[Congressional Record Volume 151, Number 18 (Thursday, February 17, 2005)]
[Senate]
[Pages S1641-S1643]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. JEFFORDS (for himself, Ms. Snowe, Ms. Cantwell, Mrs. 
        Feinstein, Mr. Durbin, Mr. Kennedy, Mr. Reed, Mr. Kerry, Mr. 
        Dodd, Mrs. Boxer, and Mr. Lautenberg):
  S. 427. A bill to amend the Public Utility Regulatory Policies Act of 
1978 to provide for a Federal renewable portfolio standard; to the 
Committee on Energy and Natural Resources.
  Mr. JEFFORDS. Mr. President, I rise today to introduce the Renewable 
Energy Investment Act of 2005 to accelerate the use of clean, domestic 
renewable energy sources as an integral part of our Nation's electrical 
generation.
  A recent episode of the television show, West Wing, portrayed 
renewable energy as science fiction. The truth is closer to Reality TV.
  Eighteen States, plus the District of Columbia, have already 
instituted minimum renewable standards. This bill would establish a 
national renewable portfolio standard requiring that, by the year 2020, 
20 percent of U.S. electricity be derived from clean, domestically 
produced renewable energy including wind, solar, biomass, geothermal 
and wave energy.
  As the ranking member of the Senate Environment and Public Works 
Committee, I think obtaining 20 percent of our country's electricity 
from renewable energy represents the modest end of what we could 
achieve.
  Let me offer five reasons why I believe we need a national commitment 
to encourage renewable power.
  First, renewable power would help consumers by reducing electricity 
prices. According to data provided by the Bush administration's Energy 
Department, a 20 percent renewables requirement similar to that set 
forth in the bill I am introducing today would lower consumer energy 
costs by the year 2020. Why? Because adding additional renewables to 
our energy mix will decrease the pressure on natural gas supplies, 
bringing overall costs down.
  This point is worth repeating. Despite concerns from those in the 
fossil fuel and nuclear industries, the Department of Energy has 
consistently found that a mandatory renewable portfolio standard would 
not raise overall energy costs and would have no significant adverse 
impact on America's wallets.
  Estimates are that reaching 10 percent renewable energy production by 
the year 2020 could reduce the demand for natural gas by as much as 1.4 
trillion cubic feet, and could reduce the price of natural gas by 6 
percent. With the higher renewable portfolio standard in my bill, the 
price reductions are even greater.
  I have received letters from the chemical industry expressing deep 
concern about the high price of natural gas, and imploring me to take 
steps to help alleviate shortages and reduce costs.
  Much to my consternation, however, neither the chemical industry, nor 
this administration have addressed the obvious link between increasing 
renewable energy production and easing demand on natural gas supplies. 
Instead, their solutions have been to open sensitive lands to more 
drilling, reduce environmental compliance and advance clean coal 
technologies.
  Whatever merits there may be to some of their suggestions, an obvious 
step that should be taken is diversifying our energy sector and easing 
the growing demand on natural gas by promoting other clean energies 
which can be readily produced on American soil.
  The second reason for a national commitment to encourage renewable 
power is the public health and environmental benefits.
  Electricity generation is the leading source of U.S. carbon 
emissions, accounting for over 40 percent of the total. Carbon dioxide 
emissions are the primary greenhouse gas, contributing to harmful 
climate change. A 20 percent renewables requirement would, according to 
the U.S. Department of Energy, reduce carbon emissions from power 
plants by up to 18 percent by the year 2020.

  A 20 percent renewables requirement would also significantly reduce 
emissions of sulfur and nitrogen oxides. These pollutants contaminate 
our water, cause smog and acid rain, and contribute to respiratory 
illnesses. As a result, a renewable portfolio standard would help 
alleviate asthma, which has become the most common chronic disease for 
children.
  Coal burning electric power plants are also the largest source of 
mercury pollution, releasing an estimated 98,000 pounds of mercury 
directly into the air, and generating an additional 80,000 pounds a 
year in mercury tainted waste. A renewable portfolio standard would 
help the estimated five million women and children regularly exposed to 
mercury at levels that EPA considers unsafe.
  And according to the Department of Energy, these public health 
benefits would be achieved without raising consumer energy costs.
  Third, a 20 percent renewable portfolio standard would enhance our 
national security by diversifying our energy supply. As we increase our 
reliance on natural gas, much of the demand may have to be met by 
liquified natural gas shipped to the U.S. from other countries. It is 
unthinkable that we should sink to greater reliance on foreign fuel 
imports when we have abundant, inexhaustible renewable energy right 
here.
  Further, much of the U.S. energy system including power plants, 
refineries, and pipelines, present significant safety and security 
risks. Renewable energy facilities are generally smaller, more 
geographically dispersed and do

[[Page S1642]]

not involve disposal or transportation of radioactive or combustible 
materials.
  A 20 percent renewable portfolio standard such as I offer today will 
help bring the costs of on-site generation down even further, making 
providing your own electricity a reality for a growing number of homes 
and facilities. In these times when we worry about the potential 
security of our energy grid, that option becomes increasingly 
attractive.
  Fourth, a national renewable portfolio standard builds on the 
successful experiments by the States. To date, 18 States, plus the 
District of Columbia, have adopted mandatory renewable energy 
standards. These State programs provide excellent incentives for 
renewable energy. In September 2004, New York created the second-
largest new renewable energy market in the country, behind only 
California, when the state Public Service Commission adopted a standard 
of 24 percent by 2013. Earlier in 2004, Hawaii, Maryland, and Rhode 
Island also enacted minimum renewable electricity standards.
  Texas has one of the most successful state programs. The Texas 
Renewable portfolio standard was signed into law by then Governor 
George W. Bush, and administered by Pat Wood, who now chairs the 
Federal Energy Regulatory Commission. These men know the value of 
renewable energy. Texas now has enough wind power to run about 300,000 
homes a year, with huge benefits to ranchers who can lease acreage for 
wind turbines.
  However, as good as these State efforts are, they are subject to the 
inherent limitation that they can only address electricity sales and 
production within their own State boundaries. Yet as we know, 
electricity generation and transmission are regional in nature. State 
renewable requirements alone cannot provide the market and other 
mechanisms necessary to address regional and national electricity 
transmission.
  But these State programs demonstrate that renewables requirements can 
work, and operate to the benefit of consumers.
  Finally, I call for a national commitment to encourage renewable 
power because a cleaner energy future is in our grasp. The U.S. has the 
technical capacity to generate 4.5 times its current electricity needs 
from renewable energy resources. European investment continues to 
outstrip U.S. markets, but that is changing. Worldwide, approximately 
6,500 megawatts of new wind energy generating capacity were installed, 
amounting to annual sales of about $7 billion. Almost a third of that 
came from the United States, which installed nearly 1,700 megawatts of 
new wind energy in 2001, or $1.7 billion worth of new wind energy 
generating capacity.
  Yet, renewable energy still accounts for only a little over 2 percent 
of U.S. electricity generation.
  It is not that we expect this renewable portfolio standard to make 
conventional energy sources obsolete. Undoubtedly, fossil, nuclear and 
other fuels will be with us for some time. But isn't it time that we 
charted our future with cleaner energies? The potential is there, but 
we have to give it the assistance of market incentives, as we have 
traditionally done for our more established fuel sources.
  I urge my colleagues to again demonstrate our strong commitment to 
renewables and support my 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. 427

       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 2005''.

     SEC. 2. RENEWABLE PORTFOLIO STANDARD.

       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. 606. FEDERAL RENEWABLE PORTFOLIO STANDARD.

       ``(a) Definitions.--In this section:
       ``(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) agricultural resources, including--

       ``(aa) orchard tree crops;
       ``(bb) vineyards;
       ``(cc) grains;
       ``(dd) legumes;
       ``(ee) sugar; and
       ``(ff) other crop by-products 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' shall not include--
       ``(i) municipal solid waste that is incinerated;
       ``(ii) recyclable post-consumer waste paper;
       ``(iii) painted, treated, or pressurized wood;
       ``(iv) wood contaminated with plastics or metals; 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, 2005, at a 
     hydroelectric dam that was placed in service before January 
     1, 2005.
       ``(4) Landfill gas.--The term `landfill gas' means gas 
     generated from the decomposition of household solid waste, 
     commercial solid waste, and industrial solid waste disposed 
     of in a municipal solid waste landfill unit (as 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;
       ``(E) landfill gas;
       ``(F) incremental hydropower; or
       ``(G) geothermal.
       ``(7) Retail electric supplier.--The term `retail electric 
     supplier' means a person or entity that sells retail 
     electricity to consumers, and which 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.
       ``(b) Renewable Energy Requirements.--
       ``(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 non-hydropower (excluding 
     incremental hydropower) electricity sold to retail consumers 
     during the previous calendar year.
       ``(2) Carryover.--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 two years.
       ``(c) Required Annual Percentage.--Of the total amount of 
     non-hydropower (excluding incremental hydropower) 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:

                                                          Percentage of
                                                       Renewable energy
``Calendar years:                                            Each year:
  2006-2009.......................................................5....

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

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

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

       ``(d) Submission of Renewable Energy Credits.--
       ``(1) In general.--To meet the requirements under 
     subsection (b), a retail electric supplier shall submit to 
     the Secretary either--
       ``(A) renewable energy credits issued to the retail 
     electric supplier under subsection (f);
       ``(B) renewable energy credits obtained by purchase or 
     exchange under subsection (g);
       ``(C) renewable energy credits purchased from the United 
     States under subsection (h); or
       ``(D) any combination of credits under subsections (f), (g) 
     or (h).
       ``(2) Prohibition on double counting.--A credit may be 
     counted toward compliance with subsection (b) only once.
       ``(e) Renewable Energy Credit Program.--The Secretary shall 
     establish, not later than 1 year after the date of enactment 
     of this Act, a program to issue, monitor the sale or exchange 
     of, and track, renewable energy credits.
       ``(f) Issuance of Renewable Energy Credits.--

[[Page S1643]]

       ``(1) In general.--Under the program established in 
     subsection (e), 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.
       ``(2) Application.--An application for the issuance of 
     renewable energy credits shall indicate--
       ``(A) the type of renewable energy resource used to produce 
     the electric energy;
       ``(B) the State in which the electric energy was produced; 
     and
       ``(C) any other information the Secretary determines 
     appropriate.
       ``(3) Credit value.--Except as provided in subparagraph 
     (4), 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.
       ``(4) Credit value for distributed generation.--The 
     Secretary shall issue 3 renewable energy credits for each 
     kilowatt-hour of distributed generation.
       ``(5) Vesting.--A renewable energy credit will vest with 
     the owner of the system or facility that generates the 
     renewable energy unless such owner explicitly transfers the 
     credit.
       ``(6) Credit eligibility.--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. If both a renewable 
     energy resource and a non-renewable 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.
       ``(7) Identifying credits.--The Secretary shall identify 
     renewable energy credits by the type and date of generation.
       ``(8) Sale under purpa contract.--When 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 is treated as the generator of the 
     electric energy for the purposes of this Act for the duration 
     of the contract.
       ``(g) Sale or Exchange of Renewable Energy Credits.--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. Credits 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.
       ``(h) Purchase From the United States.--The Secretary shall 
     offer renewable energy credits for sale at the lesser of 
     three cents per kilowatt-hour or 110 percent of the average 
     market value of credits for the applicable compliance period. 
     On January 1 of each year following calendar year 2006, the 
     Secretary shall adjust for inflation the price charged per 
     credit for such calendar year.
       ``(i) State Programs.--Nothing in this section shall 
     preclude any State from requiring additional renewable energy 
     generation in the State under any renewable energy program 
     conducted by the State.
       ``(j) Consumer Allocation.--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 (b). 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 (b).
       ``(k) Enforcement.--A retail electric supplier that does 
     not submit renewable energy credits as required under 
     subsection (b) shall be liable for the payment of a civil 
     penalty. That penalty 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 credits for the compliance period.
       ``(l) 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.
       ``(m) Voluntary Participation.--The Secretary may issue a 
     renewable energy credit pursuant to subsection (f) to any 
     entity not subject to the requirements of this Act only if 
     the entity applying for such credit meets the terms and 
     conditions of this Act to the same extent as entities subject 
     to this Act.
       ``(n) State Renewable Energy Grant Program.--
       ``(1) Distribution to states.--The Secretary shall 
     distribute amounts received from sales under subsection (h) 
     and from amounts received under subsection (k) to States to 
     be used for the purposes of this section.
       ``(2) Regional equity program.--
       ``(A) Establishment of program.--Within 1 year from the 
     date of enactment of this Act, the Secretary shall establish 
     a program to promote renewable energy production and use 
     consistent with the purposes of this section.
       ``(B) Eligibility.--The Secretary shall make funds 
     available under this section to State energy agencies for 
     grant programs for--
       ``(i) renewable energy research and development;
       ``(ii) loan guarantees to encourage construction of 
     renewable energy facilities;
       ``(iii) consumer rebate or other programs to offset costs 
     of small residential or small commercial renewable energy 
     systems including solar hot water; or
       ``(iv) promoting distributed generation.
       ``(3) Allocation preferences.--In allocating funds under 
     the program, the Secretary shall give preference to--
       ``(A) States in regions which have a disproportionately 
     small share of economically sustainable renewable energy 
     generation capacity; and
       ``(B) State grant programs most likely to stimulate or 
     enhance innovative renewable energy technologies.''.
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