[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.
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