II 118th CONGRESS 1st Session S. 2673 IN THE SENATE OF THE UNITED STATES July 27, 2023 Mr. Menendez (for himself and Mr. Risch ) introduced the following bill; which was read twice and referred to the Committee on Foreign Relations A BILL To ensure European, including Ukrainian, energy security, protect, modernize, and rebuild European energy resources and infrastructure according to accepted principles of international good governance, and support European efforts to reduce the reliance of allied European countries on imported Russian energy resources, and for other purposes.

1. Short title This Act may be cited as the Responding to the Energy Security Crisis in Ukraine and Europe (RESCUE) Act of 2023 . 2. Sense of Congress on energy resource implications of the Russian Federation’s invasion of Ukraine It is the sense of Congress that the United States should support allies and partners’ efforts to reduce dependence on imported Russian energy resources and enhance energy security in a manner that reinforces the sovereignty of these democratic countries by diversifying and securing their energy supplies and mobilizing domestic energy resource production by— (1) working to ban all imports of Russian energy resources to the United States; (2) increasing the access of European partners and allies to immediate energy resources necessitated by the Russian Federation’s invasion of Ukraine and the resulting global energy crisis; (3) supporting Europe’s development and deployment of emerging and advanced energy technologies to ensure countries’ energy security and diversification away from Russian-controlled energy resources; (4) recognizing that the severity and cost of Russia’s damage to Ukraine’s energy infrastructure is dynamic and continues to worsen, as explained in the World Bank’s second Ukraine Rapid Damage and Needs Assessment for February 2022-February 2023, which estimates that— (A) current damage and losses to Ukraine’s energy sector is estimated to be $27,000,000,000, which is more than double the level in the fall of 2022 ($12,000,000,000); (B) damage to power, gas, and heating infrastructure and coal mining, as of February 24, 2023, was above $10,000,000,000 as compared to an estimated $2,000,000,000 on June 1, 2022; (C) the largest share of damage is in the electricity production and transmission sector and is estimated to be close to $6,500,000,000 in damage; and (D) Ukraine’s gas sector has sustained an estimated $1,200,000,000 in damage, which includes damage to gas distribution infrastructure, as well as damage reported by the gas transmission system operator; (5) supporting Ukraine’s efforts to rebuild and modernize its energy infrastructure, according to internationally accepted standards of transparency and good governance, including promoting long-term energy independence from Russia with reliable energy resources in line with the Government of Ukraine’s efforts to integrate with the energy markets and principles of Europe; (6) supporting Ukraine’s prospective membership in and integration with the European Union (EU), including through alignment with policies like the EU’s 20/20/20 objectives and through the synchronization and commercial integration of the Ukrainian, Moldovan, and Baltic electric power systems with the central European power system, operated by the member of the European Network of Transmission System Operators for Electricity (ENTSO–E); (7) utilizing the Development Finance Corporation, which has unique capabilities to help finance, convene other countries’ development finance institutions, and mobilize private finance in support of efforts to restore and reconstruction Ukraine’s energy sector and improve European energy security; (8) condemning attacks and any other efforts by Russian Federation forces, Russian Federation officials, or its proxies to cut off Ukrainian electricity generation units or portions of the Ukrainian electrical grid and annex these assets into the Russian electrical grid system; (9) condemning all efforts by the Russian Federation, its proxies, or other malign actors to interfere with Ukraine’s power networks, electricity transmission, and electricity generation units, including theft, destruction, or acts of sabotage of infrastructure; (10) providing technical assistance to Ukraine, Moldova, and European allies and partners of the United States to build resilience and incident response and recovery capacities against cyberattacks on energy infrastructure; (11) supporting Ukrainian efforts to meet European and industry standards on corporate governance, transparency in contracting and procurement, and independence from political pressure; (12) working with the International Atomic Energy Agency (IAEA) to implement needed safety and security requirements; (13) providing support to Eastern and Central European countries whose energy import, storage, and generation capacity was negatively affected by the Russian Federation’s invasion of Ukraine, and improving the resilience and safety of nuclear energy infrastructure in the region, including at Ukrainian nuclear facilities; (14) cooperating on activities to support Eastern and Central European countries affected by Russian Federation forces’ invasion of Ukraine, in keeping with the European Commission’s plan to make Europe independent from Russian fossil fuels well before 2030 , including via measures to respond to rising energy prices and efforts to replenish gas stocks for next winter ; and (15) encouraging United States private sector investment and public-private partnerships in the Three Seas Initiative to facilitate resilient development of European energy, transport, and digital sectors. 3. Supporting Ukraine’s energy sector reconstruction, security, and modernization (a) In general The Secretary of State, in coordination with the heads of relevant Federal departments and agencies, as defined in section 11, shall conduct activities to increase Ukrainian access to energy resources to meet immediate needs, reconstruct energy infrastructure damaged by the Russian Federation forces’ attacks, and modernize and reconstruct Ukraine’s energy sector overall in accordance with international standards of efficiency, transparency, and good governance. These efforts to assist the modernization of Ukraine’s energy sector should begin immediately, where possible. (b) Purposes The Secretary of State, in consultation with the Administrator of the United States Agency for International Development and heads of other relevant Federal departments and agencies, shall provide assistance to the Government of Ukraine for the acquisition of energy resources and equipment to meet critical needs and prevent power disruption resulting from attacks, malevolent acts, or other actions perpetrated by the Russian Federation or its proxies. (c) Notification Congress shall be notified of any provision of assistance over $500,000 provided under subsection (b) not less than 14 days prior to the date of intended obligation of funds. (d) Certification requirement Of the funds authorized to be appropriated under section 10, not more than half shall be made available until the Secretary submits a certification to the relevant congressional committees that— (1) the Supervisory Boards of UkrEnergo, Naftogaz, and Energoatom remain independent and capable of executing their roles and responsibilities, free from undue political or oligarchic influence; (2) UkrEnergo, Naftogaz, and Energoatom continue to follow international best practices, including applicable IMF standards and conditions, related to board selection, corporate governance, anti-corruption measures, and transparent accounting and procurement; and (3) United States assistance is not supporting grants, contracts, or subcontracts to entities owned or controlled by the Government of the People’s Republic of China. 4. Efforts to reduce European reliance on Russian energy (a) Establishment The Secretary of State, in coordination with the heads of the relevant Federal departments and agencies, shall implement and conduct activities to reduce the reliance of qualified Central, Eastern, and Southeastern European countries on energy resources controlled or exported by Russia and diversify energy resources, supplies, and routes by— (1) supporting— (A) the identification and coordination of international financial products and technical assistance supporting planning activities for improving or restoring energy security, providing operational efficiencies in energy systems, recovering energy resources, or modernizing energy systems; (B) the procurement of resources, materials, equipment, and services that support the efforts described in subparagraph (A); (C) the construction of infrastructure related to the production of energy, generation, transmission, and distribution of electricity and powering of transportation that does not rely wholly or principally on Russian energy resources; and (D) the reconstruction or modernization of energy-related infrastructure damaged or destroyed due to the Russian Federation’s war against Ukraine, in accordance with internationally accepted norms of transparency and corporate governance; (2) providing qualified Central, Eastern, and Southeastern European countries, in accordance with subsection (b), under such terms and conditions as the Secretary of State determines appropriate, with awards, loans, or loan guarantees to carry out projects to develop or purchase assets, resources, materials, or equipment, that can reduce the reliance of those countries on exported Russian energy resources; and (3) providing technical assistance to qualified Central, Eastern, and Southeastern European countries, as defined under section 11 as the Secretary of State, in coordination with the heads of relevant Federal departments and agencies, determines necessary to reduce those countries’ reliance on Russian energy resources. (b) Country prioritization and exceptions The Secretary of State, in consultation with the heads of relevant Federal departments and agencies, shall prioritize the provision of support, including financial support to qualified Central, Eastern, and Southeastern European countries that are determined to be vulnerable to Russian coercive energy practices. (c) Partnerships The Secretary of State, in coordination with the heads of other relevant Federal departments and agencies, may carry out the activities established under subsection (a), including pursuing blended finance opportunities and joint investment projects with other appropriate development finance institutions of other countries. (d) Authority To enter into arrangements In carrying out the activities established under subsection (a), the Secretary of State, in coordination with the heads of the relevant Federal departments and agencies, may enter into one or more arrangements directly with qualified Central and Eastern European countries and third parties under such terms and conditions as the Secretary of State determines appropriate. (e) Domestic sourcing considerations (1) In general Except as provided in paragraph (2), the Secretary of State shall, to the maximum extent practicable, prioritize support for activities described in paragraph (1), (2), or (3) of subsection (a) that— (A) promote manufacturing in the United States; or (B) utilize resources, services, materials, or equipment that is sourced in the United States. (2) Exception Paragraph (1) shall not apply with respect to an activity described in paragraph (1), (2), or (3) of subsection (a) if the Secretary of State certifies that the activity cannot reasonably satisfy the criteria set forth in subparagraphs (A) and (B) of paragraph (1) of this subsection. (f) Reports Not later than 1 year after the date of the enactment of this Act, and annually thereafter for 3 years, the Secretary of State shall submit to the Committee on Foreign Relations and the Committee on Energy and Natural Resources of the Senate and the Committee on Foreign Affairs and the Committee on Energy and Commerce of the House of Representatives a report that— (1) identifies any resources, materials, or equipment developed, produced, procured, or provided pursuant to the activities described in subsection (a); and (2) provides an analysis of how such activities benefit United States energy resource suppliers and equipment manufacturers. 5. Ukraine and Moldova integration into the European power grid (a) Technical assistance and consultation The Administrator of the United States Agency for International Development, under the direction of the Secretary of State and in coordination with heads of relevant Federal agencies as described in this section, shall— (1) provide technical assistance and expert consultation to the Government of Moldova, the Government of Ukraine, the European Commission, and relevant stakeholders in support of completing the integration of Moldova and Ukraine into the ENTSO–E system in order to bolster the stability of Moldova and Ukraine’s electricity supply; (2) leverage available expertise to support full commercialization of Moldova and Ukraine’s interconnection with ENTSO–E systems; and (3) engage with European Union counterparts in support of full commercialization of Moldova and Ukraine’s interconnection with the ENTSO–E system. (b) Use of transfer authorities The Secretary of Energy shall take full advantage of transfer authorities to allow for maximum flexibility in utilizing expertise and resources within the Department’s Offices of Electricity and Cybersecurity, Energy Security, and Emergency Response. (c) Concurrence for activities related to activities for responding to the situation in Ukraine The Secretary of Energy shall only act with the concurrence of the Secretary and the Administrator when executing activities pursuant to title IV of the Ukraine Supplemental Appropriations Act, 2022 (division N of Public Law 117–103 ; 136 Stat. 780) and when appropriate transfer amounts to the Department of State and the United States Agency for International Development to carry out such activities. (d) Sense of Congress It is the Sense of Congress that the European Union should work expeditiously to support the synchronization of the Baltic States’ grid with ENTSO–E. 6. Initiatives for technical assistance for grid modernization, energy efficiency, and energy storage in qualified Central and Eastern European countries (a) In general The Secretary of State, in consultation with the heads of the relevant Federal departments and agencies, shall support new and existing initiatives, as appropriate, to provide technical assistance and expertise on electrical grids, energy efficiency, and energy storage integration into pre-existing and new power facilities improvements in qualified Central and Eastern European countries for purposes such as— (1) expanding and improving the reliability, flexibility, and resilience of the electrical grid to reach all regions and populations; (2) developing decentralized power grids and microgrids or distributed energy resources in areas in which connection to the larger electrical grid is challenging; (3) supporting initiatives of qualified Central, Eastern and Southeastern European countries to optimally integrate renewable and clean energy into their electrical grids; (4) enhancing the interconnectivity of electrical grids across Central and Eastern Europe; (5) developing standards for advanced energy technologies, smart buildings, and data centers; (6) increasing deployment of smart meters, heat pumps, and other energy efficiency technologies; (7) increasing the energy efficiency of buildings, appliances, and the industrial sector; (8) improving pollution controls and the efficiency of district heating systems and fossil fuel electric generating units; (9) evaluating the feasibility of retrofitting existing energy production facilities with appropriate energy storage technologies and encouraging and supporting the deployment of energy storage retrofits when practicable; and (10) providing technical assistance and support for planning, engineering, and deployment of energy storage systems for new and existing power production facilities, including promoting, to the extent practicable— (A) regulatory reforms and transparency of power production, delivery, and pricing to support long-term market-based energy storage; (B) nondiscriminatory reliable and affordable energy storage projects to promote economic growth and job creation; (C) United States exports to support United States private sector entities in contributing to energy and environmental solutions around the world and promote best practices regarding environmental, safety, corporate governance, and cyber and physical protection standards; and (D) the facilitation of public-private partnerships, to make inclusion of energy storage in new and existing power facilities practicable. (b) Consultation In carrying out subsection (a), the Secretary of State, in consultation with the heads of the relevant Federal departments and agencies, and with the cooperation of the governments of qualified Central and Eastern European countries and, as appropriate, regional authorities in Central and Eastern European countries, shall coordinate with international financial institutions and regional economic communities, cooperatives, and the private sector. 7. Mitigating environmental hazards in Ukraine (a) Sense of Congress It is the sense of Congress that Russia’s invasion of Ukraine has and will continue to contribute to significant environmental damage, some of which will be irreparable, and will threaten the health and lives of people living in Ukraine for many years to come. This damage includes— (1) contamination of a significant portion of Ukraine with unexploded ordnance; (2) the bombing of factories and industrial complexes that used or produced toxic materials; and (3) contamination of the Black Sea and the Azov Sea. (b) Establishment The Secretary of State, in consultation with the Administrator of the United States Agency for International Development, the Administrator of the Environmental Protection Agency, the Secretary of Agriculture, and the heads of other relevant Federal agencies, shall leverage institutional expertise to aid the Government of Ukraine in— (1) environmental remediation and restoration; (2) toxic chemical cleanup, including asbestos, metals, radioactive waste, combustion products, debris, and weapons residues; (3) the restoration of utility services that provide— (A) municipal drinking water; (B) wastewater and sewage services; (C) industrial water supplies; and (D) related utility infrastructure; (4) the restoration of forests, parks, natural and pastoral landscapes, and habitats; and (5) remedial work to remove and neutralize toxic effects of war activities on soils, ground and surface water resources, and air. (c) Purposes Funds authorized for this section under section 10 shall be used for activities of the Secretary of State, in consultation, as appropriate, with the United States Agency for International Development, to support the initial planning for rebuilding sustainable, inclusive, and resilient cities in Ukraine through— (1) evaluating and making assessments on the scope of environmental harms from war actions; (2) environmental remediation; (3) restoration of environmental services; and (4) repair, recovery, and replacement of destroyed or damaged utility infrastructure. (d) Notification Congress shall be notified of any provision of assistance over $500,000 provided under subsection (c) of this section not less than 14 days prior to the date of intended obligation of funds. 8. Supporting nuclear safety and security in Ukraine (a) Purpose To ensure the safety and security of Ukraine’s nuclear power plants (NPPs), including the Zaporizhzhya Nuclear Power Plant (ZNPP) in southern Ukraine, and the communities proximate to Ukraine’s 4 NPPs, prevent Russia’s theft or sabotage of resources, technology, and energy produced by the NPPs, and facilitate the continued service of the NPPs to the Ukrainian power grid, the Secretary of State, in coordination with the Secretary of Energy, shall— (1) coordinate and support efforts to prevent Russia’s— (A) further sabotage of the ZNPP and other Ukrainian NPPs; (B) forced disconnection of the ZNPP or any other Ukrainian NPPs from the Ukrainian power grid; (C) theft and transport of fuel, equipment, or other resources from the ZNPP or any other Ukrainian NPP; (D) unilateral rerouting of generated electricity from the ZNPP and other Ukrainian electricity generation units such as other NPPs to Russia or Russian controlled territories; and (E) theft of United States intellectual property belonging to United States companies who have partnered with Ukrainian NPPs; (2) support the International Atomic Energy Agency’s efforts to ensure the 7 indispensable pillars for ensuring nuclear safety and security during armed conflict are adhered to throughout Ukraine; and (3) provide nuclear disaster safety assistance and associated personal protective equipment, including iodine, to Ukrainian communities most likely to be directly impacted by a potential nuclear disaster at ZNPP stemming from Russian authorities’ irresponsible management and military activity in and around the ZNPP. 9. Oversight and Inspectors General (a) Oversight by Inspectors General The Inspector General of the Department of State and the Inspector General of the United States Agency for International Development, through or in coordination with the Ukraine Oversight Interagency Working Group and any other relevant Inspectors General, shall conduct oversight of the activities authorized by this Act to ensure independent and effective oversight of such programs and operations through joint or individual audits, inspections, investigations, and evaluations, as appropriate. (b) Reports Not later than one year after the date of the enactment of this Act, and semiannually thereafter for 3 years, the Inspectors General described in subsection (a) shall submit to the Committee on Foreign Relations of the Senate and the Committee on Foreign Affairs of the House of Representatives a report describing the oversight activities conducted regarding the programs and assistance authorized by this Act. The report may be submitted as part of a report by the Ukraine Oversight Interagency Working Group, in conjunction with other reports related to Ukraine oversight. 10. Authorized amounts There is authorized to be appropriated $1,880,000,000 for the Secretary of State and the Administrator of the United States Agency for International Development to carry out the programs and functions of this Act, of which not less than— (1) $1,100,000,000 shall be authorized for activities under section 3; and (2) $500,000,000 shall be authorized for activities under section 4. 11. Definitions In this Act: (1) Qualified Central, Eastern, and Southeastern European partners The term qualified Central, Eastern, and Southeastern European partners means European countries that are eligible for project support pursuant to the European Energy Security and Diversification Act of 2019 (title XX of division P of Public Law 116–94 ). This definition shall not be construed as imposing new requirements or restrictions pursuant to the Better Utilization of Investments Leading to Development Act of 2018 (division F of Public Law 115–254 ) on Federal agencies. (2) Relevant Federal departments and agencies The term relevant Federal departments and agencies means— (A) the Department of Energy; (B) the United States Trade and Development Agency; (C) the Millennium Challenge Corporation; and (D) other Federal agencies as considered appropriate by the Secretary or Administrator.