[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 433 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                 S. 433

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


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 12, 2009

    Mr. Udall of New Mexico (for himself and Mr. Udall of Colorado) 
introduced the following bill; which was read twice and referred to the 
               Committee on Energy and Natural Resources

_______________________________________________________________________

                                 A BILL


 
    To amend the Public Utility Regulatory Policies Act of 1978 to 
  establish a 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. 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. RENEWABLE ELECTRICITY STANDARD.

    ``(a) Definitions.--In this section:
            ``(1) Base quantity of electricity.--
                    ``(A) In general.--The term `base quantity of 
                electricity' means the total quantity of electric 
                energy sold by a retail electric supplier, expressed in 
                terms of kilowatt hours, to electric customers for 
                purposes other than resale during the most recent 
                calendar year for which information is available.
                    ``(B) Exclusions.--The term `base quantity of 
                electricity' does not include--
                            ``(i) electric energy that is not 
                        incremental hydropower generated by a 
                        hydroelectric facility; and
                            ``(ii) electricity generated through the 
                        incineration of municipal solid waste.
            ``(2) Biomass.--
                    ``(A) In general.--The term `biomass' means--
                            ``(i) cellulosic (plant fiber) organic 
                        materials from a plant that is planted for the 
                        purpose of being used to produce energy;
                            ``(ii) nonhazardous plant or algal matter 
                        that is derived from--
                                    ``(I) an agricultural crop, crop 
                                byproduct, or residue resource; or
                                    ``(II) waste, such as landscape or 
                                right-of-way trimmings (but not 
                                including municipal solid waste, 
                                recyclable postconsumer waste paper, 
                                painted, treated, or pressurized wood, 
                                wood contaminated with plastic, or 
                                metals);
                            ``(iii) animal waste or animal byproducts; 
                        and
                            ``(iv) landfill methane.
                    ``(B) National forest land and certain other public 
                land.--In the case of organic material removed from 
                National Forest System land or from public land 
                administered by the Secretary of the Interior, the term 
                `biomass' means only organic material from--
                            ``(i) ecological forest restoration;
                            ``(ii) precommercial thinnings;
                            ``(iii) brush;
                            ``(iv) mill residues; or
                            ``(v) slash.
                    ``(C) Exclusion of certain federal land.--
                Notwithstanding subparagraph (B), the term `biomass' 
                does not include material or matter that would 
                otherwise qualify as biomass if the material or matter 
                is located on the following Federal land:
                            ``(i) Federal land containing old growth 
                        forest or late successional forest unless the 
                        Secretary of the Interior or the Secretary of 
                        Agriculture determines that the removal of 
                        organic material from the land--
                                    ``(I) is appropriate for the 
                                applicable forest type; and
                                    ``(II) maximizes the retention of--
                                            ``(aa) late-successional 
                                        and large and old growth trees;
                                            ``(bb) late-successional 
                                        and old growth forest 
                                        structure; and
                                            ``(cc) late-successional 
                                        and old growth forest 
                                        composition.
                            ``(ii) Federal land on which the removal of 
                        vegetation is prohibited, including components 
                        of the National Wilderness Preservation System.
                            ``(iii) Wilderness study areas.
                            ``(iv) Inventoried roadless areas.
                            ``(v) Components of the National Landscape 
                        Conservation System.
                            ``(vi) National Monuments.
            ``(3) Existing facility.--The term `existing facility' 
        means a facility for the generation of electric energy from a 
        renewable energy resource that is not an eligible facility.
            ``(4) Incremental hydropower.--The term `incremental 
        hydropower' means additional generation that is achieved from 
        increased efficiency or additions of capacity made on or 
        after--
                    ``(A) the date of enactment of this section; or
                    ``(B) the effective date of an existing applicable 
                State renewable portfolio standard program at a 
                hydroelectric facility that was placed in service 
                before that date.
            ``(5) Indian land.--The term `Indian land' means--
                    ``(A) any land within the limits of any Indian 
                reservation, pueblo, or rancheria;
                    ``(B) any land not within the limits of any Indian 
                reservation, pueblo, or rancheria title to which was on 
                the date of enactment of this section held by--
                            ``(i) the United States for the benefit of 
                        any Indian tribe or individual; or
                            ``(ii) any Indian tribe or individual 
                        subject to restriction by the United States 
                        against alienation;
                    ``(C) any dependent Indian community; or
                    ``(D) any land conveyed to any Alaska Native 
                corporation under the Alaska Native Claims Settlement 
                Act (43 U.S.C. 1601 et seq.).
            ``(6) Indian tribe.--The term `Indian tribe' means any 
        Indian tribe, band, nation, or other organized group or 
        community, including any Alaskan Native village or regional or 
        village corporation as defined in or established pursuant to 
        the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et 
        seq.), that is recognized as eligible for the special programs 
        and services provided by the United States to Indians because 
        of their status as Indians.
            ``(7) Renewable energy.--The term `renewable energy' means 
        electric energy generated by a renewable energy resource.
            ``(8) Renewable energy resource.--The term `renewable 
        energy resource' means solar, wind, ocean, tidal, geothermal 
        energy, biomass, landfill gas, incremental hydropower, or 
        hydrokinetic energy.
            ``(9) Repowering or cofiring increment.--The term 
        `repowering or cofiring increment' means--
                    ``(A) the additional generation from a modification 
                that is placed in service on or after the date of 
                enactment of this section, to expand electricity 
                production at a facility used to generate electric 
                energy from a renewable energy resource;
                    ``(B) the additional generation above the average 
                generation during the 3-year period ending on the date 
                of enactment of this section at a facility used to 
                generate electric energy from a renewable energy 
                resource or to cofire biomass that was placed in 
                service before the date of enactment of this section; 
                or
                    ``(C) the portion of the electric generation from a 
                facility placed in service on or after the date of 
                enactment of this section, or a modification to a 
                facility placed in service before the date of enactment 
                of this section made on or after January 1, 2001, 
                associated with cofiring biomass.
            ``(10) Retail electric supplier.--
                    ``(A) In general.--The term `retail electric 
                supplier' means a person that sells electric energy to 
                electric consumers (other than consumers in Hawaii) 
                that sold not less than 1,000,000 megawatt-hours of 
                electric energy to electric consumers for purposes 
                other than resale during the preceding calendar year.
                    ``(B) Inclusion.--The term `retail electric 
                supplier' includes a person that sells electric energy 
                to electric consumers that, in combination with the 
                sales of any affiliate organized after the date of 
                enactment of this section, sells not less than 
                1,000,000 megawatt hours of electric energy to 
                consumers for purposes other than resale.
                    ``(C) Sales to parent companies or affiliates.--For 
                purposes of this paragraph, sales by any person to a 
                parent company or to other affiliates of the person 
                shall not be treated as sales to electric consumers.
                    ``(D) Governmental agencies.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), the term `retail electric 
                        supplier' does not include--
                                    ``(I) the United States, a State, 
                                any political subdivision of a State, 
                                or any agency, authority, or 
                                instrumentality of the United States, 
                                State, or political subdivision; or
                                    ``(II) a rural electric 
                                cooperative.
                            ``(ii) Inclusion.--The term `retail 
                        electric supplier' includes an entity that is a 
                        political subdivision of   a State, or an 
                        agency, authority, or instrumentality of the 
                        United States, a State, a political subdivision 
                        of a State, a rural electric cooperative that 
                        sells electric energy to electric consumers, or 
                        any other entity that sells electric energy to 
                        electric consumers that would not otherwise 
                        qualify as a retail electric supplier if the 
                        entity notifies the Secretary that the entity 
                        voluntarily agrees to participate in the 
                        Federal renewable electricity standard program.
    ``(b) Compliance.--For calendar year 2012 and each calendar year 
thereafter, each retail electric supplier shall meet the requirements 
of subsection (c) by submitting to the Secretary, not later than April 
1 of the following calendar year, 1 or more of the following:
            ``(1) Federal renewable energy credits issued under 
        subsection (e).
            ``(2) Certification of the renewable energy generated and 
        electricity savings pursuant to the funds associated with State 
        compliance payments as specified in subsection (e)(4)(G).
            ``(3) Alternative compliance payments pursuant to 
        subsection (h).
    ``(c) Required Annual Percentage.--For each of calendar years 2012 
through 2039, the required annual percentage of the base quantity of 
electricity of a retail electric supplier that shall be generated from 
renewable energy resources, or otherwise credited towards the 
percentage requirement pursuant to subsection (d), shall be the 
applicable percentage specified in the following table:

                                                        Required Amount
``Calendar Years                                             percentage
        2012...............................................        6.0 
        2013...............................................        6.0 
        2014...............................................        8.5 
        2015...............................................        8.5 
        2016...............................................       11.0 
        2017...............................................       11.0 
        2018...............................................       14.0 
        2019...............................................       14.0 
        2020...............................................       17.5 
        2021...............................................       17.5 
        2022...............................................       21.0 
        2023...............................................       21.0 
        2024...............................................       23.0 
        2025 and thereafter through 2039...................       25.0.
    ``(d) Renewable Energy Credits.--
            ``(1) In general.--A retail electric supplier may satisfy 
        the requirements of subsection (b)(1) through the submission of 
        Federal renewable energy credits--
                    ``(A) issued to the retail electric supplier under 
                subsection (e);
                    ``(B) obtained by purchase or exchange under 
                subsection (f); or
                    ``(C) borrowed under subsection (g).
            ``(2) Federal renewable energy credits.--A Federal 
        renewable energy credit may be counted toward compliance with 
        subsection (b)(1) only once.
    ``(e) Issuance of Federal Renewable Energy Credits.--
            ``(1) In general.--Not later than 1 year after the date of 
        enactment of this section, the Secretary shall establish by 
        rule a program--
                    ``(A) to verify and issue Federal renewable energy 
                credits to generators of renewable energy;
                    ``(B) to track the sale, exchange, and retirement 
                of the credits; and
                    ``(C) to enforce the requirements of this section.
            ``(2) Existing non-federal tracking systems.--To the 
        maximum extent practicable, in establishing the program, the 
        Secretary shall rely on existing and emerging State or regional 
        tracking systems that issue and track non-Federal renewable 
        energy credits.
            ``(3) Application.--
                    ``(A) In general.--An entity that generates 
                electric energy through the use of a renewable energy 
                resource may apply to the Secretary for the issuance of 
                renewable energy credits.
                    ``(B) Eligibility.--To be eligible for the issuance 
                of the credits, the applicant shall demonstrate to the 
                Secretary that--
                            ``(i) the electric energy will be 
                        transmitted onto the grid; or
                            ``(ii) in the case of a generation offset, 
                        the electric energy offset would have otherwise 
                        been consumed onsite.
                    ``(C) Contents.--The application shall indicate--
                            ``(i) the type of renewable energy resource 
                        that is used to produce the electricity;
                            ``(ii) the location at which the electric 
                        energy will be produced; and
                            ``(iii) any other information the Secretary 
                        determines appropriate.
            ``(4) Quantity of federal renewable energy credits.--
                    ``(A) In general.--Except as otherwise provided in 
                this paragraph, the Secretary shall issue to a 
                generator of electric energy 1 Federal renewable energy 
                credit for each kilowatt hour of electric energy 
                generated by the use of a renewable energy resource at 
                an eligible facility.
                    ``(B) Incremental hydropower.--
                            ``(i) In general.--For purpose of 
                        compliance with this section, Federal renewable 
                        energy credits for incremental hydropower shall 
                        be based on the increase in average annual 
                        generation resulting from the efficiency 
                        improvements or capacity additions.
                            ``(ii) Water flow information.--The 
                        incremental generation shall be calculated 
                        using the same water flow information that is--
                                    ``(I) 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.
                            ``(iii) Operational changes.--The 
                        calculation of the Federal renewable energy 
                        credits for incremental hydropower shall not be 
                        based on any operational changes at the 
                        hydroelectric facility that is not directly 
                        associated with the efficiency improvements or 
                        capacity additions.
                    ``(C) Indian land.--
                            ``(i) In general.--The Secretary shall 
                        issue 2 renewable energy credits for each 
                        kilowatt hour of electric energy generated and 
                        supplied to the grid in a calendar year through 
                        the use of a renewable energy resource at an 
                        eligible facility located on Indian land.
                            ``(ii) Biomass.--For purposes of this 
                        paragraph, renewable energy generated by 
                        biomass cofired with other fuels is eligible 
                        for 2 credits only if the biomass was grown on 
                        the land.
                    ``(D) On-site eligible facilities.--
                            ``(i) In general.--In the case of electric 
                        energy generated by a renewable energy resource 
                        at an on-site eligible facility that is not 
                        larger than 1 megawatt in capacity and is used 
                        to offset all or part of the requirements of a 
                        customer for electric energy, the Secretary 
                        shall issue 3 renewable energy credits to the 
                        customer for each kilowatt hour generated.
                            ``(ii) Indian land.--In the case of an on-
                        site eligible facility on Indian land, the 
                        Secretary shall issue not more than 3 credits 
                        per kilowatt hour.
                    ``(E) Combination of renewable and nonrenewable 
                energy resources.--If both a renewable energy resource 
                and a nonrenewable energy resource are used to generate 
                the electric energy, the Secretary shall issue the 
                Federal renewable energy credits based on the 
                proportion of the renewable energy resources used.
                    ``(F) Retail electric suppliers.--If a generator 
                has sold electric energy generated through the use of a 
                renewable energy resource to a retail electric supplier 
                under a contract for power from an existing facility 
                and the contract has not determined ownership of the 
                Federal renewable energy credits associated with the 
                generation, the Secretary shall issue the Federal 
                renewable energy credits to the retail electric 
                supplier for the duration of the contract.
                    ``(G) Compliance with state renewable portfolio 
                standard programs.--Payments made by a retail 
                electricity supplier, directly or indirectly, to a 
                State for compliance with a State renewable portfolio 
                standard program, or for an alternative compliance 
                mechanism, shall be valued at 1 credit per kilowatt 
                hour for the purpose of subsection (b)(2) based on the 
                quantity of electric energy generation from renewable 
                resources that results from the payments.
    ``(f) Renewable Energy Credit Trading.--
            ``(1) In general.--A Federal renewable energy credit may be 
        sold, transferred, or exchanged by the entity to whom the 
        credit is issued or by any other entity that acquires the 
        Federal renewable energy credit, other than renewable energy 
        credits from existing facilities.
            ``(2) Carryover.--A Federal renewable energy credit for any 
        year that is not submitted to satisfy the minimum renewable 
        generation requirement of subsection (c) for that year may be 
        carried forward for use pursuant to subsection (b)(1) within 
        the next 3 years.
            ``(3) Delegation.--The 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.
    ``(g) Renewable Energy Credit Borrowing.--
            ``(1) In general.--Not later than December 31, 2014, a 
        retail electric supplier that has reason to believe the retail 
        electric supplier will not be able to fully comply with 
        subsection (b) may--
                    ``(A) submit a plan to the Secretary demonstrating 
                that the retail electric supplier will earn sufficient 
                Federal renewable energy credits within the next 3 
                calendar years that, when taken into account, will 
                enable the retail electric supplier to meet the 
                requirements of subsection (b) for calendar year 2014 
                and the subsequent calendar years involved; and
                    ``(B) on the approval of the plan by the Secretary, 
                apply Federal renewable energy credits that the plan 
                demonstrates will be earned within the next 3 calendar 
                years to meet the requirements of subsection (b) for 
                each calendar year involved.
            ``(2) Repayment.--The retail electric supplier shall repay 
        all of the borrowed Federal renewable energy credits by 
        submitting an equivalent number of Federal renewable energy 
        credits, in addition to the credits otherwise required under 
        subsection (b), by calendar year 2022 or any earlier deadlines 
        specified in the approved plan.
    ``(h) Alternative Compliance Payments.--As a means of compliance 
under subsection (b)(4), the Secretary shall accept payment equal to 
the lesser of--
            ``(1) 200 percent of the average market value of Federal 
        renewable energy credits and Federal energy efficiency credits 
        for the applicable compliance period; or
            ``(2) 3 cents per kilowatt hour (as adjusted on January 1 
        of each year following calendar year 2006 based on the implicit 
        price deflator for the gross national product).
    ``(i) Information Collection.--The Secretary may collect the 
information necessary to verify and audit--
            ``(1)(A) the annual renewable energy generation of any 
        retail electric supplier; and
            ``(B) Federal renewable energy credits submitted by a 
        retail electric supplier pursuant to subsection (b)(1);
            ``(2) the validity of Federal renewable energy credits 
        submitted for compliance by a retail electric supplier to the 
        Secretary; and
            ``(3) the quantity of electricity sales of all retail 
        electric suppliers.
    ``(j) Environmental Savings Clause.--Incremental hydropower shall 
be subject to all applicable environmental laws and licensing and 
regulatory requirements.
    ``(k) State Programs.--
            ``(1) In general.--Nothing in this section diminishes any 
        authority of a State or political subdivision of a State--
                    ``(A) to adopt or enforce any law (including 
                regulations) respecting renewable energy, including 
                programs that exceed the required quantity of renewable 
                energy under this section; or
                    ``(B) to regulate the acquisition and disposition 
                of Federal renewable energy credits by retail electric 
                suppliers.
            ``(2) Compliance with section.--No law or regulation 
        referred to in paragraph (1)(A) shall relieve any person of any 
        requirement otherwise applicable under this section.
            ``(3) Coordination with state program.--The Secretary, in 
        consultation with States that have in effect renewable energy 
        programs, shall--
                    ``(A) preserve the integrity of the State programs, 
                including programs that exceed the required quantity of 
                renewable energy under this section; and
                    ``(B) facilitate coordination between the Federal 
                program and State programs.
            ``(4) Existing renewable energy programs.--In the 
        regulations establishing the program under this section, the 
        Secretary shall incorporate common elements of existing 
        renewable energy programs, including State programs, to ensure 
        administrative ease, market transparency and effective 
        enforcement.
            ``(5) Minimization of administrative burdens and costs.--In 
        carrying out this section, the Secretary shall work with the 
        States to minimize administrative burdens and costs to retail 
        electric suppliers.
    ``(l) Recovery of Costs.--An electric utility that has sales of 
electric energy that are subject to rate regulation (including any 
utility with rates that are regulated by the Commission and any State 
regulated electric utility) shall not be denied the opportunity to 
recover the full amount of the prudently incurred incremental cost of 
renewable energy obtained to comply with the requirements of subsection 
(b).
    ``(m) Program Review.--
            ``(1) In general.--The Secretary shall enter into an 
        arrangement with the National Academy of Sciences under which 
        the Academy shall conduct a comprehensive evaluation of all 
        aspects of the program established under this section.
            ``(2) Evaluation.--The study shall include an evaluation 
        of--
                    ``(A) the effectiveness of the program in 
                increasing the market penetration and lowering the cost 
                of the eligible renewable energy technologies;
                    ``(B) the opportunities for any additional 
                technologies and sources of renewable energy emerging 
                since the date of enactment of this section;
                    ``(C) the impact on the regional diversity and 
                reliability of supply sources, including the power 
                quality benefits of distributed generation;
                    ``(D) the regional resource development relative to 
                renewable potential and reasons for any investment in 
                renewable resources; and
                    ``(E) the net cost/benefit of the renewable 
                electricity standard to the national and State 
                economies, including--
                            ``(i) retail power costs;
                            ``(ii) the economic development benefits of 
                        investment;
                            ``(iii) avoided costs related to 
                        environmental and congestion mitigation 
                        investments that would otherwise have been 
                        required;
                            ``(iv) the impact on natural gas demand and 
                        price; and
                            ``(v) the effectiveness of green marketing 
                        programs at reducing the cost of renewable 
                        resources.
            ``(3) Report.--Not later than January 1, 2018, the 
        Secretary shall transmit to Congress a report describing the 
        results of the evaluation and any recommendations for 
        modifications and improvements to the program.
    ``(n) State Renewable Energy Account.--
            ``(1) In general.--There is established in the Treasury a 
        State renewable energy account.
            ``(2) Deposits.--All money collected by the Secretary from 
        the alternative compliance payments under subsection (h) shall 
        be deposited into the State renewable energy account 
        established under paragraph (1).
            ``(3) Grants.--
                    ``(A) In general.--Proceeds deposited in the State 
                renewable energy account shall be used by the 
                Secretary, subject to annual appropriations, for a 
                program to provide grants--
                            ``(i) to the State agency responsible for 
                        administering a fund to promote renewable 
                        energy generation for customers of the State or 
                        an alternative agency designated by the State; 
                        or
                            ``(ii) if no agency described in clause 
                        (i), to the State agency developing State 
                        energy conservation plans under section 362 of 
                        the Energy Policy and Conservation Act (42 
                        U.S.C. 6322).
                    ``(B) Use.--The grants shall be used for the 
                purpose of--
                            ``(i) promoting renewable energy 
                        production; and
                            ``(ii) providing energy assistance and 
                        weatherization services to low-income 
                        consumers.
                    ``(C) Criteria.--The Secretary may issue guidelines 
                and criteria for grants awarded under this paragraph.
                    ``(D) State-approved funding mechanisms.--At least 
                75 percent of the funds provided to each State for each 
                fiscal year shall be used to promote renewable energy 
                production through grants, production incentives, or 
                other State-approved funding mechanisms.
                    ``(E) Allocation.--The funds shall be allocated to 
                the States on the basis of retail electric sales 
                subject to the renewable electricity standard under 
                this section or through voluntary participation.
                    ``(F) Records.--State agencies receiving grants 
                under this paragraph shall maintain such records and 
                evidence of compliance as the Secretary may require.''.
    (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. 609. Rural and remote communities electrification grants.
``Sec. 610. Renewable electricity standard.''.
                                 <all>