151 
‘‘(i) deposit fees received under sub-
paragraph (A) in an escrow account estab-
lished by the Corporation; and 
‘‘(ii) periodically distribute amounts in 
the escrow account to States requesting 
such funds for use in creating electricity or 
natural gas savings at customer facilities. 
States requesting funds from the account estab-
lished by the Corporation shall submit specific 
program proposals, including funds requested, 
estimated savings and measure lifetime(s), and 
estimated cost per kWh or therm saved. The 
Corporation shall develop guidelines for these 
submissions. The Corporation shall distribute 
funds based on the following criteria: Estimated 
savings per dollar of funds provided from the 
escrow account, maximizing consumer opportu-
nities to participate across all States, and, be-
ginning in year 3, past history of each State in 
meeting energy savings and cost-effectiveness 
targets. 
‘‘(C) ELECTRIC AND NATURAL GAS SAV-
INGS CORPORATION.— 
‘‘(i) ESTABLISHMENT
AND
CERTIFI-
CATION.—Any person may submit an ap-
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plication to the Secretary for the establish-
ment and certification of a not-for-profit 
corporation, to be known as the Electric 
and Natural Gas Savings Corporation, to 
carry out this paragraph. The Secretary 
shall certify the corporation if the Sec-
retary determines that the corporation has 
submitted the most qualified application 
indicating capability to carry out this para-
graph. The Secretary may revoke such cer-
tification at any time for good cause, and 
in any such case, the Secretary may accept 
applications from other persons and certify 
another person as the Electric and Natural 
Gas Savings Corporation. 
‘‘(ii) AUTHORITY OF CORPORATION.— 
No person may distribute more than 
800,000 megawatt-hours of electric energy 
or more than 1 billion cubic feet of natural 
gas to consumers in the United States for 
purposes other than resale in any calendar 
year, including electricity or natural gas 
supplied by unregulated suppliers, regard-
less of whether such suppliers are affiliated 
or unaffiliated with the distributor unless 
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such person complies with requirements es-
tablished by the Corporation for the pay-
ment of fees under this paragraph. 
‘‘(iii) STATUS OF CORPORATION.—The 
Corporation shall not be treated as a de-
partment, agency, or instrumentality of the 
United States for any purpose. 
‘‘(iv) BOOKS
AND
RECORDS.—The 
books and records of the Corporation shall 
be available to the public at reasonable 
hours and under reasonable conditions, 
without charge. 
‘‘(v) PENALTY.—Any person who vio-
lates clause (ii) of this subparagraph shall 
be subject to a civil penalty to be assessed 
and collected by the Secretary in the 
amount equal to three times the total of 
the fees which are due and payable to the 
corporation under this paragraph. 
‘‘(e) ENFORCEMENT OF COMPLIANCE.— 
‘‘(1) IN GENERAL.—If a State regulatory au-
thority with jurisdiction over a retail electricity or 
natural gas distributor notifies the Secretary that 
the State regulatory authority will enforce compli-
ance by the distributor with the performance stand-
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ard under this section, the State regulatory author-
ity shall have the authority to administer and en-
force the performance standard for the distributor 
under State law. 
‘‘(2) AUTHORITY
OF
SECRETARY.—The Sec-
retary shall administer and enforce the performance 
standard for all electricity and natural gas distribu-
tors for which a State regulatory authority described 
in paragraph (1) has not notified the Secretary as 
described in that paragraph. 
‘‘(3) COMPLIANCE
REPORT.—Not later that 
July 1, 2010, and every 2 years thereafter, each re-
tail electricity and natural gas distributor shall sub-
mit a compliance report conforming to the provisions 
of the rule described in subsection (c)(3) to either— 
‘‘(A) the appropriate State regulatory au-
thority, if the authority has notified the Sec-
retary as described in paragraph (1); or 
‘‘(B) the Secretary. 
‘‘(4) FAILURE TO COMPLY.— 
‘‘(A) IN GENERAL.—In the case of any re-
tail electricity or natural gas distributor for 
which the Secretary is enforcing compliance 
with the standards under this section, if the 
distributor fails to comply with the performance 
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standard for more than one calendar year, the 
Secretary shalll 
‘‘(i) determine the number of kilowatt- 
hours of electricity savings, or therms of 
natural gas savings, by which the dis-
tributor has fallen short of meeting the 
performance standard; and 
‘‘(ii) by order, require the distributor, 
after notice and opportunity for hearing, to 
deposit in the escrow account established 
under paragraph (8)(B) of subsection (e) 
an amount equal to 6.0 cents per kilowatt- 
hour for each such kilowatt hour, and 60 
cents per therm for each such therm. 
‘‘(B) JUDICIAL REVIEW OF ORDERS.— 
‘‘(i) IN GENERAL.—A retail electricity 
or natural gas distributor ordered to make 
a payment under subparagraph (A)(ii) 
may, not later than 60 days after the date 
of issuance of the order, bring a civil ac-
tion in the United States Court of Appeals 
for the District of Columbia for judicial re-
view of the order. 
‘‘(ii) REMEDIES.—The court specified 
in clause (i) shall have jurisdiction to enter 
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a judgment affirming, modifying, or set-
ting aside an order that is the subject of 
a civil action brought under that clause, or 
remanding the order, in whole or in part, 
to the Secretary. 
‘‘(f) INFORMATION
COLLECTION.—The Secretary 
may collect any information necessary to verify and audit 
each of the following: 
‘‘(1) The annual electric energy sales, natural 
gas sales, electricity savings, and natural gas savings 
of any entity applying for electricity or natural gas 
savings credits under this section. 
‘‘(2) The validity of electricity or natural gas 
savings credits submitted by a retail electricity or 
natural gas distributor to the Secretary. 
‘‘(3) The quantity of electricity and natural gas 
sales of all retail electricity and natural gas distribu-
tors. 
‘‘(g) STATE LAW.— 
‘‘(1) IN GENERAL.—Nothing in this section su-
persedes or otherwise affects any State or local law 
or regulation requiring or otherwise relating to elec-
tricity or natural gas savings to the extent that the 
State or local law or regulation contains more strin-
gent savings requirements or has different proce-
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dures for buyout or penalties than those contained 
in this section. 
‘‘(2) SITE-SPECIFIC SAVINGS.—A State may re-
quire the performance standard for electricity or 
natural gas savings of any distributor within its ju-
risdiction to be achieved by measures undertaken— 
‘‘(A) within the State; 
‘‘(B) within the service territory of any re-
gional transmission organization serving the 
State; 
‘‘(C) within any group of States partici-
pating in a regional program for the control of 
green house gas emissions; or 
‘‘(D) within any airshed designated by the 
State. 
‘‘(3) TREATMENT UNDER STATE LAW.—A retail 
electricity or natural gas distributor that achieves 
electricity or natural gas savings under this section 
in accordance with any State or local savings re-
quirement specifically applicable to such distributor 
shall be entitled to full credit under this section for 
the savings to the extent that the savings meet the 
requirements of this section (including regulations 
issued under this section), including measurement, 
verification, and monitoring requirements. 
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158 
‘‘(h) DEVELOPMENT OF MODEL PROVISIONS.—Not 
later than 18 months after the date of enactment of this 
section, the Federal Energy Regulatory Commission shall, 
following public notice and comment, develop and publish 
model provisions for adoption by State utility regulatory 
commissions regarding each of the following: 
‘‘(1) REVENUE
STABILITY
AND
INCENTIVES 
FOR
DISTRIBUTORS.—Policies for rate-setting and 
return on investment for State-regulated electricity 
and natural gas distributors that participate in suc-
cessful, cost-effective energy efficiency programs. 
Such model language shall include provisions for de-
coupling the earnings of such regulated entities from 
full dependence on the volume of electricity or nat-
ural gas distributed by them to customer facilities. 
Such model language shall also include provisions 
for policies for cost recovery and other financial in-
centives, such that electric and gas utility investors 
are rewarded similarly for similar levels of invest-
ment in customer energy efficiency and in conven-
tional utility assets and that regulated utilities are 
encouraged to include end-use efficiency measures 
and utility-owned, customer-owned, or third party- 
owned CHP systems in electric capacity and trans-
mission and distribution plans. 
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‘‘(2) NONDISCRIMINATORY IDENTIFICATION OF 
COST-EFFECTIVE SAVINGS OPPORTUNITIES.—Estab-
lishing a public, nondiscriminatory bidding process 
open to customers and demand side management 
service providers to identify cost-effective electricity 
or natural gas savings opportunities within a retail 
electricity or natural gas distributor’s service area. 
The model bidding plan shall provide for a dis-
tributor to procure all or a portion of its proposed 
savings measures, including measures proposed by 
the distributor or its affiliates, in cost-effective rank 
order. The model plan shall also address the process 
that will be used by the distributor to identify and 
obtain further electricity or natural gas savings in 
the event that insufficient savings are procured 
through the bid process. 
‘‘(3) DEVELOPMENT OF MODEL LANGUAGE ON 
REVENUE DECOUPLING AND SHAREHOLDER INCEN-
TIVES IN RATEMAKING POLICIES.—Rate-setting and 
earnings for State-regulated electricity and natural 
gas distributors that participate in successful, cost- 
effective energy efficiency programs. Such model 
language shall include, but not be limited to, rec-
ommendations for decoupling the earnings of such 
regulated entities from full dependence on the vol-
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ume of electricity or natural gas distributed by them 
to customer facilities. Such model language shall 
also include recommendations for policies for cost re-
covery and shareholder incentives, such that electric 
and gas utility investors are rewarded similarly for 
similar levels of investment in customer energy effi-
ciency and in conventional utility assets. 
‘‘(i) STATE ADOPTION OF FERC MODEL PROVI-
SIONS.—Each State utility regulatory authority shall 
adopt the model provisions referred to in subsection (h) 
in the same manner and subject to the same rules and 
review as apply in the case of standards referred to in 
section 113(b) and 303(b). For purposes of any provision 
of title I or III of this Act, the model provisions referred 
to in subsection (h) shall be treated as standards under 
section 113(b) (in the case of State regulated electricity 
distributors) or 303(b) (in the case of natural gas distribu-
tors), except that in the case of such model provisions, 
any reference contained in this Act to the date of enact-
ment of this Act shall be deemed to be a reference to the 
date of enactment of this section. Each such State utility 
regulatory authority shall adopt the model provisions not 
later than 24 months after the date of enactment of this 
section in the case of paragraphs (1) and (2) of subsection 
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(h) or 42 months after such date of enactment in the case 
of paragraph (3) of subsection (h)).’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
title VI of such Act is amended by adding the following 
new items at the end thereof: 
‘‘Sec. 609. Rural and remote communities electrification grants. 
‘‘Sec. 610. Efficiency resource standard for retail electricity and natural gas 
distributors.’’. 
Subtitle E—Renewable Portfolio 
Standard 
SEC. 441. RENEWABLE PORTFOLIO STANDARD. 
Title VI of the Public Utility Regulatory Policies Act 
of 1978 (16 U.S.C. 2601 et seq.) is amended by adding 
at the end the following: 
‘‘SEC. 609. FEDERAL RENEWABLE PORTFOLIO STANDARD. 
‘‘(a) RENEWABLE ENERGY REQUIREMENT.— 
‘‘(1) IN GENERAL.—Each electric utility that 
sells electricity to electric consumers shall obtain a 
percentage of the base amount of electricity it sells 
to electric consumers in any calendar year from new 
renewable energy or existing renewable energy. The 
percentage obtained in a calendar year shall not be 
less than the amount specified in the following table: 
‘‘Calendar Year 
Minimum Annual 
Percentage 
2008 through 2011 ............................................................................
5.0
2012 through 2015 ............................................................................
10.0
2016 through 2019 ............................................................................
15.0
2020 through 2030 ............................................................................
20.0. 
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‘‘(2) MEANS OF COMPLIANCE.—An electric util-
ity shall meet the requirements of paragraph (1) 
by— 
‘‘(A) generating electric energy using new 
renewable energy or existing renewable energy; 
‘‘(B) purchasing electric energy generated 
by new renewable energy or existing renewable 
energy; 
‘‘(C) purchasing renewable energy credits 
issued under subsection (b); or 
‘‘(D) a combination of the foregoing. 
‘‘(b) RENEWABLE ENERGY CREDIT TRADING PRO-
GRAM.— 
‘‘(1) Not later than January 1, 2008, the Sec-
retary shall establish a renewable energy credit trad-
ing program to permit an electric utility that does 
not generate or purchase enough electric energy 
from renewable energy to meet its obligations under 
subsection (a)(1) to satisfy such requirements by 
purchasing sufficient renewable energy credits. 
‘‘(2) As part of such program the Secretary 
shall— 
‘‘(A) issue renewable energy credits to gen-
erators of electric energy from new renewable 
energy; 
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‘‘(B) sell renewable energy credits to elec-
tric utilities at the rate of 1.5 cents per kilo-
watt-hour (as adjusted for inflation under sub-
section (g)); 
‘‘(C) ensure that a kilowatt hour, including 
the associated renewable energy credit, shall be 
used only once for purposes of compliance with 
this section; and 
‘‘(D) allow double credits for generation 
from facilities on Indian Lands, and triple cred-
its for generation from small renewable distrib-
uted generators (meaning those no larger than 
1 megawatt). 
‘‘(3) Credits under paragraph (2)(A) may only 
be used for compliance with this section for 3 years 
from the date issued. 
‘‘(c) ENFORCEMENT.— 
‘‘(1) CIVIL
PENALTIES.—Any electric utility 
that fails to meet the renewable energy requirements 
of subsection (a) shall be subject to a civil penalty. 
‘‘(2) AMOUNT OF PENALTY.—The amount of 
the civil penalty shall be determined by multiplying 
the number of kilowatt-hours of electric energy sold 
to electric consumers in violation of subsection (a) 
by the greater of 1.5 cents (adjusted for inflation 
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under subsection (g)) or 200 percent of the average 
market value of renewable energy credits during the 
year in which the violation occurred. 
‘‘(3) MITIGATION OR WAIVER.—The Secretary 
may mitigate or waive a civil penalty under this sub-
section if the electric utility was unable to comply 
with subsection (a) for reasons outside of the rea-
sonable control of the utility. The Secretary shall re-
duce the amount of any penalty determined under 
paragraph (2) by an amount paid by the electric 
utility to a State for failure to comply with the re-
quirement of a State renewable energy program if 
the State requirement is greater than the applicable 
requirement of subsection (a). 
‘‘(4) PROCEDURE FOR ASSESSING PENALTY.— 
The Secretary shall assess a civil penalty under this 
subsection in accordance with the procedures pre-
scribed by section 333(d) of the Energy Policy and 
Conservation Act of 1954 (42 U.S.C. 6303). 
‘‘(d) STATE RENEWABLE ENERGY ACCOUNT PRO-
GRAM.— 
‘‘(1) The Secretary shall establish, not later 
than December 31, 2008, a State renewable energy 
account program. 
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‘‘(2) All money collected by the Secretary from 
the sale of renewable energy credits and the assess-
ment of civil penalties under this section shall be de-
posited into the renewable energy account estab-
lished pursuant to this subsection. The State renew-
able energy account shall be held by the Secretary 
and shall not be transferred to the Treasury Depart-
ment. 
‘‘(3) Proceeds deposited in the State renewable 
energy account shall be used by the Secretary, sub-
ject to appropriations, for a program to provide 
grants to the State agency responsible for developing 
State energy conservation plans under section 362 of 
the Energy Policy and Conservation Act (42 U.S.C. 
6322) for the purposes of promoting renewable en-
ergy production, including programs that promote 
technologies that reduce the use of electricity at cus-
tomer sites such as solar water heating. 
‘‘(4) The Secretary may issue guidelines and 
criteria for grants awarded under this subsection. 
State energy offices receiving grants under this sec-
tion shall maintain such records and evidence of 
compliance as the Secretary may require. 
‘‘(5) In allocating funds under this program, 
the Secretary shall give preference— 
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