[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 2706 Introduced in Senate (IS)]

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116th CONGRESS
  1st Session
                                S. 2706

 To amend the Public Utility Regulatory Policies Act of 1978 to assist 
   States in adopting updated interconnection procedures and tariff 
  schedules and standards for supplemental, backup, and standby power 
fees for projects for combined heat and power technology and waste heat 
              to power technology, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            October 24, 2019

 Mrs. Shaheen 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 assist 
   States in adopting updated interconnection procedures and tariff 
  schedules and standards for supplemental, backup, and standby power 
fees for projects for combined heat and power technology and waste heat 
              to power technology, 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 ``Heat Efficiency through Applied 
Technology Act'' or the ``HEAT Act''.

SEC. 2. FINDINGS.

    Congress finds that--
            (1) combined heat and power technology, also known as 
        cogeneration, is a technology that efficiently produces 
        electricity and thermal energy at the point of use of the 
        technology;
            (2) by combining the provision of both electricity and 
        thermal energy in a single step, combined heat and power 
        technology makes significantly more efficient use of fuel 
        compared to separate generation of heat and power, which has 
        significant economic and environmental advantages;
            (3) waste heat to power is a technology that captures heat 
        discarded by an existing industrial process and uses that heat 
        to generate power with no additional fuel and no incremental 
        emissions, reducing the need for electricity from other sources 
        and the grid, and any associated emissions;
            (4) waste heat or waste heat to power is considered 
        renewable energy in 17 States;
            (5)(A) a 2012 joint report by the Department of Energy and 
        the Environmental Protection Agency estimated that by achieving 
        the national goal outlined in Executive Order 13624 (77 Fed. 
        Reg. 54779) (September 5, 2012) of deploying 40 gigawatts of 
        new combined heat and power technology by 2020, the United 
        States would increase the total combined heat and power 
        capacity of the United States by 50 percent in less than a 
        decade; and
            (B) additional efficiency would--
                    (i) save 1,000,000,000,000,000 BTUs of energy; and
                    (ii) reduce emissions by 150,000,000 metric tons of 
                carbon dioxide annually, a quantity equivalent to the 
                emissions from more than 25,000,000 cars;
            (6) a 2012 report by the Environmental Protection Agency 
        estimated the amount of waste heat available at a temperature 
        high enough for power generation from industrial and 
        nonindustrial applications represents an additional 10 
        gigawatts of electric generating capacity on a national basis;
            (7) distributed energy generation, including through 
        combined heat and power technology and waste heat to power 
        technology, has ancillary benefits, such as--
                    (A) removing load from the electricity distribution 
                grid; and
                    (B) improving the overall reliability of the 
                electricity distribution system; and
            (8)(A) a number of regulatory barriers impede broad 
        deployment of combined heat and power technology and waste heat 
        to power technology; and
            (B) a 2008 study by Oak Ridge National Laboratory 
        identified interconnection issues, regulated fees and tariffs, 
        and environmental permitting as areas that could be streamlined 
        with respect to the provision of combined heat and power 
        technology and waste heat to power technology.

SEC. 3. DEFINITIONS.

    (a) In General.--In this Act:
            (1) Combined heat and power technology.--The term 
        ``combined heat and power technology'' means the generation of 
        electric energy and heat in a single, integrated system that 
        meets the efficiency criteria in clauses (ii) and (iii) of 
        section 48(c)(3)(A) of the Internal Revenue Code of 1986, under 
        which heat that is conventionally rejected is recovered and 
        used to meet thermal energy requirements.
            (2) Output-based emission standard.--The term ``output-
        based emission standard'' means a standard that relates 
        emissions to the electrical, thermal, or mechanical productive 
        output of a device or process rather than the heat input of 
        fuel burned or pollutant concentration in the exhaust.
            (3) Qualified waste heat resource.--
                    (A) In general.--The term ``qualified waste heat 
                resource'' means--
                            (i) exhaust heat or flared gas from any 
                        industrial or commercial process;
                            (ii) waste gas or industrial tail gas that 
                        would otherwise be flared, incinerated, or 
                        vented;
                            (iii) a pressure drop in any gas for an 
                        industrial or commercial process; or
                            (iv) any other form of waste heat resource 
                        as the Secretary may determine.
                    (B) Exclusion.--The term ``qualified waste heat 
                resource'' does not include a heat resource from a 
                process the primary purpose of which is the generation 
                of electricity using a fossil fuel.
            (4) Waste heat to power technology.--The term ``waste heat 
        to power technology'' means a system that generates electricity 
        through the recovery of a qualified waste heat resource.
    (b) PURPA Definitions.--Section 3 of the Public Utility Regulatory 
Policies Act of 1978 (16 U.S.C. 2602) is amended by adding at the end 
the following:
            ``(22) Combined heat and power technology.--The term 
        `combined heat and power technology' means the generation of 
        electric energy and heat in a single, integrated system that 
        meets the efficiency criteria in clauses (ii) and (iii) of 
        section 48(c)(3)(A) of the Internal Revenue Code of 1986, under 
        which heat that is conventionally rejected is recovered and 
        used to meet thermal energy requirements.
            ``(23) Qualified waste heat resource.--
                    ``(A) In general.--The term `qualified waste heat 
                resource' means--
                            ``(i) exhaust heat or flared gas from any 
                        industrial process;
                            ``(ii) waste gas or industrial tail gas 
                        that would otherwise be flared, incinerated, or 
                        vented;
                            ``(iii) a pressure drop in any gas for an 
                        industrial or commercial process; or
                            ``(iv) any other form of waste heat 
                        resource as the Secretary may determine.
                    ``(B) Exclusion.--The term `qualified waste heat 
                resource' does not include a heat resource from a 
                process the primary purpose of which is the generation 
                of electricity using a fossil fuel.
            ``(24) Waste heat to power technology.--The term `waste 
        heat to power technology' means a system that generates 
        electricity through the recovery of a qualified waste heat 
        resource.''.

SEC. 4. UPDATED INTERCONNECTION PROCEDURES AND TARIFF SCHEDULE.

    (a) Adoption of Standards.--Section 111(d) of the Public Utility 
Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) is amended by 
adding at the end the following:
            ``(20) Updated interconnection procedures and tariff 
        schedule.--
                    ``(A) In general.--Not later than 1 year after the 
                date of enactment of this paragraph, the Secretary, in 
                consultation with the Commission and other appropriate 
                agencies, shall establish, for generation with 
                nameplate capacity up to 20 megawatts using all fuels--
                            ``(i) guidance for technical 
                        interconnection standards that ensure 
                        interoperability with existing Federal 
                        interconnection rules;
                            ``(ii) model interconnection procedures, 
                        including appropriate fast track procedures; 
                        and
                            ``(iii) model rules for determining and 
                        assigning interconnection costs.
                    ``(B) Standards.--The standards established under 
                subparagraph (A) shall, to the maximum extent 
                practicable, reflect current best practices (as 
                demonstrated in model codes and rules adopted by 
                States) to encourage the use of distributed generation 
                (such as combined heat and power technology and waste 
                heat to power technology) while ensuring the safety and 
                reliability of the interconnected units and the 
                distribution and transmission networks to which the 
                units connect.
                    ``(C) Variations.--In establishing the model 
                standards under subparagraph (A), the Secretary shall 
                consider the appropriateness of using standards or 
                procedures that vary based on unit size, fuel type, or 
                other relevant characteristics.''.
    (b) Compliance.--
            (1) Time limitations.--Section 112(b) of the Public Utility 
        Regulatory Policies Act of 1978 (16 U.S.C. 2622(b)) is amended 
        by adding at the end the following:
            ``(7)(A) Not later than 90 days after the date on which the 
        Secretary completes the standards required under section 
        111(d)(20), each State regulatory authority (with respect to 
        each electric utility for which the authority has ratemaking 
        authority) shall commence the consideration referred to in that 
        section, or set a hearing date for such consideration, with 
        respect to each standard.
            ``(B) Not later than 2 years after the date on which the 
        Secretary completes the standards required under section 
        111(d)(20), each State regulatory authority (with respect to 
        each electric utility for which the authority has ratemaking 
        authority) shall--
                    ``(i) complete the consideration under subparagraph 
                (A);
                    ``(ii) make the determination referred to in 
                section 111 with respect to each standard established 
                under section 111(d)(20); and
                    ``(iii) submit to the Secretary and the Commission 
                a report detailing the updated plans of the State 
                regulatory authority for interconnection procedures and 
                tariff schedules that reflect best practices to 
                encourage the use of distributed generation.''.
            (2) Failure to comply.--Section 112(c) of the Public 
        Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622(c)) is 
        amended by adding at the end the following: ``In the case of 
        each standard established under paragraph (20) of section 
        111(d), the reference contained in this subsection to the date 
        of enactment of this Act shall be deemed to be a reference to 
        the date of enactment of that paragraph.''.
            (3) Prior state actions.--
                    (A) In general.--Section 112 of the Public Utility 
                Regulatory Policies Act of 1978 (16 U.S.C. 2622) is 
                amended by adding at the end the following:
    ``(g) Prior State Actions.--Subsections (b) and (c) shall not apply 
to a standard established under paragraph (20) of section 111(d) in the 
case of any electric utility in a State if, before the date of 
enactment of this subsection--
            ``(1) the State has implemented for the electric utility 
        the standard (or a comparable standard);
            ``(2) the State regulatory authority for the State has 
        conducted a proceeding after December 31, 2016, to consider 
        implementation of the standard (or a comparable standard) for 
        the electric utility; or
            ``(3) the State legislature has voted on the implementation 
        of the standard (or a comparable standard) for the electric 
        utility.''.
                    (B) Cross-reference.--Section 124 of the Public 
                Utility Regulatory Policies Act of 1978 (16 U.S.C. 
                2634) is amended by adding at the end the following: 
                ``In the case of each standard established under 
                paragraph (20) of section 111(d), the reference 
                contained in this subsection to the date of enactment 
                of this Act shall be deemed to be a reference to the 
                date of enactment of that paragraph.''.

SEC. 5. SUPPLEMENTAL, BACKUP, AND STANDBY POWER FEES OR RATES.

    (a) Adoption of Standards.--Section 111(d) of the Public Utility 
Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) (as amended by 
section 4(a)) is amended by adding at the end the following:
            ``(21) Supplemental, backup, and standby power fees or 
        rates.--
                    ``(A) In general.--Not later than 1 year after the 
                date of enactment of this paragraph, the Secretary, in 
                consultation with the Commission and other appropriate 
                agencies, shall establish model rules and procedures 
                for determining fees or rates for supplementary power, 
                backup or standby power, maintenance power, and 
                interruptible power supplied to facilities that operate 
                combined heat and power technology and waste heat to 
                power technology that appropriately allow for adequate 
                cost recovery by an electric utility but are not 
                excessive.
                    ``(B) Factors.--In establishing model rules and 
                procedures for determining fees or rates described in 
                subparagraph (A), the Secretary shall consider--
                            ``(i) the best practices that are used to 
                        model outage assumptions and contingencies to 
                        determine the fees or rates;
                            ``(ii) the appropriate duration, magnitude, 
                        or usage of demand charge ratchets;
                            ``(iii) the benefits to the utility and 
                        ratepayers, such as increased reliability, fuel 
                        diversification, enhanced power quality, and 
                        reduced electric losses from the use of 
                        combined heat and power technology and waste 
                        heat to power technology by a qualifying 
                        facility; and
                            ``(iv) alternative arrangements to the 
                        purchase of supplementary, backup, or standby 
                        power by the owner of combined heat and power 
                        technology and waste heat to power technology 
                        generating units if the alternative 
                        arrangements--
                                    ``(I) do not compromise system 
                                reliability; and
                                    ``(II) are nondiscretionary and 
                                nonpreferential.''.
    (b) Compliance.--
            (1) Time limitations.--Section 112(b) of the Public Utility 
        Regulatory Policies Act of 1978 (16 U.S.C. 2622(b)) (as amended 
        by section 4(b)(1)) is amended by adding at the end the 
        following:
            ``(8)(A) Not later than 90 days after the date on which the 
        Secretary completes the standards required under section 
        111(d)(21), each State regulatory authority (with respect to 
        each electric utility for which the authority has ratemaking 
        authority) shall commence the consideration referred to in that 
        section, or set a hearing date for such consideration, with 
        respect to each standard.
            ``(B) Not later than 2 years after the date on which the 
        Secretary completes the standards required under section 
        111(d)(21), each State regulatory authority (with respect to 
        each electric utility for which the authority has ratemaking 
        authority) shall--
                    ``(i) complete the consideration under subparagraph 
                (A);
                    ``(ii) make the determination referred to in 
                section 111 with respect to each standard established 
                under section 111(d)(21); and
                    ``(iii) submit to the Secretary and the Commission 
                a report detailing the updated plans of the State 
                regulatory authority for supplemental, backup, and 
                standby power fees that reflect best practices to 
                encourage the use of distributed generation.''.
            (2) Failure to comply.--Section 112(c) of the Public 
        Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622(c)) (as 
        amended by section 4(b)(2)) is amended by adding at the end the 
        following: ``In the case of each standard established under 
        paragraph (21) of section 111(d), the reference contained in 
        this subsection to the date of enactment of this Act shall be 
        deemed to be a reference to the date of enactment of that 
        paragraph.''.
            (3) Prior state actions.--
                    (A) In general.--Section 112 of the Public Utility 
                Regulatory Policies Act of 1978 (16 U.S.C. 2622) (as 
                amended by section 4(b)(3)(A)) is amended by adding at 
                the end the following:
    ``(h) Prior State Actions.--Subsections (b) and (c) shall not apply 
to a standard established under paragraph (21) of section 111(d) in the 
case of any electric utility in a State if, before the date of 
enactment of this subsection--
            ``(1) the State has implemented for the electric utility 
        the standard (or a comparable standard);
            ``(2) the State regulatory authority for the State has 
        conducted a proceeding after December 31, 2016, to consider 
        implementation of the standard (or a comparable standard) for 
        the electric utility; or
            ``(3) the State legislature has voted on the implementation 
        of the standard (or a comparable standard) for the electric 
        utility.''.
                    (B) Cross-reference.--Section 124 of the Public 
                Utility Regulatory Policies Act of 1978 (16 U.S.C. 
                2634) (as amended by section 4(b)(3)(B)) is amended by 
                adding at the end the following: ``In the case of each 
                standard established under paragraph (21) of section 
                111(d), the reference contained in this subsection to 
                the date of enactment of this Act shall be deemed to be 
                a reference to the date of enactment of that 
                paragraph.''.

SEC. 6. UPDATING OUTPUT-BASED EMISSIONS STANDARDS.

    (a) Establishment.--The Administrator of the Environmental 
Protection Agency (referred to in this section as the 
``Administrator'') shall establish a program under which the 
Administrator shall provide to each State (as defined in section 302 of 
the Clean Air Act (42 U.S.C. 7602)) that elects to participate and that 
submits an application under subsection (b) a grant for use by the 
State in accordance with subsection (c).
    (b) Application.--To be eligible to receive a grant under this 
section, a State shall submit to the Administrator an application at 
such time, in such manner, and containing such information as the 
Administrator may require.
    (c) Use of Funds.--
            (1) In general.--A State shall use a grant provided under 
        this section--
                    (A) to update any applicable State or local air 
                permitting regulations under the Clean Air Act (42 
                U.S.C. 7401 et seq.) to incorporate environmental 
                regulations relating to output-based emissions 
                standards in accordance with relevant guidelines 
                developed by the Administrator under paragraph (2); or
                    (B) if the State has already updated all applicable 
                State and local permitting regulations to incorporate 
                those output-based emissions standards, to expedite the 
                processing of relevant power generation permit 
                applications under the Public Utility Regulatory 
                Policies Act of 1978 (16 U.S.C. 2601 et seq.).
            (2) Guidelines.--As soon as practicable after the date of 
        enactment of this Act, the Administrator shall publish 
        guidelines for updating State and local permitting regulations 
        under the Clean Air Act (42 U.S.C. 7401 et seq.) that--
                    (A) provide credit, in the calculation of the 
                emission rate of the facility, for any thermal energy 
                produced by combined heat and power technology or waste 
                heat to power technology; and
                    (B) apply only to generation units that produce 5 
                megawatts of electrical energy or less.
    (d) Maximum Amount.--The amount of a grant provided under this 
section shall not exceed $100,000.
    (e) Authorization of Appropriations.--There is authorized to be 
appropriated to the Administrator to carry out this section $5,000,000.
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