[Congressional Record Volume 149, Number 62 (Tuesday, April 29, 2003)]
[Senate]
[Pages S5491-S5492]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. JEFFORDS (for himself, Mr. Durbin, Mr. Reid, and Mr. 
        Kerry):
  S. 944. A bill to enhance national security, environmental quality, 
and economic stability by increasing the production of clean, 
domestically produced renewable energy as a fuel source for the 
national electric system; to the Committee on Energy and Natural 
Resources.
  Mr. JEFFORDS. Mr. President, I rise today to introduce, along with 
Senators Durbin, Reid, and Kerry, the ``Renewable Energy Investment Act 
of 2003.''
  This legislation will guarantee that by the year 2020, twenty percent 
of our electricity will be produced from renewable energy resources. 
These resources include wind, biomass, solar, ocean, geothermal and 
landfill gas.
  Again and again, I have heard members come to this floor and say how 
important renewable energy is to our environment, to our national 
security, and to our domestic economic stability. I agree. But if we 
want to achieve these great benefits, we must, as they say, ``put our 
money where our mouth is.'' It is time to pass realistic, achievable 
standards to guarantee that renewable energy is produced.
  The Renewable Energy Investment Act of 2003 is a very important step 
in that direction. It will create a renewable portfolio standard or 
``RPS'' under which utilities and others who supply electricity to 
retail consumers will be required to ensure that by the year 2020, 
twenty percent of our domestic electricity is generated from renewable 
energy sources. The RPS in this legislation provides a flexible, 
market-driven system of tradeable credits by which utilities can 
readily achieve these renewable energy requirements.
  Why twenty percent by 2020? Because the U.S. Department of Energy, 
through its Energy Information Administration, has repeatedly indicated 
that requiring that twenty percent of our electricity come from 
renewable energy by the year 2020 will actually lower overall consumer 
energy costs, while at the same time achieving tremendous environmental 
benefits.
  According to the most recent estimates derived from the Department of 
Energy, consumer electricity prices under a twenty percent renewable 
portfolio standard would be largely the same as without one. According 
to the Department of Energy, retail electricity costs by the year 2020 
without an RPS would be 6.5 cents per kilowatt hour. If a 20 percent 
RPS is in effect, retail electricity costs would be approximately 6.7 
cents per kilowatt hour.
  However, the Department of Energy studies also indicate that because 
an RPS creates a more diverse and competitive market for energy supply, 
overall domestic consumer energy costs will actually decrease by almost 
nine percent.
  Equally important, shifting to greater renewable energy production 
will have dramatic impacts on human health and the environment. The 
Department of Energy has found that, as demand for energy grows, 
without changes to Federal law U.S. carbon emissions will increase 
forty seven percent above the 1990 level by 2020. However, with a 
twenty percent renewables standard, U.S. carbon dioxide emissions will 
decrease by more than eighteen percent by 2020.
  Electricity production, primarily from burning coal, is the source of 
an estimated sixty six percent of sulfur oxide, SOx, 
emissions. These chemicals are the main cause of acid rain, which kills 
rivers and lakes, and damages crops and buildings. Burning fossil fuels 
to produce electricity also emits nitrogen oxides, NOx, 
which cause health-damaging smog. Ground-level ozone caused by nitrogen 
oxide contributes to asthma, bronchitis and other respiratory problems.
  Electricity produced from nuclear power, while not responsible for 
the emissions associated with burning of fossil fuels, results in 
highly toxic, and essentially permanent wastes for which no complete 
disposal option currently exists.
  Switching to renewable resources virtually eliminates these concerns. 
The Renewable Energy Investment Act of 2003 will help reduce emissions 
of carbon dioxide, sulfur dioxide, nitrogen dioxide, mercury and 
particulate matter, without creation of toxic wastes.
  The twenty percent RPS established in this legislation will also 
create thousands of new, high quality jobs and bring significant new 
investment to rural communities. It will create an estimated $80 
million in new capitol investment, and result in more than $5 billion 
in new property tax revenues.
  It will bring increased diversity to our energy sector, creating 
greater market stability and reducing the price spikes that so often 
plague our domestic natural gas markets.
  Greater diversity also reduces the vulnerability of our energy 
infrastructure to terrorist threats.
  In a letter to Congress shortly after the attacks of September 11, 
2001, several national security experts endorsed congressional passage 
of an RPS. The letter, signed by former CIA director James Woolsey; 
former National Security Advisor to President Reagan, Robert McFarlane; 
and former Chairman of the Joint Chiefs of Staff, Thomas Moorer, stated 
that a strong RPS is an important component of addressing the 
significant challenges to America's new energy security.
  Rapidly increasing the production of renewable energy is vital to 
America's future. We must be willing to take the steps necessary to 
make that happen. The Renewable Energy Investment Act of 2003 is an 
essential part of that goal and I urge my colleagues to join with me in 
supporting this important legislation.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                 S. 944

       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 ``Renewable Energy Investment 
     Act of 2003.''

     SEC. 2. DEFINITIONS.

       In this Act:
       (1) Biomass.--
       (A) In general.--The term ``biomass'' means--
       (i) organic material from a plant that is planted for the 
     purpose of being used to produce energy;
       (ii) nonhazardous, cellulosic or agricultural waste 
     material that is segregated from other waste materials and is 
     derived from--

       (I) a forest-related resource, including--

       (aa) mill and harvesting residue;
       (bb) precommercial thinnings;
       (cc) slash; and
       (dd) brush;

       (II) an agricultural resource, including--

       (aa) orchard tree crops;
       (bb) vineyards;
       (cc) grains;
       (dd) legumes;
       (ee) sugar; and
       (ff) other crop byproducts or residues; or

       (III) miscellaneous waste such as--

       (aa) waste pallet;
       (bb) crate; and
       (cc) landscape or right-of-way tree trimmings; and
       (iii) animal waste that is converted to a fuel rather than 
     directly combusted, the residue of which is converted to a 
     biological fertilizer, oil, or activated carbon.
       (B) Exclusions.--The term ``biomass'' does not include--
       (i) incineration of municipal solid waste;
       (ii) recyclable postconsumer waste paper;
       (iii) painted, treated, or pressurized wood;
       (iv) wood contaminated with plastic or metal; or
       (v) tires.
       (2) Distributed generation.--The term ``distributed 
     generation'' means reduced electricity consumption from the 
     electric grid due to use by a customer of renewable energy 
     generated at a customer site.
       (3) Incremental hydropower.--The term ``incremental 
     hydropower'' means additional generation achieved from 
     increased efficiency after January 1, 2003, at a 
     hydroelectric dam that was placed in service before January 
     1, 2003.
       (4) Landfill gas.--The term ``landfill gas'' means gas 
     generated from the decomposition of household solid waste, 
     commercial solid waste, or industrial solid waste disposed of 
     in a municipal solid waste landfill unit (as

[[Page S5492]]

     those terms are defined in regulations promulgated under 
     subtitle D of the Solid Waste Disposal Act (42 U.S.C. 6941 et 
     seq.)).
       (5) Renewable energy.--The term ``renewable energy'' means 
     electricity generated from--
       (A) a renewable energy source; or
       (B) hydrogen that is produced from a renewable energy 
     source.
       (6) Renewable energy source.--The term ``renewable energy 
     source'' means--
       (A) wind;
       (B) ocean waves;
       (C) biomass;
       (D) solar sources;
       (E) landfill gas;
       (F) incremental hydropower; or
       (G) a geothermal source.
       (7) Retail electric supplier.--The term ``retail electric 
     supplier'', with respect to any calendar year, means a person 
     or entity that--
       (A) sells retail electricity to consumers; and
       (B) sold not less than 500,000 megawatt-hours of electric 
     energy to consumers for purposes other than resale during the 
     preceding calendar year.
       (8) Secretary.--The term ``Secretary'' means the Secretary 
     of Energy.

     SEC. 3. RENEWABLE ENERGY GENERATION STANDARDS.

       (a) Renewable Energy Credits.--
       (1) In general.--For each calendar year beginning in 
     calendar year 2006, each retail electric supplier shall 
     submit to the Secretary, not later than April 30 of each 
     year, renewable energy credits in an amount equal to the 
     required annual percentage of the retail electric supplier's 
     total amount of kilowatt-hours of nonhydropower electricity 
     sold to consumers during the previous calendar year.
       (2) Carryover of renewable energy credits.--A renewable 
     energy credit for any year that is not used to satisfy the 
     minimum requirement for that year may be carried over for use 
     within the next 2 years.
       (b) Required Annual Percentage.--Of the total amount of 
     nonhydropower electricity sold by each retail electric 
     supplier during a calendar year, the amount generated by 
     renewable energy sources shall be not less than the 
     percentage specified below:

Calendar year:                Percentage of Renewable energy each year:
  2006-2009......................................................5 ....

  2010-2014.....................................................10 ....

  2015-2019.....................................................15 ....

  2020 and subsequent years.....................................20.....

       (c) Submission of Renewable Energy Credits.--
       (1) In general.--To meet the requirements under subsection 
     (a), a retail electric supplier shall submit to the 
     Secretary--
       (A) renewable energy credits issued to the retail electric 
     supplier under subsection (e);
       (B) renewable energy credits obtained by purchase or 
     exchange under subsection (f);
       (C) renewable energy credits purchased from the United 
     States under subsection (g); or
       (D) any combination of renewable energy credits obtained 
     under subsections (e), (f), and (g).
       (2) No double counting.--A renewable energy credit may be 
     counted toward compliance with subsection (a) only once.
       (d) Renewable Energy Credit Program.--Not later than 1 year 
     after the date of enactment of this Act, the Secretary shall 
     establish a program to issue, monitor the sale or exchange 
     of, and track renewable energy credits.
       (e) Issuance of Renewable Energy Credits.--
       (1) Application.--
       (A) In general.--Under the program established under 
     subsection (d), an entity that generates electric energy 
     through the use of a renewable energy resource may apply to 
     the Secretary for the issuance of renewable energy credits.
       (B) Contents.--An application under subparagraph (A) shall 
     indicate--
       (i) the type of renewable energy resource used to produce 
     the electric energy;
       (ii) the State in which the electric energy was produced; 
     and
       (iii) any other information that the Secretary determines 
     to be appropriate.
       (2) Issuances.--
       (A) In general.--Except as provided in subparagraph (C), 
     the Secretary shall issue to an entity applying under this 
     subsection 1 renewable energy credit for each kilowatt-hour 
     of renewable energy generated in any State from the date of 
     enactment of this Act and in each subsequent calendar year.
       (B) Vesting.--A renewable energy credit will vest with the 
     owner of the system or facility that generates the renewable 
     energy unless the owner explicitly transfers the renewable 
     energy credit.
       (C) Amount.--The Secretary shall issue 3 renewable energy 
     credits for each kilowatt-hour of distributed generation.
       (3) Eligibility.--
       (A) In general.--To be eligible for a renewable energy 
     credit, the unit of electricity generated through the use of 
     a renewable energy resource shall be sold for retail 
     consumption or used by the generator.
       (B) Energy generated from a combination of sources.--If 
     both a renewable energy resource and a nonrenewable energy 
     resource are used to generate the electric energy, the 
     Secretary shall issue renewable energy credits based on the 
     proportion of the renewable energy resource used.
       (C) Identification of type and date.--The Secretary shall 
     identify renewable energy credits by the type and date of 
     generation.
       (4) Sale under contract under purpa.--In a case in which a 
     generator sells electric energy generated through the use of 
     a renewable energy resource to a retail electric supplier 
     under a contract subject to section 210 of the Public 
     Utilities Regulatory Policies Act of 1978 (16 U.S.C. 824a-3), 
     the retail electric supplier shall be treated as the 
     generator of the electric energy for the purposes of this Act 
     for the duration of the contract.
       (f) Sale or Exchange of Renwable Energy Credits.--
       (1) In general.--A renewable energy credit may be sold or 
     exchanged by the entity issued the renewable energy credit or 
     by any other entity that acquires the renewable energy 
     credit.
       (2) Manner of sale.--A renewable energy credit may be sold 
     or exchanged in any manner not in conflict with existing law, 
     including on the spot market or by contractual arrangements 
     of any duration.
       (g) Purchase From the United States.--
       (1) In general.--The Secretary shall offer renewable energy 
     credits for sale at the lesser of 3 cents per kilowatt-hour 
     or 110 percent of the average market value of renewable 
     energy credits for the applicable compliance period.
       (2) Adjustment for inflation.--On January 1 of each year 
     following calendar year 2006, the Secretary shall adjust for 
     inflation the price charged per renewable energy credit for 
     the calendar year.
       (h) State Programs.--Nothing in this section precludes any 
     State from requiring additional renewable energy generation 
     in the State under any renewable energy program conducted by 
     the State not in conflict with this Act.
       (i) Consumer Allocation.--
       (1) Rates.--The rates charged to classes of consumers by a 
     retail electric supplier shall reflect a proportional 
     percentage of the cost of generating or acquiring the 
     required annual percentage of renewable energy under 
     subsection (a).
       (2) Representations to customers.--A retail electric 
     supplier shall not represent to any customer or prospective 
     customer that any product contains more than the percentage 
     of eligible resources if the additional amount of eligible 
     resources is being used to satisfy the renewable generation 
     requirement under subsection (a).
       (j) Enforcement.--
       (1) In general.--A retail electric supplier that does not 
     submit renewable energy credits as required under subsection 
     (a) shall be liable for the payment of a civil penalty.
       (2) Amount.--The amount of a civil penalty under paragraph 
     (1) shall be calculated on the basis of the number of 
     renewable energy credits not submitted, multiplied by the 
     lesser of 4.5 cents or 300 percent of the average market 
     value of renewable energy credits for the compliance period.
       (k) Information Collection.--The Secretary may collect the 
     information necessary to verify and audit--
       (1) the annual electric energy generation and renewable 
     energy generation of any entity applying for renewable energy 
     credits under this section;
       (2) the validity of renewable energy credits submitted by a 
     retail electric supplier to the Secretary; and
       (3) the quantity of electricity sales of all retail 
     electric suppliers.
       (l) Voluntary Participation.--The Secretary may issue a 
     renewable energy credit under subsection (e) to any entity 
     not subject to the requirements of this Act only if the 
     entity applying for the renewable energy credit meets the 
     terms and conditions of this Act to the same extent as 
     entities subject to this Act.

     SEC. 4. STATE RENEWABLE ENERGY GRANT PROGRAM.

       (a) Distribution of Amounts.--The Secretary shall 
     distribute amounts received from sales under subsection 3(h) 
     and from amounts received under subsection 3(k) to States to 
     be used for the purposes of this section.
       (b) Program.--
       (1) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Secretary shall establish a 
     program to promote State renewable energy production and use.
       (2) Use of funds.--The Secretary shall make funds available 
     under this section to State energy agencies for grant 
     programs for--
       (A) renewable energy research and development;
       (B) loan guarantees to encourage construction of renewable 
     energy facilities;
       (C) consumer rebate or other programs to offset costs of 
     small residential or small commercial renewable energy 
     systems including solar hot water; or
       (D) promotion of distributed generation.
       (c) Preference.--In allocating funds under the program, the 
     Secretary shall give preference to--
       (1) States that have a disproportionately small share of 
     economically sustainable renewable energy generation 
     capacity; and
       (2) State grant programs that are most likely to stimulate 
     or enhance innovative renewable energy technologies.
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