S 1567 IS
110th CONGRESS
1st Session
S. 1567
To amend the Public Utility Regulatory Policies Act of 1978 to
provide a renewable portfolio standard, and for other purposes.
IN THE SENATE OF THE UNITED STATES
June 7, 2007
Ms. KLOBUCHAR introduced the following bill; which was read twice and
referred to the Committee on Energy and Natural Resources
A BILL
To amend the Public Utility Regulatory Policies Act of 1978 to
provide a renewable portfolio 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 PORTFOLIO 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
following:
`SEC. 610. FEDERAL RENEWABLE PORTFOLIO STANDARD.
`(a) Renewable Energy Requirement-
`(1) IN GENERAL- Each electric utility that sells electricity to
electric consumers shall obtain a percentage of the base amount of
electricity it sells to electric consumers in any calendar year from new
renewable energy or existing renewable energy. The percentage obtained in a
calendar year shall not be less than the amount specified in the following
table:
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`Calendar year: Minimum annual percentage:
2010 1
2011 2
2012 4
2013 6
2014 8
2015 10
2016 12
2017 14
2018 16
2019 18
2020 20
2021 21
2022 22
2023 23
2024 24
2025 25.
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`(2) MEANS OF COMPLIANCE- An electric utility shall meet the
requirements of paragraph (1) by--
`(A) submitting to the Secretary renewable energy credits issued under
subsection (b);
`(B) making alternative compliance payments to the Secretary at the
rate of 2 cents per kilowatt hour (as adjusted for inflation under
subsection (g)); or
`(C) a combination of activities described in subparagraphs (A) and
(B).
`(b) Renewable Energy Credit Trading Program-
`(1) IN GENERAL- Not later than July 1, 2009, the Secretary shall
establish a renewable energy credit trading program under which electric
utilities shall submit to the Secretary renewable energy credits to certify
the compliance of the electric utilities with respect to obligations under
subsection (a)(1).
`(2) ADMINISTRATION- As part of the program, the Secretary shall--
`(A) issue tradeable renewable energy credits to generators of
electric energy from new renewable energy;
`(B) issue nontradeable renewable energy credits to generators of
electric energy from existing renewable energy;
`(C) issue renewable energy credits to electric utilities associated
with State renewable portfolio standard compliance mechanisms pursuant to
subsection (h);
`(D) ensure that a kilowatt hour, including the associated renewable
energy credit, shall be used only once for purposes of compliance with
this Act;
`(E) allow double credits for generation from facilities on Indian
land, and triple credits for generation from small renewable distributed
generators (meaning those no larger than 1 megawatt); and
`(F) ensure that, with respect to a purchaser that, as of the date of
enactment of this section, has a purchase agreement from a renewable
energy facility placed in service before that date, the credit associated
with the generation of renewable energy under the contract is issued to
the purchaser of the electric energy.
`(3) DURATION- A credit described in subparagraph (A) or (B) of
paragraph (2) may only be used for compliance with this section during the
3-year period beginning on the date of issuance of the credit.
`(4) TRANSFERS- An electric utility that holds credits in excess of the
quantity of credits needed to comply with subsection (a) may transfer the
credits to another electric utility in the same utility holding company
system.
`(5) DELEGATION OF MARKET FUNCTION- 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.
`(1) CIVIL PENALTIES- Any electric utility that fails to meet the
compliance requirements of subsection (a) shall be subject to a civil
penalty.
`(2) AMOUNT OF PENALTY- The amount of the civil penalty shall be
determined by multiplying the number of kilowatt-hours of electric energy
sold to electric consumers in violation of subsection (a) by the greater of
2 cents (adjusted for inflation under subsection (g)) or 200 percent of the
average market value of renewable energy credits during the year in which
the violation occurred.
`(3) MITIGATION OR WAIVER- The Secretary may mitigate or waive a civil
penalty under this subsection if the electric utility was unable to comply
with subsection (a) for reasons outside of the reasonable control of the
utility. The Secretary shall reduce the amount of any penalty determined
under paragraph (2) by an amount paid by the electric utility to a State for
failure to comply with the requirement of a State renewable energy program
if the State requirement is greater than the applicable requirement of
subsection (a).
`(4) PROCEDURE FOR ASSESSING PENALTY- The Secretary shall assess a civil
penalty under this subsection in accordance with the procedures prescribed
by section 333(d) of the Energy Policy and Conservation Act of 1954 (42
U.S.C. 6303).
`(d) State Renewable Energy Account Program-
`(1) IN GENERAL- The Secretary shall establish, not later than December
31, 2008, a State renewable energy account program.
`(2) DEPOSITS- All money collected by the Secretary from alternative
compliance payments and the assessment of civil penalties under this section
shall be deposited into the 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 Treasury Department.
`(3) USE- Proceeds deposited in the State renewable energy account shall
be used by the Secretary, subject to appropriations, for a program to
provide grants to the State agency responsible for developing State energy
conservation plans under section 362 of the Energy Policy and Conservation
Act (42 U.S.C. 6322) for the purposes of promoting renewable energy
production, including programs that promote technologies that reduce the use
of electricity at customer sites such as solar water heating.
`(4) ADMINISTRATION- The Secretary may issue guidelines and criteria for
grants awarded under this subsection. State energy offices receiving grants
under this section shall maintain such records and evidence of compliance as
the Secretary may require.
`(5) PREFERENCE- In allocating funds under this program, the Secretary
shall give preference--
`(A) to States in regions which have a disproportionately small share
of economically sustainable renewable energy generation capacity;
and
`(B) to State programs to stimulate or enhance innovative renewable
energy technologies.
`(e) Rules- The Secretary shall issue rules implementing this section not
later than 1 year after the date of enactment of this section.
`(f) Exemptions- This section shall not apply in any calendar year to an
electric utility--
`(1) that sold less than 4,000,000 megawatt-hours of electric energy to
electric consumers during the preceding calendar year; or
`(g) Inflation Adjustment- Not later than December 31 of each year
beginning in 2008, the Secretary shall adjust for inflation the price of a
renewable energy credit under subsection (b)(2) and the amount of the civil
penalty per kilowatt-hour under subsection (c)(2).
`(1) IN GENERAL- Nothing in this section diminishes any authority of a
State or political subdivision of a State to adopt or enforce any law or
regulation respecting renewable energy, but, except as provided in
subsection (c)(3), no such law or regulation shall relieve any person of any
requirement otherwise applicable under this section. The Secretary, in
consultation with States having such renewable energy programs, shall, to
the maximum extent practicable, facilitate coordination between the Federal
program and State programs.
`(A) IN GENERAL- The Secretary, in consultation with States, shall
promulgate regulations to ensure that an electric utility subject to the
requirements of this section that is also subject to a State renewable
energy standard receives renewable energy credits in relation to
equivalent quantities of renewable energy associated with compliance
mechanisms, other than the generation or purchase of renewable energy by
the electric utility, including the acquisition of certificates or credits
and the payment of taxes, fees, surcharges, or other financial compliance
mechanisms by the electric utility or a customer of the electric utility,
directly associated with the generation or purchase of renewable
energy.
`(B) PROHIBITION ON DOUBLE COUNTING- The regulations promulgated under
this paragraph shall ensure that a kilowatt hour associated with a
renewable energy credit issued pursuant to this subsection shall not be
used for compliance with this section more than once.
`(1) IN GENERAL- The Commission shall issue and enforce such regulations
as are necessary to ensure that an electric utility recovers all prudently
incurred costs associated with compliance with this section.
`(2) APPLICABLE LAW- A regulation under paragraph (1) shall be
enforceable in accordance with the provisions of law applicable to
enforcement of regulations under the Federal Power Act (16 U.S.C. 791a et
seq.).
`(j) Wind Energy Development Study- The Secretary, in consultation with
appropriate Federal and State agencies, shall conduct, and submit to Congress
a report describing the results of, a study on methods to increase
transmission line capacity for wind energy development.
`(k) Definitions- In this section:
`(1) BASE AMOUNT OF ELECTRICITY- The term `base amount of electricity'
means the total amount of electricity sold by an electric utility to
electric consumers in a calendar year, excluding municipal waste and
electricity generated by a hydroelectric facility (including a pumped
storage facility, but excluding incremental hydropower).
`(2) DISTRIBUTED GENERATION FACILITY- The term `distributed generation
facility' means a facility at a customer site.
`(3) EXISTING RENEWABLE ENERGY- The term `existing renewable energy'
means, except as provided in paragraph (7)(B), electric energy generated at
a facility (including a distributed generation facility) placed in service
prior to January 1, 2001, from solar, wind, or geothermal energy, ocean
energy, biomass (as defined in section 203(a) of the Energy Policy Act of
2005), or landfill gas.
`(4) GEOTHERMAL ENERGY- The term `geothermal energy' means energy
derived from a geothermal deposit (within the meaning of section 613(e)(2)
of the Internal Revenue Code of 1986).
`(5) INCREMENTAL GEOTHERMAL PRODUCTION-
`(A) IN GENERAL- The term `incremental geothermal production' means
for any year the excess of--
`(i) the total kilowatt hours of electricity produced from a
facility (including a distributed generation facility) using geothermal
energy; over
`(ii) the average annual kilowatt hours produced at such facility
for 5 of the previous 7 calendar years before the date of enactment of
this section after eliminating the highest and the lowest kilowatt hour
production years in such 7-year period.
`(B) SPECIAL RULE- A facility described in subparagraph (A) that was
placed in service at least 7 years before the date of enactment of this
section shall, commencing with the year in which such date of enactment
occurs, reduce the amount calculated under subparagraph (A)(ii) each year,
on a cumulative basis, by the average percentage decrease in the annual
kilowatt hour production for the 7-year period described in subparagraph
(A)(ii) with such cumulative sum not to exceed 30 percent.
`(6) INCREMENTAL HYDROPOWER- The term `incremental hydropower' means
additional energy generated as a result of efficiency improvements or
capacity additions made on or after January 1, 2001, or the effective date
of an existing applicable State renewable portfolio standard program at a
hydroelectric facility that was placed in service before that date. The term
does not include additional energy generated as a result of operational
changes not directly associated with efficiency improvements or capacity
additions. Efficiency improvements and capacity additions shall be measured
on the basis of 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.
`(7) NEW RENEWABLE ENERGY- The term `new renewable energy' means--
`(A) electric energy generated at a facility (including a distributed
generation facility) placed in service on or after January 1, 2001,
from--
`(i) solar, wind, or geothermal energy or ocean energy;
`(ii) biomass (as defined in section 203(b) of the Energy Policy Act
of 2005 (42 U.S.C. 15852(b));
`(iv) incremental hydropower; and
`(B) for electric energy generated at a facility (including a
distributed generation facility) placed in service prior to the date of
enactment of this section--
`(i) the additional energy above the average generation in the 3
years preceding the date of enactment of this section at the facility
from--
`(I) solar or wind energy or ocean energy;
`(II) biomass (as defined in section 203(b) of the Energy Policy
Act of 2005 (42 U.S.C. 15852(b));
`(IV) incremental hydropower.
`(ii) incremental geothermal production.
`(8) OCEAN ENERGY- The term `ocean energy' includes current, wave,
tidal, and thermal energy.
`(l) Sunset- This section expires on December 31, 2040.'.
(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. 610. Federal renewable portfolio standard.'.
END