation science and information. 
Sec. 478. Federal natural resource agency adaptation plans. 
Sec. 479. State natural resources adaptation plans. 
Sec. 480. Natural Resources Climate Change Adaptation Fund. 
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Sec. 481. National Wildlife Habitat and Corridors Information Program. 
Sec. 482. Additional provisions regarding Indian tribes. 
PART 2—INTERNATIONAL CLIMATE CHANGE ADAPTATION PROGRAM 
Sec. 491. Findings and purposes. 
Sec. 492. Definitions. 
Sec. 493. International Climate Change Adaptation Program. 
Sec. 494. Distribution of allowances. 
Sec. 495. Bilateral assistance. 
SEC. 2. DEFINITIONS. 
For purposes of this Act: 
(1) ADMINISTRATOR.—The term ‘‘Adminis-
trator’’ means the Administrator of the Environ-
mental Protection Agency. 
(2) STATE.—The term ‘‘State’’ has the mean-
ing given that term in section 302 of the Clean Air 
Act. 
SEC. 3. INTERNATIONAL PARTICIPATION. 
The Administrator, in consultation with the Depart-
ment of State and the United States Trade Representa-
tive, shall annually prepare and certify a report to the 
Congress regarding whether China and India have adopted 
greenhouse gas emissions standards at least as strict as 
those standards required under this Act. If the Adminis-
trator determines that China and India have not adopted 
greenhouse gas emissions standards at least as stringent 
as those set forth in this Act, the Administrator shall no-
tify each Member of Congress of his determination, and 
shall release his determination to the media. 
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TITLE I—CLEAN ENERGY 
Subtitle 
A—Combined 
Efficiency 
and 
Renewable 
Electricity 
Standard 
SEC. 101. COMBINED EFFICIENCY AND RENEWABLE ELEC-
TRICITY STANDARD. 
(a) IN GENERAL.—Title VI of the Public Utility Reg-
ulatory Policies Act of 1978 (16 U.S.C. 2601 and fol-
lowing) is amended by adding at the end the following: 
‘‘SEC. 610. COMBINED EFFICIENCY AND RENEWABLE ELEC-
TRICITY STANDARD. 
‘‘(a) DEFINITIONS.—For purposes of this section: 
‘‘(1) CHP SAVINGS.—The term ‘CHP savings’ 
means— 
‘‘(A) CHP system savings from a combined 
heat and power system that commences oper-
ation after the date of enactment of this sec-
tion; and 
‘‘(B) the increase in CHP system savings 
from, at any time after the date of the enact-
ment of this section, upgrading, replacing, ex-
panding, or increasing the utilization of a com-
bined heat and power system that commenced 
operation on or before the date of enactment of 
this section. 
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‘‘(2) CHP SYSTEM SAVINGS.—The term ‘CHP 
system savings’ means the increment of electric out-
put of a combined heat and power system that is at-
tributable to the higher efficiency of the combined 
system (as compared to the efficiency of separate 
production of the electric and thermal outputs). 
‘‘(3) COMBINED HEAT AND POWER SYSTEM.— 
The term ‘combined heat and power system’ means 
a system that uses the same energy source both for 
the generation of electrical or mechanical power and 
the production of steam or another form of useful 
thermal energy, provided that— 
‘‘(A) the system meets such requirements 
relating to efficiency and other operating char-
acteristics as the Commission may promulgate 
by regulation; and 
‘‘(B) the net sales of electricity by the fa-
cility to customers not consuming the thermal 
output from that facility will not exceed 50 per-
cent of total annual electric generation by the 
facility. 
‘‘(4) CUSTOMER FACILITY SAVINGS.—The term 
‘customer facility savings’ means a reduction in end- 
use electricity consumption (including recycled en-
ergy savings) at a facility of an end-use consumer of 
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electricity served by a retail electric supplier, as 
compared to— 
‘‘(A) in the case of a new facility, con-
sumption at a reference facility of average effi-
ciency; 
‘‘(B) in the case of an existing facility, 
consumption at such facility during a base pe-
riod, except as provided in subparagraphs (C) 
and (D); 
‘‘(C) in the case of new equipment that re-
places existing equipment with remaining useful 
life, the projected consumption of the existing 
equipment for the remaining useful life of such 
equipment, and thereafter, consumption of new 
equipment of average efficiency of the same 
equipment type; and 
‘‘(D) in the case of new equipment that re-
places existing equipment at the end of the use-
ful life of the existing equipment, consumption 
by new equipment of average efficiency of the 
same equipment type. 
‘‘(5) DISTRIBUTED
RENEWABLE
GENERATION 
FACILITY.—The term ‘distributed renewable genera-
tion facility’ means a facility that— 
‘‘(A) generates renewable electricity; 
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‘‘(B) primarily serves 1 or more electricity 
consumers at or near the facility site; and 
‘‘(C) is no greater than— 
‘‘(i) 2 megawatts in capacity; or 
‘‘(ii) 4 megawatts in capacity, in the 
case of a facility that is placed in service 
after the date of enactment of this section 
and generates electricity from a renewable 
energy resource other than by means of 
combustion. 
‘‘(6) ELECTRICITY SAVINGS.—The term ‘elec-
tricity savings’ means reductions in electricity con-
sumption, relative to business-as-usual projections, 
achieved through measures implemented after the 
date of enactment of this section, limited to— 
‘‘(A) customer facility savings of elec-
tricity, adjusted to reflect any associated in-
crease in fuel consumption at the facility; 
‘‘(B) reductions in distribution system 
losses of electricity achieved by a retail elec-
tricity distributor, as compared to losses attrib-
utable to new or replacement distribution sys-
tem equipment of average efficiency; 
‘‘(C) CHP savings; and 
‘‘(D) fuel cell savings. 
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‘‘(7) FEDERAL LAND.—The term ‘Federal land’ 
means land owned by the United States, other than 
land held in trust for an Indian or Indian tribe. 
‘‘(8) 
FEDERAL
RENEWABLE
ELECTRICITY 
CREDIT.—The term ‘Federal renewable electricity 
credit’ means a credit, representing one megawatt 
hour of renewable electricity, issued pursuant to sub-
section (e). 
‘‘(9) FUEL CELL.—The term ‘fuel cell’ means a 
device that directly converts the chemical energy of 
a fuel and an oxidant into electricity by electro-
chemical processes occurring at separate electrodes 
in the device. 
‘‘(10) FUEL
CELL
SAVINGS.—The term ‘fuel 
cell savings’ means the electricity saved by a fuel cell 
that is installed after the date of enactment of this 
section, or by upgrading a fuel cell that commenced 
operation on or before the date of enactment of this 
section, as a result of the greater efficiency with 
which the fuel cell transforms fuel into electricity as 
compared with sources of electricity delivered 
through the grid, provided that— 
‘‘(A) the fuel cell meets such requirements 
relating to efficiency and other operating char-
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acteristics as the Commission may promulgate 
by regulation; and 
‘‘(B) the net sales of electricity from the 
fuel cell to customers not consuming the ther-
mal output from the fuel cell, if any, do not ex-
ceed 50 percent of the total annual electricity 
generation by the fuel cell. 
‘‘(11) HIGH CONSERVATION PRIORITY LAND.— 
The term ‘high conservation priority land’ means 
land that is not Federal land and is— 
‘‘(A) globally or State ranked as critically 
imperiled or imperiled under a State Natural 
Heritage Program; or 
‘‘(B) old-growth or late-successional forest, 
as identified by the office of the relevant State 
Forester or relevant State agency with regu-
latory jurisdiction over forestry activities. 
‘‘(12) 
OTHER
QUALIFYING
ENERGY
RE-
SOURCE.—The term ‘other qualifying energy re-
source’ means any of the following: 
‘‘(A) Landfill gas. 
‘‘(B) Wastewater treatment gas. 
‘‘(C) Coal mine methane used to generate 
electricity at or near the mine mouth. 
‘‘(D) Qualified waste-to-energy. 
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‘‘(13) QUALIFIED
HYDROPOWER.—The term 
‘qualified hydropower’ means— 
‘‘(A) energy produced from increased effi-
ciency achieved, or additions of capacity made, 
on or after January 1, 1992, at a hydroelectric 
facility that was placed in service before that 
date and does not include additional energy 
generated as a result of operational changes not 
directly associated with efficiency improvements 
or capacity additions; or 
‘‘(B) energy produced from generating ca-
pacity added to a dam on or after January 1, 
1992, provided that the Commission certifies 
that— 
‘‘(i) the dam was placed in service be-
fore the date of the enactment of this sec-
tion and was operated for flood control, 
navigation, or water supply purposes and 
was not producing hydroelectric power 
prior to the addition of such capacity; 
‘‘(ii) the hydroelectric project installed 
on the dam is licensed (or is exempt from 
licensing) by the Commission and is in 
compliance with the terms and conditions 
of the license or exemption, and with other 
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applicable legal requirements for the pro-
tection of environmental quality, including 
applicable fish passage requirements; and 
‘‘(iii) the hydroelectric project in-
stalled on the dam is operated so that the 
water surface elevation at any given loca-
tion and time that would have occurred in 
the absence of the hydroelectric project is 
maintained, subject to any license or ex-
emption requirements that require changes 
in water surface elevation for the purpose 
of improving the environmental quality of 
the affected waterway. 
‘‘(14) 
QUALIFIED
WASTE-TO-ENERGY.—The 
term ‘qualified waste-to-energy’ means energy from 
the combustion of municipal solid waste or construc-
tion, demolition, or disaster debris, or from the gas-
ification or pyrolization of such waste or debris and 
the combustion of the resulting gas at the same fa-
cility, provided that— 
‘‘(A) such term shall include only the en-
ergy derived from the non-fossil biogenic por-
tion of such waste or debris; 
‘‘(B) the Commission determines, with the 
concurrence of the Administrator of the Envi-
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ronmental Protection Agency, that the total 
lifecycle greenhouse gas emissions attributable 
to the generation of electricity from such waste 
or debris are lower than those attributable to 
the likely alternative method of disposing of 
such waste or debris; and 
‘‘(C) the owner or operator of the facility 
generating electricity from such energy provides 
to the Commission, on an annual basis— 
‘‘(i) a certification that the facility is 
in compliance with all applicable State, 
tribal, and Federal environmental permits; 
‘‘(ii) in the case of a facility that com-
menced operation before the date of enact-
ment of this section, a certification that 
the facility meets emissions standards pro-
mulgated under sections 112 or 129 of the 
Clean Air Act (42 U.S.C. 7412 or 7429) 
that apply as of the date of enactment of 
this section to new facilities within the rel-
evant source category; and 
‘‘(iii) in the case of the combustion, 
pyrolization, or gasification of municipal 
solid waste, a certification that each local 
government unit from which such waste 
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originates operates, participates in the op-
eration of, contracts for, or otherwise pro-
vides for, recycling services for its resi-
dents. 
‘‘(15) RECYCLED ENERGY SAVINGS.—The term 
‘recycled energy savings’ means a reduction in elec-
tricity consumption that results from a modification 
of an industrial or commercial system that com-
menced operation before the date of enactment of 
this section, in order to recapture electrical, mechan-
ical, or thermal energy that would otherwise be 
wasted. 
‘‘(16) RENEWABLE
BIOMASS.—The term ‘re-
newable biomass’ means any of the following: 
‘‘(A) Plant material, including waste mate-
rial, harvested or collected from actively man-
aged agricultural land that was in cultivation, 
cleared, or fallow and nonforested on January 
1, 2009. 
‘‘(B) Plant material, including waste mate-
rial, harvested or collected from pastureland 
that was nonforested on January 1, 2009. 
‘‘(C) Nonhazardous vegetative matter de-
rived from waste, including separated yard 
waste, landscape right-of-way trimmings, con-
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struction and demolition debris or food waste 
(but not municipal solid waste, recyclable waste 
paper, painted, treated or pressurized wood, or 
wood contaminated with plastic or metals). 
‘‘(D) Animal waste or animal byproducts, 
including products of animal waste digesters. 
‘‘(E) Algae. 
‘‘(F) Trees, brush, slash, residues, or any 
other vegetative matter removed from within 
600 feet of any building, campground, or route 
designated for evacuation by a public official 
with responsibility for emergency preparedness, 
or from within 300 feet of a paved road, electric 
transmission line, utility tower, or water supply 
line. 
‘‘(G) Residues from or byproducts of 
milled logs. 
‘‘(H) Any of the following removed from 
forested land that is not Federal and is not 
high conservation priority land: 
‘‘(i) Trees, brush, slash, residues, 
interplanted energy crops, or any other 
vegetative matter removed from an actively 
managed tree plantation established— 
‘‘(I) prior to January 1, 2009; or 
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‘‘(II) on land that, as of January 
1, 2009, was cultivated or fallow and 
non-forested. 
‘‘(ii) Trees, logging residue, thinnings, 
cull trees, pulpwood, and brush removed 
from naturally-regenerated forests or other 
non-plantation forests, including for the 
purposes of hazardous fuel reduction or 
preventative treatment for reducing or con-
taining insect or disease infestation. 
‘‘(iii) Logging residue, thinnings, cull 
trees, pulpwood, brush and species that are 
non-native and noxious, from stands that 
were planted and managed after January 
1, 2009, to restore or maintain native for-
est types. 
‘‘(iv) Dead or severely damaged trees 
removed within 5 years of fire, blowdown, 
or other natural disaster, and badly in-
fested trees. 
‘‘(I) Materials, pre-commercial thinnings, 
or removed invasive species from National For-
est System land and public lands (as defined in 
section 103 of the Federal Land Policy and 
Management Act of 1976 (43 U.S.C. 1702)), 
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including those that are byproducts of preven-
tive treatments (such as trees, wood, brush, 
thinnings, chips, and slash), that are removed 
as part of a federally recognized timber sale, or 
that are removed to reduce hazardous fuels, to 
reduce or contain disease or insect infestation, 
or to restore ecosystem health, and that are— 
‘‘(i) not from components of the Na-
tional Wilderness Preservation System, 
Wilderness 
Study 
Areas, 
Inventoried 
Roadless Areas, old growth or mature for-
est stands, components of the National 
Landscape Conservation System, National 
Monuments, National Conservation Areas, 
Designated Primitive Areas, or Wild and 
Scenic Rivers corridors; 
‘‘(ii) harvested in environmentally sus-
tainable quantities, as determined by the 
appropriate Federal land manager; and 
‘‘(iii) harvested in accordance with 
Federal and State law and applicable land 
management plans. 
‘‘(17) RENEWABLE
ELECTRICITY.—The term 
‘renewable electricity’ means electricity generated 
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(including by means of a fuel cell) from a renewable 
energy resource or other qualifying energy resources. 
‘‘(18) RENEWABLE
ENERGY
RESOURCE.—The 
term ‘renewable energy resource’ means each of the 
following: 
‘‘(A) Wind energy. 
‘‘(B) Solar energy. 
‘‘(C) Geothermal energy. 
‘‘(D) Renewable biomass. 
‘‘(E) Biogas derived exclusively from re-
newable biomass. 
‘‘(F) Biofuels derived exclusively from re-
newable biomass. 
‘‘(G) Qualified hydropower. 
‘‘(H) Marine and hydrokinetic renewable 
energy, as that term is defined in section 632 
of the Energy Independence and Security Act 
of 2007 (42 U.S.C. 17211). 
‘‘(19) RETAIL ELECTRIC SUPPLIER.— 
‘‘(A) IN GENERAL.—The term ‘retail elec-
tric supplier’ means, for any given year, an 
electric utility that sold not less than 4,000,000 
megawatt hours of electric energy to electric 
consumers for purposes other than resale dur-
ing the preceding calendar year. 
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‘‘(B) INCLUSIONS AND LIMITATIONS.—For 
purposes of determining whether an electric 
utility qualifies as a retail electric supplier 
under subparagraph (A)— 
‘‘(i) the sales of any affiliate of an 
electric utility to electric consumers, other 
than sales to the affiliate’s lessees or ten-
ants, for purposes other than resale shall 
be considered to be sales of such electric 
utility; and 
‘‘(ii) sales by any electric utility to an 
affiliate, lessee, or tenant of such electric 
utility shall not be treated as sales to elec-
tric consumers. 
‘‘(C) AFFILIATE.—For purposes of this 
paragraph, the term ‘affiliate’ when used in re-
lation to a person, means another person that 
directly or indirectly owns or controls, is owned 
or controlled by, or is under common ownership 
or control with, such person, as determined 
under regulations promulgated by the Commis-
sion. 
‘‘(20) RETAIL
ELECTRIC
SUPPLIER’S
BASE 
AMOUNT.—The term ‘retail electric supplier’s base 
amount’ means the total amount of electric energy 
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sold by the retail electric supplier, expressed in 
megawatt hours, to electric customers for purposes 
other than resale during the relevant calendar year, 
excluding— 
‘‘(A) electricity generated by a hydro-
electric facility that is not qualified hydropower; 
‘‘(B) electricity generated by a nuclear 
generating unit placed in service after the date 
of enactment of this section; and 
‘‘(C) the proportion of electricity generated 
by a fossil-fueled generating unit that is equal 
to the proportion of greenhouse gases produced 
by such unit that are captured and geologically 
sequestered. 
‘‘(21) RETIRE AND RETIREMENT.—The terms 
‘retire’ and ‘retirement’ with respect to a Federal re-
newable electricity credit, means to disqualify such 
credit for any subsequent use under this section, re-
gardless of whether the use is a sale, transfer, ex-
change, or submission in satisfaction of a compliance 
obligation. 
‘‘(22) THIRD-PARTY EFFICIENCY PROVIDER.— 
The term ‘third-party efficiency provider’ means any 
retailer, building owner, energy service company, fi-
nancial institution or other commercial, industrial or 
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nonprofit entity that is capable of providing elec-
tricity savings in accordance with the requirements 
of this section. 
‘‘(23) TOTAL ANNUAL ELECTRICITY SAVINGS.— 
The term ‘total annual electricity savings’ means 
electricity savings during a specified calendar year 
from measures implemented since the date of the en-
actment of this section, taking into account verified 
measure lifetimes or verified annual savings attrition 
rates, as determined in accordance with such regula-
tions as the Commission may promulgate and meas-
ured in megawatt hours. 
‘‘(b) ANNUAL COMPLIANCE OBLIGATION.— 
‘‘(1) IN GENERAL.—For each of calendar years 
2012 through 2039, not later than March 31 of the 
following calendar year, each retail electric supplier 
shall submit to the Commission an amount of Fed-
eral renewable electricity credits and demonstrated 
total annual electricity savings that, in the aggre-
gate, is equal to such retail electric supplier’s annual 
combined target as set forth in subsection (d), ex-
cept as otherwise provided in subsection (g). 
‘‘(2) DEMONSTRATION OF SAVINGS.—For pur-
poses of this subsection, submission of demonstrated 
total annual electricity savings means submission of 
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a report that demonstrates, in accordance with the 
requirements of subsection (f), the total annual elec-
tricity savings achieved by the retail electric supplier 
within the relevant compliance year. 
‘‘(3) RENEWABLE ELECTRICITY CREDITS POR-
TION.—Except as provided in paragraph (4), each 
retail electric supplier must submit Federal renew-
able electricity credits equal to at least three quar-
ters of the retail electric supplier’s annual combined 
target. 
‘‘(4) STATE PETITION.— 
‘‘(A) IN GENERAL.—Upon written request 
from the Governor of any State (including, for 
purposes of this paragraph, the Mayor of the 
District of Columbia), the Commission shall in-
crease, to not more than two fifths, the propor-
tion of the annual combined targets of retail 
electric suppliers located within such State that 
may be met through submission of dem-
onstrated total annual electricity savings, pro-
vided that such increase shall be effective only 
with regard to the portion of a retail electric 
supplier’s annual combined target that is attrib-
utable to electricity sales within such State. 
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‘‘(B) CONTENTS.—A Governor’s request 
under this paragraph shall include an expla-
nation of the Governor’s rationale for deter-
mining, after consultation with the relevant 
State regulatory authority and other retail elec-
tricity ratemaking authorities within the State, 
to make such request. The request shall specify 
the maximum proportion of annual combined 
targets (not more than two fifths) that can be 
met through demonstrated total annual elec-
tricity savings, and the period for which such 
proportion shall be effective. 
‘‘(C) REVISION.—The Governor of any 
State may, after consultation with the relevant 
State regulatory authority and other retail elec-
tricity ratemaking authorities within the State, 
submit a written request for revocation or revi-
sion of a previous request submitted under this 
paragraph. The Commission shall grant such 
request, provided that— 
‘‘(i) any revocation or revision shall 
not apply to the combined annual target 
for any year that is any earlier than 2 cal-
endar years after the calendar year in 
which such request is submitted, so as to 
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provide retail electric suppliers with ade-
quate notice of such change; and 
‘‘(ii) any revision shall meet the re-
quirements of subparagraph (A). 
‘‘(c) ESTABLISHMENT OF PROGRAM.—Not later than 
1 year after the date of enactment of this section, the 
Commission shall promulgate regulations to implement 
and enforce the requirements of this section. In promul-
gating such regulations, the Commission shall, to the ex-
tent practicable— 
‘‘(1) preserve the integrity, and incorporate best 
practices, of existing State and tribal renewable elec-
tricity and energy efficiency programs; 
‘‘(2) rely upon existing and emerging State, 
tribal, or regional tracking systems that issue and 
track non-Federal renewable electricity credits; and 
‘‘(3) cooperate with the States and Indian 
tribes to facilitate coordination between State, tribal, 
and Federal renewable electricity and energy effi-
ciency programs and to minimize administrative bur-
dens and costs to retail electric suppliers. 
‘‘(d) ANNUAL COMPLIANCE REQUIREMENT.— 
‘‘(1) ANNUAL COMBINED TARGETS.—For each 
of calendar years 2012 through 2039, a retail elec-
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tric supplier’s annual combined target shall be the 
product of— 
‘‘(A) the required annual percentage for 
such year, as set forth in paragraph (2); and 
‘‘(B) the retail electric supplier’s base 
amount for such year. 
‘‘(2) REQUIRED
ANNUAL
PERCENTAGE.—For 
each of calendar years 2012 through 2039, the re-
quired annual percentage shall be as follows: 
‘‘Calendar year 
Required annual 
percentage 
2012 ...............................................................................
6.0 
2013 ...............................................................................
6.0 
2014 ...............................................................................
9.5 
2015 ...............................................................................
9.5 
2016 ...............................................................................
13.0 
2017 ...............................................................................
13.0 
2018 ...............................................................................
16.5 
2019 ...............................................................................
16.5 
2020 ...............................................................................
20.0 
2021 through 2039 ........................................................
20.0 
‘‘(e) FEDERAL RENEWABLE ELECTRICITY CRED-
ITS.— 
‘‘(1) IN
GENERAL.—The regulations promul-
gated under this section shall include provisions gov-
erning the issuance, tracking, and verification of 
Federal renewable electricity credits. Except as pro-
vided in paragraphs (2), (3), and (4) of this sub-
section, the Commission shall issue to each gener-
ator of renewable electricity, 1 Federal renewable 
electricity credit for each megawatt hour of renew-
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tioned among retail electric suppliers and generators 
in such circumstances, the Commission shall con-
sider information and guidance furnished by the rel-
evant State or States. 
‘‘(3) CERTAIN
POWER
SALES
CONTRACTS.— 
When a generator has sold renewable electricity to 
a retail electric supplier under a contract for power 
from a facility placed in service before the date of 
enactment of this section, and the contract does not 
provide for the determination of ownership of the 
Federal renewable electricity credits associated with 
such generation, the Commission shall issue such 
Federal renewable electricity credits to the retail 
electric supplier for the duration of the contract. 
‘‘(4) CREDIT
MULTIPLIER
FOR
DISTRIBUTED 
RENEWABLE GENERATION.— 
‘‘(A) IN GENERAL.—Except as provided in 
subparagraph (B), the Commission shall issue 3 
Federal renewable electricity credits for each 
megawatt hour of renewable electricity gen-
erated by a distributed renewable generation fa-
cility. 
‘‘(B) ADJUSTMENT.—Except as provided 
in subparagraph (C), not later than January 1, 
2014, and not less frequently than every 4 
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years thereafter, the Commission shall review 
the effect of this paragraph and shall, as nec-
essary, reduce the number of Federal renewable 
electricity credits per megawatt hour issued 
under this paragraph for any given energy 
source or technology, but not below 1, to ensure 
that such number is no higher than the Com-
mission determines is necessary to make dis-
tributed renewable generation facilities using 
such source or technology cost competitive with 
other sources of renewable electricity genera-
tion. 
‘‘(C) FACILITIES
PLACED
IN
SERVICE 
AFTER ENACTMENT.—For any distributed re-
newable generation facility placed in service 
after the date of enactment of this section, sub-
paragraph (B) shall not apply for the first 10 
years after the date on which the facility is 
placed in service. For each year during such 10- 
year period, the Commission shall issue to the 
facility the same number of Federal renewable 
electricity credits per megawatt hour as are 
issued to that facility in the year in which such 
facility is placed in service. After such 10-year 
period, the Commission shall issue Federal re-
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newable electricity credits to the facility in ac-
cordance with the current multiplier as deter-
mined pursuant to subparagraph (B). 
‘‘(5) CREDITS BASED ON QUALIFIED HYDRO-
POWER.—For purposes of this subsection, the num-
ber of Federal renewable electricity credits issued for 
qualified hydropower shall be calculated— 
‘‘(A) based solely on the increase in aver-
age annual generation directly resulting from 
the efficiency improvements or capacity addi-
tions described in subsection (a)(13)(A); and 
‘‘(B) using the same water flow informa-
tion used to determine a historic average an-
nual generation baseline for the hydroelectric 
facility, as certified by the Commission. 
‘‘(6) GENERATION FROM QUALIFIED WASTE-TO- 
ENERGY.—In the case of electricity generated from 
the combustion of any municipal solid waste or con-
struction, demolition, or disaster debris that is in-
cluded in the definition of renewable biomass, or 
from the gasification or pyrolization of such waste or 
debris and the combustion of the resulting gas at 
the same facility, the Commission shall issue Federal 
renewable electricity credits only for electricity gen-
erated from qualified waste-to-energy. 
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‘‘(7) GENERATION
FROM
MIXED
RENEWABLE 
AND NONRENEWABLE RESOURCES.—If electricity is 
generated using both a renewable energy resource or 
other qualifying energy resource and an energy 
source that is not a renewable energy resource or 
other qualifying energy resource (as, for example, in 
the case of co-firing of renewable biomass and fossil 
fuel), the Commission shall issue Federal renewable 
electricity credits based on the proportion of the 
electricity that is attributable to the renewable en-
ergy resource or other qualifying energy resource. 
‘‘(8) PROHIBITION
AGAINST
DOUBLE-COUNT-
ING.—Except as provided in paragraph (4) of this 
subsection, the Commission shall ensure that no 
more than 1 Federal renewable electricity credit will 
be issued for any megawatt hour of renewable elec-
tricity and that no Federal renewable electricity 
credit will be used more than once for compliance 
with this section. 
‘‘(9) TRADING.—The lawful holder of a Federal 
renewable electricity credit may sell, exchange, 
transfer, submit for compliance in accordance with 
subsection (b), or submit such credit for retirement 
by the Commission. 
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‘‘(10) BANKING.—A Federal renewable elec-
tricity credit may be submitted in satisfaction of the 
compliance obligation set forth in subsection (b) for 
the compliance year in which the credit was issued 
or for any of the 3 immediately subsequent compli-
ance years. The Commission shall retire any Federal 
renewable electricity credit that has not been retired 
by April 2 of the calendar year that is 3 years after 
the calendar year in which the credit was issued. 
‘‘(11) RETIREMENT.—The Commission shall re-
tire a Federal renewable electricity credit imme-
diately upon submission by the lawful holder of such 
credit, whether in satisfaction of a compliance obli-
gation under subsection (b) or on some other basis. 
‘‘(f) ELECTRICITY SAVINGS.— 
‘‘(1) STANDARDS FOR MEASUREMENT OF SAV-
INGS.—As part of the regulations promulgated 
under this section, the Commission shall prescribe 
standards and protocols for defining and measuring 
electricity savings and total annual electricity sav-
ings that can be counted towards the compliance ob-
ligation set forth in subsection (b). Such protocols 
and standards shall, at minimum— 
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‘‘(A) specify the types of energy efficiency 
and energy conservation measures that can be 
counted; 
‘‘(B) require that energy consumption esti-
mates for customer facilities or portions of fa-
cilities in the applicable base and current years 
be adjusted, as appropriate, to account for 
changes in weather, level of production, and 
building area; 
‘‘(C) account for the useful life of meas-
ures; 
‘‘(D) include deemed savings values for 
specific, commonly used measures; 
‘‘(E) allow for savings from a program to 
be estimated based on extrapolation from a rep-
resentative sample of participating customers; 
‘‘(F) include procedures for counting CHP 
savings, recycled energy savings, and fuel cell 
savings; 
‘‘(G) include procedures for documenting 
measurable and verifiable electricity savings 
achieved as a result of market transformation 
efforts; 
‘‘(H) include procedures for counting elec-
tricity savings achieved by solar water heating 
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601 
auction in each quarter. Any allowances from the 
strategic reserve account that are made available for 
sale in a quarterly auction and not sold shall be 
rolled over and added to the quantity available for 
sale in the following quarter, except that allowances 
not sold at auction in the fourth quarter of a year 
shall not be rolled over to the following calendar 
year’s auctions, but shall be returned to the stra-
tegic reserve account. 
‘‘(e) PURCHASE LIMIT.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2) or (3), the annual number of emission al-
lowances that a covered entity may purchase at the 
strategic reserve auctions in each calendar year shall 
not exceed 20 percent of the covered entity’s com-
bined greenhouse gas emissions and attributable 
greenhouse gas emissions during the most recent 
year for which allowances or offset credits were re-
tired under section 722. 
‘‘(2) 2012 LIMIT.—For calendar year 2012, the 
maximum aggregate number of emission allowances 
that a covered entity may purchase from that year’s 
strategic reserve auctions shall be 20 percent of the 
covered entity’s combined greenhouse gas emissions 
and attributable greenhouse gas emissions that the 
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