1.Renewable portfolio standard
(a)Title VI of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2601 et seq.) is amended by adding at the end the following:
610.Federal renewable portfolio standard
(a)Renewable energy requirement
(1)Each electric utility that sells electricity to electric consumers shall obtain a percentage of the base amount of electricity it sells to electric consumers in any calendar year from new renewable energy or existing renewable energy. The percentage obtained in a calendar year shall not be less than the amount specified in the following table:
Minimum annual
Calendar years:percentage:
20101
20112
20124
20136
20148
201510
201612
201714
201816
201918
202020
202121
202222
202323
202424
202525.
(2)An electric utility shall meet the requirements of paragraph (1) by—
(A)submitting to the Secretary renewable energy credits issued under subsection (b);
(B)making alternative compliance payments to the Secretary at the rate of 2 cents per kilowatt hour (as adjusted for inflation under subsection (g)); or
(C)a combination of activities described in subparagraphs (A) and (B).
(b)Renewable energy credit trading program
(1)Not later than July 1, 2009, the Secretary shall establish a renewable energy credit trading program under which electric utilities shall submit to the Secretary renewable energy credits to certify the compliance of the electric utilities with respect to obligations under subsection (a)(1).
(2)As part of the program, the Secretary shall—
(A)issue tradeable renewable energy credits to generators of electric energy from new renewable energy;
(B)issue nontradeable renewable energy credits to generators of electric energy from existing renewable energy;
(C)issue renewable energy credits to electric utilities associated with State renewable portfolio standard compliance mechanisms pursuant to subsection (h);
(D)ensure that a kilowatt hour, including the associated renewable energy credit, shall be used only once for purposes of compliance with this Act;
(E)allow double credits for generation from facilities on Indian land, and triple credits for generation from small renewable distributed generators (meaning those no larger than 1 megawatt); and
(F)ensure that, with respect to a purchaser that, as of the date of enactment of this section, has a purchase agreement from a renewable energy facility placed in service before that date, the credit associated with the generation of renewable energy under the contract is issued to the purchaser of the electric energy.
(3)A credit described in subparagraph (A) or (B) of paragraph (2) may only be used for compliance with this section during the 3-year period beginning on the date of issuance of the credit.
(4)An electric utility that holds credits in excess of the quantity of credits needed to comply with subsection (a) may transfer the credits to another electric utility in the same utility holding company system.
(5)Delegation of market functionThe Secretary may delegate to an appropriate market-making entity the administration of a national tradeable renewable energy credit market for purposes of creating a transparent national market for the sale or trade of renewable energy credits.
(c)
(1)Any electric utility that fails to meet the compliance requirements of subsection (a) shall be subject to a civil penalty.
(2)The amount of the civil penalty shall be determined by multiplying the number of kilowatt-hours of electric energy sold to electric consumers in violation of subsection (a) by the greater of 2 cents (adjusted for inflation under subsection (g)) or 200 percent of the average market value of renewable energy credits during the year in which the violation occurred.
(3)The Secretary may mitigate or waive a civil penalty under this subsection if the electric utility was unable to comply with subsection (a) for reasons outside of the reasonable control of the utility. The Secretary shall reduce the amount of any penalty determined under paragraph (2) by an amount paid by the electric utility to a State for failure to comply with the requirement of a State renewable energy program if the State requirement is greater than the applicable requirement of subsection (a).
(4)Procedure for assessing penaltyThe Secretary shall assess a civil penalty under this subsection in accordance with the procedures prescribed by section 333(d) of the Energy Policy and Conservation Act of 1954 (42 U.S.C. 6303).
(d)State renewable energy account program
(1)The Secretary shall establish, not later than December 31, 2008, a State renewable energy account program.
(2)All money collected by the Secretary from alternative compliance payments and the assessment of civil penalties under this section shall be deposited into the renewable energy account established pursuant to this subsection. The State renewable energy account shall be held by the Secretary and shall not be transferred to the Treasury Department.
(3)Proceeds deposited in the State renewable energy account shall be used by the Secretary, subject to appropriations, for a program to provide grants to the State agency responsible for developing State energy conservation plans under section 362 of the Energy Policy and Conservation Act (42 U.S.C. 6322) for the purposes of promoting renewable energy production, including programs that promote technologies that reduce the use of electricity at customer sites such as solar water heating.
(4)The Secretary may issue guidelines and criteria for grants awarded under this subsection. State energy offices receiving grants under this section shall maintain such records and evidence of compliance as the Secretary may require.
(5)In allocating funds under this program, the Secretary shall give preference—
(A)to States in regions which have a disproportionately small share of economically sustainable renewable energy generation capacity; and
(B)to State programs to stimulate or enhance innovative renewable energy technologies.
(e)The Secretary shall issue rules implementing this section not later than 1 year after the date of enactment of this section.
(f)This section shall not apply in any calendar year to an electric utility—
(1)that sold less than 4,000,000 megawatt-hours of electric energy to electric consumers during the preceding calendar year; or
(2)in Hawaii.
(g)Not later than December 31 of each year beginning in 2008, the Secretary shall adjust for inflation the price of a renewable energy credit under subsection (b)(2) and the amount of the civil penalty per kilowatt-hour under subsection (c)(2).
(h)
(1)Nothing in this section diminishes any authority of a State or political subdivision of a State to adopt or enforce any law or regulation respecting renewable energy, but, except as provided in subsection (c)(3), no such law or regulation shall relieve any person of any requirement otherwise applicable under this section. The Secretary, in consultation with States having such renewable energy programs, shall, to the maximum extent practicable, facilitate coordination between the Federal program and State programs.
(2)
(A)The Secretary, in consultation with States, shall promulgate regulations to ensure that an electric utility subject to the requirements of this section that is also subject to a State renewable energy standard receives renewable energy credits in relation to equivalent quantities of renewable energy associated with compliance mechanisms, other than the generation or purchase of renewable energy by the electric utility, including the acquisition of certificates or credits and the payment of taxes, fees, surcharges, or other financial compliance mechanisms by the electric utility or a customer of the electric utility, directly associated with the generation or purchase of renewable energy.
(B)Prohibition on double countingThe regulations promulgated under this paragraph shall ensure that a kilowatt hour associated with a renewable energy credit issued pursuant to this subsection shall not be used for compliance with this section more than once.
(i)
(1)The Commission shall issue and enforce such regulations as are necessary to ensure that an electric utility recovers all prudently incurred costs associated with compliance with this section.
(2)A regulation under paragraph (1) shall be enforceable in accordance with the provisions of law applicable to enforcement of regulations under the Federal Power Act (16 U.S.C. 791a et seq.).
(j)Wind energy development studyThe Secretary, in consultation with appropriate Federal and State agencies, shall conduct, and submit to Congress a report describing the results of, a study on methods to increase transmission line capacity for wind energy development.
(k)In this section:
(1)Base amount of electricityThe term base amount of electricity means the total amount of electricity sold by an electric utility to electric consumers in a calendar year, excluding municipal waste and electricity generated by a hydroelectric facility (including a pumped storage facility, but excluding incremental hydropower).
(2)Distributed generation facilityThe term distributed generation facility means a facility at a customer site.
(3)Existing renewable energyThe term existing renewable energy means, except as provided in paragraph (7)(B), electric energy generated at a facility (including a distributed generation facility) placed in service prior to January 1, 2001, from solar, wind, or geothermal energy, ocean energy, biomass (as defined in section 203(a) of the Energy Policy Act of 2005), or landfill gas.
(4)The term geothermal energy means energy derived from a geothermal deposit (within the meaning of section 613(e)(2) of the Internal Revenue Code of 1986).
(5)Incremental geothermal production
(A)The term incremental geothermal production means for any year the excess of—
(i)the total kilowatt hours of electricity produced from a facility (including a distributed generation facility) using geothermal energy; over
(ii)the average annual kilowatt hours produced at such facility for 5 of the previous 7 calendar years before the date of enactment of this section after eliminating the highest and the lowest kilowatt hour production years in such 7-year period.
(B)A facility described in subparagraph (A) that was placed in service at least 7 years before the date of enactment of this section shall, commencing with the year in which such date of enactment occurs, reduce the amount calculated under subparagraph (A)(ii) each year, on a cumulative basis, by the average percentage decrease in the annual kilowatt hour production for the 7-year period described in subparagraph (A)(ii) with such cumulative sum not to exceed 30 percent.
(6)The term incremental hydropower means additional energy generated as a result of efficiency improvements or capacity additions made on or after January 1, 2001, or the effective date of an existing applicable State renewable portfolio standard program at a hydroelectric facility that was placed in service before that date. The term does not include additional energy generated as a result of operational changes not directly associated with efficiency improvements or capacity additions. Efficiency improvements and capacity additions shall be measured on the basis of the same water flow information used to determine a historic average annual generation baseline for the hydroelectric facility and certified by the Secretary or the Federal Energy Regulatory Commission.
(7)The term new renewable energy means—
(A)electric energy generated at a facility (including a distributed generation facility) placed in service on or after January 1, 2001, from—
(i)solar, wind, or geothermal energy or ocean energy;
(ii)biomass (as defined in section 203(b) of the Energy Policy Act of 2005 (42 U.S.C. 15852(b));
(iii)landfill gas; or
(iv)incremental hydropower; and
(B)for electric energy generated at a facility (including a distributed generation facility) placed in service prior to the date of enactment of this section—
(i)the additional energy above the average generation in the 3 years preceding the date of enactment of this section at the facility from—
(I)solar or wind energy or ocean energy;
(II)biomass (as defined in section 203(b) of the Energy Policy Act of 2005 (42 U.S.C. 15852(b));
(III)landfill gas; or
(IV)incremental hydropower.
(ii)incremental geothermal production.
(8)The term ocean energy includes current, wave, tidal, and thermal energy.
(l)This section expires on December 31, 2040. .
(b)Table of contents amendmentThe 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. 610. Federal renewable portfolio standard. .