To direct the Secretary of Energy to develop and implement a strategy for research, development, demonstration, and commercial application of distributed power hybrid energy systems, and for other purposes.

SECTION 1. SHORT TITLE.

     This Act may be cited as the ``Distributed Power Hybrid Energy 
Act''.

SEC. 2. FINDINGS.

     The Congress makes the following findings:
            (1) Renewable energy resources have the potential to help 
        diversify our Nation's energy portfolio with few adverse 
        environmental effects. By their very nature, renewable 
        resources are distributed. Our ability to cost effectively take 
        advantage of our renewable, indigenous resources can be greatly 
        advanced through systems that minimize the intermittency of 
        these resources through distributed power hybrid systems.
            (2) Distributed power sources configured as distributed 
        power hybrid systems can maximize benefits to the energy 
        consumer. The primary benefits of distributed power hybrid 
        systems are that they can--
                    (A) shelter consumers from temporary energy price 
                volatility created by supply and demand mismatches;
                    (B) increase the reliability of energy supply, 
                thereby avoiding significant costs associated with 
                power outages;
                    (C) provide a cost-effective means to minimize the 
                impact of intermittent resources, thereby expanding the 
                Nation's energy supply reserve;
                    (D) decrease environmental impacts of energy 
                supply; and
                    (E) be tailored to address significant local 
                differences in power and economic development needs and 
                resource availability that exist throughout the United 
                States.
            (3) Realizing these benefits will require a concerted and 
        integrated effort that focuses on removing market barriers to 
        the adoption of distributed power hybrid systems by--
                    (A) providing tools that enable States and regions 
                to assess their indigenous renewable energy resources;
                    (B) developing the technological foundation that 
                enables designing, testing, certifying, and operating 
                distributed power hybrid systems; and
                    (C) providing the policy framework that reduces 
                such barriers, including making net metering available 
                on a broader scale to enable consumers to reap the full 
                value of these systems, thereby lowering their overall 
                energy bill.
            (4) While many of the individual distributed power hybrid 
        systems components are either available or under development in 
        existing private and public sector programs, the capabilities 
        to integrate these components into workable distributed power 
        hybrid systems that maximize benefits to consumers in a safe 
        manner are deficient and not coherently being addressed.

SEC. 3. DEFINITIONS.

     For purposes of this Act--
            (1) the term ``distributed power hybrid system'' means a 
        system using 2 or more distributed power sources, operated 
        together with associated supporting equipment, including 
        storage equipment, and software necessary to provide electric 
        power to the grid or on site; and
            (2) the term ``distributed power source'' means an 
        independent electric energy source of usually 10 megawatts or 
        less located close to a residential, commercial, or industrial 
        load center, including--
                    (A) reciprocating engines;
                    (B) turbines;
                    (C) microturbines;
                    (D) fuel cells;
                    (E) solar electric systems;
                    (F) wind energy systems;
                    (G) biomass power systems;
                    (H) geothermal power systems; or
                    (I) electrical components of cogeneration systems.

SEC. 4. STRATEGY.

    (a) Requirement.--Not later than 1 year after the date of the 
enactment of this Act, the Secretary of Energy shall develop and 
transmit to the Congress a distributed power hybrid systems strategy 
showing--
            (1) opportunities and priorities that might best be met 
        with distributed power hybrid systems configurations;
            (2) what barriers exist to the use of distributed power 
        hybrid systems;
            (3) what technology gaps need to be closed; and
            (4) what system integration tools are needed to plan, 
        design, build, and operate distributed power hybrid systems for 
        maximum benefits.
    (b) Elements.--The strategy may provide for development of--
            (1) system integration tools for planning, designing, 
        building, and operating economical, safe, and clean distributed 
        power hybrid systems, including databases, computer models, 
        software, and sensors, controls, and other integrating 
        hardware;
            (2) tests of distributed power hybrid systems, including 
        field tests with industry and cost-shared demonstrations of 
        distributed power hybrid systems power parks and microgrids, to 
        validate integrated performance and to give consumers, 
        policymakers, and industry the confidence that distributed 
        power hybrid systems work reliably, safely, and cleanly;
            (3) special design tools that can characterize the benefits 
        and values of distributed power hybrid systems for consumers 
        and enable virtual prototyping of distributed power hybrid 
        systems to reduce testing needs and the time required to get 
        the systems into the marketplace;
            (4) data to characterize grid operations, including 
        interconnection requirements; and
            (5) precise resource assessment tools to map local 
        resources for distributed power hybrid systems.
    (c) Implementation and Integration.--The Secretary of Energy shall 
implement the strategy transmitted under subsection (a), and activities 
pursuant to the strategy shall be integrated with other activities of 
the Department's Office of Distributed Energy Resources.

SEC. 5. REPORT TO CONGRESS.

     Not later than 1 year after the date of the enactment of this Act, 
and annually thereafter, the Secretary of Energy shall transmit to the 
Congress a report on the use of, and experience with, distributed power 
hybrid systems in the United States, and the research and development 
issues remaining to ensure the successful application of distributed 
power hybrid systems.

SEC. 6. AUTHORIZATION OF APPROPRIATIONS.

     There are authorized to be appropriated to the Secretary of Energy 
for carrying out this Act--
            (1) $5,000,000 for fiscal year 2004;
            (2) $10,000,000 for fiscal year 2005;
            (3) $20,000,000 for fiscal year 2006;
            (4) $20,000,000 for fiscal year 2007; and
            (5) $5,000,000 for fiscal year 2008.

Summary: Distributed Power Hybrid Energy Act - Directs the Secretary of Energy to: (1) develop and transmit to Congress a distributed power hybrid systems strategy (involving two or more independent electric energy sources of usually ten megawatts or less each, located close to a residential, commercial, or industrial load center, including reciprocating engines, turbines, microturbines, fuel cells, solar electric systems, wind energy systems, biomass power systems, geothermal power systems, or electrical components of cogeneration systems); and (2) implement and integrate such strategy with other activities of the Department of Energy Office of Distributed Energy Resources.