American Renewable Energy Act of 2021
Bill: H.R.3959 | Sponsor: Rep. Welch, Peter (D-VT)
Policy area: Energy

Summary:
American Renewable Energy Act of 2021
This bill establishes an annual renewable energy standard for retail electricity suppliers through 2030. Under the standard, the suppliers must (1) increase their renewable energy generation each year by specified amounts, and (2) generate at least 70% renewable electricity by 2030.

To amend title VI of the Public Utility Regulatory Policies Act of 1978 
   to establish a Federal renewable electricity standard for retail 
             electricity suppliers, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; FINDINGS.

    (a) Short Title.--
            This Act may be cited as the ``American Renewable Energy 
        Act of 2021''.
    (b) Findings.--Congress finds that--
            (1) the Federal renewable electricity standard established 
        by section 610 of the Public Utility Regulatory Policies Act of 
        1978 (as added by this Act) establishes a market-based policy 
        to create ongoing competition among renewable electricity 
        generators across the United States and provide the greatest 
        quantity of clean electricity for the lowest price; and
            (2) the United States has vast wind, solar, hydropower, and 
        geothermal resources that--
                    (A) are renewable;
                    (B) are dispersed widely across different regions 
                of the United States;
                    (C) can be harnessed to generate a significant 
                share of electricity in the United States; and
                    (D) when deployed, will significantly reduce and 
                eliminate the emission of harmful greenhouse gases and 
                criteria pollutants, which have historically been 
                concentrated in underserved communities and communities 
                of color, contributing to disproportionate burdens and 
                environmental injustices.

SEC. 2. FEDERAL RENEWABLE ELECTRICITY STANDARD.

    Title VI of the Public Utility Regulatory Policies Act of 1978 (16 
U.S.C. 2601 et seq.) is amended by adding after section 609 (7 U.S.C. 
918c) the following:

``SEC. 610. FEDERAL RENEWABLE ELECTRICITY STANDARD.

    ``(a) Definitions.--In this section:
            ``(1) Criteria air pollutant.--The term `criteria air 
        pollutant' means an air pollutant for which a national ambient 
        air quality standard has been promulgated under section 109 of 
        the Clean Air Act.
            ``(2) Distributed generation.--The term `distributed 
        generation' means a non-centralized renewable energy resource 
        installation, or interconnected series of installations, that 
        generates electricity near the point of use with a total 
        generating capacity of 1 megawatt or less.
            ``(3) Environmental justice community.--
                    ``(A) In general.--The term `environmental justice 
                community' means a low-income or low-wealth community 
                that is impacted by environmental injustice.
                    ``(B) Inclusions.--The term `environmental justice 
                community' includes any community that--
                            ``(i) is located nearest to an existing 
                        area of significant environmental pollution and 
                        degradation;
                            ``(ii) bears a burden of negative public 
                        health effects from pollution;
                            ``(iii) includes 1 or more sites of--
                                    ``(I) a facility that is a part of 
                                a polluting industry;
                                    ``(II) a waste dump; or
                                    ``(III) a facility for fossil 
                                resource extraction;
                            ``(iv) experiences a high incidence of 
                        climate change impacts and disasters;
                            ``(v) has been excluded or harmed by racist 
                        or discriminatory policies that have resulted 
                        in disproportionate burdens of environmental 
                        pollution and related health and socioeconomic 
                        disparities;
                            ``(vi) has a land-based or food subsistence 
                        culture that is experiencing ecosystem 
                        disruption and devastation;
                            ``(vii) faces relocation and resettlement 
                        resulting from--
                                    ``(I) climate change; or
                                    ``(II) impacts to the environment 
                                and ecosystems; or
                            ``(viii) is an Indigenous community.
            ``(4) Federal renewable electricity credit.--The term 
        `Federal renewable electricity credit' means a credit that--
                    ``(A) represents, for purposes of compliance with 
                this section, 1 megawatt hour of renewable electricity; 
                and
                    ``(B) is issued pursuant to subsection (e).
            ``(5) Impacted community.--
                    ``(A) In general.--The term `impacted community' 
                means a community that is harmed by environmental, 
                economic, or socioeconomic injustice.
                    ``(B) Inclusions.--The term `impacted community' 
                includes--
                            ``(i) an environmental justice community; 
                        and
                            ``(ii) a community that--
                                    ``(I) has a high concentration of 
                                low-income and low-wealth households, 
                                including households comprised 
                                primarily of members of groups that 
                                have historically experienced 
                                discrimination on the basis of race, 
                                gender, national origin, or ethnicity 
                                (including Black, Indigenous, Latinx, 
                                Arab, Asian, and Pacific Islander 
                                communities);
                                    ``(II) has experienced or is 
                                experiencing economic transition, 
                                deindustrialization, historic 
                                underinvestment, and poverty; or
                                    ``(III) has high unemployment due 
                                to--
                                            ``(aa) a significant 
                                        decline in coal mining 
                                        activity; or
                                            ``(bb) the closure of a 
                                        coal-fired power plant.
            ``(6) Indian tribe.--The term `Indian Tribe' means any 
        Indian Tribe, band, nation, or other organized group or 
        community (including any Native village, Regional Corporation, 
        or Village Corporation (as those terms are defined in section 3 
        of the Alaska Native Claims Settlement Act)) that is recognized 
        as eligible for the special programs and services provided by 
        the United States to Indians because of their status as 
        Indians.
            ``(7) Qualified hydropower.--The term `qualified 
        hydropower' means energy produced from generating capacity 
        added to a dam on or after January 1, 2001, if the Commission 
        certifies that--
                    ``(A) the dam--
                            ``(i) was placed in service before the date 
                        of enactment of this section;
                            ``(ii) was operated for flood control, 
                        navigation, or water supply purposes; and
                            ``(iii) was not producing hydroelectric 
                        power prior to the addition of the capacity; 
                        and
                    ``(B) the hydroelectric project installed on the 
                dam--
                            ``(i) is licensed or is exempt from 
                        licensing by the Commission;
                            ``(ii) is in compliance with--
                                    ``(I) the terms and conditions of 
                                the license or exemption; and
                                    ``(II) other applicable legal 
                                requirements for the protection of 
                                environmental quality, including 
                                applicable fish passage requirements; 
                                and
                            ``(iii) is operated so that the water 
                        surface elevation at any given location and 
                        time that would have occurred in the absence of 
                        the hydroelectric project is maintained, 
                        subject to any license or exemption 
                        requirements that require changes in water 
                        surface elevation for the purpose of improving 
                        the environmental quality of the affected 
                        waterway.
            ``(8) Renewable electricity.--The term `renewable 
        electricity' means electricity generated (including by means of 
        a fuel cell) from a renewable energy resource.
            ``(9) Renewable energy resource.--The term `renewable 
        energy resource' means each of the following:
                    ``(A) Wind energy.
                    ``(B) Solar energy.
                    ``(C) Geothermal energy.
                    ``(D) Biogas derived from anaerobic digestion at 
                wastewater treatment facilities, or from farm anaerobic 
                digestion.
                    ``(E) Qualified hydropower.
                    ``(F) Marine energy (as defined in section 632 of 
                the Energy Independence and Security Act of 2007).
            ``(10) Retail electricity supplier.--
                    ``(A) In general.--The term `retail electricity 
                supplier' means, for any calendar year, an electric 
                utility that sells not fewer than 1,000,000 megawatt 
                hours of electricity to electric consumers during the 
                preceding calendar year.
                    ``(B) Inclusions and limitations.--For purposes of 
                determining whether an electric utility qualifies as a 
                retail electricity supplier under subparagraph (A)--
                            ``(i) the sales made by any affiliate of 
                        the electric utility to electric consumers, 
                        other than sales to lessees or tenants of the 
                        affiliate, shall be considered to be sales made 
                        by the electric utility; and
                            ``(ii) sales made by the electric utility 
                        to an affiliate, lessee, or tenant of the 
                        electric utility shall not be treated as sales 
                        to electric consumers.
                    ``(C) Affiliate.--In this paragraph, the term 
                `affiliate' when used in relation to a person, means 
                another person that directly or indirectly owns or 
                controls, is owned or controlled by, or is under common 
                ownership or control with, that person, as determined 
                under regulations promulgated by the Commission.
            ``(11) Retail electricity supplier's base quantity.--The 
        term `retail electricity supplier's base quantity' means the 
        total quantity of electricity sold by the retail electricity 
        supplier, expressed in megawatt hours, to electric consumers 
        during the relevant calendar year, excluding electricity 
        generated by a hydroelectric facility, other than qualified 
        hydropower.
            ``(12) Retire and retirement.--The terms `retire' and 
        `retirement' mean, with respect to a Federal renewable 
        electricity credit, to disqualify the credit for any subsequent 
        use under this section, regardless of whether the use is a 
        sale, transfer, exchange, or submission in satisfaction of a 
        compliance obligation.
    ``(b) Annual Compliance Obligation.--
            ``(1) In general.--Except as otherwise provided in 
        subsection (f), for each of calendar years 2021 through 2030, 
        not later than March 31 of the following calendar year, each 
        retail electricity supplier shall submit to the Commission a 
        quantity of Federal renewable electricity credits that 
        represents a quantity of megawatt hours of renewable 
        electricity that is at least equal to the annual target of the 
        retail electricity supplier under subsection (d).
            ``(2) Equity requirements.--
                    ``(A) Distributed generation.--The Commission shall 
                require that, of the quantity of Federal renewable 
                electricity credits required to be submitted by a 
                retail electricity supplier to comply with paragraph 
                (1)--
                            ``(i) for the period of calendar years 2021 
                        through 2024, at least 15 percent of such 
                        Federal renewable electricity credits represent 
                        megawatt hours of renewable electricity 
                        generated by distributed generation; and
                            ``(ii) for the period of calendar years 
                        2025 through 2030, at least 20 percent of such 
                        Federal renewable electricity credits represent 
                        megawatt hours of renewable electricity 
                        generated by distributed generation.
                    ``(B) Impacted communities.--The Commission shall 
                require that, of the quantity of Federal renewable 
                electricity credits required to be submitted by a 
                retail electricity supplier to comply with paragraph 
                (1)--
                            ``(i) for the period of calendar years 2021 
                        through 2024, at least 15 percent of such 
                        Federal renewable electricity credits represent 
                        megawatt hours of renewable electricity 
                        generated in impacted communities; and
                            ``(ii) for the period of calendar years 
                        2025 through 2030, at least 20 percent of such 
                        Federal renewable electricity credits represent 
                        megawatt hours of renewable electricity 
                        generated in impacted communities.
                    ``(C) Distributed generation occurring in a 
                impacted community.--For any calendar year, distributed 
                generation that occurs in a impacted community may be 
                used for purposes of complying with both subparagraph 
                (A) and subparagraph (B).
    ``(c) Establishment.--
            ``(1) In general.--Not later than January 1, 2022, the 
        Commission shall promulgate regulations to implement and 
        enforce the requirements of this section.
            ``(2) Considerations.--In promulgating regulations under 
        paragraph (1), the Commission shall, to the maximum extent 
        practicable--
                    ``(A) preserve the integrity and incorporate best 
                practices of existing State and Tribal renewable 
                electricity programs;
                    ``(B) preserve the integrity of voluntary renewable 
                energy markets;
                    ``(C) design and implement such regulations in a 
                manner that seeks to be equitable and just;
                    ``(D) identify and prioritize measures to maximize 
                reductions of emissions of greenhouse gases and 
                criteria air pollutants in impacted communities;
                    ``(E) ensure that activities undertaken to comply 
                with such regulations result in a net decrease in 
                emissions of criteria air pollutants in impacted 
                communities;
                    ``(F) ensure that the deployment of any new 
                renewable electricity generation provides economic, 
                health, and resiliency benefits to the communities and 
                areas in which the generation is built, including the 
                use of community benefit agreements or equivalent means 
                as determined appropriate by the Commission;
                    ``(G) prioritize measures that will incentivize or 
                allow for distributed, community, and public ownership 
                over renewable energy projects;
                    ``(H) establish and delegate to an appropriate 
                entity the administration of a national Federal 
                renewable electricity credit trading market for the 
                issuance and trade of Federal renewable electricity 
                credits, relying on existing and emerging State, 
                Tribal, or regional tracking systems that issue and 
                track non-Federal renewable electricity credits;
                    ``(I) establish and delegate to appropriate 
                entities the administration of not fewer than 6 
                regional, geographically-based, Federal renewable 
                electricity credit trading markets, and determine the 
                optimal levels of credit trading allowed within and 
                between regions to maximize deployment of new renewable 
                electricity generation within each region;
                    ``(J) cooperate with States and Indian Tribes--
                            ``(i) to facilitate coordination between 
                        State, Tribal, and Federal renewable 
                        electricity programs; and
                            ``(ii) to minimize administrative burdens 
                        and costs to retail electricity suppliers; and
                    ``(K) encourage strategic deployment of distributed 
                generation to maximize system benefits that can lower 
                costs for all customers, including siting generation 
                resources in grid-constrained areas and co-location of 
                renewable energy resources with energy storage.
    ``(d) Annual Compliance Requirement.--
            ``(1) Annual targets.--For each of calendar years 2021 
        through 2030, the annual target of a retail electricity 
        supplier shall be equal to the number of megawatt hours that is 
        equal to the product obtained by multiplying--
                    ``(A) the required annual percentage for that 
                calendar year under paragraph (2); and
                    ``(B) the retail electricity supplier's base 
                quantity for that calendar year.
            ``(2) Required annual percentage.--For each of calendar 
        years 2021 through 2030, the required annual percentage shall 
        be as follows:

                                                        Required annual
``Year:                                                     percentage:
        2021...................................................   20.0 
        2022...................................................   24.5 
        2023...................................................   29.0 
        2024...................................................   34.0 
        2025...................................................   39.0 
        2026...................................................   45.0 
        2027...................................................   51.0 
        2028...................................................   57.0 
        2029...................................................   63.5 
        2030...................................................   70.0.

    ``(e) Federal Renewable Electricity Credits.--
            ``(1) In general.--
                    ``(A) Issuance; tracking; verification.--The 
                regulations promulgated under this section shall 
                include provisions governing the issuance, tracking, 
                and verification of Federal renewable electricity 
                credits.
                    ``(B) Credit ratio.--Except as provided in 
                paragraphs (2) through (5), the Commission shall issue 
                to each generator of renewable electricity 1 Federal 
                renewable electricity credit for each megawatt hour of 
                renewable electricity generated by the generator after 
                December 31, 2020.
                    ``(C) Serial number.--The Commission shall assign a 
                unique serial number to each Federal renewable 
                electricity credit.
            ``(2) Generation from certain state renewable electricity 
        programs.--
                    ``(A) In general.--If renewable electricity is 
                generated with the support of payments from a retail 
                electricity supplier pursuant to a State renewable 
                electricity program (whether through State alternative 
                compliance payments or through payments to a State 
                renewable electricity procurement fund or entity), the 
                Commission shall issue Federal renewable electricity 
                credits to the retail electricity supplier for the 
                portion of the relevant renewable electricity 
                generation that is attributable to payments made by the 
                retail electricity supplier, as determined pursuant to 
                regulations promulgated by the Commission.
                    ``(B) Remaining portion.--For any remaining portion 
                of the relevant renewable electricity generation, the 
                Commission shall issue Federal renewable electricity 
                credits to the generator, as provided in paragraph (1), 
                except that not more than 1 Federal renewable 
                electricity credit shall be issued for the same 
                megawatt hour of electricity.
                    ``(C) State guidance.--In determining how Federal 
                renewable electricity credits will be apportioned among 
                retail electricity suppliers and generators under this 
                paragraph, the Commission shall consider information 
                and guidance issued by the applicable one or more 
                States.
            ``(3) Certain power sales contracts.--Except as otherwise 
        provided in paragraph (2), if a generator has sold renewable 
        electricity to a retail electricity supplier under a contract 
        for power from a facility placed in service before the date of 
        enactment of this section, and the contract does not provide 
        for the determination of ownership of the Federal renewable 
        electricity credits associated with the generation, the 
        Commission shall issue the Federal renewable electricity 
        credits to the retail electricity supplier for the duration of 
        the contract.
            ``(4) Credits based on qualified hydropower.--For purposes 
        of this subsection, the number of megawatt hours of renewable 
        electricity generation from qualified hydropower shall be 
        calculated--
                    ``(A) based solely on the increase in average 
                annual generation directly resulting from the 
                efficiency improvements or capacity additions described 
                in subsection (a)(6); and
                    ``(B) using the same water flow information used to 
                determine a historic average annual generation baseline 
                for the hydroelectric facility, as certified by the 
                Commission.
            ``(5) Credits based on farm anaerobic digestion.--For any 
        calendar year, a generator may only receive Federal renewable 
        electricity credits for renewable electricity generated from 
        biogas that is derived from farm anaerobic digestion if--
                    ``(A) any manure used for such anaerobic digestion 
                is from a farm that only provides its manure for 
                anaerobic digestion to one anaerobic digester system;
                    ``(B) the anaerobic digester system used by such 
                generator has a capacity of less than, or equal to, 1 
                megawatt; and
                    ``(C) during such calendar year the total renewable 
                electricity produced from biogas derived from farm 
                anaerobic digestion in the applicable State represents 
                not more than 10 percent of the State's overall 
                electricity usage.
            ``(6) Generation from mixed renewable and nonrenewable 
        resources.--If electricity is generated using both a renewable 
        energy resource and an energy source that is not a renewable 
        energy resource, the Commission shall issue Federal renewable 
        electricity credits based on the proportion of the electricity 
        generated that is attributable to the renewable energy 
        resource.
            ``(7) Prohibition against double-counting.--The Commission 
        shall ensure that--
                    ``(A) no Federal renewable electricity credit is 
                used more than once for compliance with this section; 
                and
                    ``(B) not more than 1 Federal renewable electricity 
                credit is issued for any megawatt hour of renewable 
                electricity generated.
            ``(8) Trading.--The lawful holder of a Federal renewable 
        electricity credit may--
                    ``(A) sell, exchange, or transfer the credit;
                    ``(B) submit the credit for compliance under 
                subsection (b); or
                    ``(C) submit the credit for retirement by the 
                Commission.
            ``(9) Banking.--
                    ``(A) In general.--A Federal renewable electricity 
                credit may be submitted in satisfaction of the 
                compliance obligation under subsection (b) for the 
                compliance year for which the credit was issued or for 
                any of the 2 immediately subsequent compliance years.
                    ``(B) Retirement.--The Commission shall retire any 
                Federal renewable electricity credit that has not been 
                retired by April 2 of the calendar year that is 2 years 
                after the calendar year during which the credit was 
                issued.
            ``(10) Retirement.--The Commission shall retire a Federal 
        renewable electricity credit immediately upon submission by the 
        lawful holder of the credit, whether in satisfaction of a 
        compliance obligation under subsection (b) or for another 
        reason.
    ``(f) Alternative Compliance Payments.--
            ``(1) In general.--A retail electricity supplier may 
        satisfy the requirements of subsection (b) in whole or in part 
        by submitting in accordance with this subsection, in lieu of 
        each Federal renewable electricity credit that would otherwise 
        be submitted, an alternative compliance payment equal to $50, 
        adjusted for inflation on January 1 of each year following 
        calendar year 2021, in accordance with regulations promulgated 
        by the Commission.
            ``(2) Payment to state funds.--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, payments made under this subsection 
                shall be made directly to one or more States in which 
                the retail electricity supplier sells electricity, in 
                proportion to the portion of the retail electricity 
                supplier's base quantity that is sold within each 
                applicable State, if--
                            ``(i) the payments are deposited directly 
                        into a fund of the State treasury established 
                        for that purpose; and
                            ``(ii) the State uses the funds in 
                        accordance with paragraphs (3) and (4).
                    ``(B) Noncompliance.--If the Commission determines 
                that a State is in substantial noncompliance with 
                paragraph (3) or paragraph (4), the Commission shall 
                direct that any future alternative compliance payments 
                that would otherwise be paid to the State under this 
                subsection shall instead be paid to the Commission and 
                deposited in the Treasury.
            ``(3) State use of funds.--As a condition of receipt of 
        alternative compliance payments pursuant to this subsection, a 
        State shall--
                    ``(A) use the payments exclusively for--
                            ``(i) deploying technologies that generate 
                        electricity from renewable energy resources;
                            ``(ii) deploying technologies that store 
                        electricity for use at a later time; or
                            ``(iii) implementing cost-effective energy 
                        efficiency programs to achieve energy savings; 
                        and
                    ``(B) invest or use the payments in a manner 
                designed to ensure that impacted communities receive, 
                or directly benefit from, at least 50 percent of such 
                funds.
            ``(4) Reporting.--
                    ``(A) In general.--As a condition of receipt of 
                alternative compliance payments pursuant to this 
                subsection, a State shall submit to the Commission an 
                annual report, in accordance with regulations 
                promulgated by the Commission, containing a full 
                accounting of the use of the payments, including a 
                detailed description of the activities funded by the 
                payments and demonstrating compliance with the 
                requirements of this subsection.
                    ``(B) Deadline.--A State shall submit a report 
                under this paragraph--
                            ``(i) not later than 1 year after the date 
                        on which the first alternative compliance 
                        payment is received; and
                            ``(ii) every 1 year thereafter until all 
                        alternative compliance payments are expended.
    ``(g) Information Collection.--The Commission may require any 
retail electricity supplier, renewable electricity generator, or any 
other entity that the Commission determines appropriate, to provide any 
information the Commission determines appropriate to carry out this 
section.
    ``(h) Enforcement and Judicial Review.--
            ``(1) Failure to submit credits.--If any person fails to 
        comply with the requirements of subsection (b) or (f) for a 
        calendar year, the person shall be liable to pay to the 
        Commission a civil penalty equal to the product obtained by 
        multiplying--
                    ``(A) double the alternative compliance payment 
                calculated under subsection (f)(1) for such calendar 
                year; and
                    ``(B) the aggregate quantity of Federal renewable 
                electricity credits or equivalent alternative 
                compliance payments that the person failed to submit in 
                violation of the requirements of subsections (b) and 
                (f) for such calendar year.
            ``(2) Enforcement.--The Commission shall assess a civil 
        penalty under paragraph (1) in accordance with the procedures 
        described in section 31(d) of the Federal Power Act.
            ``(3) Violation of requirement of regulations or orders.--
                    ``(A) In general.--Any person who violates or fails 
                or refuses to comply with any requirement of this 
                section, other than a requirement of subsection (b) or 
                (f), shall be subject to a civil penalty under section 
                316A(b) of the Federal Power Act.
                    ``(B) Assessment.--The penalty under subparagraph 
                (A) shall be assessed by the Commission in the same 
                manner as in the case of a violation referred to in 
                section 316A(b) of that Act.
            ``(4) Judicial review.--
                    ``(A) In general.--Any person aggrieved by a final 
                action taken by the Commission under this section, 
                other than the assessment of a civil penalty under 
                paragraphs (1) through (3), may use the procedures for 
                review described in section 313 of the Federal Power 
                Act.
                    ``(B) Reference.--For purposes of this paragraph, 
                references to an order in section 313 of that Act shall 
                be considered to refer also to all other final actions 
                of the Commission under this section other than the 
                assessment of a civil penalty under paragraphs (1) 
                through (3).
    ``(i) Administration.--Nothing in this section--
            ``(1) diminishes or qualifies any authority of a State, a 
        political subdivision of a State, or an Indian Tribe--
                    ``(A) to adopt or enforce any law or regulation 
                respecting renewable electricity, including any law or 
                regulation establishing requirements that are more 
                stringent than those established by this section, 
                provided that no such law or regulation may relieve any 
                person of any requirement otherwise applicable under 
                this section; or
                    ``(B) to regulate the acquisition and disposition 
                of Federal renewable electricity credits by retail 
                electricity suppliers within the jurisdiction of the 
                State, political subdivision, or Indian Tribe, 
                including the authority to require the retail 
                electricity supplier to acquire and submit to the 
                Commission for retirement Federal renewable electricity 
                credits in excess of those submitted under this 
                section; or
            ``(2) affects the application of or the responsibility for 
        compliance with any other provision of law or regulation.''.

SEC. 3. CLARIFYING STATE AUTHORITY TO ADOPT RENEWABLE ENERGY 
              INCENTIVES.

    Section 210 of the Public Utility Regulatory Policies Act of 1978 
(16 U.S.C. 824a-3) is amended by adding at the end the following:
    ``(o) Clarification of State Authority To Adopt Renewable Energy 
Incentives.--
            ``(1) Definition of state-approved production incentive 
        program.--In this subsection, the term `State-approved 
        production incentive program' means a requirement imposed 
        pursuant to State law or by a State regulatory authority acting 
        within its authority under State law that an electric utility 
        purchase renewable energy (as defined in section 609(a)) at a 
        specified rate.
            ``(2) State authority to adopt renewable energy 
        incentives.--Notwithstanding any other provision of this Act or 
        the Federal Power Act, a State law or State regulatory 
        authority may set the rates for a sale of electricity by a 
        facility generating renewable energy (as defined in section 
        609(a)) pursuant to a State-approved production incentive 
        program under which the facility voluntarily participates in 
        the State-approved production incentive program.''.

SEC. 4. CONFORMING AMENDMENT.

    The table of contents of the Public Utility Regulatory Policies Act 
of 1978 (16 U.S.C. prec. 2601) is amended by adding at the end of the 
items relating to title VI the following:

``Sec. 609. Rural and remote communities electrification grants.
``Sec. 610. Federal renewable electricity standard.''.
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