,i #aacth ,,congress #b;d ,session ,h4 ,r4 #ecja ,,in ,,the ,,house ,,of ,,representatives ,july #cj1 #bjad ,mr4 ,welch 7for himself and ,mr4 ,ben ,ray ,lujn of ,new ,mexico7 introduced the following bill2 which was referred to the ,committee on ,energy and ,commerce ,a ,,bill ,to amend title ,,vi of the ,public ,utility ,regulatory ,policies ,act of #aigh to establish a ,federal renewable electricity standard for retail electricity suppliers and a ,federal energy efficiency resource standard for electricity and natural gas suppliers1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,american ,renewable ,energy and ,efficiency ,act4 #b4 ,federal renewable electricity standard ,title ,,vi of the ,public ,utility ,regulatory ,policies ,act of #aigh 7#af ,u4,s4,c4 #bfja et seq47 is amended by adding after section #fji 7#g ,u4,s4,c4 #iah;c7 the following3 #faj4 ,federal renewable electricity standard 7a7 ,findings ,congress finds that-- 7#a7 #aah countries have national goals for renewable electricity production and #cj ,states and the ,district of ,columbia have enacted mandatory renewable electricity standards2 7#b7 the ,federal renewable electricity standard established by this section establishes a market-based policy to create ongoing competition among renewable electricity generators across the ,united ,states and provide the greatest quantity of clean electricity for the lowest price2 and 7#c7 the ,united ,states has vast wind1 solar1 hydropower1 biomass1 and geothermal resources that-- 7,a7 are renewable2 7,b7 are dispersed widely across different regions of the ,united ,states2 and 7,c7 can be harnessed to generate a significant share of electricity in the ,united ,states4 7b7 ,definitions ,in this section3 7#a7 ,brownfield site generation facility ,the term brownfield site generation facility means a facility that-- 7,a7 generates renewable electricity2 and 7,b7 occupies a brownfield site 7as that term is defined in section #aja of the ,comprehensive ,environmental ,response1 ,compensation1 and ,liability ,act of #aihj 7#db ,u4,s4,c4 #ifja774 7#b7 ,distributed renewable generation facility ,the term distributed renewable generation facility means a facility that-- 7,a7 generates renewable electricity2 7,b7 primarily serves one or more electric consumers at or near the facility site2 and 7,c7 has not more than #b megawatts in capacity4 7#c7 ,federal renewable electricity credit ,the term ,federal renewable electricity credit means a credit1 representing #a megawatt hour of renewable electricity1 issued pursuant to subsection 7f74 7#d7 ,indian land ,the term ,indian land means-- 7,a7 any land within the limits of any ,indian reservation1 pueblo1 or rancheria2 7,b7 any land not within the limits of any ,indian reservation1 pueblo1 or rancheria1 title to which was on the date of enactment of this section held by-- 7i7 the ,united ,states for the benefit of any ,indian tribe or individual2 or 7ii7 any ,indian tribe or individual subject to restriction by the ,united ,states against alienation2 7,c7 any dependent ,indian community2 or 7,d7 any land conveyed under the ,alaska ,native ,claims ,settlement ,act 7#dc ,u4,s4,c4 #afja et seq47 to any ,native ,corporation 7as that term is defined in section #c of that ,act 7#dc ,u4,s4,c4 #afjb774 7#e7 ,indian tribe ,the term ,indian tribe means any ,indian tribe1 band1 nation1 or other organized group or community 7including any ,native village1 ,regional ,corporation1 or ,village ,corporation 7as those terms are defined in section #c of the ,alaska ,native ,claims ,settlement ,act 7#dc ,u4,s4,c4 #afjb777 that is recognized as eligible for the special programs and services provided by the ,united ,states to ,indians because of their status as ,indians4 7#f7 ,qualified hydropower ,the term qualified hydropower means-- 7,a7 energy produced from increased efficiency achieved1 or additions of capacity made1 on or after ,january #a1 #bjja1 at a hydroelectric facility that-- 7i7 was placed in service before that date2 and 7ii7 does not include additional energy generated as a result of operational changes not directly associated with efficiency improvements or capacity additions2 or 7,b7 energy produced from generating capacity added to a dam on or after ,january #a1 #bjja1 if the ,commission certifies that-- 7i7 the dam-- 7,i7 was placed in service before the date of enactment of this section2 7,,ii7 was operated for flood control1 navigation1 or water supply purposes2 and 7,,iii7 was not producing hydroelectric power prior to the addition of the capacity2 and 7ii7 the hydroelectric project installed on the dam-- 7,i7 is licensed or is exempt from licensing by the ,commission2 7,,ii7 is in compliance with-- 7aa7 the terms and conditions of the license or exemption2 and 7bb7 other applicable legal requirements for the protection of environmental quality1 including applicable fish passage requirements2 and 7,,iii7 is operated so that the water surface elevation at any given location and time that would have occurred in the absence of the hydroelectric project is maintained1 subject to any license or exemption requirements that require changes in water surface elevation for the purpose of improving the environmental quality of the affected waterway4 7#g7 ,qualified renewable biomass ,the term qualified renewable biomass means renewable biomass that1 when combusted1 yields1 on a weighted-average basis1 a #ej-percent reduction in lifecycle greenhouse gas emissions 7as defined in section #d7;a7 of the ,american ,renewable ,energy and ,efficiency ,act7 per unit of useful energy1 as compared to the operation of a combined cycle natural gas electric generating facility using the most efficient commercially available technology1 when calculated over a #bj-year life cycle4 7#h7 ,renewable biomass ,the term renewable biomass means-- 7,a7 crops1 crop byproducts1 or crop residues harvested from actively managed or fallow agricultural land that is-- 7i7 nonforested2 and 7ii7 cleared prior to the date of enactment of this section2 7,b7 planted trees1 brush1 slash1 and all residues from an actively managed tree farm located on non-,federal land cleared prior to the date of enactment of this section2 7,c7 precommercial-sized thinnings1 slash1 brush1 and residue from milled trees1 from forested land that is not-- 7i7 old-growth or mature forest2 7ii7 identified under a ,state natural heritage program as rare1 imperiled1 or critically imperiled2 or 7iii7 ,federal land2 7,d7 algae2 7,e7 nonhazardous plant matter derived from waste-- 7i7 including separated yard waste1 landscape right-of-way trimmings1 or food waste2 but 7ii7 not including municipal solid waste1 recyclable waste paper1 painted1 treated or pressurized wood1 or wood contaminated with plastic or metals2 7,f7 animal waste or animal byproducts1 including products of animal waste digesters2 7,g7 vegetative matter removed from within #bjj yards of any manmade structure or campground2 and 7,h7 slash and precommercial-sized thinnings harvested-- 7i7 in environmentally sustainable quantities1 as determined by the appropriate ,federal land manager2 and 7ii7 from ,national ,forest ,system land or public lands 7as defined in section #ajc of the ,federal ,land ,policy and ,management ,act of #aigf 7#dc ,u4,s4,c4 #agjb771 other than-- 7,i7 components of the ,national ,wilderness ,preservation ,system established under the ,wilderness ,act 7#af ,u4,s4,c4 #aaca et seq472 7,,ii7 ,wilderness ,study ,areas1 as identified by the ,bureau of ,land ,management2 7,,iii7 inventoried roadless areas and all unroaded areas of at least #e1jjj acres2 7,,iv7 old growth and late seral stands2 7,v7 components of the ,national ,landscape ,conservation ,system administered by the ,bureau of ,land ,management2 and 7,,vi7 national monuments4 7#i7 ,renewable electricity ,the term renewable electricity means electricity generated 7including by means of a fuel cell7 from a renewable energy resource4 7#aj7 ,renewable energy resource ,the term renewable energy resource means each of the following3 7,a7 ,wind energy4 7,b7 ,solar energy4 7,c7 ,geothermal energy4 7,d7 ,qualified renewable biomass4 7,e7 ,biogas derived from qualified renewable biomass4 7,f7 ,biofuels derived from qualified renewable biomass4 7,g7 ,qualified hydropower4 7,h7 ,marine and hydrokinetic renewable energy 7as defined in section #fcb of the ,energy ,independence and ,security ,act of #bjjg 7#db ,u4,s4,c4 #agbaa774 7,i7 ,landfill gas4 7#aa7 ,retail electric supplier 7,a7 ,in general ,the term retail electric supplier means1 for any calendar year1 an electric utility that sells not fewer than #a1jjj1jjj megawatt hours of electric energy to electric consumers for purposes other than resale during the preceding calendar year4 7,b7 ,inclusions and limitations ,for purposes of determining whether an electric utility qualifies as a retail electric supplier under subparagraph 7,a7-- 7i7 the sales made by any affiliate of the electric utility to electric consumers1 other than sales to lessees or tenants of the affiliate1 for purposes other than resale shall be considered to be sales made by the electric utility2 and 7ii7 sales made by the electric utility to an affiliate1 lessee1 or tenant of the electric utility shall not be treated as sales to electric consumers4 7,c7 ,affiliate ,in this paragraph1 the term affiliate when used in relation to a person1 means another person that directly or indirectly owns or controls1 is owned or controlled by1 or is under common ownership or control with1 that person1 as determined under regulations promulgated by the ,commission4 7#ab7 ,retail electric supplier's base quantity ,the term retail electric supplier's base quantity means the total quantity of electric energy sold by the retail electric supplier1 expressed in megawatt hours1 to electric customers for purposes other than resale during the relevant calendar year1 excluding-- 7,a7 electricity generated by a hydroelectric facility1 other than qualified hydropower2 and 7,b7 electricity generated by the combustion of municipal solid waste4 7#ac7 ,retire and retirement ,the terms retire and retirement with respect to a ,federal renewable electricity credit1 means to disqualify the credit for any subsequent use under this section1 regardless of whether the use is a sale1 transfer1 exchange1 or submission in satisfaction of a compliance obligation4 7c7 ,annual compliance obligation ,except as otherwise provided in subsection 7g71 for each of calendar years #bjae through #bjdj1 not later than ,march #ca of the following calendar year1 each retail electric supplier shall submit to the ,commission a quantity of ,federal renewable electricity credits that is equal to at least the annual target of the retail electric supplier under subsection 7e74 7d7 ,establishment of program 7#a7 ,in general ,not later than #a year after the date of enactment of this section1 the ,commission shall promulgate regulations to implement and enforce the requirements of this section4 7#b7 ,considerations ,in promulgating regulations under paragraph 7#a71 the ,commission shall1 to the maximum extent practicable-- 7,a7 preserve the integrity and incorporate best practices of existing ,state and tribal renewable electricity programs2 7,b7 rely on existing and emerging ,state1 tribal1 or regional tracking systems that issue and track non-,federal renewable electricity credits2 and 7,c7 cooperate with ,states and ,indian tribes-- 7i7 to facilitate coordination between ,state1 tribal1 and ,federal renewable electricity programs2 and 7ii7 to minimize administrative burdens and costs to retail electric suppliers4 7e7 ,annual compliance requirement 7#a7 ,annual targets ,for each of calendar years #bjae through #bjdj1 the annual target of a retail electric supplier shall be equal to the product obtained by multiplying-- 7,a7 the required annual percentage for that calendar year under paragraph 7#b72 and 7,b7 the retail electric supplier's base quantity for that calendar year4 7#b7 ,required annual percentage 7,a7 ,calendar years #bjae through #bjdj ,subject to subparagraph 7,b71 for each of calendar years #bjae through #bjdj1 the required annual percentage shall be as follows3 ,required annual ,year3percentage3 #bjaef #bjafg #bjagi #bjahaa #bjaiac #bjbjae #bjbaag #bjbbai #bjbcba #bjbdbc #bjbe-bjdjbe4 7,b7 ,increase authorized for calendar years #bjbf through #bjdj ,the ,commission may issue orders increasing the required annual percentage amounts for each of calendar years #bjbf through #bjdj to reflect the maximum achievable level of renewable electricity generation potential1 taking into account regional resource availability1 economic feasibility1 and technological capability4 7f7 ,federal renewable electricity credits 7#a7 ,in general 7,a7 ,issuance2 tracking2 verification ,the regulations promulgated under this section shall include provisions governing the issuance1 tracking1 and verification of ,federal renewable electricity credits4 7,b7 ,credit ratio ,except as provided in paragraphs 7#b7 through 7#d71 the ,commission shall issue to each generator of renewable electricity1 #a ,federal renewable electricity credit for each megawatt hour of renewable electricity generated by the generator after ,december #ca1 #bjad4 7,c7 ,serial number ,the ,commission shall assign a unique serial number to each ,federal renewable electricity credit4 7#b7 ,generation from certain ,state renewable electricity programs 7,a7 ,in general ,if renewable electricity is generated with the support of payments from a retail electric supplier pursuant to a ,state renewable electricity program 7whether through ,state alternative compliance payments or through payments to a ,state renewable electricity procurement fund or entity71 the ,commission shall issue ,federal renewable electricity credits to the retail electric supplier for the portion of the relevant renewable electricity generation that is attributable to payments made by the retail electric supplier1 as determined pursuant to regulations promulgated by the ,commission4 7,b7 ,remaining portion ,for any remaining portion of the relevant renewable electricity generation1 the ,commission shall issue ,federal renewable electricity credits to the generator1 as provided in paragraph 7#a71 except that not more than #a ,federal renewable electricity credit shall be issued for the same megawatt hour of electricity4 7,c7 ,state guidance ,in determining how ,federal renewable electricity credits will be apportioned among retail electric suppliers and generators under this paragraph1 the ,commission shall consider information and guidance issued by the applicable one or more ,states4 7#c7 ,certain power sales contracts ,except as otherwise provided in paragraph 7#b71 if a generator has sold renewable electricity to a retail electric supplier under a contract for power from a facility placed in service before the date of enactment of this section1 and the contract does not provide for the determination of ownership of the ,federal renewable electricity credits associated with the generation1 the ,commission shall issue the ,federal renewable electricity credits to the retail electric supplier for the duration of the contract4 7#d7 ,credit multipliers 7,a7 ,in general ,except as provided in subparagraph 7,b71 the ,commission shall issue-- 7i7 not more than #c ,federal renewable electricity credits for each megawatt hour of renewable electricity generated by a distributed renewable generation facility2 7ii7 not more than #b ,federal renewable electricity credits for each megawatt hour of renewable electricity generated on ,indian land2 and 7iii7 not more than #b ,federal renewable electricity credits for each megawatt hour of renewable electricity generated by a brownfield site generation facility4 7,b7 ,adjustment ,except as provided in subparagraph 7,c71 not later than ,january #a1 #bjag1 and not less frequently than every #d years thereafter1 the ,commission shall review the effect of this paragraph on the aggregate quantity of renewable electricity produced under the standard and shall1 as necessary and after providing #a year of notice1 reduce the number of ,federal renewable electricity credits per megawatt hour issued under this paragraph for any given energy source or facility1 but not below one1 to ensure that the number is no higher than the ,commission determines is necessary-- 7i7 to incentivize incremental renewable energy generation on ,indian land and brownfield sites2 and 7ii7 to make distributed renewable generation facilities cost competitive with other sources of renewable electricity generation4 7,c7 ,facilities placed in service after enactment 7i7 ,in general ,for any renewable generation facility placed in service after the date of enactment of this section1 subparagraph 7,b7 shall not apply for the first #aj years after the date on which the facility is placed in service4 7ii7 ,initial period ,for each year during the #aj-year period described in clause 7i71 the ,commission shall issue to the facility the same number of ,federal renewable electricity credits per megawatt hour as are issued to that facility in the year in which the facility is placed in service4 7iii7 ,subsequent period ,after the #aj-year period described in clause 7i71 the ,commission shall issue ,federal renewable electricity credits to the facility in accordance with subparagraph 7,b74 7#e7 ,credits based on qualified hydropower ,for purposes of this subsection1 the number of ,federal renewable electricity credits issued for qualified hydropower shall be calculated-- 7,a7 based solely on the increase in average annual generation directly resulting from the efficiency improvements or capacity additions described in subsection 7a77#f77;,a72 and 7,b7 using the same water flow information used to determine a historic average annual generation baseline for the hydroelectric facility1 as certified by the ,commission4 7#f7 ,generation from mixed renewable and nonrenewable resources ,if electricity is generated using both a renewable energy resource and an energy source that is not a renewable energy resource 7such as cofiring of renewable biomass and fossil fuel71 the ,commission shall issue ,federal renewable electricity credits based on the proportion of the electricity that is attributable to the renewable energy resource4 7#g7 ,prohibition against double-counting ,the ,commission shall ensure that-- 7,a7 no ,federal renewable electricity credit is used more than once for compliance with this section2 and 7,b7 except as provided in paragraph 7#d71 not more than #a ,federal renewable electricity credit is issued for any megawatt hour of renewable electricity4 7#h7 ,trading ,the lawful holder of a ,federal renewable electricity credit may-- 7,a7 sell1 exchange1 or transfer the credit2 7,b7 submit the credit for compliance under subsection 7c72 or 7,c7 submit the credit for retirement by the ,commission4 7#i7 ,banking 7,a7 ,in general ,a ,federal renewable electricity credit may be submitted in satisfaction of the compliance obligation under subsection 7c7 for the compliance year in which the credit was issued or for any of the #c immediately subsequent compliance years4 7,b7 ,retirement ,the ,commission shall retire any ,federal renewable electricity credit that has not been retired by ,april #b of the calendar year that is #c years after the calendar year during which the credit was issued4 7#aj7 ,retirement ,the ,commission shall retire a ,federal renewable electricity credit immediately upon submission by the lawful holder of the credit1 whether in satisfaction of a compliance obligation under subsection 7c7 or for another reason4 7g7 ,alternative compliance payments 7#a7 ,in general ,a retail electric supplier may satisfy the requirements of subsection 7c7 in whole or in part by submitting in accordance with this subsection1 in lieu of each ,federal renewable electricity credit that would otherwise be due1 a payment equal to #ej1 adjusted for inflation on ,january #a of each year following calendar year #bjae1 in accordance with regulations promulgated by the ,commission4 7#b7 ,payment to ,state funds 7,a7 ,in general ,except as otherwise provided in this paragraph1 payments made under this subsection shall be made directly to one or more ,states in which the retail electric supplier sells electric energy1 in proportion to the portion of the retail electric supplier's base quantity that is sold within each applicable ,state1 if-- 7i7 the payments are deposited directly into a fund of the ,state treasury established for that purpose2 and 7ii7 the ,state uses the funds in accordance with paragraphs 7#c7 and 7#d74 7,b7 ,noncompliance ,if the ,commission determines that a ,state is in substantial noncompliance with paragraph 7#c7 or 7#d71 the ,commission shall direct that any future alternative compliance payments that would otherwise be paid to the ,state under this subsection shall instead be paid to the ,commission and deposited in the ,treasury4 7#c7 ,state use of funds ,as a condition of receipt of alternative compliance payments under this subsection1 a ,state shall use the payments exclusively for-- 7,a7 deploying technologies that generate electricity from renewable energy resources2 or 7,b7 implementing cost-effective energy efficiency programs to achieve energy savings4 7#d7 ,reporting 7,a7 ,in general ,as a condition of receipt of alternative compliance payments pursuant to this subsection1 a ,state shall submit to the ,commission an annual report1 in accordance with regulations promulgated by the ,commission1 containing a full accounting of the use of the payments1 including a detailed description of the activities funded by the payments and demonstrating compliance with the requirements of this subsection4 7,b7 ,deadline ,a ,state shall submit a report under this paragraph-- 7i7 not later than #a year after the date on which the first alternative compliance payment is received2 and 7ii7 every #a year thereafter until all alternative compliance payments are expended4 7h7 ,information collection 7#a7 ,in general ,the ,commission may require any retail electric supplier1 renewable electricity generator1 or any other entity that the ,commission determines appropriate1 to provide any information the ,commission determines appropriate to carry out this section4 7#b7 ,failure to submit2 false or misleading information ,any entity required to submit information under paragraph 7#a7 that fails to submit the information or submits false or misleading information shall be in violation of this section4 7i7 ,enforcement and judicial review 7#a7 ,failure to submit credits ,if any person fails to comply with the requirements of subsection 7c7 or 7g71 the person shall be liable to pay to the ,commission a civil penalty equal to the product obtained by multiplying-- 7,a7 double the alternative compliance payment calculated under subsection 7g77#a72 and 7,b7 the aggregate quantity of ,federal renewable electricity credits or equivalent alternative compliance payments that the person failed to submit in violation of the requirements of subsections 7c7 and 7g74 7#b7 ,enforcement ,the ,commission shall assess a civil penalty under paragraph 7#a7 in accordance with the procedures described in section #ca7;d7 of the ,federal ,power ,act 7#af ,u4,s4,c4 #hbc;b7d774 7#c7 ,violation of requirement of regulations or orders 7,a7 ,in general ,any person who violates or fails or refuses to comply with any requirement of a regulation promulgated or order issued under this section shall be subject to a civil penalty under section #caf;,a7b7 of the ,federal ,power ,act 7#af ,u4,s4,c4 #hbeo-#a7;b774 7,b7 ,assessment ,the penalty under subparagraph 7,a7 shall be assessed by the ,commission in the same manner as in the case of a violation referred to in section #caf;,a7b7 of that ,act4 7#d7 ,judicial review 7,a7 ,in general ,any person aggrieved by a final action taken by the ,commission under this section1 other than the assessment of a civil penalty under paragraphs 7#a7 through 7#c71 may use the procedures for review described in section #cac of the ,federal ,power ,act 7#af ,u4,s4,c4 #hbel74 7,b7 ,reference ,for purposes of this paragraph1 references to an order in section #cac of that ,act shall be considered to refer also to all other final actions of the ,commission under this section other than the assessment of a civil penalty under paragraphs 7#a7 through 7#c74 7j7 ,administration ,nothing in this section-- 7#a7 diminishes or qualifies any authority of a ,state1 a political subdivision of a ,state1 or an ,indian tribe-- 7,a7 to adopt or enforce any law or regulation respecting renewable electricity1 including any law or regulation establishing requirements that are more stringent than those established by this section1 provided that no such law or regulation may relieve any person of any requirement otherwise applicable under this section2 or 7,b7 to regulate the acquisition and disposition of ,federal renewable electricity credits by retail electric suppliers within the jurisdiction of the ,state1 political subdivision1 or ,indian tribe1 including the authority to require the retail electric supplier to acquire and submit to the ,commission for retirement ,federal renewable electricity credits in excess of those submitted under this section2 or 7#b7 affects the application of or the responsibility for compliance with any other provision of law or regulation1 including environmental and licensing requirements4 7k7 ,sunset ,the authority provided by this section expires on ,december #ca1 #bjda4 4 #c4 ,clarifying state authority to adopt renewable energy incentives ,section #baj of the ,public ,utility ,regulatory ,policies ,act of #aigh 7#af ,u4,s4,c4 #hbd;a-#c7 is amended by adding at the end the following3 7o7 ,clarification of ,state authority ,to adopt renewable energy incentives 7#a7 ,definition of ,state-approved production incentive program ,in this subsection1 the term ,state-approved production incentive program means a requirement imposed pursuant to ,state law or by a ,state regulatory authority acting within its authority under ,state law that an electric utility purchase renewable energy 7as defined in section #fji7;a77 at a specified rate4 7#b7 ,state authority to adopt renewable energy incentives ,notwithstanding any other provision of this ,act or the ,federal ,power ,act 7#af ,u4,s4,c4 #gia;a et seq471 a ,state legislature or regulatory authority may set the rates for a sale of electric energy by a facility generating electric energy from renewable energy sources pursuant to a ,state-approved production incentive program under which the facility voluntarily participates in the ,state-approved production incentive program4 4 #d4 ,guidelines for determining qualified renewable biomass 7a7 ,definitions ,in this section3 7#a7 ,administrator ,the term ,administrator means the ,administrator of the ,environmental ,protection ,agency4 7#b7 ,lifecycle greenhouse gas emissions 7,a7 ,in general ,the term lifecycle greenhouse gas emissions means the aggregate quantity of greenhouse gas emissions1 adjusted to account for the relative global warming potential of the emissions relative to all greenhouse gas emissions4 7,b7 ,inclusions ,for purposes of subparagraph 7,a71 the term greenhouse gas emissions includes-- 7i7 direct emissions2 and 7ii7 significant indirect emissions1 including from-- 7,i7 land use changes and temporal changes in forest carbon sequestration2 7,,ii7 biomass harvests1 regrowth1 and avoided decomposition related to the full fuel lifecycle1 including all stages of fuel and feedstock production and distribution2 and 7,,iii7 feedstock generation or extraction through the distribution and delivery of the finished fuel to the ultimate consumer4 7b7 ,guidelines ,not later than #a year after the date of enactment of this ,act1 the ,administrator shall1 recognizing the recommendations of and coordinating with the ,scientific ,advisory ,board of the ,environmental ,protection ,agency regarding the accounting of biogenic carbon dioxide emissions and after notice and public comment1 issue guidelines for calculating lifecycle greenhouse gas emissions for renewable biomass 7as that term is defined in section #faj7;b7 of the ,public ,utility ,regulatory ,policies ,act of #aigh74 #e4 ,energy efficiency resource standard for retail electricity and natural gas suppliers 7a7 ,in general ,title ,,vi of the ,public ,utility ,regulatory ,policies ,act of #aigh 7#af ,u4,s4,c4 #bfja et seq47 7as amended by section #b7 is amended by adding after section #faj the following3 #faa4 ,federal energy efficiency resource standard for retail electricity and natural gas suppliers 7a7 ,findings ,congress finds that-- 7#a7 the ,federal energy efficiency resource standard established by this section-- 7,a7 establishes nationwide minimum levels of electricity and natural gas savings to be achieved through utility efficiency programs1 building energy codes1 appliance standards1 and related efficiency measures2 and 7,b7 rewards energy-saving improvements achieved through-- 7i7 end-use energy efficiency upgrades2 7ii7 reduced losses in transmission and distribution of energy2 and 7iii7 fuel-switching1 to the extent that the switching results in reduced primary energy use2 and 7#b7 in light of the cost-effective energy efficiency opportunities that exist across the ,united ,states in every sector of the economy1 retail electricity suppliers1 retail natural gas suppliers1 and ,states should-- 7,a7 consider energy efficiency as a resource in utility planning and procurement activities2 and 7,b7 seek to achieve all energy efficiency that is available at lower cost than other energy supply options4 7b7 ,definitions ,in this section3 7#a7 ,affiliate ,the term affiliate when used in relation to a person1 means another person that owns or controls1 is owned or controlled by1 or is under common ownership control with1 that person1 as determined under regulations promulgated by the ,secretary4 7#b7 ,,ashrae1 ansi1 and iesna ,the terms ,,ashrae1 ,,ansi1 and ,,iesna mean the ,american ,society of ,heating1 ,refrigerating and ,air ,conditioning ,engineers1 the ,american ,national ,standards ,institute1 and the ,illuminating ,engineering ,society of ,north ,america1 respectively4 7#c7 ,base quantity 7,a7 ,in general ,the term base quantity1 with respect to a retail electricity supplier or retail natural gas supplier1 means1 for each calendar year for which a performance standard is established under subsection 7d71 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 #c calendar years immediately preceding the year that compliance is required under subsection 7d77#a74 7,b7 ,exclusion ,the term base quantity1 with respect to a retail natural gas supplier1 does not include natural gas delivered for purposes of electricity generation4 7#d7 ,,chp savings ,the term ,,chp savings means-- 7,a7 ,,chp system savings from a combined heat and power system that commences operation after the date of enactment of this section2 and 7,b7 the increase in ,,chp system savings from upgrading or replacing1 after the date of enactment of this section1 a combined heat and power system that commenced operation on or before the date of enactment of this section4 7#e7 ,,chp system savings ,the term ,,chp system savings means the electric output1 and the electricity saved due to the mechanical output1 of a combined heat and power system1 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 system1 as determined in accordance with regulations promulgated by the ,secretary4 7#f7 ,codes and standards savings 7,a7 ,in general ,the term codes and standards savings means a reduction in end-use electricity or natural gas consumption by a retail electricity supplier or in the service territory of a retail natural gas supplier as a result of the adoption and implementation1 after the date of enactment of this section1 of new or revised appliance and equipment efficiency standards or building energy codes4 7,b7 ,baselines ,in calculating codes and standards savings under subparagraph 7,a7-- 7i7 the baseline for calculating savings from building codes shall be the more stringent of-- 7,i7 7aa7 the #bjji ,international ,energy ,conservation ,code for residential buildings2 or 7bb7 the ,,ashrae_/,,ansi_/,,iesna ,standard #ij4a-bjjg for commercial buildings2 or 7,,ii7 the applicable ,state building code in effect on the date of enactment of this section2 and 7ii7 the baseline for calculating savings from appliance standards shall be the average efficiency of new appliances in the applicable one or more categories prior to the adoption and implementation of the new standard4 7#g7 ,combined heat and power system ,the term combined heat and power system means a system that uses the same energy source both for the generation of electrical or mechanical power and the production of steam or another form of useful thermal energy1 if-- 7,a7 the system meets any requirements relating to efficiency and other operating characteristics that the ,secretary promulgates by regulation2 and 7,b7 the net wholesale sales of electricity by a facility does not exceed #ej percent of total annual electric generation by the facility4 7#h7 ,cost-effective ,the term cost-effective1 with respect to an energy efficiency measure1 means that the measure achieves a net present value of economic benefits over the life of the measure1 both directly to the energy consumer and to the economy1 that is greater than the net present value of the cost of the measure over the life of the measure1 both directly to the energy consumer and to the economy1 using the societal benefit-cost test calculated using the weighted average utility cost of capital as the discount rate4 7#i7 ,customer facility savings ,the term customer facility savings means a reduction in end-use electricity or natural gas consumption 7including waste heat energy savings7 at a facility of an end-use consumer of electricity or natural gas served by a retail electricity supplier or natural gas supplier1 as compared to-- 7,a7 in the case of a new facility1 consumption at a reference facility of average efficiency2 7,b7 in the case of an existing facility1 consumption at the facility during a base period of not less than #a year2 7,c7 in the case of new equipment that replaces existing equipment at the end of the useful life of the existing equipment1 consumption by new equipment of average efficiency of the same equipment type1 except that customer savings under this subparagraph shall not be counted towards customer savings under subparagraph 7,a7 or 7,b72 and 7,d7 in the case of new equipment that replaces existing equipment with remaining useful life-- 7i7 consumption of the existing equipment for the remaining useful life of the equipment2 and 7ii7 thereafter1 consumption of new equipment of average efficiency4 7#aj7 ,electricity savings ,the term electricity savings means reductions in electricity consumption achieved through measures implemented after the date of enactment of this section1 as determined in accordance with regulations promulgated by the ,secretary1 that are limited to-- 7,a7 customer facility savings of electricity1 adjusted to reflect any associated increase in fuel consumption at the facility2 7,b7 reductions in distribution system losses of electricity achieved by a retail electricity supplier1 as compared to losses attributable to new or replacement distribution system equipment of average efficiency1 as defined in regulations promulgated by the ,secretary2 7,c7 ,,chp savings2 7,d7 codes and standards savings of electricity2 and 7,e7 fuel switching energy savings that results in net savings of electricity4 7#aa7 ,fuel switching energy savings 7,a7 ,in general ,the term fuel-switching energy savings means net energy savings1 calculated in accordance with subparagraph 7,b71 from end-user switches from #a energy source to another1 as determined in accordance with regulations promulgated by the ,secretary4 7,b7 ,calculation ,for purposes of calculating fuel-switching net energy savings-- 7i7 electricity use shall be evaluated based on the average quantity of fuel burned at a power plant to provide each kilowatt hour of electricity2 7ii7 electricity and natural gas use shall include losses in the transmission and distribution system2 and 7iii7 fuel-switching that is not cost-effective to the end-user shall not be counted4 7#ab7 ,natural gas savings ,the term natural gas savings means reductions in natural gas consumption from measures implemented after the date of enactment of this section1 as determined in accordance with regulations promulgated by the ,secretary1 that are limited to-- 7,a7 customer facility savings of natural gas1 adjusted to reflect any associated increase in electricity consumption or consumption of other fuels at the facility2 7,b7 reductions in leakage1 operational losses1 and consumption of natural gas fuel to operate a gas distribution system1 achieved by a retail natural gas supplier1 as compared to similar leakage1 losses1 and consumption during a base period of not less than #a year2 7,c7 codes and standards savings of natural gas2 and 7,d7 fuel switching energy savings that results in net savings of natural gas4 7#ac7 ,power pool ,the term power pool means an association of two or more interconnected electric systems that have entered into an agreement to coordinate operations and planning for improved reliability and efficiencies1 including a ,regional ,transmission ,organization or an ,independent ,system ,operator1 as determined by the ,secretary4 7#ad7 ,reporting period ,the term reporting period means-- 7,a7 calendar year #bjae2 and 7,b7 each successive #b-;calendar-year period thereafter4 7#ae7 ,retail electricity supplier 7,a7 ,in general ,the term retail electricity supplier means1 for any given calendar year1 an electric utility that sells not less than #a1jjj1jjj megawatt hours of electric energy to electric consumers for purposes other than resale during the preceding calendar4 7,b7 ,inclusions and limitations ,for purposes of determining whether an electric utility qualifies as a retail electricity supplier under subparagraph 7,a7-- 7i7 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 utility2 and 7ii7 deliveries by any electric utility to a lessee1 tenant1 or affiliate of the electric utility shall not be considered to be deliveries to electric consumers4 7#af7 ,retail natural gas supplier 7,a7 ,in general ,the term retail natural gas supplier means1 for any given calendar year1 a local distribution company 7as defined in section #b of the ,natural ,gas ,policy ,act of #aigh 7#ae ,u4,s4,c4 #ccja771 that delivered to natural gas consumers more than #e1jjj1jjj1jjj cubic feet of natural gas for purposes other than resale during the preceding calendar year4 7,b7 ,inclusions and limitations ,for purposes of determining whether a person qualifies as a retail natural gas supplier under subparagraph 7,a7-- 7i7 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 company2 and 7ii7 deliveries of natural gas to a lessee1 tenant1 or affiliate of a local distribution company shall not be considered to be deliveries to natural gas consumers4 7#ag7 ,third-party efficiency provider ,the term third-party efficiency provider means any retailer1 building owner1 energy service company1 financial institution or other commercial1 industrial or nonprofit entity that is capable of providing electricity savings or natural gas savings in accordance with subsections 7e7 and 7f74 7#ah7 ,waste heat energy savings 7,a7 ,in general ,the term waste heat energy savings means a reduction in electricity or natural gas consumption that results from a modification of an industrial or commercial system that commenced operation before the date of enactment of this section1 in order to recapture electrical1 mechanical1 or thermal energy that would otherwise be wasted1 as determined in accordance with regulations promulgated by the ,secretary4 7,b7 ,inclusion ,such savings shall be included as part of customer facility savings4 7c7 ,establishment of program 7#a7 ,regulations ,not later than #a year after the date of enactment of this section1 the ,secretary shall1 by regulation1 establish a program to implement and enforce the requirements of this section1 including by-- 7,a7 establishing measurement and verification procedures and standards under subsection 7f72 7,b7 establishing requirements under which retail electricity suppliers and retail natural gas suppliers shall-- 7i7 demonstrate1 document1 and report the compliance of the retail electricity suppliers and retail natural gas suppliers with the performance standards under subsection 7d72 and 7ii7 estimate the impact of the standards on current and future electricity and natural gas use in the service territories of the suppliers2 and 7,c7 establishing requirements governing applications for1 and implementation of1 delegated ,state administration under subsection 7h74 7#b7 ,coordination with state programs ,in establishing and implementing this section1 the ,secretary shall1 to the maximum extent practicable1 preserve the integrity and incorporate best practices of existing ,state energy efficiency programs4 7d7 ,performance standards 7#a7 ,compliance obligation ,not later than ,may #a of the calendar year immediately following each reporting period-- 7,a7 each retail electricity supplier shall submit to the ,secretary a report1 in accordance with regulations promulgated by the ,secretary1 demonstrating that the retail electricity supplier has achieved annual electricity savings 7adjusted to account for any attrition of savings measures implemented in prior years7 in each calendar year that are equal to the applicable percentage1 established under paragraph 7#b71 7#c71 or 7#d71 of the base quantity of the retail electricity supplier2 and 7,b7 each retail natural gas supplier shall submit to the ,secretary a report1 in accordance with regulations promulgated by the ,secretary1 demonstrating that it has achieved cumulative natural gas savings 7adjusted to account for any attrition of savings measures implemented in prior years7 in each calendar year that are equal to the applicable percentage1 established under paragraph 7#b71 7#c71 or 7#d71 of the base quantity of such retail natural gas supplier1 subject to business-as-usual consumption projections calculated in accordance with subsection 7f77#a77,p74 7#b7 ,standards for #bjae through #bjbe ,for each of calendar years #bjae through #bjbe1 the applicable percentages are as follows3 ,calendar ,year,cumulative ,electricity ,savings ,percentage,cumulative ,natural ,gas ,savings ,percentage #bjae #a4jj #j4ej #bjaf #b4jj #a4be #bjag #c4jj #b4jj #bjah #d4be #c4jj #bjai #e4ej #d4jj #bjbj #g4jj #e4jj #bjba #h4ej #f4jj #bjbb #aj4jj #g4jj #bjbc #aa4ej #h4jj #bjbd #ac4be #i4jj #bjbe #ae4jjaj4jj4 7#c7 ,subsequent years 7,a7 ,calendar years #bjbf through #bjdj ,not later than ,december #ca1 #bjbc1 the ,secretary shall promulgate regulations establishing performance standards 7expressed as applicable percentages of base quantity for both cumulative electricity savings and cumulative natural gas savings7 for each of calendar years #bjbf through #bjdj4 7,b7 ,subsequent extensions ,except as provided in subparagraph 7,a71 not later than ,december #ca of the penultimate reporting period for which performance standards have been established under this paragraph1 the ,secretary shall promulgate regulations establishing performance standards 7expressed as applicable percentages of base quantity for both cumulative electricity savings and cumulative natural gas savings7 for the #aj-;calendar-year period following the last calendar year for which performance standards previously were established4 7,c7 ,requirements ,the ,secretary shall establish standards under this paragraph at levels reflecting the maximum achievable level of cost-effective energy efficiency potential1 taking into account-- 7i7 cost-effective energy savings achieved by leading retail electricity suppliers and retail natural gas suppliers2 7ii7 opportunities for new codes and standard savings2 7iii7 technology improvements2 and 7iv7 other indicators of cost-effective energy efficiency potential4 7,d7 ,minimum percentage ,in no case shall the applicable percentages for any calendar year be less than the applicable percentages for calendar year #bjbe 7including any increase in the standard for calendar year #bjbe established pursuant to paragraph 7#d774 7#d7 ,midcourse review and adjustment of standards 7,a7 ,in general ,not later than ,december #ca1 #bjbj1 and at #aj-year intervals thereafter1 the ,secretary shall-- 7i7 review the most recent standards established under paragraph 7#b7 or 7#c72 and 7ii7 increase the standards by regulation if the ,secretary determines that additional cost-effective energy efficiency potential is achievable1 taking into account the requirements described in paragraph 7#c77;,c74 7,b7 ,lead time ,if the ,secretary revises standards under this paragraph1 the regulations shall provide adequate lead time to ensure that compliance with the increased standards is feasible4 7#e7 ,delay of submission for first reporting period 7,a7 ,in general ,notwithstanding paragraphs 7#a7 and 7#b71 for the #bjae reporting period1 the ,secretary may accept a request from a retail electricity supplier or a retail natural gas supplier to delay the required submission of documentation of all or part of the required savings for up to #b years4 7,b7 ,plan for compliance ,the request for delay under subparagraph 7,a7 shall include a plan for coming into full compliance by the end of the #bjaf-bjag reporting period4 7#f7 ,applying unused savings to future years ,if savings achieved in a year exceed the performance standards specified in this subsection1 any savings in excess of the performance standards may be applied toward performance standards specified for future years4 7e7 ,transfers of electricity or natural gas savings 7#a7 ,bilateral contracts for savings transfers ,subject to the limitations of this subsection1 a retail electricity supplier or retail natural gas supplier may use electricity savings or natural gas savings purchased pursuant to a bilateral contract from another retail electricity supplier or retail natural gas supplier1 a ,state1 or a third-party efficiency provider to meet the applicable performance standard under subsection 7d74 7#b7 ,requirements ,electricity savings or natural gas savings purchased and used for compliance under this subsection shall be-- 7,a7 measured and verified in accordance with subsection 7f72 7,b7 reported in accordance with subsection 7d72 and 7,c7 achieved within the same ,state as is served by the retail electricity supplier or retail natural gas supplier4 7#c7 ,exception ,notwithstanding paragraph 7#b77;,c71 a ,state regulatory authority may authorize a retail electricity supplier or a retail natural gas supplier regulated by the ,state regulatory authority to purchase savings achieved in a different ,state1 if-- 7,a7 the savings are achieved within the same power pool2 and 7,b7 the ,state regulatory authority that regulates the purchaser oversees the measurement and verification of the savings pursuant to the procedures and standards applicable in the ,state in which the purchaser is located4 7#d7 ,regulatory approval ,nothing in this subsection limits or affects the authority of a ,state regulatory authority to require a retail electricity supplier or retail natural gas supplier that is regulated by the ,state regulatory authority to obtain the authorization or approval of the ,state regulatory authority of a contract for transfer of electricity savings or natural gas savings under this paragraph4 7#e7 ,limitations ,to optimize the achievement of cost-effective efficiency potential1 the ,secretary may prescribe such limitations as the ,secretary determines appropriate with respect to the proportion of the compliance obligation of a retail electricity or natural gas supplier under the applicable performance standards under subsection 7d7 that may be met using electricity savings or natural gas savings that are purchased under this subsection4 7f7 ,measurement and verification of savings ,the regulations promulgated pursuant to subsection 7c7 shall include-- 7#a7 procedures and standards for defining and measuring electricity savings and natural gas savings that can be counted towards the performance standards established under subsection 7d71 that shall-- 7,a7 specify the types of energy efficiency and energy conservation measures that can be counted2 7,b7 require that energy consumption estimates for customer facilities or portions of facilities in the applicable base and current years be adjusted1 as appropriate1 to account for changes in weather1 level of production1 and building area2 7,c7 account for the useful life of measures2 7,d7 include assigned savings values for specific1 commonly used measures2 7,e7 allow for savings from a program to be estimated based on extrapolation from a representative sample of participating customers2 7,f7 include procedures for calculating and documenting ,,chp savings1 fuel-switching energy savings1 and waste heat energy savings2 7,g7 establish methods for calculating codes and standards energy savings1 including the use of verified compliance rates2 7,h7 include procedures for calculating and documenting-- 7i7 customer facility savings and reductions in distribution system losses of electricity and natural gas that are achieved as a result of smart grid deployment1 as described in section #acja of the ,energy ,independence and ,security ,act of #bjjg 7#db ,u4,s4,c4 #agcha72 and 7ii7 reductions in natural gas distribution system losses attributable to pipeline repair and replacement programs2 7,i7 count only measures and savings that are additional to business-as-usual customer purchase practices2 7,j7 ensure that the retail electricity supplier or retail natural gas supplier claiming the electricity savings or natural gas savings1 including codes and standards savings1 played a significant role in achieving the savings 7including through the activities of a designated agent of the supplier or through the purchase of transferred electricity savings or natural gas savings72 7,k7 avoid double-counting of savings used for compliance with this section1 including transferred savings2 7,l7 include electricity savings or natural gas savings from programs administered by the retail electric supplier or natural gas supplier that are funded by ,federal1 ,state1 or other sources2 7,m7 credit large customer self-directed electricity savings or natural gas savings to the retail electricity supplier or the retail natural gas supplier if the large customers receive incentives or rate reductions from the retail supplier for self-directed energy efficiency improvements2 7,n7 include procedures for counting electricity savings and natural gas savings achieved by solar water heating1 solar light pipe technology1 geothermal heat pumps1 and other technologies utilizing renewable resources that reduce on-site energy use2 7,o7 in any ,state in which the ,state regulatory authority has designated one or more entities to administer electric ratepayer-funded efficiency programs approved by the ,state regulatory authority1 provide that electricity savings and natural gas savings achieved through the programs shall be distributed proportionally among retail electric suppliers and retail natural gas suppliers2 and 7,p7 include guidance for utilities to calculate and document business-as-usual consumption projections2 and 7#b7 procedures and standards for third-party verification of reported electricity savings or natural gas savings4 7g7 ,enforcement and judicial review 7#a7 ,review of retail supplier reports 7,a7 ,in general ,the ,secretary shall review each report submitted to the ,secretary by a retail electricity supplier or retail natural gas supplier under subsection 7d7 to verify that the applicable performance standards under subsection 7d7 have been met4 7,b7 ,exclusion ,in determining compliance with the applicable performance standards under subsection 7d71 the ,secretary shall exclude reported electricity savings or natural gas savings that are not adequately demonstrated and documented1 in accordance with the regulations promulgated under subsections 7d71 7e71 and 7f74 7#b7 ,penalty for failure to document adequate savings ,if a retail electricity supplier or a retail natural gas supplier fails to demonstrate compliance with an applicable performance standard under subsection 7d71 or to pay to the ,state an applicable alternative compliance payment under subsection 7h77#d71 the ,secretary shall assess against the retail electricity supplier or retail natural gas supplier a civil penalty for each failure in an amount equal to1 as adjusted for inflation in accordance with such regulations as the ,secretary may promulgate-- 7,a7 #ajj per megawatt hour of electricity savings or alternative compliance payment that the retail electricity supplier failed to achieve or make1 respectively2 or 7,b7 #aj per million ,btu of natural gas savings or alternative compliance payment that the retail natural gas supplier failed to achieve or make1 respectively4 7#c7 ,offsetting state penalties ,the ,secretary shall reduce the amount of any penalty under paragraph 7#b7 by the amount paid by the relevant retail electricity supplier or retail natural gas supplier to a ,state for failure to comply with the requirements of a ,state energy efficiency resource standard during the same compliance period1 if the ,state standard-- 7,a7 is comparable in type to the ,federal standard established under this section2 and 7,b7 is more stringent than the applicable performance standards under subsection 7d74 7#d7 ,enforcement procedures ,the ,secretary shall assess a civil penalty1 as provided under paragraph 7#b71 in accordance with the procedures described in section #ccc7;d7 of the ,energy ,policy and ,conservation ,act 7#db ,u4,s4,c4 #fcjc7;d774 7#e7 ,judicial review 7,a7 ,in general ,any person adversely affected by a final action taken by the ,secretary under this section1 other than the assessment of a civil penalty1 may use the procedures for review described in section #ccf7;b7 of the ,energy ,policy and ,conservation ,act 7#db ,u4,s4,c4 #fcjf7;b774 7,b7 ,reference ,in this paragraph1 references to a rule in section #ccf7;b7 of the ,energy ,policy and ,conservation ,act 7#db ,u4,s4,c4 #fcjf7;b77 shall be considered to refer also to all other final actions of the ,secretary under this section other than the assessment of a civil penalty4 7h7 ,state administration 7#a7 ,in general ,upon receipt of an application from the ,governor of a ,state 7including the ,mayor of the ,district of ,columbia71 the ,secretary may delegate to the ,state responsibility for administering this section within the territory of the ,state if the ,secretary determines that the ,state will implement an energy efficiency program that meets or exceeds the requirements of this section1 including-- 7,a7 achieving electricity savings and natural gas savings that are at least as great as those required under the applicable performance standards established under subsection 7d72 7,b7 reviewing reports and verifying electricity savings and natural gas savings achieved in the ,state 7including savings transferred from outside the ,state72 and 7,c7 collecting any alternative compliance payments under paragraph 7#d7 and using the payments to implement cost-effective efficiency programs4 7#b7 ,secretarial determination ,not later than #ahj days after the date on which a complete application is received by the ,secretary1 the ,secretary shall make a substantive determination approving or disapproving a ,state application1 after public notice and comment4 7#c7 ,alternative measurement and verification procedures and standards ,as part of an application submitted under paragraph 7#a71 a ,state may request to use alternative measurement and verification procedures and standards from the procedures and standards described in subsection 7f71 if the ,state demonstrates that the alternative procedures and standards provide a level of accuracy of measurement and verification that are at least equivalent to the ,federal procedures and standards under subsection 7f74 7#d7 ,alternative compliance payments 7,a7 ,in general ,as part of an application submitted under paragraph 7#a71 a ,state may permit retail electricity suppliers or retail natural gas suppliers to pay to the ,state1 by not later than ,april #a of the calendar year immediately following the applicable reporting period1 an alternative compliance payment in an amount equal to1 as adjusted for inflation in accordance with such regulations as the ,secretary may promulgate1 not less than-- 7i7 #ej per megawatt hour of electricity savings needed to make up any deficit with regard to a compliance obligation under the applicable performance standard2 or 7ii7 #e per million ,btu of natural gas savings needed to make up any deficit with regard to a compliance obligation under the applicable performance standard4 7,b7 ,use of payments ,alternative compliance payments collected by a ,state under subparagraph 7,a7 shall be used by the ,state to administer the delegated authority of the ,state under this section and to implement cost-effective energy efficiency programs that-- 7i7 to the maximum extent practicable1 achieve electricity savings and natural gas savings in the ,state sufficient to make up the deficit associated with the alternative compliance payments2 and 7ii7 can be measured and verified in accordance with the applicable procedures and standards under subsection 7f7 or paragraph 7#c71 as applicable4 7#e7 ,review of state implementation 7,a7 ,periodic review ,every #b years1 the ,secretary shall review ,state implementation of this section for conformance with the requirements of this section in approximately of the ,states that have received approval under this subsection to administer the program1 so that each ,state shall be reviewed at least every #d years4 7,b7 ,report ,to facilitate the review under subparagraph 7,a71 the ,secretary may require the ,state to submit a report demonstrating the conformance of the ,state with the requirements of this section1 including-- 7i7 reports submitted by retail electricity suppliers and retail natural gas suppliers to the ,state demonstrating compliance with applicable performance standards2 7ii7 the impact of the standards on projected electricity and natural gas demand within the ,state2 7iii7 an accounting of the use of alternative compliance payments by the ,state and the resulting electricity savings and natural gas savings achieved2 and 7iv7 any other information that the ,secretary determines appropriate4 7,c7 ,review upon petition ,notwithstanding subparagraph 7,a71 upon receipt of a public petition containing credible allegation of substantial deficiencies1 the ,secretary shall promptly review the ,state implementation of delegated authority under this section4 7,d7 ,deficiencies 7i7 ,in general ,in completing a review under this paragraph1 if the ,secretary finds deficiencies1 the ,secretary shall-- 7,i7 notify the ,state of the deficiencies2 7,,ii7 direct the ,state to correct the deficiencies2 and 7,,iii7 require the ,state to report to the ,secretary on progress made by not later than #ahj days after the date on which the ,state receives notice under subclause 7,i74 7ii7 ,substantial deficiencies ,if the deficiencies are substantial1 the ,secretary shall-- 7,i7 disallow the reported electricity savings or natural gas savings that the ,secretary determines are not credible due to deficiencies2 7,,ii7 re-review the ,state not later than #b years after the date on which the original review was completed2 and 7,,iii7 if substantial deficiencies remain uncorrected after the review provided for under subclause 7,,ii71 revoke the authority of the ,state to administer the program established under this section4 7#f7 ,calls for revision of ,state applications ,as a condition of maintaining the delegated authority of a ,state to administer this section1 the ,secretary may require a ,state to submit a revised application under paragraph 7#a7 if the ,secretary has-- 7,a7 promulgated new or revised performance standards under subsection 7d72 7,b7 promulgated new or substantially revised measurement and verification procedures and standards under subsection 7f72 or 7,c7 otherwise substantially revised the program established under this section4 7#g7 ,cost recovery1 fixed cost recovery and shareholder incentives ,state utility regulatory commissions are encouraged to review the rules and regulations of the commission to ensure that utilities under the jurisdiction of the commission can-- 7,a7 recover the direct costs of energy efficiency programs2 7,b7 fully recover authorized fixed costs1 including lost margins from lower annual sales due to energy efficiency programs2 and 7,c7 earn an incentive for shareholders if the energy efficiency standards are achieved4 7i7 ,information and reports ,in accordance with section #ac of the ,federal ,energy ,administration ,act of #aigd 7#ae ,u4,s4,c4 #ggb71 the ,secretary may require any retail electricity supplier1 retail natural gas supplier1 third-party efficiency provider1 or any other entity that the ,secretary determines appropriate1 to provide any information the ,secretary determines appropriate to carry out this section4 7j7 ,state law ,nothing in this section diminishes or qualifies any authority of a ,state or political subdivision of a ,state to adopt or enforce any law or regulation respecting electricity savings or natural gas savings1 including any law or regulation establishing energy efficiency requirements that are more stringent than those under this section1 except that no ,state law or regulation shall relieve any person of any requirement otherwise applicable under this section4 4 #f4 ,program review 7a7 ,national academy of sciences review ,the ,secretary of ,energy shall enter into a contract with the ,national ,academy of ,sciences under which the ,academy shall1 not later than ,july #a1 #bjai1 and every #aj years thereafter1 submit to ,congress1 the ,federal ,energy ,regulatory ,commission1 and the ,secretary of ,energy a comprehensive evaluation of all aspects of the programs established under this ,act and under sections #faj and #faa of the ,public ,utility ,regulatory ,policies ,act of #aigh 7as added by this ,act71 including-- 7#a7 an evaluation of the effectiveness of the programs1 including the specific design elements of the programs1 in increasing the efficiency of retail natural gas and electricity distribution and consumption and increasing the deployment of renewable electricity capacity2 7#b7 the opportunities for additional technologies and sources of efficiency and renewable electricity that have emerged since the date of enactment of this ,act2 7#c7 the impact of the programs on the reliability of electricity and natural gas supply2 7#d7 the net benefits or costs of the programs to the ,united ,states and the ,states1 including-- 7,a7 the effects on electricity and natural gas demand and prices2 7,b7 the economic development benefits of investment2 7,c7 environmental costs and benefits2 7,d7 the impacts on public health and health care costs2 and 7,e7 avoided costs related to environmental and congestion mitigation investments that otherwise would have been required2 7#e7 an assessment of the benefits and costs of increasing the performance standards established under section #faa7;d7 of the ,public ,utility ,regulatory ,policies ,act of #aigh 7as added by this ,act72 7#f7 the feasibility1 advantages1 and disadvantages of alternative models for demonstrating compliance with a ,federal energy efficiency resource standard1 including-- 7,a7 establishing a national trading system for energy efficiency credits2 or 7,b7 demonstrating compliance through actual reductions in delivery or sales of electricity and natural gas1 rather than on program savings2 and 7#g7 recommendations regarding potential changes to this section1 to regulations and procedures for implementing this section1 or to related public policies4 7b7 ,recommendations to ,congress ,not later than ,january #a1 #bjbj1 and every #aj years thereafter1 the ,secretary of ,energy shall submit to the ,committee on ,energy and ,commerce of the ,house of ,representatives and the ,committee on ,energy and ,natural ,resources of the ,senate a report making recommendations for modifications and improvements to the programs established under this ,act and under sections #faj and #faa of the ,public ,utility ,regulatory ,policies ,act of #aigh 7as added by this ,act71 including an explanation of the inconsistencies1 if any1 between the recommendations of the ,secretary of ,energy and the recommendations included in the evaluation of the ,national ,academy of ,sciences under paragraph 7#a74 #g4 ,conforming amendment ,the table of contents of the ,public ,utility ,regulatory ,policies ,act of #aigh 7#af ,u4,s4,c4 prec4 #bfja7 is amended by adding at the end of the items relating to title ,,vi the following3 ,sec4 #fji4 ,rural and remote communities electrification grants4 ,sec4 #faj4 ,federal renewable electricity standard4 ,sec4 #faa4 ,federal energy efficiency resource standard for retail electricity and natural gas suppliers4 4