[Congressional Record Volume 159, Number 74 (Thursday, May 23, 2013)]
[Senate]
[Pages S3847-S3849]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. WYDEN (for himself, Ms. Collins, Mr. Merkley, and Mr. 
        King):
  S. 1030. A bill to amend the Internal Revenue Code of 1986 to provide 
for an energy investment credit for energy storage property connected 
to the grid, and for other purposes; to the Committee on Finance.
  Mr. WYDEN. Mr. President, today I am being joined by my colleagues 
Senators Collins, Merkley, and King on the introduction of the Storage 
Technology for Renewable and Green Energy Act of 2013 or the STORAGE 
2013 Act. The purpose of the bill is to promote the deployment of 
energy storage technologies to make the electric grid operate more 
efficiently and help manage intermittent renewable energy generation 
from wind, solar, and other sources that vary with the time of day and 
the weather.
  Traditionally, peak demand has been met by building more generation 
and transmission facilities, many of which sit idle much of the time. 
The Electric Power Research Institute's White Paper on storage 
technology observed that 25 percent of the equipment and capacity of 
the U.S. electric distribution system and 10 percent of the generation 
and transmission system is needed less than 400 hours a year. Peak 
generation is also often met with the least efficient, most costly 
power plants. Energy storage systems offer an alternative to simply 
building more generation and transmission to meet peak demand because 
they allow the current system to meet peak demands by storing less 
expensive off-peak power, from the most cost-efficient plants, for use 
during peak demand.
  The growth of renewable energy from wind and solar and other 
intermittent renewable sources, like wave and tidal energy, raises yet 
another challenge for the electric grid that storage can help address. 
These renewable sources deliver power at times of the day or night when 
they might not be needed or fluctuate with the weather. Energy storage 
technology allows these intermittent sources to store power as it is 
generated and allow it to be dispatched when it is most needed and in a 
predictable, steady of stream of electricity no longer at the vagaries 
of weather conditions. And equally important, it allows this 
intermittent generation to more closely match demand. Instead of trying 
to find a place to sell power at 3:00 am in the morning when demand is 
down, wind farms for example would be able to sell their power at 3:00 
pm in the afternoon when demand is up.
  The STORAGE 2013 Act is substantially similar to the STORAGE Act of 
2011 I introduced last Congress. It offers investment tax credits for 
three categories of energy storage facilities that temporarily store 
energy for delivery or use at a later time. The bill is technology 
neutral and does not pick storage technology ``winners'' and ``losers'' 
either in terms of the storage technology that is used or in terms of 
the source of the energy that is stored. The electricity can come from 
a wind farm or it can come for a coal or nuclear plant. Pumped hydro, 
compressed air, batteries, flywheels, and thermal storage are all 
eligible technologies as are smart-grid enabled plug-in electric 
vehicles.
  First, the STORAGE 2013 Act provides a 20 percent investment tax 
credit of up to $40 million per project for storage systems connected 
to the electric grid and distribution system. A total of $1.5 billion 
in these investment credits are available for these grid connected 
systems. Developers would have to apply to the Treasury Department and 
DOE for the credits, similar to the process used for the green energy 
manufacturing credits the ``48C'' program. This is a 20 percent credit 
so that means the actual cost of the project that would be eligible for 
the full credit would be $200 million.
  The act also provides a 30 percent investment tax credit of up to $1 
million per project to businesses for on-site storage, such as an ice-
storage facility in on office building, where ice is made at night 
using low-cost, off-peak power and then used to help air-condition the 
building luring the day while reducing peak demand. This is a 30 
percent credit so the cost of the actual projects that would get the 
full credit amount would be around $3.3 million.
  One change from last year's version of the bill is that the minimum 
size for storage systems to be eligible for this credit is now 5 kWh, 
whereas it was 20 kWh before. 20 kWh is a reasonable size or industrial 
energy consumers and big-box stores, but a 5 kWh limit is a size that 
makes sense for small businesses. This change will allow small 
businesses to participate in pioneering storage on the grid, and will 
incentivize storage companies to create leasing models for residential 
users. Leasing models are proving very successful at increasing grid-
connected residential solar, and this credit will open up a whole new 
market for storage to follow suit.
  But if homeowners want to install storage on their own, they will be 
able to. The Act also provides for 30 percent tax credit for homeowners 
for on-site

[[Page S3848]]

storage projects to store off-peak electricity from solar panels or 
from the grid for later use during peak hours.
  As the EPRI white paper noted ``(d)espite the large anticipated need 
for energy storage solutions within the electric enterprise, very few 
grid-integrated storage installations are in actual operation in the 
United States today.'' The purpose of the STORAGE 2013 Act is to help 
jump start the deployment of these storage solutions so that renewable 
energy technologies can increase their economic value to the electric 
grid while reducing their power integration costs as well as to improve 
the overall efficiency of the electrical system.
  I urge my colleagues to take a closer look at what storage 
technologies can do to help reduce the cost of electricity and improve 
the performance of the electric grid and renewable energy technologies. 
If they do, I am confident my colleagues will join Senators Collins, 
Merkley, and King in supporting this bipartisan legislation.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1030

       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 ``Storage Technology for 
     Renewable and Green Energy Act of 2013'' or the ``STORAGE 
     2013 Act''.

     SEC. 2. ENERGY INVESTMENT CREDIT FOR ENERGY STORAGE PROPERTY 
                   CONNECTED TO THE GRID.

       (a) Up to 20 Percent Credit Allowed.--Subparagraph (A) of 
     section 48(a)(2) of the Internal Revenue Code of 1986 is 
     amended--
       (1) by striking ``and'' at the end of subclause (IV) of 
     clause (i),
       (2) by striking ``clause (i)'' in clause (ii) and inserting 
     ``clause (i) or (ii)'',
       (3) by redesignating clause (ii) as clause (iii), and
       (4) by inserting after clause (i) the following new clause:
       ``(ii) as provided in subsection (c)(5)(D), up to 20 
     percent in the case of qualified energy storage property, 
     and''.
       (b) Qualified Energy Storage Property.--Subsection (c) of 
     section 48 of the Internal Revenue Code of 1986 is amended by 
     adding at the end the following new paragraph:
       ``(5) Qualified energy storage property.--
       ``(A) In general.--The term `qualified energy storage 
     property' means property--
       ``(i) which is directly connected to the electrical grid, 
     and
       ``(ii) which is designed to receive electrical energy, to 
     store such energy, and--

       ``(I) to convert such energy to electricity and deliver 
     such electricity for sale, or
       ``(II) to use such energy to provide improved reliability 
     or economic benefits to the grid.

     Such term may include hydroelectric pumped storage and 
     compressed air energy storage, regenerative fuel cells, 
     batteries, superconducting magnetic energy storage, 
     flywheels, thermal energy storage systems, and hydrogen 
     storage, or combination thereof, or any other technologies as 
     the Secretary, in consultation with the Secretary of Energy, 
     shall determine.
       ``(B) Minimum capacity.--The term `qualified energy storage 
     property' shall not include any property unless such property 
     in aggregate has the ability to sustain a power rating of at 
     least 1 megawatt for a minimum of 1 hour.
       ``(C) Electrical grid.--The term `electrical grid' means 
     the system of generators, transmission lines, and 
     distribution facilities which--
       ``(i) are under the jurisdiction of the Federal Energy 
     Regulatory Commission or State public utility commissions, or
       ``(ii) are owned by--

       ``(I) the Federal government,
       ``(II) a State or any political subdivision of a State,
       ``(III) an electric cooperative that is eligible for 
     financing under the Rural Electrification Act of 1936 (7 
     U.S.C. 901 et seq.), or
       ``(IV) any agency, authority, or instrumentality of any one 
     or more of the entities described in subclause (I) or (II), 
     or any corporation which is wholly owned, directly or 
     indirectly, by any one or more of such entities.

       ``(D) Allocation of credits.--
       ``(i) In general.--In the case of qualified energy storage 
     property placed in service during the taxable year, the 
     credit otherwise determined under subsection (a) for such 
     year with respect to such property shall not exceed the 
     amount allocated to such project under clause (ii).
       ``(ii) National limitation and allocation.--There is a 
     qualified energy storage property investment credit 
     limitation of $1,500,000,000. Such limitation shall be 
     allocated by the Secretary among qualified energy storage 
     property projects selected by the Secretary, in consultation 
     with the Secretary of Energy, for taxable years beginning 
     after the date of the enactment of the STORAGE 2013 Act, 
     except that not more than $40,000,000 shall be allocated to 
     any project for all such taxable years.
       ``(iii) Selection criteria.--In making allocations under 
     clause (ii), the Secretary, in consultation with the 
     Secretary of Energy, shall select only those projects which 
     have a reasonable expectation of commercial viability, select 
     projects representing a variety of technologies, 
     applications, and project sizes, and give priority to 
     projects which--

       ``(I) provide the greatest increase in reliability or the 
     greatest economic benefit,
       ``(II) enable the greatest improvement in integration of 
     renewable resources into the grid, or
       ``(III) enable the greatest increase in efficiency in 
     operation of the grid.

       ``(iv) Deadlines.--

       ``(I) In general.--If a project which receives an 
     allocation under clause (ii) is not placed in service within 
     2 years after the date of such allocation, such allocation 
     shall be invalid.
       ``(II) Special rule for hydroelectric pumped storage.--
     Notwithstanding subclause (I), in the case of a hydroelectric 
     pumped storage project, if such project has not received such 
     permits or licenses as are determined necessary by the 
     Secretary, in consultation with the Secretary of Energy, 
     within 3 years after the date of such allocation, begun 
     construction within 5 years after the date of such 
     allocation, and been placed in service within 8 years after 
     the date of such allocation, such allocation shall be 
     invalid.
       ``(III) Special rule for compressed air energy storage.--
     Notwithstanding subclause (I), in the case of a compressed 
     air energy storage project, if such project has not begun 
     construction within 3 years after the date of the allocation 
     and been placed in service within 5 years after the date of 
     such allocation, such allocation shall be invalid.
       ``(IV) Exceptions.--The Secretary may extend the 2-year 
     period in subclause (I) or the periods described in 
     subclauses (II) and (III) on a project-by-project basis if 
     the Secretary, in consultation with the Secretary of Energy, 
     determines that there has been a good faith effort to begin 
     construction or to place the project in service, whichever is 
     applicable, and that any delay is caused by factors not in 
     the taxpayer's control.

       ``(E) Review and redistribution.--
       ``(i) Review.--Not later than 4 years after the date of the 
     enactment of the STORAGE 2013 Act, the Secretary shall review 
     the credits allocated under subparagraph (D) as of the date 
     of such review.
       ``(ii) Redistribution.--Upon the review described in clause 
     (i), the Secretary may reallocate credits allocated under 
     subparagraph (D) if the Secretary determines that--

       ``(I) there is an insufficient quantity of qualifying 
     applications for certification pending at the time of the 
     review, or
       ``(II) any allocation made under subparagraph (D)(ii) has 
     been revoked pursuant to subparagraph (D)(iv) because the 
     project subject to such allocation has been delayed.

       ``(F) Disclosure of allocations.--The Secretary shall, upon 
     making an allocation under subparagraph (D)(ii), publicly 
     disclose the identity of the applicant, the location of the 
     project, and the amount of the credit with respect to such 
     applicant.
       ``(G) Termination.--No credit shall be allocated under 
     subparagraph (D) for any period ending after December 31, 
     2020.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to periods after the date of the enactment of 
     this Act, under rules similar to the rules of section 48(m) 
     of the Internal Revenue Code of 1986 (as in effect on the day 
     before the date of the enactment of the Revenue 
     Reconciliation Act of 1990).

     SEC. 3. ENERGY STORAGE PROPERTY CONNECTED TO THE GRID 
                   ELIGIBLE FOR NEW CLEAN RENEWABLE ENERGY BONDS.

       (a) In General.--Paragraph (1) of section 54C(d) of the 
     Internal Revenue Code of 1986 is amended to read as follows:
       ``(1) Qualified renewable energy facility.--The term 
     `qualified renewable energy facility' means a facility which 
     is--
       ``(A)(i) a qualified facility (as determined under section 
     45(d) without regard to paragraphs (8) and (10) thereof and 
     to any placed in service date), or
       ``(ii) a qualified energy storage property (as defined in 
     section 48(c)(5)), and
       ``(B) owned by a public power provider, a governmental 
     body, or a cooperative electric company.''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to obligations issued after the date of the 
     enactment of this Act.

     SEC. 4. ENERGY INVESTMENT CREDIT FOR ONSITE ENERGY STORAGE.

       (a) Credit Allowed.--Clause (i) of section 48(a)(2)(A) of 
     the Internal Revenue Code of 1986, as amended by this Act, is 
     amended--
       (1) by striking ``and'' at the end of subclause (III),
       (2) by inserting ``and'' at the end of subclause (IV), and
       (3) by adding at the end the following new subclause:

       ``(V) qualified onsite energy storage property,''.

       (b) Qualified Onsite Energy Storage Property.--Subsection 
     (c) of section 48 of the Internal Revenue Code of 1986, as 
     amended by this Act, is amended by adding at the end the 
     following new paragraph:

[[Page S3849]]

       ``(6) Qualified onsite energy storage property.--
       ``(A) In general.--The term `qualified onsite energy 
     storage property' means property which--
       ``(i) provides supplemental energy to reduce peak energy 
     requirements primarily on the same site where the property is 
     located, or
       ``(ii) is designed and used primarily to receive and store, 
     firm, or shape variable renewable or off-peak energy and to 
     deliver such energy primarily for onsite consumption.

     Such term may include thermal energy storage systems and 
     property used to charge plug-in and hybrid electric vehicles 
     if such property or vehicles are equipped with smart grid 
     equipment or services which control time-of-day charging and 
     discharging of such vehicles. Such term shall not include any 
     property for which any other credit is allowed under this 
     chapter.
       ``(B) Minimum capacity.--The term `qualified onsite energy 
     storage property' shall not include any property unless such 
     property in aggregate--
       ``(i) has the ability to store the energy equivalent of at 
     least 5 kilowatt hours of energy, and
       ``(ii) has the ability to have an output of the energy 
     equivalent of 1 kilowatts of electricity for a period of 5 
     hours.
       ``(C) Limitation.--In the case of qualified onsite energy 
     storage property placed in service during the taxable year, 
     the credit otherwise determined under subsection (a) for such 
     year with respect to such property shall not exceed 
     $1,000,000.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to periods after the date of the enactment of 
     this Act, under rules similar to the rules of section 48(m) 
     of the Internal Revenue Code of 1986 (as in effect on the day 
     before the date of the enactment of the Revenue 
     Reconciliation Act of 1990).

     SEC. 5. CREDIT FOR RESIDENTIAL ENERGY STORAGE EQUIPMENT.

       (a) Credit Allowed.--Subsection (a) of section 25D of the 
     Internal Revenue Code of 1986 is amended--
       (1) by striking ``and'' at the end of paragraph (4),
       (2) by striking the period at the end of paragraph (5) and 
     inserting ``, and'', and
       (3) by adding at the end the following new paragraph:
       ``(6) 30 percent of the qualified residential energy 
     storage equipment expenditures made by the taxpayer during 
     such taxable year.''.
       (b) Qualified Residential Energy Storage Equipment 
     Expenditures.--Section 25D(d) of the Internal Revenue Code of 
     1986 is amended by adding at the end the following new 
     paragraph:
       ``(6) Qualified residential energy storage equipment 
     expenditures.--For purposes of this section, the term 
     `qualified residential energy storage equipment expenditure' 
     means an expenditure for property--
       ``(A) which is installed in or on a dwelling unit located 
     in the United States and owned and used by the taxpayer as 
     the taxpayer's principal residence (within the meaning of 
     section 121), or on property owned by the taxpayer on which 
     such a dwelling unit is located,
       ``(B) which--
       ``(i) provides supplemental energy to reduce peak energy 
     requirements primarily on the same site where the property is 
     located, or
       ``(ii) is designed and used primarily to receive and store, 
     firm, or shape variable renewable or off-peak energy and to 
     deliver such energy primarily for onsite consumption, and
       ``(C) which--
       ``(i) has the ability to store the energy equivalent of at 
     least 2 kilowatt hours of energy, and
       ``(ii) has the ability to have an output of the energy 
     equivalent of 500 watts of electricity for a period of 4 
     hours.

     Such term may include thermal energy storage systems and 
     property used to charge plug-in and hybrid electric vehicles 
     if such property or vehicles are equipped with smart grid 
     equipment or services which control time-of-day charging and 
     discharging of such vehicles. Such term shall not include any 
     property for which any other credit is allowed under this 
     chapter.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to property placed in service after the date of 
     the enactment of this Act.
                                 ______