I 
107TH CONGRESS 
2D SESSION 
H. R. 5756
To amend title VI of the Public Utility Regulatory Policies Act of 1978 
to establish a Federal renewable energy portfolio standard for certain 
retail electric utilities, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
NOVEMBER 14, 2002
Mr. UDALL of New Mexico introduced the following bill; which was referred 
to the Committee on Energy and Commerce 
A BILL 
To amend title VI of the Public Utility Regulatory Policies 
Act of 1978 to establish a Federal renewable energy 
portfolio standard for certain retail electric utilities, and 
for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. FEDERAL RENEWABLE PORTFOLIO STANDARD. 
Title VI of the Public Utility Regulatory Policies Act 
of 1978 is amended by adding at the end the following: 
‘‘SEC. 606. FEDERAL RENEWABLE PORTFOLIO STANDARD. 
‘‘(a) MINIMUM RENEWABLE GENERATION REQUIRE-
MENT.—For each calendar year beginning in calendar
year 2005, each retail electric supplier shall submit to the 
Secretary, not later than April 1 of the following calendar 
year, renewable energy credits in an amount equal to the 
required annual percentage specified in subsection (b). 
‘‘(b) REQUIRED ANNUAL PERCENTAGE.—For cal-
endar years 2005 through 2025, the required annual per-
centage of the retail electric supplier’s base amount that 
shall be generated from renewable energy resources shall 
be the percentage specified in the following table:
Required annual 
‘‘Calendar Years 
percentage 
2005 through 2006 ..............................................................
1.0
2007 through 2008 ..............................................................
2.2
2009 through 2010 ..............................................................
3.4
2011 through 2012 ..............................................................
4.6
2013 through 2014 ..............................................................
5.8
2015 through 2016 ..............................................................
7.0
2017 through 2018 ..............................................................
8.5
2019 through 2020 ..............................................................
10.0
2020 through 2021 ..............................................................
12.0
2021 through 2022 ..............................................................
14.0
2022 through 2023 ..............................................................
16.0
2023 through 2024 ..............................................................
18.0
2024 through 2025 ..............................................................
20.0.
‘‘(c) SUBMISSION OF CREDITS.—(1) A retail electric 
supplier may satisfy the requirements of subsection (a) 
through the submission of renewable energy credits—
‘‘(A) issued to the retail electric supplier under 
subsection (d); 
‘‘(B) obtained by purchase or exchange under 
subsection (e); or 
‘‘(C) borrowed under subsection (f).
‘‘(2) A credit may be counted toward compliance with 
subsection (a) only once. 
‘‘(d) ISSUANCE
OF CREDITS.—(1) The Secretary 
shall establish, not later than 1 year after the date of en-
actment of this section, a program to issue, monitor the 
sale or exchange of, and track renewable energy credits. 
‘‘(2) Under the program, an entity that generates 
electric energy through the use of a renewable energy re-
source may apply to the Secretary for the issuance of re-
newable energy credits. The application shall indicate—
‘‘(A) the type of renewable energy resource used 
to produce the electricity, 
‘‘(B) the location where the electric energy was 
produced, and 
‘‘(C) any other information the Secretary deter-
mines appropriate. 
‘‘(3)(A) Except as provided in paragraphs (B), (C), 
and (D), the Secretary shall issue to an entity one renew-
able energy credit for each kilowatt-hour of electric energy 
the entity generates from the date of enactment of this 
section and in each subsequent calendar year through the 
use of a renewable energy resource at an eligible facility. 
‘‘(B) For incremental hydropower the credits shall be 
calculated based on the expected increase in average an-
nual generation resulting from the efficiency improve-
ments or capacity additions. The number of credits shall 
be calculated using the same water flow information used 
to determine a historic average annual generation baseline 
for the hydroelectric facility and certified by the Secretary 
or the Federal Energy Regulatory Commission. The cal-
culation of the credits for incremental hydropower shall 
not be based on any operational changes at the hydro-
electric facility not directly associated with the efficiency 
improvements or capacity additions. 
‘‘(C) The Secretary shall issue two renewable energy 
credits for each kilowatt-hour of electric energy generated 
and supplied to the grid in that calendar year through the 
use of a renewable energy resource at an eligible facility 
located on Indian land. For purposes of this paragraph, 
renewable energy generated by biomass cofired with other 
fuels is eligible for two credits only if the biomass was 
grown on the land eligible under this paragraph. 
‘‘(D) For renewable energy resources produced from 
a generation offset, the Secretary shall issue two renew-
able energy credits for each kilowatt-hour generated. 
‘‘(E) To be eligible for a renewable energy credit, the 
unit of electric energy generated through the use of a re-
newable energy resource may be sold or may be used by 
the generator. If both a renewable energy resource and 
a nonrenewable energy resource are used to generate the
electric energy, the Secretary shall issue credits based on 
the proportion of the renewable energy resource used. The 
Secretary shall identify renewable energy credits by type 
and date of generation. 
‘‘(4) When a generator sells electric energy generated 
through the use of a renewable energy resource to a retail 
electric supplier under a contract subject to section 210 
of this Act, the retail electric supplier is treated as the 
generator of the electric energy for the purposes of this 
section for the duration of the contract. 
‘‘(5) The Secretary may issue credits for existing fa-
cility offsets to be applied against a retail electric sup-
plier’s own required annual percentage. The credits are 
not tradeable and may only be used in the calendar year 
generation actually occurs. 
‘‘(e) CREDIT TRADING.—A renewable energy credit 
may be sold or exchanged by the entity to whom issued 
or by any other entity who acquires the credit. A renew-
able energy credit for any year that is not used to satisfy 
the minimum renewable generation requirement of sub-
section (a) for that year may be carried forward for use 
within the next 4 years.
‘‘(f) CREDIT BORROWING.—At any time before the 
end of calendar year 2005, a retail electric supplier that
has reason to believe it will not have sufficient renewable 
energy credits to comply with subsection (a) may—
‘‘(1) submit a plan to the Secretary dem-
onstrating that the retail electric supplier will earn 
sufficient credits within the next 3 calendar years 
which, when taken into account, will enable the re-
tail electric suppliers to meet the requirements of 
subsection (a) for calendar year 2005 and the subse-
quent calendar years involved; and 
‘‘(2) upon the approval of the plan by the Sec-
retary, apply credits that the plan demonstrates will 
be earned within the next 3 calendar years to meet 
the requirements of subsection (a) for each calendar 
year involved. 
‘‘(g) CREDIT COST CAP.—The Secretary shall offer 
renewable energy credits for sale at the lesser of 3 cents 
per kilowatt-hour or 200 percent of the average market 
value of credits for the applicable compliance period. On 
January 1 of each year following calendar year 2005, the 
Secretary shall adjust for inflation the price charged per 
credit for such calendar year, based on the Gross Domestic 
Product Implicit Price Deflator. 
‘‘(h) ENFORCEMENT.—The Secretary may bring an 
action in the appropriate United States district court to 
impose a civil penalty on a retail electric supplier that does
not comply with subsection (a), unless the retail electric 
supplier was unable to comply with subsection (a) for rea-
sons outside of the supplier’s reasonable control (including 
weather-related damage, mechanical failure, lack of trans-
mission capacity or availability, strikes, lockouts, actions 
of a governmental authority). A retail electric supplier who 
does not submit the required number of renewable energy 
credits under subsection (a) shall be subject to a civil pen-
alty of not more than the greater of 3 cents or 200 percent 
of the average market value of credits for the compliance 
period for each renewable energy credit not submitted. 
‘‘(i) INFORMATION
COLLECTION.—The Secretary 
may collect the information necessary to verify and 
audit—
‘‘(1) the annual electric energy generation and 
renewable energy generation of any entity applying 
for renewable energy credits under this section, 
‘‘(2) the validity of renewable energy credits 
submitted by a retail electric supplier to the Sec-
retary, and 
‘‘(3) the quantity of electricity sales of all retail 
electric suppliers. 
‘‘(j) ENVIRONMENTAL
SAVINGS
CLAUSE.—Incre-
mental hydropower shall be subject to all applicable envi-
ronmental laws and licensing and regulatory requirements.
placed in service on or after the date of enact-
ment of this section; or 
‘‘(B) a repowering or cofiring increment 
that is placed in service on or after the date of 
enactment of this section at a facility for the 
generation of electric energy from a renewable 
energy resource that was placed in service be-
fore that date. 
‘‘(3) 
ELIGIBLE
RENEWABLE
ENERGY
RE-
SOURCE.—The term ‘renewable energy resource’ 
means solar, wind, ocean, or geothermal energy, bio-
mass (excluding solid waste and paper that is com-
monly recycled), landfill gas, a generation offset, or 
incremental hydropower. 
‘‘(4) 
GENERATION
OFFSET.—The 
term 
‘generation offset’ means reduced electricity usage 
metered at a site where a customer consumes energy 
from a renewable energy technology. 
‘‘(5) EXISTING FACILITY OFFSET.—The term 
‘existing facility offset’ means renewable energy gen-
erated from an existing facility, not classified as an 
eligible facility, that is owned or under contract to 
a retail electric supplier on the date of enactment of 
this section.
‘‘(6) INCREMENTAL HYDROPOWER.—The term 
‘incremental hydropower’ means additional genera-
tion that is achieved from increased efficiency or ad-
ditions of capacity after the date of enactment of 
this section at a hydroelectric dam that was placed 
in service before that date. 
‘‘(7) INDIAN
LAND.—The term ‘Indian land’ 
means—
‘‘(A) any land within the limits of any In-
dian reservation, pueblo, or rancheria, 
‘‘(B) any land not within the limits of any 
Indian reservation, pueblo, or rancheria title to 
which was on the date of enactment of this 
paragraph either held by the United States for 
the benefit of any Indian tribe or individual or 
held by any Indian tribe or individual subject to 
restriction by the United States against alien-
ation, 
‘‘(C) any dependent Indian community, 
and 
‘‘(D) any land conveyed to any Alaska Na-
tive corporation under the Alaska Native 
Claims Settlement Act.
‘‘(8) INDIAN TRIBE.—The term ‘Indian tribe’ 
means any Indian tribe, band, nation, or other orga-
nized group or community, including any Alaskan 
Native village or regional or village corporation as 
defined in or established pursuant to the Alaska Na-
tive Claims Settlement Act (43 U.S.C. 1601 et seq.), 
which is recognized as eligible for the special pro-
grams and services provided by the United States to 
Indians because of their status as Indians. 
‘‘(9) 
RENEWABLE
ENERGY.—The 
term 
‘renewable energy’ means electric energy generated 
by a renewable energy resource. 
‘‘(10) RENEWABLE
ENERGY
RESOURCE.—The 
term ‘renewable energy resource’ means solar, wind, 
ocean, or geothermal energy, biomass (including mu-
nicipal solid waste), landfill gas, a generation offset, 
or incremental hydropower. 
‘‘(11) 
REPOWERING
OR
COFIRING
INCRE-
MENT.—The term ‘repowering or cofiring increment’ 
means the additional generation from a modification 
that is placed in service on or after the date of en-
actment of this section to expand electricity produc-
tion at a facility used to generate electric energy 
from a renewable energy resource or to cofire bio-
mass that was placed in service before the date of 
enactment of this section, or the additional genera-
tion above the average generation in the 3 years pre-
ceding the date of enactment of this section, to ex-
pand electricity production at a facility used to gen-
erate electric energy from a renewable energy re-
source or to cofire biomass that was placed in serv-
ice before the date of enactment of this section. 
‘‘(12) RETAIL ELECTRIC SUPPLIER.—The term 
‘retail electric supplier’ means a person that sells 
electric energy to electric consumers and sold not 
less than 1,000,000 megawatt-hours of electric en-
ergy to electric consumers for purposes other than 
resale during the preceding calendar year, except 
that such term does not include the United States, 
a State or any political subdivision of a State, or any 
agency, authority, or instrumentality of any one or 
more of the foregoing, or a rural electric cooperative. 
‘‘(13) 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 to electric cus-
tomers during the most recent calendar year for 
which information is available, excluding electric en-
ergy generated by—
‘‘(A) an eligible renewable energy resource; 
‘‘(B) municipal solid waste; or 
‘‘(C) a hydroelectric facility.
‘‘(m) SUNSET.—This section expires December 31, 
2030.’’.
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