II 117th CONGRESS 1st Session S. 1632 IN THE SENATE OF THE UNITED STATES May 13, 2021 Mr. Merkley introduced the following bill; which was read twice and referred to the Committee on Energy and Natural Resources A BILL To amend the Energy Policy and Conservation Act to establish a program to provide loans to implement cost-effective energy efficiency measures, and for other purposes.

1. Short title This Act may be cited as the Community Energy Savings Program Act of 2021 . 2. Community energy savings program (a) In general The Energy Policy and Conservation Act is amended by inserting after section 362 ( 42 U.S.C. 6322 ) the following: 362A. Community energy savings program (a) Purpose The purpose of this section is to help households and small businesses achieve cost savings by providing loans to implement cost-effective energy efficiency measures. (b) Definitions In this section: (1) Community development financial institution The term community development financial institution means a financial institution certified by the Community Development Financial Institutions Fund administered by the Secretary of the Treasury. (2) Eligible entity The term eligible entity means— (A) a public power group; (B) a community development financial institution; and (C) an eligible unit of local government. (3) Eligible unit of local government The term eligible unit of local government means any agency or political subdivision of a State. (4) Energy efficiency measures The term energy efficiency measures means, with respect to a property served by or in the service area or jurisdiction, as applicable, of an eligible entity, structural improvements and investments in cost-effective commercial technologies to increase energy efficiency (including cost-effective on- or off-grid renewable energy, energy storage, or demand response systems). (5) Household with a high energy burden (A) In general The term household with a high energy burden means a low-income household the residential energy burden of which exceeds the median energy burden for all low-income households in the State in which the low-income household is located. (B) Calculation The residential energy burden referred to in subparagraph (A) is the quotient obtained by dividing residential energy expenditures by the annual income of the low-income household. (6) Indian tribe The term Indian tribe has the meaning given the term in section 4 of the Indian Self-Determination and Education Assistance Act ( 25 U.S.C. 5304 ). (7) Manufactured home The term manufactured home — (A) has the meaning given the term in section 603 of the National Manufactured Housing Construction and Safety Standards Act of 1974 ( 42 U.S.C. 5402 ); and (B) includes a home described in subparagraph (A) without regard to whether the home was built before, on, or after the date on which the construction and safety standards established under section 604 of that Act ( 42 U.S.C. 5403 ) became effective. (8) Program The term program means the program established under subsection (c). (9) Public power group The term public power group means— (A) a public utility; (B) an electric or energy cooperative; (C) a public power district; and (D) a group of 1 or more public utilities or electric or energy cooperatives (commonly referred to as a joint action agency , generation and transmission cooperative , municipal power association , or State cooperative association ). (10) Qualified consumer The term qualified consumer means a consumer served by or in the service area or jurisdiction, as applicable, of an eligible entity that has the ability to repay a loan made under subsection (f), as determined by the eligible entity. (11) Secretary The term Secretary means the Secretary of Energy. (12) State The term State means— (A) a State; (B) the District of Columbia; (C) the Commonwealth of Puerto Rico; and (D) any other territory or possession of the United States. (c) Establishment Not later than 120 days after the date of enactment of this section, the Secretary shall establish a program under which the Secretary shall provide grants to States and Indian tribes to provide loans to eligible entities in accordance with this section. (d) Grant fund allocation (1) In general Of the amount appropriated under subsection (k) for each fiscal year, the Secretary shall allocate as grant funds— (A) 98 percent to be provided to States in accordance with paragraph (2); and (B) 2 percent to be provided to Indian tribes in accordance with paragraph (3). (2) Allocation to States Of the amount allocated for all States under paragraph (1)(A), the Secretary shall— (A) allocate not less than 1 percent to each State described in subparagraphs (A) through (C) of subsection (b)(12); (B) allocate not less than 0.5 percent to each State described in subparagraph (D) of that subsection; and (C) of the amount remaining after the allocations under subparagraphs (A) and (B), allocate funds to States based on the population of each State as determined in the latest available decennial census conducted under section 141(a) of title 13, United States Code. (3) Allocation to Indian tribes Of the amount allocated for Indian tribes under paragraph (1)(B), the Secretary shall allocate funds to each Indian tribe participating in the program during that fiscal year based on a formula established by the Secretary that takes into account any factor that the Secretary determines to be appropriate. (4) Publication of allocation formulas Not later than 90 days before the beginning of each fiscal year for which grants are provided to States and Indian tribes under this section, the Secretary shall publish in the Federal Register the formulas for allocation established under this subsection. (5) Administrative costs Of the amount allocated to a State or Indian tribe under this subsection, not more than 15 percent shall be used by the State or Indian tribe for the administrative costs of administering loans. (e) Loans by States and Indian tribes to eligible entities (1) In general Under the program, a State or Indian tribe shall make loans to eligible entities to make loans to qualified consumers— (A) to implement cost-effective energy efficiency measures; and (B) in accordance with subsection (f). (2) State energy offices A State shall carry out paragraph (1) through the State energy office that is responsible for developing a State energy conservation plan under section 362. (3) Priority In making loans under paragraph (1), a State or Indian tribe shall give priority to public power groups. (4) Requirements (A) In general Subject to subparagraph (C), as a condition of receiving a loan under this subsection, an eligible entity shall— (i) establish a list of energy efficiency measures that are expected to decrease the energy use or costs of qualified consumers; (ii) prepare an implementation plan for use of the loan funds, including the use of any interest to be received under subsection (f)(4); (iii) establish an appropriate measurement and verification system to ensure— (I) the effectiveness of the energy efficiency loans made by the eligible entity; and (II) that there is no conflict of interest in any loan provided by the eligible entity; (iv) demonstrate expertise in the effective implementation of energy efficiency measures; (v) ensure that a portion of the loan funds, which may be determined by the State or Indian tribe, are used to provide loans to qualified consumers that are households with a high energy burden; and (vi) give priority to providing loans to qualified consumers that own homes or other real property that pose health risks to the occupants of the property that may be mitigated by energy efficiency measures, as determined by the State or Indian tribe. (B) Revision of list of energy efficiency measures Subject to the approval of the State or Indian tribe, as applicable, an eligible entity may update the list required under subparagraph (A)(i) to account for newly available efficiency technologies. (C) Existing energy efficiency programs An eligible entity that has established an energy efficiency program for qualified consumers before the date of enactment of this section may use an existing list of energy efficiency measures, implementation plan, and measurement and verification system for that program to satisfy the applicable requirements under subparagraph (A), if the State or Indian tribe, as applicable, determines that the list, plan, or system, as applicable, is consistent with the purposes of this section. (5) No interest A loan under this subsection shall bear no interest. (6) Term The term of a loan provided to an eligible entity under paragraph (1) shall not exceed 20 years after the date on which the loan is issued. (7) Advance (A) In general In providing a loan to an eligible entity under paragraph (1), a State or Indian tribe may provide an advance of loan funds on request of the eligible entity. (B) Amount limitation Any advance provided to an eligible entity under subparagraph (A) in any single year shall not exceed 50 percent of the approved loan amount. (C) Repayment The repayment of an advance under subparagraph (A) shall be amortized for a period of not more than 10 years. (8) Special advance for start-up activities (A) In general In providing a loan to an eligible entity under paragraph (1), a State or Indian tribe may provide a special advance on request of the eligible entity for assistance in defraying the start-up costs of the eligible entity, as determined by the State or Indian tribe, as applicable, of providing loans to qualified consumers under subsection (f). (B) Limitation A special advance shall be provided to an eligible entity under subparagraph (A) only during the 10-year period beginning on the date on which the loan is issued to that eligible entity. (C) Amount The amount of a special advance provided under subparagraph (A) shall not be greater than 5 percent of the approved loan amount. (D) Repayment Repayment of a special advance provided under subparagraph (A)— (i) shall be required during the 10-year period beginning on the date on which the special advance is made; and (ii) may be deferred to the end of the 10-year period described in clause (i) at the election of the eligible entity. (9) Revolving loan fund (A) In general As a condition of participating in the program, a State or Indian tribe shall use the funds repaid to the State or Indian tribe under loans offered under this subsection to issue new loans under this subsection. (B) Administrative costs Not more than 10 percent of the repaid funds described in subparagraph (A) may be used for the administrative cost of issuing new loans from those repaid funds under this subsection. (f) Loans by eligible entities to qualified consumers (1) Use of loan (A) In general A loan made by an eligible entity to a qualified consumer using loan funds provided by a State or Indian tribe under subsection (e)— (i) shall be used to finance energy efficiency measures for the purpose of decreasing the energy use or costs of the qualified consumer by an amount that ensures, to the maximum extent practicable, that the applicable loan term described in subparagraph (B) shall not be an undue financial burden on the qualified consumer, as determined by the eligible entity; (ii) shall not be used to fund purchases of, or modifications to, personal property unless the personal property is or becomes attached to real property as a fixture; (iii) may be used to upgrade a manufactured home, regardless of the classification of the home as real or personal property; and (iv) may be used to finance the replacement of a manufactured home— (I) if the cost of upgrading the manufactured home is excessive, as determined by the eligible entity; and (II) with priority given to a manufactured home that was constructed before June 15, 1976. (B) Loan term described The loan term referred to in subparagraph (A)(i) is— (i) in the case of a manufactured home replacement, not more than 20 years; and (ii) in the case of any other energy efficiency measure, not more than 15 years. (2) Repayment (A) In general Subject to subparagraph (B), a loan described in paragraph (1)(A) shall be repaid by the qualified consumer through charges added to an existing or new electric or recurring service bill for the property of the qualified consumer for, or at which, energy efficiency measures are being implemented. (B) Alternative repayment Repayment under subparagraph (A) shall not preclude— (i) the voluntary prepayment of the loan by the qualified consumer; or (ii) the use of any additional repayment mechanism, including a tariffed on-bill mechanism, that— (I) has appropriate risk mitigation features, as determined by the eligible entity; or (II) is required due to the qualified consumer no longer being a customer of the eligible entity. (3) Energy assessment (A) In general Prior to the installation of energy efficiency measures at the property of a qualified consumer that receives a loan from an eligible entity under this section, and to assist in the selection of the energy efficiency measures to be installed, the eligible entity shall conduct an energy assessment or audit to determine the impact of proposed energy efficiency measures on— (i) the energy costs and consumption of the qualified consumer; and (ii) the health and safety of the occupants of the property on which the energy efficiency measures are to be installed. (B) Field or online assessment An energy assessment or audit under subparagraph (A) may be conducted in the field or online, as determined by the State or Indian tribe that has issued a loan to the eligible entity under subsection (e). (4) Interest A loan described in paragraph (1)(A) may bear interest, not to exceed 5 percent, which may be used— (A) to establish a loan loss reserve for the eligible entity; (B) to offset the personnel and program costs of the eligible entity in providing the loan; and (C) for any other related purpose, as determined by the eligible entity, in consultation with the State or Indian tribe that has issued a loan to the eligible entity under subsection (e). (5) Outside contracts An eligible entity may enter into 1 or more contracts with 1 or more qualified entities, as determined by the State or Indian tribe that has issued a loan to the eligible entity under subsection (e)— (A) to assist the eligible entity in administering the loans described in paragraph (1)(A); and (B) to carry out any of the requirements of the eligible entity described in subsection (e)(4)(A). (g) Direct loans from States and Indian tribes A State or Indian tribe may act as an eligible entity under subsection (f) to provide loans directly to qualified consumers— (1) in accordance with that subsection; and (2) if the State or Indian tribe satisfies the requirements under subsection (e)(4), as determined by the Secretary. (h) Program administration (1) Plan Not later than 120 days after the date of enactment of this section, the Secretary shall establish and begin carrying out a plan— (A) to measure and verify the success of the program in implementing energy efficiency measures; (B) provide training to the employees of eligible entities relating to carrying out the requirements of eligible entities under this section; and (C) provide technical assistance to States, Indian tribes, and eligible entities relating to carrying out the requirements of this section. (2) Public awareness Not later than 120 days after the date of enactment of this section, the Secretary shall establish and begin carrying out a plan to make eligible entities and the general public aware of the program, including by developing a marketing program to raise awareness of the program. (3) Outside contracts (A) In general The Secretary may enter into 1 or more contracts with 1 or more qualified entities, as determined by the Secretary, to carry out paragraphs (1) and (2). (B) Use of subcontractors authorized A qualified entity that enters into a contract with the Secretary under subparagraph (A) may use 1 or more subcontractors to assist the qualified entity in carrying out the contract. (4) Accounting The Secretary, and each State and Indian tribe participating in the program, shall take appropriate steps to streamline the accounting requirements for eligible entities under the program while maintaining adequate assurances of the repayment of the loans made to those eligible entities under the program. (i) Effect on authority Nothing in this section shall impede, impair, or modify the authority of the Secretary to offer loans or grants under any other law. (j) Report (1) In general Not later than 15 months after the date on which the program is established, and 90 days after the end of each fiscal year for each fiscal year thereafter, the Secretary shall submit to the appropriate committees of Congress and make publicly available a report that describes, with respect to the program— (A) the number of applications received by each State and Indian tribe from eligible entities for that fiscal year; (B) the number of loans made by each State and Indian tribe for that fiscal year— (i) to eligible entities; and (ii) directly to qualified consumers; (C) the eligible entities that are the recipients of the loans described in subparagraph (B)(i); and (D) the manner in which the program was advertised to eligible entities and the general public. (2) Consultation The Secretary shall consult with and obtain information from States and Indian tribes in preparing the report submitted under paragraph (1). (k) Authorization of appropriations (1) In general There is authorized to be appropriated to the Secretary to carry out this section $150,000,000 for each of fiscal years 2023 through 2028. (2) Supplement not supplant The funding provided to a State or Indian tribe under subsection (d) for each fiscal year shall be used to supplement, not supplant, any Federal, State, or other funds otherwise made available to that State or Indian tribe under— (A) a State energy conservation plan established under part D of title III of the Energy Policy and Conservation Act ( 42 U.S.C. 6321 et seq.); or (B) the weatherization assistance program established under part A of title IV of the Energy Conservation and Production Act ( 42 U.S.C. 6861 et seq.). . (b) State energy conservation plans Section 362(d)(5) of the Energy Policy and Conservation Act ( 42 U.S.C. 6322(d)(5) ) is amended— (1) in subparagraph (A), by striking or at the end; (2) in subparagraph (B), by inserting or after the semicolon; and (3) by adding at the end the following: (C) which may include the community energy savings program under section 362A; . (c) Technical amendment The table of contents for the Energy Policy and Conservation Act ( Public Law 94–163 ; 89 Stat. 872) is amended by inserting after the item relating to section 362 the following: Sec. 362A. Community energy savings program. .