To amend the Public Utility Regulatory Policies Act of 1978
to establish a renewable electricity standard, and for other purposes.
IN THE SENATE OF THE UNITED STATES
April 6 (legislative day, April 5), 2011
Mr. UDALL of New Mexico (for himself, Mr. UDALL of Colorado, Mr. BENNET,
Mr. CARDIN, Mr. KERRY, Mr. MENENDEZ, Mr. MERKLEY, Mr. SANDERS, Mr. WHITEHOUSE,
and Ms. KLOBUCHAR) introduced the following bill; which was read twice
and referred to the Committee on Energy and Natural Resources
To amend the Public Utility Regulatory Policies Act of 1978
to establish a renewable electricity standard, 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. RENEWABLE ELECTRICITY STANDARD.
(a) In General- 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
`SEC. 610. RENEWABLE ELECTRICITY STANDARD.
`(a) Definitions- In this section:
`(1) BASE QUANTITY OF ELECTRICITY-
`(A) IN GENERAL- The term `base quantity of electricity' means the
total quantity of electric energy sold by a retail electric supplier,
expressed in terms of kilowatt hours, to electric customers for
purposes other than resale during the most recent calendar year
for which information is available.
`(B) EXCLUSIONS- The term `base quantity of electricity' does not
`(i) electric energy that is not incremental hydropower generated
by a hydroelectric facility; and
`(ii) electricity generated through the incineration of municipal
`(A) IN GENERAL- The term `biomass' means--
`(i) cellulosic (plant fiber) organic materials from a plant that
is planted for the purpose of being used to produce energy;
`(ii) nonhazardous plant or algal matter that is derived from--
`(I) an agricultural crop, crop byproduct, or residue resource;
`(II) waste, such as landscape or right-of-way trimmings (but
not including municipal solid waste, recyclable postconsumer
waste paper, painted, treated, or pressurized wood, wood contaminated
with plastic, or metals);
`(iii) animal waste or animal byproducts; and
`(B) NATIONAL FOREST LAND AND CERTAIN OTHER PUBLIC LAND- In the
case of organic material removed from National Forest System land
or from public land administered by the Secretary of the Interior,
the term `biomass' means only organic material from--
`(i) ecological forest restoration;
`(ii) precommercial thinnings;
`(C) EXCLUSION OF CERTAIN FEDERAL LAND- Notwithstanding subparagraph
(B), the term `biomass' does not include material or matter that
would otherwise qualify as biomass if the material or matter is
located on the following Federal land:
`(i) Federal land containing old growth forest or late successional
forest unless the Secretary of the Interior or the Secretary of
Agriculture determines that the removal of organic material from
`(I) is appropriate for the applicable forest type; and
`(II) maximizes the retention of--
`(aa) late-successional and large and old growth trees;
`(bb) late-successional and old growth forest structure; and
`(cc) late-successional and old growth forest composition.
`(ii) Federal land on which the removal of vegetation is prohibited,
including components of the National Wilderness Preservation System.
`(iii) Wilderness study areas.
`(iv) Inventoried roadless areas.
`(v) Components of the National Landscape Conservation System.
`(vi) National Monuments.
`(3) EXISTING FACILITY- The term `existing facility' means a facility
for the generation of electric energy from a renewable energy resource
that is not an eligible facility.
`(4) INCREMENTAL HYDROPOWER- The term `incremental hydropower' means
additional generation that is achieved from increased efficiency or
additions of capacity made on or after--
`(A) the date of enactment of this section; or
`(B) the effective date of an existing applicable State renewable
portfolio standard program at a hydroelectric facility that was
placed in service before that date.
`(5) INDIAN LAND- The term `Indian land' means--
`(A) any land within the limits of any Indian reservation, pueblo,
`(B) any land not within the limits of any Indian reservation, pueblo,
or rancheria title to which was on the date of enactment of this
section held by--
`(i) the United States for the benefit of any Indian tribe or
`(ii) any Indian tribe or individual subject to restriction by
the United States against alienation;
`(C) any dependent Indian community; or
`(D) any land conveyed to any Alaska Native corporation under the
Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq.).
`(6) INDIAN TRIBE- The term `Indian tribe' means any Indian tribe,
band, nation, or other organized group or community, including any
Alaskan Native village or regional or village corporation as defined
in or established pursuant to the Alaska Native Claims Settlement
Act (43 U.S.C. 1601 et seq.), that is recognized as eligible for the
special programs and services provided by the United States to Indians
because of their status as Indians.
`(7) RENEWABLE ENERGY- The term `renewable energy' means electric
energy generated by a renewable energy resource.
`(8) RENEWABLE ENERGY RESOURCE- The term `renewable energy resource'
means solar, wind, ocean, tidal, geothermal energy, biomass, landfill
gas, incremental hydropower, or hydrokinetic energy.
`(9) REPOWERING OR COFIRING INCREMENT- The term `repowering or cofiring
`(A) the additional generation from a modification that is placed
in service on or after the date of enactment of this section, to
expand electricity production at a facility used to generate electric
energy from a renewable energy resource;
`(B) the additional generation above the average generation during
the 3-year period ending on the date of enactment of this section
at a facility used to generate electric energy from a renewable
energy resource or to cofire biomass that was placed in service
before the date of enactment of this section; or
`(C) the portion of the electric generation from a facility placed
in service on or after the date of enactment of this section, or
a modification to a facility placed in service before the date of
enactment of this section made on or after January 1, 2001, associated
with cofiring biomass.
`(10) RETAIL ELECTRIC SUPPLIER-
`(A) IN GENERAL- The term `retail electric supplier' means a person
that sells electric energy to electric consumers (other than consumers
in Hawaii) that sold not less than 1,000,000 megawatt hours of electric
energy to electric consumers for purposes other than resale during
the preceding calendar year.
`(B) INCLUSION- The term `retail electric supplier' includes a person
that sells electric energy to electric consumers that, in combination
with the sales of any affiliate organized after the date of enactment
of this section, sells not less than 1,000,000 megawatt hours of
electric energy to consumers for purposes other than resale.
`(C) SALES TO PARENT COMPANIES OR AFFILIATES- For purposes of this
paragraph, sales by any person to a parent company or to other affiliates
of the person shall not be treated as sales to electric consumers.
`(D) GOVERNMENTAL AGENCIES-
`(i) IN GENERAL- Except as provided in clause (ii), the term `retail
electric supplier' does not include--
`(I) the United States, a State, any political subdivision of
a State, or any agency, authority, or instrumentality of the
United States, State, or political subdivision; or
`(II) a rural electric cooperative.
`(ii) INCLUSION- The term `retail electric supplier' includes
an entity that is a political subdivision of a State, or an agency,
authority, or instrumentality of the United States, a State, a
political subdivision of a State, a rural electric cooperative
that sells electric energy to electric consumers, or any other
entity that sells electric energy to electric consumers that would
not otherwise qualify as a retail electric supplier if the entity
notifies the Secretary that the entity voluntarily agrees to participate
in the Federal renewable electricity standard program.
`(b) Compliance- For calendar year 2013 and each calendar year thereafter,
each retail electric supplier shall meet the requirements of subsection
(c) by submitting to the Secretary, not later than April 1 of the following
calendar year, 1 or more of the following:
`(1) Federal renewable energy credits issued under subsection (e).
`(2) Certification of the renewable energy generated and electricity
savings pursuant to the funds associated with State compliance payments
as specified in subsection (e)(4)(G).
`(3) Alternative compliance payments pursuant to subsection (h).
`(c) Required Annual Percentage- For each of calendar years 2013 through
2039, the required annual percentage of the base quantity of electricity
of a retail electric supplier that shall be generated from renewable
energy resources, or otherwise credited towards the percentage requirement
pursuant to subsection (d), shall be the applicable percentage specified
in the following table:
2025 and thereafter through 2039
`(d) Renewable Energy Credits-
`(1) IN GENERAL- A retail electric supplier may satisfy the requirements
of subsection (b)(1) through the submission of Federal renewable energy
`(A) issued to the retail electric supplier under subsection (e);
`(B) obtained by purchase or exchange under subsection (f); or
`(C) borrowed under subsection (g).
`(2) FEDERAL RENEWABLE ENERGY CREDITS- A Federal renewable energy
credit may be counted toward compliance with subsection (b)(1) only
`(e) Issuance of Federal Renewable Energy Credits-
`(1) IN GENERAL- Not later than 1 year after the date of enactment
of this section, the Secretary shall establish by rule a program--
`(A) to verify and issue Federal renewable energy credits to generators
of renewable energy;
`(B) to track the sale, exchange, and retirement of the credits;
`(C) to enforce the requirements of this section.
`(2) EXISTING NON-FEDERAL TRACKING SYSTEMS- To the maximum extent
practicable, in establishing the program, the Secretary shall rely
on existing and emerging State or regional tracking systems that issue
and track non-Federal renewable energy credits.
`(A) IN GENERAL- 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) ELIGIBILITY- To be eligible for the issuance of the credits,
the applicant shall demonstrate to the Secretary that--
`(i) the electric energy will be transmitted onto the grid; or
`(ii) in the case of a generation offset, the electric energy
offset would have otherwise been consumed onsite.
`(C) CONTENTS- The application shall indicate--
`(i) the type of renewable energy resource that is used to produce
`(ii) the location at which the electric energy will be produced;
`(iii) any other information the Secretary determines appropriate.
`(4) QUANTITY OF FEDERAL RENEWABLE ENERGY CREDITS-
`(A) IN GENERAL- Except as otherwise provided in this paragraph,
the Secretary shall issue to a generator of electric energy 1 Federal
renewable energy credit for each kilowatt hour of electric energy
generated by the use of a renewable energy resource at an eligible
`(B) INCREMENTAL HYDROPOWER-
`(i) IN GENERAL- For purpose of compliance with this section,
Federal renewable energy credits for incremental hydropower shall
be based on the increase in average annual generation resulting
from the efficiency improvements or capacity additions.
`(ii) WATER FLOW INFORMATION- The incremental generation shall
be calculated using the same water flow information that is--
`(I) used to determine a historic average annual generation
baseline for the hydroelectric facility; and
`(II) certified by the Secretary or the Federal Energy Regulatory
`(iii) OPERATIONAL CHANGES- The calculation of the Federal renewable
energy credits for incremental hydropower shall not be based on
any operational changes at the hydroelectric facility that is
not directly associated with the efficiency improvements or capacity
`(i) IN GENERAL- The Secretary shall issue 2 renewable energy
credits for each kilowatt hour of electric energy generated and
supplied to the grid in a calendar year through the use of a renewable
energy resource at an eligible facility located on Indian land.
`(ii) BIOMASS- For purposes of this paragraph, renewable energy
generated by biomass cofired with other fuels is eligible for
2 credits only if the biomass was grown on the land.
`(D) ON-SITE ELIGIBLE FACILITIES-
`(i) IN GENERAL- In the case of electric energy generated by a
renewable energy resource at an on-site eligible facility that
is not larger than 1 megawatt in capacity and is used to offset
all or part of the requirements of a customer for electric energy,
the Secretary shall issue 3 renewable energy credits to the customer
for each kilowatt hour generated.
`(ii) INDIAN LAND- In the case of an on-site eligible facility
on Indian land, the Secretary shall issue not more than 3 credits
per kilowatt hour.
`(E) COMBINATION OF RENEWABLE AND NONRENEWABLE ENERGY RESOURCES-
If both a renewable energy resource and a nonrenewable energy resource
are used to generate the electric energy, the Secretary shall issue
the Federal renewable energy credits based on the proportion of
the renewable energy resources used.
`(F) RETAIL ELECTRIC SUPPLIERS- If a generator has sold electric
energy generated through the use of a renewable energy resource
to a retail electric supplier under a contract for power from an
existing facility and the contract has not determined ownership
of the Federal renewable energy credits associated with the generation,
the Secretary shall issue the Federal renewable energy credits to
the retail electric supplier for the duration of the contract.
`(G) COMPLIANCE WITH STATE RENEWABLE PORTFOLIO STANDARD PROGRAMS-
Payments made by a retail electricity supplier, directly or indirectly,
to a State for compliance with a State renewable portfolio standard
program, or for an alternative compliance mechanism, shall be valued
at 1 credit per kilowatt hour for the purpose of subsection (b)(2)
based on the quantity of electric energy generation from renewable
resources that results from the payments.
`(f) Renewable Energy Credit Trading-
`(1) IN GENERAL- A Federal renewable energy credit may be sold, transferred,
or exchanged by the entity to whom the credit is issued or by any
other entity that acquires the Federal renewable energy credit, other
than renewable energy credits from existing facilities.
`(2) CARRYOVER- A Federal renewable energy credit for any year that
is not submitted to satisfy the minimum renewable generation requirement
of subsection (c) for that year may be carried forward for use pursuant
to subsection (b)(1) within the next 3 years.
`(3) DELEGATION- The Secretary may delegate to an appropriate market-making
entity the administration of a national tradeable renewable energy
credit market for purposes of creating a transparent national market
for the sale or trade of renewable energy credits.
`(g) Renewable Energy Credit Borrowing-
`(1) IN GENERAL- Not later than December 31, 2014, a retail electric
supplier that has reason to believe the retail electric supplier will
not be able to fully comply with subsection (b) may--
`(A) submit a plan to the Secretary demonstrating that the retail
electric supplier will earn sufficient Federal renewable energy
credits within the next 3 calendar years that, when taken into account,
will enable the retail electric supplier to meet the requirements
of subsection (b) for calendar year 2014 and the subsequent calendar
years involved; and
`(B) on the approval of the plan by the Secretary, apply Federal
renewable energy credits that the plan demonstrates will be earned
within the next 3 calendar years to meet the requirements of subsection
(b) for each calendar year involved.
`(2) REPAYMENT- The retail electric supplier shall repay all of the
borrowed Federal renewable energy credits by submitting an equivalent
number of Federal renewable energy credits, in addition to the credits
otherwise required under subsection (b), by calendar year 2022 or
any earlier deadlines specified in the approved plan.
`(h) Alternative Compliance Payments- As a means of compliance under
subsection (b)(4), the Secretary shall accept payment equal to the lesser
`(1) 200 percent of the average market value of Federal renewable
energy credits and Federal energy efficiency credits for the applicable
compliance period; or
`(2) 3 cents per kilowatt hour (as adjusted on January 1 of each year
following calendar year 2006 based on the implicit price deflator
for the gross national product).
`(i) Information Collection- The Secretary may collect the information
necessary to verify and audit--
`(1)(A) the annual renewable energy generation of any retail electric
`(B) Federal renewable energy credits submitted by a retail electric
supplier pursuant to subsection (b)(1);
`(2) the validity of Federal renewable energy credits submitted for
compliance by a retail electric supplier to the Secretary; and
`(3) the quantity of electricity sales of all retail electric suppliers.
`(j) Environmental Savings Clause- Incremental hydropower shall be subject
to all applicable environmental laws and licensing and regulatory requirements.
`(1) IN GENERAL- Nothing in this section diminishes any authority
of a State or political subdivision of a State--
`(A) to adopt or enforce any law (including regulations) respecting
renewable energy, including programs that exceed the required quantity
of renewable energy under this section; or
`(B) to regulate the acquisition and disposition of Federal renewable
energy credits by retail electric suppliers.
`(2) COMPLIANCE WITH SECTION- No law or regulation referred to in
paragraph (1)(A) shall relieve any person of any requirement otherwise
applicable under this section.
`(3) COORDINATION WITH STATE PROGRAM- The Secretary, in consultation
with States that have in effect renewable energy programs, shall--
`(A) preserve the integrity of the State programs, including programs
that exceed the required quantity of renewable energy under this
`(B) facilitate coordination between the Federal program and State
`(4) EXISTING RENEWABLE ENERGY PROGRAMS- In the regulations establishing
the program under this section, the Secretary shall incorporate common
elements of existing renewable energy programs, including State programs,
to ensure administrative ease, market transparency and effective enforcement.
`(5) MINIMIZATION OF ADMINISTRATIVE BURDENS AND COSTS- In carrying
out this section, the Secretary shall work with the States to minimize
administrative burdens and costs to retail electric suppliers.
`(l) Recovery of Costs- An electric utility that has sales of electric
energy that are subject to rate regulation (including any utility with
rates that are regulated by the Commission and any State regulated electric
utility) shall not be denied the opportunity to recover the full amount
of the prudently incurred incremental cost of renewable energy obtained
to comply with the requirements of subsection (b).
`(1) IN GENERAL- The Secretary shall enter into an arrangement with
the National Academy of Sciences under which the Academy shall conduct
a comprehensive evaluation of all aspects of the program established
under this section.
`(2) EVALUATION- The study shall include an evaluation of--
`(A) the effectiveness of the program in increasing the market penetration
and lowering the cost of the eligible renewable energy technologies;
`(B) the opportunities for any additional technologies and sources
of renewable energy emerging since the date of enactment of this
`(C) the impact on the regional diversity and reliability of supply
sources, including the power quality benefits of distributed generation;
`(D) the regional resource development relative to renewable potential
and reasons for any investment in renewable resources; and
`(E) the net cost/benefit of the renewable electricity standard
to the national and State economies, including--
`(ii) the economic development benefits of investment;
`(iii) avoided costs related to environmental and congestion mitigation
investments that would otherwise have been required;
`(iv) the impact on natural gas demand and price; and
`(v) the effectiveness of green marketing programs at reducing
the cost of renewable resources.
`(3) REPORT- Not later than January 1, 2018, the Secretary shall transmit
to Congress a report describing the results of the evaluation and
any recommendations for modifications and improvements to the program.
`(n) State Renewable Energy Account-
`(1) IN GENERAL- There is established in the Treasury a State renewable
`(2) DEPOSITS- All money collected by the Secretary from the alternative
compliance payments under subsection (h) shall be deposited into the
State renewable energy account established under paragraph (1).
`(A) IN GENERAL- Proceeds deposited in the State renewable energy
account shall be used by the Secretary, subject to annual appropriations,
for a program to provide grants--
`(i) to the State agency responsible for administering a fund
to promote renewable energy generation for customers of the State
or an alternative agency designated by the State; or
`(ii) if no agency described in clause (i), to the State agency
developing State energy conservation plans under section 362 of
the Energy Policy and Conservation Act (42 U.S.C. 6322).
`(B) USE- The grants shall be used for the purpose of--
`(i) promoting renewable energy production; and
`(ii) providing energy assistance and weatherization services
to low-income consumers.
`(C) CRITERIA- The Secretary may issue guidelines and criteria for
grants awarded under this paragraph.
`(D) STATE-APPROVED FUNDING MECHANISMS- At least 75 percent of the
funds provided to each State for each fiscal year shall be used
to promote renewable energy production through grants, production
incentives, or other State-approved funding mechanisms.
`(E) ALLOCATION- The funds shall be allocated to the States on the
basis of retail electric sales subject to the renewable electricity
standard under this section or through voluntary participation.
`(F) RECORDS- State agencies receiving grants under this paragraph
shall maintain such records and evidence of compliance as the Secretary
(b) Table of Contents Amendment- The table of contents of the Public
Utility Regulatory Policies Act of 1978 (16 U.S.C. prec. 2601) is amended
by adding at the end of the items relating to title VI the following:
`Sec. 609. Rural and remote communities electrification grants.
`Sec. 610. Renewable electricity standard.'.