[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