[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 1359 Introduced in Senate (IS)]
<DOC>
116th CONGRESS
1st Session
S. 1359
To amend the Public Utility Regulatory Policies Act of 1978 to
establish a market-oriented standard for clean electric energy
generation, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
May 8, 2019
Ms. Smith (for herself, Mr. Heinrich, Mr. Kaine, Mr. Whitehouse, and
Mr. Schatz) 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 market-oriented standard for clean electric energy
generation, 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 ``Clean Energy Standard Act of 2019''.
SEC. 2. FEDERAL CLEAN ENERGY 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 CLEAN ENERGY STANDARD.
``(a) Purpose.--The purpose of this section is to establish a
technology-neutral, market-oriented standard for electric energy
generation that--
``(1) stimulates clean energy innovation and allows the
United States to achieve a net-zero emission electric sector at
the lowest cost;
``(2) will guide power sector investment and provide
regulatory certainty, while helping to ensure that the United
States is the leader and dominant competitor in the global
clean energy transition; and
``(3) will result in--
``(A) hundreds of billions of dollars in domestic
health and environmental benefits by the mid-21st
century; and
``(B) save tens of thousands of lives in the United
States.
``(b) Definitions.--In this section:
``(1) Applicable carbon intensity.--The term `applicable
carbon intensity' means 0.4 metric tons of carbon dioxide
equivalent per megawatt-hour.
``(2) Applicable clean energy percentage.--The term
`applicable clean energy percentage', with respect to a retail
electricity supplier, means the clean energy percentage
applicable to the retail electricity supplier for the relevant
calendar year under subsection (c).
``(3) Base quantity.--
``(A) In general.--The term `base quantity', with
respect to a retail electricity supplier for a calendar
year, means the total quantity of electric energy
consumed by electric customers of the retail
electricity supplier, expressed in megawatt-hours,
during the calendar year, including--
``(i) the quantity of electric energy sold
by the retail electricity supplier to electric
customers for purposes other than resale; and
``(ii) the quantity of behind-the-meter
generation consumed by electric consumers
served by the retail electricity supplier.
``(B) Determination.--For purposes of subparagraph
(A), not later than 180 days after the date of
enactment of this section, the Secretary shall develop
appropriate processes for determining the quantity of
behind-the-meter generation consumed by electric
consumers served by a retail electricity supplier,
including by requiring from the retail electricity
supplier relevant documentation of behind-the-meter
electric energy consumption, such as records associated
with net-metering.
``(4) Baseline percentage.--The term `baseline percentage'
means--
``(A) for a retail electricity supplier in
operation on the date of enactment of this section, the
clean energy percentage of the retail electricity
supplier calculated for the calendar year in which this
section is enacted; and
``(B) for a retail electricity supplier that
commences operation after the date of enactment of this
section, such clean energy percentage as the Secretary
determines to be appropriate.
``(5) Behind-the-meter generation.--The term `behind-the-
meter generation' means the generation of clean energy using a
system that operates on the customer side of the applicable
utility meter, subject to the condition that the retail
electricity supplier serving the generator shall submit to the
Secretary, not less frequently than annually, verification of
the quantity of that generation in such form, in such manner,
and containing such information as the Secretary may require.
``(6) Carbon dioxide equivalent.--
``(A) In general.--The term `carbon dioxide
equivalent' means the number of metric tons of carbon
dioxide emissions with the same global warming
potential over a 100-year period as 1 metric ton of
another greenhouse gas.
``(B) Global warming potential.--For purposes of
subparagraph (A), global warming potential shall be
determined in accordance with the Fifth Assessment
Report of the Intergovernmental Panel on Climate
Change.
``(7) Carbon intensity.--The term `carbon intensity' means
the carbon dioxide equivalent emissions associated with the
generation of 1 megawatt-hour of electric energy by a
generator.
``(8) Clean energy.--The term `clean energy' means electric
energy that is--
``(A) generated at a facility using--
``(i) renewable energy;
``(ii) qualified renewable biomass;
``(iii) hydropower;
``(iv) nuclear power;
``(v) qualified waste-to-energy;
``(vi) qualified low-carbon fuels;
``(vii) a qualified combined heat and power
system; or
``(viii) any other source of energy in a
manner that ensures that the facility does not
exceed the applicable carbon intensity;
``(B) generated at a facility that--
``(i) captures the carbon dioxide from--
``(I) a waste stream of the
facility;
``(II) another waste stream; or
``(III) the atmosphere directly;
and
``(ii) prevents the release of the captured
carbon dioxide into the atmosphere; or
``(C) dispatched from a qualified energy storage
system.
``(9) Clean energy percentage.--
``(A) In general.--The term `clean energy
percentage' means the percentage of clean energy
consumed by all electric consumers of a retail
electricity supplier.
``(B) Calculation.--For purposes of subparagraph
(A), the clean energy percentage of a retail
electricity supplier shall be equal to the quotient
obtained by dividing--
``(i) the sum of--
``(I) the quantity of clean energy
sold by the retail electricity supplier
to electric consumers; and
``(II) the quantity of behind-the-
meter generation consumed by electric
consumers served by the retail
electricity supplier; by
``(ii) the base quantity of the retail
electricity supplier.
``(C) Determination.--
``(i) In general.--For purposes of
subparagraph (B), not later than 180 days after
the date of enactment of this section, the
Secretary shall develop a process for
determining the quantities of--
``(I) clean energy sold by a retail
electricity supplier to electric
consumers, taking into account--
``(aa) the need to
quantify, without double
counting, appropriate
quantities of clean energy--
``(AA) owned by the
retail electricity
supplier;
``(BB) obtained by
the retail electricity
supplier through power
purchase agreements;
``(CC) imported by
the retail electricity
supplier;
``(DD) purchased by
the retail electricity
supplier from wholesale
markets; and
``(EE) purchased by
the retail electricity
supplier through
existing renewable or
clean energy credits
and certificates; and
``(bb) appropriate
differences between--
``(AA) retailers
operating in organized
wholesale markets; and
``(BB) retailers
operating in vertically
integrated market
contexts; and
``(II) behind-the-meter generation
consumed by electric consumers served
by a retail electricity supplier,
including by requiring from the retail
electricity supplier relevant
documentation of behind-the-meter
electric energy consumption, such as
records associated with net-metering.
``(ii) Quantifying clean energy.--For
purposes of quantifying clean energy and
behind-the-meter generation under clause (i),
the Secretary shall use the methods used to
assign a quantity of credits to generators
under subsection (f).
``(10) Dispatchable low-emission technology.--The term
`dispatchable low-emission technology' means a generator that
uses a technology or combination of technologies that--
``(A) has a carbon intensity of not more than 0.05
metric tons of carbon dioxide equivalent per megawatt-
hour;
``(B) has the ability, at any time, to start,
increase, decrease, and stop energy production on
demand;
``(C) is placed into service after the date of
enactment of this section; and
``(D) is not a dispatchable zero-emission
technology.
``(11) Dispatchable zero-emission technology.--The term
`dispatchable zero-emission technology' means a generator that
uses a technology or combination of technologies that--
``(A) has a carbon intensity of zero;
``(B) has the ability, at any time, to start,
increase, decrease, and stop energy production on
demand; and
``(C) is placed into service after the date of
enactment of this section.
``(12) Energy storage system.--The term `energy storage
system' means any equipment or facility relating to the
electric grid that--
``(A) is capable of absorbing energy, storing the
energy for a period of time, and dispatching the energy
as electric energy; and
``(B) uses mechanical, electrochemical,
biochemical, or thermal processes--
``(i) to store energy generated at an
earlier time for use at a later time; or
``(ii) to store energy generated from a
mechanical process that would otherwise be
wasted for delivery at a later time.
``(13) Federal clean energy credit.--The term `Federal
clean energy credit' means a credit issued pursuant to
subsection (e).
``(14) Generator.--The term `generator' means a unit or
system of units that--
``(A) generates not fewer than 20 megawatt-hours of
electric energy per calendar year;
``(B) delivers electric energy to the grid; and
``(C) is located in the United States.
``(15) Lifecycle greenhouse gas emissions.--The term
`lifecycle greenhouse gas emissions' means the aggregate
quantity of carbon dioxide equivalent emissions relating to the
full lifecycle of electric energy production, including--
``(A) extraction, production, and distribution of
fuels and materials for physical capital;
``(B) power generation and transmission; and
``(C) handling and disposal of waste, byproducts,
and end-of-life materials.
``(16) Qualified combined heat and power system.--The term
`qualified combined heat and power system' means a system
that--
``(A) uses the same energy source for the
simultaneous or sequential generation of electrical
energy and thermal energy;
``(B) produces at least--
``(i) 20 percent of the useful energy of
the system in the form of electricity; and
``(ii) 20 percent of the useful energy in
the form of useful thermal energy;
``(C) to the extent that the system uses biomass,
uses only qualified renewable biomass; and
``(D) operates with an energy efficiency
percentage, as determined in accordance with section
48(c)(3)(C)(i) of the Internal Revenue Code of 1986, of
greater than 50 percent.
``(17) Qualified dispatchable.--
``(A) In general.--The term `qualified
dispatchable' means--
``(i) with respect to a dispatchable low-
emission technology, a dispatchable low-
emission technology that--
``(I) is 1 of the first 5 original
demonstrations in the United States of
a particular innovative technology
providing not less than 20 megawatts of
electric energy generation capacity;
``(II) generates revenue from the
sale of electric energy; and
``(III) is placed into service
before January 1, 2030; and
``(ii) with respect to a dispatchable zero-
emission technology, means a dispatchable zero-
emission technology that--
``(I) is 1 of the first 5 original
demonstrations in the United States of
a particular innovative technology
providing not less than 20 megawatts of
electric energy generation capacity;
``(II) generates revenue from the
sale of electric energy; and
``(III) is placed into service
before January 1, 2040.
``(B) Determination.--For purposes of determining
whether a dispatchable low-emission technology or
dispatchable zero-emission technology is an original
demonstration of an innovative technology under clause
(i)(I) or (ii)(I), respectively, of subparagraph (A),
the Secretary shall--
``(i) develop a process that--
``(I) ensures that each innovative
technology exhibits a significant
technical or economic advancement, as
compared to existing technologies; and
``(II) includes consideration of an
application submitted to the Secretary
by the owner of the dispatchable low-
emission technology or dispatchable
zero-emission technology;
``(ii) not later than 90 days after the
date of submission of an application under
clause (i)(II), make a determination regarding
whether to approve the application; and
``(iii) subject to subparagraph (C),
provide to each owner, the application of which
is approved under clause (ii), a
certification--
``(I) that the applicable generator
is a qualified dispatchable low-
emission technology or dispatchable
zero-emission technology; and
``(II) that shall be surrendered to
earn Federal clean energy credits under
subsection (f)(10).
``(C) Termination of certification.--Except as
otherwise provided by the Secretary, a certification
provided under subparagraph (B)(iii) shall cease to
have any force or effect if the Secretary determines
that construction of the applicable generator--
``(i) does not commence by the date that is
2 years after the date of certification; or
``(ii) has been suspended indefinitely.
``(18) Qualified energy storage system.--The term
`qualified energy storage system' means an energy storage
system that stores clean energy--
``(A) that would otherwise be wasted or curtailed;
``(B) with verifiable carbon intensity that does
not exceed the applicable carbon intensity; and
``(C) for which no Federal clean energy credit is
issued.
``(19) Qualified generation.--The term `qualified
generation' means the number of megawatt-hours of electric
energy that a generator--
``(A)(i) generates; or
``(ii) generates and stores using a connected
energy storage system; and
``(B)(i) sells for resale;
``(ii) if the generator is owned by a retail
electricity supplier, sells to electric consumers; or
``(iii) if the generator is a behind-the-meter
generation system, consumes onsite for a useful
purpose.
``(20) Qualified low-carbon fuel.--
``(A) In general.--The term `qualified low-carbon
fuel' means a fuel used to generate electric energy
that--
``(i) is produced through any process (but
not including any processes that use electric
energy as an input) that significantly limits
or avoids greenhouse gas emissions; and
``(ii) does not release greenhouse gas or
other pollutant emissions during combustion.
``(B) Inclusion.--The term `qualified low-carbon
fuel' includes--
``(i) ammonia; and
``(ii) hydrogen.
``(21) Qualified renewable biomass.--The term `qualified
renewable biomass' means--
``(A) any crop byproduct or crop residue harvested
from actively managed or fallow agricultural land that
is cleared before the date of enactment of this
section, if the harvesting of the residue does not lead
to a net decline in soil organic matter for the
applicable land;
``(B) any planted tree, brush, slash, or residue
from an actively managed tree farm dedicated to energy
crop production and located on forest land established
for planted tree crop production before the date of
enactment of this section;
``(C) any brush, slash, or residue from an actively
managed forest that is certified to achieve compliance
with applicable--
``(i) sustainability standards of the
Forest Stewardship Council; or
``(ii) standards endorsed by the Programme
for the Endorsement of Forest Certification,
including--
``(I) the Sustainable Forestry
Initiative; and
``(II) the American Tree Farm
System;
``(D) algae;
``(E) nonhazardous plant matter derived from
landscape right-of-way trimmings; and
``(F) vegetative matter removed from an area
located not more than 200 yards from a building,
residence, or campground for the purpose of hazardous
fuels management.
``(22) Qualified waste-to-energy.--The term `qualified
waste-to-energy' means energy produced--
``(A) from the combustion of--
``(i) post-recycled municipal solid waste;
``(ii) gas produced from the gasification
or pyrolization of post-recycled municipal
solid waste;
``(iii) biogas;
``(iv) landfill methane;
``(v) animal waste or animal byproducts;
``(vi) food waste;
``(vii) 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; or
``(viii) any byproduct of a wood or paper
mill operation, including lignin in spent
pulping liquors; and
``(B) at a facility that the Secretary has
certified, on an annual basis, is in compliance with
all applicable Federal and State environmental permits,
including--
``(i) in the case of a facility that
commences operation before the date of
enactment of this section, compliance with
emission standards under sections 112 and, as
applicable, 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 applicable source category; and
``(ii) in the case of a facility that
produces electric or thermal energy from the
combustion, pyrolization, or gasification of
municipal solid waste, certification that each
local government unit from which the waste
originates operates, participates in the
operation of, contracts for, or otherwise
provides for recycling services for residents
of the local government unit.
``(23) Renewable energy.--The term `renewable energy' means
solar, wind, ocean, current, wave, tidal, or geothermal energy.
``(24) Retail electricity supplier.--
``(A) In general.--The term `retail electricity
supplier', as determined for each calendar year, means
an entity in the United States that sold not fewer than
20 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
making a determination under subparagraph (A) with
respect to an entity--
``(i) any sale of electric energy made by
an affiliate of the entity to an electric
consumer (other than to a lessee or tenant of
the affiliate) for purposes other than resale
may be considered to be a sale made by the
entity; and
``(ii) any sale of electric energy made by
the entity to an affiliate, lessee, or tenant
of the entity shall not be considered to be a
sale to an electric consumer.
``(C) Affiliate.--For purposes of subparagraph (B),
the term `affiliate', with respect to an entity, means
an individual or entity that directly or indirectly
owns or controls, is owned or controlled by, or is
under common ownership or control with, the entity, as
determined in accordance with applicable regulations of
the Secretary.
``(c) Clean Energy Requirement.--
``(1) In general.--Beginning in the second full calendar
year beginning after the date of enactment of this section, and
each calendar year thereafter, each retail electricity supplier
shall sell a quantity of clean energy equal to the product
obtained by multiplying--
``(A) the applicable clean energy percentage
determined for the retail electricity supplier for the
calendar year under paragraph (2); and
``(B) the base quantity of the retail electricity
supplier for the applicable calendar year.
``(2) Determination of applicable clean energy
percentages.--
``(A) Initial percentage.--
``(i) Use of baseline percentage.--For
purposes of the determinations required under
subparagraphs (B) and (C), the applicable clean
energy percentage for a retail electricity
supplier for the calendar year during which
this section is enacted shall be the baseline
percentage of the retail electricity supplier.
``(ii) New retail electricity suppliers.--
For purposes of the determinations required
under subparagraphs (B) and (C), for a retail
electricity supplier that is established after
the date of enactment of this section, the
Secretary shall determine the appropriate
applicable clean energy percentage for the
first calendar year beginning after the date on
which the retail electricity supplier commences
operation.
``(B) Subsequent determinations.--Subject to
paragraph (3), for the first calendar year beginning
after the date of enactment of this section and each
calendar year thereafter until the calendar year for
which the applicable clean energy percentage for a
retail electricity supplier is 90 percent, the
applicable clean energy percentage for the retail
electricity supplier under paragraph (1) shall be--
``(i) in the case of a retail electricity
supplier with not less than 2,000,000 megawatt-
hours of retail electric energy sales during
the calendar year in which this section is
enacted, or a retail electricity supplier with
less than 2,000,000 megawatt-hours of retail
electric energy sales during that calendar year
but more than 2,000,000 megawatt-hours of
retail electric energy sales during a
subsequent calendar year due to a merger or the
acquisition of additional territory, the
applicable clean energy percentage for the
retail electricity supplier for the preceding
calendar year, as increased--
``(I) for any calendar year for
which the applicable clean energy
percentage of the retail electricity
supplier is not more than 60 percent,
by the fast growth rate for the
calendar year, as determined under
paragraph (3)(B); and
``(II) for any calendar year for
which the applicable clean energy
percentage of the retail electricity
supplier is more than 60 percent, by
the slow growth rate for the calendar
year, as determined under paragraph
(3)(C), up to a maximum of 90 percent;
and
``(ii) in the case of a retail electricity
supplier not described in clause (i), the
applicable clean energy percentage for the
retail electricity supplier for the preceding
calendar year, as increased by the small growth
rate for the calendar year, as determined under
paragraph (3)(D), up to a maximum of 90
percent.
``(C) Final target percentage.--Effective beginning
in calendar year 2040, for each calendar year beginning
after the first calendar year for which the applicable
clean energy percentage of a retail electricity
supplier under subparagraph (B) is 90 percent, the
applicable clean energy percentage for the retail
electricity supplier under paragraph (1) shall be
increased by 1 percentage point, up to a maximum of 100
percent.
``(3) Rate increase adjustments.--
``(A) Definitions.--In this paragraph:
``(i) Rate decrease-adjusted calendar
year.--The term `rate decrease-adjusted
calendar year' means any calendar year
beginning after a calendar year for which
alternative compliance payments accounted for
greater than 10 percent of total compliance
obligations of all retail electricity providers
under subsection (d) for that calendar year.
``(ii) Rate increase-adjusted calendar
year.--The term `rate increase-adjusted
calendar year' means any calendar year
beginning after a 2-consecutive calendar year
period during which, for each of those 2
consecutive calendar years, the average price
of a Federal clean energy credit for the 3
preceding calendar years was below the rate-
increased floor price.
``(iii) Rate-increased floor price.--The
term `rate-increased floor price' means the
difference between--
``(I) the alternative compliance
payment for the applicable calendar
year; and
``(II)(aa) during the period
beginning on the date of enactment of
this section and ending on December 31
of the second full calendar year
beginning after that date of enactment,
a rate of 1.5 cents per kilowatt-hour;
and
``(bb) for each calendar year
thereafter, the rate described in item
(aa) for the preceding calendar year--
``(AA) increased by 3
percent; and
``(BB) adjusted for
inflation, as the Secretary
determines to be necessary.
``(B) Fast growth rate.--For purposes of paragraph
(2)(B)(i)(I), the fast growth rate shall be--
``(i) for the calendar year in which this
section is enacted, 2.75 percentage points;
``(ii) for the first calendar year
beginning after the date of enactment of this
section and each calendar year thereafter that
is not a rate increase-adjusted calendar year
or a rate decrease-adjusted calendar year, the
fast growth rate for the preceding calendar
year;
``(iii) for a rate increase-adjusted
calendar year, the fast growth rate for the
preceding calendar year, increased by 0.5
percentage points; and
``(iv) for a rate decrease-adjusted
calendar year, the fast growth rate for the
preceding calendar year, decreased by 0.25
percentage points, down to a minimum of 2.75
percentage points.
``(C) Slow growth rate.--For purposes of paragraph
(2)(B)(i)(II), the slow growth rate shall be--
``(i) for the calendar year in which this
section is enacted, 1.75 percentage points;
``(ii) for the first calendar year
beginning after the date of enactment of this
section and each calendar year thereafter that
is not a rate increase-adjusted calendar year
or a rate decrease-adjusted calendar year, the
slow growth rate for the preceding calendar
year;
``(iii) for a rate increase-adjusted
calendar year, the slow growth rate for the
preceding calendar year, increased by 0.5
percentage points; and
``(iv) for a rate decrease-adjusted
calendar year, the slow growth rate for the
preceding calendar year, decreased by 0.25
percentage points, down to a minimum of 1.75
percentage points.
``(D) Small growth rate.--For purposes of paragraph
(2)(B)(ii), the small growth rate shall be--
``(i) for the calendar year in which this
section is enacted, 1.5 percentage points;
``(ii) for the first calendar year
beginning after the date of enactment of this
section and each calendar year thereafter that
is not a rate increase-adjusted calendar year
or a rate decrease-adjusted calendar year, the
small growth rate for the preceding calendar
year;
``(iii) for a rate increase-adjusted
calendar year, the small growth rate for the
preceding calendar year, increased by 0.5
percentage points; and
``(iv) for a rate decrease-adjusted
calendar year, the small growth rate for the
preceding calendar year, decreased by 0.25
percentage points, down to a minimum of 1.5
percentage points.
``(d) Means of Compliance.--
``(1) In general.--A retail electricity supplier shall
annually achieve compliance with subsection (c) by--
``(A) submitting to the Secretary Federal clean
energy credits;
``(B) submitting to the Secretary documentation of
the quantity of behind-the-meter generation consumed by
electric consumers served by the retail electricity
supplier;
``(C) making alternative compliance payments of 3
cents per kilowatt-hour in accordance with subsection
(i); or
``(D) taking a combination of actions described in
subparagraphs (A) through (C).
``(2) Failure to establish federal clean energy credit
trading program.--If the Secretary does not establish a Federal
clean energy credit trading program under subsection (e), a
retail electricity supplier shall achieve compliance with
subsection (c) by--
``(A) submitting to the Secretary documentation of
the clean energy percentage of the retail electricity
supplier;
``(B) making alternative compliance payments of 3
cents per kilowatt-hour in accordance with subsection
(i); or
``(C) taking a combination of actions described in
subparagraphs (A) and (B).
``(e) Federal Clean Energy Credit Trading Program.--
``(1) Establishment.--Not later than 1 year after the date
of enactment of this section, the Secretary shall establish a
Federal clean energy credit trading program under which--
``(A) 1 Federal clean energy credit represents 1
megawatt-hour of clean energy generated by a generator;
``(B) retail electricity suppliers may submit to
the Secretary Federal clean energy credits to certify
compliance by the retail electricity suppliers with
subsection (c); and
``(C) those Federal clean energy credits are
issued, recorded, tracked, and transferred.
``(2) Clean energy credits.--Except as provided in
subparagraphs (B) and (C) of paragraph (3), the Secretary shall
issue to each generator and qualified energy storage system a
quantity of Federal clean energy credits determined in
accordance with subsections (f) and (g).
``(3) Administration.--In carrying out the program under
this subsection, the Secretary shall ensure that--
``(A) a Federal clean energy credit may be--
``(i) used only once for purposes of
compliance with this section; and
``(ii) purchased only by a retail
electricity supplier;
``(B) a Federal clean energy credit issued for
clean energy generated and sold for resale under a
contract in effect on the date of enactment of this
section shall be issued to the purchasing retail
electricity supplier, unless otherwise provided by the
contract; and
``(C) with respect to clean energy generated in a
facility outside of the United States, a Federal clean
energy credit may be issued only--
``(i) if the clean energy is sold for
resale in the United States; and
``(ii) to the purchasing retail electricity
supplier.
``(4) Delegation of market function.--
``(A) In general.--In carrying out the program
under this subsection, the Secretary may delegate--
``(i) to 1 or more appropriate entities
(including any Federal entity in existence on
the date of enactment of this section), the
administration of a national Federal clean
energy credit market for purposes of
establishing a transparent national market for
the sale or trade of Federal clean energy
credits; and
``(ii) to appropriate entities, the
tracking of dispatch of clean energy
generation.
``(B) Administration.--In making a delegation under
subparagraph (A)(ii), the Secretary shall ensure that
the tracking and reporting of information concerning
the dispatch of clean energy generation is transparent,
verifiable, and independent of any generation or load
interests subject to an obligation under this section.
``(5) Banking of federal clean energy credits.--
``(A) In general.--Subject to subparagraph (B), for
purposes of achieving compliance with subsection (c), a
Federal clean energy credit shall be valid for--
``(i) the calendar year during which the
Federal clean energy credit is issued; or
``(ii) either of the 2 subsequent calendar
years.
``(B) Adjustments.--
``(i) Calendar years 2040 through 2049.--
For each of calendar years 2040 through 2049, a
Federal clean energy credit shall be valid
for--
``(I) the calendar year during
which the Federal clean energy credit
is issued; or
``(II) the subsequent calendar
year.
``(ii) Calendar year 2050 and thereafter.--
Beginning in calendar year 2050, a Federal
clean energy credit shall be valid only for the
calendar year during which the Federal clean
energy credit is issued.
``(f) Determination of Quantity of Credits.--
``(1) In general.--Except as otherwise provided in this
subsection, the quantity of Federal clean energy credits issued
to a generator of clean energy shall be equal to the product
obtained by multiplying--
``(A) the qualified generation of the generator;
and
``(B) the difference between--
``(i) 1.0; and
``(ii) the quotient obtained by dividing--
``(I) the carbon intensity of the
generator, as determined in accordance
with subsection (g) (expressed in
metric tons per megawatt-hour); by
``(II) the applicable carbon
intensity.
``(2) Qualified combined heat and power systems.--
``(A) In general.--The quantity of Federal clean
energy credits issued to a generator that is a
qualified combined heat and power system shall be equal
to the difference between--
``(i) the product obtained by multiplying--
``(I) the number of megawatt-hours
of electric energy generated by the
qualified combined heat and power
system; and
``(II) the difference between--
``(aa) 1.0; and
``(bb) the quotient
obtained by dividing--
``(AA) the carbon
intensity of the
generator, as
determined in
accordance with
subsection (g)
(expressed in metric
tons per megawatt-
hour); by
``(BB) the
applicable carbon
intensity; and
``(ii) the product obtained by
multiplying--
``(I) the number of megawatt-hours
of electric energy generated by the
qualified combined heat and power
system that are consumed onsite; and
``(II) the national weighted
average of the applicable clean energy
percentage required for the calendar
year under subsection (c), as
determined by the Secretary.
``(B) Additional credits.--In addition to Federal
clean energy credits issued under subparagraph (A), the
Secretary shall issue Federal clean energy credits to a
generator that is a qualified combined heat and power
system for greenhouse gas emissions avoided as a result
of the use of the qualified combined heat and power
system, rather than a separate thermal source, to meet
the onsite thermal needs of the generator.
``(3) Qualified renewable biomass.--
``(A) In general.--Subject to subparagraph (B), the
quantity of Federal clean energy credits issued to each
generator of clean energy using qualified renewable
biomass shall be equal to the product obtained by
multiplying--
``(i) the qualified generation of the
generator using qualified renewable biomass;
and
``(ii) the qualified renewable biomass
credit value determined under subsection
(g)(4)(B)(iii).
``(B) Existing generators.--For generators placed
into service before the date of enactment of this
section, the quantity of Federal clean energy credits
issued to each generator of energy using qualified
renewable biomass shall be equal to the greater of--
``(i) the product obtained by multiplying--
``(I) the qualified generation of
the generator, not to exceed the
generation capacity of the generator on
the date of enactment of this section;
and
``(II) 0.5; and
``(ii) the quantity of credits determined
under subparagraph (A).
``(4) Qualified waste-to-energy.--
``(A) In general.--Subject to subparagraph (B), the
quantity of Federal clean energy credits issued to a
generator that is a qualified waste-to-energy facility
shall be equal to the product obtained by multiplying--
``(i) the qualified generation of the
generator using qualified waste-to-energy; and
``(ii) the qualified waste-to-energy credit
value determined under subsection
(g)(4)(B)(iii).
``(B) Existing generators.--For generators placed
into service before the date of enactment of this
section, the quantity of Federal clean energy credits
issued to each generator of energy that is a qualified
waste-to-energy facility shall be equal to the greater
of--
``(i) the qualified generation of the
generator, not to exceed the generation
capacity of the generator on the date of
enactment of this section; and
``(ii) the quantity of credits determined
under subparagraph (A).
``(5) Qualified low-carbon fuels.--The quantity of Federal
clean energy credits issued to a generator using qualified low-
carbon fuels shall be equal to the product obtained by
multiplying--
``(A) the qualified generation of the generator
using qualified low-carbon-fuels; and
``(B) the qualified low-carbon fuel credit value
determined under subsection (g)(4)(B)(iii).
``(6) Carbon capture, storage, and utilization.--
``(A) Definitions.--In this paragraph, the terms
`qualified carbon oxide', `qualified enhanced oil or
natural gas recovery project', and `tertiary injectant'
have the meanings given those terms in section 45Q of
the Internal Revenue Code of 1986.
``(B) Quantity of credits.--Except as otherwise
provided in this subsection, the quantity of Federal
clean energy credits issued to each generator of clean
energy through the capture and storage or utilization
of qualified carbon oxide from a waste stream of the
generator shall be equal to the product obtained by
multiplying--
``(i) the qualified generation of the
generator; and
``(ii) the difference between--
``(I) 1.0; and
``(II) the quotient obtained by
dividing--
``(aa) the carbon intensity
of the generator, as determined
in accordance with subsection
(g) (expressed in metric tons
per megawatt-hour); by
``(bb) the applicable
carbon intensity.
``(C) Additional credits.--In addition to Federal
clean energy credits issued under subparagraph (B), the
Secretary shall issue Federal clean energy credits to
each generator of clean energy through the capture and
storage or utilization of qualified carbon oxide from a
waste stream other than the waste stream of the
generator, or from the atmosphere directly, in a
quantity equal to the quotient obtained by dividing--
``(i) the number of metric tons of
qualified carbon oxide captured and stored or
utilized; by
``(ii) the carbon intensity of the
generator, as determined in accordance with
subsection (g) (expressed in metric tons per
megawatt-hour).
``(D) Special rules.--
``(i) Regulations.--
``(I) In general.--Subject to
subclause (III), not later than 1 year
after the date of enactment of this
section, the Secretary, in consultation
with the Administrator of the
Environmental Protection Agency, shall
promulgate regulations establishing--
``(aa) the conditions under
which qualified carbon oxide
may be safely and permanently
stored for purposes of issuing
Federal clean energy credits to
a generator under this
paragraph; and
``(bb) in accordance with
subclause (II), the methods and
processes by which qualified
carbon oxide may be utilized in
a manner that ensures the
removal of the qualified carbon
oxide safely and permanently
from the atmosphere.
``(II) Requirements.--For purposes
of subclause (I)(bb)--
``(aa) utilization of
qualified carbon oxide may
include the production of
substances, such as plastics
and chemicals; and
``(bb) the regulations
promulgated pursuant to that
subclause shall minimize the
escape or further emission of
qualified carbon oxide into the
atmosphere.
``(III) Existing requirements.--In
promulgating regulations pursuant to
this clause, the Secretary shall
incorporate any existing Federal
requirements for the permanent geologic
storage of carbon oxides, including any
requirements under section 45Q of the
Internal Revenue Code of 1986.
``(ii) Adjusted quantity.--
``(I) In general.--Notwithstanding
subparagraphs (B) and (C), except as
provided in subclause (II), the
quantity of Federal clean energy
credits issued under this paragraph to
a generator at which qualified carbon
oxide is captured and used as a
tertiary injectant in a qualified
enhanced oil or natural gas recovery
project shall be reduced by 50 percent.
``(II) No reduction.--If the
qualified carbon oxide captured and
used as a tertiary injectant in a
qualified enhanced oil or natural gas
recovery project by a generator
achieves compliance with the conditions
established pursuant to clause
(i)(I)(aa), the quantity of Federal
clean energy credits issued to the
generator shall not be reduced.
``(7) Qualified energy storage systems.--The quantity of
Federal clean energy credits issued to each qualified energy
storage system shall be equal to the product obtained by
multiplying--
``(A) the electric energy dispatched and sold by
the qualified energy storage system (expressed in
megawatt-hours); and
``(B) the difference between--
``(i) 1.0; and
``(ii) the quotient obtained by dividing--
``(I) the average carbon intensity
of the clean energy stored in the
qualified energy storage system, as
determined in accordance with
subsection (g) (expressed in metric
tons per megawatt-hour); by
``(II) the applicable carbon
intensity.
``(8) Negative credits.--Notwithstanding any other
provision of this subsection, the Secretary shall not issue a
negative quantity of Federal clean energy credits to any
generator.
``(9) Maximum quantity of credits.--Notwithstanding
paragraphs (1) through (6), the total quantity of Federal clean
energy credits issued under those paragraphs to a generator for
a calendar year shall not exceed the number of megawatt-hours
of the applicable annual qualified generation of the generator.
``(10) Innovation multiplier.--
``(A) In general.--Notwithstanding paragraphs (1)
through (6), until the applicable date described in
subparagraph (C), the quantity of Federal clean energy
credits issued under this section to--
``(i) a generator that is a qualified
dispatchable low-emission technology or a
qualified dispatchable zero-emission technology
shall be equal to the product obtained by
multiplying--
``(I) the qualified generation of
that generator;
``(II) the difference between--
``(aa) 1.0; and
``(bb) the quotient
obtained by dividing--
``(AA) the carbon
intensity of the
generator, as
determined in
accordance with
subsection (g)
(expressed in metric
tons per megawatt-
hour); by
``(BB) the
applicable carbon
intensity; and
``(III) 1.5;
``(ii) a generator that is a dispatchable
zero-emission technology that is not issued
Federal clean energy credits under clause (i)
shall be equal to the product obtained by
multiplying--
``(I) the qualified generation of
that generator;
``(II) the difference between--
``(aa) 1.0; and
``(bb) the quotient
obtained by dividing--
``(AA) the carbon
intensity of the
generator, as
determined in
accordance with
subsection (g)
(expressed in metric
tons per megawatt-
hour); by
``(BB) the
applicable carbon
intensity; and
``(III) the appropriate multiplier,
as determined under subparagraph
(B)(i); and
``(iii) a generator that is a dispatchable
low-emission technology that is not issued
Federal clean energy credits under clause (i)
shall be equal to the product obtained by
multiplying--
``(I) the qualified generation of
that generator;
``(II) the difference between--
``(aa) 1.0; and
``(bb) the quotient
obtained by dividing--
``(AA) the carbon
intensity of the
generator, as
determined in
accordance with
subsection (g)
(expressed in metric
tons per megawatt-
hour); by
``(BB) the
applicable carbon
intensity; and
``(III) the appropriate multiplier,
as determined under subparagraph
(B)(ii).
``(B) Multipliers.--The multipliers referred to in
clauses (ii)(III) and (iii)(III) of subparagraph (A)
are--
``(i) for a dispatchable zero-emission
technology described in subparagraph (A)(ii)--
``(I) for the period beginning on
the date of enactment of this section
and ending on the date on which the
total capacity of dispatchable zero-
emission technologies in the United
States is greater than 5 gigawatts, as
determined by the Secretary, 1.25;
``(II) for the period beginning on
the day after the date of expiration of
the period described in subclause (I)
and ending on the date on which the
total capacity of dispatchable zero-
emission technologies in the United
States is greater than 10 gigawatts, as
determined by the Secretary, 1.2;
``(III) for the period beginning on
the day after the date of expiration of
the period described in subclause (II)
and ending on the date on which the
total capacity of dispatchable zero-
emission technologies in the United
States is greater than 15 gigawatts, as
determined by the Secretary, 1.15; and
``(IV) for the period beginning on
the day after the date of expiration of
the period described in subclause (III)
and ending on the date on which the
total capacity of dispatchable zero-
emission technologies in the United
States is greater than 20 gigawatts, as
determined by the Secretary, 1.1; and
``(ii) for a dispatchable low-emission
technology described in subparagraph (A)(iii)--
``(I) for the period beginning on
the date of enactment of this section
and ending on the date on which the
total capacity of dispatchable low-
emission technologies and dispatchable
zero-emission technologies in the
United States is greater than 5
gigawatts, as determined by the
Secretary, 1.25;
``(II) for the period beginning on
the day after the date of expiration of
the period described in subclause (I)
and ending on the date on which the
total capacity of dispatchable low-
emission technologies and dispatchable
zero-emission technologies in the
United States is greater than 10
gigawatts, as determined by the
Secretary, 1.2;
``(III) for the period beginning on
the day after the date of expiration of
the period described in subclause (II)
and ending on the date on which the
total capacity of dispatchable low-
emission technologies and dispatchable
zero-emission technologies in the
United States is greater than 15
gigawatts, as determined by the
Secretary, 1.15; and
``(IV) for the period beginning on
the day after the date of expiration of
the period described in subclause (III)
and ending on the date on which the
total capacity of dispatchable low-
emission technologies and dispatchable
zero-emission technologies in the
United States is greater than 20
gigawatts, as determined by the
Secretary, 1.1.
``(C) Phase-out.--The quantity of Federal clean
energy credits issued under this section to--
``(i) a generator described in subparagraph
(A)(i) that is--
``(I) a qualified dispatchable low-
emission technology shall be determined
in accordance with subparagraph
(A)(iii), effective beginning on the
earlier of--
``(aa) the date on which
the qualified dispatchable low-
emission technology has been in
service for 10 years; and
``(bb) January 1, 2035; and
``(II) a qualified dispatchable
zero-emission technology shall be
determined in accordance with
subparagraph (A)(ii), effective
beginning on the date on which the
qualified dispatchable zero-emission
technology has been in service for 10
years;
``(ii) a generator described in
subparagraph (A)(ii) shall be determined in
accordance with paragraphs (1) through (6),
effective beginning on January 1, 2050; and
``(iii) a generator described in
subparagraph (A)(iii) shall be determined in
accordance with paragraphs (1) through (6),
effective beginning on January 1, 2040.
``(D) Prohibition on double receipts.--A generator
that receives Federal clean energy credits under
subparagraph (A) may not receive any additional Federal
clean energy credit under any of paragraphs (1) through
(6).
``(g) Determination of Carbon Intensity and Credit Value.--
``(1) In general.--For purposes of determining the quantity
of Federal clean energy credits under subsection (f), except as
otherwise provided in this subsection, the Secretary shall
determine the carbon intensity of each generator using data and
methods from the Air Emission Measurement Center of the
Environmental Protection Agency for emission testing and
monitoring, including--
``(A) Continuous Emission Monitoring Systems; and
``(B) Predictive Emission Monitoring Systems.
``(2) Natural gas adjustment.--Except as provided in
paragraph (4), the Secretary shall adjust the carbon intensity
determined under paragraph (1) for each generator using natural
gas by applying the methane leakage rates assumed in the 9-
region MARKAL Database of the Environmental Protection Agency
(commonly known as the `EPAUS9R database').
``(3) Nonemitting generators.--Except as provided in
paragraph (4), the Secretary shall assign a carbon intensity of
zero for any generator that does not produce emissions on
electric energy generation, including any generator that uses
renewable energy, hydropower, or nuclear power.
``(4) Determination and national academy of sciences
study.--The Secretary shall--
``(A) not later than 180 days after the date of
enactment of this section, enter into an agreement with
the National Academy of Sciences, under which the
Academy shall--
``(i) evaluate data, models, and
methodologies for quantifying lifecycle
greenhouse gas emissions associated with
generating electric energy from each type of
significant source of clean energy, including
the sources described in subparagraphs (A) and
(B) of subsection (b)(8);
``(ii) evaluate data, models, and
methodologies for determining the appropriate
credit value for use in the quantification of
Federal clean energy credits under subsection
(f) for--
``(I) qualified renewable biomass,
taking into consideration total
lifecycle carbon dynamics, including--
``(aa) carbon absorbed
through the regrowth of
vegetation;
``(bb) avoided
decomposition relating to the
full fuel lifecycle;
``(cc) carbon sink value
from land use changes and
temporal changes in forest
carbon sequestration; and
``(dd) lifecycle greenhouse
gas emissions, including--
``(AA) direct
greenhouse gas
emissions; and
``(BB) significant
indirect greenhouse gas
emissions, including
all stages of fuel and
feedstock production
and distribution and
feedstock generation or
extraction through the
distribution and
delivery of the
finished fuel to
electric consumers;
``(II) qualified waste-to-energy,
taking into consideration total
lifecycle carbon dynamics, including--
``(aa) avoided
decomposition relating to the
feedstock lifecycle; and
``(bb) lifecycle greenhouse
gas emissions, including--
``(AA) direct
greenhouse gas
emissions; and
``(BB) indirect
greenhouse gas
emissions; and
``(III) qualified low-carbon fuels,
taking into consideration lifecycle
greenhouse gas emissions, including--
``(aa) direct greenhouse
gas emissions; and
``(bb) significant indirect
greenhouse gas emissions,
including--
``(AA) all stages
of fuel and feedstock
production and
distribution; and
``(BB) feedstock
generation or
extraction through the
distribution and
delivery of the
finished fuel to
electric consumers;
``(iii) evaluate the appropriateness of the
definitions contained in subsection (b) of the
terms--
``(I) `qualified renewable
biomass', taking into consideration
whether the definition should be
expanded or contracted;
``(II) `qualified waste-to-energy';
and
``(III) `qualified low-carbon
fuel';
``(iv) if it is determined under clause
(iii)(I) that the definition of the term
`qualified renewable biomass' should be
expanded, evaluate tools for determining the
allowable carbon stock removal levels during
defined forest management operations; and
``(v) not later than 540 days after the
date of enactment of this section, publish a
report that includes--
``(I) a description of the
evaluations under clauses (i) through
(iv); and
``(II) recommendations for--
``(aa) determining the
carbon intensity, accounting
for lifecycle greenhouse gas
emissions, of electric energy
generated from each type of
significant source of clean
energy evaluated under clause
(i);
``(bb) determining the
credit value of electric energy
generated from qualified
renewable biomass, qualified
waste-to-energy, and qualified
low-carbon fuels;
``(cc) if applicable,
changes to the definitions of
the terms `qualified renewable
biomass', `qualified waste-to-
energy', and `qualified low-
carbon fuel'; and
``(dd) if applicable,
determining the allowable
carbon stock removal levels
during defined forest
management operations;
``(B) not later than 1 year after the date of
publication of the report under subparagraph (A)(v),
after providing notice an opportunity for public
comment, promulgate regulations, taking into
consideration the report, for--
``(i) calculating lifecycle greenhouse gas
emissions of electric energy generated from
each type of significant source of clean energy
evaluated under subparagraph (A)(i);
``(ii) determining the carbon intensity of
electric energy generated from each type of
significant source of clean energy evaluated
under subparagraph (A)(i); and
``(iii) determining the credit value of
electric energy generated from qualified
renewable biomass, qualified waste-to-energy,
and qualified low-carbon fuels; and
``(C) if recommended in the report under
subparagraph (A)(v)(II)(cc), submit to Congress
recommendations relating to changes to the definitions
of the terms `qualified renewable biomass', `qualified
waste-to-energy', and `qualified low-carbon fuel' for
purposes of this section.
``(5) Consultation.--The Secretary shall consult with--
``(A) in determining carbon intensities of
generators pursuant to paragraph (1) and making
adjustments pursuant to paragraph (2), the
Administrator of the Environmental Protection Agency;
``(B) in promulgating regulations for calculating
lifecycle greenhouse gas emissions pursuant to
paragraph (4)(B)(i) and determining carbon intensities
pursuant to paragraph (4)(B)(ii), the Administrator of
the Environmental Protection Agency;
``(C) in promulgating regulations for determining
appropriate credit values pursuant to paragraph
(4)(B)(iii)--
``(i) the Administrator of the
Environmental Protection Agency;
``(ii) the Secretary of Agriculture; and
``(iii) the Secretary of the Interior; and
``(D) in making recommendations to Congress under
paragraph (4)(C), the Administrator of the
Environmental Protection Agency, acting in consultation
with the Scientific Advisory Board of the Environmental
Protection Agency.
``(h) Civil Penalties.--
``(1) In general.--Subject to paragraph (2), a retail
electricity supplier that fails to meet the requirements of
this section shall be subject to a civil penalty in an amount
equal to the product obtained by multiplying--
``(A) the number of kilowatt-hours of electric
energy sold by the retail electricity supplier to
electric consumers in violation of subsection (c); and
``(B) 200 percent of the value of the alternative
compliance payment, as adjusted under subsection
(i)(2).
``(2) Waivers and mitigation.--
``(A) Force majeure.--The Secretary may mitigate or
waive a civil penalty under paragraph (1) if the
applicable retail electricity supplier was unable to
comply with an applicable requirement of this section
for reasons outside of the reasonable control of the
retail electricity supplier.
``(B) Reduction for state penalties.--The Secretary
shall reduce the amount of a penalty determined under
paragraph (1) by the amount paid by the applicable
retail electricity supplier to a State for failure to
comply with the requirement of a State renewable energy
program, if the State requirement is more stringent
than the applicable requirement of this section.
``(3) Procedure for assessing penalty.--The Secretary shall
assess a civil penalty under this subsection in accordance with
section 333(d) of the Energy Policy and Conservation Act (42
U.S.C. 6303(d)).
``(i) Alternative Compliance Payments.--
``(1) In general.--A retail electricity supplier may
satisfy the requirements of subsection (c), in whole or in
part, by submitting, in lieu of Federal clean energy credits
issued under this section, a payment equal to the amount
required under subsection (d)(1)(C), in accordance with such
regulations as the Secretary may promulgate, subject to
paragraph (2).
``(2) Adjustment.--Not later than December 1 of the second
full calendar year beginning after the date of enactment of
this section, and annually thereafter, the Secretary shall--
``(A) increase the rate of the alternative
compliance payment under subsection (d)(1)(C) by--
``(i) during the period beginning on the
date of enactment of this section and ending on
December 31, 2029, 3 percent; and
``(ii) beginning on January 1, 2030, 5
percent; and
``(B) additionally adjust that rate for inflation,
as the Secretary determines to be necessary.
``(j) State Energy Efficiency, Clean Energy Deployment, and
Electric Consumer Bill Reduction Program.--
``(1) Establishment.--Not later than December 1 of the
first calendar year beginning after the date of enactment of
this section, the Secretary shall establish a State energy
efficiency, clean energy deployment, and electric consumer bill
reduction program.
``(2) Funding.--All funds collected by the Secretary as
alternative compliance payments under subsection (i), or as
civil penalties under subsection (h), shall be used solely to
carry out the program under this subsection.
``(3) Distribution to states.--
``(A) In general.--Of the funds described in
paragraph (2), an amount equal to 75 percent shall be
used by the Secretary, without further appropriation or
fiscal year limitation, to provide funds to States, in
an amount determined proportionally based on the
amounts collected from each State--
``(i) for the implementation of State
energy efficiency plans under section 362 of
the Energy Policy and Conservation Act (42
U.S.C. 6322);
``(ii) for the conduct of clean energy
programs in the State; and
``(iii) to carry out activities to reduce
the amount of electricity bills for households
in the State below 300 percent of the poverty
line (as defined in section 673 of the
Community Services Block Grant Act (42 U.S.C.
9902)).
``(B) Action by states.--A State that receives
funds under this paragraph shall maintain such records
and evidence of compliance as the Secretary may
require.
``(4) Guidelines and criteria.--
``(A) Buy american compliance.--The funds made
available under the program established under this
subsection shall not be used for a project unless the
project achieves compliance with all applicable
requirements of chapter 83 of title 41, United States
Code (formerly known as the `Buy American Act').
``(B) Davis-bacon compliance.--
``(i) In general.--All laborers and
mechanics employed on projects funded directly,
or assisted in whole or in part, by this
section shall be paid wages at rates not less
than those prevailing on projects of a
character similar in the locality as determined
by the Secretary of Labor in accordance with
subchapter IV of chapter 31 of part A of
subtitle II of title 40, United States Code
(commonly referred to as the `Davis-Bacon
Act').
``(ii) Authority.--With respect to the
labor standards specified in this subparagraph,
the Secretary of Labor shall have the authority
and functions set forth in Reorganization Plan
Numbered 14 of 1950 (64 Stat. 1267; 5 U.S.C.
App.) and section 3145 of title 40, United
States Code.
``(C) Additional guidelines and criteria.--The
Secretary may issue such additional guidelines and
criteria for the program under this subsection as the
Secretary determines to be appropriate.
``(k) State Programs.--
``(1) Savings provision.--
``(A) In general.--Subject to subparagraph (B),
nothing in this section affects the authority of a
State or a political subdivision of a State to adopt or
enforce any law or regulation relating to--
``(i) clean or renewable energy; or
``(ii) the regulation of any retail
electricity supplier.
``(B) Federal law.--No law or regulation of a State
or a political subdivision of a State may relieve a
retail electricity supplier from the obligation to
comply with an applicable requirement of this section.
``(2) Coordination.--The Secretary, in consultation with
States that have clean and renewable energy programs in effect,
shall facilitate, to the maximum extent practicable,
coordination between the Federal clean energy program under
this section and the relevant State clean and renewable energy
programs.
``(l) Information Collection.--
``(1) In general.--The Secretary may require any retail
electricity supplier, generator, or any other entity that the
Secretary determines appropriate to submit to the Secretary any
information the Secretary determines to be appropriate to carry
out this section.
``(2) Failure to submit; false or misleading information.--
An entity required to submit information pursuant to paragraph
(1) that fails to submit the information, or submits false or
misleading information, shall be in violation of this section.
``(m) Report on Clean Energy Resources That Do Not Generate
Electric Energy.--
``(1) In general.--Not later than 3 years after the date of
enactment of this section, the Secretary shall submit to
Congress a report examining mechanisms to supplement the
standard under this section by addressing clean energy
resources that do not generate electric energy but that may
substantially reduce overall energy emissions, including energy
efficiency, demand response, flexible load, beneficial
electrification, microgrids, biomass converted to thermal
energy, geothermal energy collected using heat pumps, thermal
energy delivered through district heating systems, and waste
heat used as industrial process heat.
``(2) Potential integration.--The report under paragraph
(1) shall examine the benefits and challenges of integrating
the additional clean energy resources into the standard
established by this section, including--
``(A) the extent to which such an integration would
achieve the purposes of this section;
``(B) the manner in which a baseline describing the
use of the resources could be developed that would
ensure that only incremental action that increased the
use of the resources received credit; and
``(C) the challenges of crediting the resources,
alone or in combination with other resources, in a
comparable manner between organized markets and
vertically integrated markets to incentivize sufficient
deployment of those resources to support efficient
integration into the standard.
``(3) Complementary policies.--The report under paragraph
(1) shall examine the benefits and challenges of using
complementary policies or standards, other than the standard
established under this section, to provide effective incentives
for using the additional clean energy resources.
``(4) Legislative recommendations.--As part of the report
under paragraph (1), the Secretary shall provide legislative
recommendations for changes to the standard established under
this section or new complementary policies that would provide
effective incentives for using the additional clean energy
resources.
``(n) Periodic Review and Adjustments.--
``(1) National academy of sciences review.--The Secretary
shall enter into an agreement with the National Academy of
Sciences under which the Academy shall, not later than July 1,
2028, and every 10 years thereafter, submit to Congress and the
Secretary a comprehensive evaluation of all aspects of the
standard established under this section, including--
``(A) an evaluation of the effectiveness of the
standard in decreasing the aggregate net carbon dioxide
equivalent emissions in the electric sector,
including--
``(i) a comparison of--
``(I) the actual carbon dioxide
equivalent emissions associated with
the electric sector for the preceding
calendar year; and
``(II)(aa) for the initial review,
900,000,000 metric tons of carbon
dioxide equivalent;
``(bb) for the review conducted
with respect to calendar year 2038,
600,000,000 metric tons of carbon
dioxide equivalent; or
``(cc) if the Academy determines
that an emissions value described in
item (aa) or (bb) is inappropriate
after taking into consideration changes
in electric energy consumption, and in
emissions relating to energy use
outside of the electric sector, such
emissions as the Academy determines to
be appropriate for the applicable
review year; and
``(ii) an evaluation of the methods by
which the quantity of Federal clean energy
credits is determined, including--
``(I) alternative methods of
quantifying credits for clean energy
resources eligible to receive Federal
clean energy credits under this section
that may be more effective, such as--
``(aa) issuing credits
based on the difference between
the carbon intensity of a
generator and the marginal
emissions rate in a given hour
and balancing area; and
``(bb) adjusting the
innovation multipliers; and
``(II) potential methods of
crediting other clean energy resources
not already addressed in the report
under subsection (m);
``(B) the impact of the standard on the
reliability, resilience, security, and safety of
electricity generation, transmission, and distribution;
``(C) the impact of the standard on the function of
regulated and deregulated electricity markets;
``(D) the net benefits or costs of the standard to
the United States and the States, including--
``(i) the effects on electricity demand and
prices;
``(ii) the economic development benefits of
investment;
``(iii) lifecycle environmental and safety
costs and benefits;
``(iv) the impacts on public health and
health care costs; and
``(v) avoided costs relating to
environmental damages and adaptation
investments that otherwise would have been
required;
``(E) the impact of the standard on the emissions
of behind-the-meter and off-grid electricity
generation;
``(F) recommendations regarding potential changes
to the standard, such as--
``(i) to regulations and procedures for
implementing the standard;
``(ii) to the structure and specific design
elements of the standard, such as--
``(I) if the comparison of
emissions under paragraph (1)(A)(i)
reveals that actual emissions for the
electric sector are greater than the
required emissions under paragraph
(1)(A)(i)(II), changes to the values of
the growth rates, the applicable carbon
intensity, and alternative compliance
payment to eliminate the gap between
actual and required emissions;
``(II) the quantification of
Federal clean energy credits; and
``(III) the value of and
eligibility for the innovation
multiplier; and
``(iii) to the structure and administration
of the Federal clean energy credit trading
program; and
``(G) recommendations regarding potential changes
to related public policies or creation of new
complementary policies.
``(2) Recommendations to congress.--Not later than January
1, 2029, and not less frequently than once every 10 years
thereafter, the Secretary shall submit to the Committee on
Energy and Natural Resources of the Senate and the Committee on
Energy and Commerce of the House of Representatives a report
including recommendations for modifications and improvements to
the standard established under this section, including an
explanation of the inconsistencies, if any, between--
``(A) the recommendations of the Secretary; and
``(B) the recommendations included in the
evaluation of the National Academy of Sciences under
paragraph (1).
``(3) Congressional action.--Not later than January 1,
2030, and not less frequently than once every 10 years
thereafter, Congress shall enact legislation that amends this
section or establishes new policies based on the
recommendations submitted by the Secretary under paragraph (2).
``(4) Adjustments upon failure of congressional action.--
``(A) In general.--If Congress fails to enact
legislation under paragraph (3) by an applicable
deadline, the Secretary--
``(i) shall, in any case in which the
comparison of emissions under paragraph
(1)(A)(i) reveals that actual emissions for the
electric sector are greater than the required
emissions under paragraph (1)(A)(i)(II), make
such compensatory adjustments to the standard
established under this section as the Secretary
considers to be necessary, based on, and
consistent with, the findings and
recommendations of the National Academy of
Sciences under paragraph (1)(F)(ii)(I), to
eliminate the gap between actual and required
emissions by not later than 3 years after the
date of the applicable deadline by--
``(I) increasing the fast growth
rate;
``(II) increasing the slow growth
rate;
``(III) increasing the small growth
rate;
``(IV) decreasing the applicable
carbon intensity;
``(V) increasing the alternative
compliance payment under subsection
(d)(1)(C); or
``(VI) taking a combination of
actions described in subclauses (I)
through (V); and
``(ii) if the evaluation of the crediting
system under paragraph (1)(A)(ii) describes a
more-effective method of issuing Federal clean
energy credits to clean energy resources, may
make other modifications and improvements to
the standard based on, and consistent with, the
recommendations under paragraph (1)(F)(ii) that
would have the effect of decreasing economy-
wide emissions.
``(B) Requirement.--In making the compensatory
adjustments under subparagraph (A)(i), the Secretary
shall ensure that retail electricity suppliers that
have exceeded the proportionate share of the reductions
of the retail electricity suppliers required under
paragraph (1)(A)(i)(II) shall not bear significant
additional costs under this paragraph.
``(o) Regulations.--Not later than 1 year after the date of
enactment of this section, the Secretary shall promulgate regulations
to implement 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:
``609. Rural and remote communities electrification grants.
``610. Federal clean energy standard.''.
SEC. 3. CLEAN ENERGY RESEARCH, DEVELOPMENT, DEMONSTRATION, AND
DEPLOYMENT PROGRAM.
(a) Establishment.--The Secretary of Energy shall establish a
cross-cutting national program within the Department of Energy for the
research, development, demonstration, and deployment of clean energy
technologies and portfolios for the purpose of meeting the requirements
established under section 610 of the Public Utility Regulatory Policies
Act of 1978 (as added by section 2(a)).
(b) Requirements.--In establishing the program under subsection
(a), the Secretary of Energy shall--
(1) identify and coordinate, across all relevant program
offices throughout the Department of Energy, key areas of
existing and future research with respect to a portfolio of
technologies and approaches;
(2) with respect to dispatchable low-emission technologies
and dispatchable zero-emission technologies (as defined in
sections 610(b) of the Public Utility Regulatory Policies Act
of 1978 (as added by section 2(a))--
(A) prioritize programs that would accelerate the
research, development, demonstration, and deployment of
technologies by--
(i) identifying specific applications of
those technologies;
(ii) cataloguing existing Department of
Energy programs and research to advance the
specific applications; and
(iii) establishing a center within the
Department of Energy to coordinate research
priorities and demonstration programs for the
specific applications;
(B) adopt long-term cost, performance, and
deployment targets for the specific applications
identified under subparagraph (A)(i), including a goal
of conducting not fewer than 5 technology
demonstrations in the United States by December 31,
2030;
(C) identify opportunities to work with States and
the private sector for technology demonstration; and
(D) identify barriers to the demonstration and
deployment of those technologies;
(3) identify approaches to expedite deployment of clean
energy technologies by evaluating and avoiding or minimizing
potential impacts to natural communities, ecological resources,
and high-quality working land; and
(4) recommend to Congress any additional funding needs or
policy changes necessary to implement the program.
(c) Funding.--Subject to the availability of appropriations, the
Secretary of Energy may use amounts available to the Secretary to carry
out this section.
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