agency, authority, or instrumentality of any one or 
more of the foregoing or a rural electric cooperative. 
‘‘(9) 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 kilo-
watt hours, to electric customers for purposes other 
than resale during the most recent calendar year for 
which information is available, excluding electric en-
ergy generated by a hydroelectric facility. 
‘‘(m) RECOVERY
OF COSTS.—An electric utility 
whose sales of electric energy are subject to rate regula-
tion, including any utility whose rates are regulated by the 
Commission and any State regulated electric utility, shall 
not be denied the opportunity to recover the full amount 
of the prudently incurred incremental cost of renewable 
energy obtained to comply with the requirements of sub-
section (a) for sales to electric customers which are subject 
to rate regulation, notwithstanding any other law, regula-
tion, rule, administrative order or any agreement between 
the electric utility and either the Commission or a State 
regulatory authority. For the purpose of this subsection, 
the term ‘incremental cost of renewable energy’ means— 
‘‘(1) the additional cost to the electric utility for 
the purchase or generation of renewable energy to 
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satisfy the minimum renewable generation require-
ment of subsection (a), as compared to the cost of 
the electric energy the electric utility would generate 
or purchase from another source but for the require-
ments of subsection (a); and 
‘‘(2) the cost to the electric utility for acquiring 
by purchase or exchange renewable energy credits to 
satisfy the minimum renewable generation require-
ment of subsection (a). 
For purposes of this subsection, the definitions in section 
3 of this Act shall apply to the terms ‘electric utility’, 
‘State regulated electric utility’, ‘State agency’, ‘Commis-
sion’, and ‘State regulatory authority’. 
‘‘(n) VOLUNTARY PARTICIPATION.—The Secretary 
shall encourage federally-owned utilities, municipally- 
owned utilities and rural electric cooperatives that sell 
electric energy to electric consumers for purposes other 
than resale to participate in the renewable portfolio stand-
ard program. A municipally-owned utility or rural electric 
cooperative that owns or has under contract a facility for 
the generation of electric energy from a renewable energy 
resource may not sell or trade renewable energy credits 
generated by such resource unless it participates in the 
renewable portfolio standard program under the same 
terms and conditions as retail electric suppliers. 
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‘‘(o) PROGRAM REVIEW.—The Secretary shall con-
duct a comprehensive evaluation of all aspects of the Re-
newable Portfolio Standard program, within 10 years of 
enactment of this section. The study shall include an eval-
uation of— 
‘‘(1) the effectiveness of the program in increas-
ing the market penetration and lower the cost of the 
eligible renewable technologies; 
‘‘(2) the opportunities for any additional tech-
nologies emerging since enactment of this section; 
‘‘(3) the impact on the regional diversity and 
reliability of supply sources, including the power 
quality benefits of distributed generation; 
‘‘(4) the regional resource development relative 
to renewable potential and reasons for any under in-
vestment in renewable resources; and 
‘‘(5) the net cost/benefit of the renewable port-
folio standard to the national and state economies, 
including retail power costs, economic development 
benefits of investment, avoided costs related to envi-
ronmental and congestion mitigation investments 
that would otherwise have been required, impact on 
natural gas demand and price, effectiveness of green 
marketing programs at reducing the cost of renew-
able resources. 
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The Secretary shall transmit the results of the program 
review and any recommendations for modifications and 
improvements to the program to Congress not later than 
January 1, 2014. 
‘‘(p) PROGRAM IMPROVEMENTS.—Using the results 
of the review under subsection (o), the Secretary shall by 
rule, within 6 months of the completion of the review, 
make such modifications to the program as may be nec-
essary to improve the efficiency of the program and maxi-
mize the use of renewable energy under the program. 
‘‘(q) STATE RENEWABLE ENERGY ACCOUNT PRO-
GRAM.—(1) The Secretary shall establish, not later than 
December 31, 2007, a State renewable energy account 
program. 
‘‘(2) All money collected by the Secretary from the 
sale of renewable energy credits shall be deposited into the 
state renewable energy account established pursuant to 
this subsection. The State renewable energy account shall 
be held by the Secretary and shall not be transferred to 
the Treasury Department. 
‘‘(3) Proceeds deposited in the state renewable energy 
account shall be used by the Secretary for a program to 
provide grants to the State agency responsible for devel-
oping State energy conservation plans under section 363 
of the Energy Policy and Conservation Act (42 U.S.C. 
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6322) for the purposes of promoting renewable energy 
production and providing energy assistance and weather-
ization services to low-income consumers. 
‘‘(4) The Secretary may issue guidelines and criteria 
for grants awarded under this subsection. At least 75 per-
cent of the funds provided to each State shall be used for 
promoting renewable energy production. The funds shall 
be allocated to the States on the basis of retail electric 
sales subject to the Renewable Portfolio Standard under 
this section or through voluntary participation. To the ex-
tent Federal credits have been issued without payment due 
to reciprocity with State programs under subsection 
(d)(3)(E), deductions shall be made from the relevant 
State’s allocation. State energy offices receiving grants 
under this section shall maintain such records and evi-
dence of compliance as the Secretary may require. 
‘‘(r) SUNSET.—This section expires December 31, 
2030.’’. 
(b) TABLE OF CONTENTS.—The table of contents for 
such title is amended by adding the following new item 
at the end: 
‘‘Sec. 119. Federal renewable portfolio standard.’’. 
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SEC. 302. ELECTRICITY TRANSMISSION LINES DESIGNED 
TO CARRY ELECTRICITY FROM RENEWABLE 
ENERGY RESOURCES. 
The Secretary of the Treasury, in consultation with 
the Secretary of Energy, the Secretary of Commerce, and 
the Administrator of the Environmental Protection Agen-
cy, shall establish an appropriate investment tax credit for 
the construction of new electricity transmission lines de-
signed primarily to carry electricity from renewable energy 
resources. Such credit shall be sufficient to encourage the 
development of promising rural renewable energy domestic 
resources that otherwise would likely not be developed. 
SEC. 303. EXTENSION THROUGH 2017 FOR PLACING QUALI-
FIED FACILITIES IN SERVICE FOR PRO-
DUCING RENEWABLE ELECTRIC ENERGY. 
(a) IN GENERAL.—Subsection (d) of section 45 of the 
Internal Revenue Code of 1986 is amended— 
(1) by striking ‘‘January 1, 2008’’ each place 
it appears and inserting ‘‘January 1, 2018’’, and 
(2) in paragraph (4) by striking the parenthet-
ical. 
(b) EFFECTIVE DATE.—The amendments made by 
this section shall apply to property originally placed in 
service on or after January 1, 2007. 
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SEC. 304. NET METERING. 
(a) ADOPTION OF STANDARD.—Section 111(d)(11) 
of the Public Utility Regulatory Policies Act of 1978 (16 
U.S.C. 2621(d)) is amended to read as follows: 
‘‘(11) NET METERING.—(A) Each electric util-
ity shall make available upon request net metering 
service to any electric consumer that the electric 
utility serves. 
‘‘(B) For purposes of implementing this para-
graph, any reference contained in this section to the 
date of enactment of the Public Utility Regulatory 
Policies Act of 1978 shall be deemed to be a ref-
erence to the date of enactment of this paragraph. 
‘‘(C) Notwithstanding subsections (b) and (c) of 
section 112, each State regulatory authority may 
consider and make a determination concerning 
whether it is appropriate in the public interest to not 
implement the standard set out in subparagraph (A) 
not later than 1 year after the date of enactment of 
this paragraph. 
‘‘(D) Nothing in this section shall preclude a 
State from establishing additional incentives or to 
encourage on-site generating facilities and net me-
tering in addition to that required under this sec-
tion. 
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‘‘(E) The Secretary shall report within 11 
months of enactment and annually thereafter on the 
public benefit provided by adoption of net metering 
and interconnection standards, and the status of 
state adoption of such.’’. 
(b) SPECIAL RULES FOR NET METERING.—Section 
115 of the Public Utility Regulatory Policies Act of 1978 
(16 U.S.C. 2625) is amended by adding at the end the 
following: 
‘‘(i) NET METERING.—In undertaking the consider-
ation and making the determination under section 111 
with respect to the standard concerning net metering es-
tablished by section 111(d)(11), the term ‘net metering 
service’ shall mean a service provided in accordance with 
the following standards: 
‘‘(1) An electric utility— 
‘‘(A) shall charge the owner or operator of 
an on-site generating facility rates and charges 
that are identical to those that would be 
charged other electric consumers of the electric 
utility in the same rate class; and 
‘‘(B) shall not charge the owner or oper-
ator of an on-site generating facility any addi-
tional standby, capacity, interconnection, or 
other rate or charge. 
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‘‘(2) An electric utility that sells electric energy 
to the owner or operator of an on-site generating fa-
cility shall measure the quantity of electric energy 
produced by the on-site facility and the quantity of 
electric energy consumed by the owner or operator 
of an on-site generating facility during a billing pe-
riod with a single bi-directional meter or otherwise 
in accordance with reasonable metering practices. 
‘‘(3) If the quantity of electric energy sold by 
the electric utility to an on-site generating facility 
exceeds the quantity of electric energy supplied by 
the on-site generating facility to the electric utility 
during the billing period, the electric utility may bill 
the owner or operator for the net quantity of electric 
energy sold, in accordance with reasonable metering 
practices. 
‘‘(4) If the quantity of electric energy supplied 
by the on-site generating facility to the electric util-
ity exceeds the quantity of electric energy sold by 
the electric utility to the on-site generating facility 
during the billing period— 
‘‘(A) the electric utility may bill the owner 
or operator of the on-site generating facility for 
the appropriate charges for the billing period in 
accordance with paragraph; and 
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‘‘(B) the owner or operator of the on-site 
generating facility shall be credited for the ex-
cess kilowatt-hours generated during the billing 
period, with the kilowatt-hour credit appearing 
on the bill for the following billing period. 
‘‘(5) An eligible on-site generating facility and 
net metering system used by an electric consumer 
shall meet all applicable safety, performance, reli-
ability, and interconnection standards established by 
the National Electrical Code, the Institute of Elec-
trical and Electronics Engineers, and Underwriters 
Laboratories. 
‘‘(6) The Commission, after consultation with 
State regulatory authorities and unregulated electric 
utilities and after notice and opportunity for com-
ment, may adopt, by rule, additional control and 
testing and interconnection requirements for on-site 
generating facilities and net metering systems that 
the Commission determines are necessary to protect 
public safety and system reliability. 
‘‘(7) For purposes of this subsection— 
‘‘(A) the term ‘eligible on-site generating 
facility’ means a facility on the site of a resi-
dential electric consumer with a maximum gen-
erating capacity of 10 kilowatts or less that is 
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fueled by solar energy, wind energy, or fuel 
cells; or a facility on the site of a commercial 
electric consumer with a maximum generating 
capacity of 500 kilowatts or less that is fueled 
solely by a renewable energy resource, landfill 
gas, or a high efficiency system; 
‘‘(B) the term ‘renewable energy resource’ 
means solar, wind, biomass, micro-freeflow 
hydro, or geothermal energy; 
‘‘(C) the term ‘high efficiency system’ 
means fuel cells or combined heat and power; 
and 
‘‘(D) the term ‘net metering service’ means 
service to an electric consumer under which 
electric energy generated by that electric con-
sumer from an eligible on-site generating facil-
ity and delivered to the local distribution facili-
ties may be used to offset electric energy pro-
vided by the electric utility to the electric con-
sumer during the applicable billing period.’’. 
SEC. 305. LOAN GUARANTEES FOR BIOREFINERIES AND RE-
NEWABLE ENERGY PRODUCTION FACILITIES. 
(a) AUTHORITY.—The Secretary of Energy may 
guarantee not more than 80 percent of the principal of 
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any loan made to any person or other entity for any of 
the following: 
(1) The construction of any new facility that 
primarily makes cellulosic biomass ethanol or bio-
methanol or generates electricity, or any combina-
tion thereof, from wind energy, biomass, solar en-
ergy, ocean energy or geothermal sources. 
(2) The modification of any facility that pri-
marily generates electricity from wind energy, bio-
mass, solar energy, ocean energy, or geothermal 
sources if such modification adds additional electric 
generation capacity from any of such sources. 
(3) The modification of any facility that pri-
marily makes cellulosic biomass ethanol, biometh-
anol, or electricity from wind energy, biomass, solar 
energy, ocean energy or geothermal sources if such 
modification adds additional capacity to make cel-
lulosic biomass ethanol or biomethanol from any 
such source or combination of sources. 
(4) The conversion of any facility that primarily 
makes ethanol to a facility that primarily makes cel-
lulosic biomass ethanol. 
(5) The construction of any new ninety percent 
sequestration coal power facility. 
(b) CONDITIONS.— 
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