[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[S. 1291 Introduced in Senate (IS)]

112th CONGRESS
  1st Session
                                S. 1291

   To amend the Internal Revenue Code of 1986 to provide a renewable 
electricity integration credit for a utility that purchases or produces 
                            renewable power.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 28, 2011

Ms. Klobuchar (for herself and Mr. Johnson of South Dakota) introduced 
the following bill; which was read twice and referred to the Committee 
                               on Finance

_______________________________________________________________________

                                 A BILL


 
   To amend the Internal Revenue Code of 1986 to provide a renewable 
electricity integration credit for a utility that purchases or produces 
                            renewable power.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. 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:

``SEC. 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       For taxable years beginning before     For taxable years beginning in or
 renewable electricity percentage      2012, the intermittent renewable         after 2012, the intermittent
                is:                          portfolio factor is:              renewable portfolio factor is:
----------------------------------------------------------------------------------------------------------------
Less than 4 percent...............  zero cents                             zero cents
At least 4 percent but less than 8  0.1 cents                              zero cents
 percent..........................
At least 8 percent but less than    0.2 cents                              0.2 cents
 12 percent.......................
At least 12 percent but less than   0.3 cents                              0.3 cents
 16 percent.......................
At least 16 percent but less than   0.4 cents                              0.4 cents
 20 percent.......................
At least 20 percent but less than   0.5 cents                              0.5 cents
 24 percent.......................
Equal to or greater than 24         0.6 cents                              0.6 cents.
 percent..........................
----------------------------------------------------------------------------------------------------------------

            ``(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       For taxable years beginning before     For taxable years beginning in or
 renewable electricity percentage      2019, the intermittent renewable         after 2019, the intermittent
                is:                          portfolio factor is:              renewable portfolio factor is:
----------------------------------------------------------------------------------------------------------------
Less than 10 percent..............  zero cents                             zero cents
At least 10 percent but less than   0.2 cents                              zero cents
 12 percent.......................
At least 12 percent but less than   0.3 cents                              0.15 cents
 16 percent.......................
At least 16 percent but less than   0.4 cents                              0.4 cents
 20 percent.......................
At least 20 percent but less than   0.5 cents                              0.5 cents
 24 percent.......................
Equal to or greater than 24         0.6 cents                              0.6 cents.
 percent..........................
----------------------------------------------------------------------------------------------------------------

    ``(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:

``SEC. 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, 2009.
                                 <all>