[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 1063 Introduced in Senate (IS)]

114th CONGRESS
  1st Session
                                S. 1063

To amend title VI of the Public Utility Regulatory Policies Act of 1978 
    to establish a Federal energy efficiency resource standard for 
     electricity and natural gas suppliers, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 22, 2015

  Mr. Franken introduced the following bill; which was read twice and 
       referred to the Committee on Energy and Natural Resources

_______________________________________________________________________

                                 A BILL


 
To amend title VI of the Public Utility Regulatory Policies Act of 1978 
    to establish a Federal energy efficiency resource standard for 
     electricity and natural gas suppliers, 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 ``American Energy Efficiency Act''.

SEC. 2. ENERGY EFFICIENCY RESOURCE STANDARD FOR RETAIL ELECTRICITY AND 
              NATURAL GAS SUPPLIERS.

    (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 ENERGY EFFICIENCY RESOURCE STANDARD FOR RETAIL 
              ELECTRICITY AND NATURAL GAS SUPPLIERS.

    ``(a) Definitions.--In this section:
            ``(1) Base quantity.--
                    ``(A) In general.--The term `base quantity', with 
                respect to a retail electricity supplier or retail 
                natural gas supplier, means, for each calendar year for 
                which a performance standard is established under 
                subsection (c), the average annual quantity of 
                electricity or natural gas delivered by the retail 
                electricity supplier or retail natural gas supplier to 
                retail customers during the 3 calendar years 
                immediately preceding the first year that compliance is 
                required under subsection (c)(1).
                    ``(B) Exclusion.--The term `base quantity', with 
                respect to a retail natural gas supplier, does not 
                include natural gas delivered for purposes of 
                electricity generation.
            ``(2) Customer facility savings.--The term `customer 
        facility savings' means a reduction in end-use electricity or 
        natural gas consumption (including waste heat energy savings) 
        at a facility of an end-use consumer of electricity or natural 
        gas served by a retail electricity supplier or natural gas 
        supplier, as compared to--
                    ``(A) in the case of a new facility, consumption at 
                a reference facility of average efficiency;
                    ``(B) in the case of an existing facility, 
                consumption at the facility during a base period of not 
                less than 1 year;
                    ``(C) in the case of new equipment that replaces 
                existing equipment at the end of the useful life of the 
                existing equipment, consumption by new equipment of 
                average efficiency of the same equipment type, except 
                that customer savings under this subparagraph shall not 
                be counted towards customer savings under subparagraph 
                (A) or (B); and
                    ``(D) in the case of new equipment that replaces 
                existing equipment with remaining useful life--
                            ``(i) consumption of the existing equipment 
                        for the remaining useful life of the equipment; 
                        and
                            ``(ii) thereafter, consumption of new 
                        equipment of average efficiency.
            ``(3) Electricity savings.--The term `electricity savings' 
        means reductions in electricity consumption achieved through 
        measures implemented after the date of enactment of this 
        section, as determined in accordance with regulations 
        promulgated by the Secretary, that are limited to--
                    ``(A) customer facility savings of electricity, 
                adjusted to reflect any associated increase in fuel 
                consumption at the facility;
                    ``(B) reductions in distribution system losses of 
                electricity achieved by a retail electricity supplier, 
                as compared to losses attributable to new or 
                replacement distribution system equipment of average 
                efficiency, as defined in regulations promulgated by 
                the Secretary;
                    ``(C) CHP savings;
                    ``(D) codes and standards savings of electricity; 
                and
                    ``(E) fuel switching energy savings that results in 
                net savings of electricity.
            ``(4) Natural gas savings.--The term `natural gas savings' 
        means reductions in natural gas consumption from measures 
        implemented after the date of enactment of this section, as 
        determined in accordance with regulations promulgated by the 
        Secretary, that are limited to--
                    ``(A) customer facility savings of natural gas, 
                adjusted to reflect any associated increase in 
                electricity consumption or consumption of other fuels 
                at the facility;
                    ``(B) reductions in leakage, operational losses, 
                and consumption of natural gas fuel to operate a gas 
                distribution system, achieved by a retail natural gas 
                supplier, as compared to similar leakage, losses, and 
                consumption during a base period of not less than 1 
                year;
                    ``(C) codes and standards savings of natural gas; 
                and
                    ``(D) fuel switching energy savings that results in 
                net savings of natural gas.
            ``(5) Retail electricity supplier.--
                    ``(A) In general.--The term `retail electricity 
                supplier' means, for any given calendar year, an 
                electric utility that sells 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) Inclusions and limitations.--For purposes of 
                determining whether an electric utility qualifies as a 
                retail electricity supplier under subparagraph (A)--
                            ``(i) deliveries by any affiliate of an 
                        electric utility to electric consumers for 
                        purposes other than resale shall be considered 
                        to be deliveries by the electric utility; and
                            ``(ii) deliveries by any electric utility 
                        to a lessee, tenant, or affiliate of the 
                        electric utility shall not be considered to be 
                        deliveries to electric consumers.
            ``(6) Retail natural gas supplier.--
                    ``(A) In general.--The term `retail natural gas 
                supplier' means, for any given calendar year, a local 
                distribution company (as defined in section 2 of the 
                Natural Gas Policy Act of 1978 (15 U.S.C. 3301)), that 
                delivered to natural gas consumers more than 
                5,000,000,000 cubic feet of natural gas for purposes 
                other than resale during the preceding calendar year.
                    ``(B) Inclusions and limitations.--For purposes of 
                determining whether a person qualifies as a retail 
                natural gas supplier under subparagraph (A)--
                            ``(i) deliveries of natural gas by any 
                        affiliate of a local distribution company to 
                        consumers for purposes other than resale shall 
                        be considered to be deliveries by the local 
                        distribution company; and
                            ``(ii) deliveries of natural gas to a 
                        lessee, tenant, or affiliate of a local 
                        distribution company shall not be considered to 
                        be deliveries to natural gas consumers.
    ``(b) Establishment of Program.--
            ``(1) Regulations.--Not later than 1 year after the date of 
        enactment of this section, the Secretary shall, by regulation, 
        establish a program to implement and enforce the requirements 
        of this section, including by--
                    ``(A) defining the terms `CHP savings', `code and 
                standards savings', `combined heat and power system', 
                `cost-effective', `fuel switching energy savings', 
                `reporting period', `third-party efficiency provider', 
                and `waste heat energy savings';
                    ``(B) establishing measurement and verification 
                procedures and standards that count only measures and 
                savings that are additional to business-as-usual 
                customer purchase practices;
                    ``(C) establishing requirements under which retail 
                electricity suppliers and retail natural gas suppliers 
                shall--
                            ``(i) demonstrate, document, and report the 
                        compliance of the retail electricity suppliers 
                        and retail natural gas suppliers with the 
                        performance standards under subsection (c); and
                            ``(ii) estimate the impact of the standards 
                        on current and future electricity and natural 
                        gas use in the service territories of the 
                        suppliers;
                    ``(D) establishing requirements governing 
                applications for, and implementation of, delegated 
                State administration under subsection (e); and
                    ``(E) establishing rules to govern transfers of 
                electricity or natural gas savings between suppliers 
                and third-party efficiency providers serving the same 
                State and between suppliers and third-party efficiency 
                providers serving different States.
            ``(2) Coordination with state programs.--In establishing 
        and implementing this section, the Secretary shall, to the 
        maximum extent practicable, preserve the integrity and 
        incorporate best practices of existing State energy efficiency 
        programs.
    ``(c) Performance Standards.--
            ``(1) Compliance obligation.--Not later than May 1 of the 
        calendar year immediately following each reporting period--
                    ``(A) each retail electricity supplier shall submit 
                to the Secretary a report, in accordance with 
                regulations promulgated by the Secretary, demonstrating 
                that the retail electricity supplier has achieved 
                cumulative electricity savings (adjusted to account for 
                any attrition of savings measures implemented in prior 
                years) in each calendar year that are equal to the 
                applicable percentage of the base quantity of the 
                retail electricity supplier; and
                    ``(B) each retail natural gas supplier shall submit 
                to the Secretary a report, in accordance with 
                regulations promulgated by the Secretary, demonstrating 
                that it has achieved cumulative natural gas savings 
                (adjusted to account for any attrition of savings 
                measures implemented in prior years) in each calendar 
                year that are equal to the applicable percentage of the 
                base quantity of such retail natural gas supplier.
            ``(2) Standards for 2017 through 2030.--For each of 
        calendar years 2017 through 2030, the applicable percentages 
        are as follows:


------------------------------------------------------------------------
                          Cumulative Electricity  Cumulative Natural Gas
    ``Calendar Year         Savings Percentage       Savings Percentage
------------------------------------------------------------------------
                 2017                     1.00                    0.50
------------------------------------------------------------------------
                 2018                     2.00                    1.25
------------------------------------------------------------------------
                 2019                     3.00                    2.00
------------------------------------------------------------------------
                 2020                     4.25                    3.00
------------------------------------------------------------------------
                 2021                     5.50                    4.00
------------------------------------------------------------------------
                 2022                     7.00                    5.00
------------------------------------------------------------------------
                 2023                     8.50                    6.00
------------------------------------------------------------------------
                 2024                    10.00                    7.00
------------------------------------------------------------------------
                 2025                    11.50                    8.00
------------------------------------------------------------------------
                 2026                    13.00                    9.00
------------------------------------------------------------------------
                 2027                    14.75                   10.00
------------------------------------------------------------------------
                 2028                    16.50                   11.00
------------------------------------------------------------------------
                 2029                    18.25                   12.00
------------------------------------------------------------------------
                 2030                    20.00                  13.00.
------------------------------------------------------------------------

            ``(3) Subsequent years.--
                    ``(A) Calendar years 2031 through 2040.--Not later 
                than December 31, 2028, the Secretary shall promulgate 
                regulations establishing performance standards 
                (expressed as applicable percentages of base quantity 
                for both cumulative electricity savings and cumulative 
                natural gas savings) for each of calendar years 2031 
                through 2040.
                    ``(B) Requirements.--The Secretary shall establish 
                standards under this paragraph at levels reflecting the 
                maximum achievable level of cost-effective energy 
                efficiency potential, taking into account--
                            ``(i) cost-effective energy savings 
                        achieved by leading retail electricity 
                        suppliers and retail natural gas suppliers;
                            ``(ii) opportunities for new codes and 
                        standard savings;
                            ``(iii) technology improvements; and
                            ``(iv) other indicators of cost-effective 
                        energy efficiency potential including 
                        differences between States.
                    ``(C) Minimum percentage.--In no case shall the 
                applicable percentages for any calendar year be less 
                than the applicable percentages for calendar year 2030.
            ``(4) Delay of submission for first reporting period.--
                    ``(A) In general.--Notwithstanding paragraphs (1) 
                and (2), for the 2017 reporting period, the Secretary 
                may accept a request from a retail electricity supplier 
                or a retail natural gas supplier to delay the required 
                submission of documentation of all or part of the 
                required savings for up to 2 years.
                    ``(B) Plan for compliance.--The request for delay 
                under subparagraph (A) shall include a plan for coming 
                into full compliance by the end of the 2018-2019 
                reporting period.
            ``(5) Applying unused savings to future years.--If savings 
        achieved in a year exceed the performance standards specified 
        in this subsection, any savings in excess of the performance 
        standards may be applied toward performance standards specified 
        for future years.
    ``(d) Enforcement and Judicial Review.--
            ``(1) Review of retail supplier reports.--
                    ``(A) In general.--The Secretary shall review each 
                report submitted to the Secretary by a retail 
                electricity supplier or retail natural gas supplier 
                under subsection (c) to verify that the applicable 
                performance standards under subsection (c) have been 
                met.
                    ``(B) Exclusion.--In determining compliance with 
                the applicable performance standards under subsection 
                (c), the Secretary shall exclude reported electricity 
                savings or natural gas savings that are not adequately 
                demonstrated and documented, in accordance with the 
                regulations promulgated under subsections (b) and (c).
            ``(2) Penalty for failure to document adequate savings.--If 
        a retail electricity supplier or a retail natural gas supplier 
        fails to demonstrate compliance with an applicable performance 
        standard under subsection (c), or to pay to the State an 
        applicable alternative compliance payment under subsection 
        (e)(3), the Secretary shall assess against the retail 
        electricity supplier or retail natural gas supplier a civil 
        penalty for each failure in an amount equal to, as adjusted for 
        inflation in accordance with such regulations as the Secretary 
        may promulgate--
                    ``(A) $100 per megawatt hour of electricity savings 
                or alternative compliance payment that the retail 
                electricity supplier failed to achieve or make, 
                respectively; or
                    ``(B) $10 per million Btu of natural gas savings or 
                alternative compliance payment that the retail natural 
                gas supplier failed to achieve or make, respectively.
            ``(3) Offsetting state penalties.--The Secretary shall 
        reduce the amount of any penalty under paragraph (2) by the 
        amount paid by the relevant retail electricity supplier or 
        retail natural gas supplier to a State for failure to comply 
        with the requirements of a State energy efficiency resource 
        standard during the same compliance period.
            ``(4) Enforcement procedures.--The Secretary shall assess a 
        civil penalty, as provided under paragraph (2), in accordance 
        with the procedures described in section 333(d) of the Energy 
        Policy and Conservation Act of 1954 (42 U.S.C. 6303).
    ``(e) State Administration.--
            ``(1) In general.--Upon receipt of an application from the 
        Governor of a State (including the Mayor of the District of 
        Columbia), the Secretary may delegate to the State 
        responsibility for administering this section within the 
        territory of the State if the Secretary determines that the 
        State will implement an energy efficiency program that meets or 
        exceeds the requirements of this section.
            ``(2) Secretarial determination.--Not later than 180 days 
        after the date on which a complete application is received by 
        the Secretary, the Secretary shall make a substantive 
        determination approving or disapproving a State application, 
        after public notice and comment.
            ``(3) Alternative compliance payments.--
                    ``(A) In general.--As part of an application 
                submitted under paragraph (1), a State may permit 
                retail electricity suppliers or retail natural gas 
                suppliers to pay to the State, by not later than May 1 
                of the calendar year immediately following the 
                applicable reporting period, an alternative compliance 
                payment in an amount equal to, as adjusted for 
                inflation in accordance with such regulations as the 
                Secretary may promulgate, not less than--
                            ``(i) $50 per megawatt hour of electricity 
                        savings needed to make up any deficit with 
                        regard to a compliance obligation under the 
                        applicable performance standard; or
                            ``(ii) $5 per million Btu of natural gas 
                        savings needed to make up any deficit with 
                        regard to a compliance obligation under the 
                        applicable performance standard.
                    ``(B) Use of payments.--Alternative compliance 
                payments collected by a State under subparagraph (A) 
                shall be used by the State to administer the delegated 
                authority of the State under this section and to 
                implement cost-effective energy efficiency programs 
                that--
                            ``(i) to the maximum extent practicable, 
                        achieve electricity savings and natural gas 
                        savings in the State sufficient to make up the 
                        deficit associated with the alternative 
                        compliance payments; and
                            ``(ii) can be measured and verified in 
                        accordance with the applicable procedures and 
                        standards under subsection (b)(1)(B).
            ``(4) Review of state implementation.--
                    ``(A) Periodic review.--Every 2 years, the 
                Secretary shall review State implementation of this 
                section for conformance with the requirements of this 
                section in approximately \1/2\ of the States that have 
                received approval under this subsection to administer 
                the program, so that each State shall be reviewed at 
                least every 4 years.
                    ``(B) Report.--To facilitate the review under 
                subparagraph (A), the Secretary may require the State 
                to submit a report demonstrating the conformance of the 
                State with the requirements of this section.
                    ``(C) Deficiencies.--
                            ``(i) In general.--In completing a review 
                        under this paragraph, if the Secretary finds 
                        deficiencies, the Secretary shall--
                                    ``(I) notify the State of the 
                                deficiencies;
                                    ``(II) direct the State to correct 
                                the deficiencies; and
                                    ``(III) require the State to report 
                                to the Secretary on progress made by 
                                not later than 180 days after the date 
                                on which the State receives notice 
                                under subclause (I).
                            ``(ii) Substantial deficiencies.--If the 
                        deficiencies are substantial, the Secretary 
                        shall--
                                    ``(I) disallow the reported 
                                electricity savings or natural gas 
                                savings that the Secretary determines 
                                are not credible due to deficiencies;
                                    ``(II) re-review the State not 
                                later than 2 years after the date on 
                                which the original review was 
                                completed; and
                                    ``(III) if substantial deficiencies 
                                remain uncorrected after the review 
                                provided for under subclause (II), 
                                revoke the authority of the State to 
                                administer the program established 
                                under this section.
    ``(f) Information and Reports.--In accordance with section 13 of 
the Federal Energy Administration Act of 1974 (15 U.S.C. 772), the 
Secretary may require any retail electricity supplier, retail natural 
gas supplier, third-party efficiency provider, or any other entity that 
the Secretary determines appropriate, to provide any information the 
Secretary determines appropriate to carry out this section.
    ``(g) State Law.--Nothing in this section diminishes or qualifies 
any authority of a State or political subdivision of a State to adopt 
or enforce any law or regulation respecting electricity savings or 
natural gas savings, including any law or regulation establishing 
energy efficiency requirements that are more stringent than those under 
this section, except that no State law or regulation shall relieve any 
person of any requirement otherwise applicable under this section.''.
    (b) Conforming 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. Federal energy efficiency resource standard for retail 
                            electricity and natural gas suppliers.''.
                                 <all>