HR 969 IH
110th CONGRESS
1st Session
H. R. 969
To amend title VI of the Public Utility Regulatory Policies Act of
1978 to establish a Federal renewable energy portfolio standard for certain
retail electric utilities, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
February 8, 2007
Mr. UDALL of New Mexico (for himself, Mr. PLATTS, Mr. PALLONE, Mr. UDALL of
Colorado, Mr. SHAYS, Ms. DEGETTE, Mr. MCNERNEY, and Mr. DOGGETT) introduced the
following bill; which was referred to the Committee on Energy and Commerce
A BILL
To amend title VI of the Public Utility Regulatory Policies Act of
1978 to establish a Federal renewable energy portfolio standard for certain
retail electric utilities, 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. FEDERAL RENEWABLE PORTFOLIO STANDARD.
(a) In General- Title VI of the Public Utility Regulatory Policies Act of
1978 is amended by adding at the end the following:
`SEC. 610. FEDERAL RENEWABLE PORTFOLIO STANDARD.
`(a) Definitions- For purposes of this section:
`(1) BIOMASS- The term `biomass' means--
`(A) cellulosic (plant fiber) organic materials from a plant that is
planted for the purpose of being used to produce energy;
`(B) nonhazardous, plant or algal matter waste materials that is
segregated from other waste materials and 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--
`(I) municipal solid waste;
`(II) recyclable postconsumer waste paper;
`(III) painted, treated, or pressurized wood;
`(IV) wood contaminated with plastic or metals; or
`(iii) gasified animal waste;
`(iv) landfill methane; and
`(C) with respect to material removed from National Forest System
lands the term includes only organic material from--
`(i) precommercial thinnings;
`(2) ELIGIBLE FACILITY- The term `eligible facility' means--
`(A) a facility for the generation of electric energy from a renewable
energy resource that is placed in service on or after the date of
enactment of this section or the effective date of the applicable State
renewable portfolio standard program; or
`(B) a repowering or cofiring increment that is placed in service on
or after the date of enactment of this section or the effective date of
the applicable State renewable portfolio standard program, at a facility
for the generation of electric energy from a renewable energy resource
that was placed in service before that date.
`(3) EXISTING FACILITY OFFSET- The term `existing facility offset' means
renewable energy generated from an existing facility, not classified as an
eligible facility, that is owned or under contract, directly or indirectly,
to a retail electric supplier on the date of enactment of this
section.
`(4) INCREMENTAL HYDROPOWER- The term `incremental hydropower' means
additional generation that is achieved from increased efficiency or
additions of capacity on or after the date of enactment of this section or
the effective date of the 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, or
rancheria;
`(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 paragraph
either held by the United States for the benefit of any Indian tribe or
individual or held by any Indian tribe or individual subject to
restriction by the United States against alienation;
`(C) any dependent Indian community; and
`(D) any land conveyed to any Alaska Native corporation under the
Alaska Native Claims Settlement Act.
`(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.), which 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 (including solar water heating), wind, ocean, tidal, geothermal
energy, biomass, landfill gas, or incremental hydropower.
`(9) REPOWERING OR COFIRING INCREMENT- The term `repowering or cofiring
increment' means--
`(A) the additional generation from a modification that is placed in
service on or after the date of enactment of this section or the effective
date of the applicable State renewable portfolio standard program, to
expand electricity production 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 the
effective date of the applicable State renewable portfolio standard
program; or
`(B) the additional generation above the average generation in the 3
years preceding the date of enactment of this section or the effective
date of the applicable State renewable portfolio standard program, to
expand electricity production 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 the
effective date of the applicable State renewable portfolio standard
program.
`(10) RETAIL ELECTRIC SUPPLIER- The term `retail electric supplier'
means a person that sells electric energy to electric consumers and 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; except
that such term does not include the United States, a State or any political
subdivision of a State, or any agency, authority, or instrumentality of any
one or more of the foregoing, or a rural electric cooperative.
`(11) RETAIL ELECTRIC SUPPLIER'S BASE AMOUNT- The term `retail electric
supplier's base amount' means the total amount of electric energy sold by
the 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, excluding electric energy
generated by a hydroelectric facility.
`(b) Minimum Renewable Generation Requirement- For each calendar year
beginning in calendar year 2010, each retail electric supplier shall submit to
the Secretary, not later than April 1 of the following calendar year,
renewable energy credits in an amount equal to the required annual percentage
specified in subsection (c).
`(c) Required Annual Percentage- For calendar years 2010 through 2039, the
required annual percentage of the retail electric supplier's base amount that
shall be generated from renewable energy resources, or otherwise credited
towards such percentage requirement pursuant to subsection (d), shall be the
percentage specified in the following table:
Required annual
`Calendar Years
percentage
--1
--2
--4
--6
--8
--10
--12
--14
--16
--18
--20.
`(d) Renewable Energy Credits- (1) A retail electric supplier may satisfy
the requirements of subsection (b) through the submission of renewable energy
credits--
`(A) issued to the retail electric supplier under subsection (e);
`(B) obtained by purchase or exchange under subsection (f) or (h);
or
`(C) borrowed under subsection (j).
`(2) A renewable energy credit may be counted toward compliance with
subsection (b) only once.
`(e) Issuance of Credits- (1) The Secretary shall establish by rule, not
later than 1 year after the date of enactment of this section, a program to
verify and issue renewable energy credits, track their sale, exchange and
submission, and enforce the requirements of this section.
`(2) 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. The applicant must demonstrate that the electric
energy will be transmitted onto the grid or, in the case of a generation
offset, that the electric energy offset would have otherwise been consumed on
site. The application shall indicate--
`(A) the type of renewable energy resource used to produce the
electricity;
`(B) the location where the electric energy was produced; and
`(C) any other information the Secretary determines appropriate.
`(3)(A) Except as provided in subparagraphs (B), (C), and (D), the
Secretary shall issue to each entity that generates electric energy one
renewable energy credit for each kilowatt hour of electric energy the entity
generates from the date of enactment of this section and in each subsequent
calendar year through the use of a renewable energy resource at an eligible
facility.
`(B) For incremental hydropower the renewable energy credits shall be
calculated based on the expected increase in average annual generation
resulting from the efficiency improvements or capacity additions. The number
of credits shall be calculated using the same water flow information used to
determine a historic average annual generation baseline for the hydroelectric
facility and certified by the Secretary or the Federal Energy Regulatory
Commission. The calculation of the renewable energy credits for incremental
hydropower shall not be based on any operational changes at the hydroelectric
facility not directly associated with the efficiency improvements or capacity
additions.
`(C) The Secretary shall issue two renewable energy credits for each
kilowatt hour of electric energy generated and supplied to the grid in that
calendar year through the use of a renewable energy resource at an eligible
facility located on Indian land. For purposes of this paragraph, renewable
energy generated by biomass cofired with other fuels is eligible for two
credits only if the biomass was grown on such land.
`(D) For electric energy generated by a renewable energy resource at an
on-site eligible facility, used to offset part or all of the customer's
requirements for electric energy, the Secretary shall issue three renewable
energy credits to such customer for each kilowatt hour generated.
`(E) In the case of a retail electric supplier that is subject to a State
renewable standard program that--
`(i) requires the generation of electricity from renewable energy;
or
`(ii) provides for alternative compliance payments in satisfaction of
applicable State requirements under the program,
the Secretary shall issue an amount of renewable energy credits equal to
the amount of renewable energy credits that the Secretary would have issued
had a payment of the same amount been made to the Secretary under subsection
(j). Such renewable energy credits may be applied against the retail electric
supplier's own required annual percentage or may be transferred for use only
by an associate company of the retail electric supplier.
`(f) Eligibility- To be eligible for a renewable energy credit, the unit
of electric energy generated through the use of a renewable energy resource
may be sold or may be 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 resources used. The Secretary shall
identify renewable energy credits by type and date of generation.
`(g) Contracts Under Section 210- 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 this Act, the retail
electric supplier is treated as the generator of the electric energy for the
purposes of this section or the duration of the contract.
`(h) Existing Facility Offsets- The Secretary shall issue renewable energy
credits for existing facility offsets to be applied against a retail electric
supplier's required annual percentage. Such credits are not tradeable and may
be used only in the calendar year generation actually occurs.
`(i) Renewable Energy Credit Trading- A renewable energy credit, may be
sold, transferred or exchanged by the entity to whom issued or by any other
entity who acquires the renewable energy credit, except for those renewable
energy credits issued pursuant to subsection (e)(3)(E). A renewable energy
credit for any year that is not used to satisfy the minimum renewable
generation requirement of subsection (a) for that year may be carried forward
for use within the next 4 years.
`(j) Renewable Energy Credit Borrowing- At any time before the end of
calendar year 2012, a retail electric supplier that has reason to believe it
will not have sufficient renewable energy credits to comply with subsection
(b) may--
`(1) submit a plan to the Secretary demonstrating that the retail
electric supplier will earn sufficient credits within the next 3 calendar
years which, when taken into account, will enable the retail electric
supplier to meet the requirements of subsection (b) for calendar year 2012
and the subsequent calendar years involved; and
`(2) upon the approval of the plan by the Secretary, apply 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.
The retail electric supplier must repay all of the borrowed renewable
energy credits by submitting an equivalent number of renewable energy credits,
in addition to those otherwise required under subsection (b), by calendar year
2020 or any earlier deadlines specified in the approved plan. Failure to repay
the borrowed renewable energy credits shall subject the retail electric
supplier to civil penalties under subsection (k) for violation of the
requirements of subsection (b) for each calendar year involved.
`(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. Any such penalty shall be due and payable without
demand to the Secretary as provided in the regulations issued under subsection
(e). On January 1 of each year following calendar year 2006, the Secretary
shall adjust for inflation the penalty for such calendar year, based on the
Gross Domestic Product Implicity Price Deflator.
`(l) Credit Cost Cap- The Secretary shall offer renewable energy credits
for sale at the lesser of 3 cents per kilowatt-hour or 200 percent of the
average market value of renewable 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, based on the Gross Domestic Product Implicit Price Deflator.
`(m) 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.
`(n) Environmental Savings Clause- Incremental hydropower shall be subject
to all applicable environmental laws and licensing and regulatory
requirements.
`(o) Existing Programs- (1) This section does not preclude a State from
imposing additional renewable energy requirements in that State, including
specifying eligible technologies under such State requirements.
`(2) In the rule establishing this program, the Secretary shall
incorporate common elements of existing renewable energy programs, including
State programs, to ensure administrative ease, market transparency and
effective enforcement. The Secretary shall work with the States to minimize
administrative burdens and costs and to avoid duplicating compliance charges
to retail electric suppliers.
`(p) Recovery of Costs- An electric utility whose sales of electric energy
are subject to rate regulation, including any utility whose rates 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) for sales to electric customers which are
subject to rate regulation, notwithstanding any other law, regulation, rule,
administrative order or any agreement between the electric utility and either
the Commission or a State regulatory authority. For the purpose of this
subsection, the term `incremental cost of renewable energy' means--
`(1) the additional cost to the electric utility for the purchase or
generation of renewable energy to satisfy the minimum renewable generation
requirement of subsection (b), as compared to the cost of the electric
energy the electric utility would generate or purchase from another source
but for the requirements of subsection (b); and
`(2) the cost to the electric utility for acquiring by purchase or
exchange renewable energy credits to satisfy the minimum renewable
generation requirement of subsection (b).
For purposes of this subsection, the definitions in section 3 of this Act
shall apply to the terms `electric utility', `State regulated electric
utility', `State agency', `Commission', and `State regulatory authority'.
`(q) Voluntary Participation- The Secretary shall encourage
federally-owned utilities, municipally-owned utilities and rural electric
cooperatives that sell electric energy to electric consumers for purposes
other than resale to participate in the renewable portfolio standard program.
A municipally-owned utility or rural electric cooperative that owns or has
under contract a facility for the generation of electric energy from a
renewable energy resource may not sell or trade renewable energy credits
generated by such resource unless it participates in the renewable portfolio
standard program under the same terms and conditions as retail electric
suppliers.
`(r) Program Review- The Secretary shall enter into a contract with the
National Academy of Sciences to conduct a comprehensive evaluation of all
aspects of the Renewable Portfolio Standard program, within 8 years of
enactment of this section. The study shall include an evaluation of--
`(1) the effectiveness of the program in increasing the market
penetration and lower the cost of the eligible renewable technologies;
`(2) the opportunities for any additional technologies and sources of
renewable energy emerging since enactment of this section;
`(3) the impact on the regional diversity and reliability of supply
sources, including the power quality benefits of distributed
generation;
`(4) the regional resource development relative to renewable potential
and reasons for any under investment in renewable resources; and
`(5) the net cost/benefit of the renewable portfolio standard to the
national and State economies, including retail power costs, economic
development benefits of investment, avoided costs related to environmental
and congestion mitigation investments that would otherwise have been
required, impact on natural gas demand and price, effectiveness of green
marketing programs at reducing the cost of renewable resources.
The Secretary shall transmit the results of the evaluation and any
recommendations for modifications and improvements to the program to Congress
not later than January 1, 2016.
`(s) Program Improvements- Using the results of the evaluation under
subsection (p), the Secretary shall by rule, within 6 months of the completion
of the evaluation, make such modifications to the program as may be necessary
to improve the efficiency of the program and maximize the use of renewable
energy under the program.
`(t) State Renewable Energy Account Program- (1) The Secretary shall
establish, not later than December 31, 2009, a State renewable energy account
program.
`(2) All money collected by the Secretary from the sale of renewable
energy credits shall be deposited into the State renewable energy account
established pursuant to this subsection. The State renewable energy account
shall be held by the Secretary and shall not be transferred to the Secretary
of the Treasury.
`(3) Proceeds deposited in the State renewable energy account shall be
used by the Secretary, subject to annual appropriations, for a program to
provide grants to the State agency responsible for developing State energy
conservation plans under section 363 of the Energy Policy and Conservation Act
(42 U.S.C. 6322) for the purposes of promoting renewable energy production and
providing energy assistance and weatherization services to low-income
consumers.
`(4) The Secretary may issue guidelines and criteria for grants awarded
under this subsection. At least 75 percent of the funds provided to each State
shall be used for promoting renewable energy production. The funds shall be
allocated to the States on the basis of retail electric sales subject to the
Renewable Portfolio Standard under this section or through voluntary
participation. To the extent Federal credits have been issued without payment
due to reciprocity with State programs under subsection (d)(3)(E), deductions
shall be made from the relevant State's allocation. State energy offices
receiving grants under this section shall maintain such records and evidence
of compliance as the Secretary may require.'.
(b) Table of Contents- The table of contents for such title is amended by
adding the following new item at the end:
`Sec. 610. Federal renewable portfolio standard.'.
(c) Sunset- Section 610 of such title and the item relating to such
section 610 in the table of contents for such title are each repealed as of
December 31, 2039.
END