II 118th CONGRESS 2d Session S. 5288 IN THE SENATE OF THE UNITED STATES September 25, 2024 Ms. Klobuchar (for herself and Ms. Smith ) introduced the following bill; which was read twice and referred to the Committee on Energy and Natural Resources A BILL To require the Secretary of Energy to establish a program to provide grants to States to award grants for the establishment of networked geothermal heating and cooling systems, and for other purposes.

1. Short title This Act may be cited as the Grants Enabling Optimized Thermal Handling from Energy Recovered from Mediums that are Aquatic or Land-based Act of 2024 or GEOTHERMAL Act of 2024 . 2. Definitions In this Act: (1) Baseline energy usage intensity The term baseline energy usage intensity means— (A) the annual site energy usage intensity (as measured in British thermal units per year per square foot) for a 12-month period ending as of any date during the 24-month period immediately preceding the installation of a networked geothermal heating and cooling system at the site; and (B) in the case of new construction, the modeled site energy usage intensity of the new construction, subject to the condition that the project shall be minimally code compliant. (2) Eligible recipient The term eligible recipient means— (A) a nonprofit entity that owns— (i) a building that may be connected to a networked geothermal heating and cooling system; or (ii) multiple buildings that may be connected by and to a networked geothermal heating and cooling system; (B) an institution of higher education; (C) a municipality or neighborhood association; (D) an owner of a multifamily housing development or mixed-use community development with at least 50-percent low-income or moderate-income households; (E) a wastewater treatment authority seeking to install a networked geothermal heating and cooling system that would utilize waste heat from greywater, sewage, or treated sewage effluent; (F) an electric utility (as defined in section 3 of the Federal Power Act ( 16 U.S.C. 796 )), an electric cooperative (as defined in that section), or a natural gas utility seeking to install a networked geothermal heating and cooling system as a thermal distribution demonstration project; (G) a third-party developer seeking to install a networked geothermal heating and cooling system on behalf of any entity described in subparagraphs (A) through (F); and (H) a consortium of 2 or more entities described in subparagraphs (A) through (G). (3) Geothermal heat pump The term geothermal heat pump means a heat pump that uses the thermal energy of the ground or water to provide space heating, space cooling, water heating, or a combination of those functions. (4) 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 ). (5) Networked geothermal heating and cooling system The term networked geothermal heating and cooling system means a system— (A) that provides space heating, space cooling, water heating, or a combination of those functions to a set of buildings; (B) that utilizes— (i) heat pumps that use, as a heat source or sink, the ground, groundwater, surface water, industrial process or commercial building waste heat, greywater, sewage, or treated sewage effluent; (ii) direct use of geothermal heat; or (iii) a combination of the systems described in clauses (i) and (ii); (C) that is a stand-alone system or is coupled with another energy system; (D) the ground-source or waste heat component of which is designed to provide at least 90 percent of the combined annual heating and cooling energy (as measured in British thermal units per year); and (E) that may use— (i) subsurface or surface thermal storage in the form of borehole thermal energy storage, aquifer thermal energy storage, reservoir thermal energy storage, thermal storage tanks, or other thermal storage; and (ii) waste heat or other thermal discharge from commercial, institutional, or public buildings or industrial facilities as an additional heat source. (6) Program The term program means the program established under section 3(a). (7) Registered apprenticeship program The term registered apprenticeship program means an apprenticeship program registered under the Act of August 16, 1937 (50 Stat. 664, chapter 663; 29 U.S.C. 50 et seq. ) (commonly known as the National Apprenticeship Act ), that meets the standards of part 29 and part 30 of title 29, Code of Federal Regulations (or successor regulations). (8) Secretary The term Secretary means the Secretary of Energy. (9) Site energy usage intensity The term site energy usage intensity means a site energy usage intensity (as measured in British thermal units per year per square foot) determined for a building or set of buildings in accordance with such regulations or other guidance as the Secretary may provide. (10) State The term State means— (A) a State; (B) an Indian Tribe; (C) the District of Columbia; (D) the Commonwealth of Puerto Rico; and (E) any other territory or possession of the United States. (11) State Energy Program The term State Energy Program means the State Energy Program established under part D of title III of the Energy Policy and Conservation Act ( 42 U.S.C. 6321 et seq. ). 3. Networked geothermal heating and cooling grant program (a) In general Not later than 1 year after the date of enactment of this Act, under the State Energy Program, the Secretary shall establish a program under which the Secretary shall provide grants to States— (1) that are eligible for funding under the State Energy Program; (2) in accordance with the allocation formula established under section 420.11 of title 10, Code of Federal Regulations (or successor regulations); and (3) that the States shall use to provide grants to eligible recipients in accordance with this section. (b) Applications for grants A State seeking a grant under the program shall submit to the Secretary an application at such time, in such manner, and containing such information as the Secretary may require, including— (1) a description of the expected benefits that networked geothermal heating and cooling systems will have on communities in the State; and (2) a plan for the use of the grant to assist the State in achieving those benefits. (c) Use of State grant (1) In general A State that receives a grant under the program shall award grants to eligible recipients in accordance with paragraphs (2) and (3). (2) Project deployment grants (A) In general A State that receives a grant under the program may provide a grant to an eligible recipient to finance the deployment of a networked geothermal heating and cooling system that meets the requirements described in subparagraph (B), including the installation of in-building or behind-the-meter equipment. (B) System requirements A networked geothermal heating and cooling system deployed pursuant to subparagraph (A) shall— (i) use— (I) geothermal heat pumps to provide heating, cooling, or heating and cooling of space, water, or space and water from— (aa) the ground through 1 or more closed-loop geo-exchange boreholes in which water pumped through pipes that exchange heat with the surrounding rock or soil returns to the surface; (bb) groundwater using 1 or more open-loop well doublets that pump groundwater from an aquifer and inject the water into a second well following heat exchange in a heat pump or water-to-water heat exchanger; (cc) surface water through heat exchange in a heat pump or water-to-water heat exchanger, with the water returned to the surface water body; or (dd) greywater, sewage, or treated sewage effluent through a heat exchanger installed in a sewage pipe, treated sewage effluent pipe, or above-ground plant consisting of a water-to-water heat exchanger or heat pump; (II) hot water obtained from geothermal wells to produce hot water through a water-to-water heat exchanger for direct use in building heating; (III) hot water produced by deep geothermal wells in which water is pumped through pipes containing a fluid that exchanges heat with the surrounding rock or soil and returns to the surface for direct use for building heating; (IV) industrial process waste heat; or (V) a combination of the systems described in subclauses (I) through (IV); (ii) reduce the greenhouse gas emissions associated with heating and cooling the building, set of buildings, or facility of the eligible recipient; and (iii) (I) reduce the site energy intensity of the building, set of buildings, or facility of the eligible recipient in comparison to the baseline energy usage intensity of the building, set of buildings, or facility, as applicable; (II) improve the control and management of energy usage of the building, set of buildings, or facility to reduce demand during peak times; (III) substantially reduce the amount of water used to provide heating and cooling to the building, set of buildings, or facility; or (IV) improve, with respect to the building, set of buildings, or facility of the eligible recipient— (aa) the physical comfort of the building, set of buildings, or facility occupants; (bb) the energy efficiency of the building, set of buildings, or facility; or (cc) the quality of the air in the building, set of buildings, or facility. (C) Priority Each State providing grants under this paragraph shall give priority— (i) to the maximum extent practicable, to eligible recipients that do not have access to private capital; (ii) to larger block-scale projects comprising at least 100,000 square feet of building space for which the networked geothermal heating and cooling system will be used; (iii) to projects that may be extended to multiple blocks or wider scales, including systems featuring decentralized heat pumps interconnected by a single underground shared loop pipe of ambient-temperature water; or (iv) to projects located in an energy community (as defined in section 45(b)(11)(B) of the Internal Revenue Code of 1986), a low-income community, or a disadvantaged community. (D) Wage rate and apprenticeship requirements (i) Davis-Bacon All laborers and mechanics employed by contractors or subcontractors in the performance of construction, alteration, or repair work on a project assisted in whole or in part by a grant awarded by a State under this paragraph shall be paid wages at rates not less than those prevailing on similar projects in the locality, as determined by the Secretary of Labor in accordance with subchapter IV of chapter 31 of title 40, United States Code (commonly referred to as the Davis-Bacon Act ). (ii) Authority With respect to the labor standards specified in clause (i), the Secretary of Labor shall have the authority and functions set forth in Reorganization Plan Numbered 14 of 1950 (64 Stat. 1267; 5 U.S.C. App.) and section 3145 of title 40, United States Code. (iii) Apprenticeship (I) In general All laborers and mechanics employed by contractors or subcontractors in the performance of construction, alteration, or repair work on a project assisted in whole or in part by a grant awarded by a State under this paragraph shall participate in, and all such contractors or subcontractors shall sponsor, a registered apprenticeship program for each crafts or trade employed on the project. (II) Annual certification In order to remain eligible for funding under a grant awarded by a State under this paragraph, each contractor and subcontractor described in subclause (I) shall annually submit to the Secretary of Labor a certification verifying that— (aa) the contractor or subcontractor sponsors a registered apprenticeship program for each applicable craft or trade; and (bb) the sponsored registered apprenticeship program has graduated apprentices for at least 3 of the preceding 5 years. (3) Grants for studies and technical assistance (A) In general A State that receives a grant under the program may use not more than 50 percent of the grant funds— (i) to award grants or provide technical assistance to eligible recipients to carry out the activities described in subparagraph (B); and (ii) to conduct broad surveys to ascertain the localities or projects in the State that are best suited to receive grants under paragraph (2). (B) Use of grants Grant funds received by eligible recipients under subparagraph (A)(i) may be used to partially or fully fund— (i) community thermal opportunity assessments— (I) to identify potential thermal resources, including heat sources or sinks, including the geological nature or other characteristics of the local ground, groundwater, surface water, greywater, sewage or sewage effluent thermal, waste heat from commercial or industrial sources, or deep earth geological heat potential; and (II) to assess proximity of thermal sources, sinks, or storage, as applicable, to existing or potential concentrations of thermal loads; (ii) studies to demonstrate the relative potential of different locations for deployment of networked geothermal heating and cooling systems; (iii) feasibility studies and designs for networked geothermal heating and cooling systems; (iv) geoscientific investigation, including test bores, thermal response tests, and thermal conductivity tests, to determine underground thermal and hydraulic characteristics; and (v) activities, studies, or research to assess and overcome barriers to the implementation of networked geothermal heating and cooling systems, including financial, contracting, siting, permitting, technical, and technology barriers. (4) Multiple grants A State may provide more than 1 grant under this subsection to the same eligible recipient to facilitate multiple steps in the planning and deployment of a networked geothermal heating and cooling system. (5) Administrative expenses A State that receives a grant under the program may use not more than 5 percent of the grant funds for administrative expenses. (d) Coordination with existing programs A State receiving a grant under the program is encouraged to utilize and build on existing programs and infrastructure, including physical infrastructure such as pipes or wells, existing rights-of-way, and land leases, within the State that may aid the State in awarding grants under subsection (c). (e) Outreach The Secretary shall engage in outreach to inform States of the availability of grants under the program. (f) State Energy Program exclusions (1) No matching A State receiving a grant under the program shall not be subject, for that grant, to the matching requirement under the item relating to Energy conservation under the heading Department of Energy in title II of the Department of the Interior and Related Agencies Appropriations Act, 1985 ( 42 U.S.C. 6323a ; 98 Stat. 1861). (2) Expenditure prohibitions and limitations Nothing in section 420.18 of title 10, Code of Federal Regulations (or successor regulations), shall prohibit projects carried out using grants provided by States under this section. (g) Report Each State that receives a grant under the program shall, not later than 18 months after a grant is received, and annually thereafter, submit to the Secretary a report that describes— (1) for each grant awarded to an eligible recipient under subsection (c)(2), data on the projects to be carried out using the grant, organized in a format to be determined by the Secretary; (2) for each grant awarded or any technical assistance provided under subsection (c)(3), any output in the form of feasibility studies, geoscientific investigation, thermal mapping of heat sources or sink or waste heat sources in an area, or other study results; and (3) any statutory or regulatory changes undertaken by the State or other local regulatory body to facilitate projects carried out using a grant awarded or technical assistance provided by the State under subsection (c). (h) Authorization of appropriations (1) In general There are authorized to be appropriated to the Secretary to carry out this section, to remain available until expended— (A) $150,000,000 for fiscal year 2025; and (B) $120,000,000 for each of fiscal years 2026 through 2029. (2) Indian Tribes Of the amounts made available under paragraph (1) for a fiscal year, not less than 2 percent shall be used to award grants under the program to Indian Tribes. 4. Reports on networked geothermal heating and cooling systems (a) Analysis and report Not later than 2 years after the date of enactment of this Act, the Secretary shall— (1) perform an analysis of air source and geothermal heat pump system performance, including determining the full-year, 8,760-hour coefficient of performance curves or seasonal performance factor, from a range of building types, in a variety of representative regional climate zones, and from a representative sample of heat pump models; and (2) submit to Congress and make publicly available on the website of the Department of Energy a report, to be entitled Real world considerations on the deployment of heat pump technologies , that describes— (A) factors that the Secretary is able to analyze that may impact the decision to pursue a networked geothermal heating and cooling system, such as the seasonal performance data and peak summer and winter power draw profiles for air source and geothermal heat pumps for each building type and climate region analyzed under paragraph (1); and (B) information that the Secretary is able to ascertain regarding capital or operating cost, regulatory hurdles, site considerations, or other factors. (b) Survey and report Not later than 2 years after the date of enactment of this Act, and annually thereafter, the Secretary shall submit to Congress and make publicly available on the website of the Department of Energy— (1) a compendium of available heat mapping, feasibility, or other studies undertaken by a State or the Department of Energy that serves to support decisions relating to locations, layouts, and designs for networked geothermal heating and cooling systems; (2) a repository of formatted data on the projects funded under grants awarded by States under section 3(c); and (3) a report summarizing the statutory or regulatory changes undertaken by States or localities to support or facilitate those projects. 5. Model guidance for waste heat to direct use systems Section 40556 of the Infrastructure Investment and Jobs Act ( 42 U.S.C. 18842 ) is amended— (1) in subsection (a)— (A) by redesignating paragraphs (2) and (3) as paragraphs (3) and (4), respectively; and (B) by inserting after paragraph (1) the following: (2) Waste heat to direct use system The term waste heat to direct use system means a system that directly heats a building or directly utilizes heat for other commercial or industrial applications through the recovery of waste energy. ; (2) in subsection (b)(1), by striking and waste heat to power systems and inserting , waste heat to power systems, and waste heat to direct use systems ; and (3) in subsection (c)— (A) in paragraph (2), in the matter preceding subparagraph (A), by striking and waste heat to power systems and inserting , waste heat to power systems, and waste heat to direct use systems ; and (B) in paragraph (3)(G), by striking and waste heat to power systems and inserting , waste heat to power systems, and waste heat to direct use systems .