[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 3813 Placed on Calendar Senate (PCS)]

                                                       Calendar No. 576
111th CONGRESS
  2d Session
                                S. 3813

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


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           September 21, 2010

Mr. Bingaman (for himself, Mr. Brownback, Mr. Dorgan, Ms. Collins, Mr. 
 Udall of New Mexico, Mr. Ensign, Mr. Udall of Colorado, Ms. Cantwell, 
   Mr. Johnson, Mrs. Shaheen, Mr. Harkin, Mr. Reid, Mr. Bennet, Mrs. 
    Murray, Mr. Begich, Mr. Franken, Mr. Burris, Mr. Kaufman, Mrs. 
  Feinstein, Mr. Kerry, Mr. Durbin, Mr. Cardin, Mr. Grassley, and Ms. 
 Stabenow) introduced the following bill; which was read the first time

                           September 22, 2010

            Read the second time and placed on the calendar

_______________________________________________________________________

                                 A BILL


 
    To amend the Public Utility Regulatory Policies Act of 1978 to 
   establish a Federal renewable electricity standard, 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.

    This Act may be cited as the ``Renewable Electricity Promotion Act 
of 2010''.

SEC. 2. FEDERAL RENEWABLE ELECTRICITY STANDARD.

    (a) In General.--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:

``SEC. 610. FEDERAL RENEWABLE ELECTRICITY STANDARD.

    ``(a) Definitions.--In this section:
            ``(1) Affiliate.--The term `affiliate' when used with 
        respect 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, such person, as 
        determined under regulations issued by the Secretary.
            ``(2) Base quantity of electricity.--
                    ``(A) In general.--The term `base quantity of 
                electricity' means the total quantity of electricity 
                sold by an electric utility to electric consumers in a 
                calendar year.
                    ``(B) Exclusions.--The term `base quantity of 
                electricity' does not include--
                            ``(i) electricity generated by a 
                        hydroelectric facility (including a pumped 
                        storage facility but excluding qualified 
                        hydropower) owned by an electric utility or 
                        sold under contract or rate order to an 
                        electric utility to meet the needs of the 
                        retail customers of the utility;
                            ``(ii) the quantity of electricity 
                        generated by a fossil-fuel facility that is 
                        equal to the proportion of greenhouse gases 
                        produced by such a unit that are captured and 
                        geologically sequestered; or
                            ``(iii)(I) electricity generated by a 
                        nuclear generating unit placed in service after 
                        the date of enactment of this section; or
                            ``(II) additional energy generated by an 
                        existing nuclear facility as a result of 
                        efficiency improvements or capacity additions 
                        made on or after the date of enactment of this 
                        section.
            ``(3) Biomass.--The term `biomass' has the meaning given 
        the term in section 203(b) of the Energy Policy Act of 2005 (42 
        U.S.C. 15852(b)).
            ``(4) Distributed generation facility.--The term 
        `distributed generation facility' means a facility at or near a 
        customer site that provides electric energy to 1 or more 
        customers for purposes other than resale other than to a 
        utility through a net metering arrangement.
            ``(5) Geothermal energy.--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).
            ``(6) Incremental cost of compliance.--
                    ``(A) In general .--The term `incremental cost of 
                compliance' means--
                            ``(i) the costs attributable to all retail 
                        sales of electricity incurred in a year by an 
                        electric utility to--
                                    ``(I) generate renewable energy 
                                eligible for Federal renewable energy 
                                credits;
                                    ``(II) acquire Federal renewable 
                                energy credits; or
                                    ``(III) make alternative compliance 
                                payments in order to comply with the 
                                requirements of subsection (b); less
                            ``(ii)(I) the costs the electric utility 
                        would have incurred to serve all of the retail 
                        customers of that electric utility in that year 
                        to generate or acquire additional electricity 
                        not eligible for renewable energy credits if 
                        the requirements of subsection (b) did not 
                        apply to the electric utility; and
                            ``(II) the costs of compliance with any 
                        comparable State renewable requirement.
                    ``(B) Cost of electricity.--In calculating the 
                incremental cost of compliance of an electric utility 
                under this section, the Secretary shall take into 
                account the reduction, if any, on the cost of 
                electricity generated with fossil fuels associated with 
                increased reliance on renewable electric energy 
                generation.
            ``(7) Incremental geothermal production.--
                    ``(A) In general.--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 number of kilowatt hours 
                        produced annually at the 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 that 7-year period.
                    ``(B) Special rule.--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 that 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, but not to exceed 30 percent.
            ``(8) Incremental hydropower.--
                    ``(A) In general.--The term `incremental 
                hydropower' means additional energy generated as a 
                result of efficiency improvements or capacity additions 
                made on or after January 1, 1992.
                    ``(B) Exclusion.--The term `incremental hydropower' 
                does not include additional energy generated as a 
                result of operational changes not directly associated 
                with efficiency improvements or capacity additions.
                    ``(C) Measurement and certification.--Efficiency 
                improvements and capacity additions referred to in 
                subparagraph (A) shall be--
                            ``(i) measured on the basis of the same 
                        water flow information used to determine a 
                        historic average annual generation baseline for 
                        the hydroelectric facility; and
                            ``(ii) certified by the Secretary or the 
                        Federal Energy Regulatory Commission.
            ``(9) Indian land.--The term `Indian land' has the meaning 
        given the term in section 2601 of the Energy Policy Act of 1992 
        (25 U.S.C. 3501).
            ``(10) Qualified hydropower.--
                    ``(A) In general.--The term `qualified hydropower' 
                means--
                            ``(i) incremental hydropower;
                            ``(ii) additions of capacity made on or 
                        after January 1, 2001, or the effective 
                        commencement date of an existing applicable 
                        State renewable electricity standard program at 
                        an existing nonhydroelectric dam, if--
                                    ``(I) the hydroelectric project 
                                installed on the nonhydroelectric dam--
                                            ``(aa) is licensed by the 
                                        Federal Energy Regulatory 
                                        Commission, or is exempt from 
                                        licensing, and is in compliance 
                                        with the terms and conditions 
                                        of the license or exemption; 
                                        and
                                            ``(bb) meets all other 
                                        applicable environmental, 
                                        licensing, and regulatory 
                                        requirements, including 
                                        applicable fish passage 
                                        requirements;
                                    ``(II) the nonhydroelectric dam--
                                            ``(aa) was placed in 
                                        service before the date of 
                                        enactment of this section;
                                            ``(bb) was operated for 
                                        flood control, navigation, or 
                                        water supply purposes; and
                                            ``(cc) did not produce 
                                        hydroelectric power as of the 
                                        date of enactment of this 
                                        section; and
                                    ``(III) the hydroelectric project 
                                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 
                                requirements imposed under applicable 
                                law that change the water surface 
                                elevation for the purpose of improving 
                                the environmental quality of the 
                                affected waterway, as certified by the 
                                Federal Energy Regulatory Commission; 
                                and
                            ``(iii) in the case of the State of 
                        Alaska--
                                    ``(I) energy generated by a small 
                                hydroelectric facility that produces 
                                less than 50 megawatts;
                                    ``(II) energy from pumped storage; 
                                and
                                    ``(III) energy from a lake tap.
                    ``(B) Standards.--Nothing in this paragraph or the 
                application of this paragraph shall affect the 
                standards under which the Federal Energy Regulatory 
                Commission issues licenses for and regulates hydropower 
                projects under part I of the Federal Power Act (16 
                U.S.C. 791a et seq.).
            ``(11) Qualified waste-to-energy.--The term `qualified 
        waste-to-energy' means energy from the combustion of post-
        recycled municipal solid waste, or from the gasification or 
        pyrolization of such waste and the combustion of the resulting 
        gas at the same facility, if the owner or operator of the 
        facility generating electricity from the energy provides to the 
        Commission, on an annual basis--
                    ``(A) a certification that the facility is in 
                compliance with all applicable Federal and State 
                environmental permits;
                    ``(B) in the case of a facility that commences 
                operation before the date of enactment of this section, 
                a certification that the facility meets emissions 
                standards promulgated under section 112 or 129 of the 
                Clean Air Act (42 U.S.C. 7412, 7429) that apply as of 
                the date of enactment of this section to new facilities 
                within the relevant source category; and
                    ``(C) in the case of the combustion, pyrolization, 
                or gasification of municipal solid waste, a 
                certification that each local government unit from 
                which such waste originates operates, participates in 
                the operation of, contracts for, or otherwise provides 
                for, recycling services for residents of the local 
                government unit.
            ``(12) Renewable energy.--The term `renewable energy' means 
        electric energy generated at a facility (including a 
        distributed generation facility) from--
                    ``(A) solar, wind, or geothermal energy or ocean 
                energy;
                    ``(B) biomass;
                    ``(C) landfill gas;
                    ``(D) qualified hydropower;
                    ``(E) marine and hydrokinetic renewable energy (as 
                defined in section 632 of the Energy Independence and 
                Security Act of 2007 (42 U.S.C. 17211));
                    ``(F) incremental geothermal production;
                    ``(G) coal-mined methane;
                    ``(H) qualified waste-to-energy; or
                    ``(I) another renewable energy source based on 
                innovative technology, as determined by the Secretary 
                through rulemaking.
    ``(b) Renewable Energy and Energy Efficiency Requirement.--
            ``(1) Requirement.--
                    ``(A) In general.--Subject to subparagraph (B), 
                each electric utility that sells electricity to 
                electric consumers for a purpose other than resale 
                shall obtain a percentage of the base quantity of 
                electricity the electric utility sells to electric 
                consumers in any calendar year from renewable energy or 
                energy efficiency.
                    ``(B) Percentage.--Except as provided in section 
                611, the percentage obtained in a calendar year under 
                subparagraph (A) shall not be less than the amount 
                specified in the following table:

``Calendar year:..................  Minimum annual percentage:
  2012 through 2013...............  3.0
  2014 through 2016...............  6.0
  2017 through 2018...............  9.0
  2019 through 2020...............  12.0
  2021 through 2039...............  15.0
 

            ``(2) Means of compliance.--An electric utility shall meet 
        the requirements of paragraph (1) by--
                    ``(A) submitting to the Secretary renewable energy 
                credits issued under subsection (c);
                    ``(B) submitting Federal energy efficiency credits 
                issued under subsection (i), except that those credits 
                may not be used to meet more than 26.67 percent of the 
                requirements under paragraph (1) in any calendar year;
                    ``(C) making alternative compliance payments to the 
                Secretary at the rate of 2.1 cents per kilowatt hour 
                (as adjusted for inflation under subsection (g)) if the 
                electric utility does not elect to petition the 
                Secretary to waive the requirements under subsection 
                (d)(3)(C); or
                    ``(D) a combination of activities described in 
                subparagraphs (A), (B), and (C).
            ``(3) Phase-in.--The Secretary shall prescribe, by 
        regulation, a reasonable phase-in of the requirements of 
        paragraph (1) as the requirements apply to an electric utility 
        that becomes subject to this section on or after January 1, 
        2013.
    ``(c) Federal Renewable Energy and Energy Efficiency Credit Trading 
Programs.--
            ``(1) In general.--Not later than January 1, 2012, the 
        Secretary shall establish a Federal renewable energy credit 
        trading program, and a Federal energy efficiency credit trading 
        program, under which electric utilities shall submit to the 
        Secretary Federal renewable energy credits and Federal energy 
        efficiency credits to certify the compliance of the electric 
        utilities with subsection (b)(1).
            ``(2) Administration.--As part of the program, the 
        Secretary shall--
                    ``(A) issue renewable energy credits to generators 
                of electric energy from renewable energy, regardless of 
                whether the energy is transmitted over the national 
                interstate transmission system;
                    ``(B) to the extent that renewable sources of 
                electricity are used in combination with other sources 
                of energy, issue credits only to the extent that the 
                electricity generated is from renewable resources;
                    ``(C) issue renewable energy credits to electric 
                utilities associated with State renewable electricity 
                standard compliance mechanisms pursuant to subsection 
                (h);
                    ``(D) issue energy efficiency credits pursuant to 
                subsection (i);
                    ``(E) subject to subparagraph (F), ensure that a 
                kilowatt hour, including the associated renewable 
                energy credit or energy efficiency credit, shall be 
                used only once for purposes of compliance with this 
                Act;
                    ``(F) 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), except that 
                no distributed renewable generation facilities on 
                Indian land shall receive a greater number of credits 
                than triple credits;
                    ``(G) allow triple credits for generation of energy 
                from algae;
                    ``(H) 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 to the extent that the contract does 
                not already provide for the allocation of the Federal 
                credit; and
                    ``(I) issue tradeable renewable energy credits for 
                the useful electric and thermal output from a facility 
                that produces the output from biomass, using a system 
                under which--
                            ``(i) in the case of efficiency that is 
                        less than 50 percent, 1 renewable energy credit 
                        is awarded;
                            ``(ii) in the case of efficiency that is 50 
                        percent or more but less than 70 percent, 1.1 
                        renewable energy credits are awarded for the 
                        same unit output;
                            ``(iii) in the case of efficiency that is 
                        70 percent or more but less than 90 percent, 
                        1.25 renewable energy credits are awarded for 
                        the same unit output; and
                            ``(iv) in the case of efficiency that is 90 
                        percent or more, 1.5 renewable energy credits 
                        are awarded for the same unit output.
            ``(3) Duration.--A credit described in subparagraph (A), 
        (B), (C), or (D) 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) Transfers.--An electric utility that holds credits in 
        excess of the quantity of credits needed to comply with 
        subsection (b) may transfer the credits to another electric 
        utility in the same utility holding company system.
            ``(5) Delegation of market function.--
                    ``(A) In general.--The Secretary may delegate to--
                            ``(i) an appropriate market-making entity 
                        the administration of a national renewable 
                        energy credit market and a national energy 
                        efficiency credit market for purposes of 
                        creating a transparent national market for the 
                        sale or trade of renewable energy credits and 
                        energy efficiency credits; and
                            ``(ii) regional entities the tracking of 
                        dispatch of renewable generation.
                    ``(B) Administration.--Any delegation under 
                subparagraph (A) shall ensure that the tracking and 
                reporting of information concerning the dispatch of 
                renewable generation is transparent, verifiable, and 
                independent of any generation or load interests with 
                obligations under this section. .
    ``(d) Enforcement.--
            ``(1) Civil penalties.--Any electric utility that fails to 
        meet the requirements of subsection (b) shall be subject to a 
        civil penalty.
            ``(2) Amount of penalty.--The amount of the civil penalty 
        shall be equal to the product obtained by multiplying--
                    ``(A) the number of kilowatt-hours of electric 
                energy sold to electric consumers in violation of 
                subsection (b); by
                    ``(B) 200 percent of the value of the alternative 
                compliance payment, as adjusted for inflation under 
                subsection (g).
            ``(3) Mitigation or waiver.--
                    ``(A) Penalty.--
                            ``(i) In general.--The Secretary may 
                        mitigate or waive a civil penalty under this 
                        subsection if the electric utility is unable to 
                        comply with subsection (b) due to a reason 
                        outside of the reasonable control of the 
                        electric utility.
                            ``(ii) Amount.--The Secretary shall reduce 
                        the amount of any penalty determined under 
                        paragraph (2) by the 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 (b).
                    ``(B) Requirement.--The Secretary may waive the 
                requirements of subsection (b) for a period of up to 5 
                years with respect to an electric utility if the 
                Secretary determines that the electric utility cannot 
                meet the requirements due to a hurricane, tornado, 
                fire, flood, earthquake, ice storm, or other natural 
                disaster or act of God beyond the reasonable control of 
                the utility.
                    ``(C) Ratepayer protection.--Effective beginning 
                June 1, 2010, and not later than June 1 of each year 
                thereafter, an electric utility may petition the 
                Secretary to waive, for the following compliance year, 
                all or part of the requirements of subsection (b) in 
                order to limit the rate impact of the incremental cost 
                of compliance of the electric utility to not more than 
                4 percent per retail customer in any year.
                    ``(D) Variance.--A State public utility commission 
                or electric utility may submit an application to the 
                Secretary that requests a variance from the 
                requirements of subsection (b) for 1 or more calendar 
                years (including suspension or reduction of the 
                requirements) on the basis of transmission constraints 
                preventing delivery of service.
            ``(4) Procedure for assessing penalty.--The 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 (42 U.S.C. 6303(d)).
    ``(e) Alternative Compliance Payments.--
            ``(1) In general.--An electric utility 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 or megawatt hour of 
        demonstrated total annual electricity savings that would 
        otherwise be due, a payment equal to the amount required under 
        subsection (b) in accordance with such regulations as the 
        Secretary may promulgate.
            ``(2) Payment to state funds.--An amount equal to 75 
        percent of the payments made under this subsection shall be 
        made directly to the State in which the electric utility is 
        located, if the payments are deposited directly into a fund 
        within the treasury of the State for use in accordance with 
        paragraph (3).
            ``(3) Use of grants.--The Governor of any State may expend 
        amounts in a State renewable energy escrow account solely for 
        purposes of--
                    ``(A) increasing the quantity of electric energy 
                produced from a renewable energy source in the State, 
                including nuclear and advanced coal technologies for 
                carbon capture and sequestration;
                    ``(B) promoting the deployment and use of electric 
                drive vehicles in the State, including the development 
                of electric drive vehicles and batteries; and
                    ``(C) offsetting the costs of carrying out this 
                section paid by electric consumers in the State 
                through--
                            ``(i) direct grants to electric consumers; 
                        or
                            ``(ii) energy efficiency investments.
            ``(4) Information and reports.--As a condition of providing 
        payments to a State under this subsection, the Secretary may 
        require the Governor to keep such accounts or records, and 
        furnish such information and reports, as the Secretary 
        determines are necessary and appropriate for determining 
        compliance with this subsection.
    ``(f) Exemptions.--During any calendar year, this section shall not 
apply 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, except that sales to an affiliate, lessee, or 
        tenant of the electric utility shall not be treated as sales to 
        electric consumers under this paragraph; or
            ``(2) in Hawaii.
    ``(g) Inflation Adjustment.--Not later than December 31 of each 
year beginning in 2013, the Secretary shall adjust for inflation the 
rate of the alternative compliance payment under subsection (b)(2)(C).
    ``(h) State Programs.--
            ``(1) In general.--Subject to paragraph (2), 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 or energy efficiency, or 
        the regulation of electric utilities,.
            ``(2) Compliance.--Except as provided in subsection (d)(3), 
        no such law or regulation shall relieve any person of any 
        requirement otherwise applicable under this section.
            ``(3) Coordination.--The Secretary, in consultation with 
        States having such renewable energy and energy efficiency 
        programs, shall, to the maximum extent practicable, facilitate 
        coordination between the Federal program and State programs.
            ``(4) Regulations.--
                    ``(A) In general.--The Secretary, in consultation 
                with States, shall promulgate regulations to ensure 
                that an electric utility that is subject to the 
                requirements of this section and is subject to a State 
                renewable energy standard receives renewable energy 
                credits if--
                            ``(i) the electric utility complies with 
                        the State standard by generating or purchasing 
                        renewable electric energy or renewable energy 
                        certificates or credits representing renewable 
                        electric energy; or
                            ``(ii) the State imposes or allows other 
                        mechanisms for achieving the State standard, 
                        including the payment of taxes, fees, 
                        surcharges, or other financial obligations.
                    ``(B) Amount of credits.--The amount of credits 
                received by an electric utility under this subsection 
                shall equal--
                            ``(i) in the case of subparagraph (A)(i), 
                        the quantity of renewable energy resulting from 
                        the generation or purchase by the electric 
                        utility of renewable energy; and
                            ``(ii) in the case of subparagraph (A)(ii), 
                        the pro rata share of the electric utility, 
                        based on the contributions to the mechanism 
                        made by the electric utility or customers of 
                        the electric utility, in the State, of the 
                        quantity of renewable energy resulting from 
                        those mechanisms.
                    ``(C) Prohibition on double counting.--The 
                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) Energy Efficiency Credits.--
            ``(1) Definitions.--In this subsection:
                    ``(A) Customer facility savings.--The term 
                `customer facility savings' means a reduction in the 
                consumption of end-use electricity at a facility of an 
                end-use consumer of electricity served by an electric 
                utility, as compared to--
                            ``(i) consumption at the facility during a 
                        base year, taking into account reductions 
                        attributable to causes other than energy 
                        efficiency investments (such as economic 
                        downturns, reductions in customer base, 
                        favorable weather conditions, or other such 
                        causes); or
                            ``(ii) in the case of new equipment 
                        (regardless of whether the new equipment 
                        replaces existing equipment at the end of the 
                        useful life of the existing equipment), 
                        consumption by similar equipment of average 
                        efficiency available for purchase at the time 
                        that new equipment is acquired.
                    ``(B) Electricity savings.--The term `electricity 
                savings' means--
                            ``(i) customer facility savings of 
                        electricity consumption adjusted to reflect any 
                        associated increase in fuel consumption at the 
                        facility;
                            ``(ii) reductions in distribution system 
                        losses of electricity achieved by a retail 
                        electricity distributor, as compared to losses 
                        attributable to new or replacement distribution 
                        system equipment of average efficiency (as 
                        defined by the Secretary by regulation); and
                            ``(iii) the output of new combined heat and 
                        power systems, to the extent provided under 
                        paragraph (5).
                    ``(C) Qualified electricity savings.--The term 
                `qualified electricity savings' means electricity 
                saving that meet the measurement and verification 
                requirements of paragraph (4).
            ``(2) Petition.--On petition by the Governor of a State or, 
        in the case of the power service area of the Tennessee Valley 
        Authority, the Board of Directors of the Tennessee Valley 
        Authority, the Secretary shall allow up to 26.67 percent of the 
        requirements of an electric utility under subsection (b)(1) 
        associated with the sales of electricity of the utility in the 
        State to be met by submitting Federal energy efficiency credits 
        issued pursuant to this subsection.
            ``(3) Issuance of energy efficiency credits.--
                    ``(A) In general.--The Secretary shall issue energy 
                efficiency credits for qualified electricity savings 
                achieved in States described in paragraph (2) in 
                accordance with this subsection.
                    ``(B) Qualified electricity savings.--Subject to 
                subparagraph (C), in accordance with regulations 
                promulgated by the Secretary, the Secretary shall issue 
                credits for--
                            ``(i) qualified electricity savings 
                        achieved by an electric utility on or after the 
                        date of enactment of this section; and
                            ``(ii) qualified electricity savings 
                        achieved by other entities (including State 
                        agencies) on or after the date of enactment of 
                        this section if--
                                    ``(I) the measures used to achieve 
                                the qualified electricity savings were 
                                installed or placed in operation by the 
                                entity seeking the credit; and
                                    ``(II) an electric utility eligible 
                                to receive efficiency did not pay a 
                                substantial portion of the cost of 
                                achieving the qualified electricity 
                                savings (unless the utility has waived 
                                any entitlement to the credit).
                    ``(C) Standards.--No credits shall be issued for 
                electricity savings achieved as a result of compliance 
                with a national, State, or local building, equipment, 
                or appliance efficiency standard.
            ``(4) Measurement and verification of electricity 
        savings.--Not later than January 2010, the Secretary shall 
        promulgate regulations regarding the measurement and 
        verification of electricity savings under this subsection, 
        including regulations covering--
                    ``(A) procedures and standards for defining and 
                measuring electricity savings that will be eligible to 
                receive credits under paragraph (3), which shall--
                            ``(i) specify the types of energy 
                        efficiency and energy conservation that will be 
                        eligible for the credits;
                            ``(ii) require that energy consumption for 
                        customer facilities or portions of facilities 
                        in the applicable base and current years be 
                        adjusted, as appropriate, to account for 
                        changes in weather, level of production, and 
                        building area;
                            ``(iii) account for the useful life of 
                        electricity savings measures;
                            ``(iv) include specified electricity 
                        savings values for specific, commonly-used 
                        efficiency measures; and
                            ``(v) exclude electricity savings that--
                                    ``(I) are not properly attributable 
                                to measures carried out by the entity 
                                seeking the credit;
                                    ``(II) have already been credited 
                                under this section to another entity; 
                                or
                                    ``(III) do not result from actions 
                                not intended to achieve electricity 
                                savings;
                    ``(B) procedures and standards for third-party 
                verification of reported electricity savings; and
                    ``(C) such requirements for information, reports, 
                and access to facilities as may be necessary to carry 
                out this subsection.
            ``(5) Combined heat and power.--Under regulations 
        promulgated by the Secretary, the increment of electricity 
        output of a new combined heat and power system that is 
        attributable to the higher efficiency of the combined system 
        (as compared to the efficiency of separate production of the 
        electric and thermal outputs), shall be considered electricity 
        savings under this subsection.
    ``(j) Biomass Harvesting and Sustainability.--The provisions of 
this section relating to biomass shall be administered in accordance 
with section 203(e) of the Energy Policy Act of 2005 (42 U.S.C. 
15852(e)).
    ``(k) Loans for Projects to Comply With Federal Renewable 
Electricity Standard.--
            ``(1) Purposes.--The purposes of this subsection are--
                    ``(A) to reduce the cost incurred by electric 
                utilities in complying with the requirements of this 
                section; and
                    ``(B) to minimize the impact of the requirements on 
                electricity rates for consumers.
            ``(2) Loans.--The Secretary shall make loans available to 
        electric utilities to carry out qualified projects approved by 
        the Secretary to comply with the requirements of this section.
            ``(3) Qualified projects.--
                    ``(A) In general.--A loan may be made under this 
                subsection for a project--
                            ``(i) to construct a renewable energy 
                        generation facility;
                            ``(ii) to install an energy efficiency or 
                        electricity demand reduction technology; or
                            ``(iii) to carry out any other project 
                        approved by the Secretary that the Secretary 
                        determines is consistent with the purposes of 
                        this subsection.
                    ``(B) Disapproval.--The Secretary may disapprove an 
                application for a loan for a project under this 
                subsection if the Secretary determines that--
                            ``(i) the revenues generated under the 
                        project are unlikely to be sufficient to cover 
                        the repayment obligations of the proposed loan; 
                        or
                            ``(ii) the project is not otherwise 
                        consistent with the purposes of this 
                        subsection.
            ``(4) Terms.--A loan made by the Secretary to an electric 
        utility under this subsection shall--
                    ``(A) be for a term of not to exceed 30 years; and
                    ``(B) bear an annual interest rate that is 50 basis 
                points more than the Federal funds rate established by 
                the Board of Governors of the Federal Reserve System.
            ``(5) Priority.--Notwithstanding any other provision of 
        law, the debt to the Federal Government under a loan made to an 
        electric utility under this subsection shall have priority in 
        any case in which the electric utility files for bankruptcy 
        protection under title 11, United States Code.
            ``(6) Authorization of appropriations.--There are 
        authorized to be appropriated such sums as are necessary to 
        carry out this subsection.
    ``(l) Reconsideration.--
            ``(1) Review.--
                    ``(A) In general.--Not later than January 15, 2017, 
                and every 5 years thereafter, the Secretary shall 
                review and make recommendations to Congress on the 
                program established under this section.
                    ``(B) Analysis.--The review shall analyze whether--
                            ``(i) the program established under this 
                        section has contributed to an economically 
                        harmful increase in electricity rates in 
                        regions of the United States;
                            ``(ii) the program has resulted in net 
                        economic benefits for the United States; and
                            ``(iii) new technologies and clean, 
                        renewable energy sources will advance the 
                        purposes of this section.
            ``(2) Recommendations.--The Secretary shall submit to 
        Congress recommendations on whether--
                    ``(A) the percentage of energy efficiency credits 
                eligible to be submitted under subsection (b)(1) should 
                be increased or decreased;
                    ``(B) the percentage of renewable electricity 
                required under subsection (b)(1) should be increased or 
                decreased; and
                    ``(C) the definition of `renewable energy' should 
                be expanded to reflect advances in technology or 
                previously unavailable sources of clean or renewable 
                energy.
            ``(3) Report.--Not later than January 15, 2017, the 
        Secretary shall submit to Congress a report that describes any 
        recommendations of the Secretary on changes to the program 
        established under this section.
    ``(m) Regulations.--
            ``(1) In general.--Not later than 1 year after the date of 
        enactment of this section, the Secretary shall promulgate 
        interim final rules establishing regulations implementing this 
        section.
            ``(2) Information collection.--Chapter 35 of title 44, 
        United States Code, shall not apply to any information 
        collection requirement necessary for the implementation of the 
        program established by this section.
    ``(n) Termination of Authority.--This section and the authority 
provided by this section terminate on December 31, 2039.''.
    (b) Table of Contents 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. 610. Federal renewable electricity standard.''.

SEC. 3. FEDERAL PURCHASE REQUIREMENT AMENDMENTS.

    Section 203 of the Energy Policy Act of 2005 (42 U.S.C. 15852) is 
amended--
            (1) by striking subsection (b) and inserting the following:
    ``(b) Definitions.--In this section:
            ``(1) Biomass.--The term `biomass' means the following 
        types of nonhazardous organic materials:
                    ``(A) Residues and byproducts from milled logs.
                    ``(B) Wood, paper products that are not commonly 
                recyclable, and vegetation (including trees and 
                trimmings, yard waste, pallets, railroad ties, crates, 
                and solid-wood manufacturing and construction debris), 
                if diverted from or separated from other waste out of a 
                municipal waste stream.
                    ``(C) Hazard trees, trimmings, and brush that are 
                necessary to remove in order to maintain a utility 
                right-of-way or a public road (not including any 
                unpaved road within Federal land).
                    ``(D) Trees, trimmings, and brush harvested from 
                the immediate vicinity of any building, campground, or 
                other structure in wildfire-prone areas to reduce the 
                risk to the structure or campground or to human life 
                from wildfires.
                    ``(E) Invasive species (as defined in Executive 
                Order 13112 (42 U.S.C. 4321 note; relating to invasive 
                species)) removed to control or eradicate the invasive 
                species.
                    ``(F) Animal waste and animal byproducts (including 
                biogas and any solid produced by micro-organisms).
                    ``(G) Food waste.
                    ``(H) Algae.
                    ``(I) Slash, brush, trees, and other vegetation 
                that is harvested from non-Federal land or Indian 
                land--
                            ``(i) that is, at the time of harvest--
                                    ``(I) naturally regenerated forest 
                                land;
                                    ``(II) forest land that was planted 
                                for the purpose of restoring land to a 
                                naturally regenerated forest; or
                                    ``(III) if harvested in quantities 
                                and through practices that maintain or 
                                contribute toward the restoration of 
                                the species, ecological systems, and 
                                ecological communities for which the 
                                conservation forest land was 
                                identified, conservation forest land; 
                                or
                            ``(ii) that is--
                                    ``(I) at the time of harvest, 
                                planted forest land; and
                                    ``(II) on the date of enactment of 
                                this section, cropland (including 
                                fallow land), pastureland, or planted 
                                forest land.
                    ``(J) Crops, crop byproducts, and crop residues 
                from non-Federal land or Indian land that is--
                            ``(i) at the time of harvest, not forest 
                        land; and
                            ``(ii) on the date of enactment of this 
                        section--
                                    ``(I) cropland (including fallow 
                                land and not including planted forest 
                                land); or
                                    ``(II) pastureland.
                    ``(K) If harvested from Federal land in accordance 
                with applicable law and land management plans and in 
                quantities and through practices that maintain or 
                contribute toward the restoration of ecological 
                sustainability--
                            ``(i) slash; and
                            ``(ii) brush and trees that are byproducts 
                        of ecological restoration, disease or insect 
                        infestation control, or hazardous fuels 
                        reduction treatments and--
                                    ``(I) are from stands that--
                                            ``(aa) were killed by an 
                                        insect or disease epidemic or a 
                                        natural disaster; and
                                            ``(bb) do not meet the 
                                        utilization standards for 
                                        sawtimber; or
                                    ``(II) do not exceed the minimum 
                                size standards for sawtimber.
            ``(2) Conservation forest land.--
                    ``(A) In general.--The term `conservation forest 
                land' means forest land that contains a species, or 
                includes all or part of an ecological system or 
                community, that is at risk of extinction or elimination 
                within a State or globally.
                    ``(B) Identification.--Conservation forest land 
                shall be identified based on the best available science 
                and data by any of--
                            ``(i) the State in which the land is 
                        located, unless the land is under the 
                        jurisdiction of an Indian tribe;
                            ``(ii) an Indian tribe with jurisdiction 
                        over the land; or
                            ``(iii) in consultation with the State in 
                        which the land is located or the Indian tribe 
                        with jurisdiction over the land--
                                    ``(I) the Secretary of Agriculture; 
                                or
                                    ``(II) the Secretary of the 
                                Interior.
                    ``(C) Exceptions.--A tract of conservation forest 
                land may not be removed from conservation forest land 
                status under this section as a result of land 
                management practices on the tract that--
                            ``(i) occurred on or after the date of 
                        enactment of this subparagraph; and
                            ``(ii) contributed toward the elimination 
                        of the species, or all or part of an ecological 
                        system or ecological community, for which the 
                        land was identified as conservation forest 
                        land.
            ``(3) Federal land.--
                    ``(A) In general.--The term `Federal land' means--
                            ``(i) National Forest System land; and
                            ``(ii) public lands (as defined in section 
                        103 of the Federal Land Policy and Management 
                        Act of 1976 (43 U.S.C. 1702)).
                    ``(B) Exclusions.--
                            ``(i) In general.--The term `Federal land' 
                        does not include--
                                    ``(I) any area designated by 
                                Congress to be administered for 
                                conservation purposes; or
                                    ``(II) a National Monument 
                                proclaimed by the President.
                            ``(ii) Old growth or late successional 
                        forest stands.--The term `Federal land' does 
                        not include an old growth or late successional 
                        forest stand unless biomass from the stand does 
                        not exceed the minimum size standards for 
                        sawtimber and is a byproduct of an ecological 
                        restoration treatment that fully maintains, or 
                        contributes toward the restoration of, the 
                        structure and composition of an old growth 
                        forest stand in accordance with the old growth 
                        conditions characteristic of the forest type 
                        and retains the large trees contributing to old 
                        growth structure.
            ``(4) Indian land.--The term `Indian land' has the meaning 
        given the term `Indian country' in section 1151 of title 18, 
        United States Code.
            ``(5) 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. 450b).
            ``(6) Non-federal land.--The term `non-Federal land' means 
        land that is not owned by the Federal Government.
            ``(7) Renewable energy.--The term `renewable energy' means 
        energy generated from solar, wind, biomass, landfill gas, ocean 
        (including tidal, wave, current, and thermal), geothermal, 
        municipal solid waste, or new hydroelectric generation capacity 
        achieved from increased efficiency or additions of new capacity 
        at an existing hydroelectric project.
            ``(8) Secretary concerned.--The term `Secretary concerned' 
        means--
                    ``(A) the Secretary of Agriculture, with regard 
                to--
                            ``(i) National Forest System land; and
                            ``(ii) except as provided by subparagraph 
                        (B), non-Federal land; and
                    ``(B) the Secretary of the Interior, with regard 
                to--
                            ``(i) public lands (as defined in section 
                        103 of the Federal Land Policy and Management 
                        Act of 1976 (43 U.S.C. 1702)); and
                            ``(ii) Indian land.''; and
            (2) by adding at the end the following:
    ``(e) Biomass Harvesting and Sustainability.--
            ``(1) In general.--The Secretaries concerned shall 
        administer the provisions covered by subsection (b)(1) relating 
        to the harvesting of biomass from Federal land and forest land.
            ``(2) Inter-agency biomass sustainability study.--
                    ``(A) In general.--The Secretary, in consultation 
                with the Secretary of Agriculture, the Secretary of the 
                Interior, and the Administrator of the Environmental 
                Protection Agency, shall conduct a study that assesses 
                the impacts of biomass harvesting for energy production 
                on--
                            ``(i) landscape-level water quality, soil 
                        productivity, wildlife habitat, and 
                        biodiversity; and
                            ``(ii) conservation forest land.
                    ``(B) Timing.--The Secretary shall--
                            ``(i) complete the study required under 
                        this paragraph not later than 5 years after the 
                        date of enactment of this subsection; and
                            ``(ii) update the study not later than 
                        every 5 years thereafter.
                    ``(C) Basis.--The Secretary shall base the study on 
                the best available data and science.
                    ``(D) Recommendations.--The Secretary shall include 
                in the study such recommendations as are appropriate to 
                reduce the impacts described in subparagraph (A).
                    ``(E) Public participation and availability.--In 
                carrying out this paragraph, the Secretary shall--
                            ``(i) consult with States, Indian tribes, 
                        and other interested stakeholders;
                            ``(ii) make available, and seek public 
                        comment on, a draft version of the study 
                        results; and
                            ``(iii) make the final study results 
                        available to the public.''.
                                                       Calendar No. 576

111th CONGRESS

  2d Session

                                S. 3813

_______________________________________________________________________

                                 A BILL

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

_______________________________________________________________________

                           September 22, 2010

            Read the second time and placed on the calendar