II 116TH CONGRESS 1ST SESSION S. 2288 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 JULY 25, 2019 Ms. SMITH (for herself, Mr. KING, and Mr. MERKLEY) introduced the fol- lowing bill; which was read twice and referred to the Committee on En- ergy 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 sup- pliers, 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 ‘‘American Energy Effi- 4 ciency Act of 2019’’. 5 VerDate Sep 11 2014 20:50 Jul 29, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2288.IS S2288 pamtmann on DSKBFK8HB2PROD with BILLS 2 •S 2288 IS SEC. 2. ENERGY EFFICIENCY RESOURCE STANDARD FOR 1 RETAIL ELECTRICITY AND NATURAL GAS 2 SUPPLIERS. 3 (a) IN GENERAL.—Title VI of the Public Utility Reg- 4 ulatory Policies Act of 1978 is amended by adding after 5 section 609 (7 U.S.C. 918c) the following: 6 ‘‘SEC. 610. FEDERAL ENERGY EFFICIENCY RESOURCE 7 STANDARD FOR RETAIL ELECTRICITY AND 8 NATURAL GAS SUPPLIERS. 9 ‘‘(a) DEFINITIONS.—In this section: 10 ‘‘(1) ASHRAE; ANSI; IESNA.—The terms 11 ‘ASHRAE’, ‘ANSI’, and ‘IESNA’ mean the Amer- 12 ican Society of Heating, Refrigerating and Air-Con- 13 ditioning Engineers, the American National Stand- 14 ards Institute, and the Illuminating Engineering So- 15 ciety of North America, respectively. 16 ‘‘(2) BASE QUANTITY.— 17 ‘‘(A) IN GENERAL.—The term ‘base quan- 18 tity’, with respect to a retail electricity supplier 19 or retail natural gas supplier, means, for each 20 calendar year for which a performance standard 21 is established under subsection (c), the average 22 annual quantity of electricity or natural gas de- 23 livered by the retail electricity supplier or retail 24 natural gas supplier to retail customers during 25 the 3 calendar years immediately preceding the 26 VerDate Sep 11 2014 02:13 Jul 31, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2288.IS S2288 pamtmann on DSKBFK8HB2PROD with BILLS 3 •S 2288 IS first year that compliance is required under 1 subsection (c)(1). 2 ‘‘(B) EXCLUSION.—The term ‘base quan- 3 tity’, with respect to a retail natural gas sup- 4 plier, does not include natural gas delivered for 5 purposes of electricity generation. 6 ‘‘(3) CHP SAVINGS.—The term ‘CHP savings’ 7 means— 8 ‘‘(A) CHP system savings from a combined 9 heat and power system that commences oper- 10 ation after the date of enactment of this sec- 11 tion; and 12 ‘‘(B) the increase in CHP system savings 13 from upgrading or replacing, after the date of 14 enactment of this section, a combined heat and 15 power system that commenced operation on or 16 before the date of enactment of this section. 17 ‘‘(4) CHP SYSTEM SAVINGS.—The term ‘CHP 18 system savings’ means the electric output, and the 19 electricity saved due to the mechanical output, of a 20 combined heat and power system, adjusted to reflect 21 any increase in fuel consumption by that system as 22 compared to the fuel that would have been required 23 to produce an equivalent useful thermal energy out- 24 put in a separate thermal-only system, as deter- 25 VerDate Sep 11 2014 20:50 Jul 29, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2288.IS S2288 pamtmann on DSKBFK8HB2PROD with BILLS 4 •S 2288 IS mined in accordance with regulations promulgated 1 by the Secretary. 2 ‘‘(5) COMBINED HEAT AND POWER SYSTEM.— 3 The term ‘combined heat and power system’ means 4 a system that uses the same energy source for the 5 generation of electrical or mechanical power and the 6 production of steam or another form of useful ther- 7 mal energy, if— 8 ‘‘(A) the system meets all applicable re- 9 quirements relating to efficiency and other op- 10 erating characteristics that the Secretary pro- 11 mulgates by regulation; and 12 ‘‘(B) the net quantity of electricity sold 13 wholesale by the facility using the system does 14 not exceed 50 percent of the total quantity of 15 electricity generated annually by the system. 16 ‘‘(6) COST-EFFECTIVE.—The term ‘cost-effec- 17 tive’ means, with respect to an energy efficiency 18 measure, that the measure achieves, directly to the 19 energy consumer and to the economy, a net present 20 value of economic benefits over the life of the meas- 21 ure that is greater than the net present value of the 22 cost of the measure over the life of the measure, 23 using a societal benefit-cost test calculated using the 24 lower of— 25 VerDate Sep 11 2014 20:50 Jul 29, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2288.IS S2288 pamtmann on DSKBFK8HB2PROD with BILLS 5 •S 2288 IS ‘‘(A) a utility weighted average cost of cap- 1 ital; or 2 ‘‘(B) a social discount rate of 3 percent. 3 ‘‘(7) CUSTOMER FACILITY SAVINGS.—The term 4 ‘customer facility savings’ means a reduction in end- 5 use electricity or natural gas consumption (including 6 waste heat energy savings) at a facility of an end- 7 use consumer of electricity or natural gas served by 8 a retail electricity supplier or natural gas supplier, 9 as compared to— 10 ‘‘(A) in the case of a new facility, con- 11 sumption at a reference facility of average effi- 12 ciency; 13 ‘‘(B) in the case of an existing facility, 14 consumption at the facility during a base period 15 of not less than 1 year; 16 ‘‘(C) in the case of new equipment that re- 17 places existing equipment at the end of the use- 18 ful life of the existing equipment, consumption 19 by new equipment of average efficiency of the 20 same equipment type, except that customer sav- 21 ings under this subparagraph shall not be 22 counted towards customer savings under sub- 23 paragraph (A) or (B); and 24 VerDate Sep 11 2014 20:50 Jul 29, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2288.IS S2288 pamtmann on DSKBFK8HB2PROD with BILLS 6 •S 2288 IS ‘‘(D) in the case of new equipment that re- 1 places existing equipment with remaining useful 2 life— 3 ‘‘(i) consumption of the existing 4 equipment for the remaining useful life of 5 the equipment; and 6 ‘‘(ii) thereafter, consumption of new 7 equipment of average efficiency. 8 ‘‘(8) ELECTRICITY SAVINGS.—The term ‘elec- 9 tricity savings’ means reductions in electricity con- 10 sumption achieved through measures implemented 11 after the date of enactment of this section, as deter- 12 mined in accordance with regulations promulgated 13 by the Secretary, that are limited to— 14 ‘‘(A) customer facility savings of elec- 15 tricity, adjusted to reflect any associated in- 16 crease in fuel consumption at the facility; 17 ‘‘(B) reductions in distribution system 18 losses of electricity achieved by a retail elec- 19 tricity supplier, as compared to losses attrib- 20 utable to new or replacement distribution sys- 21 tem equipment of average efficiency, as defined 22 in regulations promulgated by the Secretary; 23 ‘‘(C) CHP savings; 24 VerDate Sep 11 2014 20:50 Jul 29, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2288.IS S2288 pamtmann on DSKBFK8HB2PROD with BILLS 7 •S 2288 IS ‘‘(D) State and local codes and standards 1 savings of electricity; and 2 ‘‘(E) fuel switching energy savings that re- 3 sults in net savings of source energy, as defined 4 in regulations promulgated by the Secretary. 5 ‘‘(9) FUEL SWITCHING ENERGY SAVINGS.— 6 ‘‘(A) IN GENERAL.—The term ‘fuel-switch- 7 ing energy savings’ means net energy savings, 8 calculated in accordance with subparagraph 9 (B), from end-user switches from 1 energy 10 source to another, as determined in accordance 11 with regulations promulgated by the Secretary. 12 ‘‘(B) CALCULATION.—For purposes of cal- 13 culating fuel-switching net energy savings— 14 ‘‘(i) electricity use shall be evaluated 15 based on the average quantity of fuel 16 burned at a new power plant, taking into 17 account existing and planned renewable en- 18 ergy generators to provide each kilowatt 19 hour of electricity; 20 ‘‘(ii) electricity and natural gas use 21 shall include losses in the transmission and 22 distribution system; and 23 VerDate Sep 11 2014 20:50 Jul 29, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2288.IS S2288 pamtmann on DSKBFK8HB2PROD with BILLS 8 •S 2288 IS ‘‘(iii) fuel-switching that is not cost-ef- 1 fective to the end-user shall not be count- 2 ed. 3 ‘‘(10) NATURAL GAS SAVINGS.—The term ‘nat- 4 ural gas savings’ means reductions in natural gas 5 consumption from measures implemented after the 6 date of enactment of this section, as determined in 7 accordance with regulations promulgated by the Sec- 8 retary, that are limited to— 9 ‘‘(A) customer facility savings of natural 10 gas, adjusted to reflect any associated increase 11 in electricity consumption or consumption of 12 other fuels at the facility; 13 ‘‘(B) reductions in leakage, operational 14 losses, and consumption of natural gas fuel to 15 operate a gas distribution system, achieved by 16 a retail natural gas supplier, as compared to 17 similar leakage, losses, and consumption during 18 a base period of not less than 1 year; 19 ‘‘(C) State and local codes and standards 20 savings of natural gas; and 21 ‘‘(D) fuel switching energy savings that re- 22 sult in net savings of source energy, as defined 23 in regulations promulgated by the Secretary. 24 VerDate Sep 11 2014 20:50 Jul 29, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2288.IS S2288 pamtmann on DSKBFK8HB2PROD with BILLS 9 •S 2288 IS ‘‘(11) REPORTING PERIOD.—The term ‘report- 1 ing period’ means— 2 ‘‘(A) calendar year 2021; and 3 ‘‘(B) each successive 2-calendar-year pe- 4 riod thereafter. 5 ‘‘(12) RETAIL ELECTRICITY SUPPLIER.— 6 ‘‘(A) IN GENERAL.—The term ‘retail elec- 7 tricity supplier’ means, for any given calendar 8 year, an electric utility that delivers not less 9 than 2,000,000 megawatt hours of electric en- 10 ergy to electric consumers for purposes other 11 than resale during the preceding calendar year. 12 ‘‘(B) INCLUSIONS AND LIMITATIONS.—For 13 purposes of determining whether an electric 14 utility qualifies as a retail electricity supplier 15 under subparagraph (A)— 16 ‘‘(i) deliveries by any affiliate of an 17 electric utility to electric consumers for 18 purposes other than resale shall be consid- 19 ered to be deliveries by the electric utility; 20 and 21 ‘‘(ii) deliveries by any electric utility 22 to a lessee, tenant, or affiliate of the elec- 23 tric utility shall not be considered to be de- 24 liveries to electric consumers. 25 VerDate Sep 11 2014 20:50 Jul 29, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S2288.IS S2288 pamtmann on DSKBFK8HB2PROD with BILLS 10 •S 2288 IS ‘‘(13) RETAIL NATURAL GAS SUPPLIER.— 1 ‘‘(A) IN GENERAL.—The term ‘retail nat- 2 ural gas supplier’ means, for any given calendar 3 year, a local distribution company (as defined 4 in section 2 of the Natural Gas Policy Act of 5 1978 (15 U.S.C. 3301)), that delivered to nat- 6 ural gas consumers more than 5,000,000,000 7 cubic feet of natural gas for purposes other 8 than resale during the preceding calendar year. 9 ‘‘(B) INCLUSIONS AND LIMITATIONS.—For 10 purposes of determining whether a person 11 qualifies as a retail natural gas supplier under 12 subparagraph (A)— 13 ‘‘(i) deliveries of natural gas by any 14 affiliate of a local distribution company to 15 consumers for purposes other than resale 16 shall be considered to be deliveries by the 17 local distribution company; and 18 ‘‘(ii) deliveries of natural gas to a les- 19 see, tenant, or affiliate of a local distribu- 20 tion company shall not be considered to be 21 deliveries to natural gas consumers. 22 ‘‘(14) STATE AND LOCAL CODES AND STAND- 23 ARDS SAVINGS.— 24 VerDate Sep 11 2014 20:50 Jul 29, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S2288.IS S2288 pamtmann on DSKBFK8HB2PROD with BILLS 11 •S 2288 IS ‘‘(A) IN GENERAL.—The term ‘State and 1 local codes and standards savings’ means a re- 2 duction, due to the adoption and implementa- 3 tion, after the date of enactment of this section, 4 of new or revised appliance and equipment effi- 5 ciency standards or building energy codes, in— 6 ‘‘(i) end-use electricity consumption 7 for a retail electricity supplier; or 8 ‘‘(ii) natural gas consumption in the 9 service territory of a retail natural gas 10 supplier. 11 ‘‘(B) BASELINES.—In calculating State 12 and local codes and standards savings under 13 subparagraph (A)— 14 ‘‘(i) the baseline for calculating sav- 15 ings from a new or revised building code 16 shall be the more stringent of— 17 ‘‘(I)(aa) the 2015 International 18 Energy Conservation Code for resi- 19 dential buildings; or 20 ‘‘(bb) the ASHRAE/ANSI/ 21 IESNA Standard 90.1–2013 for com- 22 mercial buildings; or 23 VerDate Sep 11 2014 20:50 Jul 29, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S2288.IS S2288 pamtmann on DSKBFK8HB2PROD with BILLS 12 •S 2288 IS ‘‘(II) the applicable State build- 1 ing code in effect on the date of en- 2 actment of this section; and 3 ‘‘(ii) the baseline for calculating sav- 4 ings from a new or revised appliance 5 standard shall be the estimated average ef- 6 ficiency of new appliances in the applicable 7 1 or more categories during the 1-year pe- 8 riod preceding the date on which the new 9 or revised standard is adopted. 10 ‘‘(15) THIRD-PARTY EFFICIENCY PROVIDER.— 11 The term ‘third-party efficiency provider’ means any 12 retailer, building owner, energy service company, fi- 13 nancial institution, or other commercial, industrial, 14 or nonprofit entity that is capable of providing elec- 15 tricity savings or natural gas savings in accordance 16 with any procedures, standards, and rules estab- 17 lished by the Secretary under subsections (b)(1)(D) 18 and (d). 19 ‘‘(16) WASTE HEAT ENERGY SAVINGS.—The 20 term ‘waste heat energy savings’ means the mechan- 21 ical or thermal energy used at a facility or the elec- 22 tric output of a facility, adjusted to reflect any asso- 23 ciated increase in fuel consumption, that results 24 from a modification of an industrial, commercial, or 25 VerDate Sep 11 2014 20:50 Jul 29, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\S2288.IS S2288 pamtmann on DSKBFK8HB2PROD with BILLS 13 •S 2288 IS institutional system that commenced operation be- 1 fore the date of enactment of this section, in order 2 to recapture mechanical or thermal energy that 3 wou [Text truncated for display. Full text available on Congress.gov.]