Clean Distributed Energy Grid Integration Act

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Clean Distributed Energy Grid 
Integration Act''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) research by the Secretary of Energy and the 
        Administrator of the Environmental Protection Agency has found 
        that clean distributed energy technologies can create important 
        values for both the host facility and the electric grid 
        operator;
            (2) the values described in paragraph (1) can include, for 
        the host facility--
                    (A) energy bill savings;
                    (B) additional revenue from offering ancillary 
                services to the electric grid operator;
                    (C) increased electric reliability in the event of 
                grid outages; and
                    (D) improved electric power quality;
            (3) the values described in paragraph (1) can include, for 
        the electric grid operator--
                    (A) avoiding the need for transmission and 
                distribution upgrade investments;
                    (B) enhanced grid stability by providing reactive 
                power;
                    (C) voltage and frequency stabilization; and
                    (D) more reliable and stable operation of the grid 
                by providing dispatchable energy to the grid during 
                periods of insufficient capacity or supply; and
            (4) new advances in intelligent sensing and simulation and 
        control technologies offer the potential to enhance the 
        benefits of clean distributed generation to both the host 
        facility and the electric grid operator from dynamic, adaptive, 
        and anticipatory response to changing grid conditions.

SEC. 3. DEFINITIONS.

    In this Act:
            (1) Ancillary service.--The term ``ancillary service'' 
        means those services necessary to support the transmission of 
        electric power from seller to purchaser given the obligations 
        of control areas and transmitting utilities within those 
        control areas to maintain reliable operations of the 
        interconnected transmission system.
            (2) Clean distributed energy.--The term ``clean distributed 
        energy'' means energy technologies that are located on the 
        customer site operating on the customer side of the electric 
        meter and are interconnected with the electric grid.
            (3) Combined heat and power technology.--The term 
        ``combined heat and power technology'' means the generation of 
        electric energy and heat in a single, integrated system that 
        meets the efficiency criteria in clauses (ii) and (iii) of 
        section 48(c)(3)(A) of the Internal Revenue Code of 1986, under 
        which heat that is conventionally rejected is recovered and 
        used to meet thermal energy requirements.
            (4) Energy storage.--The term ``energy storage'' means 
        technologies that store electric energy and are able to 
        discharge on demand to meet customer or grid needs for electric 
        energy.
            (5) Fuel cell.--The term ``fuel cell'' means a device that 
        produces electric energy directly from a chemical reaction.
            (6) Grid.--The term ``grid'' means the electric grid that 
        is composed on both distribution and transmission lines, and 
        associated facilities, including substations, sensors, and 
        operational controls.
            (7) Intelligence.--The term ``intelligence'' means any 
        devices or technologies that manifest adaptive, anticipatory, 
        and dynamic optimization behavior.
            (8) Qualified waste heat resource.--
                    (A) In general.--The term ``qualified waste heat 
                resource'' means--
                            (i) exhaust heat or flared gas from any 
                        industrial process;
                            (ii) waste gas or industrial tail gas that 
                        would otherwise be flared, incinerated, or 
                        vented;
                            (iii) a pressure drop in any gas for an 
                        industrial or commercial process; or
                            (iv) any other form of waste heat resource, 
                        as determined by the Secretary.
                    (B) Exclusion.--The term ``qualified waste heat 
                resource'' does not include a heat resource from a 
                process the primary purpose of which is the generation 
                of electricity using a fossil fuel.
            (9) Secretary.--The term ``Secretary'' means the Secretary 
        of Energy.
            (10) Waste heat to power technology.--The term ``waste heat 
        to power technology'' means a system that generates electricity 
        through the recovery of a qualified waste heat resource.

SEC. 4. RESEARCH AND DEPLOYMENT PLAN FOR ENHANCED INTEGRATION OF CLEAN 
              DISTRIBUTED ENERGY WITH THE GRID.

    (a) In General.--The Secretary shall carry out efforts for 
advancing the integration of clean distributed energy into electric 
grids.
    (b) Study and Report on the Status of Grid Integration.--
            (1) In general.--In carrying out the efforts under 
        subsection (a) and not later than 180 days after the date of 
        enactment of this Act, the Secretary shall conduct a study on 
        the status of integration of clean distributed energy into the 
        grid, identifying any issues that require additional research 
        or regulatory development.
            (2) Inclusions.--In conducting the study under paragraph 
        (1), the Secretary shall--
                    (A) identify and quantify the benefits to all 
                stakeholders of expanded integration of clean 
                distributed energy resources into the grid;
                    (B) identify any technical issues that require 
                research to identify solutions; and
                    (C) identify any regulatory barriers that inhibit 
                the expanded integration of clean distributed energy 
                resources into the grid.
            (3) Report.--Not later than 1 year after the date of 
        enactment of this Act, the Secretary shall submit to Congress a 
        report describing the results of the study conducted under 
        paragraph (1).
            (4) Funding.--The Secretary shall use unobligated funds of 
        the Department of Energy to carry out this subsection.
    (c) Research Into the Technical Barriers to the Integration of 
Clean Distributed Energy With the Grid.--
            (1) In general.--Not later than 18 months after the date of 
        enactment of this Act, the Secretary shall--
                    (A) issue a solicitation for research proposals to 
                address the technical barriers identified in the report 
                submitted under subsection (b)(3); and
                    (B) make grants to those applicants with research 
                proposals selected by the Secretary in accordance with 
                paragraph (2).
            (2) Criteria.--The Secretary shall select research 
        proposals to receive a grant under this subsection on the basis 
        of merit, using criteria identified by the Secretary, including 
        the likelihood that the research results will address critical 
        barriers identified by the Secretary.
            (3) Funding.--Beginning in the first full fiscal year 
        following the date of enactment of this Act, and annually 
        thereafter for 2 years, the Secretary may request funding as 
        necessary to carry out this subsection, but in no case shall 
        funding exceed $5,000,000 in any 1 fiscal year.
    (d) Creation of a Stakeholder Working Group.--
            (1) In general.--Not later than 18 months after the date of 
        enactment of this Act, the Secretary shall convene a working 
        group (referred to in this subsection as the ``Group'') to 
        address regulatory barriers to deployment of intelligent grid 
        integration of clean distributed energy technologies.
            (2) Purpose.--The purpose of the Group is to provide 
        guidance on how to address the technical, regulatory and 
        economic factors that limit widespread integration of grid-
        level clean distributed energy use in order to advance the 
        integration of clean distributed energy into electric grids.
            (3) Membership.--
                    (A) In general.--The Group shall be composed of 
                representatives of all groups determined by the 
                Secretary to have a material interest in the 
                development, implementation, siting, and integration of 
                clean distributed energy technology or systems into the 
                electric grid.
                    (B) Criteria.--Members shall be selected--
                            (i) from representatives that apply as a 
                        result of a public announcement from the 
                        Secretary; and
                            (ii) by the Secretary based on 
                        qualifications and balance of interests 
                        represented by the selected individuals.
            (4) Duties.--The duties of the Group shall be--
                    (A) to review the regulatory barriers identified in 
                the report prepared by the Secretary under subsection 
                (b)(3);
                    (B) to identify any additional regulatory barriers 
                that inhibit the installation of distributed energy; 
                and
                    (C) to recommend to the Secretary any actions that 
                should be undertaken to remove these barriers.
            (5) Report.--Not later than 3 years after the date of 
        enactment of this Act, the Secretary shall prepare and submit 
        to Congress a report based on the recommendations of the Group 
        under paragraph (4)(C), to be made publicly available.
            (6) Funding.--The Secretary may request funding as 
        necessary to carry out this subsection, but in no case shall 
        funding exceed $2,000,000 in any 1 fiscal year.
    (e) Demonstrations of Intelligent Grid Integration of Clean 
Distributed Energy Systems.--
            (1) In general.--Based on the findings in the reports 
        conducted under this section and not later than 3 years after 
        the date of enactment of this Act, the Secretary shall issue a 
        solicitation for demonstration of integration of distributed 
        energy resources into the grid.
            (2) Eligible entities.--Any individual entity or group of 
        entities may submit to the Secretary proposals for 
        demonstration projects based on the solicitation described in 
        paragraph (1), including--
                    (A) State and local agencies;
                    (B) public institutions;
                    (C) private companies;
                    (D) electric utilities; and
                    (E) equipment manufacturers.
            (3) Grants authorized.--The Secretary may make grants, in 
        amounts not to exceed a total of $5,000,000, to eligible 
        entities to carry out demonstration projects, to be selected 
        based on--
                    (A) the technical merits of the demonstration 
                project;
                    (B) the likelihood that the demonstration project 
                will address critical barriers identified by the 
                Secretary under this section; and
                    (C) the share of non-Federal funds for the 
                demonstration project.
            (4) Funding.--Beginning in the third full fiscal year 
        following the date of enactment of this Act, and annually 
        thereafter for 3 years, the Secretary may request funding as 
        necessary to carry out this subsection, but in no case shall 
        funding exceed $15,000,000 in any 1 fiscal year.
    (f) Report.--The Secretary annually shall submit to Congress a 
report that--
            (1) describes the progress made in carrying out this 
        section; and
            (2) identifies any technical or regulatory issues that 
        require legislative action.

Summary: Clean Distributed Energy Grid Integration Act This bill directs the Department of Energy (DOE) to: (1) study the status of integration of clean distributed energy into electric grids, (2) identify issues requiring additional research or regulatory development, and (3) make grants for research proposals that address technical barriers identified in the study. &quot;Clean distributed energy&quot; means energy technologies that are located on the customer site operating on the customer side of the electric meter and are interconnected with the electric grid. DOE shall convene a stakeholder working group to:  address regulatory barriers to deployment of intelligent grid integration of clean distributed energy technologies; and provide guidance on how to address the technical, regulatory, and economic factors that limit widespread integration of grid-level clean distributed energy use in order to advance the integration of such energy into electric grids.   DOE may make grants to implement integration demonstration projects, based on study findings, to state and local agencies, public institutions, private companies, electric utilities, and equipment manufacturers.