PEAKER Act of 2021

II 117TH CONGRESS 1ST SESSION S. 1553 To require the Secretary of Energy to submit to Congress an annual report on peaker plants in the United States and to provide financial incentives for replacing peaker plants with technology that receives, stores, and delivers energy generated by renewable energy resources, and for other purposes. IN THE SENATE OF THE UNITED STATES MAY 11, 2021 Mrs. GILLIBRAND (for herself and Mr. VAN HOLLEN) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To require the Secretary of Energy to submit to Congress an annual report on peaker plants in the United States and to provide financial incentives for replacing peaker plants with technology that receives, stores, and delivers energy generated by renewable energy resources, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Promoting Energy Al- 4 ternatives is Key to Emission Reductions Act of 2021’’ 5 or the ‘‘PEAKER Act of 2021’’. 6 VerDate Sep 11 2014 00:32 May 27, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1553.IS S1553 kjohnson on DSK79L0C42PROD with BILLS 2 •S 1553 IS SEC. 2. DEFINITIONS. 1 In this Act: 2 (1) APPROPRIATE COMMITTEES OF CON- 3 GRESS.—The term ‘‘appropriate committees of Con- 4 gress’’ means— 5 (A) the Committee on Finance of the Sen- 6 ate; 7 (B) the Committee on Energy and Natural 8 Resources of the Senate; 9 (C) the Committee on Environment and 10 Public Works of the Senate; 11 (D) the Committee on Ways and Means of 12 the House of Representatives; and 13 (E) the Committee on Energy and Com- 14 merce of the House of Representatives. 15 (2) DISADVANTAGED COMMUNITY.—The term 16 ‘‘disadvantaged community’’ means a community 17 that— 18 (A) is located in an area with a high con- 19 centration of individuals who— 20 (i) are members of low- and moderate- 21 income households (as defined in section 22 570.3 of title 24, Code of Federal Regula- 23 tions (or a successor regulation)); 24 (ii) experience high levels of unem- 25 ployment; 26 VerDate Sep 11 2014 00:32 May 27, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1553.IS S1553 kjohnson on DSK79L0C42PROD with BILLS 3 •S 1553 IS (iii) face a high rent burden; 1 (iv) face a high energy burden; 2 (v) have low levels of home ownership; 3 (vi) have low levels of educational at- 4 tainment; or 5 (vii) are members of groups that have 6 historically experienced discrimination on 7 the basis of race or ethnicity; 8 (B) is burdened by high cumulative envi- 9 ronmental pollution or other hazards that can 10 lead to negative public health effects; or 11 (C) is determined to be a disadvantaged 12 community, an environmental justice commu- 13 nity, a climate-burdened community, or an oth- 14 erwise similarly vulnerable community pursuant 15 to any Federal or State-level initiative, includ- 16 ing any relevant mapping initiative. 17 (3) HIGH ENERGY BURDEN.—The term ‘‘high 18 energy burden’’ means, with respect to a household, 19 expenditure of the household on residential energy 20 costs that equals 6 percent or more of the household 21 income. 22 (4) PEAKER PLANT.—The term ‘‘peaker plant’’ 23 means a fossil fuel-fired power plant or unit of a 24 power plant that is run primarily to meet peak elec- 25 VerDate Sep 11 2014 00:32 May 27, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1553.IS S1553 kjohnson on DSK79L0C42PROD with BILLS 4 •S 1553 IS tricity demand, as determined by the Secretary, in 1 coordination with the Administrator of the Environ- 2 mental Protection Agency and the applicable local 3 electrical grid operator. 4 (5) SECRETARY.—The term ‘‘Secretary’’ means 5 the Secretary of Energy. 6 SEC. 3. ANNUAL REPORT ON PEAKER PLANTS IN THE 7 UNITED STATES. 8 (a) IN GENERAL.—Not later than 180 days after the 9 date of enactment of this Act, and annually thereafter, 10 the Secretary, in coordination with the Administrator of 11 the Environmental Protection Agency, the White House 12 Environmental Justice Advisory Council, the White House 13 Environmental Justice Interagency Council, the Council 14 on Environmental Quality, and any other relevant Federal 15 entity that the Secretary determines to be appropriate, 16 shall submit to the appropriate committees of Congress 17 a report that— 18 (1) identifies each peaker plant in the United 19 States; and 20 (2) for each peaker plant identified under para- 21 graph (1)— 22 (A) describes the location of the peaker 23 plant and related socioeconomic and demo- 24 graphic data for that location, including wheth- 25 VerDate Sep 11 2014 00:32 May 27, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1553.IS S1553 kjohnson on DSK79L0C42PROD with BILLS 5 •S 1553 IS er the peaker plant is located in or adjacent to 1 a disadvantaged community; 2 (B) evaluates the quantity of carbon diox- 3 ide, nitric oxides, sulfur oxides, fine particulate 4 matter (PM2.5), and methane emitted per unit 5 of electricity generated by the peaker plant; 6 (C) identifies— 7 (i) the total number of hours that the 8 peaker plant generates electricity during 9 the year covered by the report; 10 (ii) the capacity factor of the plant; 11 (iii) the average number of hours that 12 the peaker plant generates electricity each 13 time that the peaker plant generates elec- 14 tricity; and 15 (iv) the percentage of the total num- 16 ber of instances in which the peaker plant 17 is started that result in the peaker plant 18 generating electricity for— 19 (I) not less than 4 hours; 20 (II) not less than 8 hours; and 21 (III) not less than 12 hours; and 22 (D) identifies, for each day on which the 3 23 air monitors closest to the peaker plant indicate 24 that Federal ozone or particulate matter stand- 25 VerDate Sep 11 2014 00:32 May 27, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1553.IS S1553 kjohnson on DSK79L0C42PROD with BILLS 6 •S 1553 IS ards have been exceeded, the percentage of peak 1 demand met by the peaker plant for the elec- 2 trical grid load zone served by the peaker plant. 3 (b) COMMUNITY ENGAGEMENT.—In preparing a re- 4 port under subsection (a), the Secretary shall initiate and 5 carry out public engagement with residents and stake- 6 holders from disadvantaged communities containing a 7 peaker plant. 8 SEC. 4. CREDIT FOR GENERATION AND STORAGE OF EN- 9 ERGY FROM RENEWABLE SOURCES. 10 (a) IN GENERAL.—Subpart E of part IV of sub- 11 chapter A of chapter 1 of the Internal Revenue Code of 12 1986 is amended by inserting after section 48C the fol- 13 lowing new section: 14 ‘‘SEC. 48D. RENEWABLE ENERGY GENERATION AND STOR- 15 AGE CREDIT. 16 ‘‘(a) IN GENERAL.—For purposes of section 46, the 17 renewable energy generation and storage credit for any 18 taxable year is an amount equal to 10 percent of the quali- 19 fied investment for such taxable year with respect to any 20 qualified renewable energy facility. 21 ‘‘(b) QUALIFIED INVESTMENT WITH RESPECT TO 22 QUALIFIED RENEWABLE ENERGY FACILITIES.— 23 ‘‘(1) IN GENERAL.—For purposes of subsection 24 (a), the qualified investment with respect to a quali- 25 VerDate Sep 11 2014 00:32 May 27, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1553.IS S1553 kjohnson on DSK79L0C42PROD with BILLS 7 •S 1553 IS fied renewable energy facility for any taxable year is 1 the basis of any qualified property placed in service 2 by the taxpayer during such taxable year which is 3 part of a qualified renewable energy facility. 4 ‘‘(2) QUALIFIED PROPERTY.—For purposes of 5 this subsection, the term ‘qualified property’ means 6 property— 7 ‘‘(A) which is— 8 ‘‘(i) tangible personal property, or 9 ‘‘(ii) other tangible property (not in- 10 cluding a building or its structural compo- 11 nents), but only if such property is used as 12 an integral part of the qualified renewable 13 energy facility, 14 ‘‘(B) with respect to which depreciation (or 15 amortization in lieu of depreciation) is allow- 16 able, 17 ‘‘(C) which is constructed, reconstructed, 18 erected, installed, or acquired by the taxpayer, 19 and 20 ‘‘(D) the original use of which commences 21 with the taxpayer. 22 ‘‘(3) QUALIFIED RENEWABLE ENERGY FACIL- 23 ITY.— 24 VerDate Sep 11 2014 00:32 May 27, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1553.IS S1553 kjohnson on DSK79L0C42PROD with BILLS 8 •S 1553 IS ‘‘(A) IN GENERAL.—Subject to subpara- 1 graph (B), the term ‘qualified renewable energy 2 facility’ means a facility which— 3 ‘‘(i) uses solar, wind, low-impact hy- 4 droelectric (as certified by the Low Impact 5 Hydropower Institute), geothermal, tidal, 6 or wave energy to generate electricity 7 which will be received and stored by prop- 8 erty described in clause (ii), 9 ‘‘(ii) contains property which receives, 10 stores, and delivers electricity described in 11 clause (i), provided that such electricity 12 is— 13 ‘‘(I)(aa) sold by the taxpayer to 14 an unrelated person, or 15 ‘‘(bb) in the case of a facility 16 which is equipped with a metering de- 17 vice which is owned and operated by 18 an unrelated person, sold or consumed 19 by the taxpayer, and 20 ‘‘(II) at a minimum, discharged 21 at such times as a peaker plant within 22 the same electrical grid load zone 23 would operate to meet peak electricity 24 VerDate Sep 11 2014 00:32 May 27, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1553.IS S1553 kjohnson on DSK79L0C42PROD with BILLS 9 •S 1553 IS demand (as determined by the grid 1 operator for such electrical grid), and 2 ‘‘(iii) which is placed in service— 3 ‘‘(I) in a disadvantaged commu- 4 nity which is located within— 5 ‘‘(aa) the same census tract 6 as a peaker plant, or 7 ‘‘(bb) a census tract that is 8 adjacent to a census tract in 9 which a peaker plant is located, 10 and 11 ‘‘(II) after December 31, 2021. 12 ‘‘(B) SPECIAL RULE.—For purposes of 13 this paragraph, a facility shall not be deemed to 14 be a qualified renewable energy facility unless 15 the taxpayer demonstrates, to the satisfaction 16 of the Secretary, that— 17 ‘‘(i) the property described in clause 18 (i) of subparagraph (A) is co-located with 19 property described in clause (ii) of such 20 subparagraph, 21 ‘‘(ii) such taxpayer has, with respect 22 to the property described in clause (ii) of 23 such subparagraph, entered into a contract 24 which ensures that such property operates 25 VerDate Sep 11 2014 00:32 May 27, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1553.IS S1553 kjohnson on DSK79L0C42PROD with BILLS 10 •S 1553 IS primarily to receive, store, and deliver elec- 1 tricity from any property described in 2 clause (i) of such subparagraph, or 3 ‘‘(iii) the property described in clause 4 (ii) of such subparagraph receives elec- 5 tricity during periods of typically high pro- 6 duction of electricity, as a percentage of 7 the grid generation mix, from sources de- 8 scribed in clause (i) of such subparagraph, 9 as determined by the grid operator for the 10 electrical grid. 11 ‘‘(c) CERTAIN PROGRESS EXPENDITURE RULES 12 MADE APPLICABLE.—Rules similar to the rules of sub- 13 sections (c)(4) and (d) of section 46 (as in effect on the 14 day before the date of the enactment of the Revenue Rec- 15 onciliation Act of 1990) shall apply for purposes of sub- 16 section (a). 17 ‘‘(d) DEFINITIONS.—The terms ‘disadvantaged com- 18 munity’ and ‘peaker plant’ have the same meanings given 19 such term under section 2 of the PEAKER Act of 2021.’’. 20 (b) CONFORMING AMENDMENTS.— 21 (1) Section 46 of the Internal Revenue Code of 22 1986 is amended— 23 (A) by striking ‘‘and’’ at the end of para- 24 graph (5); 25 VerDate Sep 11 2014 00:32 May 27, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1553.IS S1553 kjohnson on DSK79L0C42PROD with BILLS 11 •S 1553 IS (B) by striking the period at the end of 1 paragraph (6) and inserting ‘‘, and’’; and 2 (C) by adding at the end the following new 3 paragraph: 4 ‘‘(7) the renewable energy generation and stor- 5 age credit.’’. 6 (2) Section 49(a)(1)(C) of such Code is amend- 7 ed— 8 (A) by striking ‘‘and’’ at the end of clause 9 (iv); 10 (B) by striking the period at the end of 11 clause (v) and inserting ‘‘, and’’; and 12 (C) by adding at the end the following new 13 clause: 14 ‘‘(vi) the basis of any qualified prop- 15 erty which is part of a qualified renewable 16 energy facility under section 48D.’’. 17 (3) Section 50(a)(2)(E) of such Code is amend- 18 ed by striking ‘‘or 48C(b)(2)’’ and inserting 19 ‘‘48C(b)(2), or 48D(c)’’. 20 (4) The table of sections for subpart E of part 21 IV of subchapter A of chapter 1 of such Code is 22 amended by inserting after the item relating to sec- 23 tion 48C the following new item: 24 ‘‘48D. Renewable energy generation and storage credit.’’. VerDate Sep 11 2014 00:32 May 27, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6211 E:\BILLS\S1553.IS S1553 kjohnson on DSK79L0C42PROD with BILLS 12 •S 1553 IS (c) EFFECTIVE DATE.—The amendments made by 1 this subsection shall apply to property placed in service 2 after December 31, 2020, under rules similar to the rules 3 of section 48(m) of the Internal Revenue Code of 1986 4 (as in effect on the day before the date of the enactment 5 of the Revenue Reconciliation Act of 1990). 6 SEC. 5. RENEWABLE ENERGY GRANT PROGRAM. 7 (a) DEFINITIONS.—In this section: 8 (1) ELIGIBLE ENTITY.—The term ‘‘eligible enti- 9 ty’’ means each of the following: 10 (A) A unit of State or local government. 11 (B) A tax-exempt nonprofit organization. 12 (C) A community-owned energy generation 13 facility or energy storage facility located in a 14 disadvantaged community. 15 (D) A community-based energy cooperative 16 or a similar group of individuals within a com- 17 munity who are pursuing an eligible project de- 18 scribed in subsection (d). 19 (E) A partnership between— 20 (i) 1 or more of the entities described 21 in subparagraphs (A) through (D); and 22 (ii)(I) an electric utility; or 23 (II) a private entity. 24 VerDate Sep 11 2014 00:32 May 27, 2021 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S1553.IS S1553 kjohnson on DSK79L0C42PROD with BILLS 13 •S 1553 IS (2) ENERGY STORAGE FACILITY.—The term 1 ‘‘energy storage facility’’ means a facility that re- 2 ceives, stores, and delivers electricity. 3 (3) PROGRAM.—The term ‘‘program’’ means 4 the grant program established under subsection (b). 5 (4) QUALIFYING COMMUNITY ENERGY PRO- 6 POSAL.—The term ‘‘qualifying community energy 7 proposal’’ means a proposal to deploy and implement 8 renewable energy generation, energy storage [Text truncated for display. 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