Clean Energy Standard Act of 2019

II 116TH CONGRESS 1ST SESSION S. 1359 To amend the Public Utility Regulatory Policies Act of 1978 to establish a market-oriented standard for clean electric energy generation, and for other purposes. IN THE SENATE OF THE UNITED STATES MAY 8, 2019 Ms. SMITH (for herself, Mr. HEINRICH, Mr. KAINE, Mr. WHITEHOUSE, and Mr. SCHATZ) introduced the following bill; which was read twice and re- ferred to the Committee on Energy and Natural Resources A BILL To amend the Public Utility Regulatory Policies Act of 1978 to establish a market-oriented standard for clean electric energy generation, 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 ‘‘Clean Energy Stand- 4 ard Act of 2019’’. 5 SEC. 2. FEDERAL CLEAN ENERGY STANDARD. 6 (a) IN GENERAL.—Title VI of the Public Utility Reg- 7 ulatory Policies Act of 1978 (16 U.S.C. 2601 et seq.) is 8 amended by adding at the end the following: 9 VerDate Sep 11 2014 04:37 May 15, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 \\ALPHA3\E\BILLS\S1359.IS S1359 kjohnson on DSK79L0C42 with BILLS 2 •S 1359 IS ‘‘SEC. 610. FEDERAL CLEAN ENERGY STANDARD. 1 ‘‘(a) PURPOSE.—The purpose of this section is to es- 2 tablish a technology-neutral, market-oriented standard for 3 electric energy generation that— 4 ‘‘(1) stimulates clean energy innovation and al- 5 lows the United States to achieve a net-zero emis- 6 sion electric sector at the lowest cost; 7 ‘‘(2) will guide power sector investment and 8 provide regulatory certainty, while helping to ensure 9 that the United States is the leader and dominant 10 competitor in the global clean energy transition; and 11 ‘‘(3) will result in— 12 ‘‘(A) hundreds of billions of dollars in do- 13 mestic health and environmental benefits by the 14 mid-21st century; and 15 ‘‘(B) save tens of thousands of lives in the 16 United States. 17 ‘‘(b) DEFINITIONS.—In this section: 18 ‘‘(1) APPLICABLE CARBON INTENSITY.—The 19 term ‘applicable carbon intensity’ means 0.4 metric 20 tons of carbon dioxide equivalent per megawatt-hour. 21 ‘‘(2) APPLICABLE CLEAN ENERGY PERCENT- 22 AGE.—The term ‘applicable clean energy percent- 23 age’, with respect to a retail electricity supplier, 24 means the clean energy percentage applicable to the 25 VerDate Sep 11 2014 04:37 May 15, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 \\ALPHA3\E\BILLS\S1359.IS S1359 kjohnson on DSK79L0C42 with BILLS 3 •S 1359 IS retail electricity supplier for the relevant calendar 1 year under subsection (c). 2 ‘‘(3) BASE QUANTITY.— 3 ‘‘(A) IN GENERAL.—The term ‘base quan- 4 tity’, with respect to a retail electricity supplier 5 for a calendar year, means the total quantity of 6 electric energy consumed by electric customers 7 of the retail electricity supplier, expressed in 8 megawatt-hours, during the calendar year, in- 9 cluding— 10 ‘‘(i) the quantity of electric energy 11 sold by the retail electricity supplier to 12 electric customers for purposes other than 13 resale; and 14 ‘‘(ii) the quantity of behind-the-meter 15 generation consumed by electric consumers 16 served by the retail electricity supplier. 17 ‘‘(B) DETERMINATION.—For purposes of 18 subparagraph (A), not later than 180 days 19 after the date of enactment of this section, the 20 Secretary shall develop appropriate processes 21 for determining the quantity of behind-the- 22 meter generation consumed by electric con- 23 sumers served by a retail electricity supplier, in- 24 cluding by requiring from the retail electricity 25 VerDate Sep 11 2014 04:37 May 15, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 \\ALPHA3\E\BILLS\S1359.IS S1359 kjohnson on DSK79L0C42 with BILLS 4 •S 1359 IS supplier relevant documentation of behind-the- 1 meter electric energy consumption, such as 2 records associated with net-metering. 3 ‘‘(4) BASELINE PERCENTAGE.—The term ‘base- 4 line percentage’ means— 5 ‘‘(A) for a retail electricity supplier in op- 6 eration on the date of enactment of this section, 7 the clean energy percentage of the retail elec- 8 tricity supplier calculated for the calendar year 9 in which this section is enacted; and 10 ‘‘(B) for a retail electricity supplier that 11 commences operation after the date of enact- 12 ment of this section, such clean energy percent- 13 age as the Secretary determines to be appro- 14 priate. 15 ‘‘(5) BEHIND-THE-METER GENERATION.—The 16 term ‘behind-the-meter generation’ means the gen- 17 eration of clean energy using a system that operates 18 on the customer side of the applicable utility meter, 19 subject to the condition that the retail electricity 20 supplier serving the generator shall submit to the 21 Secretary, not less frequently than annually, 22 verification of the quantity of that generation in 23 such form, in such manner, and containing such in- 24 formation as the Secretary may require. 25 VerDate Sep 11 2014 04:37 May 15, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 \\ALPHA3\E\BILLS\S1359.IS S1359 kjohnson on DSK79L0C42 with BILLS 5 •S 1359 IS ‘‘(6) CARBON DIOXIDE EQUIVALENT.— 1 ‘‘(A) IN GENERAL.—The term ‘carbon di- 2 oxide equivalent’ means the number of metric 3 tons of carbon dioxide emissions with the same 4 global warming potential over a 100-year period 5 as 1 metric ton of another greenhouse gas. 6 ‘‘(B) GLOBAL WARMING POTENTIAL.—For 7 purposes of subparagraph (A), global warming 8 potential shall be determined in accordance with 9 the Fifth Assessment Report of the Intergov- 10 ernmental Panel on Climate Change. 11 ‘‘(7) CARBON INTENSITY.—The term ‘carbon 12 intensity’ means the carbon dioxide equivalent emis- 13 sions associated with the generation of 1 megawatt- 14 hour of electric energy by a generator. 15 ‘‘(8) CLEAN ENERGY.—The term ‘clean energy’ 16 means electric energy that is— 17 ‘‘(A) generated at a facility using— 18 ‘‘(i) renewable energy; 19 ‘‘(ii) qualified renewable biomass; 20 ‘‘(iii) hydropower; 21 ‘‘(iv) nuclear power; 22 ‘‘(v) qualified waste-to-energy; 23 ‘‘(vi) qualified low-carbon fuels; 24 VerDate Sep 11 2014 04:37 May 15, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 \\ALPHA3\E\BILLS\S1359.IS S1359 kjohnson on DSK79L0C42 with BILLS 6 •S 1359 IS ‘‘(vii) a qualified combined heat and 1 power system; or 2 ‘‘(viii) any other source of energy in a 3 manner that ensures that the facility does 4 not exceed the applicable carbon intensity; 5 ‘‘(B) generated at a facility that— 6 ‘‘(i) captures the carbon dioxide 7 from— 8 ‘‘(I) a waste stream of the facil- 9 ity; 10 ‘‘(II) another waste stream; or 11 ‘‘(III) the atmosphere directly; 12 and 13 ‘‘(ii) prevents the release of the cap- 14 tured carbon dioxide into the atmosphere; 15 or 16 ‘‘(C) dispatched from a qualified energy 17 storage system. 18 ‘‘(9) CLEAN ENERGY PERCENTAGE.— 19 ‘‘(A) IN GENERAL.—The term ‘clean en- 20 ergy percentage’ means the percentage of clean 21 energy consumed by all electric consumers of a 22 retail electricity supplier. 23 ‘‘(B) CALCULATION.—For purposes of sub- 24 paragraph (A), the clean energy percentage of 25 VerDate Sep 11 2014 04:37 May 15, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 \\ALPHA3\E\BILLS\S1359.IS S1359 kjohnson on DSK79L0C42 with BILLS 7 •S 1359 IS a retail electricity supplier shall be equal to the 1 quotient obtained by dividing— 2 ‘‘(i) the sum of— 3 ‘‘(I) the quantity of clean energy 4 sold by the retail electricity supplier 5 to electric consumers; and 6 ‘‘(II) the quantity of behind-the- 7 meter generation consumed by electric 8 consumers served by the retail elec- 9 tricity supplier; by 10 ‘‘(ii) the base quantity of the retail 11 electricity supplier. 12 ‘‘(C) DETERMINATION.— 13 ‘‘(i) IN GENERAL.—For purposes of 14 subparagraph (B), not later than 180 days 15 after the date of enactment of this section, 16 the Secretary shall develop a process for 17 determining the quantities of— 18 ‘‘(I) clean energy sold by a retail 19 electricity supplier to electric con- 20 sumers, taking into account— 21 ‘‘(aa) the need to quantify, 22 without double counting, appro- 23 priate quantities of clean en- 24 ergy— 25 VerDate Sep 11 2014 04:37 May 15, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 \\ALPHA3\E\BILLS\S1359.IS S1359 kjohnson on DSK79L0C42 with BILLS 8 •S 1359 IS ‘‘(AA) owned by the re- 1 tail electricity supplier; 2 ‘‘(BB) obtained by the 3 retail electricity supplier 4 through power purchase 5 agreements; 6 ‘‘(CC) imported by the 7 retail electricity supplier; 8 ‘‘(DD) purchased by 9 the retail electricity supplier 10 from wholesale markets; and 11 ‘‘(EE) purchased by the 12 retail electricity supplier 13 through existing renewable 14 or clean energy credits and 15 certificates; and 16 ‘‘(bb) appropriate dif- 17 ferences between— 18 ‘‘(AA) retailers oper- 19 ating in organized wholesale 20 markets; and 21 ‘‘(BB) retailers oper- 22 ating in vertically integrated 23 market contexts; and 24 VerDate Sep 11 2014 04:37 May 15, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 \\ALPHA3\E\BILLS\S1359.IS S1359 kjohnson on DSK79L0C42 with BILLS 9 •S 1359 IS ‘‘(II) behind-the-meter generation 1 consumed by electric consumers 2 served by a retail electricity supplier, 3 including by requiring from the retail 4 electricity supplier relevant docu- 5 mentation of behind-the-meter electric 6 energy consumption, such as records 7 associated with net-metering. 8 ‘‘(ii) QUANTIFYING CLEAN ENERGY.— 9 For purposes of quantifying clean energy 10 and behind-the-meter generation under 11 clause (i), the Secretary shall use the 12 methods used to assign a quantity of cred- 13 its to generators under subsection (f). 14 ‘‘(10) DISPATCHABLE LOW-EMISSION TECH- 15 NOLOGY.—The term ‘dispatchable low-emission tech- 16 nology’ means a generator that uses a technology or 17 combination of technologies that— 18 ‘‘(A) has a carbon intensity of not more 19 than 0.05 metric tons of carbon dioxide equiva- 20 lent per megawatt-hour; 21 ‘‘(B) has the ability, at any time, to start, 22 increase, decrease, and stop energy production 23 on demand; 24 VerDate Sep 11 2014 04:37 May 15, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 \\ALPHA3\E\BILLS\S1359.IS S1359 kjohnson on DSK79L0C42 with BILLS 10 •S 1359 IS ‘‘(C) is placed into service after the date of 1 enactment of this section; and 2 ‘‘(D) is not a dispatchable zero-emission 3 technology. 4 ‘‘(11) DISPATCHABLE ZERO-EMISSION TECH- 5 NOLOGY.—The term ‘dispatchable zero-emission 6 technology’ means a generator that uses a tech- 7 nology or combination of technologies that— 8 ‘‘(A) has a carbon intensity of zero; 9 ‘‘(B) has the ability, at any time, to start, 10 increase, decrease, and stop energy production 11 on demand; and 12 ‘‘(C) is placed into service after the date of 13 enactment of this section. 14 ‘‘(12) ENERGY STORAGE SYSTEM.—The term 15 ‘energy storage system’ means any equipment or fa- 16 cility relating to the electric grid that— 17 ‘‘(A) is capable of absorbing energy, stor- 18 ing the energy for a period of time, and dis- 19 patching the energy as electric energy; and 20 ‘‘(B) uses mechanical, electrochemical, bio- 21 chemical, or thermal processes— 22 ‘‘(i) to store energy generated at an 23 earlier time for use at a later time; or 24 VerDate Sep 11 2014 04:37 May 15, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 \\ALPHA3\E\BILLS\S1359.IS S1359 kjohnson on DSK79L0C42 with BILLS 11 •S 1359 IS ‘‘(ii) to store energy generated from a 1 mechanical process that would otherwise be 2 wasted for delivery at a later time. 3 ‘‘(13) FEDERAL CLEAN ENERGY CREDIT.—The 4 term ‘Federal clean energy credit’ means a credit 5 issued pursuant to subsection (e). 6 ‘‘(14) GENERATOR.—The term ‘generator’ 7 means a unit or system of units that— 8 ‘‘(A) generates not fewer than 20 mega- 9 watt-hours of electric energy per calendar year; 10 ‘‘(B) delivers electric energy to the grid; 11 and 12 ‘‘(C) is located in the United States. 13 ‘‘(15) LIFECYCLE GREENHOUSE GAS EMIS- 14 SIONS.—The term ‘lifecycle greenhouse gas emis- 15 sions’ means the aggregate quantity of carbon diox- 16 ide equivalent emissions relating to the full lifecycle 17 of electric energy production, including— 18 ‘‘(A) extraction, production, and distribu- 19 tion of fuels and materials for physical capital; 20 ‘‘(B) power generation and transmission; 21 and 22 ‘‘(C) handling and disposal of waste, by- 23 products, and end-of-life materials. 24 VerDate Sep 11 2014 04:37 May 15, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 \\ALPHA3\E\BILLS\S1359.IS S1359 kjohnson on DSK79L0C42 with BILLS 12 •S 1359 IS ‘‘(16) QUALIFIED COMBINED HEAT AND POWER 1 SYSTEM.—The term ‘qualified combined heat and 2 power system’ means a system that— 3 ‘‘(A) uses the same energy source for the 4 simultaneous or sequential generation of elec- 5 trical energy and thermal energy; 6 ‘‘(B) produces at least— 7 ‘‘(i) 20 percent of the useful energy of 8 the system in the form of electricity; and 9 ‘‘(ii) 20 percent of the useful energy 10 in the form of useful thermal energy; 11 ‘‘(C) to the extent that the system uses 12 biomass, uses only qualified renewable biomass; 13 and 14 ‘‘(D) operates with an energy efficiency 15 percentage, as determined in accordance with 16 section 48(c)(3)(C)(i) of the Internal Revenue 17 Code of 1986, of greater than 50 percent. 18 ‘‘(17) QUALIFIED DISPATCHABLE.— 19 ‘‘(A) IN GENERAL.—The term ‘qualified 20 dispatchable’ means— 21 ‘‘(i) with respect to a dispatchable 22 low-emission technology, a dispatchable 23 low-emission technology that— 24 VerDate Sep 11 2014 04:37 May 15, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 \\ALPHA3\E\BILLS\S1359.IS S1359 kjohnson on DSK79L0C42 with BILLS 13 •S 1359 IS ‘‘(I) is 1 of the first 5 original 1 demonstrations in the United States 2 of a particular innovative technology 3 providing not less than 20 megawatts 4 of electric energy generation capacity; 5 ‘‘(II) generates revenue from the 6 sale of electric energy; and 7 ‘‘(III) is placed into service be- 8 fore January 1, 2030; and 9 ‘‘(ii) with respect to a dispatchable 10 zero-emission technology, means a dis- 11 patchable zero-emission technology that— 12 ‘‘(I) is 1 of the first 5 original 13 demonstrations in the United States 14 of a particular innovative technology 15 providing not less than 20 megawatts 16 of electric energy generation capacity; 17 ‘‘(II) generates revenue from the 18 sale of electric energy; and 19 ‘‘(III) is placed into service be- 20 fore January 1, 2040. 21 ‘‘(B) DETERMINATION.—For purposes of 22 determining whether a dispatchable low-emis- 23 sion technology or dis [Text truncated for display. 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