[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 4615 Introduced in Senate (IS)]
<DOC>
118th CONGRESS
2d Session
S. 4615
To amend title VI of the Public Utility Regulatory Policies Act of 1978
to establish a Federal energy efficiency resource standard for
electricity and natural gas suppliers, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 20, 2024
Ms. Smith (for herself, Mr. Welch, Mr. Booker, Mr. Lujan, Mrs. Shaheen,
and Mr. Van Hollen) introduced the following bill; which was read twice
and referred to the Committee on Energy and Natural Resources
_______________________________________________________________________
A BILL
To amend title VI of the Public Utility Regulatory Policies Act of 1978
to establish a Federal energy efficiency resource standard for
electricity and natural gas suppliers, 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. SHORT TITLE.
This Act may be cited as the ``American Energy Efficiency Act of
2024''.
SEC. 2. ENERGY EFFICIENCY RESOURCE STANDARD FOR RETAIL ELECTRICITY AND
NATURAL GAS SUPPLIERS.
(a) In General.--Title VI of the Public Utility Regulatory Policies
Act of 1978 is amended by adding after section 609 (7 U.S.C. 918c) the
following:
``SEC. 610. FEDERAL ENERGY EFFICIENCY RESOURCE STANDARD FOR RETAIL
ELECTRICITY AND NATURAL GAS SUPPLIERS.
``(a) Definitions.--In this section:
``(1) Affiliate.--The term `affiliate', when used in
relation to a person (including an electric utility and a local
distribution company), means another person that owns or
controls, is owned or controlled by, or is under common
ownership or control with, that person, as determined under
regulations promulgated by the Secretary.
``(2) ASHRAE; ANSI; IESNA.--The terms `ASHRAE', `ANSI', and
`IESNA' mean the American Society of Heating, Refrigerating and
Air-Conditioning Engineers, the American National Standards
Institute, and the Illuminating Engineering Society of North
America, respectively.
``(3) Base quantity.--
``(A) In general.--The term `base quantity', with
respect to a retail electricity supplier or retail
natural gas supplier, means, for each calendar year for
which a performance standard is established under
subsection (c), the average annual quantity of
electricity or natural gas delivered by the retail
electricity supplier or retail natural gas supplier to
retail customers during the 3 calendar years
immediately preceding the first year that compliance is
required under subsection (c)(1).
``(B) Exclusion.--The term `base quantity', with
respect to a retail natural gas supplier, does not
include natural gas delivered for purposes of
electricity generation.
``(4) CHP savings.--The term `CHP savings' means--
``(A) CHP system savings from a combined heat and
power system that commences operation after the date of
enactment of this section; and
``(B) the increase in CHP system savings from
upgrading or replacing, after the date of enactment of
this section, a combined heat and power system that
commenced operation on or before the date of enactment
of this section.
``(5) CHP system savings.--The term `CHP system savings'
means the electric output, and the electricity saved due to the
mechanical output, of a combined heat and power system,
adjusted to reflect any increase in fuel consumption by that
system as compared to the fuel that would have been required to
produce an equivalent useful thermal energy output in a
separate thermal-only system, as determined in accordance with
regulations promulgated by the Secretary.
``(6) Combined heat and power system.--The term `combined
heat and power system' means a system that uses the same energy
source for the generation of electrical or mechanical power and
the production of steam or another form of useful thermal
energy, if--
``(A) the system meets all applicable requirements
relating to efficiency and other operating
characteristics that the Secretary promulgates by
regulation; and
``(B) the net quantity of electricity sold
wholesale by the facility using the system does not
exceed 50 percent of the total quantity of electricity
generated annually by the system.
``(7) Cost-effective.--The term `cost-effective' means,
with respect to an energy efficiency measure, that the measure
achieves, directly to the energy consumer and to the economy, a
net present value of economic benefits over the life of the
measure that is greater than the net present value of the cost
of the measure over the life of the measure, using a societal
benefit-cost test calculated using the lower of--
``(A) a utility weighted average cost of capital;
or
``(B) a social discount rate of 3 percent.
``(8) Customer facility savings.--The term `customer
facility savings' means a reduction in end-use electricity or
natural gas consumption (including waste heat energy savings)
at a facility of an end-use consumer of electricity or natural
gas served by a retail electricity supplier or retail natural
gas supplier, as compared to--
``(A) in the case of a new facility, consumption at
a reference facility of average efficiency;
``(B) in the case of an existing facility,
consumption at the facility during a base period of not
less than 1 year;
``(C) in the case of new equipment that replaces
existing equipment at the end of the useful life of the
existing equipment, consumption by new equipment of
average efficiency of the same equipment type, except
that customer savings under this subparagraph shall not
be counted toward customer savings under subparagraph
(A) or (B); and
``(D) in the case of new equipment that replaces
existing equipment with remaining useful life--
``(i) consumption by the existing equipment
for the remaining useful life of the equipment;
and
``(ii) thereafter, consumption by new
equipment of average efficiency of the same
equipment type.
``(9) Electricity savings.--The term `electricity savings'
means reductions in electricity consumption or losses achieved
through measures implemented after the date of enactment of
this section, as determined in accordance with regulations
promulgated by the Secretary, that--
``(A) occur in the service territory of the retail
electricity supplier claiming or transferring the
electricity savings; and
``(B) are limited to--
``(i) customer facility savings of
electricity, adjusted to reflect any associated
increase in fuel consumption at the facility;
``(ii) reductions in distribution system
losses of electricity achieved by a retail
electricity supplier, as compared to losses
attributable to new or replacement distribution
system equipment of average efficiency, as
defined in regulations promulgated by the
Secretary;
``(iii) CHP savings;
``(iv) State and local codes and standards
savings of electricity; and
``(v) fuel-switching energy savings that
result in net savings of source energy, as
defined in regulations promulgated by the
Secretary.
``(10) Fuel-switching energy savings.--
``(A) In general.--The term `fuel-switching energy
savings' means net energy savings, calculated in
accordance with subparagraph (B), from end-user
switches from 1 energy source to another, as determined
in accordance with regulations promulgated by the
Secretary.
``(B) Calculation.--For purposes of calculating
fuel-switching net energy savings--
``(i) electricity use shall be evaluated
based on the average quantity of fuel burned at
a new power plant, taking into account existing
and planned renewable energy generators to
provide each kilowatt hour of electricity;
``(ii) electricity and natural gas use
shall include losses in the transmission and
distribution system; and
``(iii) fuel-switching that is not cost-
effective to the end-user shall not be counted.
``(11) Local distribution company.--The term `local
distribution company' has the meaning given the term in section
2 of the Natural Gas Policy Act of 1978 (15 U.S.C. 3301).
``(12) Natural gas savings.--The term `natural gas savings'
means reductions in natural gas consumption, leakage, or
operational losses from measures implemented after the date of
enactment of this section, as determined in accordance with
regulations promulgated by the Secretary, that--
``(A) occur in the service territory of the retail
natural gas supplier claiming or transferring the
natural gas savings; and
``(B) are limited to--
``(i) customer facility savings of natural
gas, adjusted to reflect any associated
increase in electricity consumption or
consumption of other fuels at the facility;
``(ii) reductions in leakage, operational
losses, and consumption of natural gas fuel to
operate a gas distribution system, achieved by
a retail natural gas supplier, as compared to
similar leakage, losses, and consumption during
a base period of not less than 1 year;
``(iii) State and local codes and standards
savings of natural gas; and
``(iv) fuel-switching energy savings that
result in net savings of source energy, as
defined in regulations promulgated by the
Secretary.
``(13) Performance standard.--
``(A) In general.--The term `performance standard'
means a standard established for a calendar year for
cumulative electricity savings or cumulative natural
gas savings that is expressed as a percentage of base
quantity.
``(B) Calendar years 2025 through 2039.--For each
of calendar years 2025 through 2039, the term
`performance standard' means the percentage labeled as
cumulative electricity savings percentage or cumulative
natural gas savings percentage, as applicable, in the
table in subsection (c)(2) for the applicable calendar
year.
``(14) Power pool.--
``(A) In general.--The term `power pool' means an
association of 2 or more interconnected electric
systems that have entered into an agreement to
coordinate operations and planning for improved
reliability and efficiencies, as determined by the
Secretary.
``(B) Inclusions.--The term `power pool' includes a
Regional Transmission Organization (as defined in
section 3 of the Federal Power Act (16 U.S.C. 796)) and
an Independent System Operator (as defined in that
section).
``(15) Reporting period.--The term `reporting period'
means--
``(A) calendar year 2025; and
``(B) each successive 2-calendar-year period
thereafter.
``(16) Retail electricity supplier.--
``(A) In general.--The term `retail electricity
supplier' means, for any given calendar year, an
electric utility that delivers not less than 2,000,000
megawatt hours of electric energy to electric consumers
for purposes other than resale during the preceding
calendar year.
``(B) Inclusions and limitations.--For purposes of
determining whether an electric utility qualifies as a
retail electricity supplier under subparagraph (A)--
``(i) deliveries by any affiliate of an
electric utility to electric consumers for
purposes other than resale shall be considered
to be deliveries by the electric utility; and
``(ii) deliveries by any electric utility
to a lessee, tenant, or affiliate of the
electric utility shall not be considered to be
deliveries to electric consumers.
``(17) Retail natural gas supplier.--
``(A) In general.--The term `retail natural gas
supplier' means, for any given calendar year, a local
distribution company that delivered to natural gas
consumers more than 5,000,000,000 cubic feet of natural
gas for purposes other than resale during the preceding
calendar year.
``(B) Inclusions and limitations.--For purposes of
determining whether an entity qualifies as a retail
natural gas supplier under subparagraph (A)--
``(i) deliveries of natural gas by any
affiliate of a local distribution company to
consumers for purposes other than resale shall
be considered to be deliveries by the local
distribution company; and
``(ii) deliveries of natural gas to a
lessee, tenant, or affiliate of a local
distribution company shall not be considered to
be deliveries to natural gas consumers.
``(18) State and local codes and standards savings.--
``(A) In general.--The term `State and local codes
and standards savings' means a reduction, due to the
adoption and implementation, after the date of
enactment of this section, of new or revised appliance
and equipment efficiency standards or building energy
codes, in--
``(i) end-use electricity consumption for a
retail electricity supplier; or
``(ii) natural gas consumption in the
service territory of a retail natural gas
supplier.
``(B) Baselines.--In calculating State and local
codes and standards savings under subparagraph (A)--
``(i) the baseline for calculating savings
from a new or revised building code shall be
the more stringent of--
``(I)(aa) the 2021 International
Energy Conservation Code for
residential buildings; or
``(bb) the ASHRAE/ANSI/IESNA
Standard 90.1-2019 for commercial
buildings; or
``(II) the applicable State
building code in effect on the date of
enactment of this section; and
``(ii) the baseline for calculating savings
from a new or revised appliance standard shall
be the estimated average efficiency of new
appliances in the applicable 1 or more
categories during the 1-year period preceding
the date on which the new or revised standard
is adopted.
``(19) Third-party efficiency provider.--The term `third-
party efficiency provider' means any retailer, building owner,
energy service company, financial institution, or other
commercial, industrial, or nonprofit entity that is capable of
providing electricity savings or natural gas savings in
accordance with any procedures, standards, and rules
established by the Secretary under subsections (b)(1)(D) and
(e).
``(20) Waste heat energy savings.--The term `waste heat
energy savings' means a reduction in the mechanical or thermal
energy used at a facility or the electric output of a facility,
adjusted to reflect any associated increase in fuel
consumption, that results from a modification of an industrial,
commercial, or institutional system that commenced operation
before the date of enactment of this section, in order to
recapture electrical, mechanical, or thermal energy that would
otherwise be wasted, such as through exhaust or dissipation to
the environment, and productively use that recaptured energy,
represented as a reduction in net electricity or natural gas
consumption, as determined in accordance with regulations
promulgated by the Secretary.
``(b) Establishment of Program.--
``(1) Regulations.--Not later than 1 year after the date of
enactment of this section, the Secretary shall, by regulation,
establish a program to implement and enforce the requirements
of this section, including--
``(A) by establishing evaluation, measurement, and
verification procedures and standards under subsection
(e);
``(B) by establishing requirements under which
retail electricity suppliers and retail natural gas
suppliers shall--
``(i) demonstrate, document, and report the
compliance of the retail electricity suppliers
and retail natural gas suppliers with the
performance standards under subsection (c); and
``(ii) estimate the impact of the standards
on current and future electricity and natural
gas use in the service territories of the
suppliers;
``(C) by establishing requirements governing
applications for, and implementation of, delegated
State administration under subsection (g); and
``(D) by establishing rules to govern transfers of
electricity savings and natural gas savings--
``(i) between suppliers and third-party
efficiency providers serving the same State;
and
``(ii) between suppliers and third-party
efficiency providers serving different States.
``(2) National Academy of Sciences study.--In establishing
and implementing the program under this section, the Secretary
shall take into consideration a report published under
subsection (e)(2)(C).
``(3) Coordination with State programs.--In establishing
and implementing the program under this section, the Secretary
shall, to the maximum extent practicable, preserve the
integrity and incorporate best practices of existing State
energy efficiency programs.
``(4) Savings programs for low-income customers.--In
implementing this section, the Secretary shall encourage retail
electricity suppliers and retail natural gas suppliers to
ensure that a portion of the customer facility savings achieved
for a calendar year shall result from programs that target
households that are at or below 200 percent of the poverty line
(as defined in section 673 of the Community Services Block
Grant Act (42 U.S.C. 9902)).
``(c) Performance Standards.--
``(1) Compliance obligation.--Not later than May 1 of the
calendar year immediately following each reporting period--
``(A) each retail electricity supplier shall submit
to the Secretary a report, in accordance with
regulations promulgated by the Secretary, demonstrating
that the retail electricity supplier has achieved
cumulative consistent electricity savings (adjusted to
account for any attrition of savings measures
implemented in prior years) in each calendar year that
are equal to the applicable percentage of the base
quantity of the retail electricity supplier; and
``(B) each retail natural gas supplier shall submit
to the Secretary a report, in accordance with
regulations promulgated by the Secretary, demonstrating
that the retail natural gas supplier has achieved
cumulative consistent natural gas savings (adjusted to
account for any attrition of savings measures
implemented in prior years) in each calendar year that
are equal to the applicable percentage of the base
quantity of the retail natural gas supplier.
``(2) Standards for 2025 through 2039.--For each of
calendar years 2025 through 2039, the applicable percentages
are as follows:
------------------------------------------------------------------------
Cumulative Electricity Cumulative Natural Gas
``Calendar Year Savings Percentage Savings Percentage
------------------------------------------------------------------------
2025 1.00 0.50
------------------------------------------------------------------------
2026 2.00 1.25
------------------------------------------------------------------------
2027 3.00 2.00
------------------------------------------------------------------------
2028 4.25 3.00
------------------------------------------------------------------------
2029 5.50 4.00
------------------------------------------------------------------------
2030 7.00 5.00
------------------------------------------------------------------------
2031 8.50 6.00
------------------------------------------------------------------------
2032 10.00 7.00
------------------------------------------------------------------------
2033 11.50 8.00
------------------------------------------------------------------------
2034 13.00 9.00
------------------------------------------------------------------------
2035 14.75 10.00
------------------------------------------------------------------------
2036 16.50 11.00
------------------------------------------------------------------------
2037 18.25 12.00
------------------------------------------------------------------------
2038 20.00 13.00
------------------------------------------------------------------------
2039 22.00 14.00
------------------------------------------------------------------------
``(3) Subsequent years.--
``(A) Calendar years 2040 through 2049.--Not later
than December 31, 2034, the Secretary shall promulgate
regulations establishing performance standards
(expressed as applicable percentages of base quantity
for both cumulative electricity savings and cumulative
natural gas savings) for each of calendar years 2040
through 2049.
``(B) Requirements.--The Secretary shall establish
standards under this paragraph at levels reflecting the
maximum achievable level of cost-effective energy
efficiency potential, taking into account--
``(i) cost-effective energy savings
achieved by leading retail electricity
suppliers and retail natural gas suppliers;
``(ii) opportunities for new State and
local codes and standards savings;
``(iii) technology improvements; and
``(iv) other indicators of cost-effective
energy efficiency potential, including
differences between States.
``(C) Minimum percentage.--In no case shall the
applicable percentages for any calendar year after
calendar year 2039 be less than the applicable
percentages for calendar year 2039.
``(4) Midcourse review and adjustment of performance
standards.--
``(A) In general.--Not later than December 31,
2033, and at 10-year intervals thereafter, the
Secretary shall--
``(i) review the most recent performance
standards established under paragraph (2) or
(3), as applicable; and
``(ii) increase the performance standards
by regulation if the Secretary determines that
additional cost-effective energy efficiency
potential is achievable, taking into account
the requirement described in paragraph (3)(C).
``(B) Lead time.--If the Secretary revises
performance standards under this paragraph, the
applicable regulations shall provide adequate lead time
to ensure that compliance with the increased
performance standards is feasible.
``(5) Delay of submission for first reporting period.--
``(A) In general.--Notwithstanding paragraphs (1)
and (2), for the first reporting period after the date
of enactment of this section, the Secretary may accept
a request from a retail electricity supplier or a
retail natural gas supplier to delay the required
submission of documentation of all or part of the
required savings for up to 2 years.
``(B) Plan for compliance.--The request for delay
under subparagraph (A) shall include a plan for coming
into full compliance by the end of the second reporting
period after the date of enactment of this section.
``(6) Applying unused savings to future years.--If savings
achieved in a year exceed the performance standards specified
in this subsection, any savings in excess of the performance
standards may be applied toward performance standards specified
for the first 3 years following the year in which the excess
savings are achieved.
``(d) Transfers of Electricity Savings and Natural Gas Savings.--
``(1) Bilateral contracts for savings transfers.--Subject
to the limitations of this subsection, a retail electricity
supplier or retail natural gas supplier may use electricity
savings or natural gas savings purchased pursuant to a
bilateral contract from another retail electricity supplier or
retail natural gas supplier, a State, or a third-party
efficiency provider to meet the applicable performance standard
under subsection (c).
``(2) Requirements.--Electricity savings or natural gas
savings purchased and used for compliance under this subsection
shall be--
``(A) measured and verified in accordance with
subsection (e);
``(B) reported in accordance with subsection (c);
and
``(C) achieved within the same power pool as is
served by the applicable retail electricity supplier or
retail natural gas supplier.
``(3) Regulatory approval.--Nothing in this subsection
limits or affects the authority of a State regulatory authority
to require a retail electricity supplier or retail natural gas
supplier that is regulated by the State regulatory authority to
obtain the authorization or approval of the State regulatory
authority of a contract for transfer of electricity savings or
natural gas savings under this subsection.
``(4) Limitations.--To optimize the achievement of cost-
effective energy efficiency potential, the Secretary may
prescribe such limitations as the Secretary determines
appropriate with respect to the proportion of the compliance
obligation of a retail electricity supplier or retail natural
gas supplier under the applicable performance standards under
subsection (c) that may be met using electricity savings or
natural gas savings that are purchased under this subsection.
``(e) Evaluation, Measurement, and Verification of Savings.--
``(1) Regulations.--The regulations promulgated pursuant to
subsection (b) shall--
``(A) be based on--
``(i) the Uniform Methods Project of the
Department of Energy;
``(ii) the National Standard Practice
Manual for Assessing the Cost-Effectiveness of
Energy Efficiency Resources, developed by the
National Efficiency Screening Project; and
``(iii) other best practices recognized in
the energy efficiency industry; and
``(B) include--
``(i) procedures and standards for
evaluating, measuring, and verifying
electricity savings and natural gas savings
that count toward the performance standards
established under subsection (c) that--
``(I) specify the types of energy
efficiency and energy conservation
measures that may be counted;
``(II) require that energy
consumption estimates for customer
facilities or portions of facilities in
the applicable base and current years
be adjusted, as appropriate, to account
for changes in weather, level of
production, seasonal patterns, and
building area;
``(III) for new customer
facilities, establish a standardized
method for calculating average
efficiency that accounts for factors
such as weather, level of production,
seasonal patterns, and building area;
``(IV) do not prevent overall load
growth due to beneficial
electrification;
``(V) account for the useful life
of energy efficiency and energy
conservation measures;
``(VI) allow for savings from a
program to be estimated based on
extrapolation from a representative
sample of participating customers;
``(VII) include procedures for
calculating and documenting CHP
savings, fuel-switching energy savings,
and waste heat energy savings;
``(VIII) establish methods for
calculating State and local codes and
standards savings, including the use of
verified compliance rates;
``(IX) include procedures for
calculating and documenting--
``(aa) customer facility
savings and reductions in
distribution system losses of
electricity and natural gas
that are achieved as a result
of smart grid deployment, as
described in section 1301 of
the Energy Independence and
Security Act of 2007 (42 U.S.C.
17381), or the siting of new
generation capacity closer to
the end-use customer; and
``(bb) reductions in
natural gas distribution system
losses attributable to pipeline
repair and replacement
programs;
``(X) count only measures and
savings that are additional to
business-as-usual customer purchase
practices;
``(XI) ensure that the retail
electricity supplier or retail natural
gas supplier claiming the electricity
savings or natural gas savings,
including State and local codes and
standards savings, has played a
significant role in achieving the
savings (including through the
activities of a designated agent of the
supplier or through the purchase of
transferred electricity savings or
natural gas savings);
``(XII) avoid double-counting of
savings used for compliance with this
section, including transferred savings;
``(XIII) include electricity
savings or natural gas savings from
programs administered by retail
electricity suppliers or retail natural
gas suppliers that are funded by
Federal, State, or other sources,
unless the funding source specifies
otherwise;
``(XIV) credit large customer self-
directed electricity savings or natural
gas savings to the retail electricity
supplier or retail natural gas supplier
if the large customer receives
incentives or rate reductions from the
retail electricity supplier or retail
natural gas supplier for self-directed
energy efficiency improvements;
``(XV) include guidance, as
appropriate, for additional alternative
approaches to evaluate electricity
savings and natural gas savings for
large commercial and industrial
customers in energy-intensive
industries that are subject to
international competition;
``(XVI) include procedures for
counting electricity savings and
natural gas savings achieved by solar
heating and cooling technologies, solar
light pipe technology, geothermal heat
pumps, and other technologies utilizing
renewable resources that do not produce
electricity or gaseous fuel and reduce
on-site energy use;
``(XVII) include procedures for
counting electricity savings and
natural gas savings achieved by
weatherization measures, such as
installing mechanical insulation,
repairing or replacing heating and
cooling systems, repairing or replacing
windows and doors, performing air
sealing, and replacing lights and
appliances with more energy efficient
models;
``(XVIII) include procedures for
counting electricity savings and
natural gas savings achieved from
increased utilization of mechanical
insulation for new, retrofit, and
maintenance construction for
commercial, industrial, public, and
nonprofit buildings and facilities;
``(XIX) in any State in which the
State regulatory authority has
designated 1 or more entities to
administer electric ratepayer-funded
efficiency programs approved by the
State regulatory authority, provide
that electricity savings and natural
gas savings achieved through those
programs shall be distributed
proportionally among retail electricity
suppliers and retail natural gas
suppliers;
``(XX) include guidance for retail
electricity suppliers and retail
natural gas suppliers to calculate and
document business-as-usual consumption
projections;
``(XXI) include guidance for
estimating savings using information
from the database established under
paragraph (3) based on similar measures
and programs in other settings with
appropriate adjustments, as necessary;
and
``(XXII) incorporate advances in
the science of policy evaluation, such
as the use of--
``(aa) randomized control
trials;
``(bb) other experimental
and quasi-experimental
approaches; and
``(cc) large data sets and
machine learning techniques;
and
``(ii) procedures and standards for third-
party verification of reported electricity
savings or natural gas savings.
``(2) National Academy of Sciences study.--Not later than
180 days after the date of enactment of this section, the
Secretary shall seek to enter into an agreement with the
National Academy of Sciences, under which the Academy shall--
``(A) evaluate existing state-of-the-art methods
for evaluating energy efficiency policies and measures;
``(B) identify approaches in program evaluation
literature that may be brought into the energy
efficiency domain, including--
``(i) randomized control trials and other
experimental or quasi-experimental approaches;
``(ii) control of confounding factors;
``(iii) longitudinal studies;
``(iv) assessments by neutral arbiters; and
``(v) disclosure of data for replication;
and
``(C) not later than 18 months after the date of
enactment of this section, publish a report that
includes--
``(i) a description of the evaluation under
subparagraph (A);
``(ii) a description of the approaches
identified under subparagraph (B); and
``(iii) recommendations for advancing and
adopting rigorous state-of-the-art methods for
evaluating energy efficiency policies and
measures.
``(3) Energy efficiency program evaluation database.--
``(A) In general.--The Secretary shall establish
and maintain a searchable public database, accessible
on the website of the Department of Energy, that
contains a list of randomized control trials and other
experimental or quasi-experimental evaluations of
energy efficiency programs.
``(B) Requirements.--Each trial or evaluation on
the list described in subparagraph (A) shall include,
at a minimum--
``(i) the State in which the trial or
evaluation was conducted;
``(ii) the type of trial or evaluation
conducted;
``(iii) the type of program evaluated;
``(iv) an abstract or summary of the
program evaluated;
``(v) a summary of the trial or evaluation
methodology;
``(vi) the revealed energy savings from the
trial or evaluation; and
``(vii) to the extent practicable, the
underlying data used to conduct the trial or
evaluation.
``(f) Enforcement and Judicial Review.--
``(1) Review of retail supplier reports.--
``(A) In general.--The Secretary shall review each
report submitted to the Secretary by a retail
electricity supplier or retail natural gas supplier
under subsection (c) to verify that the applicable
performance standards under subsection (c) have been
met.
``(B) Exclusion.--In determining compliance with
the applicable performance standards under subsection
(c), the Secretary shall exclude reported electricity
savings or natural gas savings that are not adequately
demonstrated and documented, in accordance with the
regulations promulgated under subsections (b) and (c).
``(2) Penalty for failure to document adequate savings.--If
a retail electricity supplier or a retail natural gas supplier
fails to demonstrate compliance with an applicable performance
standard under subsection (c), or to pay to the State an
applicable alternative compliance payment under subsection
(g)(4), the Secretary shall assess against the retail
electricity supplier or retail natural gas supplier a civil
penalty for each failure in an amount equal to, as adjusted for
inflation in accordance with such regulations as the Secretary
may promulgate--
``(A) $100 per megawatt hour of electricity savings
or alternative compliance payment that the retail
electricity supplier failed to achieve or make,
respectively; or
``(B) $10 per million Btu of natural gas savings or
alternative compliance payment that the retail natural
gas supplier failed to achieve or make, respectively.
``(3) Offsetting state penalties.--The Secretary shall
reduce the amount of any penalty under paragraph (2) by the
amount paid by the relevant retail electricity supplier or
retail natural gas supplier to a State for failure to comply
with the requirements of a State energy efficiency resource
standard during the same compliance period.
``(4) Use of payments.--
``(A) Definition of covered rate.--In this
paragraph, the term `covered rate' means the proportion
that--
``(i) the amount of penalty payments made
by retail electricity suppliers and retail
natural gas suppliers in a State under
paragraph (2); bears to
``(ii) the total amount of penalty payments
collected by the Secretary under that
paragraph.
``(B) Use of payments.--Penalty payments collected
under paragraph (2) by the Secretary shall be--
``(i) provided to each State at the covered
rate for the State; and
``(ii) used by the State to implement cost-
effective energy efficiency programs that--
``(I) to the maximum extent
practicable, achieve electricity
savings and natural gas savings in the
State sufficient to make up the deficit
associated with the penalty payments;
and
``(II) can be measured and verified
in accordance with the applicable
procedures and standards established
under subsection (e).
``(5) Enforcement procedures.--The Secretary shall assess a
civil penalty, as provided under paragraph (2), in accordance
with the procedures described in section 333(d) of the Energy
Policy and Conservation Act (42 U.S.C. 6303(d)).
``(6) Judicial review.--
``(A) In general.--Any person adversely affected by
a final action taken by the Secretary under this
section, other than the assessment of a civil penalty,
may use the procedures for review described in section
336(b) of the Energy Policy and Conservation Act (42
U.S.C. 6306(b)).
``(B) References.--For purposes of subparagraph
(A)--
``(i) any reference in section 336(b) of
the Energy Policy and Conservation Act (42
U.S.C. 6306(b)) to a rule shall be considered
to be a reference to a final action taken by
the Secretary under this section (including the
promulgation of a regulation, if applicable),
other than the assessment of a civil penalty;
and
``(ii) any reference in that section to the
date on which a rule is prescribed shall be
considered to be a reference to the date on
which the applicable final action was taken.
``(g) State Administration.--
``(1) In general.--On receipt of an application from the
Governor of a State (including the Mayor of the District of
Columbia), the Secretary may delegate to the State
responsibility for administering this section within the
territory of the State if the Secretary determines that the
State will implement an energy efficiency program that meets or
exceeds the requirements of this section.
``(2) Secretarial determination.--Not later than 180 days
after the date on which a complete application described in
paragraph (1) is received by the Secretary, the Secretary shall
make a substantive determination approving or disapproving the
application, after public notice and comment.
``(3) Alternative measurement and verification procedures
and standards.--As part of an application submitted under
paragraph (1), a State may request to use alternative
measurement and verification procedures and standards to the
procedures and standards described in subsection (e), if the
State demonstrates that the alternative procedures and
standards provide a level of accuracy of measurement and
verification that are at least equivalent to the Federal
procedures and standards under that subsection.
``(4) Alternative compliance payments.--
``(A) In general.--As part of an application
submitted under paragraph (1), a State may permit
retail electricity suppliers or retail natural gas
suppliers to pay to the State, by not later than May 1
of the calendar year immediately following the
applicable reporting period, an alternative compliance
payment in an amount equal to, as adjusted for
inflation in accordance with such regulations as the
Secretary may promulgate, not less than--
``(i) $50 per megawatt hour of electricity
savings needed to make up any deficit with
regard to a compliance obligation under the
applicable performance standard; or
``(ii) $5 per million Btu of natural gas
savings needed to make up any deficit with
regard to a compliance obligation under the
applicable performance standard.
``(B) Use of payments.--Alternative compliance
payments collected by a State under subparagraph (A)
shall be used by the State to administer the delegated
authority of the State under this subsection and to
implement cost-effective energy efficiency programs
that--
``(i) to the maximum extent practicable,
achieve electricity savings and natural gas
savings in the State sufficient to make up the
deficit associated with the alternative
compliance payments; and
``(ii) can be measured and verified in
accordance with the applicable procedures and
standards established under subsection (e).
``(5) Review of State administration.--
``(A) Periodic review.--Every 2 years, the
Secretary shall review State administration of this
section for conformance with the requirements of this
section in approximately \1/2\ of the States that have
received approval under this subsection to administer
this section, so that each State shall be reviewed not
less frequently than once every 4 years.
``(B) Report.--To facilitate the review under
subparagraph (A), the Secretary may require the State
to submit a report demonstrating the conformance of the
State with the requirements of this section,
including--
``(i) reports submitted by retail
electricity suppliers and retail natural gas
suppliers to the State demonstrating compliance
with applicable requirements;
``(ii) the impact of applicable
requirements on projected electricity and
natural gas demand in the State;
``(iii) an accounting of the use of
alternative compliance payments by the State
and the resulting electricity savings and
natural gas savings achieved; and
``(iv) any other information that the
Secretary determines appropriate.
``(C) Review on petition.--Notwithstanding
subparagraph (A), on receipt of a public petition
containing a credible allegation of a substantial
deficiency of a State energy efficiency program
authorized under this subsection, the Secretary shall
promptly re-review the State energy efficiency program.
``(D) Deficiencies.--
``(i) In general.--In completing a review
under this paragraph, if the Secretary finds
deficiencies, the Secretary shall--
``(I) notify the State of the
deficiencies;
``(II) direct the State to correct
the deficiencies; and
``(III) require the State to report
to the Secretary on progress made by
not later than 180 days after the date
on which the State receives notice
under subclause (I).
``(ii) Substantial deficiencies.--If the
deficiencies are substantial, the Secretary
shall--
``(I) disallow the reported
electricity savings or natural gas
savings that the Secretary determines
are not credible due to deficiencies;
``(II) re-review the State not
later than 2 years after the date on
which the original review was
completed; and
``(III) if substantial deficiencies
remain uncorrected after the review
provided for under subclause (II),
revoke the authority of the State to
administer this section.
``(6) Calls for revision of state applications.--As a
condition of maintaining the delegated authority to administer
this section, the Secretary may require a State to submit a
revised application under paragraph (1) if the Secretary has--
``(A) established new or revised performance
standards under subsection (c);
``(B) promulgated new or substantially revised
measurement and verification procedures and standards
under subsection (e); or
``(C) otherwise substantially revised the Federal
program established under this section.
``(7) Cost recovery, fixed cost recovery, and shareholder
incentives.--The Secretary shall encourage State utility
regulatory commissions to review the rules and regulations of
the Commission to ensure that utilities under the jurisdiction
of the Commission may--
``(A) recover the direct costs of energy efficiency
programs;
``(B)(i) fully recover authorized fixed costs from
customers, including recovery of revenue associated
with fixed costs that was lost due to annual sales that
were lower than forecasted; but
``(ii) return to customers the revenue associated
with fixed costs collected in excess of the authorized
amount under clause (i); and
``(C) earn a performance-based incentive for
shareholders for the achievement of energy efficiency
standards.
``(8) Evaluation, measurement, and verification
incentives.--The Secretary shall encourage States that have
delegated authority to administer this section to provide
incentives to retail electricity suppliers, retail natural gas
suppliers, and third-party efficiency providers to use
randomized control trials and other experimental or quasi-
experimental approaches to evaluate energy efficiency measures
and programs within the State.
``(h) Information and Reports.--In accordance with section 13 of
the Federal Energy Administration Act of 1974 (15 U.S.C. 772), the
Secretary may require any retail electricity supplier, retail natural
gas supplier, third-party efficiency provider, or any other entity that
the Secretary determines appropriate, to provide any information the
Secretary determines appropriate to carry out this section.
``(i) State Law.--Nothing in this section diminishes or qualifies
any authority of a State or political subdivision of a State to adopt
or enforce any law or regulation respecting electricity savings or
natural gas savings, including any law or regulation establishing
energy efficiency requirements that are more stringent than those under
this section, except that no State law or regulation shall relieve any
person of any requirement otherwise applicable under this section.''.
(b) Conforming Amendment.--The table of contents in section 1(b) of
the Public Utility Regulatory Policies Act of 1978 (Public Law 95-617;
92 Stat. 3118) 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 energy efficiency resource standard for retail
electricity and natural gas suppliers.''.
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