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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). 
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 
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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. 
(D) Consumers using such products took full 
advantage of such capability. 
(E) The utility avoided incremental investments 
and rate increases related to such savings. 
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(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-
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 
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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-
nent manner on any ENERGY GUIDE label 
for any product actually including Smart Grid 
capability that— 
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‘‘(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).’’. 
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- 
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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 
Reliability Corporation, shall develop a system and rules 
for measurement and verification of demand reductions. 
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(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-
mand shall be evaluated in a neutral and objective 
manner. 
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(4) The applicable peak demand reduction goals shall 
provide that— 
(A) load-serving entities will reduce or mitigate 
peak demand by a minimum percentage amount 
from the applicable baseline to a lower peak demand 
during calendar year 2012; 
(B) load-serving entities will reduce or mitigate 
peak demand by a minimum percentage greater 
amount from the applicable baseline to a lower peak 
demand during calendar year 2015; and 
(C) the minimum percentage reductions 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— 
(A) energy efficiency measures (including 
efficient transmission wire technologies which 
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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. 
(D) 
Megawatts 
committed 
from 
dispatchable 
distributed 
generation 
dem-
onstrated to be reliable under peak period con-
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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 
any peak demand reduction plan of any information 
that is confidential for competitive or other reasons 
or that identifies individual customers. 
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(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-
mation and data demonstrating compliance by States, In-
dian tribes regional entities, and load-serving entities with 
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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’ 
SEED Accounts or to the tribes pursuant to section 
132 of this Act. To the extent that a State provides 
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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-
ing ‘‘economic and environmental benefits to con-
sumers and the United States of optimizing’’. 
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(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 
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.’’. 
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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).’’. 
(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’’. 
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(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.’’. 
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: 
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(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: 
‘‘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 
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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) 
conductors, superconductor technologies, under-
ground transmission technologies, and new conven-
tional electric transmission capacity and corridors. 
‘‘(b) PLANNING.— 
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‘‘(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, 
shall identify themselves and the regions for which 
they propose to develop plans to the Commission. 
‘‘(3) COORDINATION OF REGIONAL PLANNING 
ENTITIES.—The Commission shall encourage re-
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gional planning entities described under paragraph 
(2) to cooperate and coordinate across regions and 
to harmonize regional electric grid planning with 
planning in adjacent or overlapping jurisdictions to 
the maximum extent feasible. The Commission shall 
work with States, Indian tribes, Federal land man-
agement agencies, State energy, environment, nat-
ural resources, and land management agencies and 
commissions, Federal power marketing administra-
tions, electric utilities, transmission providers, load- 
serving entities, transmission operators, regional 
transmission organizations, independent system op-
erators, and other organizations to resolve any con-
flict or competition among proposed planning enti-
ties in order to build consensus and promote the 
Federal policy established under subsection (a). The 
Commission shall seek to ensure that planning that 
is consistent with the national electricity grid plan-
ning principles adopted pursuant to paragraph (1) is 
conducted in all regions of the United States and 
the territories, but in a manner that, to the extent 
feasible, avoids uncoordinated planning by more 
than one planning entity for the same area. 
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‘‘(4) RELATION TO EXISTING PLANNING POL-
ICY.—In implementing the Federal policy established 
under subsection (a), the Commission shall— 
‘‘(A) incorporate and coordinate with any 
ongoing planning efforts undertaken pursuant 
to section 217 and Commission Order No. 890; 
‘‘(B) coordinate with the Secretary of En-
ergy in providing to the regional planning enti-
ties an annual summary of national energy pol-
icy priorities and goals; 
‘‘(C) coordinate with corridor designation 
and planning functions carried out pursuant to 
section 216 by the Secretary of Energy, who 
shall provide financial support from available 
funds to support the purposes of this section; 
and 
‘‘(D) coordinate with the Secretaries of the 
Interior and Agriculture and Indian tribes in 
carrying out the Secretaries’ or tribal govern-
ments’ existing responsibilities for the planning 
or siting of transmission facilities on Federal or 
tribal lands, consistent with law, policy, and 
regulations relating to the management of fed-
eral public lands. 
‘‘(5) ASSISTANCE.— 
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‘‘(A) IN GENERAL.—The Commission shall 
provide support to and may participate if in-
vited to do so in the regional grid planning 
processes conducted by regional planning enti-
ties. The Secretary of Energy and the Commis-
sion may provide planning resources and assist-
ance as required or as requested by regional 
planning entities, including system data, cost 
information, system analysis, technical exper-
tise, modeling support, dispute resolution serv-
ices, and other assistance to regional planning 
entities, as appropriate. 
‘‘(B) AUTHORIZATION.—There are author-
ized to be appropriated such sums as may be 
necessary to carry out this paragraph. 
‘‘(6) CONFLICT
RESOLUTION.—In the event 
that regional grid plans conflict, the Commission 
shall assist the regional planning entities in resolving 
such conflicts in order to achieve the objectives of 
the Federal policy established under subsection (a). 
‘‘(7) SUBMISSION OF PLANS.—The Commission 
shall require regional planning entities to submit ini-
tial regional electric grid plans to the Commission 
not later than 18 months after the date the Commis-
sion promulgates national electricity grid planning 
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principles pursuant to paragraph (1), with updates 
to such plans not less than every 3 years thereafter. 
The Commission shall review such plans for consist-
ency with the national grid planning principles and 
may return a plan to one or more planning entities 
for further consideration, along with the Commis-
sion’s own recommendations for resolution of any 
conflict or for improvement. 
‘‘(8) INTEGRATION OF PLANS.—Regional elec-
tric grid plans should, in general, be developed from 
sub-regional requirements and plans, including plan-
ning input reflecting individual utility service areas. 
Regional plans may then in turn be combined into 
larger regional plans, up to interconnection-wide and 
national plans, as appropriate and necessary as de-
termined by the Commission. In no case shall a 
multi-regional plan impose inclusion of a facility on 
a region that has submitted a valid plan that, after 
efforts to resolve the conflict, does not include such 
facility. To the extent practicable, all plans sub-
mitted to the Commission shall be public documents 
and available on the Commission’s Web site. 
‘‘(9) MULTI-REGIONAL MEETINGS.—As regional 
grid plans are submitted to the Commission, the 
Commission may convene multi-regional meetings to 
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