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SA 4840. Mr. SANDERS (for himself, Mr. MENENDEZ, and Mr. KERRY) submitted an amendment intended to be proposed by him to the bill S. 3036, to direct the Administrator of the Environmental Protection Agency to establish a program to decrease emissions of greenhouse gases, and for other purposes; which was ordered to lie on the table; as follows:

At the end of title IX, add the following:
Subtitle C--Renewable Energy Standard


SEC. 921. 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) 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) BIOMASS.--
``(A) IN GENERAL.--Except as otherwise provided in this paragraph, 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; or
``(ii) nonhazardous, plant or algal matter that is derived from any of--
``(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, or wood contaminated with plastic or metals);
``(III) gasified animal waste; or
``(IV) landfill methane.
``(B) NATIONAL FOREST LAND AND CERTAIN OTHER PUBLIC LAND.--With respect to 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) pre-commercial thinnings;
``(iii) brush;
``(iv) mill residues; and
``(v) slash.
``(C) EXCLUSION OF CERTAIN FEDERAL LAND.--Notwithstanding subparagraph (B), material or matter that would otherwise qualify as biomass shall not be included in the term `biomass' if the material or matter is located on--
``(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 the Federal land--
``(I) is appropriate for the applicable forest type; and
``(II) maximizes the retention of late-successional and large and old growth trees, late-successional and old growth forest structure, and 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) a Wilderness Study Area;
``(iv) an inventoried roadless area of Federal land;
``(v) any part of the National Landscape Conservation System; or
``(vi) a National Monument.
``(3) DISTRIBUTED GENERATION FACILITY.--The term `distributed generation facility' means a facility at a customer site.
``(4) EXISTING RENEWABLE ENERGY.--The term `existing renewable energy' means, except as provided in paragraph (8)(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, or landfill gas.
``(5) 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).
``(6) 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.
``(7) INCREMENTAL HYDROPOWER.--
``(A) IN GENERAL.--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.
``(B) EXCLUSION.--The term `incremental hydropower' does not include additional energy generated as a result of operational changes not directly associated with efficiency improvements or capacity additions.
``(C) MEASUREMENT.--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.
``(8) 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;
``(iii) landfill gas; or
``(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 during the 3-year period ending on the date of enactment of this section at the facility from--
``(I) solar or wind energy or ocean energy;
``(II) biomass;
``(III) landfill gas; or
``(IV) incremental hydropower; and
``(ii) incremental geothermal production.
``(9) OCEAN ENERGY.--The term `ocean energy' includes current, wave, tidal, and thermal energy.
``(b) 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 the electric utility sells to electric consumers in any calendar year from new renewable energy or existing renewable energy.
``(2) MINIMUM ANNUAL PERCENTAGE.--The percentage obtained in a calendar year shall not be less than the amount specified in the following table:



Minimum annual
``Calendar year:
percentage:
2010

1
2011

2
2012

4
2013

6
2014

8
2015

10
2016

12
2017

14
2018

16
2019

18
2020

20
``(3) MEANS OF COMPLIANCE.--An electric utility shall meet the requirements of this subsection by--
``(A) submitting to the Secretary renewable energy credits issued under subsection (c);
``(B) making alternative compliance payments to the Secretary at the rate of 2 cents per kilowatt hour (as adjusted for inflation under subsection (h)); or
``(C) conducting a combination of activities described in subparagraphs (A) and (B).
``(c) 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 each electric utility shall submit to the Secretary renewable energy credits to certify the compliance of the electric utility with respect to obligations under subsection (b).
``(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 (i);
``(D) ensure that a kilowatt hour, including the associated renewable energy credit, shall be used only once for purposes of compliance with this section;
``(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 (b) 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 entity that establishes markets 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.
``(d) Enforcement.--
``(1) CIVIL PENALTIES.--Any electric utility that fails to meet the compliance requirements of subsection (b) shall be subject to a civil penalty.
``(2) AMOUNT OF PENALTY.--Subject to paragraph (3), the amount of the civil penalty shall be equal to the product obtained by multiplying--
``(A) the number of kilowatt-hours of electric energy sold to electric consumers in violation of subsection (b); by
``(B) the greater of--
``(i) 2 cents (adjusted for inflation under subsection (h)); or
``(ii) 200 percent of the average market value of renewable energy credits during the year in which the violation occurred.
``(3) MITIGATION OR WAIVER.--
``(A) IN GENERAL.--The Secretary may mitigate or waive a civil penalty under this subsection if the electric utility is unable to comply with subsection (b) for reasons outside of the reasonable control of the utility.
``(B) REDUCTION.--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 (b).
``(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).
``(e) State Renewable Energy Account Program.--
``(1) IN GENERAL.--Not later than December 31, 2008, the Secretary of the Treasury shall establish a State renewable energy account in the Treasury.
``(2) DEPOSITS.--
``(A) IN GENERAL.--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 under paragraph (1).
``(B) SEPARATE ACCOUNT.--The State renewable energy account shall be maintained as a separate account in the Treasury and shall not be transferred to the general fund of the Treasury.
``(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.
``(f) Rules.--The Secretary shall issue rules implementing this section not later than 1 year after the date of enactment of this section.
``(g) 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
``(2) in Hawaii.
``(h) Inflation Adjustment.--Not later than December 31, 2008, and December 31 of each year thereafter, the Secretary shall adjust for United States dollar inflation (as measured by the Consumer Price Index)--
``(1) the price of a renewable energy credit under subsection (c)(2); and
``(2) the amount of the civil penalty per kilowatt-hour under subsection (d)(2).
``(i) State Programs.--
``(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 (d)(3), no such law or regulation shall relieve any person of any requirement otherwise applicable under this section.
``(2) COORDINATION.--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.
``(3) REGULATIONS.--
``(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.
``(j) Recovery of Costs.--
``(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.).
``(k) 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.
``(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..609..Rural and remote communities electrification grants.
``Sec..610..Federal renewable portfolio standard.''.


(As printed in the Congressional Record for the Senate on Jun 4, 2008.)