I 
111TH CONGRESS 
1ST SESSION 
H. R. 890 
To amend title VI of the Public Utility Regulatory Policies Act of 1978 
to establish a Federal renewable electricity standard for certain electric 
utilities, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
FEBRUARY 4, 2009 
Mr. MARKEY of Massachusetts (for himself and Mr. PLATTS) introduced the 
following bill; which was referred to the Committee on Energy and Commerce 
A BILL 
To amend title VI of the Public Utility Regulatory Policies 
Act of 1978 to establish a Federal renewable electricity 
standard for certain electric utilities, and for other pur-
poses. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘American Renewable 
Energy Act’’. 
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SEC. 2. FEDERAL RENEWABLE ELECTRICITY 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. FEDERAL RENEWABLE ELECTRICITY STANDARD. 
‘‘(a) DEFINITIONS.—For purposes of this section: 
‘‘(1) AFFILIATE.—The term ‘affiliate’ when 
used in relation to a person, means another person 
which owns or controls, is owned or controlled by, or 
is under common ownership or control with, such 
person, as determined under regulations promul-
gated by the Secretary. 
‘‘(2) BIOMASS.— 
‘‘(A) IN
GENERAL.—The term ‘biomass’ 
means each of the following: 
‘‘(i) Cellulosic (plant fiber) organic 
materials from a plant that is planted for 
the purpose of being used to produce en-
ergy. 
‘‘(ii) Nonhazardous, plant or algal 
matter that is derived from any of the fol-
lowing: 
‘‘(I) An agricultural crop, crop 
byproduct or residue resource. 
‘‘(II) Waste such as landscape or 
right-of-way trimmings (but not in-
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cluding municipal solid waste, recycla-
ble postconsumer waste paper, paint-
ed, treated, or pressurized wood, or 
wood contaminated with plastic or 
metals). 
‘‘(iii) Animal waste or animal byprod-
ucts, including products of animal waste 
digesters. 
‘‘(B) BIOMASS FROM FEDERAL LANDS.— 
‘‘(i) COVERED MATERIALS.—With re-
spect to organic material removed from 
Federal land, the term ‘biomass’ covers 
only organic material from— 
‘‘(I) ecological forest restoration; 
‘‘(II) pre-commercial thinnings; 
‘‘(III) brush; 
‘‘(IV) mill residues; and 
‘‘(V) slash. 
‘‘(ii) 
EXCLUSION
OF
CERTAIN 
LANDS.—Notwithstanding clause (i), mate-
rial or matter that would otherwise qualify 
as biomass are not included in the term 
‘biomass’ if it is located on Federal land in 
the following categories: 
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‘‘(I) Federal land containing old 
growth forest or late successional for-
est, unless the Secretary of the Inte-
rior or the Secretary of Agriculture 
(whichever has administrative jurisdic-
tion over such land) determines that 
the removal or organic material from 
such land is appropriate for the appli-
cable forest type and maximizes the 
retention 
of 
late-successional 
and 
large and old growth trees, late suc-
cessional and old growth forest struc-
ture, and late-successional and old 
growth forest composition. 
‘‘(II) Federal land on which the 
removal of vegetation is prohibited, in-
cluding components of the National 
Wilderness Preservation System. 
‘‘(III) Wilderness Study Areas. 
‘‘(IV) 
Inventoried 
Roadless 
Areas. 
‘‘(V) Units of the National Land-
scape Conservation System. 
‘‘(VI) National Monuments. 
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‘‘(3) DISTRIBUTED
GENERATION
FACILITY.— 
The term ‘distributed generation facility’ means a 
facility that— 
‘‘(A) generates renewable electricity other 
than by means of combustion; 
‘‘(B) primarily serves 1 or more electricity 
consumers at or near the facility site; and 
‘‘(C) is no larger than 2 megawatts in ca-
pacity. 
‘‘(4) FEDERAL ALTERNATIVE COMPLIANCE PAY-
MENT.—The term ‘Federal alternative compliance 
payment’ means a payment, to be submitted in lieu 
of 1 Federal renewable electricity credit, pursuant to 
subsection (c)(3). 
‘‘(5) FEDERAL LAND.—The term ‘Federal land’ 
means land owned by the United States and under 
the administrative jurisdiction of the Secretary of 
the Interior or the Secretary of Agriculture, other 
than land held in trust for an Indian or Indian tribe. 
‘‘(6) 
FEDERAL
RENEWABLE
ELECTRICITY 
CREDIT.—The term ‘Federal renewable electricity 
credit’ means a credit, representing one kilowatt 
hour of renewable electricity, issued pursuant to sub-
section (d). 
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‘‘(7) FUND.—The term ‘Fund’ means the Re-
newable Electricity Deployment Fund established 
under subsection (f). 
‘‘(8) 
INVENTORIED
ROADLESS
AREA.—The 
term ‘Inventoried Roadless Area’ means one of the 
areas identified in the set of inventoried roadless 
areas maps contained in the Forest Service Roadless 
Areas Conservation, Final Environmental Impact 
Statement, Volume 2, dated November 2000. 
‘‘(9) QUALIFIED
HYDROPOWER.—The term 
‘qualified hydropower’ means— 
‘‘(A) electricity generated solely from in-
creased efficiency achieved, or additions of ca-
pacity made, on or after January 1, 2001 at a 
hydroelectric facility that was placed in service 
before that date; or 
‘‘(B) electricity generated from generating 
capacity added on or after January 1, 2001 to 
a dam that did not previously have the capacity 
to generate electricity, provided that the Com-
mission 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 
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did not produce hydroelectric power before 
January 1, 2001; 
‘‘(ii) the hydroelectric project installed 
on the dam is licensed by the Commission 
and meets all other applicable environ-
mental, licensing, and regulatory require-
ments, including applicable fish passage re-
quirements; 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 require-
ments that require changes in water sur-
face elevation for the purpose of improving 
the environmental quality of the affected 
waterway. 
‘‘(10) RENEWABLE
ELECTRICITY.—The term 
‘renewable electricity’ means electricity generated 
from a renewable energy resource. 
‘‘(11) RENEWABLE
ENERGY
RESOURCE.—The 
term ‘renewable energy resource’ means each of the 
following: 
‘‘(A) wind energy; 
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‘‘(B) solar energy; 
‘‘(C) geothermal energy; 
‘‘(D) combustion of biomass or landfill gas; 
‘‘(E) qualified hydropower; or 
‘‘(F) 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). 
‘‘(12) 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 1,000,000 
megawatt hours of electric energy to electric 
consumers for purposes other than resale dur-
ing the preceding calendar year. 
‘‘(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 for 
purposes other than resale shall be consid-
ered to be sales of such electric utility; and 
‘‘(ii) sales by any electric utility to a 
parent company or to other affiliates of 
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such electric utility shall not be treated as 
sales to electric consumers. 
‘‘(13) RETAIL
ELECTRIC
SUPPLIER’S
BASE 
AMOUNT.—The term ‘retail electric supplier’s base 
amount’ means the total amount of electric energy 
sold by the retail electric supplier, expressed in 
terms of kilowatt hours, to electric customers for 
purposes other than resale during the relevant cal-
endar year, excluding electricity generated by— 
‘‘(A) a hydroelectric facility that is not 
qualified hydropower; or 
‘‘(B) combustion of municipal solid waste. 
‘‘(14) 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. 
‘‘(b) ESTABLISHMENT OF PROGRAM.—Not later than 
1 year after the date of enactment of this section, the Sec-
retary shall, by regulation, establish a program to imple-
ment and enforce the requirements of this section. In es-
tablishing such program, the Secretary shall, to the extent 
practicable— 
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‘‘(1) preserve the integrity, and incorporate best 
practices, of existing State renewable electricity pro-
grams; 
‘‘(2) rely upon existing and emerging State or 
regional tracking systems that issue and track non- 
Federal renewable electricity credits; and 
‘‘(3) cooperate with the States to facilitate co-
ordination between State and Federal renewable 
electricity programs and to minimize administrative 
burdens and costs to retail electric suppliers. 
‘‘(c) ANNUAL COMPLIANCE REQUIREMENT.— 
‘‘(1) IN GENERAL.—For each of calendar years 
2012 through 2039, each retail electric supplier 
shall, not later than April 1 of the following calendar 
year, submit to the Secretary a quantity of Federal 
renewable electricity credits equal to the retail elec-
tric supplier’s base amount for the calendar year 
multiplied by the required annual percentage set 
forth in paragraph (2). 
‘‘(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 ...............................................................................
8.5 
2015 ...............................................................................
8.5 
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‘‘Calendar year 
Required annual 
percentage 
2016 ...............................................................................
11.0 
2017 ...............................................................................
11.0 
2018 ...............................................................................
14.0 
2019 ...............................................................................
14.0 
2020 ...............................................................................
17.5 
2021 ...............................................................................
17.5 
2022 ...............................................................................
21.0 
2023 ...............................................................................
21.0 
2024 ...............................................................................
23.0 
2025 through 2039 ........................................................
25.0 
‘‘(3) ALTERNATIVE COMPLIANCE PAYMENTS.— 
A retail electric supplier may satisfy the require-
ments of paragraph (1) in whole or in part by sub-
mitting in lieu of each Federal renewable electricity 
credit, a payment equal to the lesser of— 
‘‘(A) 200 percent of the average market 
value of a Federal renewable electricity credit 
for the previous compliance year, as determined 
by the Secretary; or 
‘‘(B) 5 cents, adjusted on January 1 of 
each year following calendar year 2009 based 
on the Gross Domestic Product Implicit Price 
Deflator. 
‘‘(4) USE OF PAYMENTS.—Alternative compli-
ance payments submitted pursuant to paragraph (3) 
shall be deposited in the Fund established under 
subsection (f). 
‘‘(d) ISSUANCE
OF FEDERAL RENEWABLE ELEC-
TRICITY CREDITS.— 
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kilowatt hour of renewable electricity generated 
by a distributed generation facility. 
‘‘(B) ADJUSTMENT.—Except as provided 
in subparagraph (C), not later than January 1, 
2014, and not less frequently than every 4 
years thereafter, the Secretary shall review the 
effect of this paragraph and shall, as necessary, 
reduce the number of Federal renewable elec-
tricity credits per kilowatt hour issued under 
this paragraph, but not below 1, to ensure that 
such number is no higher than the Secretary 
determines is necessary to make distributed 
generation facilities cost competitive with other 
sources of renewable electricity generation. 
‘‘(C) FACILITIES
PLACED
IN
SERVICE 
AFTER ENACTMENT.—For any distributed gen-
eration facility placed in service after the date 
of enactment of this section, subparagraph (B) 
shall not apply for the first 10 years after date 
of enactment. For each year during such 10- 
year period, the Secretary shall issue the facil-
ity the same number of Federal renewable elec-
tricity credits per kilowatt hour as are issued to 
that facility in the year in which such facility 
is placed in service. After such 10-year period, 
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the Secretary shall issue Federal renewable en-
ergy credits to the facility in accordance with 
the current multiplier as determined pursuant 
to subparagraph (B). 
‘‘(5) CREDITS
BASED
ON
INCREMENTAL
HY-
DROPOWER.—For purposes of this subsection, the 
number of Federal renewable electricity credits 
issued for qualifying hydropower described in sub-
section (a)(9)(A) 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)(9)(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 Secretary or by the 
Commission. 
‘‘(6) GENERATION
FROM
MIXED
RENEWABLE 
AND NON-RENEWABLE RESOURCES.—If electricity is 
generated using both a renewable energy resource 
and an energy source that is not a renewable energy 
resource (as, for example, in the case of co-firing of 
biomass and fossil fuel), the Secretary shall issue 
Federal renewable electricity credits based on the 
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proportion of the electricity that is attributable to 
the renewable energy resource. 
‘‘(7) PROHIBITION
AGAINST
DOUBLE-COUNT-
ING.—Except as provided in paragraph (4) of this 
subsection, the Secretary shall ensure that no more 
than 1 Federal renewable electricity credit will be 
issued for any kilowatt hour of renewable electricity 
and that no Federal renewable electricity credit will 
be used more than once for compliance with this sec-
tion. 
‘‘(e) TRADING AND BANKING OF CREDITS.— 
‘‘(1) TRADING.—The lawful holder of a Federal 
renewable electricity credit may sell, exchange, 
transfer, submit for compliance in accordance with 
subsection (c), or submit such credit for retirement 
by the Secretary. 
‘‘(2) BANKING.—A Federal renewable elec-
tricity credit may be submitted in satisfaction of the 
compliance obligation set forth in subsection (c) for 
the compliance year in which the credit was issued 
or for any of the 3 immediately subsequent compli-
ance years. The Secretary shall retire any Federal 
renewable electricity credit that has not been sub-
mitted under subsection (c) by the deadline for the 
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compliance year that is 3 years after the compliance 
year in which the credit was issued. 
‘‘(3) DELEGATION
OF
MARKET
ADMINISTRA-
TION.—The Secretary may delegate to one or more 
appropriate market-making entities the administra-
tion of a Federal renewable electricity credit market 
for purposes of creating a transparent and efficient 
national market. 
‘‘(4) OVERSIGHT.—The Commission, in con-
sultation with the Secretary and relevant Federal 
agencies, may prescribe such rules as the Commis-
sioner determines necessary to ensure the trans-
parency, fairness, and stability of the market in 
Federal renewable electricity credits and any deriva-
tive instruments based on such credits. 
‘‘(f) 
RENEWABLE
ELECTRICITY
DEPLOYMENT 
FUND.— 
‘‘(1) IN GENERAL.—There is established in the 
Treasury of the United States a Renewable Elec-
tricity Deployment Fund. 
‘‘(2) DEPOSITS.—All Federal alternative com-
pliance payments submitted to the Secretary pursu-
ant to subsection (c)(3) and civil penalties assessed 
under this section shall be deposited into the Fund. 
‘‘(3) USE.— 
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‘‘(A) IN GENERAL.—Amounts deposited in 
the Fund shall be available exclusively for use 
by the Secretary, subject to appropriations, to 
make payments to retail electric suppliers in ac-
cordance with subparagraph (B). 
‘‘(B) ALLOCATION.—Not later than May 1 
of each year from 2013 through 2040, the Sec-
retary shall distribute amounts deposited in the 
Fund during the preceding 12-month period 
among the retail electric suppliers which have 
submitted Federal renewable electricity credits 
to the Secretary in total or partial compliance 
with their obligations under subsection (c) for 
the preceding calendar year. Each retail electric 
supplier shall receive a payment equal to the 
product of— 
‘‘(i) the total payments made to all re-
tail electric suppliers under this subsection; 
and 
‘‘(ii) the quotient obtained by dividing 
the quantity specified in subclause (I) by 
the quantity specified in subclause (II): 
‘‘(I) The quantity of Federal re-
newable electricity credits submitted 
by the retail electric supplier for the 
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preceding calendar year pursuant to 
subsection (c). 
‘‘(II) The total quantity of Fed-
eral renewable electricity credits sub-
mitted by all retail electric suppliers 
for the preceding calendar year pursu-
ant to subsection (c). 
‘‘(g) INFORMATION
COLLECTION.—In accordance 
with section 13 of the Federal Energy Administration Act 
of 1974 (15 U.S.C. 772), the Secretary may require any 
retail electric supplier, renewable electricity generator, or 
such other entities as the Secretary deems appropriate, to 
provide any information the Secretary determines appro-
priate to carry out this section. 
‘‘(h) ENFORCEMENT AND JUDICIAL REVIEW.— 
‘‘(1) CIVIL PENALTY.—If any person fails to 
comply with the requirements of subsection (c), such 
person shall be liable to pay to the Secretary a civil 
penalty equal to the product of— 
‘‘(A) double the Federal alternative compli-
ance payment calculated under subsection 
(c)(3), and 
‘‘(B) the aggregate quantity of Federal re-
newable electricity credits (or equivalent Fed-
eral alternative compliance payments) that the 
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person failed to submit to the Secretary in vio-
lation of the requirements of subsection (c). 
‘‘(2) ENFORCEMENT.—The Secretary shall as-
sess a civil penalty under paragraph (1) in accord-
ance with the procedures described in section 333(d) 
of the Energy Policy and Conservation Act of 1954 
(42 U.S.C. 6303). 
‘‘(3) JUDICIAL REVIEW.—Any person who will 
be adversely affected by a final action taken by the 
Secretary under this section, other than the assess-
ment of a civil penalty under this subsection, may 
use the procedures for review described in section 
336(b) of the Energy Policy and Conservation Act 
(42 U.S.C. 6306). For purposes of this paragraph, 
references to a rule in section 336(b) of the Energy 
Policy and Conservation Act shall be deemed to refer 
also to all other final actions of the Secretary under 
this section other than the assessment of a civil pen-
alty under this subsection. 
‘‘(i) SAVINGS PROVISIONS.—Nothing in this section 
shall— 
‘‘(1) diminish or qualify any authority of a 
State or political subdivision of a State to— 
‘‘(A) adopt or enforce any law or regula-
tion respecting renewable electricity, including 
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programs that exceed the required amount of 
renewable electricity under this section, pro-
vided that no such law or regulation may relieve 
any person of any requirement otherwise appli-
cable under this section; or 
‘‘(B) regulate the acquisition and disposi-
tion of Federal renewable electricity credits by 
retail electric suppliers located within the terri-
tory of such State or political subdivision, in-
cluding the authority to require such retail elec-
tric supplier to acquire and retire Federal re-
newable electricity credits associated with elec-
tric energy it sells to end-use customers; or 
‘‘(2) affect the application of, or the responsi-
bility for compliance with, any other provision of law 
or regulation, including environmental and licensing 
requirements. 
‘‘(j) COST RECOVERY.—An electric utility, the retail 
electricity sales of which are subject to rate regulation, 
shall not be denied the opportunity to recover the full 
amount of the prudently incurred incremental cost of re-
newable electricity or Federal renewable electricity credits 
obtained, or alternative compliance payments made, to 
comply with the requirements of subsection (c). 
‘‘(k) PROGRAM REVIEW.— 
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‘‘(1) NATIONAL
ACADEMY
OF
SCIENCES
RE-
VIEW.—The Secretary shall enter into a contract 
with the National Academy of Sciences under which 
the Academy shall, not later than July 1, 2017, and 
every 5 years thereafter through 2032, submit to the 
Secretary and to Congress a comprehensive evalua-
tion of all aspects of the program established under 
this section, including— 
‘‘(A) an evaluation of the effectiveness of 
the program, including its specific design ele-
ments, in increasing the market penetration 
and lowering the cost of the eligible renewable 
electricity generation technologies; 
‘‘(B) the opportunities for any additional 
technologies and sources of renewable electricity 
generation that have emerged since enactment 
of this section; 
‘‘(C) the program’s impact on the regional 
diversity and reliability of electricity supply; 
‘‘(D) the net benefits or costs of the pro-
gram to the national and State economies, in-
cluding effects on retail electricity costs, eco-
nomic development benefits of investment, envi-
ronmental benefits, impacts on natural gas de-
mand and price, and avoided costs related to 
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environmental and congestion mitigation invest-
ments that otherwise would have been required; 
‘‘(E) an assessment of the benefits and 
costs of increasing or extending the renewable 
electricity requirements set forth in subsection 
(c) of this section; and 
‘‘(F) recommendations regarding potential 
changes to this section, to regulations and pro-
cedures for implementing this section, or to re-
lated public policies. 
‘‘(2) RECOMMENDATIONS TO CONGRESS.—Not 
later than January 1, 2018, and every 5 years there-
after through 2033, the Secretary shall transmit to 
the Committee on Energy and Commerce of the 
United States House of Representatives and the 
Committee on Energy and Natural Resources of the 
United States Senate a report making recommenda-
tions for modifications and improvements to the pro-
gram established under this section and any related 
programs, including an explanation of the inconsist-
encies, if any, between the Secretary’s recommenda-
tions and those included in the National Academy of 
Sciences evaluation under paragraph (1). 
‘‘(l) SUNSET.—This section expires on December 31, 
2040.’’. 
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(b) TABLE OF CONTENTS AMENDMENT.—The table 
of contents of the Public Utility Regulatory Policies Act 
of 1978 (16 U.S.C. 2601 and following) is amended by 
adding at the end of the items relating to title VI the fol-
lowing: 
‘‘SEC. 610. Federal renewable electricity standard.’’. 
Æ 
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