I 112th CONGRESS 1st Session H. R. 2391 IN THE HOUSE OF REPRESENTATIVES June 24, 2011 Mr. Paulsen (for himself and Mr. Kind) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Energy and Commerce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To amend the Internal Revenue Code of 1986 to provide a renewable electricity integration credit.

1.

Short title

This Act may be cited as the Renewable Energy for a Brighter Future Act.

2.

Renewable electricity integration credit

(a)

Business Credit

(1)

In general

Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

45S.

Renewable electricity integration credit

(a)

General Rule

For purposes of section 38, in the case of an eligible taxpayer, the renewable electricity integration credit for any taxable year is an amount equal to the product of— (1)the intermittent renewable portfolio factor of such eligible taxpayer, and (2)the number of kilowatt hours of renewable electricity— (A)purchased or produced by such taxpayer, and (B)sold by such taxpayer to a retail customer during the taxable year. (b)

Intermittent renewable portfolio factor

(1)

Years before 2017

In the case of taxable years beginning before January 1, 2017, the intermittent renewable portfolio factor for an eligible taxpayer shall be determined as follows: In the case of an eligible taxpayer whose intermittent renewable electricity percentage is:For taxable years beginning before 2012, the intermittent renewable portfolio factor is:For taxable years beginning in or after 2012, the intermittent renewable portfolio factor is: Less than 4 percentzero centszero cents At least 4 percent but less than 8 percent0.1 centszero cents At least 8 percent but less than 12 percent0.2 cents0.2 cents At least 12 percent but less than 16 percent0.3 cents0.3 cents At least 16 percent but less than 20 percent0.4 cents0.4 cents At least 20 percent but less than 24 percent0.5 cents0.5 cents Equal to or greater than 24 percent0.6 cents0.6 cents. (2)

Years after 2016

In the case of taxable years beginning after December 31, 2016, the intermittent renewable portfolio factor for an eligible taxpayer shall be determined as follows: In the case of an eligible taxpayer whose intermittent renewable electricity percentage is:For taxable years beginning before 2019, the intermittent renewable portfolio factor is:For taxable years beginning in or after 2019, the intermittent renewable portfolio factor is: Less than 10 percentzero centszero cents At least 10 percent but less than 12 percent0.2 centszero cents At least 12 percent but less than 16 percent0.3 cents0.15 cents At least 16 percent but less than 20 percent0.4 cents0.4 cents At least 20 percent but less than 24 percent0.5 cents0.5 cents Equal to or greater than 24 percent0.6 cents0.6 cents. (c)

Definitions and special rules

For purposes of this section— (1)

Eligible taxpayer

The term eligible taxpayer means an electric utility (as defined in section 3(22) of the Federal Power Act (16 U.S.C. 796(22)). (2)

Renewable electricity

The term renewable electricity means electricity generated by— (A)any facility using wind to generate such electricity; (B)any facility using solar energy to generate such electricity; or (C)any facility using any other intermittent renewable energy source which the Secretary of Energy determines has a capacity factor of less than 50 percent on an annual basis. (3)

Intermittent renewable electricity percentage

The term intermittent renewable electricity percentage means the percentage of an eligible taxpayer’s total sales of electricity to retail customers that is derived from renewable electricity (determine without regard to whether such electricity was produced by the taxpayer). (4)

Application of other rules

For purposes of this section, rules similar to the rules of paragraphs (1), (3), and (5) of section 45(e) shall apply. (5)

Credit allowed only with respect to 1 eligible entity

No credit shall be allowed under subsection (a) with respect to renewable electricity purchased from another eligible entity if a credit has been allowed under this section or a payment has been made under section 6433 to such other eligible entity. (d)

Credit disallowed unless credit passed to third party generators charged for integration costs

(1)

In general

In the case of renewable electricity eligible for the credit under subsection (a) that is purchased and not produced by an eligible taxpayer, no credit shall be allowed unless any charge the taxpayer has assessed the seller to recover the integration costs associated with such electricity has been reduced (but not below zero) to the extent of the credit received under subsection (a) associated with such electricity. (2)

Definitions

For purposes of paragraph (1), charges intended to recover integration costs do not include amounts paid by the producer of the electricity for interconnection facilities, distribution upgrades, network upgrades, or stand alone network upgrades as those terms have been defined by the Federal Energy Regulatory Commission in its Standard Interconnection Procedures. (e)

Coordination With Payments

The amount of the credit determined under this section with respect to any electricity shall be reduced to take into account any payment provided with respect to such electricity solely by reason of the application of section 6433.

. (2)

Credit made part of general business credit

Subsection (b) of section 38 of the Internal Revenue Code of 1986 is amended by striking plus at the end of paragraph (35), by striking the period at the end of paragraph (36) and inserting , plus, and by adding at the end the following new paragraph: (37)the renewable electricity integration credit determined under section 45S(a). . (3)

Specified credit

Subparagraph (B) of section 38(c)(4) of the Internal Revenue Code of 1986 is amended by redesignating clauses (vii) through (ix) as clauses (viii) through (x), respectively, and by inserting after clause (v) the following new clause: (vi)the credit determined under section 45S. . (4)

Clerical amendment

The table of sections for subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item: Sec. 45S. Renewable electricity integration credit. . (b)

Payments in Lieu of Credit

(1)

In general

Subchapter B of chapter 65 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

6433.

Renewable electricity integration payments

(a)

In General

If any eligible person sells renewable electricity to a retail customer, the Secretary shall pay (without interest) to any such person who elects to receive a payment an amount equal to the product of— (1)the intermittent renewable portfolio factor of such eligible person; and (2)the number of kilowatt hours of renewable electricity— (A)purchased or produced by such person; and (B)sold by such person in the trade or business of such person to a retail customer. (b)

Timing of Payments

(1)

In general

Except as provided in paragraph (2), rules similar to the rules of section 6427(i)(1) shall apply for purposes of this section. (2)

Quarterly payments

(A)

In general

If, at the close of any quarter of the taxable year of any person, at least $750 is payable in the aggregate under subsection (a), to such person with respect to electricity purchased or produced during— (i)such quarter; or (ii)any prior quarter (for which no other claim has been filed) during such taxable year, a claim may be filed under this section with respect to such electricity. (B)

Time for filing claim

No claim filed under this paragraph shall be allowed unless filed on or before the last day of the first quarter following the earliest quarter included in the claim. (c)

Definitions and Special Rules

For purposes of this section: (1)

Eligible person

The term eligible person means an electric utility (as defined in section 3(22) of the Federal Power Act (16 U.S.C. 796(22)). (2)

Other definitions

Any term used in this section which is also used in section 45S shall have the meaning given such term under section 45S. (3)

Application of other rules

For purposes of this section, rules similar to the rules of paragraphs (1) and (3) of section 45(e) shall apply. (d)

Payment Disallowed Unless Amount Passed to Third Party Generators Charged for Integration Costs

(1)

In general

In the case of renewable electricity eligible for the payment under subsection (a) that is purchased and not produced by an eligible person, no payment shall be made under this section unless any charge the eligible person has assessed the seller to recover the integration costs associated with such electricity has been reduced (but not below zero) to the extent of the payment received under subsection (a) associated with such electricity. (2)

Definitions

For purposes of paragraph (1), charges intended to recover integration costs do not include amounts paid by the producer of the electricity for interconnection facilities, distribution upgrades, network upgrades, or stand alone network upgrades as those terms have been defined by the Federal Energy Regulatory Commission in its Standard Interconnection Procedures.

. (2)

Clerical amendment

The table of sections for subpart B of chapter 65 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item: Sec. 6433. Renewable electricity integration payments. . (c)

Effective Date

The amendments made by this section shall apply to electricity produced or purchased after December 31, 2010.