,,ii #aafth ,,congress #ast ,session ,s4 #bbhh ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,july #be1 #bjai,ms4 ,smith 7for herself1 ,mr4 ,king1 and ,mr4 ,merkley7 introduced the following bill2 which was read twice and referred to the ,committee on ,energy and ,natural ,resources ,a ,,bill ,to amend title ,,vi of the ,public ,utility ,regulatory ,policies ,act of #aigh to establish 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 ,energy ,efficiency ,act of #bjai4 #b4 ,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 is amended by adding after section #fji 7#g ,u4,s4,c4 #iah;c7 the following3 #faj4 ,federal energy efficiency resource standard for retail electricity and natural gas suppliers 7a7 ,definitions ,in this section3 7#a7 ,,ashrae2 ,,ansi2 ,,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#b7 ,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 7c71 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 first year that compliance is required under subsection 7c77#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#c7 ,,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#d7 ,,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#e7 ,combined heat and power system ,the term combined heat and power system means a system that uses the same energy source for the generation of electrical or mechanical power and the production of steam or another form of useful thermal energy1 if-- 7,a7 the system meets all applicable requirements relating to efficiency and other operating characteristics that the ,secretary promulgates by regulation2 and 7,b7 the net quantity of electricity sold wholesale by the facility using the system does not exceed #ej percent of the total quantity of electricity generated annually by the system4 7#f7 ,cost-effective ,the term cost-effective means1 with respect to an energy efficiency measure1 that the measure achieves1 directly to the energy consumer and to the economy1 a net present value of economic benefits over the life of the measure that is greater than the net present value of the cost of the measure over the life of the measure1 using a societal benefit-cost test calculated using the lower of-- 7,a7 a utility weighted average cost of capital2 or 7,b7 a social discount rate of #c percent4 7#g7 ,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#h7 ,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 ,state and local codes and standards savings of electricity2 and 7,e7 fuel switching energy savings that results in net savings of source energy1 as defined in regulations promulgated by the ,secretary4 7#i7 ,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 new power plant1 taking into account existing and planned renewable energy generators 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#aj7 ,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 ,state and local codes and standards savings of natural gas2 and 7,d7 fuel switching energy savings that result in net savings of source energy1 as defined in regulations promulgated by the ,secretary4 7#aa7 ,reporting period ,the term reporting period means-- 7,a7 calendar year #bjba2 and 7,b7 each successive #b-;calendar-year period thereafter4 7#ab7 ,retail electricity supplier 7,a7 ,in general ,the term retail electricity supplier means1 for any given calendar year1 an electric utility that delivers not less than #b1jjj1jjj 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 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#ac7 ,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#ad7 ,state and local codes and standards savings 7,a7 ,in general ,the term ,state and local codes and standards savings means a reduction1 due to the adoption and implementation1 after the date of enactment of this section1 of new or revised appliance and equipment efficiency standards or building energy codes1 in-- 7i7 end-use electricity consumption for a retail electricity supplier2 or 7ii7 natural gas consumption in the service territory of a retail natural gas supplier4 7,b7 ,baselines ,in calculating ,state and local codes and standards savings under subparagraph 7,a7-- 7i7 the baseline for calculating savings from a new or revised building code shall be the more stringent of-- 7,i7 7aa7 the #bjae ,international ,energy ,conservation ,code for residential buildings2 or 7bb7 the ,,ashrae_/,,ansi_/,,iesna ,standard #ij4a-bjac 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 a new or revised appliance standard shall be the estimated average efficiency of new appliances in the applicable #a or more categories during the #a-year period preceding the date on which the new or revised standard is adopted4 7#ae7 ,third-party efficiency provider ,the term third-party efficiency provider means any retailer1 building owner1 energy service company1 financial institution1 or other commercial1 industrial1 or nonprofit entity that is capable of providing electricity savings or natural gas savings in accordance with any procedures1 standards1 and rules established by the ,secretary under subsections 7b77#a77;,d7 and 7d74 7#af7 ,waste heat energy savings ,the term waste heat energy savings means the mechanical or thermal energy used at a facility or the electric output of a facility1 adjusted to reflect any associated increase in fuel consumption1 that results from a modification of an industrial1 commercial1 or institutional system that commenced operation before the date of enactment of this section1 in order to recapture mechanical or thermal energy that would otherwise be wasted1 as determined in accordance with regulations promulgated by the ,secretary4 7b7 ,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-- 7,a7 by establishing evaluation1 measurement1 and verification procedures and standards under subsection 7d72 7,b7 by 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 7c72 and 7ii7 estimate the impact of the standards on current and future electricity and natural gas use in the service territories of the suppliers2 7,c7 by establishing requirements governing applications for1 and implementation of1 delegated ,state administration under subsection 7f72 and 7,d7 by establishing rules to govern transfers of electricity or natural gas savings-- 7i7 between suppliers and third-party efficiency providers serving the same ,state2 and 7ii7 between suppliers and third-party efficiency providers serving different ,states4 7#b7 ,national ,academy of ,sciences study ,in establishing and implementing this section1 the ,secretary shall take into consideration a report published under subsection 7d77#b77;,c74 7#c7 ,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 7#d7 ,savings programs for low-income customers ,in implementing this section1 the ,secretary shall encourage retail electricity suppliers and retail natural gas suppliers to ensure that a portion of the customer facility savings achieved for a calendar year shall result from programs that target households that are at or below #bjj percent of the poverty line 7as defined in section #fgc of the ,community ,services ,block ,grant ,act 7#db ,u4,s4,c4 #iijb774 7c7 ,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 cumulative consistent 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 percentage 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 consistent 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 percentage of the base quantity of such retail natural gas supplier4 7#b7 ,standards for #bjba through #bjce ,for each of calendar years #bjba through #bjce1 the applicable percentages are as follows3 ,calendar ,year,cumulative ,electricity ,savings ,percentage,cumulative ,natural ,gas ,savings ,percentage#bjba #a4jj #j4ejbjbb #b4jj #a4bebjbc #c4jj #b4jjbjbd #d4be #c4jjbjbe #e4ej #d4jjbjbf #g4jj #e4jjbjbg #h4ej #f4jjbjbhaj4jj #g4jjbjbiaa4ej #h4jjbjcjac4jj #i4jjbjcaad4geaj4jjbjcbaf4ejaa4jjbjccah4 beab4jjbjcdbj4jjac4jjbjcebb4jjad4jj 7#c7 ,subsequent years 7,a7 ,calendar years #bjcf through #bjde ,not later than ,december #ca1 #bjcj1 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 #bjcf through #bjde4 7,b7 ,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 ,state and local codes and standards savings2 7iii7 technology improvements2 and 7iv7 other indicators of cost-effective energy efficiency potential including differences between ,states4 7,c7 ,minimum percentage ,in no case shall the applicable percentages for any calendar year be less than the applicable percentages for calendar year #bjce4 7#d7 ,delay of submission for first reporting period 7,a7 ,in general ,notwithstanding paragraphs 7#a7 and 7#b71 for the #bjba 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 #bjbb-bjbc reporting period4 7#e7 ,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 the first #c years following the year in which the excess savings are achieved4 7d7 ,evaluation1 measurement1 and verification of savings 7#a7 ,regulations ,the regulations promulgated pursuant to subsection 7b7 shall-- 7,a7 be based on-- 7i7 the ,uniform ,methods ,project of the ,department of ,energy2 7ii7 the ,national ,standard ,practice ,manual for ,assessing the ,cost-,effectiveness of ,energy ,efficiency ,resources1 developed by the ,national ,efficiency ,screening ,project2 and 7iii7 other best practices recognized in the energy efficiency industry2 and 7,b7 include-- 7i7 procedures and standards for evaluating1 measuring1 and verifying electricity savings and natural gas savings that count towards the performance standards established under subsection 7c7 that-- 7,i7 specify the types of energy efficiency and energy conservation measures that may be counted2 7,,ii7 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,,iii7 do not prevent overall load growth due to beneficial electrification2 7,,iv7 account for the useful life of energy efficiency and energy conservation measures2 7,v7 allow for savings from a program to be estimated based on extrapolation from a representative sample of participating customers2 7,,vi7 include procedures for calculating and documenting ,,chp savings1 fuel-switching energy savings1 and waste heat energy savings2 7,,vii7 establish methods for calculating codes and standards energy savings1 including the use of verified compliance rates2 7,,viii7 include procedures for calculating and documenting-- 7aa7 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 7bb7 reductions in natural gas distribution system losses attributable to pipeline repair and replacement programs2 7,,ix7 count only measures and savings that are additional to business-as-usual customer purchase practices2 7,x7 ensure that the retail electricity supplier or retail natural gas supplier claiming the electricity savings or natural gas savings1 including ,state and local codes and standards savings1 has 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,,xi7 avoid double-counting of savings used for compliance with this section1 including transferred savings2 7,,xii7 include electricity savings or natural gas savings from programs administered by retail electricity suppliers or natural gas suppliers that are funded by ,federal1 ,state1 or other sources2 7,,xiii7 credit large customer self-directed electricity savings or natural gas savings to the retail electricity supplier or retail natural gas supplier if the large customer receives incentives or rate reductions from the retail electricity supplier or retail natural gas supplier for self-directed energy efficiency improvements2 7,,xiv7 include guidance1 as appropriate1 for additional alternative approaches to evaluate electricity savings and natural gas savings for large commercial and industrial customers in energy-intensive industries that are subject to international competition2 7,,xv7 include procedures for counting electricity savings and natural gas savings achieved by solar heating and cooling technologies1 solar light pipe technology1 geothermal heat pumps1 and other technologies utilizing renewable resources that do not produce electricity or gaseous fuel and reduce on-site energy use2 7,,xvi7 include procedures for counting electricity savings and natural gas savings achieved by weatherization measures1 such as installing mechanical insulation1 repairing or replacing heating and cooling systems1 repairing or replacing windows and doors1 performing air sealing1 and replacing lights and appliances with more energy efficient models2 7,,xvii7 include procedures for counting electricity savings and natural gas savings achieved from increased utilization of mechanical insulation for new1 retrofit1 and maintenance construction for commercial1 industrial1 public1 and nonprofit buildings and facilities2 7,,xviii7 in any ,state in which the ,state regulatory authority has designated #a 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 those programs shall be distributed proportionally among retail electricity suppliers and retail natural gas suppliers2 7,,xix7 include guidance for retail electricity suppliers and retail natural gas suppliers to calculate and document business-as-usual consumption projections2 7,,xx7 include guidance for estimating savings using information from the database established under paragraph 7#c7 based on similar measures and programs in other settings with appropriate adjustments1 as necessary2 and 7,,xxi7 incorporate advances in the science of policy evaluation1 such as the use of-- 7aa7 randomized control trials2 7bb7 other experimental and quasi-experimental approaches2 and 7cc7 large data sets and machine learning techniques2 and 7ii7 procedures and standards for third-party verification of reported electricity savings or natural gas savings4 7#b7 ,national ,academy of ,sciences study ,not later than #ahj days after the date of enactment of this section1 the ,secretary shall offer to enter into an agreement with the ,national ,academy of ,sciences1 under which the ,academy shall-- 7,a7 evaluate existing state-of-the-art methods for evaluating energy efficiency policies and measures2 7,b7 identify approaches in program evaluation literature that may be brought into the energy efficiency domain1 including-- 7i7 randomized control trials and other experimental or quasi-experimental approaches2 7ii7 control of confounding factors2 7iii7 longitudinal studies2 7iv7 assessments by neutral arbiters2 and 7v7 disclosure of data for replication2 and 7,c7 not later than #ah months after the date of enactment of this section1 publish a report that includes-- 7i7 a description of the evaluation under subparagraph 7,a72 7ii7 a description of the approaches identified under subparagraph 7,b72 and 7iii7 recommendations for advancing and adopting rigorous state-of-the-art methods for evaluating energy efficiency policies and measures4 7#c7 ,energy efficiency program evaluation database 7,a7 ,in general ,the ,secretary shall establish and maintain a searchable public database1 accessible on the website of the ,department of ,energy1 that contains a list of randomized control trials and other experimental or quasi-experimental evaluations of energy efficiency programs4 7,b7 ,requirements ,each trial or evaluation on the list described in subparagraph 7,a7 shall include1 at a minimum-- 7i7 the ,state in which the trial or evaluation was conducted2 7ii7 the type of trial or evaluation conducted2 7iii7 the type of program evaluated2 7iv7 an abstract or summary of the program evaluated2 7v7 a summary of the trial or evaluation methodology2 7vi7 the revealed energy savings from the trial or evaluation2 and 7vii7 to the extent practicable1 the underlying data used to conduct the trial or evaluation4 7e7 ,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 7c7 to verify that the applicable performance standards under subsection 7c7 have been met4 7,b7 ,exclusion ,in determining compliance with the applicable performance standards under subsection 7c71 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 7b7 and 7c74 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 7c71 or to pay to the ,state an applicable alternative compliance payment under subsection 7f77#c71 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 period4 7#d7 ,use of payments 7,a7 ,definition of covered rate ,in this paragraph1 the term covered rate means the proportion that-- 7i7 the amount of penalty payments made by retail electricity suppliers and natural gas suppliers in a ,state under paragraph 7#b72 bears to 7ii7 the total amount of penalty payments collected by the ,secretary under that paragraph4 7,b7 ,use of payments ,penalty payments collected under paragraph 7#b7 by the ,secretary shall be-- 7i7 provided to each ,state at the covered rate for the ,state2 and 7ii7 used by the ,state to implement cost-effective energy efficiency programs that-- 7,i7 to the maximum extent practicable1 achieve electricity savings and natural gas savings in the ,state sufficient to make up the deficit associated with the penalty payments2 and 7,,ii7 can be measured and verified in accordance with the applicable procedures and standards established under subsection 7d74 7#e7 ,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 7f7 ,state administration 7#a7 ,in general ,on 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 section4 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 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 ,may #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 established under subsection 7d74 7#d7 ,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 #a_/b of the ,states that have received approval under this subsection to administer the program1 so that each ,state shall be reviewed not less frequently than once 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 section4 7,c7 ,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#e7 ,cost recovery1 fixed cost recovery1 and shareholder incentives ,the ,secretary shall encourage ,state utility regulatory commissions to review the rules and regulations of the ,commission to ensure that utilities under the jurisdiction of the ,commission may-- 7,a7 recover the direct costs of energy efficiency programs2 7,b7 7i7 fully recover authorized fixed costs from customers1 including recovery of revenue associated with fixed costs that was lost due to annual sales that were lower than forecasted2 but 7ii7 return to customers the revenue associated with fixed costs collected in excess of the authorized amount under clause 7i72 and 7,c7 earn a performance-based incentive for shareholders for the achievement of energy efficiency standards4 7#f7 ,evaluation1 measurement1 and verification incentives ,the ,secretary shall encourage ,states that have delegated authority to administer this section to provide incentives to retail electricity suppliers1 retail natural gas suppliers1 and third-party efficiency providers to use randomized control trials and other experimental or quasi-experimental approaches to evaluate energy efficiency measures and programs within the ,state4 7g7 ,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 7h7 ,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 7b7 ,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 energy efficiency resource standard for retail electricity and natural gas suppliers4 4