[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 983 Introduced in House (IH)]
109th CONGRESS
1st Session
H. R. 983
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 17, 2005
Mr. Udall of New Mexico (for himself, Mr. Udall of Colorado, Mr. Leach,
Mr. Pallone, Mr. Waxman, Mr. Shays, and Mr. Platts) 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. 609. FEDERAL RENEWABLE PORTFOLIO STANDARD.
``(a) Minimum Renewable Generation Requirement.--For each calendar
year beginning in calendar year 2008, 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 (b).
``(b) Required Annual Percentage.--For calendar years 2008 through
2037, 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 (c), shall be the percentage specified in the following
table:
Required annual
``Calendar Years percentage
2008....................................... 1
2009....................................... 2
2010....................................... 3
2011....................................... 4
2012....................................... 5
2013....................................... 6
2014....................................... 7
2015....................................... 8
2016....................................... 9
2017....................................... 10
2018....................................... 11
2019....................................... 12
2020....................................... 13
2021....................................... 14
2022....................................... 15
2023....................................... 16
2024....................................... 17
2025....................................... 18
2026....................................... 19
2027 and thereafter........................ 20.
``(c) Renewable Energy Credits.--(1) A retail electric supplier may
satisfy the requirements of subsection (a) through the submission of
renewable energy credits--
``(A) issued to the retail electric supplier under
subsection (d);
``(B) obtained by purchase or exchange under subsection (e)
or (g); or
``(C) borrowed under subsection (f).
``(2) A renewable energy credit may be counted toward compliance
with subsection (a) only once.
``(d) 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 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 (g). 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) 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.
``(4) 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.
``(5) 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.
``(e) 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
(d)(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.
``(f) Renewable Energy Credit Borrowing.--At any time before the
end of calendar year 2010, a retail electric supplier that has reason
to believe it will not have sufficient renewable energy credits to
comply with subsection (a) 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 (a) for calendar year 2010 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 (a) 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 (a),
by calendar year 2008 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 (h) for violation of the requirements of subsection (a) for
each calendar year involved.
``(g) 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.
``(h) Enforcement.--A retail electric supplier that does not submit
renewable energy credits as required under subsection (a) 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 (d).
``(i) 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.
``(j) Environmental Savings Clause.--Incremental hydropower shall
be subject to all applicable environmental laws and licensing and
regulatory requirements.
``(k) 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.
``(l) Definitions.--For purposes of this section:
``(1) Biomass.--The term `biomass' means any organic
material that is available on a renewable or recurring basis,
including dedicated energy crops, trees grown for energy
production, wood waste and wood residues, plants (including
aquatic plants, grasses, and agricultural crops), residues,
fibers, animal wastes and other organic waste materials (but
not including unsegregated municipal solid waste (garbage)),
and fats and oils, except that with respect to material removed
from National Forest System lands the term includes only
organic material from--
``(A) precommercial thinnings;
``(B) slash;
``(C) brush; and
``(D) mill residues.
``(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, 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.
``(m) 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 (a) 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 (a), 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 (a); 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 (a).
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'.
``(n) 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.
``(o) Program Review.--The Secretary shall conduct a comprehensive
evaluation of all aspects of the Renewable Portfolio Standard program,
within 10 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
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 program review and any
recommendations for modifications and improvements to the program to
Congress not later than January 1, 2014.
``(p) Program Improvements.--Using the results of the review under
subsection (o), the Secretary shall by rule, within 6 months of the
completion of the review, 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.
``(q) State Renewable Energy Account Program.--(1) The Secretary
shall establish, not later than December 31, 2007, 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 Treasury Department.
``(3) Proceeds deposited in the state renewable energy account
shall be used by the Secretary 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.
``(r) Sunset.--This section expires December 31, 2037.''.
(b) Table of Contents.--The table of contents for such title is
amended by adding the following new item at the end:
``Sec. 609. Federal renewable portfolio standard.''.
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