I 
111TH CONGRESS 
1ST SESSION H. R. 1774 
To incorporate smart grid capability into the Energy Star Program, to reduce 
peak electric demand, to reauthorize energy efficiency public information 
program to include Smart Grid information, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 30, 2009 
Mr. MCNERNEY introduced the following bill; which was referred to the 
Committee on Energy and Commerce 
A BILL 
To incorporate smart grid capability into the Energy Star 
Program, to reduce peak electric demand, to reauthorize 
energy efficiency public information program to include 
Smart Grid information, and for other purposes. 
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 ‘‘Smart Grid Advance-
ment Act’’. 
SEC. 2. DEFINITIONS. 
For purposes of this Act, the terms: 
(1) ‘‘Secretary’’ means the Secretary of Energy. 
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(2) ‘‘Administrator’’ means the Administrator 
of the Environmental Protection Agency. 
(3) ‘‘Commission’’ means Federal Energy Reg-
ulatory Commission. 
(4) ‘‘Smart grid’’ has the meaning provided by 
section 1301 of the Energy Independence and Secu-
rity Act of 2007 (15 U.S.C. 17381). 
(5) ‘‘Peak demand reduction’’ means the reduc-
tion in annual peak demand as compared to a pre-
vious 
baseline 
year 
or 
period, 
expressed 
in 
Megawatts (MW). 
(6) ‘‘Peak demand’’ shall mean the highest 
point of electricity demand during any hour on the 
system of a load serving entity during a annual cal-
endar year, expressed in megawatts, or more than 
one such high point of electricity demand as a func-
tion of seasonal demand changes. 
(7) ‘‘Peak period’’ shall mean the time period 
on the system of a load serving entity relative to 
peak demand that may warrant special measures or 
electricity resources to maintain system reliability 
while meeting peak demand. 
(8) ‘‘Load serving entity’’ means an entity that 
provides electricity directly to retail consumers with 
the responsibility to assure power quality and reli-
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ability, including such entities that are investor- 
owned, publicly owned, owned by rural electric co-
operatives, or other entities. 
(9) ‘‘Applicable baseline’’ shall mean the aver-
age of the highest three annual peak demands a load 
serving entity has experienced during the 5 years 
immediately prior to the date of enactment of this 
Act. 
(10) ‘‘Peak load reduction plan’’ means a plan 
developed by or for a load serving entity that it will 
implement to meet its peak demand management 
goals. 
SEC. 3. INCORPORATION OF SMART GRID CAPABILITY IN 
ENERGY STAR PROGRAM. 
(a) ASSESSMENT.—Within one year after the date of 
enactment of this Act, the Secretary and the Adminis-
trator shall each assess the potential for cost-effective in-
tegration of Smart Grid technologies and capabilities in 
all products that are reviewed by the Department of En-
ergy and the Environmental Protection Agency, respec-
tively, for potential designation as Energy Star products. 
(b) ANALYSIS.—(1) Within 2 years after the date of 
enactment of this Act, the Secretary and the Adminis-
trator shall each prepare an analysis of the potential en-
ergy savings and electricity cost savings that could accrue 
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for each of the products referred to in subsection (a) in 
the following optimal circumstances: 
(A) The products possessed full Smart 
Grid capability. 
(B) The products were utilized in an elec-
tricity utility service area which had Smart Grid 
capability and time-of-use electric rates. 
(C) The time-of-use rates reflected national 
average utility rates including average peak and 
valley daily electricity costs to the utility. 
(D) Consumers using such products took 
full advantage of such capability. 
(2) The analysis under paragraph (1) shall be consid-
ered the ‘‘best case’’ Smart Grid analysis. On the basis 
of such an analysis for each product, the Secretary and 
the Administrator shall determine whether the installation 
of Smart Grid capability for such a product would be cost 
effective. For purposes of this paragraph, the term ‘‘cost 
effective’’ means that the cumulative savings from using 
the product under the ‘‘best case’’ Smart Grid cir-
cumstances for a period of 5 years will be greater than 
the incremental cost of the Smart Grid features included 
in the product. 
(3) To the extent that including Smart Grid capa-
bility in any products analyzed under paragraph (2) yield-
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ed a finding that doing so was cost effective in the best 
case, the Secretary and the Administrator shall, not later 
than 3 years after the date of enactment of this Act take 
each of the following actions: 
(A) Inform the manufacturer of such product of 
such finding. 
(B) Make special note in a prominent manner 
on any Energy Star label for any product actually 
including Smart Grid capability that— 
(i) Smart Grid capability is a feature of 
that product; 
(ii) the use and value of those features de-
pended on the Smart Grid capability of the util-
ity system in which the product was installed 
and the use of those features by the customer; 
and 
(iii) on a utility system with Smart Grid 
capability, the use of the product’s Smart Grid 
capability could potentially reduce the cost of 
the product’s annual operation by an estimated 
dollar amount representing the result of incre-
mental energy and electricity cost savings that 
would result from the Smart Grid best case for 
that product. 
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(C) Submit a report to Congress summarizing 
the results of the analyses for each class of products, 
and presenting the potential national energy and 
electricity cost savings that could be realized if cost- 
effective Smart Grid capability were installed in the 
relevant products reviewed by the Energy Star pro-
gram. 
SEC. 4. SMART GRID PEAK DEMAND REDUCTION GOALS. 
(a) GOALS.—Not later than one year after the date 
of enactment of this Act, load serving entities, or States, 
shall determine and publish peak demand reduction goals 
for any load serving entities that have an applicable base-
line in excess of 250 megawatts. 
(b) BASELINES.—(1) The Commission, in consulta-
tion with the Secretary, shall develop and publish, after 
an opportunity for public comment, a methodology to pro-
vide for adjustments or normalization to a load serving 
entity’s applicable baseline over time to reflect changes in 
the number of customers served, weather conditions, gen-
eral economic conditions, and any other appropriate fac-
tors external to peak load management, as determined by 
the Commission. 
(2) The Commission shall support load serving enti-
ties in determining their applicable baselines, and in devel-
oping their peak demand reduction goals, including any 
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load serving entity with an applicable baseline of less than 
250 megawatts that volunteers to participate in achieving 
the purposes of this Act. 
(3) The Secretary, in consultation with the Commis-
sion and the National Electric Reliability Corporation, 
shall develop a system and rules for measurement and 
verification of demand reductions. 
(c) PEAK DEMAND REDUCTION GOALS.—(1) Peak 
demand reduction goals may be established for an indi-
vidual load serving entity, or, at the determination of a 
State or regional entity, by that State or regional entity 
for a larger region that shares a common system peak de-
mand and for which peak demand reduction measures 
would offer regional benefit. 
(2) A State or regional entity establishing peak de-
mand reduction goals shall cooperate, as necessary and 
appropriate, with the Commission, the Secretary, State 
regulatory commissions, State energy offices, the National 
Electric Reliability Corporation, and other relevant au-
thorities. 
(3) In determining the applicable peak demand reduc-
tion goals, States and other jurisdictional entities may uti-
lize the results of the 2009 National Demand Response 
Potential Assessment, as authorized by section 529 of the 
Energy Independence and Security Act of 2007. 
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(4) The applicable peak demand reduction goals shall 
provide that— 
(A) load serving entities will reduce or mitigate 
peak demand by a minimum percentage amount 
from the applicable baseline to a lower peak demand 
during calendar year 2012; 
(B) load serving entities will reduce or mitigate 
peak demand by a minimum percentage greater 
amount from the applicable baseline to a lower peak 
demand during calendar year 2015; and 
(C) the minimum percentage reductions selected 
are the percentage reductions that are realistically 
achievable with an aggressive effort to deploy smart 
grid and peak demand reduction technologies and 
methods, including but not limited to those listed in 
subsection (d). 
(d) PLAN.—Each load serving entity shall prepare a 
peak load reduction plan that demonstrates its ability to 
meet each applicable goal by any or a combination of the 
following options: 
(1) Direct reduction in megawatts of peak de-
mand through energy efficiency measures with reli-
able and continued application during peak demand 
periods. 
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(2) 
Demonstration 
that 
an 
amount 
of 
megawatts equal to a stated portion of the applicable 
goal is contractually committed to be available for 
peak reduction through one or more of the following: 
(A) Megawatts enrolled in demand re-
sponse programs. 
(B) Megawatts subject to the ability of a 
load serving entity to call on demand response 
programs, smart appliances, smart electricity 
storage devices, distributed generation resources 
on the entity’s customers’ premises, or other 
measures 
directly 
capable 
of 
actively, 
controllably, reliably, and dynamically reducing 
peak demand (‘‘dynamic peak management con-
trol’’). 
(C) Megawatts available from distributed 
dynamic electricity storage under agreement 
with the owner of that storage. 
(D) 
Megawatts 
committed 
from 
dispatchable 
distributed 
generation 
dem-
onstrated to be reliable under peak period con-
ditions. 
(E) Megawatts available from smart appli-
ances and equipment with smart grid capability 
available for direct control by the utility 
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through agreement with the customer owning 
the appliances or equipment. 
(F) Megawatts from a demonstrated and 
assured minimum of distributed solar electric 
generation capacity in instances where peak pe-
riod and peak load conditions are directly re-
lated to solar radiation and accompanying heat. 
(3) If any of the methods listed in subpara-
graph (C), (D), or (E) of paragraph (2) are relied 
upon to meet its peak demand reduction goals, the 
load serving entity must demonstrate this capability 
by operating a test during the applicable calendar 
year. 
(4) Nothing in this Act shall require the publi-
cation in peak demand reduction goals or in any 
peak demand reduction plan of any information that 
is confidential for competitive or other reasons or 
that identifies individual customers. 
(e) EXISTING AUTHORITY AND REQUIREMENTS.— 
Nothing in this Act diminishes or supersedes any author-
ity of a State or political subdivision of a State to adopt 
or enforce any law or regulation respecting peak load man-
agement, demand response, distributed storage, use of dis-
tributed generation, or the regulation of load serving enti-
ties. The Commission, in consultation with States having 
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such peak management, demand response and distributed 
storage programs, shall to the maximum extent prac-
ticable, facilitate coordination between the Federal pro-
gram and such State programs. 
(f) RELIEF.—The Commission may, for good cause, 
grant relief to load serving entities from the requirements 
of this section. 
(g) OTHER LAWS.—Except as provided in sub-
sections (e) and (f), no law or regulation shall relieve any 
person of any requirement otherwise applicable under this 
section. 
(h) COMPLIANCE.—(1) The Commission shall within 
one year after the enactment of this Act establish a public 
domain website where the Commission will provide infor-
mation and data demonstrating compliance by States, re-
gional entities, and load serving entities with this Act, in-
cluding the success of load serving entities in meeting ap-
plicable peak demand reduction goals. 
(2) The Commission shall, by April 1 of each year 
beginning in 2012, provide a report to Congress on com-
pliance with this Act and success in meeting applicable 
peak demand reduction goals and, as appropriate, shall 
make recommendations as to how to increase peak de-
mand reduction efforts. 
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(3) The Commission shall note in each such report 
any State, political subdivision of a State, or load serving 
entity that has failed to comply with this Act, or is not 
a part of any region or group of load serving entities serv-
ing a region that has complied with this Act. 
(4) The Commission shall have and exercise the au-
thority to take reasonable steps to modify the process of 
establishing peak demand reduction goals and to accept 
adjustments to them as appropriate when sought by load 
serving entities. 
(i) ASSISTANCE AND FUNDING.— 
(1) ASSISTANCE.—The Secretary may make 
grants to States and to other entities with respon-
sibilities to be carried out under the Act to offset 
any documented costs of carrying out such respon-
sibilities to the extent such costs are deemed burden-
some or extraordinary by the Secretary. 
(2) FUNDING.—There are authorized to be ap-
propriated sums as may be necessary to the Com-
mission, the Secretary, and the Administrator to 
carry out the provisions of this Act. 
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SEC. 5. REAUTHORIZATION OF ENERGY EFFICIENCY PUB-
LIC INFORMATION PROGRAM TO INCLUDE 
SMART GRID INFORMATION. 
Section 134 of the Energy Policy Act of 2005 (42 
U.S.C. 15832) is amended as follows: 
(1) By amending the title heading to read 
‘‘ENERGY 
EFFICIENCY 
AND 
SMART 
GRID PUBLIC INFORMATION INITIA-
TIVE.’’. 
(2) In subsection (a)(1) by striking ‘‘reduce en-
ergy consumption during the 4-year period beginning 
on the date of enactment of this Act’’ and inserting 
‘‘increase energy efficiency and to adopt Smart Grid 
technology and practices’’. 
(3) In subsection (a)(2) by striking ‘‘benefits to 
consumers of reducing’’ and inserting ‘‘economic and 
environmental benefits to consumers and the United 
States of optimizing’’. 
(4) In subsection (a)(3) by inserting at the be-
ginning of that subsection ‘‘the effect of energy effi-
ciency and Smart Grid capability in reducing energy 
and electricity prices throughout the economy, to-
gether with’’. 
(5) In subsection (a)(4) by redesignating sub-
paragraph (D) as (E), by striking ‘‘and’’ at the end 
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of subparagraph (C), and by inserting after subpara-
graph (C) the following: 
‘‘(D) purchasing and utilizing equipment 
that includes smart grid features and capa-
bility; and’’. 
(6) In subsection (c), by striking ‘‘Not later 
than July 1, 2009,’’ and inserting, ‘‘For each year 
when appropriations pursuant to the authorization 
in this section exceed $10,000,000,’’. 
(7) In subsection (d) by striking ‘‘2010’’ and 
inserting ‘‘2020’’. 
(8) In subsection (e) by striking ‘‘2010’’ and in-
serting ‘‘2020’’. 
SEC. 6. INCLUSION OF SMART GRID FEATURES IN APPLI-
ANCE REBATE PROGRAM. 
(a) AMENDMENT.—Section 124 of the Energy Policy 
Act of 2005 (42 U.S.C. 15821) is amended as follows: 
(1) By amending the section heading to read 
‘‘ENERGY EFFICIENT AND SMART APPLIANCE 
REBATE PROGRAM.’’. 
(2) By redesignating paragraphs (4) and (5) as 
(5) and (6) and inserting after paragraph (3) the 
following: 
‘‘(4) SMART APPLIANCE.—The term ‘smart ap-
pliance’ means a product that the Administrator of 
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the Environmental Protection Agency or the sec-
retary of Energy has determined qualifies for such 
a designation in the Energy Star program pursuant 
to section 213 of the Smart Grid Advancement Act 
or that the Secretary or the Administrator has sepa-
rately determined includes the relevant Smart Grid 
capabilities listed in section 1301 of the Energy 
Independence and Security Act of 2007 (15 U.S.C. 
17381).’’. 
(3) In subsection (b)(1) by inserting ‘‘and 
smart’’ after ‘‘efficient’’ and by inserting after 
‘‘products’’ the first place it appears ‘‘, including 
products designated as being smart appliances,’’. 
(4) In subsection (b)(3), by inserting ‘‘the ad-
ministration of’’ after ‘‘carry out’’. 
(5) In subsection (d), by inserting ‘‘the admin-
istration of’’ after ‘‘carrying out’’ and by inserting 
‘‘, and up to 100 percent of the value of the rebates 
provided pursuant to this section’’ before the period 
at the end. 
(6) In subsection (e)(3), by inserting ‘‘with sep-
arate consideration as applicable if the product is 
also a smart appliance,’’ after ‘‘Energy Star prod-
uct’’ the first place it appears and by inserting ‘‘or 
smart appliance’’ before the period at the end. 
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(7) 
In 
subsection 
(f), 
by 
striking 
‘‘$50,000,000’’ through the period at the end and 
inserting ‘‘such sums as may be necessary for each 
fiscal year from 2010 through 2015.’’. 
(b) TABLE OF CONTENTS.—The item relating to sec-
tion 124 in the table of contents for the Energy Policy 
Act of 2005 (42 U.S.C. 15801 and following) is amended 
to read as follows: 
‘‘Sec. 124. Energy efficient and smart appliance rebate program.’’. 
Æ 
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