I 
113TH CONGRESS 
2D SESSION 
H. R. 3838 
To amend the Internal Revenue Code of 1986 to provide a consumer 
renewable credit for utilities that sell intermittent renewable power. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 9, 2014 
Mr. PAULSEN (for himself and Mr. KIND) introduced the following bill; which 
was referred to the Committee on Ways and Means, and in addition to 
the Committee on Energy and Commerce, for a period to be subsequently 
determined by the Speaker, in each case for consideration of such provi-
sions as fall within the jurisdiction of the committee concerned 
A BILL 
To amend the Internal Revenue Code of 1986 to provide 
a consumer renewable credit for utilities that sell inter-
mittent renewable power. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. CONSUMER RENEWABLE CREDIT. 
(a) BUSINESS CREDIT.— 
(1) IN GENERAL.—Subpart D of part IV of 
subchapter A of chapter 1 of the Internal Revenue 
Code of 1986 is amended by adding at the end the 
following new section: 
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‘‘SEC. 45S. CONSUMER RENEWABLE CREDIT. 
‘‘(a) GENERAL RULE.—For purposes of section 38, 
in the case of an eligible taxpayer, the consumer renewable 
credit for any taxable year is an amount equal to the prod-
uct of— 
‘‘(1) the renewable portfolio factor of such eligi-
ble taxpayer, and 
‘‘(2) the number of kilowatt hours of renewable 
electricity— 
‘‘(A) purchased or produced by such tax-
payer, and 
‘‘(B) sold by such taxpayer to a retail cus-
tomer during the taxable year and before Janu-
ary 1, 2020. 
‘‘(b) RENEWABLE PORTFOLIO FACTOR.—The renew-
able portfolio factor for an eligible taxpayer for any tax-
able year shall be determined in accordance with the fol-
lowing table: 
‘‘In the case of a renewable electricity percentage of: 
The 
renewable 
portfolio 
factor is: 
Less than 6 percent ........................................................................
zero cents
At least 6 percent but less than 8 percent .....................................
0.1 cents
At least 8 percent but less than 12 percent ...................................
0.2 cents
At least 12 percent but less than 16 percent .................................
0.3 cents
At least 16 percent but less than 20 percent .................................
0.4 cents
At least 20 percent but less than 24 percent .................................
0.5 cents
Equal to or greater than 24 percent ..............................................
0.6 cents. 
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‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section— 
‘‘(1) ELIGIBLE TAXPAYER.—The term ‘eligible 
taxpayer’ means an electric utility (as defined in sec-
tion 3(22) of the Federal Power Act, 16 U.S.C. 
796(22)). 
‘‘(2) RENEWABLE ELECTRICITY.—The term ‘re-
newable electricity’ means electricity generated by— 
‘‘(A) any facility using wind to generate 
such electricity, or 
‘‘(B) any facility using solar energy to gen-
erate such electricity. 
‘‘(3) 
RENEWABLE
ELECTRICITY
PERCENT-
AGE.—The term ‘renewable electricity percentage’ 
means, with respect to any taxable year, the percent-
age of an eligible taxpayer’s total sales of electricity 
to retail customers that is derived from renewable 
electricity (determined without regard to whether 
such electricity was produced by the taxpayer). 
‘‘(4) APPLICATION
OF
OTHER
RULES.—For 
purposes of this section, rules similar to the rules of 
paragraphs (1), (3), and (5) of section 45(e) shall 
apply. 
‘‘(5) CREDIT ALLOWED ONLY WITH RESPECT 
TO ONE ELIGIBLE ENTITY.—No credit shall be al-
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lowed under subsection (a) with respect to renewable 
electricity purchased from another eligible entity if a 
credit has been allowed under this section or a pay-
ment has been made under section 6433 to such 
other eligible entity. 
‘‘(6) CREDIT
AND
RENEWABLE
ELECTRICITY 
PERCENTAGE ENHANCEMENT.— 
‘‘(A) 
NATIVE
AMERICAN
WIND
AND 
SOLAR.—Any renewable electricity generated 
from a wind or solar energy facility located on 
Indian land, as defined in section 2601 of the 
Energy Policy Act of 1992 (25 U.S.C. 3501), 
shall for purposes of this section be considered 
as twice the electricity production as is actually 
produced from such facility. 
‘‘(B) ELECTRIC COOPERATIVE WIND AND 
SOLAR.—Any renewable electricity generated 
from a wind or solar energy facility owned en-
tirely by a mutual or cooperative electric com-
pany, as defined in section 501(c)(12), or sec-
tion 1381(a)(2)(C), shall for purposes of this 
section be considered as one and one-half times 
the electricity production as is actually pro-
duced from such facility. 
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‘‘(d) COORDINATION WITH PAYMENTS.—The amount 
of the credit determined under this section with respect 
to any electricity shall be reduced to take into account any 
payment provided with respect to such electricity solely by 
reason of the application of section 6433.’’. 
(2) CREDIT MADE PART OF GENERAL BUSINESS 
CREDIT.—Subsection (b) of section 38 of the Inter-
nal Revenue Code of 1986 is amended by striking 
‘‘plus’’ at the end of paragraph (35), by striking the 
period at the end of paragraph (36) and inserting ‘‘, 
plus’’, and by adding at the end the following new 
paragraph: 
‘‘(37) the consumer renewable credit deter-
mined under section 45S(a).’’. 
(3) SPECIFIED CREDIT.—Subparagraph (B) of 
section 38(c)(4) of the Internal Revenue Code of 
1986 is amended by redesignating clauses (vii) 
through (ix) as clauses (viii) through (x), respec-
tively, and by inserting after clause (v) the following 
new clause: 
‘‘(vi) the credit determined under sec-
tion 45S.’’. 
(4) CLERICAL AMENDMENT.—The table of sec-
tions for subpart D of part IV of subchapter A of 
chapter 1 of the Internal Revenue Code of 1986 is 
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amended by adding at the end the following new 
item: 
‘‘Sec. 45S. Consumer renewable credit.’’. 
(b) PAYMENTS IN LIEU OF CREDIT.— 
(1) IN GENERAL.—Subchapter B of chapter 65 
of the Internal Revenue Code of 1986 is amended by 
adding at the end the following new section: 
‘‘SEC. 6433. CONSUMER RENEWABLE CREDIT PAYMENTS. 
‘‘(a) IN GENERAL.—If any eligible person sells re-
newable electricity to a retail customer, the Secretary shall 
pay (without interest) to any such person who elects to 
receive a payment an amount equal to the product of— 
‘‘(1) the renewable portfolio factor of such eligi-
ble person, and 
‘‘(2) the number of kilowatt hours of renewable 
electricity— 
‘‘(A) purchased or produced by such per-
son, and 
‘‘(B) sold by such person in the trade or 
business of such person to a retail customer be-
fore January 1, 2020. 
‘‘(b) TIMING OF PAYMENTS.— 
‘‘(1) IN GENERAL.—Except as provided in para-
graph (2), rules similar to the rules of section 
6427(i)(1) shall apply for purposes of this section. 
‘‘(2) QUARTERLY PAYMENTS.— 
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‘‘(A) IN GENERAL.—If, at the close of any 
quarter of the taxable year of any person (or 
fiscal year in the case of an eligible person that 
does not have a taxable year), at least $750 is 
payable in the aggregate under subsection (a), 
to such person with respect to electricity pur-
chased or produced during— 
‘‘(i) such quarter, or 
‘‘(ii) any prior quarter (for which no 
other claim has been filed) during such 
year, 
a claim may be filed under this section with re-
spect to such electricity. 
‘‘(B) TIME FOR FILING CLAIM.—No claim 
filed under this paragraph shall be allowed un-
less filed on or before the last day of the first 
quarter following the earliest quarter included 
in the claim. 
‘‘(c) DEFINITIONS AND SPECIAL RULES.—For pur-
poses of this section— 
‘‘(1) ELIGIBLE
PERSON.—The term ‘eligible 
person’ means an electric utility (as defined in sec-
tion 3(22) of the Federal Power Act, 16 U.S.C. 
796(22)) or a Federal power marketing agency as 
defined in section 3(19) of the Federal Power Act. 
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‘‘(2) OTHER DEFINITIONS.—Any term used in 
this section which is also used in section 45S shall 
have the meaning given such term under section 
45S. 
‘‘(3) APPLICATION
OF
OTHER
RULES.—For 
purposes of this section, rules similar to the rules of 
paragraphs (1) and (3) of section 45(e) shall apply. 
‘‘(d) PAYMENT
DISALLOWED
UNLESS
AMOUNT 
PASSED TO THIRD-PARTY GENERATORS CHARGED FOR 
INTEGRATION COSTS.— 
‘‘(1) IN GENERAL.—In the case of renewable 
electricity eligible for the payment under subsection 
(a) that is purchased and not produced by an eligi-
ble person, no payment shall be made under this sec-
tion unless any charge the eligible person has as-
sessed the seller to recover the integration costs as-
sociated with such electricity has been reduced (but 
not below zero) to the extent of the payment re-
ceived under subsection (a) associated with such 
electricity. 
‘‘(2) DEFINITIONS.—For purposes of paragraph 
(1), charges intended to recover integration costs do 
not include amounts paid by the producer of the 
electricity for interconnection facilities, distribution 
upgrades, network upgrades, or stand-alone network 
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upgrades as those terms have been defined by the 
Federal Energy Regulatory Commission in its 
Standard Interconnection Procedures. 
‘‘(e) PAYMENT ALLOWED FOR SPECIAL GENERATING 
AND TRANSMITTING ENTITIES.— 
‘‘(1) IN GENERAL.—Notwithstanding subsection 
(a)(1)(B), an entity that is a special generating and 
transmitting entity shall be eligible for a payment 
under this section for renewable electricity it trans-
mits, regardless of whether such utility purchased or 
sold such electricity for its customers. 
‘‘(2) DEFINITIONS.—For purposes of this sub-
section, the term ‘special generating and transmit-
ting entity’ means— 
‘‘(A) an entity that is primarily engaged in 
marketing electricity and— 
‘‘(i) provides transmission service for 
over four thousand megawatts of renewable 
generating facilities, as determined by ref-
erence to the machine or nameplate capac-
ity thereof, and 
‘‘(ii) transmits the majority of its re-
newable electricity transmitted to cus-
tomers located outside the region it serves, 
or 
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‘‘(B) an entity that is a generation and 
transmission cooperative, which engages pri-
marily in providing wholesale electric service to 
its members, generally consisting of distribution 
cooperatives.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions for subpart B of chapter 65 of the Internal 
Revenue Code of 1986 is amended by adding at the 
end the following new item: 
‘‘Sec. 6433. Renewable electricity integration payments.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to electricity sold to retail cus-
tomers after the date of the enactment of this Act. 
Æ 
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