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. 610. Combined efficiency and renewable electricity standard. 
Sec. 102. Clarifying State authority to adopt renewable energy incentives. 
Sec. 103. Federal renewable energy purchases. 
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. Definition of renewable biomass. 
Sec. 127. Open fuel standard. 
‘‘Sec. 32920. Open fuel standard for transportation. 
Sec. 128. Diesel emissions reduction. 
Sec. 129. Loan guarantees for projects to construct renewable fuel pipelines. 
Sec. 130. Fleet vehicles. 
Sec. 130A. Report on natural gas vehicle emissions reductions. 
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.
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 and siting. 
‘‘Sec. 216A Transmission planning. 
‘‘Sec. 216B. Siting and construction in the Western Interconnection. 
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. 
Sec. 175. High efficiency gas turbine research, development, and demonstra-
tion. 
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.
‘‘Sec. 319. Office of Consumer Advocacy. 
Sec. 199. Development corporation for renewable power borrowing authority. 
Sec. 199A. Study. 
TITLE II—ENERGY EFFICIENCY 
Subtitle A—Building Energy Efficiency Programs 
Sec. 201. Greater energy efficiency in building codes. 
‘‘Sec. 304. 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. 
Sec. 207. Community building code administration grants. 
Sec. 208. Solar energy systems building permit requirements for receipt of com-
munity development block grant funds. 
Sec. 209. Prohibition of restrictions on residential installation of solar energy 
system. 
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. 334. Jurisdiction and venue. 
Sec. 214. Best-in-Class Appliances Deployment Program. 
Sec. 215. WaterSense. 
Sec. 216. Federal procurement of water efficient products. 
Sec. 217. Early adopter water efficient product incentive 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. 
‘‘Sec. 347. Motor efficiency rebate program. 
Sec. 246. Clean energy manufacturing revolving loan fund program. 
‘‘Sec. 27. Clean energy manufacturing revolving loan fund program. 
Sec. 247. Clean energy and efficiency manufacturing partnerships. 
Sec. 248. Technical amendments. 
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. 
Sec. 265. Consumer behavior research. 
Subtitle G—Miscellaneous 
Sec. 271. Energy efficient information and communications technologies. 
‘‘Sec. 543. Energy efficient information and communications technologies. 
Sec. 272. National energy efficiency goals. 
Sec. 273. Affiliated island energy independence team. 
Sec. 274. Product carbon disclosure program. 
Sec. 275. Industrial energy efficiency education and training initiative. 
Sec. 276. Sense of Congress. 
Subtitle H—Green Resources for Energy Efficient Neighborhoods 
Sec. 281. Short title. 
Sec. 282. Definitions. 
Sec. 283. Implementation of energy efficiency participation incentives for HUD 
programs. 
Sec. 284. Basic HUD energy efficiency standards and standards for additional 
credit. 
Sec. 285. Energy efficiency and conservation demonstration program for multi-
family housing projects assisted with project-based rental as-
sistance. 
Sec. 286. Additional credit for Fannie Mae and Freddie Mac housing goals for 
energy-efficient and location-efficient mortgages. 
Sec. 287. Duty to serve underserved markets for energy-efficient and location- 
efficient mortgages. 
Sec. 288. Consideration of energy efficiency under FHA mortgage insurance 
programs and Native American and Native Hawaiian loan 
guarantee programs. 
‘‘Sec. 543. Consideration of energy efficiency. 
Sec. 289. Energy-efficient mortgages and location-efficient mortgages education 
and outreach campaign. 
Sec. 290. Collection of information on energy-efficient and location-efficient 
mortgages through Home Mortgage Disclosure Act. 
Sec. 291. Ensuring availability of homeowners insurance for homes not con-
nected to electricity grid. 
Sec. 292. Mortgage incentives for energy-efficient multifamily housing. 
Sec. 293. Energy-efficient certifications for manufactured housing with mort-
gages.
Sec. 294. Assisted housing energy loan pilot program. 
Sec. 295. Making it green. 
Sec. 296. Residential energy efficiency block grant program. 
‘‘Sec. 123. Residential energy efficiency block grant program. 
Sec. 297. Including sustainable development and transportation strategies in 
comprehensive housing affordability strategies. 
Sec. 298. Grant program to increase sustainable low-income community devel-
opment capacity. 
Sec. 299. HOPE VI green developments requirement. 
Sec. 299A. Consideration of energy efficiency improvements in appraisals. 
Sec. 299B. Housing Assistance Council. 
Sec. 299C. Rural housing and economic development assistance. 
Sec. 299D. Loans to States and Indian tribes to carry out renewable energy 
sources activities. 
Sec. 299E. Green banking centers. 
Sec. 299F. GAO reports on availability of affordable mortgages. 
Sec. 299G. Public housing energy cost report. 
Sec. 299H. Secondary market for residential renewable energy lease instru-
ments. 
Sec. 299I. Green guarantees. 
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. 
‘‘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. Supplemental agriculture and renewable energy incentives pro-
grams. 
‘‘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. 
‘‘Sec. 795. Exchange for early action offset credits. 
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. 619. Hydrofluorocarbons (HFCs). 
Sec. 333. Black carbon. 
‘‘PART E—BLACK CARBON 
‘‘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. 
Sec. 340. Reducing acid rain and mercury pollution. 
Subtitle D—Carbon Market Assurance 
Sec. 341. Carbon market assurance. 
‘‘PART IV—CARBON MARKET ASSURANCE 
‘‘Sec. 401. Oversight and assurance of carbon markets. 
‘‘Sec. 402. Applicability of Part III provisions. 
‘‘Sec. 1041. Fraud and false statements in connection with regulated al-
lowances. 
Sec. 342. Carbon derivative markets. 
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. Effect of derivatives regulatory reform legislation. 
Sec. 359. Cease-and-desist authority. 
Sec. 360. Presidential review of regulations. 
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. Definitions. 
‘‘SUBPART 1—EMISSION ALLOWANCE REBATE PROGRAM 
‘‘Sec. 763. Eligible industrial sectors. 
‘‘Sec. 764. Distribution of emission allowance rebates. 
‘‘SUBPART 2—PROMOTING INTERNATIONAL REDUCTIONS IN INDUSTRIAL 
EMISSIONS 
‘‘Sec. 765. International negotiations. 
‘‘Sec. 766. United States negotiating objectives with respect to multilateral 
environmental negotiations. 
‘‘Sec. 767. Presidential reports and determinations. 
‘‘Sec. 768. International reserve allowance program. 
‘‘Sec. 769. Iron and steel sector. 
Subtitle B—Green Jobs and Worker Transition 
PART 1—GREEN JOBS 
Sec. 421. Clean energy curriculum development grants. 
Sec. 422. Increased funding for energy worker training program. 
Sec. 423. Development of Information and Resources clearinghouse for voca-
tional education and job training in renewable energy sectors. 
Sec. 424. Monitoring program effectiveness. 
Sec. 424A. Green construction careers demonstration project. 
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. 
‘‘TITLE XXII—ENERGY REFUND PROGRAM 
‘‘Sec. 2201. 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. 
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. 
TITLE V—AGRICULTURAL AND FORESTRY RELATED OFFSETS 
Subtitle A—Offset Credit Program From Domestic Agricultural and Forestry 
Sources 
Sec. 501. Definitions. 
Sec. 502. Establishment of offset credit program from domestic agricultural 
and forestry sources.
Sec. 503. List of eligible domestic agricultural and forestry offset practice 
types. 
Sec. 504. Requirements for domestic agricultural and forestry practices. 
Sec. 505. Project plan submission and approval. 
Sec. 506. Verification of offset practices. 
Sec. 507. Certification of offset credits. 
Sec. 508. Ownership and transfer of offset credits. 
Sec. 509. Program review and revision. 
Sec. 510. Environmental considerations. 
Sec. 511. Audits. 
Subtitle B—USDA Greenhouse Gas Emission Reduction and Sequestration 
Advisory Committee 
Sec. 531. Establishment of USDA Greenhouse Gas Emission Reduction and 
Sequestration Advisory Committee. 
Subtitle C—Miscellaneous 
Sec. 551. International indirect land use changes. 
Sec. 552. Biomass-based diesel. 
Sec. 553. Modification of definition of renewable biomass. 
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. 
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. 
‘‘(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 
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; 
‘‘(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. 
‘‘(7) CENTRAL
PROCUREMENT
STATE.—The 
term ‘central procurement State’ means a State 
that, as of January 1, 2009, had adopted and imple-
mented a legally enforceable mandate that, in lieu of 
requiring utilities to submit credits or certificates 
issued based on generation of electricity from (or to 
purchase or generate electricity from) resources de-
fined by the State as renewable, requires retail elec-
tric suppliers to collect payments from electricity 
ratepayers within the State that are used for central 
procurement, by a State agency or a public benefit 
corporation established pursuant to State law, of 
credits or certificates issued based on generation of 
electricity from resources defined by the State as re-
newable. 
‘‘(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-
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) 
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. 
‘‘(12) 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, 1988, 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, 
1988, 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 
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. 
‘‘(13) 
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-
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 section 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 
originates operates, participates in the op-
eration of, contracts for, or otherwise pro-
vides for, recycling services for its resi-
dents. 
‘‘(14) 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. 
‘‘(15) RENEWABLE
BIOMASS.—The term ‘re-
newable biomass’ means any of the following: 
‘‘(A) 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)), 
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 stands, late- 
successional stands (except for dead, se-
verely damaged, or badly infested trees), 
components of the National Landscape 
Conservation 
System, 
National 
Monu-
ments, National Conservation Areas, Des-
ignated Primitive Areas, or Wild and Sce-
nic 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. 
‘‘(B) Any organic matter that is available 
on a renewable or recurring basis from non- 
Federal land or land belonging to an Indian or 
Indian tribe that is held in trust by the United 
States or subject to a restriction against alien-
ation imposed by the United States, including— 
‘‘(i) renewable plant material, includ-
ing— 
‘‘(I) feed grains; 
‘‘(II) other agricultural commod-
ities; 
‘‘(III) other plants and trees; and 
‘‘(IV) algae; and 
‘‘(ii) waste material, including— 
‘‘(I) crop residue; 
‘‘(II) other vegetative waste ma-
terial (including wood waste and wood 
residues); 
‘‘(III) animal waste and byprod-
ucts (including fats, oils, greases, and 
manure); 
‘‘(IV) construction waste; and
‘‘(V) food waste and yard waste. 
‘‘(C) Residues and byproducts from wood, 
pulp, or paper products facilities. 
‘‘(16) RENEWABLE
ELECTRICITY.—The term 
‘renewable electricity’ means electricity generated 
(including by means of a fuel cell) from a renewable 
energy resource or other qualifying energy resources. 
‘‘(17) 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). 
‘‘(18) 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. 
‘‘(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. 
‘‘(19) 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 
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. 
‘‘(20) 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. 
‘‘(21) 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 
nonprofit entity that is capable of providing elec-
tricity savings in accordance with the requirements 
of this section. 
‘‘(22) 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 (h). 
‘‘(2) DEMONSTRATION OF SAVINGS.—For pur-
poses of this subsection, submission of demonstrated 
total annual electricity savings means submission of 
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. 
‘‘(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 
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-
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-
able electricity generated by such generator after 
December 31, 2011. The Commission shall assign a 
unique serial number to each Federal renewable 
electricity credit. 
‘‘(2) GENERATION FROM CERTAIN STATE RE-
NEWABLE ELECTRICITY PROGRAMS.—(A) Except as 
provided in subparagraph (B), where renewable elec-
tricity is generated with the support of payments 
from a retail electric supplier pursuant to a State re-
newable electricity program (whether through State 
alternative compliance payments or through pay-
ments to a State renewable electricity procurement 
fund or entity), the Commission shall issue Federal 
renewable electricity credits to such retail electric 
supplier for the proportion of the relevant renewable 
electricity generation that is attributable to the retail 
electric supplier’s payments, as determined pursuant 
to regulations issued by the Commission. For any 
remaining portion of the relevant renewable elec-
tricity generation, the Commission shall issue Fed-
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. 
‘‘(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. 
‘‘(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— 
‘‘(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 
and solar light pipe technology that has the ca-
pability to provide measurable data on the 
amount of megawatt-hours displaced; 
‘‘(I) avoid double-counting of savings used 
for compliance with this section, including sav-
ings that are transferred pursuant to paragraph 
(3); 
‘‘(J) ensure that, except as provided in 
subparagraph (L), the retail electric supplier 
claiming the savings played a significant role in 
achieving the savings (including through the ac-
tivities of a designated agent of the supplier or 
through the purchase of transferred savings); 
‘‘(K) include savings from programs ad-
ministered by a retail electric supplier (or a re-
tail electricity distributor that is not a retail 
electric supplier) that are funded by State, Fed-
eral, or other sources; 
‘‘(L) in any State in which the State regu-
latory authority has designated 1 or more enti-
ties to administer electric ratepayer-funded effi-
ciency programs approved by such State regu-
latory authority, provide that electricity savings 
achieved through such programs shall be dis-
tributed equitably among retail electric sup-
pliers in accordance with the direction of the 
relevant State regulatory authority; and 
‘‘(M) exclude savings achieved as a result 
of compliance with mandatory appliance and 
equipment efficiency standards or building 
codes. 
‘‘(2) 
STANDARDS
FOR
THIRD-PARTY 
VERIFICATION
OF
SAVINGS.—The regulations pro-
mulgated under this section shall establish proce-
dures 
and 
standards 
requiring 
third-party 
verification of all reported electricity savings, includ-
ing requirements for accreditation of third-party 
verifiers to ensure that such verifiers are profes-
sionally qualified and have no conflicts of interest. 
‘‘(3) TRANSFERS OF SAVINGS.— 
‘‘(A) BILATERAL CONTRACTS FOR SAVINGS 
TRANSFERS.—Subject to the limitations of this 
paragraph, a retail electric supplier may use 
electricity savings transferred, pursuant to a bi-
lateral contract, from another retail electric 
supplier, an owner of an electric distribution fa-
cility that is not a retail electric supplier, a 
State, or a third-party efficiency provider to 
meet the applicable compliance obligation under 
subsection (b). 
‘‘(B) REQUIREMENTS.—Electricity savings 
transferred and used for compliance pursuant 
to this paragraph shall be— 
‘‘(i) measured and verified in accord-
ance with the procedures specified under 
this subsection; 
‘‘(ii) reported in accordance with 
paragraph (4) of this subsection; and 
‘‘(iii) achieved within the same State 
as is served by the retail electric supplier.
‘‘(C) REGULATORY
APPROVAL.—Nothing 
in this paragraph shall limit or affect the au-
thority of a State regulatory authority to re-
quire a retail electric supplier that is regulated 
by such authority to obtain such authority’s au-
thorization or approval of a contract for trans-
fer of savings under this paragraph. 
‘‘(4) REPORTING SAVINGS.— 
‘‘(A) REQUIREMENTS.—The regulations 
promulgated under this section shall establish 
requirements governing the submission of re-
ports to demonstrate, in accordance with the 
protocols and standards for measurement and 
third-party verification established under this 
subsection, the total annual electricity savings 
achieved by a retail electric supplier within the 
relevant year. 
‘‘(B) REVIEW AND APPROVAL.—The Com-
mission shall review each report submitted to 
the Commission by a retail electric supplier and 
shall exclude any electricity savings that have 
not been adequately demonstrated in accord-
ance with the requirements of this subsection. 
‘‘(5) STATE ADMINISTRATION.—
‘‘(A) DELEGATION OF AUTHORITY.—Upon 
receipt of an application from the Governor of 
a State (including, for purposes of this sub-
section, the Mayor of the District of Columbia), 
the Commission may delegate to the State the 
authority to review and verify reported elec-
tricity savings for purposes of determining dem-
onstrated total annual electricity savings that 
may be counted towards a retail electric sup-
plier’s compliance obligation under subsection 
(b). The Commission shall make a substantive 
determination approving or disapproving a 
State application under this subparagraph, 
after notice and comment, within 180 days of 
receipt of a complete application. 
‘‘(B) ALTERNATIVE
MEASUREMENT
AND 
VERIFICATION
PROCEDURES
AND
STAND-
ARDS.—As part of an application submitted 
under subparagraph (A), a State may request 
to use alternative measurement and verification 
procedures and standards to those specified in 
paragraphs (1) and (2), provided the State 
demonstrates that such alternative procedures 
and standards provide a level of accuracy of 
measurement and verification at least equiva-
lent to the Federal procedures and standards 
promulgated under paragraphs (1) and (2). 
‘‘(C) REVIEW
OF
STATE
IMPLEMENTA-
TION.—The Commission shall, not less fre-
quently than once every 4 years, review each 
State’s implementation of delegated authority 
under this paragraph to ensure conformance 
with the requirements of this section. The Com-
mission may, at any time, revoke the delegation 
of authority under this section upon a finding 
that the State is not implementing its delegated 
responsibilities in conformity with this para-
graph. As a condition of maintaining its dele-
gated authority under this paragraph, the Com-
mission may require a State to submit a revised 
application under subparagraph (A) if the Com-
mission has— 
‘‘(i) promulgated new or substantially 
revised measurement and verification pro-
cedures and standards under this sub-
section; or 
‘‘(ii) otherwise substantially revised 
the program established under this section. 
‘‘(g) ALTERNATIVE COMPLIANCE PAYMENTS.—
‘‘(1) IN GENERAL.—A retail electric supplier, or 
a central procurement State that, pursuant to sub-
section (g), has assumed responsibility for compli-
ance with the requirements of subsection (b), may 
satisfy the requirements of subsection (b) in whole 
or in part by submitting in accordance with this sub-
section, in lieu of each Federal renewable electricity 
credit or megawatt hour of demonstrated total an-
nual electricity savings that would otherwise be due, 
a payment equal to $25, adjusted for inflation on 
January 1 of each year following calendar year 
2009, in accordance with such regulations as the 
Commission may promulgate. 
‘‘(2) PAYMENT TO STATE FUNDS.—Except as 
otherwise provided in this paragraph and paragraph 
(4), payments made under this subsection shall be 
made directly to the State or States in which the re-
tail electric supplier is located, in proportion to the 
portion of the retail electric supplier’s base amount 
that is sold within each relevant State, provided that 
such payments are deposited directly into a fund in 
the State treasury established for this purpose and 
that the State uses such funds in accordance with 
paragraphs (3) and (5) and with paragraph (4), 
where applicable. If the Commission determines at
any time that a State is in substantial noncompli-
ance with paragraph (3) or (5), or with paragraph 
(4), where applicable, the Commission shall direct 
that any future alternative compliance payments 
that would otherwise be paid to such State under 
this subsection shall instead be paid to the Commis-
sion and deposited in the United States Treasury. 
‘‘(3) STATE USE OF FUNDS.—As a condition of 
continued receipt of alternative compliance payments 
pursuant to this subsection, a State shall use such 
payments exclusively for the purposes of— 
‘‘(A) deploying technologies that generate 
electricity from renewable energy resources; or 
‘‘(B) implementing cost-effective energy ef-
ficiency programs to achieve electricity savings. 
‘‘(4) CENTRAL PROCUREMENT STATES.— 
‘‘(A) IN GENERAL.—A central procurement 
State that, pursuant to subsection (g), has as-
sumed responsibility for compliance with the re-
quirements of subsection (b) shall deposit any 
alternative compliance payments under this 
subsection in a unique fund in the State treas-
ury created and used solely for this purpose. 
‘‘(B) REQUIREMENTS.—As a precondition 
of making alternative compliance payments
under this subsection, a central procurement 
State shall certify to the Commission, in ac-
cordance with such requirements as the Com-
mission may prescribe, that— 
‘‘(i) making such payments is the low-
est cost alternative to meet the require-
ments of subsection (b); and 
‘‘(ii) moneys used by the State to 
make such payments are in addition to any 
spending that the State, and any separate 
entity charged with administering the 
State central procurement requirement 
identified under subsection (a)(7), other-
wise collectively would direct to the pur-
poses identified in paragraph (3). 
‘‘(C) USES.—A central procurement State 
that makes alternative compliance payments 
under this subsection shall certify to the Com-
mission that, in using such payments in accord-
ance with paragraph (3), it has, to the extent 
practicable, maximized the level of deployment 
of renewable electricity generation (measured in 
megawatt hours) and electricity savings per dol-
lar that are achieved through such expendi-
tures.
‘‘(5) REPORTING.—As a condition of continued 
receipt of alternative compliance payments pursuant 
to this subsection, a State shall, within 12 months 
of receipt of any such payments and at 12-month in-
tervals thereafter until such payments are expended, 
provide a report to the Commission, in accordance 
with such regulations as the Commission may pre-
scribe, giving a full accounting of the use of such 
payments, including a detailed description of the ac-
tivities funded thereby and demonstrating compli-
ance with the requirements of this subsection. 
‘‘(g) CENTRAL PROCUREMENT STATES.— 
‘‘(1) IN
GENERAL.—A central procurement 
State may, upon submission of a written request by 
the Governor of such State to the Commission, as-
sume responsibility for compliance with the require-
ments of subsection (b) on behalf of retail electric 
suppliers located in such State, exclusively with re-
gard to the portion of such retail electric suppliers’ 
base amount that is sold within the State. 
‘‘(2) DEMONSTRATION
OF
ELECTRICITY
SAV-
INGS.—If a central procurement State opts to meet 
any part of the requirements of subsection (b) based 
on the achievement of demonstrated total annual 
electricity savings, regardless of whether such State
has received delegated authority pursuant to sub-
section (f)(5), such State shall submit such dem-
onstrated total annual electricity savings to the 
Commission through an annual report in accordance 
with requirements prescribed by the Commission by 
regulation, which shall be of equivalent stringency to 
those applicable to retail electric suppliers under 
subsection (f). 
‘‘(3) NONCOMPLIANCE.—If a central procure-
ment State that pursuant to this subsection has as-
sumed responsibility for compliance with the require-
ments of subsection (b), fails to satisfy the require-
ments of subsection (b) or (h) for any year, the 
State’s assumption of responsibility under this sub-
section shall be discontinued immediately, and retail 
electric suppliers located in such State henceforth 
shall be directly subject to the requirements of this 
section. 
‘‘(h) INFORMATION COLLECTION.—The Commission 
may require any retail electric supplier, renewable elec-
tricity generator, or such other entities as the Commission 
deems appropriate, to provide any information the Com-
mission determines appropriate to carry out this section. 
Failure to submit such information or submission of false
or misleading information under this subsection shall be 
a violation of this section. 
‘‘(i) ENFORCEMENT AND JUDICIAL REVIEW.— 
‘‘(1) FAILURE TO SUBMIT CREDITS OR DEM-
ONSTRATE SAVINGS.—If any person, other than any 
central procurement State that pursuant to sub-
section (g) has assumed responsibility for compliance 
with the requirements of subsection (b), fails to com-
ply with the requirements of subsection (b) or (h), 
such person shall be liable to pay to the Commission 
a civil penalty equal to the product of— 
‘‘(A) double the alternative compliance 
payment calculated under subsection (h)(1), 
and 
‘‘(B) the aggregate quantity of Federal re-
newable electricity credits, total annual elec-
tricity savings, or equivalent alternative compli-
ance payments that the person failed to submit 
in violation of the requirements of subsections 
(b) and (h). 
‘‘(2) ENFORCEMENT.—The Commission shall 
assess a civil penalty under paragraph (1) in accord-
ance with the procedures described in section 31(d) 
of the Federal Power Act (16 U.S.C. 823b(d)).
‘‘(3) VIOLATION OF REQUIREMENT OF REGULA-
TIONS
OR
ORDERS.—Any person, other than any 
central procurement State that pursuant to sub-
section (g) has assumed responsibility for compliance 
with the requirements of subsection (b), who vio-
lates, or fails or refuses to comply with, any require-
ment of a regulation promulgated or order issued 
under this section shall be subject to a civil penalty 
under section 316A(b) of the Federal Power Act (16 
U.S.C. 825o–1). Such penalty shall be assessed by 
the Commission in the same manner as in the case 
of a violation referred to in section 316A(b) of such 
Act. 
‘‘(j) JUDICIAL REVIEW.—Any person aggrieved by a 
final action taken by the Commission under this section, 
other than the assessment of a civil penalty under sub-
section (j), may use the procedures for review described 
in section 313 of the Federal Power Act (16 U.S.C. 825l). 
For purposes of this paragraph, references to an order in 
section 313 of such Act shall be deemed to refer also to 
all other final actions of the Commission under this section 
other than the assessment of a civil penalty under sub-
section (i). 
‘‘(k) SAVINGS PROVISIONS.—Nothing in this section 
shall—
‘‘(1) diminish or qualify any authority of a 
State, a political subdivision of a State, or an Indian 
tribe to— 
‘‘(A) adopt or enforce any law or regula-
tion respecting renewable electricity or energy 
efficiency, including any law or regulation es-
tablishing requirements more stringent than 
those established by this section, provided that 
no such law or regulation may relieve any per-
son of any requirement otherwise applicable 
under this section; or 
‘‘(B) regulate the acquisition and disposi-
tion of Federal renewable electricity credits by 
retail electric suppliers within the jurisdiction of 
such State, political subdivision, or Indian tribe, 
including the authority to require such retail 
electric supplier to acquire and submit to the 
Secretary for retirement Federal renewable 
electricity credits in excess of those submitted 
under this section; 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.
‘‘(l) SUNSET.—This section expires on December 31, 
2040.’’. 
(b) CONFORMING AMENDMENT.—The table of con-
tents set forth in section 1(b) of the Public Utility Regu-
latory Policies Act of 1978 (16 U.S.C. 2601 and following) 
is amended by inserting after the item relating to section 
609 the following: 
‘‘Sec. 610. Combined efficiency and renewable electricity standard.’’. 
SEC. 102. CLARIFYING STATE AUTHORITY TO ADOPT RE-
NEWABLE ENERGY INCENTIVES. 
Section 210 of the Public Utility Regulatory Policies 
Act of 1978 is amended by adding at the end thereof: 
‘‘(o) CLARIFICATION
OF
STATE
AUTHORITY
TO 
ADOPT
RENEWABLE
ENERGY
INCENTIVES.—Notwith-
standing any other provision of this Act or the Federal 
Power Act, a State legislature or regulatory authority may 
set the rates for a sale of electric energy by a facility gen-
erating electric energy from renewable energy sources pur-
suant to a State-approved production incentive program 
under which the facility voluntarily sells electric energy. 
For purposes of this subsection, ‘State-approved produc-
tion incentive program’ means a requirement imposed pur-
suant to State law, or by a State regulatory authority act-
ing within its authority under State law, that an electric 
utility purchase renewable energy (as defined in section 
609 of this Act) at a specified rate.’’.
SEC. 103. FEDERAL RENEWABLE ENERGY PURCHASES. 
(a) REQUIREMENT.—For each of calendar years 
2012 through 2039, the President shall ensure that, of 
the total amount of electricity Federal agencies consume 
in the United States during each calendar year, the fol-
lowing percentage shall be renewable electricity: 
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 
(b) DEFINITIONS.—For purposes of this section: 
(1) RENEWABLE ELECTRICITY.—The term ‘‘re-
newable electricity’’ shall have the meaning given in 
section 610 of the Public Utility Regulatory Policies 
Act of 1978 (16 U.S.C. 2601 and following). 
(2) RENEWABLE
ENERGY
RESOURCE.—The 
term ‘‘renewable energy resource’’ shall have the 
meaning given in section 610 of the Public Utility 
Regulatory Policies Act of 1978 (16 U.S.C. 2601 
and following). 
(c) MODIFICATION OF REQUIREMENT.—If the Presi-
dent determines that the Federal Government cannot fea-
sibly meet the requirement established in subsection (a)
in a specific calendar year, the President may, by written 
order, reduce such requirement for such calendar year to 
a percentage the President determines the Federal Gov-
ernment can feasibly meet. 
(d) REPORTS.—Not later than April 1, 2013, and 
each year thereafter, the Secretary of Energy shall provide 
a report to Congress on the percentage of each Federal 
agency’s electricity consumption in the United States that 
was renewable electricity in the previous calendar year. 
(e) CONTRACTS
FOR RENEWABLE ENERGY.—(1) 
Notwithstanding section 501(b)(1)(B) of title 40, United 
States Code, a contract for the acquisition of electricity 
generated from a renewable energy resource for the Fed-
eral Government may be made for a period of not more 
than 20 years. 
(2) Not later than 90 days after the date of enact-
ment of this subsection, the Secretary of Energy, through 
the Federal Energy Management Program, shall publish 
a standardized renewable energy purchase agreement, set-
ting forth commercial terms and conditions, that Federal 
agencies may use to acquire electricity generated from a 
renewable energy resource. 
(3) The Secretary of Energy shall provide technical 
assistance to assist Federal agencies in implementing this 
subsection.
Subtitle B—Carbon Capture and 
Sequestration 
SEC. 111. NATIONAL STRATEGY. 
(a) IN GENERAL.—Not later than 1 year after the 
date of enactment of this Act, the Administrator, in con-
sultation with the Secretary of Energy, the Secretary of 
the Interior, and the heads of such other relevant Federal 
agencies as the President may designate, shall submit to 
Congress a report setting forth a unified and comprehen-
sive strategy to address the key legal, regulatory and other 
barriers to the commercial-scale deployment of carbon 
capture and sequestration. 
(b) BARRIERS.— The report under this section 
shall— 
(1) identify those regulatory, legal, and other 
gaps and barriers that could be addressed by a Fed-
eral agency using existing statutory authority, those, 
if any, that require Federal legislation, and those 
that would be best addressed at the State, tribal, or 
regional level; 
(2) identify regulatory implementation chal-
lenges, including those related to approval of State 
and tribal programs and delegation of authority for 
permitting; and
(3) recommend rulemakings, Federal legisla-
tion, or other actions that should be taken to further 
evaluate and address such barriers. 
SEC. 112. REGULATIONS FOR GEOLOGIC SEQUESTRATION 
SITES. 
(a) COORDINATED CERTIFICATION AND PERMITTING 
PROCESS.—Title VIII of the Clean Air Act, as added by 
section 331 of this Act, is amended by adding after section 
812 (as added by section 116 of this Act) the following: 
‘‘SEC. 813. GEOLOGIC SEQUESTRATION SITES. 
‘‘(a) COORDINATED PROCESS.—The Administrator 
shall establish a coordinated approach to certifying and 
permitting geologic sequestration, taking into consider-
ation all relevant statutory authorities. In establishing 
such approach, the Administrator shall— 
‘‘(1) take into account, and reduce redundancy 
with, the requirements of section 1421 of the Safe 
Drinking Water Act (42 U.S.C. 300h), as amended 
by section 112(b) of the American Clean Energy and 
Security Act of 2009, including the rulemaking for 
geologic sequestration wells described at 73 Fed. 
Reg. 43491–541 (July 25, 2008); and 
‘‘(2) to the extent practicable, reduce the bur-
den on certified entities and implementing authori-
ties.
‘‘(b) REGULATIONS.—Not later than 2 years after 
the date of enactment of this title, the Administrator shall 
promulgate regulations to protect human health and the 
environment by minimizing the risk of escape to the at-
mosphere of carbon dioxide injected for purposes of geo-
logic sequestration. 
‘‘(c) REQUIREMENTS.—The regulations under sub-
section (b) shall include— 
‘‘(1) a process to obtain certification for geo-
logic sequestration under this section; and 
‘‘(2) requirements for— 
‘‘(A) monitoring, record keeping, and re-
porting for emissions associated with injection 
into, and escape from, geologic sequestration 
sites, taking into account any requirements or 
protocols developed under section 713; 
‘‘(B) public participation in the certifi-
cation process that maximizes transparency; 
‘‘(C) the sharing of data between States, 
Indian tribes, and the Environmental Protec-
tion Agency; and 
‘‘(D) other elements or safeguards nec-
essary to achieve the purpose set forth in sub-
section (b).
‘‘(d) REPORT.—Not later than 2 years after the pro-
mulgation of regulations under subsection (b), and at 3- 
year intervals thereafter, the Administrator shall deliver 
to the Committee on Energy and Commerce of the House 
of Representatives and the Committee on Environment 
and Public Works of the Senate a report on geologic se-
questration in the United States, and, to the extent rel-
evant, other countries in North America. Such report shall 
include— 
‘‘(1) data regarding injection, emissions to the 
atmosphere, if any, and performance of active and 
closed geologic sequestration sites, including those 
where enhanced hydrocarbon recovery operations 
occur; 
‘‘(2) an evaluation of the performance of rel-
evant Federal environmental regulations and pro-
grams in ensuring environmentally protective geo-
logic sequestration practices; 
‘‘(3) recommendations on how such programs 
and regulations should be improved or made more 
effective; and 
‘‘(4) other relevant information.’’. 
(b) SAFE DRINKING WATER ACT STANDARDS.—Sec-
tion 1421 of the Safe Drinking Water Act (42 U.S.C.
300h) is amended by inserting after subsection (d) the fol-
lowing: 
‘‘(e) CARBON DIOXIDE GEOLOGIC SEQUESTRATION 
WELLS.— 
‘‘(1) IN GENERAL.—Not later than 1 year after 
the date of enactment of this subsection, the Admin-
istrator shall promulgate regulations under sub-
section (a) for carbon dioxide geologic sequestration 
wells. 
‘‘(2) FINANCIAL RESPONSIBILITY.—The regula-
tions referred to in paragraph (1) shall include re-
quirements for maintaining evidence of financial re-
sponsibility, including financial responsibility for 
emergency and remedial response, well plugging, site 
closure, and post-injection site care. Financial re-
sponsibility may be established for carbon dioxide 
geologic sequestration wells in accordance with regu-
lations promulgated by the Administrator by any 
one, or any combination, of the following: insurance, 
guarantee, trust, standby trust, surety bond, letter 
of credit, qualification as a self-insurer, or any other 
method satisfactory to the Administrator.’’. 
SEC. 113. STUDIES AND REPORTS. 
(a) STUDY OF LEGAL FRAMEWORK FOR GEOLOGIC 
SEQUESTRATION SITES.—
(1) ESTABLISHMENT
OF
TASK
FORCE.—As 
soon as practicable, but not later than 6 months 
after the date of enactment of this Act, the Adminis-
trator shall establish a task force to be composed of 
an equal number of subject matter experts, non-
governmental organizations with expertise in envi-
ronmental policy, academic experts with expertise in 
environmental law, State and tribal officials with en-
vironmental expertise, representatives of State and 
tribal Attorneys General, representatives from the 
Environmental Protection Agency, the Department 
of the Interior, the Department of Energy, the De-
partment of Transportation, and other relevant Fed-
eral agencies, and members of the private sector, to 
conduct a study of— 
(A) existing Federal environmental stat-
utes, State environmental statutes, and State 
common law that apply to geologic sequestra-
tion sites for carbon dioxide, including the abil-
ity of such laws to serve as risk management 
tools; 
(B) the existing statutory framework, in-
cluding Federal and State laws, that apply to 
harm and damage to the environment or public 
health at closed sites where carbon dioxide in-
jection has been used for enhanced hydrocarbon 
recovery; 
(C) the statutory framework, environ-
mental health and safety considerations, imple-
mentation issues, and financial implications of 
potential models for Federal, State, or private 
sector assumption of liabilities and financial re-
sponsibilities with respect to closed geologic se-
questration sites; 
(D) private sector mechanisms, including 
insurance and bonding, that may be available to 
manage environmental, health and safety risk 
from closed geologic sequestration sites; and 
(E) the subsurface mineral rights, water 
rights, or property rights issues associated with 
geologic sequestration of carbon dioxide, includ-
ing issues specific to Federal lands. 
(2) REPORT.—Not later than 18 months after 
the date of enactment of this Act, the task force es-
tablished under paragraph (1) shall submit to Con-
gress a report describing the results of the study 
conducted under that paragraph including any con-
sensus recommendations of the task force. 
(b) ENVIRONMENTAL STATUTES.—
(1) STUDY.—The Administrator shall conduct a 
study 
examining 
how, 
and 
under 
what 
cir-
cumstances, the environmental statutes for which 
the Environmental Protection Agency has responsi-
bility would apply to carbon dioxide injection and 
geologic sequestration activities. 
(2) REPORT.—Not later than 1 year after the 
date of enactment of this Act, the Administrator 
shall submit to Congress a report describing the re-
sults of the study conducted under paragraph (1). 
SEC. 114. CARBON CAPTURE AND SEQUESTRATION DEM-
ONSTRATION AND EARLY DEPLOYMENT PRO-
GRAM. 
(a) DEFINITIONS.—For purposes of this section: 
(1) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Energy. 
(2) DISTRIBUTION
UTILITY.—The term ‘‘dis-
tribution utility’’ means an entity that distributes 
electricity directly to retail consumers under a legal, 
regulatory, or contractual obligation to do so. 
(3) ELECTRIC
UTILITY.—The term ‘‘electric 
utility’’ has the meaning provided by section 3(22) 
of the Federal Power Act (16 U.S.C. 796(22)).
(4) FOSSIL
FUEL-BASED
ELECTRICITY.—The 
term ‘‘fossil fuel-based electricity’’ means electricity 
that is produced from the combustion of fossil fuels. 
(5) FOSSIL
FUEL.—The term ‘‘fossil fuel’’ 
means coal, petroleum, natural gas or any derivative 
of coal, petroleum, or natural gas. 
(6) CORPORATION.—The term ‘‘Corporation’’ 
means the Carbon Storage Research Corporation es-
tablished in accordance with this section. 
(7) QUALIFIED INDUSTRY ORGANIZATION.—The 
term ‘‘qualified industry organization’’ means the 
Edison Electric Institute, the American Public 
Power Association, the National Rural Electric Co-
operative Association, a successor organization of 
such organizations, or a group of owners or opera-
tors of distribution utilities delivering fossil fuel- 
based electricity who collectively represent at least 
20 percent of the volume of fossil fuel-based elec-
tricity delivered by distribution utilities to consumers 
in the United States. 
(8) RETAIL CONSUMER.—The term ‘‘retail con-
sumer’’ means an end-user of electricity. 
(b) CARBON STORAGE RESEARCH CORPORATION.— 
(1) ESTABLISHMENT.—
(A) REFERENDUM.—Qualified industry or-
ganizations may conduct, at their own expense, 
a referendum among the owners or operators of 
distribution utilities delivering fossil fuel-based 
electricity for the creation of a Carbon Storage 
Research Corporation. Such referendum shall 
be conducted by an independent auditing firm 
agreed to by the qualified industry organiza-
tions. Voting rights in such referendum shall be 
based on the quantity of fossil fuel-based elec-
tricity delivered to consumers in the previous 
calendar year or other representative period as 
determined by the Secretary pursuant to sub-
section (f). Upon approval of those persons rep-
resenting two-thirds of the total quantity of fos-
sil fuel-based electricity delivered to retail con-
sumers, the Corporation shall be established un-
less opposed by the State regulatory authorities 
pursuant to subparagraph (B). All distribution 
utilities voting in the referendum shall certify to 
the independent auditing firm the quantity of 
fossil fuel-based electricity represented by their 
vote. 
(B) STATE REGULATORY AUTHORITIES.— 
Upon its own motion or the petition of a quali-
fied industry organization, each State regu-
latory authority shall consider its support or op-
position to the creation of the Corporation 
under subparagraph (A). State regulatory au-
thorities may notify the independent auditing 
firm referred to in subparagraph (A) of their 
views on the creation of the Corporation within 
180 days after the date of enactment of this 
Act. If 40 percent or more of the State regu-
latory authorities submit to the independent au-
diting firm written notices of opposition, the 
Corporation shall not be established notwith-
standing the approval of the qualified industry 
organizations as provided in subparagraph (A). 
(2) TERMINATION.—The Corporation shall be 
authorized to collect assessments and conduct oper-
ations pursuant to this section for a 10-year period 
from the date 6 months after the date of enactment 
of this Act. After such 10-year period, the Corpora-
tion is no longer authorized to collect assessments 
and shall be dissolved on the date 15 years after 
such date of enactment, unless the period is ex-
tended by an Act of Congress. 
(3) GOVERNANCE.—The Corporation shall oper-
ate as a division or affiliate of the Electric Power
Research Institute (referred to in this section as 
‘‘EPRI’’) and be managed by a Board of not more 
than 15 voting members responsible for its oper-
ations, including compliance with this section. EPRI, 
in consultation with the Edison Electric Institute, 
the American Public Power Association and the Na-
tional Rural Electric Cooperative Association shall 
appoint the Board members under clauses (i), (ii), 
and (iii) of subparagraph (A) from among can-
didates recommended by those organizations. At 
least a majority of the Board members appointed by 
EPRI shall be representatives of distribution utilities 
subject to assessments under subsection (d). 
(A) MEMBERS.—The Board shall include 
at least one representative of each of the fol-
lowing: 
(i) Investor-owned utilities. 
(ii) Utilities owned by a State agency, 
a municipality, and an Indian tribe. 
(iii) Rural electric cooperatives. 
(iv) Fossil fuel producers. 
(v) Nonprofit environmental organiza-
tions. 
(vi) Independent generators or whole-
sale power providers.
(vii) Consumer groups. 
(B) NONVOTING
MEMBERS.—The Board 
shall also include as additional nonvoting Mem-
bers the Secretary of Energy or his designee 
and 2 representatives of State regulatory au-
thorities as defined in section 3(17) of the Pub-
lic Utility Regulatory Policies Act of 1978 (16 
U.S.C. 2602(17)), each designated by the Na-
tional Association of State Regulatory Utility 
Commissioners from States that are not within 
the same transmission interconnection. 
(4) COMPENSATION.—Corporation Board mem-
bers shall receive no compensation for their services, 
nor shall Corporation Board members be reimbursed 
for expenses relating to their service. 
(5) TERMS.—Corporation Board members shall 
serve terms of 4 years and may serve not more than 
2 full consecutive terms. Members filling unexpired 
terms may serve not more than a total of 8 consecu-
tive years. Former members of the Corporation 
Board may be reappointed to the Corporation Board 
if they have not been members for a period of 2 
years. Initial appointments to the Corporation Board 
shall be for terms of 1, 2, 3, and 4 years, staggered 
to provide for the selection of 3 members each year.
(6) STATUS OF CORPORATION.—The Corpora-
tion shall not be considered to be an agency, depart-
ment, or instrumentality of the United States, and 
no officer or director or employee of the Corporation 
shall be considered to be an officer or employee of 
the United States Government, for purposes of title 
5 or title 31 of the United States Code, or for any 
other purpose, and no funds of the Corporation shall 
be treated as public money for purposes of chapter 
33 of title 31, United States Code, or for any other 
purpose. 
(c) FUNCTIONS AND ADMINISTRATION OF THE COR-
PORATION.— 
(1) IN GENERAL.—The Corporation shall estab-
lish and administer a program to accelerate the com-
mercial availability of carbon dioxide capture and 
storage technologies and methods, including tech-
nologies which capture and store, or capture and 
convert, carbon dioxide. Under such program com-
petitively awarded grants, contracts, and financial 
assistance shall be provided and entered into with el-
igible entities. Except as provided in paragraph (8), 
the Corporation shall use all funds derived from as-
sessments under subsection (d) to issue grants and 
contracts to eligible entities.
(2) PURPOSE.—The purposes of the grants, 
contracts, and assistance under this subsection shall 
be to support commercial-scale demonstrations of 
carbon capture or storage technology projects capa-
ble of advancing the technologies to commercial 
readiness. Such projects should encompass a range 
of different coal and other fossil fuel varieties, be 
geographically diverse, involve diverse storage media, 
and employ capture or storage, or capture and con-
version, technologies potentially suitable either for 
new or for retrofit applications. The Corporation 
shall seek, to the extent feasible, to support at least 
5 commercial-scale demonstration projects inte-
grating carbon capture and sequestration or conver-
sion technologies. 
(3) ELIGIBLE ENTITIES.—Entities eligible for 
grants, contracts or assistance under this subsection 
may include distribution utilities, electric utilities 
and other private entities, academic institutions, na-
tional laboratories, Federal research agencies, State 
and tribal research agencies, nonprofit organizations, 
or consortiums of 2 or more entities. Pilot-scale and 
similar small-scale projects are not eligible for sup-
port by the Corporation. Owners or developers of
projects supported by the Corporation shall, where 
appropriate, share in the costs of such projects. 
(4) GRANTS FOR EARLY MOVERS.—Fifty per-
cent of the funds raised under this section shall be 
provided in the form of grants to electric utilities 
that had, prior to the award of any grant under this 
section, committed resources to deploy a large scale 
electricity generation unit with integrated carbon 
capture and sequestration or conversion applied to a 
substantial portion of the unit’s carbon dioxide emis-
sions.
Grant funds shall be provided to defray costs 
incurred by such electricity utilities for at least 5 
such electricity generation units. 
(5) ADMINISTRATION.—The members of the 
Board of Directors of the Corporation shall elect a 
Chairman and other officers as necessary, may es-
tablish committees and subcommittees of the Cor-
poration, and shall adopt rules and bylaws for the 
conduct of business and the implementation of this 
section. The Board shall appoint an Executive Di-
rector and professional support staff who may be 
employees of the Electric Power Research Institute 
(EPRI). After consultation with the Technical Advi-
sory Committee established under subsection (j), the 
Secretary, and the Director of the National Energy
Technology Laboratory to obtain advice and rec-
ommendations on plans, programs, and project selec-
tion criteria, the Board shall establish priorities for 
grants, contracts, and assistance; publish requests 
for proposals for grants, contracts, and assistance; 
and award grants, contracts, and assistance competi-
tively, on the basis of merit, after the establishment 
of procedures that provide for scientific peer review 
by the Technical Advisory Committee. The Board 
shall give preference to applications that reflect the 
best overall value and prospect for achieving the 
purposes of the section, such as those which dem-
onstrate an integrated approach for capture and 
storage or capture and conversion technologies. The 
Board members shall not participate in making 
grants or awards to entities with whom they are af-
filiated. 
(6) USES OF GRANTS, CONTRACTS, AND ASSIST-
ANCE.—A grant, contract, or other assistance pro-
vided under this subsection may be used to purchase 
carbon dioxide when needed to conduct tests of car-
bon dioxide storage sites, in the case of established 
projects that are storing carbon dioxide emissions, or 
for other purposes consistent with the purposes of 
this section. The Corporation shall make publicly
available at no cost information learned as a result 
of projects which it supports financially. 
(7) INTELLECTUAL
PROPERTY.—The Board 
shall establish policies regarding the ownership of in-
tellectual property developed as a result of Corpora-
tion grants and other forms of technology support. 
Such policies shall encourage individual ingenuity 
and invention. 
(8) ADMINISTRATIVE EXPENSES.—Up to 5 per-
cent of the funds collected in any fiscal year under 
subsection (d) may be used for the administrative 
expenses of operating the Corporation (not including 
costs incurred in the determination and collection of 
the assessments pursuant to subsection (d)). 
(9) PROGRAMS AND BUDGET.—Before August 1 
each year, the Corporation, after consulting with the 
Technical Advisory Committee and the Secretary 
and the Director of the Department’s National En-
ergy Technology Laboratory and other interested 
parties to obtain advice and recommendations, shall 
publish for public review and comment its proposed 
plans, programs, project selection criteria, and 
projects to be funded by the Corporation for the 
next calendar year. The Corporation shall also pub-
lish for public review and comment a budget plan for
the next calendar year, including the probable costs 
of all programs, projects, and contracts and a rec-
ommended rate of assessment sufficient to cover 
such costs. The Secretary may recommend programs 
and activities the Secretary considers appropriate. 
The Corporation shall include in the first publication 
it issues under this paragraph a strategic plan or 
roadmap for the achievement of the purposes of the 
Corporation, as set forth in paragraph (2). 
(10) RECORDS; AUDITS.—The Corporation shall 
keep minutes, books, and records that clearly reflect 
all of the acts and transactions of the Corporation 
and make public such information. The books of the 
Corporation shall be audited by a certified public ac-
countant at least once each fiscal year and at such 
other times as the Corporation may designate. Cop-
ies of each audit shall be provided to the Congress, 
all Corporation board members, all qualified indus-
try organizations, each State regulatory authority 
and, upon request, to other members of the industry. 
If the audit determines that the Corporation’s prac-
tices fail to meet generally accepted accounting prin-
ciples the assessment collection authority of the Cor-
poration under subsection (d) shall be suspended 
until a certified public accountant renders a subse-
quent opinion that the failure has been corrected. 
The Corporation shall make its books and records 
available for review by the Secretary or the Comp-
troller General of the United States. 
(11) 
PUBLIC
ACCESS.—The 
Corporation 
Board’s meetings shall be open to the public and 
shall occur after at least 30 days advance public no-
tice. Meetings of the Board of Directors may be 
closed to the public where the agenda of such meet-
ings includes only confidential matters pertaining to 
project selection, the award of grants or contracts, 
personnel matters, or the receipt of legal advice. The 
minutes of all meetings of the Corporation shall be 
made available to and readily accessible by the pub-
lic. 
(12) ANNUAL
REPORT.—Each year the Cor-
poration shall prepare and make publicly available a 
report which includes an identification and descrip-
tion of all programs and projects undertaken by the 
Corporation during the previous year. The report 
shall also detail the allocation or planned allocation 
of Corporation resources for each such program and 
project. The Corporation shall provide its annual re-
port to the Congress, the Secretary, each State regu-
latory authority, and upon request to the public. The
Secretary shall, not less than 60 days after receiving 
such report, provide to the President and Congress 
a report assessing the progress of the Corporation in 
meeting the objectives of this section. 
(d) ASSESSMENTS.— 
(1) AMOUNT.—(A) In all calendar years fol-
lowing its establishment, the Corporation shall col-
lect an assessment on distribution utilities for all 
fossil fuel-based electricity delivered directly to retail 
consumers (as determined under subsection (f)). The 
assessments shall reflect the relative carbon dioxide 
emission rates of different fossil fuel-based elec-
tricity, and initially shall be not less than the fol-
lowing amounts for coal, natural gas, and oil: 
Fuel type 
Rate of assessment 
per kilowatt hour 
Coal ...................................................................
$0.00043 
Natural Gas ......................................................
$0.00022 
Oil .....................................................................
$0.00032. 
(B) The Corporation is authorized to adjust the 
assessments on fossil fuel-based electricity to reflect 
changes in the expected quantities of such electricity 
from different fuel types, such that the assessments 
generate not less than $1.0 billion and not more 
than $1.1 billion annually. The Corporation is au-
thorized to supplement assessments through addi-
tional financial commitments.
(2) INVESTMENT
OF
FUNDS.—Pending dis-
bursement pursuant to a program, plan, or project, 
the Corporation may invest funds collected through 
assessments under this subsection, and any other 
funds received by the Corporation, only in obliga-
tions of the United States or any agency thereof, in 
general obligations of any State or any political sub-
division thereof, in any interest-bearing account or 
certificate of deposit of a bank that is a member of 
the Federal Reserve System, or in obligations fully 
guaranteed as to principal and interest by the 
United States. 
(3) REVERSION
OF
UNUSED
FUNDS.—If the 
Corporation does not disburse, dedicate or assign 75 
percent or more of the available proceeds of the as-
sessed fees in any calendar year 7 or more years fol-
lowing its establishment, due to an absence of quali-
fied projects or similar circumstances, it shall reim-
burse the remaining undedicated or unassigned bal-
ance of such fees, less administrative and other ex-
penses authorized by this section, to the distribution 
utilities upon which such fees were assessed, in pro-
portion to their collected assessments. 
(e) ERCOT.—
(1) ASSESSMENT, COLLECTION, AND
REMIT-
TANCE.—(A) Notwithstanding any other provision of 
this section, within ERCOT, the assessment pro-
vided for in subsection (d) shall be— 
(i) levied directly on qualified scheduling 
entities, or their successor entities; 
(ii) charged consistent with other charges 
imposed on qualified scheduling entities as a fee 
on energy used by the load-serving entities; and 
(iii) collected and remitted by ERCOT to 
the Corporation in the amounts and in the 
same manner as set forth in subsection (d). 
(B) The assessment amounts referred to in sub-
paragraph (A) shall be— 
(i) determined by the amount and types of 
fossil fuel-based electricity delivered directly to 
all retail customers in the prior calendar year 
beginning with the year ending immediately 
prior to the period described in subsection 
(b)(2); and 
(ii) take into account the number of renew-
able energy credits retired by the load-serving 
entities represented by a qualified scheduling 
entity within the prior calendar year.
(2) ADMINISTRATION EXPENSES.—Up to 1 per-
cent of the funds collected in any fiscal year by 
ERCOT under the provisions of this subsection may 
be used for the administrative expenses incurred in 
the determination, collection and remittance of the 
assessments to the Corporation. 
(3) AUDIT.—ERCOT shall provide a copy of its 
annual audit pertaining to the administration of the 
provisions of this subsection to the Corporation. 
(4) DEFINITIONS.—For the purposes of this 
subsection: 
(A) The term ‘‘ERCOT’’ means the Elec-
tric Reliability Council of Texas. 
(B) The term ‘‘load-serving entities’’ has 
the meaning adopted by ERCOT Protocols and 
in effect on the date of enactment of this Act. 
(C) The term ‘‘qualified scheduling enti-
ties’’ has the meaning adopted by ERCOT Pro-
tocols and in effect on the date of enactment of 
this Act. 
(D) The term ‘‘renewable energy credit’’ 
has the meaning as promulgated and adopted 
by the Public Utility Commission of Texas pur-
suant to section 39.904(b) of the Public Utility
Regulatory Act of 1999, and in effect on the 
date of enactment of this Act. 
(f) DETERMINATION OF FOSSIL FUEL-BASED ELEC-
TRICITY DELIVERIES.— 
(1) FINDINGS.—The Congress finds that: 
(A) The assessments under subsection (d) 
are to be collected based on the amount of fossil 
fuel-based electricity delivered by each distribu-
tion utility. 
(B) Since many distribution utilities pur-
chase all or part of their retail consumer’s elec-
tricity needs from other entities, it may not be 
practical to determine the precise fuel mix for 
the power sold by each individual distribution 
utility. 
(C) It may be necessary to use average 
data, often on a regional basis with reference to 
Regional Transmission Organization (‘‘RTO’’) 
or NERC regions, to make the determinations 
necessary for making assessments. 
(2) DOE PROPOSED
RULE.—The Secretary, 
acting in close consultation with the Energy Infor-
mation Administration, shall issue for notice and 
comment a proposed rule to determine the level of 
fossil fuel electricity delivered to retail customers by
each distribution utility in the United States during 
the most recent calendar year or other period deter-
mined to be most appropriate. Such proposed rule 
shall balance the need to be efficient, reasonably pre-
cise, and timely, taking into account the nature and 
cost of data currently available and the nature of 
markets and regulation in effect in various regions 
of the country. Different methodologies may be ap-
plied in different regions if appropriate to obtain the 
best balance of such factors. 
(3) FINAL RULE.—Within 6 months after the 
date of enactment of this Act, and after opportunity 
for comment, the Secretary shall issue a final rule 
under this subsection for determining the level and 
type of fossil fuel-based electricity delivered to retail 
customers by each distribution utility in the United 
States during the appropriate period. In issuing 
such rule, the Secretary may consider opportunities 
and costs to develop new data sources in the future 
and issue recommendations for the Energy Informa-
tion Administration or other entities to collect such 
data. After notice and opportunity for comment the 
Secretary may, by rule, subsequently update and 
modify the methodology for making such determina-
tions.
(4) ANNUAL
DETERMINATIONS.—Pursuant to 
the final rule issued under paragraph (3), the Sec-
retary shall make annual determinations of the 
amounts and types for each such utility and publish 
such determinations in the Federal Register. Such 
determinations shall be used to conduct the ref-
erendum under subsection (b) and by the Corpora-
tion in applying any assessment under this sub-
section. 
(5) REHEARING AND JUDICIAL REVIEW.—The 
owner or operator of any distribution utility that be-
lieves that the Secretary has misapplied the method-
ology in the final rule in determining the amount 
and types of fossil fuel electricity delivered by such 
distribution utility may seek rehearing of such deter-
mination within 30 days of publication of the deter-
mination in the Federal Register. The Secretary 
shall decide such rehearing petitions within 30 days. 
The Secretary’s determinations following rehearing 
shall be final and subject to judicial review in the 
United States Court of Appeals for the District of 
Columbia. 
(g) COMPLIANCE
WITH
CORPORATION
ASSESS-
MENTS.—The Corporation may bring an action in the ap-
propriate court of the United States to compel compliance
with an assessment levied by the Corporation under this 
section. A successful action for compliance under this sub-
section may also require payment by the defendant of the 
costs incurred by the Corporation in bringing such action. 
(h) MIDCOURSE REVIEW.—Not later than 5 years 
following establishment of the Corporation, the Comp-
troller General of the United States shall prepare an anal-
ysis, and report to Congress, assessing the Corporation’s 
activities, including project selection and methods of dis-
bursement of assessed fees, impacts on the prospects for 
commercialization of carbon capture and storage tech-
nologies, adequacy of funding, and administration of 
funds. The report shall also make such recommendations 
as may be appropriate in each of these areas. The Cor-
poration shall reimburse the Government Accountability 
Office for the costs associated with performing this mid-
course review. 
(i) RECOVERY OF COSTS.— 
(1) IN GENERAL.—A distribution utility whose 
transmission, delivery, or sales of electric energy are 
subject to any form of rate regulation shall not be 
denied the opportunity to recover the full amount of 
the prudently incurred costs associated with com-
plying with this section, consistent with applicable 
State or Federal law.
(2) RATEPAYER REBATES.—Regulatory authori-
ties that approve cost recovery pursuant to para-
graph (1) may order rebates to ratepayers to the ex-
tent that distribution utilities are reimbursed 
undedicated or unassigned balances pursuant to sub-
section (d)(3). 
(j) TECHNICAL ADVISORY COMMITTEE.— 
(1) ESTABLISHMENT.—There is established an 
advisory committee, to be known as the ‘‘Technical 
Advisory Committee’’. 
(2) MEMBERSHIP.—The Technical Advisory 
Committee shall be comprised of not less than 7 
members appointed by the Board from among aca-
demic institutions, national laboratories, independent 
research institutions, and other qualified institu-
tions. No member of the Committee shall be affili-
ated with EPRI or with any organization having 
members serving on the Board. At least one member 
of the Committee shall be appointed from among of-
ficers or employees of the Department of Energy 
recommended to the Board by the Secretary of En-
ergy. 
(3) CHAIRPERSON AND VICE CHAIRPERSON.— 
The Board shall designate one member of the Tech-
nical Advisory Committee to serve as Chairperson of
the Committee and one to serve as Vice Chairperson 
of the Committee. 
(4) COMPENSATION.—The Board shall provide 
compensation to members of the Technical Advisory 
Committee for travel and other incidental expenses 
and such other compensation as the Board deter-
mines to be necessary. 
(5) PURPOSE.—The Technical Advisory Com-
mittee shall provide independent assessments and 
technical evaluations, as well as make non-binding 
recommendations to the Board, concerning Corpora-
tion activities, including but not limited to the fol-
lowing: 
(A) Reviewing and evaluating the Corpora-
tion’s plans and budgets described in subsection 
(c)(9), as well as any other appropriate areas, 
which could include approaches to prioritizing 
technologies, appropriateness of engineering 
techniques, monitoring and verification tech-
nologies for storage, geological site selection, 
and cost control measures. 
(B) 
Making 
annual 
non-binding 
rec-
ommendations to the Board concerning any of 
the matters referred to in subparagraph (A), as 
well as what types of investments, scientific re-
search, or engineering practices would best fur-
ther the goals of the Corporation. 
(6) PUBLIC AVAILABILITY.—All reports, evalua-
tions, and other materials of the Technical Advisory 
Committee shall be made available to the public by 
the Board, without charge, at time of receipt by the 
Board. 
(k) LOBBYING RESTRICTIONS.—No funds collected 
by the Corporation shall be used in any manner for influ-
encing legislation or elections, except that the Corporation 
may recommend to the Secretary and the Congress 
changes in this section or other statutes that would fur-
ther the purposes of this section. 
(l) DAVIS-BACON COMPLIANCE.—The Corporation 
shall ensure that entities receiving grants, contracts, or 
other financial support from the Corporation for the 
project activities authorized by this section are in compli-
ance with the Davis-Bacon Act (40 U.S.C. 276a–276a– 
5). 
SEC. 115. COMMERCIAL DEPLOYMENT OF CARBON CAP-
TURE AND SEQUESTRATION TECHNOLOGIES. 
Part H of title VII of the Clean Air Act (as added 
by section 321 of this Act) is amended by adding the fol-
lowing new section after section 785:
‘‘SEC. 786. COMMERCIAL DEPLOYMENT OF CARBON CAP-
TURE AND SEQUESTRATION TECHNOLOGIES. 
‘‘(a) REGULATIONS.—Not later than 2 years after 
the date of enactment of this title, the Administrator shall 
promulgate regulations providing for the distribution of 
emission allowances allocated pursuant to section 782(f), 
pursuant to the requirements of this section, to support 
the commercial deployment of carbon capture and seques-
tration technologies in both electric power generation and 
industrial operations. 
‘‘(b) ELIGIBILITY CRITERIA.—For an owner or oper-
ator of a project to be eligible to receive emission allow-
ances under this section, the project must— 
‘‘(1) implement carbon capture and sequestra-
tion technology— 
‘‘(A) at an electric generating unit that— 
‘‘(i) has a nameplate capacity of 200 
megawatts or more; 
‘‘(ii) in the case of a retrofit applica-
tion, applies the carbon capture and se-
questration technology to the flue gas from 
at least 200 megawatts of the total name-
plate generating capacity of the unit, pro-
vided that clause (i) shall apply without ex-
ception;
‘‘(iii) derives at least 50 percent of its 
annual fuel input from coal, petroleum 
coke, or any combination of these 2 fuels; 
and 
‘‘(iv) upon implementation of capture 
and sequestration technology, will achieve 
an emission limit that is at least a 50 per-
cent reduction in emissions of the carbon 
dioxide produced by— 
‘‘(I) the unit, measured on an 
annual basis, determined in accord-
ance with section 812(b)(2); or 
‘‘(II) in the case of retrofit appli-
cations under clause (ii), the treated 
portion of flue gas from the unit, 
measured on an annual basis, deter-
mined in accordance with section 
812(b)(2); or 
‘‘(B) at an industrial source that— 
‘‘(i) absent carbon capture and se-
questration, would emit greater than 
50,000 tons per year of carbon dioxide; 
‘‘(ii) 
upon 
implementation, 
will 
achieve an emission limit that is at least a 
50 percent reduction in emissions of the
carbon dioxide produced by the emission 
point, measured on an annual basis, deter-
mined 
in 
accordance 
with 
section 
812(b)(2); and 
‘‘(iii) does not produce a liquid trans-
portation fuel from a solid fossil-based 
feedstock; 
‘‘(2) geologically sequester carbon dioxide at a 
site that meets all applicable permitting and certifi-
cation requirements for geologic sequestration, or, 
pursuant to such requirements as the Administrator 
may prescribe by regulation, convert captured car-
bon dioxide to a stable form that will safely and per-
manently sequester such carbon dioxide; 
‘‘(3) meet all other applicable State, tribal, and 
Federal permitting requirements; and 
‘‘(4) be located in the United States. 
‘‘(c) PHASE I DISTRIBUTION TO ELECTRIC GENER-
ATING UNITS.— 
‘‘(1) 
APPLICATION.—This 
subsection 
shall 
apply only to projects at the first 6 gigawatts of 
electric generating units, measured in cumulative 
generating capacity of such units, that receive allow-
ances under this section.
‘‘(2) DISTRIBUTION.—The Administrator shall 
distribute emission allowances allocated under sec-
tion 782(f) to the owner or operator of each eligible 
project at an electric generating unit in a quantity 
equal to the quotient obtained by dividing— 
‘‘(A) the product obtained by multi-
plying— 
‘‘(i) the number of metric tons of car-
bon dioxide emissions avoided through cap-
ture and sequestration of emissions by the 
project, as determined pursuant to such 
methodology as the Administrator shall 
prescribe by regulation; and 
‘‘(ii) a bonus allowance value, pursu-
ant to paragraph (3); by 
‘‘(B) the average fair market value of an 
emission allowance during the preceding year. 
‘‘(3) BONUS ALLOWANCE VALUES.— 
‘‘(A) For a generating unit achieving the 
capture and sequestration of 85 percent or 
more of the carbon dioxide that otherwise would 
be emitted by such unit, the bonus allowance 
value shall be $90 per ton. 
‘‘(B) The Administrator shall by regulation 
establish a bonus allowance value for each rate
of lower capture and sequestration achieved by 
a generating unit, from a minimum of $50 per 
ton for a 50 percent rate and varying directly 
with increasing rates of capture and sequestra-
tion up to $90 per ton for an 85 percent rate. 
‘‘(C) For a generating unit that achieves 
the capture and sequestration of at least 50 
percent of the carbon dioxide that otherwise 
would be emitted by such unit by not later than 
January 1, 2017, the otherwise applicable 
bonus allowance value under this paragraph 
shall be increased by $10, provided that the 
owner of such unit notifies the Administrator 
by not later than January 1, 2012, of its intent 
to achieve such rate of capture and sequestra-
tion. 
‘‘(D) For a carbon capture and sequestra-
tion project sequestering in a geological forma-
tion for purposes of enhanced hydrocarbon re-
covery, the Administrator shall, by regulation, 
reduce the applicable bonus allowance value 
under this paragraph to reflect the lower net 
cost of the project when compared to sequestra-
tion into geological formations solely for pur-
poses of sequestration.
‘‘(E) The Administrator shall annually ad-
just for inflation the bonus allowance values es-
tablished under this paragraph. 
‘‘(d) PHASE II DISTRIBUTION TO ELECTRIC GENER-
ATING UNITS.— 
‘‘(1) 
APPLICATION.—This 
subsection 
shall 
apply only to the distribution of emission allowances 
for carbon capture and sequestration projects at 
electric generating units after the capacity threshold 
identified in subsection (c)(1) is reached. 
‘‘(2) REGULATIONS.—Not later than 2 years 
prior to the date on which the capacity threshold 
identified in subsection (c)(1) is projected to be 
reached, the Administrator shall promulgate regula-
tions to govern the distribution of emission allow-
ances to the owners or operators of eligible projects 
under this subsection. 
‘‘(3) REVERSE AUCTIONS.— 
‘‘(A) IN GENERAL.—Except as provided in 
paragraph (4), the regulations promulgated 
under paragraph (2) shall provide for the dis-
tribution of emission allowances to the owners 
or operators of eligible projects under this sub-
section through reverse auctions, which shall be 
held no less frequently than once each calendar
year. The Administrator may establish a sepa-
rate auction for each of no more than 5 dif-
ferent project categories, defined on the basis of 
coal type, capture technology, geological forma-
tion type, new unit versus retrofit application, 
such other factors as the Administrator may 
prescribe, or any combination thereof. The Ad-
ministrator may establish appropriate minimum 
rates of capture and sequestration in imple-
menting this paragraph. 
‘‘(B) AUCTION PROCESS.—At each reverse 
auction— 
‘‘(i) the Administrator shall solicit 
bids from eligible projects; 
‘‘(ii) eligible projects participating in 
the auction shall submit a bid including 
the desired level of carbon dioxide seques-
tration incentive per ton and the estimated 
quantity of carbon dioxide that the project 
will permanently sequester over 10 years; 
and 
‘‘(iii) the Administrator shall select 
bids, within each auction, for the seques-
tration amount submitted, beginning with 
the eligible project submitting the bid for
the lowest level of sequestration incentive 
on a per ton basis and meeting such other 
requirements as the Administrator may 
specify, until the amount of funds available 
for the reverse auction is committed. 
‘‘(C) FORM OF DISTRIBUTION.—The Ad-
ministrator shall distribute emission allowances 
to the owners or operators of eligible projects 
selected through a reverse auction under this 
paragraph pursuant to a formula equivalent to 
that described in subsection (c)(2), except that 
the bonus allowance value that is bid by the en-
tity shall be substituted for the bonus allowance 
values set forth in subsection (c)(3). 
‘‘(4) ALTERNATIVE DISTRIBUTION METHOD.— 
‘‘(A) IN GENERAL.—If the Administrator 
determines that reverse auctions would not pro-
vide for efficient and cost-effective commercial 
deployment of carbon capture and sequestration 
technologies, the Administrator may instead, 
through regulations promulgated under para-
graph (2) or (5), prescribe a schedule for the 
award of bonus allowances to the owners or op-
erators of eligible projects under this sub-
section, in accordance with the requirements of 
this paragraph. 
‘‘(B) MULTIPLE TRANCHES.—The Admin-
istrator shall divide emission allowances avail-
able for distribution to the owners or operators 
of eligible projects into a series of tranches, 
each supporting the deployment of a specified 
quantity of cumulative electric generating ca-
pacity utilizing carbon capture and sequestra-
tion technology, each of which shall not be 
greater than 6 gigawatts. 
‘‘(C) METHOD
OF
DISTRIBUTION.—The 
Administrator shall distribute emission allow-
ances within each tranche, on a first-come, 
first-served basis— 
‘‘(i) based on the date of full-scale op-
eration of capture and sequestration tech-
nology; and 
‘‘(ii) pursuant to a formula, similar to 
that set forth in subsection (c)(2) (except 
that the Administrator shall prescribe 
bonus allowance values different than those 
set forth in subsection (c)(3)), establishing 
the number of allowances to be distributed
per ton of carbon dioxide sequestered by 
the project. 
‘‘(D) REQUIREMENTS.—For each tranche 
established pursuant to subparagraph (B), the 
Administrator shall establish a schedule for dis-
tributing emission allowances that— 
‘‘(i) is based on a sliding scale that 
provides higher bonus allowance values for 
projects achieving higher rates of capture 
and sequestration; 
‘‘(ii) for each capture and sequestra-
tion rate, establishes a bonus allowance 
value that is lower than that established 
for such rate in the previous tranche (or, 
in the case of the first tranche, than that 
established for such rate under subsection 
(c)(3)); and 
‘‘(iii) may establish different bonus al-
lowance levels for no more than 5 different 
project categories, defined by coal type, 
capture technology, geological formation 
type, new unit versus retrofit application, 
such other factors as the Administrator 
may prescribe, or any combination thereof.
‘‘(E) CRITERIA FOR ESTABLISHING BONUS 
ALLOWANCE VALUES.—In setting bonus allow-
ance values under this paragraph, the Adminis-
trator shall seek to cover no more than the rea-
sonable incremental capital and operating costs 
of a project that are attributable to implemen-
tation of carbon capture, transportation, and 
sequestration technologies, taking into ac-
count— 
‘‘(i) the reduced cost of compliance 
with section 722 of this Act; 
‘‘(ii) the reduced cost associated with 
sequestering in a geological formation for 
purposes of enhanced hydrocarbon recovery 
when compared to sequestration into geo-
logical formations solely for purposes of se-
questration; 
‘‘(iii) the relevant factors defining the 
project category; and 
‘‘(iv) such other factors as the Admin-
istrator determines are appropriate. 
‘‘(5) REVISION OF REGULATIONS.—The Admin-
istrator shall review, and as appropriate revise, the 
applicable regulations under this subsection no less 
frequently than every 8 years.
‘‘(e) LIMITS FOR CERTAIN ELECTRIC GENERATING 
UNITS.— 
‘‘(1) DEFINITIONS.—For purposes of this sub-
section, the terms ‘covered EGU’ and ‘initially per-
mitted’ shall have the meaning given those terms in 
section 812 of this Act. 
‘‘(2) COVERED
EGUS
INITIALLY
PERMITTED 
FROM
2009
THROUGH
2014.—For a covered EGU 
that is initially permitted on or after January 1, 
2009, and before January 1, 2015, the Adminis-
trator shall reduce the quantity of emission allow-
ances that the owner or operator of such covered 
EGU would otherwise be eligible to receive under 
this section as follows: 
‘‘(A) In the case of a unit commencing op-
eration on or before January 1, 2019, if the 
date in clause (ii)(I) is earlier than the date in 
clause (ii)(II), by the product of— 
‘‘(i) 20 percent; and 
‘‘(ii) the number of years, if any, that 
have elapsed between— 
‘‘(I) the earlier of January 1, 
2020, or the date that is 5 years after 
the commencement of operation of 
such covered EGU; and
‘‘(II) the first year that such cov-
ered EGU achieves (and thereafter 
maintains) an emission limit that is at 
least a 50 percent reduction in emis-
sions of the carbon dioxide produced 
by the unit, measured on an annual 
basis, as determined in accordance 
with section 812(b)(2). 
‘‘(B) In the case of a unit commencing op-
eration after January 1, 2019, by the product 
of— 
‘‘(i) 20 percent; and 
‘‘(ii) the number of years between— 
‘‘(I) the commencement of oper-
ation of such covered EGU; and 
‘‘(II) the first year that such cov-
ered EGU achieves (and thereafter 
maintains) an emission limit that is at 
least a 50 percent reduction in emis-
sions of the carbon dioxide produced 
by the unit, measured on an annual 
basis, as determined in accordance 
with section 812(b)(2). 
‘‘(3) COVERED
EGUS
INITIALLY
PERMITTED 
FROM 2015 THROUGH 2019.—The owner or operator
100 
of a covered EGU that is initially permitted on or 
after January 1, 2015, and before January 1, 2020, 
shall be ineligible to receive emission allowances pur-
suant to this section if such unit, upon commence-
ment of operations (and thereafter), does not achieve 
and maintain an emission limit that is at least a 50 
percent reduction in emissions of the carbon dioxide 
produced by the unit, measured on an annual basis, 
as determined in accordance with section 812(b)(2). 
‘‘(f) INDUSTRIAL SOURCES.— 
‘‘(1) ALLOWANCES.—The Administrator may 
distribute not more than 15 percent of the allow-
ances allocated under section 782(f) for any vintage 
year to the owners or operators of eligible industrial 
sources to support the commercial-scale deployment 
of carbon capture and sequestration technologies at 
such sources. 
‘‘(2) DISTRIBUTION.—The Administrator shall, 
by regulation, prescribe requirements for the dis-
tribution of emission allowances to the owners or op-
erators of industrial sources under this subsection, 
based on a bonus allowance formula that awards al-
lowances to qualifying projects on the basis of tons 
of carbon dioxide captured and permanently seques-
101 
tered. The Administrator may provide for the dis-
tribution of emission allowances pursuant to— 
‘‘(A) a reverse auction method, similar to 
that described under subsection (d)(3), includ-
ing the use of separate auctions for different 
project categories; or 
‘‘(B) an incentive schedule, similar to that 
described under subsection (d)(4), which shall 
ensure that incentives are set so as to satisfy 
the 
requirement 
described 
in 
subsection 
(d)(4)(E). 
‘‘(3) REVISION OF REGULATIONS.—The Admin-
istrator shall review, and as appropriate revise, the 
applicable regulations under this subsection no less 
frequently than every 8 years. 
‘‘(g) LIMITATIONS.—Allowances may be distributed 
under this section only for tons of carbon dioxide emis-
sions that have already been captured and sequestered. A 
qualifying project may receive annual emission allowances 
under this section only for the first 10 years of operation. 
No greater than 72 gigawatts of total cumulative gener-
ating capacity (including industrial applications, measured 
by such equivalent metric as the Administrator may des-
ignate) may receive emission allowances under this sec-
tion. Upon reaching the limit described in the preceding
102 
sentence, any emission allowances that are allocated for 
carbon capture and sequestration deployment under sec-
tion 782(f) and are not yet obligated under this section 
shall be treated as allowances not designated for distribu-
tion for purposes of section 782(r). 
‘‘(h) EXHAUSTION OF ACCOUNT AND ANNUAL ROLL- 
OVER OF SURPLUS ALLOWANCES.— 
‘‘(1) In distributing emission allowances under 
this section, the Administrator shall ensure that 
qualifying projects receiving allowances receive dis-
tributions for 10 years. 
‘‘(2) If the Administrator determines that the 
emission allowances allocated under section 782(f) 
with a vintage year that matches the year of dis-
tribution will be exhausted once the estimated full 
10-year distributions will be provided to current eli-
gible participants, the Administrator shall provide to 
new eligible projects allowances from vintage years 
after the year of the distribution. 
‘‘(i) RETROFIT APPLICATIONS.—(1) In calculating 
bonus allowance values for retrofit applications eligible 
under subsection (b)(1)(A)(ii) and (iv)(II), the Adminis-
trator shall apply the required capture rates with respect 
to the treated portion of flue gas from the unit.
103 
‘‘(2) No additional projects shall be eligible for allow-
ances under subsection (b)(1)(A)(ii) and (iv)(II) as of such 
time as the Administrator reports, pursuant to section 
812(d), that carbon capture and sequestration retrofit 
projects at electric generating units that are eligible for 
allowances under this section have been applied, in the ag-
gregate, to the flue gas generated by 1 gigawatt of total 
cumulative generating capacity. The limitation in the pre-
ceding sentence shall not apply to projects that meet the 
eligibility criteria in subsection (b)(1)(A)(iv)(I). 
‘‘(j) DAVIS-BACON COMPLIANCE.—All laborers and 
mechanics employed on projects funded directly by or as-
sisted in whole or in part by this section through the use 
of emission allowances shall be paid wages at rates not 
less than those prevailing on projects of a character simi-
lar in the locality as determined by the Secretary of Labor 
in accordance with subchapter IV, chapter 31, part A of 
subtitle II of title 40, United States Code. With respect 
to the labor standards specified in this subsection, the Sec-
retary of Labor shall have the authority and functions set 
forth in Reorganization Plan Numbered 14 of 1950 (64 
Stat. 1267; 5 U.S.C. App.) and section 3145 of title 40, 
United States Code.’’.
104 
SEC. 116. PERFORMANCE STANDARDS FOR COAL-FUELED 
POWER PLANTS. 
(a) IN GENERAL.—Title VIII of the Clean Air Act 
(as added by section 331 of this Act) is amended by add-
ing the following new section after section 811: 
‘‘SEC. 812. PERFORMANCE STANDARDS FOR NEW COAL- 
FIRED POWER PLANTS. 
‘‘(a) DEFINITIONS.—For purposes of this section: 
‘‘(1) COVERED EGU.—The term ‘covered EGU’ 
means a utility unit that is required to have a per-
mit under section 503(a) and is authorized under 
state or federal law to derive at least 30 percent of 
its annual heat input from coal, petroleum coke, or 
any combination of these fuels. 
‘‘(2) INITIALLY
PERMITTED.—The term ‘ini-
tially permitted’ means that the owner or operator 
has received a Clean Air Act preconstruction ap-
proval or permit, for the covered EGU as a new (not 
a modified) source, but administrative review or ap-
peal of such approval or permit has not been ex-
hausted. A subsequent modification of any such ap-
proval or permits, ongoing administrative or court 
review, appeals, or challenges, or the existence or 
tolling of any time to pursue further review, appeals, 
or challenges shall not affect the date on which a
105 
covered EGU is considered to be initially permitted 
under this paragraph. 
‘‘(b) STANDARDS.—(1) A covered EGU that is ini-
tially permitted on or after January 1, 2020, shall achieve 
an emission limit that is a 65 percent reduction in emis-
sions of the carbon dioxide
produced by the
unit, as 
measured on an annual basis, or meet such more stringent 
standard as the Administrator may establish pursuant to 
subsection (c). 
‘‘(2) A covered EGU that is initially permitted after 
January 1, 2009, and before January 1, 2020, shall, by 
the applicable compliance date established under this 
paragraph, achieve an emission limit that is a 50 percent 
reduction in emissions of the carbon dioxide produced by 
the
unit, as measured on an annual basis. Compliance 
with the requirement set forth in this paragraph shall be 
required by the earliest of the following: 
‘‘(A) Four years after the date the Adminis-
trator has published pursuant to subsection (d) a re-
port that there are in commercial operation in the 
United States electric generating units or other sta-
tionary sources equipped with carbon capture and 
sequestration technology that, in the aggregate— 
‘‘(i) have a total of at least 4 gigawatts of 
nameplate generating capacity of which—
106 
‘‘(I) at least 3 gigawatts must be elec-
tric generating units; and 
‘‘(II) up to 1 gigawatt may be indus-
trial applications, for which capture and 
sequestration of 3 million tons of carbon 
dioxide 
per 
year 
on 
an 
aggregate 
annualized basis shall be considered equiv-
alent to 1 gigawatt; 
‘‘(ii) include at least 2 electric generating 
units, each with a nameplate generating capac-
ity of 250 megawatts or greater, that capture, 
inject, and sequester carbon dioxide into geo-
logic formations other than oil and gas fields; 
and 
‘‘(iii) are capturing and sequestering in the 
aggregate at least 12 million tons of carbon di-
oxide per year, calculated on an aggregate 
annualized basis. 
‘‘(B) January 1, 2025. 
‘‘(3) If the deadline for compliance with paragraph 
(2) is January 1, 2025, the Administrator may extend the 
deadline for compliance by a covered EGU by up to 18 
months if the Administrator makes a determination, based 
on a showing by the owner or operator of the unit, that 
it will be technically infeasible for the unit to meet the
107 
standard by the deadline. The owner or operator must 
submit a request for such an extension by no later than 
January 1, 2022, and the Administrator shall provide for 
public notice and comment on the extension request. 
‘‘(c) REVIEW AND REVISION OF STANDARDS.—Not 
later than 2025 and at 5-year intervals thereafter, the Ad-
ministrator shall review the standards for new covered 
EGUs under this section and shall, by rule, reduce the 
maximum carbon dioxide emission rate for new covered 
EGUs to a rate which reflects the degree of emission limi-
tation achievable through the application of the best sys-
tem of emission reduction which (taking into account the 
cost of achieving such reduction and any nonair quality 
health and environmental impact and energy require-
ments) the Administrator determines has been adequately 
demonstrated. 
‘‘(d) REPORTS.—Not later than the date 18 months 
after the date of enactment of this title and semiannually 
thereafter, the Administrator shall publish a report on the 
nameplate capacity of units (determined pursuant to sub-
section (b)(2)(A)) in commercial operation in the United 
States equipped with carbon capture and sequestration 
technology, including the information described in sub-
section (b)(2)(A) (including the cumulative generating ca-
pacity to which carbon capture and sequestration retrofit
108 
projects meeting the criteria described in section 
786(b)(1)(A)(ii) and (b)(1)(A)(iv)(II) has been applied 
and the quantities of carbon dioxide captured and seques-
tered by such projects). 
‘‘(e) REGULATIONS.—Not later than 2 years after the 
date of enactment of this title, the Administrator shall 
promulgate regulations to carry out the requirements of 
this section.’’. 
Subtitle C—Clean Transportation 
SEC. 121. ELECTRIC VEHICLE INFRASTRUCTURE. 
(a) AMENDMENT OF PURPA.—Section 111(d) of the 
Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 
2621(d)) is amended by adding at the end the following: 
‘‘(20) PLUG-IN ELECTRIC DRIVE VEHICLE IN-
FRASTRUCTURE.— 
‘‘(A) UTILITY
PLAN
FOR
INFRASTRUC-
TURE.—Each electric utility shall develop a 
plan to support the use of plug-in electric drive 
vehicles, including heavy-duty hybrid electric ve-
hicles. The plan may provide for deployment of 
electrical charging stations in public or private 
locations, including street parking, parking ga-
rages, parking lots, homes, gas stations, and 
highway rest stops. Any such plan may also in-
clude—
109 
‘‘(i) battery exchange, fast charging 
infrastructure and other services; 
‘‘(ii) triggers for infrastructure de-
ployment based upon market penetration 
of plug-in electric drive vehicles; and 
‘‘(iii) such other elements as the State 
determines necessary to support plug-in 
electric drive vehicles. 
Each plan under this paragraph shall provide 
for the deployment of the charging infrastruc-
ture or other infrastructure necessary to ade-
quately support the use of plug-in electric drive 
vehicles. 
‘‘(B) 
SUPPORT
REQUIREMENTS.—Each 
State regulatory authority (in the case of each 
electric utility for which it has ratemaking au-
thority) and each utility (in the case of a non-
regulated utility) shall— 
‘‘(i) require that charging infrastruc-
ture deployed is interoperable with prod-
ucts of all auto manufacturers to the ex-
tent possible; and 
‘‘(ii) consider adopting minimum re-
quirements for deployment of electrical 
charging infrastructure and other appro-
110 
priate requirements necessary to support 
the use of plug-in electric drive vehicles. 
‘‘(C) COST RECOVERY.—Each State regu-
latory authority (in the case of each electric 
utility for which it has ratemaking authority) 
and each utility (in the case of a nonregulated 
utility) shall consider whether, and to what ex-
tent, to allow cost recovery for plans and imple-
mentation of plans. 
‘‘(D) SMART
GRID
INTEGRATION.—The 
State regulatory authority (in the case of each 
electric utility for which it has ratemaking au-
thority) and each utility (in the case of a non-
regulated utility) shall, in accordance with regu-
lations issued by the Federal Energy Regu-
latory Commission pursuant to section 1305(d) 
of the Energy Independence and Security Act 
of 2007— 
‘‘(i) establish any appropriate proto-
cols and standards for integrating plug-in 
electric drive vehicles into an electrical dis-
tribution system, including Smart Grid 
systems and devices as described in title 
XIII of the Energy Independence and Se-
curity Act of 2007;
111 
‘‘(ii) include, to the extent feasible, 
the ability for each plug-in electric drive 
vehicle to be identified individually and to 
be associated with its owner’s electric util-
ity account, regardless of the location that 
the vehicle is plugged in, for purposes of 
appropriate billing for any electricity re-
quired to charge the vehicle’s batteries as 
well as any crediting for electricity pro-
vided to the electric utility from the vehi-
cle’s batteries; and 
‘‘(iii) review the determination made 
in response to section 1252 of the Energy 
Policy Act of 2005 in light of this section, 
including 
whether 
time-of-use 
pricing 
should be employed to enable the use of 
plug-in electric drive vehicles to contribute 
to meeting peak-load and ancillary service 
power needs.’’. 
(b) COMPLIANCE.— 
(1) TIME LIMITATIONS.—Section 112(b) of the 
Public Utility Regulatory Policies Act of 1978 (16 
U.S.C. 2622(b)) is amended by adding the following 
at the end thereof:
112 
‘‘(7)(A) Not later than 3 years after the date of en-
actment of this paragraph, each State regulatory authority 
(with respect to each electric utility for which it has rate-
making authority) and each nonregulated utility shall 
commence the consideration referred to in section 111, or 
set a hearing date for consideration, with respect to the 
standard established by paragraph (20) of section 111(d). 
‘‘(B) Not later than 4 years after the date of enact-
ment of the this paragraph, each State regulatory author-
ity (with respect to each electric utility for which it has 
ratemaking authority), and each nonregulated electric util-
ity, shall complete the consideration, and shall make the 
determination, referred to in section 111 with respect to 
the standard established by paragraph (20) of section 
111(d).’’. 
(2) FAILURE TO COMPLY.—Section 112(c) of 
the Public Utility Regulatory Policies Act of 1978 
(16 U.S.C. 2622(c)) is amended by adding the fol-
lowing at the end: ‘‘In the case of the standards es-
tablished by paragraph (20) of section 111(d), the 
reference contained in this subsection to the date of 
enactment of this Act shall be deemed to be a ref-
erence to the date of enactment of such paragraph.’’. 
(3) PRIOR STATE ACTIONS.—Section 112(d) of 
the Public Utility Regulatory Policies Act of 1978
113 
(16 U.S.C. 2622(d)) is amended by striking ‘‘(19)’’ 
and inserting ‘‘(20)’’ before ‘‘of section 111(d)’’. 
SEC. 122. LARGE-SCALE VEHICLE ELECTRIFICATION PRO-
GRAM. 
(a) DEPLOYMENT PROGRAM.—The Secretary of En-
ergy shall establish a program to deploy and integrate 
plug-in electric drive vehicles into the electricity grid in 
multiple regions. In carrying out the program, the Sec-
retary may provide financial assistance described under 
subsection (d), consistent with the goals under subsection 
(b). The Secretary shall select regions based upon applica-
tions for assistance received pursuant to subsection (c). 
(b) GOALS.—The goals of the program established 
pursuant to subsection (a) shall be— 
(1) to demonstrate the viability of a vehicle- 
based transportation system that is not overly de-
pendent on petroleum as a fuel and contributes to 
lower carbon emissions than a system based on con-
ventional vehicles; 
(2) to facilitate the integration of advanced ve-
hicle technologies into electricity distribution areas 
to improve system performance and reliability; 
(3) to demonstrate the potential benefits of co-
ordinated investments in vehicle electrification on 
personal mobility and a regional grid;
114 
(4) to demonstrate protocols and standards that 
facilitate vehicle integration into the grid; and 
(5) to investigate differences in each region and 
regulatory environment regarding best practices in 
implementing vehicle electrification. 
(c) APPLICATIONS.—Any State, Indian tribe, or local 
government (or group of State, Indian tribe, or local gov-
ernments) may apply to the Secretary of Energy for finan-
cial assistance in furthering the regional deployment and 
integration into the electricity grid of plug-in electric drive 
vehicles. Such applications may be jointly sponsored by 
electric utilities, automobile manufacturers, technology 
providers, car sharing companies or organizations, or 
other persons or entities. 
(d) USE OF FUNDS.—Pursuant to applications re-
ceived under subsection (c), the Secretary may make fi-
nancial assistance available to any applicant or joint spon-
sor of the application to be used for any of the following: 
(1) Assisting persons located in the regional de-
ployment area, including fleet owners, in the pur-
chase of new plug-in electric drive vehicles by offset-
ting in whole or in part the incremental cost of such 
vehicles above the cost of comparable conventionally 
fueled vehicles.
115 
(2) Supporting the use of plug-in electric drive 
vehicles by funding projects for the deployment of 
any of the following: 
(A) Electrical charging infrastructure for 
plug-in electric drive vehicles, including battery 
exchange, fast charging infrastructure, and 
other services, in public or private locations, in-
cluding street parking, parking garages, park-
ing lots, homes, gas stations, and highway rest 
stops. 
(B) Smart Grid equipment and infrastruc-
ture, as described in title XIII of the Energy 
Independence and Security Act of 2007, to fa-
cilitate the charging and integration of plug-in 
electric drive vehicles. 
(3) Such other projects as the Secretary deter-
mines appropriate to support the large-scale deploy-
ment of plug-in electric drive vehicles in regional de-
ployment areas. 
(e) PROGRAM REQUIREMENTS.—The Secretary, in 
consultation with the Administrator and the Secretary of 
Transportation, shall determine design elements and re-
quirements of the program established pursuant to sub-
section (a), including—
116 
(1) the type of financial mechanism with which 
to provide financial assistance; 
(2) criteria for evaluating applications sub-
mitted under subsection (c), including the antici-
pated ability to promote deployment and market 
penetration of vehicles that are less dependent on 
petroleum as a fuel source; and 
(3) reporting requirements for entities that re-
ceive financial assistance under this section, includ-
ing a comprehensive set of performance data charac-
terizing the results of the deployment program. 
(f) INFORMATION CLEARINGHOUSE.—The Secretary 
shall, as part of the program established pursuant to sub-
section (a), collect and make available to the public infor-
mation regarding the cost, performance, and other tech-
nical data regarding the deployment and integration of 
plug-in electric drive vehicles. 
(g) AUTHORIZATION.—There are authorized to be ap-
propriated to carry out this section such sums as may be 
necessary. 
SEC. 123. PLUG-IN ELECTRIC DRIVE VEHICLE MANUFAC-
TURING. 
(a) VEHICLE MANUFACTURING ASSISTANCE PRO-
GRAM.—The Secretary of Energy shall establish a pro-
gram to provide financial assistance to automobile manu-
117 
facturers to facilitate the manufacture of plug-in electric 
drive vehicles, as defined in section 131(a)(5) of the En-
ergy Independence and Security Act of 2007, that are de-
veloped and produced in the United States. 
(b) FINANCIAL ASSISTANCE.—The Secretary of En-
ergy may provide financial assistance to an automobile 
manufacturer under the program established pursuant to 
subsection (a) for the reconstruction or retooling of facili-
ties for the manufacture of plug-in electric drive vehicles 
or batteries for such vehicles that are developed and pro-
duced in the United States. 
(c) COORDINATION
WITH
REGIONAL
DEPLOY-
MENT.—The Secretary may provide financial assistance 
under subsection (b) in conjunction with the award of fi-
nancial assistance under the large scale vehicle electrifica-
tion program established pursuant to section 122 of this 
Act. 
(d) PROGRAM REQUIREMENTS.—The Secretary shall 
determine design elements and requirements of the pro-
gram established pursuant to subsection (a), including— 
(1) the type of financial mechanism with which 
to provide financial assistance; 
(2) criteria, in addition to the criteria described 
under subsection (e), for evaluating applications for 
financial assistance; and
118 
(3) reporting requirements for automobile man-
ufacturers that receive financial assistance under 
this section. 
(e) CRITERIA.—In selecting recipients of financial as-
sistance from among applicant automobile manufacturers, 
the Secretary shall give preference to proposals that— 
(1) are most likely to be successful; and 
(2) are located in local markets that have the 
greatest need for the facility. 
(f) REPORTS.—The Secretary shall annually submit 
to Congress a report on the program established pursuant 
to this section. 
(g) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated such sums as are nec-
essary to carry out this section. 
SEC. 124. INVESTMENT IN CLEAN VEHICLES. 
(a) DEFINITIONS.—In this section: 
(1) ADVANCED
TECHNOLOGY
VEHICLES
AND 
QUALIFYING
COMPONENTS.—The terms ‘‘advanced 
technology vehicles’’ and ‘‘qualifying components’’ 
shall have the definition of such terms in section 136 
of the Energy Independence and Security Act of 
2007, except that for purposes of this section, the 
average base year as described in such section 
136(a)(1)(C) shall be the following:
119 
(A) In each of the years 2012 through 
2016, model year 2009. 
(B) In 2017, the Administrator shall, not-
withstanding such section 136(a)(1)(C), deter-
mine an appropriate baseline based on techno-
logical and economic feasibility. 
(2) PLUG-IN ELECTRIC DRIVE VEHICLE.—The 
term ‘‘plug-in electric drive vehicle’’ shall have the 
definition of such term in section 131 of the Energy 
Independence and Security Act of 2007. 
(b) DISTRIBUTION OF ALLOWANCES.—The Adminis-
trator shall, in accordance with this section, distribute 
emission allowances allocated pursuant to section 782(i) 
of the Clean Air Act not later than September 30 of 2012 
and each calendar year thereafter through 2025. 
(c) PLUG-IN ELECTRIC DRIVE VEHICLE MANUFAC-
TURING AND DEPLOYMENT.— 
(1) IN GENERAL.—The Administrator shall, at 
the direction of the Secretary of Energy, provide 
emission allowances allocated pursuant to section 
782(i) to applicants, joint sponsors and automobile 
manufacturers pursuant to sections 122 and 123 of 
this Act. 
(2) ANNUAL AMOUNT.—In each of the years 
2012 through 2017, one-quarter of the portion of
120 
the emission allowances allocated pursuant to section 
782(i) of the Clean Air Act shall be available to 
carry out paragraph (1) such that— 
(A) one-eighth of the portion shall be avail-
able to carry out section 122; and 
(B) one-eighth of the portion shall be 
available to carry out section 123. 
(3) PREFERENCE.—In directing the provision 
of emission allowances under this subsection to carry 
out section 122, the Secretary shall give preference 
to applications under section 122(c) that are jointly 
sponsored by one or more automobile manufacturers. 
(4) MULTI-YEAR COMMITMENTS.—The Admin-
istrator shall commit to providing emission allow-
ances to an applicant, joint sponsor, or automobile 
manufacturer for up to five consecutive years if— 
(A) an application under section 122 or 
123 of this Act requests a multi-year commit-
ment; 
(B) such application meets the criteria for 
support established by the Secretary of Energy 
under section 122 or 123 of this Act; 
(C) the Administrator confirms to the Sec-
retary that emission allowances will be available 
for a multi-year commitment;
121 
(D) the Secretary of Energy determines 
that a multi-year commitment for such applica-
tion will advance the goals of section 122 or 
123; and 
(E) the Secretary of Energy directs the 
Administrator to make a multi-year commit-
ment. 
(5) INSUFFICIENT APPLICATIONS.—If, in any 
year, emission allowances available under paragraph 
(2) cannot be provided because of insufficient num-
bers of submitted applications that meet the criteria 
for support established by the Secretary of Energy 
under section 122 or 123 of this Act, the remaining 
emission allowances shall be distributed according to 
subsection (d). 
(d) ADVANCED TECHNOLOGY VEHICLES.— 
(1) IN GENERAL.—The Administrator shall, at 
the direction of the Secretary of Energy, provide any 
emission allowances allocated pursuant to section 
782(i) of the Clean Air Act that are not provided 
under subsection (c) to automobile manufacturers 
and component suppliers to pay not more than 30 
percent of the cost of—
122 
(A) reequipping, expanding, or establishing 
a manufacturing facility in the United States to 
produce— 
(i) qualifying advanced technology ve-
hicles; or 
(ii) qualifying components; and 
(B) engineering integration performed in 
the United States of qualifying vehicles and 
qualifying components. 
(2) PREFERENCE.—In directing the provision 
of emission allowances under this subsection during 
the years 2012 through 2017, the Secretary shall 
give preference to applications for projects that save 
the maximum number of gallons of fuel. 
SEC. 125. ADVANCED TECHNOLOGY VEHICLE MANUFAC-
TURING INCENTIVE LOANS. 
Section 136(d)(1) of the Energy Independence and 
Security Act of 2007 (42 U.S.C. 17013(d)(1)) is amended 
by 
striking 
‘‘$25,000,000,000’’ 
and 
inserting 
‘‘$50,000,000,000’’. 
SEC. 126. DEFINITION OF RENEWABLE BIOMASS. 
(a) IN GENERAL.—Section 211(o)(1)(I) of the Clean 
Air Act (42 U.S.C. 7545(o)(1)(I)) is amended to read as 
follows:
123 
‘‘(I) RENEWABLE BIOMASS.—The term ‘re-
newable biomass’ means any of the following: 
‘‘(i) 
Materials, 
pre-commercial 
thinnings, or removed invasive species from 
National Forest 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)), including those 
that are byproducts of preventive treat-
ments 
(such 
as 
trees, 
wood, 
brush, 
thinnings, chips, and slash), that are re-
moved as part of a federally recognized 
timber sale, or that are removed to reduce 
hazardous fuels, to reduce or contain dis-
ease or insect infestation, or to restore eco-
system health, and that are— 
‘‘(I) not from components of the 
National Wilderness Preservation Sys-
tem, Wilderness Study Areas, Inven-
toried Roadless Areas, old growth 
stands, late-successional stands (ex-
cept for dead, severely damaged, or 
badly infested trees), components of 
the National Landscape Conservation 
System, National Monuments, Na-
124 
tional Conservation Areas, Designated 
Primitive Areas, or Wild and Scenic 
Rivers corridors; 
‘‘(II) 
harvested 
in 
environ-
mentally sustainable quantities, as de-
termined by the appropriate Federal 
land manager; and 
‘‘(III) harvested in accordance 
with Federal and State law, and ap-
plicable land management plans. 
‘‘(ii) Any organic matter that is avail-
able on a renewable or recurring basis 
from non-Federal land or land belonging to 
an Indian or Indian tribe that is held in 
trust by the United States or subject to a 
restriction against alienation imposed by 
the United States, including— 
‘‘(I) renewable plant material, in-
cluding— 
‘‘(aa) feed grains; 
‘‘(bb) 
other 
agricultural 
commodities; 
‘‘(cc) other plants and trees; 
and 
‘‘(dd) algae; and
125 
‘‘(II) waste material, including— 
‘‘(aa) crop residue; 
‘‘(bb) other vegetative waste 
material (including wood waste 
and wood residues); 
‘‘(cc) animal waste and by-
products (including fats, oils, 
greases, and manure); 
‘‘(dd) construction waste; 
‘‘(ee) food waste and yard 
waste; and 
‘‘(ff) the non-fossil biogenic 
portion of municipal solid waste 
and construction, demolition, and 
disaster debris. 
‘‘(iii) Residues and byproducts from 
wood, pulp, or paper products facilities.’’. 
(b) REDUCTION.—The last sentence of section 
211(o)(7)(D) of the Clean Air Act (42 U.S.C. 
7545(o)(7)(D)) is amended to read as follows: ‘‘For any 
calendar year in which the Administrator makes such a 
reduction, the Administrator shall also reduce the applica-
ble volume of renewable fuel and advanced biofuels re-
quirement established under paragraph (2)(B) by the 
same volume.’’.
126 
SEC. 127. OPEN FUEL STANDARD. 
(a) FINDINGS.—The Congress finds that— 
(1) the status of oil as a strategic commodity, 
which derives from its domination of the transpor-
tation sector, presents a clear and present danger to 
the United States; 
(2) in a prior era, when salt was a strategic 
commodity, salt mines conferred national power and 
wars were fought over the control of such mines; 
(3) technology, in the form of electricity and re-
frigeration, decisively ended salt’s monopoly of meat 
preservation and greatly reduced its strategic impor-
tance; 
(4) fuel competition and consumer choice would 
similarly serve to end oil’s monopoly in the transpor-
tation sector and strip oil of its strategic status; 
(5) the current closed fuel market has allowed 
a cartel of petroleum exporting countries to inflate 
fuel prices, effectively imposing a harmful tax on the 
economy of the United States; 
(6) much of the inflated petroleum revenues the 
oil cartel earns at the expense of the people of the 
United States are used for purposes antithetical to 
the interests of the United States and its allies; 
(7) alcohol fuels, including ethanol and meth-
anol, could potentially provide significant supplies of
127 
additional fuels that could be produced in the United 
States and in many other countries in the Western 
Hemisphere that are friendly to the United States; 
(8) alcohol fuels can only play a major role in 
securing the energy independence of the United 
States if a substantial portion of vehicles in the 
United States are capable of operating on such fuels; 
(9) it is not in the best interest of United 
States consumers or the United States Government 
to be constrained to depend solely upon petroleum 
resources for vehicle fuels if alcohol fuels are poten-
tially available; 
(10) existing technology, in the form of flexible 
fuel vehicles, allows internal combustion engine cars 
and trucks to be produced at little or no additional 
cost, which are capable of operating on conventional 
gasoline, alcohol fuels, or any combination of such 
fuels, as availability or cost advantage dictates, pro-
viding a platform on which fuels can compete; 
(11) the necessary distribution system for such 
alcohol fuels will not be developed in the United 
States until a substantial fraction of the vehicles in 
the United States are capable of operating on such 
fuels;
128 
(12) the establishment of such a vehicle fleet 
and distribution system would provide a large mar-
ket that would mobilize private resources to substan-
tially advance the technology and expand the pro-
duction of alcohol fuels in the United States and 
abroad; 
(13) the United States has an urgent national 
security interest to develop alcohol fuels technology, 
production, and distribution systems as rapidly as 
possible; 
(14) new cars sold in the United States that 
are equipped with an internal combustion engine 
should allow for fuel competition by being flexible 
fuel vehicles, and new diesel cars should be capable 
of operating on biodiesel; and 
(15) such an open fuel standard would help to 
protect the United States economy from high and 
volatile oil prices and from the threats caused by 
global instability, terrorism, and natural disaster. 
(b) OPEN
FUEL
STANDARD
FOR
TRANSPOR-
TATION.—(1) Chapter 329 of title 49, United States Code, 
is amended by adding at the end the following: 
‘‘§ 32920. Open fuel standard for transportation 
‘‘(a) DEFINITIONS.—In this section:
129 
‘‘(1) E85.—The term ‘E85’ means a fuel mix-
ture containing 85 percent ethanol and 15 percent 
gasoline by volume. 
‘‘(2) FLEXIBLE FUEL AUTOMOBILE.—The term 
‘flexible fuel automobile’ means an automobile that 
has been warranted by its manufacturer to operate 
on gasoline, E85, and M85. 
‘‘(3) FUEL CHOICE-ENABLING AUTOMOBILE.— 
The term ‘fuel choice-enabling automobile’ means— 
‘‘(A) a flexible fuel automobile; or 
‘‘(B) an automobile that has been war-
ranted by its manufacturer to operate on bio-
diesel. 
‘‘(4) LIGHT-DUTY
AUTOMOBILE.—The term 
‘light-duty automobile’ means— 
‘‘(A) a passenger automobile; or 
‘‘(B) a non-passenger automobile. 
‘‘(5) 
LIGHT-DUTY
AUTOMOBILE
MANUFAC-
TURER’S ANNUAL COVERED INVENTORY.—The term 
‘light-duty automobile manufacturer’s annual cov-
ered inventory’ means the number of light-duty 
automobiles powered by an internal combustion en-
gine that a manufacturer, during a given calendar 
year, manufactures in the United States or imports
130 
from outside of the United States for sale in the 
United States. 
‘‘(6) M85.—The term ‘M85’ means a fuel mix-
ture containing 85 percent methanol and 15 percent 
gasoline by volume. 
‘‘(b) OPEN
FUEL
STANDARD
FOR
TRANSPOR-
TATION.— 
‘‘(1) IN GENERAL.—The Secretary may promul-
gate regulations to require each light-duty auto-
mobile manufacturer’s annual covered inventory to 
be comprised of a minimum percentage of fuel-choice 
enabling automobiles, with sufficient lead time, if 
the Secretary, in coordination with the Secretary of 
Energy and the Administrator of the Environmental 
Protection Agency, determines such requirement is a 
cost-effective way to achieve the Nation’s energy 
independence and environmental objectives. The 
cost-effective determination shall consider the future 
availability of both alternative fuel supply and infra-
structure to deliver the alternative fuel to the fuel- 
choice enabling vehicles. 
‘‘(2) TEMPORARY EXEMPTION FROM REQUIRE-
MENTS.— 
‘‘(A) APPLICATION.—A manufacturer may 
request an exemption from the requirement de-
131 
scribed in paragraph (1) by submitting an ap-
plication to the Secretary, at such time, in such 
manner, and containing such information as the 
Secretary may require by regulation. Each such 
application shall specify the models, lines, and 
types of automobiles affected. 
‘‘(B) EVALUATION.—After evaluating an 
application received from a manufacturer, the 
Secretary may at any time, under such terms 
and conditions, and to such extent as the Sec-
retary considers appropriate, temporarily ex-
empt, or renew the exemption of, a light-duty 
automobile from the requirement described in 
paragraph (1) if the Secretary determines that 
unavoidable events not under the control of the 
manufacturer prevent the manufacturer of such 
automobile from meeting its required produc-
tion volume of fuel choice-enabling automobiles, 
including— 
‘‘(i) a disruption in the supply of any 
component required for compliance with 
the regulations; 
‘‘(ii) a disruption in the use and in-
stallation by the manufacturer of such 
component; or
132 
‘‘(iii) application to plug-in electric 
drive vehicles causing such vehicles to fail 
to meet State air quality requirements. 
‘‘(C) 
CONSOLIDATION.—The 
Secretary 
may consolidate applications received from mul-
tiple manufacturers under subparagraph (A) if 
they are of a similar nature. 
‘‘(D) CONDITIONS.—Any exemption grant-
ed under subparagraph (B) shall be conditioned 
upon the manufacturer’s commitment to recall 
the exempted automobiles for installation of the 
omitted components within a reasonable time 
proposed by the manufacturer and approved by 
the Secretary after such components become 
available in sufficient quantities to satisfy both 
anticipated production and recall volume re-
quirements. 
‘‘(E) NOTICE.—The Secretary shall pub-
lish in the Federal Register— 
‘‘(i) notice of each application received 
from a manufacturer; 
‘‘(ii) notice of each decision to grant 
or deny a temporary exemption; and 
‘‘(iii) the reasons for granting or de-
nying such exemptions.’’.
133 
(2) The table of contents in chapter 329 of such title 
is amended adding at the end the following: 
‘‘32920. Open fuel standard for transportation.’’. 
SEC. 128. DIESEL EMISSIONS REDUCTION. 
Subtitle G of title VII of the Energy Policy Act of 
2005 (42 U.S.C. 16131 et seq.) is amended— 
(1) in the matter preceding clause (i) in section 
791(3)(B), by inserting ‘‘in any State’’ after ‘‘non-
profit organization or institution’’; 
(2) in section 791(9), by striking ‘‘The term 
‘State’ includes the District of Columbia.’’ and in-
serting ‘‘The term ‘State’ includes the District of 
Columbia, American Samoa, Guam, the Common-
wealth of the Northern Mariana Islands, Puerto 
Rico, and the Virgin Islands.’’; 
(3) in section 793(c)— 
(A) in paragraph (2)(A), by striking ‘‘51 
States’’ and inserting ‘‘56 States’’; 
(B) in paragraph (2)(A), by striking ‘‘1.96 
percent’’ and inserting ‘‘1.785 percent’’; 
(C) in paragraph (2)(B), by striking ‘‘51 
States’’ and inserting ‘‘56 States’’; and 
(D) in paragraph (2)(B), by amending 
clause (ii) to read as follows: 
‘‘(ii) the amount of funds remaining 
after each State described in paragraph (1)
134 
receives the 1.785-percent allocation under 
this paragraph.’’; and 
(4) in section 797, by striking ‘‘2011’’ and in-
serting ‘‘2016’’. 
SEC. 129. LOAN GUARANTEES FOR PROJECTS TO CON-
STRUCT RENEWABLE FUEL PIPELINES. 
(a) DEFINITIONS.—Section 1701 of the Energy Pol-
icy Act of 2005 (42 U.S.C. 16511) is amended by adding 
at the end the following: 
‘‘(6) RENEWABLE FUEL.—The term ‘renewable 
fuel’ has the meaning given the term in section 
211(o)(1) of the Clean Air Act (42 U.S.C. 
7545(o)(1)), except that the term shall include all 
ethanol and biodiesel. 
‘‘(7) RENEWABLE FUEL PIPELINE.—The term 
‘renewable fuel pipeline’ means a common carrier 
pipeline for transporting renewable fuel.’’. 
(b) RENEWABLE FUEL PIPELINE ELIGIBILITY.— 
Section 1703(b) the Energy Policy Act of 2005 (42 U.S.C. 
16513) is amended by adding at the end the following: 
‘‘(11) Renewable fuel pipelines.’’. 
SEC. 130. FLEET VEHICLES. 
Section 508 of the Energy Policy Act of 1992 (42 
U.S.C. 13258) is amended as follows:
135 
(1) By adding the following new paragraph at 
the end of subsection (a): 
‘‘(6) REPOWERED
OR
CONVERTED
ALTER-
NATIVE FUELED VEHICLES.—As used in this para-
graph, the term ‘repowered or converted alternative 
fueled vehicle’ includes light-, medium- or heavy-duty 
motor vehicles that have been modified with an EPA 
or CARB compliant engine or vehicle or aftermarket 
system so that the vehicle or engine is capable of op-
erating on an alternative fuel.’’. 
(2) By adding the following new paragraph at 
the end of subsection (b): 
‘‘(3) Repowered or converted vehicles. Not later 
than January 1, 2010, the Secretary shall allocate 
credits to fleets that repower or convert an existing 
vehicle so that it is capable of operating on an alter-
native fuel. In the case of any medium- or heavy- 
duty vehicle that is repowered or converted so that 
it is capable of operating on an alternative fuel, the 
Secretary shall allocate additional credits for such 
vehicles if he determines that such vehicles displace 
more petroleum than light duty alternative fueled ve-
hicles. Such rules shall also include a requirement 
that such vehicles remain in the fleet for a period of 
no less than 2 years in order to continue to qualify
136 
for credit. The Secretary also shall extend the flexi-
bility afforded in this paragraph to Federal fleets 
subject to the purchase provisions contained in sec-
tion 303 of this Act.’’. 
SEC. 130A. REPORT ON NATURAL GAS VEHICLE EMISSIONS 
REDUCTIONS. 
Within 360 days after the date of enactment of this 
Act, the Administrator, in consultation with the Secre-
taries of Energy and Transportation, and the Adminis-
trator of the General Services Administration, and after 
an examination of available scientific studies or analysis, 
shall submit to the Congress a report on— 
(1) the contribution that light and heavy duty 
natural gas vehicles, by category and State, have 
made during the last decade to the reduction of 
greenhouse gases and criteria pollutants under the 
Clean Air Act, and the reduced consumption of pe-
troleum-based fuels; 
(2) the contribution that light and heavy duty 
natural gas vehicles are expected to make from 2010 
to 2020 in reducing greenhouse gas and criteria pol-
lutants under the Clean Air Act based, among other 
things, on additional Federal incentives for the man-
ufacture and deployment of natural gas vehicles pro-
vided in this Act, and other Federal legislation; and
137 
(3) additional Federal measures, including leg-
islation, that could, if implemented, maximize the 
potential for natural gas used in both stationary and 
mobile sources to contribute to the reduction of 
greenhouse gases and criteria pollutants under the 
Clean Air Act. 
Subtitle D—State Energy and Envi-
ronment Development Accounts 
SEC. 131. ESTABLISHMENT OF SEED ACCOUNTS. 
(a) DEFINITIONS.—In this section: 
(1) SEED ACCOUNT.—The term ‘‘SEED Ac-
count’’ means a State Energy and Environment De-
velopment Account established pursuant to this sec-
tion. 
(2) STATE ENERGY OFFICE.—The term ‘‘State 
Energy Office’’ means a State entity eligible for 
grants under part D of title III of the Energy Policy 
and Conservation Act (42 U.S.C. 6321 et seq.). 
(b) ESTABLISHMENT OF PROGRAM.—The Adminis-
trator shall establish a program under which a State, 
through its State Energy Office or other State agency des-
ignated by the State, may operate a State Energy and En-
vironment Development Account. 
(c) PURPOSE.—The purpose of each SEED Account 
is to serve as a common State-level repository for man-
138 
aging and accounting for emission allowances provided to 
States designated for renewable energy and energy effi-
ciency purposes. 
(d) REGULATIONS.—Not later than 1 year after the 
date of enactment of this Act, the Administrator shall pro-
mulgate regulations to carry out this section, including 
regulations— 
(1) to ensure that each State operates its 
SEED Account and any subaccounts thereof effi-
ciently and in accordance with this Act and applica-
ble State and Federal laws; 
(2) to prevent waste, fraud, and abuse; 
(3) to indicate the emission allowances that 
may be deposited in a State’s SEED Account pend-
ing distribution or use; 
(4) to indicate the programs and objectives au-
thorized by Federal law for which emission allow-
ances in a SEED Account may be distributed or 
used; 
(5) to identify the forms of financial assistance 
and incentives that States may provide through dis-
tribution or use of SEED Accounts; and 
(6) to prescribe the form and content of reports 
that the States are required to submit under this 
section on the use of SEED Accounts.
139 
(e) OPERATION.— 
(1) DEPOSITS.— 
(A) IN GENERAL.—In the allowance track-
ing system established pursuant to section 
724(d) of the Clean Air Act, the Administrator 
shall establish a SEED Account for each State 
and place in it the allowances allocated pursu-
ant to section 782(g) of the Clean Air Act to 
be distributed to States pursuant to sections 
132 and 201 of this Act. 
(B) FINANCIAL ACCOUNT.—A State may 
create a financial account associated with its 
SEED Account to deposit, retain, and manage 
any proceeds of any sale of any allowance pro-
vided pursuant to this Act pending expenditure 
or disbursement of those proceeds for purposes 
permitted under this section. The funds in such 
an account shall not be commingled with other 
funds not derived from the sale of allowances 
provided to the State; however, loans made by 
the State from such funds pursuant to para-
graph (2)(C)(i) may be repaid into such a fi-
nancial account, including any interest charged. 
(2) WITHDRAWALS.—
140 
(A) IN GENERAL.—All allowances distrib-
uted pursuant to sections 132 and 201, includ-
ing the proceeds of any sale of such allowances, 
shall support renewable energy and energy effi-
ciency programs authorized or approved by the 
Federal Government. 
(B) 
DEDICATED
ALLOWANCES.—Allow-
ances distributed pursuant to sections 132 and 
201 that are required by law to be used for spe-
cific purposes for a specified period shall be 
used according to those requirements during 
that period. 
(C) UNDEDICATED ALLOWANCES.—To the 
extent that allowances distributed pursuant to 
sections 132 and 201 are not required by law 
to be used for specific purposes for a specified 
period as described in subparagraph (B), such 
allowances or the proceeds of their sale may be 
used for any of the following purposes: 
(i) LOANS.—Loans of allowances, or 
the proceeds from the sale of allowances, 
may be provided, interest on commercial 
loans may be subsidized at an interest rate 
as low as zero, and other credit support 
may be provided to support programs au-
141 
thorized to use SEED Account allowance 
value or any other renewable energy or en-
ergy efficiency purpose authorized or ap-
proved by the Federal Government. 
(ii) GRANTS.—Grants of allowances or 
the proceeds of their sale may be provided 
to support programs authorized to use 
SEED Account allowance value or any 
other renewable energy or energy efficiency 
purpose authorized or approved by the 
Federal Government. 
(iii) OTHER FORMS OF SUPPORT.—Al-
lowances or the proceeds of the sale of al-
lowances may be provided for other forms 
of support for programs authorized to use 
SEED Account allowance value or any 
other renewable energy or energy efficiency 
purpose authorized or approved by the 
Federal Government. 
(iv) ADMINISTRATIVE COSTS.—Except 
to the extent provided in Federal law au-
thorizing or allocating allowances deposited 
in a SEED Account, not more than 5 per-
cent of the allowance value in a SEED Ac-
count in any year may be used to cover ad-
142 
ministrative expenses of the SEED Ac-
count. 
(D) SUBACCOUNTS.—A State may request 
that the Administrator establish accounts for 
local governments that request such sub-
accounts to hold allowances distributed to local 
governments for renewable energy or energy ef-
ficiency programs authorized or approved by 
the Federal Government. 
(E) INTENDED USE PLANS.— 
(i) IN GENERAL.—After providing for 
public review and comment, each State ad-
ministering a SEED Account shall annu-
ally prepare a plan that identifies the in-
tended uses of the allowances or proceeds 
from the sale of allowances in its SEED 
Account. 
(ii) CONTENTS.—An intended use 
plan shall include— 
(I) a list of the projects or pro-
grams for which withdrawals from the 
SEED Account are intended in the 
next fiscal year that begins after the 
date of the plan, including a descrip-
tion of each project;
143 
(II) the relationship of each of 
the projects or programs to an identi-
fied Federal purpose authorized by 
this Act, or any other Federal statute; 
(III) the expected terms of use of 
allowance value to provide assistance; 
(IV) the criteria and methods es-
tablished for the distribution of allow-
ances or allowance value; 
(V) a description of the equiva-
lent financial value and status of the 
SEED Account; and 
(VI) a statement of the mid-term 
and long-term goals of the State for 
use of its SEED Account. 
(3) ACCOUNTABILITY AND TRANSPARENCY.— 
(A) CONTROLS
AND
PROCEDURES.—Any 
State that has a SEED Account shall establish 
fiscal controls and recordkeeping and account-
ing procedures for the SEED Account sufficient 
to ensure proper accounting during appropriate 
accounting periods for distributions into the 
SEED Account, transfers from the SEED Ac-
count, and SEED Account balances, including 
any related financial accounts. Such controls
144 
and procedures shall conform to generally ac-
cepted government accounting principles. Any 
State that has a SEED Account shall retain 
records for a period of at least 5 years. 
(B) AUDITS.—Any State that has a SEED 
Account shall have an annual audit conducted 
of the SEED Account by an independent public 
accountant in accordance with generally accept-
ed auditing standards, and shall transmit the 
results of that audit to the Administrator. 
(C) STATE REPORT.—Each State admin-
istering a SEED Account shall make publicly 
available and submit to the Administrator a re-
port every 2 years on its activities related to its 
SEED Account. 
(D) PUBLIC INFORMATION.—Any— 
(i) controls and procedures established 
under subparagraph (A); and 
(ii) information obtained through au-
dits conducted under subparagraph (B), 
except to the extent that it would be pro-
tected from disclosure, if it were informa-
tion held by the Federal Government, 
under section 552(b) of title 5, United 
States Code,
145 
shall be made publicly available. 
(E) OTHER PROTECTIONS.—The Adminis-
trator shall require such additional procedures 
and protections as are necessary to ensure that 
any State that has a SEED Account will oper-
ate the SEED Account in an accountable and 
transparent manner. 
(f) REQUIREMENTS FOR ELIGIBILITY.—A State’s eli-
gibility to receive allowances in its SEED Account shall 
depend on that State’s compliance with the requirements 
of this Act (and the amendments made by this Act). 
(g) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Administrator 
such sums as may be necessary for SEED Account oper-
ations. 
SEC. 132. SUPPORT OF STATE RENEWABLE ENERGY AND 
ENERGY EFFICIENCY PROGRAMS. 
(a) DEFINITIONS.—For purposes of this section: 
(1) 
ALLOWANCE.—The 
term 
‘‘allowance’’ 
means an emission allowance established under sec-
tion 721 of the Clean Air Act (as added by section 
311 of this Act). 
(2) COST-EFFECTIVE.—The term ‘‘cost-effec-
tive’’, with respect to an energy efficiency program, 
means that the program meets the Total Resource
146 
Cost Test, which requires that the net present value 
of economic benefits over the life of the program or 
measure, including avoided supply and delivery costs 
and deferred or avoided investments, is greater than 
the net present value of the economic costs over the 
life of the program, including program costs and in-
cremental costs borne by the energy consumer. 
(3) RENEWABLE
ENERGY
RESOURCE.—The 
term ‘‘renewable energy resource’’ shall have the 
meaning given that term in section 610 of the Public 
Utility Regulatory Policies Act of 1978 (as added by 
section 101 of this Act). 
(4) VINTAGE YEAR.—The term ‘‘vintage year’’ 
shall the meaning given that term in section 700 of 
the Clean Air Act (as added by section 311 of this 
Act). 
(b) DISTRIBUTION AMONG STATES.—Not later than 
September 30 of each calendar year from 2011 through 
2049, the Administrator shall, in accordance with this sec-
tion, distribute allowances allocated pursuant to section 
782(g)(1) of the Clean Air Act (as added by section 311 
of this Act) for the following vintage year. The Adminis-
trator shall distribute 0.5 percent of such allowances pur-
suant to section 133 of this Act. The Administrator shall 
distribute the remaining allowances to States for renew-
147 
able energy and energy efficiency programs to be deposited 
in and administered through the State Energy and Envi-
ronment Development (SEED) Accounts established pur-
suant to section 131. The Administrator shall distribute 
allowances among the States under this section each year 
in accordance with the following formula: 
(1) One third of the allowances shall be divided 
equally among the States. 
(2) One third of the allowances shall be distrib-
uted ratably among the States based on the popu-
lation of each State, as contained in the most recent 
reliable census data available from the Bureau of the 
Census, Department of Commerce, for all States at 
the time the Administrator calculates the formula 
for distribution. 
(3) One third of the allowances for shall be dis-
tributed ratably among the States on the basis of 
the energy consumption of each State as contained 
in the most recent State Energy Data Report avail-
able from the Energy Information Administration 
(or such alternative reliable source as the Adminis-
trator may designate). 
(c) USES.—The allowances distributed to each State 
pursuant to this section shall be used exclusively in accord-
ance with the following requirements:
148 
(1) Not less than 12.5 percent shall be distrib-
uted by the State to units of local government within 
such State to be used exclusively to support the en-
ergy efficiency and renewable energy purposes listed 
in paragraphs (2) and (3). 
(2) Not less than 20 percent shall be used ex-
clusively for the following energy efficiency purposes, 
provided that not less than 1 percent shall be used 
for the purpose described in subparagraph (D) and 
not less than 5.5 percent shall be used for the pur-
pose described in subparagraph (E): 
(A) Implementation and enforcement of 
building codes adopted in compliance with sec-
tion 201. 
(B) Implementation of the energy efficient 
manufactured homes program established pur-
suant to section 203. 
(C) Implementation of the building energy 
performance labeling program established pur-
suant to section 204. 
(D) Low-income community energy effi-
ciency programs that are consistent with the 
grant program established under section 264 of 
this Act.
149 
(E) Implementation of the Retrofit for En-
ergy and Environmental Performance (REEP) 
program established pursuant to section 202. 
(3) Not less than 20 percent shall be used ex-
clusively for capital grants, tax credits, production 
incentives, loans, loan guarantees, forgivable loans, 
direct provision of allowances, and interest rate buy- 
downs for— 
(A) re-equipping, expanding, or estab-
lishing a manufacturing facility that receives 
certification from the Secretary of Energy pur-
suant to section 1302 of the American Recovery 
and Reinvestment Act of 2009 for the produc-
tion of— 
(i) property designed to be used to 
produce energy from renewable energy 
sources; and 
(ii) electricity storage systems; 
(B) deployment of technologies to generate 
electricity from renewable energy sources; and 
(C) deployment of facilities or equipment, 
such as solar panels, to generate electricity or 
thermal energy from renewable energy re-
sources in and on buildings in an urban envi-
ronment.
150 
(4) The remaining 47.5 percent shall be used 
exclusively for any of the following purposes: 
(A) Energy efficiency purposes described 
in paragraph (2). 
(B) Renewable energy purposes described 
in paragraph (3)(B) and (C). 
(C) Cost-effective energy efficiency pro-
grams for end-use consumers of electricity, nat-
ural gas, home heating oil, or propane, includ-
ing, where appropriate, programs or mecha-
nisms administered by local governments and 
entities other than the State. 
(D) Enabling the development of a Smart 
Grid (as described in section 1301 of the En-
ergy Independence and Security Act of 2007 
(42 U.S.C. 17381)) for State, local government, 
and other public buildings and facilities, includ-
ing integration of renewable energy resources 
and distributed generation, demand response, 
demand side management, and systems anal-
ysis. 
(E) Providing the non-Federal share of 
support for surface transportation capital 
projects under—
151 
(i) sections 5307, 5308, 5309, 5310, 
5311 and 5319 of title 49, United States 
Code; and 
(ii) sections 142, 146, and 149 of title 
23, United States Code, 
provided that not more than 10 percent of al-
lowances distributed to each State pursuant to 
this section shall be used for such purpose. 
(5) For any allowances used for the purpose de-
scribed in paragraph (4)(C), the State shall— 
(A) prioritize expansion of existing energy 
efficiency programs approved and overseen by 
the State or the appropriate State regulatory 
authority; and 
(B) demonstrate that such allowances have 
been used to supplement, and not to supplant, 
existing and otherwise available State, local, 
and ratepayer funding for such purpose. 
(d) REPORTING.—Each State receiving allowances 
under this section shall include in its biennial reports re-
quired under section 131, in accordance with such require-
ments as the Administrator may prescribe— 
(1) a list of entities receiving allowances or al-
lowance value under this section, including entities 
receiving such allowances or allowance value from
152 
units of local government pursuant to subsection 
(c)(1); 
(2) the amount and nature of allowances or al-
lowance value received by each such recipient; 
(3) the specific purposes for which such allow-
ances or allowance value was conveyed to each such 
recipient; 
(4) documentation of the amount of energy sav-
ings, emission reductions, renewable energy deploy-
ment, and new or retooled manufacturing capacity 
resulting from the use of such allowances or allow-
ance value; and 
(5) for any energy efficiency program supported 
under subsection (c)(4)(C)— 
(A) an assessment demonstrating the cost- 
effectiveness of such program; and 
(B) a demonstration that the requirements 
set forth in subsection (c)(5) have been satis-
fied. 
(e) ENFORCEMENT.—If the Administrator deter-
mines that a State is not in compliance with this section, 
the Administrator may withhold up to twice the number 
of allowances that the State failed to use in accordance 
with the requirements of this section, that such State 
would otherwise be eligible to receive under this section
153 
in later years. Allowances withheld pursuant to this sub-
section shall be distributed among the remaining States 
in accordance with the requirements of subsection (b). 
SEC. 133. SUPPORT OF INDIAN RENEWABLE ENERGY AND 
ENERGY EFFICIENCY PROGRAMS. 
(a) DEFINITIONS.—For purposes of this section: 
(1) ALLOWANCE; 
COST-EFFECTIVE; 
RENEW-
ABLE ENERGY RESOURCE.—The terms ‘‘allowance’’, 
‘‘cost-effective’’, and ‘‘renewable energy resource’’ 
have the meaning given those terms in section 132 
of this Act. 
(2) INDIAN TRIBE.—The term ‘‘Indian tribe’’ 
has the meaning given the term in section 4 of the 
Indian Self-Determination and Education Assistance 
Act (25. U.S.C. 450b). 
(3) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Energy. 
(b) ESTABLISHMENT.—Not later than 18 months 
after the date of enactment of this Act, the Secretary 
shall, in consultation with the Administrator and the Sec-
retary of the Interior, promulgate regulations establishing 
a program to distribute allowances to Indian tribes on a 
competitive basis for the following purposes:
154 
(1) ENERGY
EFFICIENCY.—Cost-effective en-
ergy efficiency programs for end-use consumers of 
electricity, natural gas, home heating oil, or propane. 
(2) 
RENEWABLE
ENERGY.—Deployment 
of 
technologies to generate electricity from renewable 
energy resources. 
(c) REQUIREMENTS.—The regulations promulgated 
pursuant to subsection (b) shall prescribe design elements 
and requirements of the program established under this 
section, including— 
(1) objective criteria for evaluating proposals 
submitted by Indian tribes, and for selecting projects 
and programs to receive support, under this section; 
(2) reporting requirements for Indian tribes 
that receive allowances under this section; and 
(3) other appropriate elements and require-
ments. 
(d) DISTRIBUTION.—The Administrator shall, at the 
direction of the Secretary, distribute to Indian tribes al-
lowances that are set aside, pursuant to section 132, for 
use under this section. 
Subtitle E—Smart Grid 
Advancement 
SEC. 141. DEFINITIONS. 
For purposes of this subtitle:
155 
(1) The term ‘‘applicable baseline’’ means the 
average 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. 
(2) The term ‘‘Commission’’ means Federal En-
ergy Regulatory Commission. 
(3) The term ‘‘load-serving entity’’ means an 
entity that provides electricity directly to retail con-
sumers with the responsibility to assure power qual-
ity and reliability, including such entities that are 
investor-owned, publicly owned, owned by rural elec-
tric cooperatives, or other entities. 
(4) The term ‘‘peak demand’’ means the high-
est point of electricity demand, net of any distrib-
uted electricity generation or storage from sources 
on the load-serving entity’s customers’ premises, 
during any hour on the system of a load serving en-
tity during a calendar year, expressed in Megawatts 
(MW), or more than one such high point as a func-
tion of seasonal demand changes. 
(5) The term ‘‘peak demand reduction’’ means 
the reduction in annual peak demand as compared 
to a previous baseline year or period, expressed in 
Megawatts (MW), whether accomplished by—
156 
(A) diminishing the end-use requirements 
for electricity; 
(B) use of locally stored energy or gen-
erated electricity to meet those requirements 
from distributed resources on the load-serving 
entity’s customers’ premises and without use of 
high-voltage transmission; or 
(C) energy savings from efficient operation 
of the distribution grid resulting from the use 
of a Smart Grid. 
(6) The term ‘‘peak demand reduction plan’’ 
means a plan developed by or for a load-serving enti-
ty that it will implement to meet its peak demand 
reduction goals. 
(7) The term ‘‘peak period’’ means the time pe-
riod 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) The term ‘‘Secretary’’ means the Secretary 
of Energy. 
(9) The term ‘‘Smart Grid’’ has the meaning 
provided by section 1301 of the Energy Independ-
ence and Security Act of 2007 (15 U.S.C. 17381).
157 
SEC. 142. ASSESSMENT OF SMART GRID COST EFFECTIVE-
NESS IN PRODUCTS. 
(a) ASSESSMENT.—Within 1 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, greenhouse gas emission reductions, and 
electricity cost savings that could accrue for each of the 
products identified by the assessment in subsection (a) in 
the following optimal circumstances: 
(A) The products possessed Smart Grid capa-
bility and interoperability that is tested and proven 
reliable. 
(B) The products were utilized in an electricity 
utility service area which had Smart Grid capability 
and offered customers rate or program incentives to 
use the products. 
(C) The utility’s rates reflected national average 
costs, including average peak and valley seasonal 
and daily electricity costs.
158 
(D) Consumers using such products took full 
advantage of such capability. 
(E) The utility avoided incremental investments 
and rate increases related to such savings. 
(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 circumstances 
for a period of one-half of the product’s expected useful 
life 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) is 
found to be 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 fol-
lowing actions: 
(A) Inform the manufacturer of such product of 
such finding of cost effectiveness. 
(B) Assess the potential contributions the devel-
opment and use of products with Smart Grid tech-
159 
nologies bring to reducing peak demand and pro-
moting grid stability. 
(C) Assess the potential national energy savings 
and electricity cost savings that could be realized if 
Smart Grid potential were installed in the relevant 
products reviewed by the Energy Star program. 
(D) Assess and identify options for providing 
consumers information on products with Smart Grid 
capabilities, including the necessary conditions for 
cost-effective savings. 
(E) Submit a report to Congress summarizing 
the results of the assessment for each class of prod-
ucts, and presenting the potential energy and green-
house gas savings that could result if Smart Grid 
capability were installed and utilized on such prod-
ucts. 
SEC. 143. INCLUSIONS OF SMART GRID CAPABILITY ON AP-
PLIANCE ENERGY GUIDE LABELS. 
Section 324(a)(2) of the Energy Policy and Conserva-
tion Act (42 U.S.C. 6294(a)(2)) is amended by adding the 
following at the end: 
‘‘(J)(i) Not later than 1 year after the date 
of enactment of this subparagraph, the Federal 
Trade Commission shall initiate a rulemaking 
to consider making a special note in a promi-
160 
nent manner on any ENERGY GUIDE label 
for any product actually including Smart Grid 
capability that— 
‘‘(I) Smart Grid capability is a fea-
ture of that product; 
‘‘(II) the use and value of that feature 
depended on the Smart Grid capability of 
the utility system in which the product was 
installed and the active utilization of that 
feature by the customer; and 
‘‘(III) on a utility system with Smart 
Grid capability, the use of the product’s 
Smart Grid capability could reduce the 
customer’s cost of the product’s annual op-
eration by an estimated dollar amount 
range representing the result of incre-
mental energy and electricity cost savings 
that would result from the customer taking 
full advantage of such Smart Grid capa-
bility. 
‘‘(ii) Not later than 3 years after the date 
of enactment of this subparagraph, the Com-
mission shall complete the rulemaking initiated 
under clause (i).’’.
161 
SEC. 144. SMART GRID PEAK DEMAND REDUCTION GOALS. 
(a) GOALS.—Not later than 1 year after the date of 
enactment of this section, each load-serving entity, or, at 
the option of the State, each State with respect to load- 
serving entities that the State regulates, shall determine 
and publish peak demand reduction goals for any load- 
serving entities that have an applicable baseline in excess 
of 250 megawatts. 
(b) BASELINES.—(1) The Commission, in consulta-
tion with the Secretary and the Administrator, shall de-
velop and publish, after an opportunity for public com-
ment, but not later than 180 days after enactment of this 
section, a methodology to provide for adjustments or nor-
malization to a load-serving entity’s applicable baseline 
over time to reflect changes in the number of customers 
served, weather conditions, general economic conditions, 
and any other appropriate factors external to peak de-
mand management, as determined by the Commission. 
(2) The Commission shall support load-serving enti-
ties (including any load-serving entities with an applicable 
baseline of less than 250 megawatts that volunteer to par-
ticipate in achieving the purposes of this section) in deter-
mining their applicable baselines, and in developing their 
peak demand reduction goals. 
(3) The Secretary, in consultation with the Commis-
sion, the Administrator, and the North American Electric
162 
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, tribal, or regional entity, by that State, tribal, or 
regional entity for a larger region that shares a common 
system peak demand and for which peak demand reduc-
tion 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 North 
American Electric Reliability Corporation, and other rel-
evant authorities. 
(3) In determining the applicable peak demand reduc-
tion goals— 
(A) States and other jurisdictional entities may 
utilize the results of the 2009 National Demand Re-
sponse Potential Assessment, as authorized by sec-
tion 571 of the National Energy Conservation Policy 
Act (42 U.S.C. 8279); and 
(B) the relative economics of peak demand re-
duction and generation required to meet peak de-
163 
mand shall be evaluated in a neutral and objective 
manner. 
(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 estab-
lished as peak demand reduction goals shall be the 
maximum 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 sub-
section (d). 
(d) PLAN.—Each load-serving entity shall prepare a 
peak demand 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—
164 
(A) energy efficiency measures (including 
efficient transmission wire technologies which 
significantly reduce line loss compared to tradi-
tional wire technology) with reliable and contin-
ued application during peak demand periods; or 
(B) use of a Smart Grid. 
(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 or 
energy 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 or energy storage under 
agreement with the owner of that storage.
165 
(D) 
Megawatts 
committed 
from 
dispatchable 
distributed 
generation 
dem-
onstrated to be reliable under peak period con-
ditions and in compliance with air quality regu-
lations. 
(E) Megawatts available from smart appli-
ances and equipment with Smart Grid capa-
bility available for direct control by the utility 
through agreement with the customer owning 
the appliances or equipment or with a third 
party pursuant to such agreements. 
(F) Megawatts from a demonstrated and 
assured minimum of distributed solar electric 
generation capacity in instances where peak pe-
riod and peak demand conditions are directly 
related 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 section shall require the 
publication in peak demand reduction goals or in
166 
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 section diminishes or supersedes any au-
thority of a State or political subdivision of a State to 
adopt or enforce any law or regulation respecting peak de-
mand management, demand response, distributed energy 
storage, use of distributed generation, or the regulation 
of load-serving entities. The Commission, in consultation 
with States and Indian tribes having such peak manage-
ment, demand response and distributed energy storage 
programs, shall to the maximum extent practicable, facili-
tate coordination between the Federal program and such 
State and tribal 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 
1 year after the date of enactment of this Act establish 
a public website where the Commission will provide infor-
167 
mation and data demonstrating compliance by States, In-
dian tribes regional entities, and load-serving entities with 
this section, including the success of load-serving entities 
in meeting applicable 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 section 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. 
(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 section, or is 
not a part of any region or group of load-serving entities 
serving a region that has complied with this section. 
(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 TO STATES AND TRIBES.—Any 
costs incurred by States for activities undertaken 
pursuant to this section shall be supported by the 
use of emission allowances allocated to the States’
168 
SEED Accounts or to the tribes pursuant to section 
132 of this Act. To the extent that a State provides 
allowances to local governments within the State to 
implement this program, that shall be deemed a dis-
tribution of such allowances to units of local govern-
ment pursuant to subsection (c)(1) of that section. 
(2) FUNDING.—There are authorized to be ap-
propriated such sums as may be necessary to the 
Commission, the Secretary, and the Administrator to 
carry out the provisions of this section. 
SEC. 145. REAUTHORIZATION OF ENERGY EFFICIENCY PUB-
LIC INFORMATION PROGRAM TO INCLUDE 
SMART GRID INFORMATION. 
(a) IN GENERAL.—Section 134 of the Energy Policy 
Act of 2005 (42 U.S.C. 15832) is amended as follows: 
(1) By amending the section heading to read as 
follows: ‘‘ENERGY EFFICIENCY AND SMART GRID 
PUBLIC INFORMATION INITIATIVE’’. 
(2) In paragraph (1) of subsection (a) by strik-
ing ‘‘reduce energy 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 paragraph (2) of subsection (a) by strik-
ing ‘‘benefits to consumers of reducing’’ and insert-
169 
ing ‘‘economic and environmental benefits to con-
sumers and the United States of optimizing’’. 
(4) In subsection (a) by inserting at the begin-
ning of paragraph (3) ‘‘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 
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’’. 
(b) TABLE OF CONTENTS.—The item relating to sec-
tion 134 in the table of contents for the Energy Policy
170 
Act of 2005 (42 U.S.C. 15801 and following) is amended 
to read as follows: 
‘‘Sec. 134. Energy efficiency and Smart Grid public information initiative.’’. 
SEC. 146. INCLUSION OF SMART GRID FEATURES IN APPLI-
ANCE REBATE PROGRAM. 
(a) AMENDMENTS.—Section 124 of the Energy Pol-
icy Act of 2005 (42 U.S.C. 15821) is amended as follows: 
(1) By amending the section heading to read as 
follows: ‘‘ENERGY EFFICIENT AND SMART AP-
PLIANCE REBATE PROGRAM.’’. 
(2) By redesignating paragraphs (4) and (5) of 
subsection (a) as paragraphs (5) and (6), respec-
tively, and inserting after paragraph (3) the fol-
lowing: 
‘‘(4) SMART APPLIANCE.—The term ‘smart ap-
pliance’ means a product that the Administrator of 
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 142 of the American Clean Energy and 
Security Act of 2009, or that the Secretary or the 
Administrator has separately 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).’’.
171 
(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 
separate 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. 
(7) 
In 
subsection 
(f), 
by 
striking 
‘‘$50,000,000’’ through the period at the end and 
inserting ‘‘$100,000,000 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.’’.
172 
Subtitle F—Transmission Planning 
SEC. 151. TRANSMISSION PLANNING AND SITING. 
(a) IN GENERAL.—Section 216 of the Federal Power 
Act (16 U.S.C. 824p) is amended as follows: 
(1) In subsection (b), in paragraph (5), by 
striking ‘‘; and’’ and inserting a semicolon, in para-
graph (6) by striking the period and inserting ‘‘; 
and’’ and by adding the following at the end thereof: 
‘‘(7) the facility is interstate in nature or is an 
intrastate segment integral to a proposed interstate 
facility;’’. 
(2) In subsection (k), by inserting at the end 
the following: ‘‘Subsections (a), (b), (c), and (h) of 
this section shall not apply in the Western inter-
connection.’’. 
(3) In subsections (d) and (e), by striking ‘‘sub-
section (b)’’ in each place and inserting ‘‘subsection 
(b) or section 216B’’, and by striking ‘‘permit’’ and 
inserting ‘‘permit or certificate’’ in each place it ap-
pears. 
(b) NEW SECTIONS.—The Federal Power Act (16 
U.S.C. 824p) is amended by inserting the following new 
sections after section 216:
173 
‘‘SEC. 216A. TRANSMISSION PLANNING. 
‘‘(a) FEDERAL POLICY FOR TRANSMISSION PLAN-
NING.— 
‘‘(1) OBJECTIVES.—It is the policy of the 
United States that regional electric grid planning 
should facilitate the deployment of renewable and 
other zero-carbon and low-carbon energy sources for 
generating electricity to reduce greenhouse gas emis-
sions while ensuring reliability, reducing congestion, 
ensuring cyber-security, minimizing environmental 
harm, and providing for cost-effective electricity 
services throughout the United States, in addition to 
serving the objectives stated in section 217(b)(4). 
‘‘(2) OPTIONS.—In addition to the policy under 
paragraph (1), it is the policy of the United States 
that regional electric grid planning to meet these ob-
jectives should result from an open, inclusive and 
transparent process, taking into account all signifi-
cant demand-side and supply-side options, including 
energy efficiency, distributed generation, renewable 
energy and zero-carbon electricity generation tech-
nologies, smart-grid technologies and practices, de-
mand response, electricity storage, voltage regulation 
technologies, high capacity conductors with at least 
25 percent greater efficiency than traditional ACSR 
(aluminum stranded conductors steel reinforced)
174 
conductors, superconductor technologies, under-
ground transmission technologies, and new conven-
tional electric transmission capacity and corridors. 
‘‘(b) PLANNING.— 
‘‘(1) PLANNING PRINCIPLES.—Not later than 1 
year after the date of enactment of this section, the 
Commission shall adopt, after notice and oppor-
tunity for comment, national electricity grid plan-
ning principles derived from the Federal policy es-
tablished under subsection (a) to be applied in ongo-
ing and future transmission planning that may im-
plicate interstate transmission of electricity. 
‘‘(2) REGIONAL
PLANNING
ENTITIES.—Not 
later than 3 months after the date of adoption by 
the Commission of national electricity grid planning 
principles pursuant to paragraph (1), entities that 
conduct or may conduct transmission planning pur-
suant to State, tribal, or Federal law or regulation, 
including States, Indian tribes, entities designated 
by States and Indian tribes, Federal Power Mar-
keting Administrations, transmission providers, op-
erators and owners, regional organizations, and elec-
tric utilities, and that are willing to incorporate the 
national electricity grid planning principles adopted 
by the Commission in their electric grid planning,