[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