Sec. 2. Federal renewable electricity standard

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Title VI of the Public Utility Regulatory Policies Act of 1978 ( 16 U.S.C. 2601 et seq.) is amended by adding after section 609 ( 7 U.S.C. 918c ) the following: Congress finds that— 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 price; and the United States has vast wind, solar, hydropower, biomass, and geothermal resources that— are renewable; are dispersed widely across different regions of the United States; and can be harnessed to generate a significant share of electricity in the United States.

In this section: The term brownfield site generation facility means a facility that— generates renewable electricity; and occupies a brownfield site (as that term is defined in section 101 of the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 ( 42 U.S.C. 9601 )). The term distributed renewable generation facility means a facility that— generates renewable electricity; primarily serves one or more electric consumers at or near the facility site; and has not more than 2 megawatts in capacity.

The term Federal renewable electricity credit means a credit, representing 1 megawatt hour of renewable electricity, issued pursuant to subsection (f). The term Indian land means— any land within the limits of any Indian reservation, pueblo, or rancheria; any land not within the limits of any Indian reservation, pueblo, or rancheria, title to which was on the date of enactment of this section held by— the United States for the benefit of any Indian tribe or individual; or any Indian tribe or individual subject to restriction by the United States against alienation; any dependent Indian community; or any land conveyed under the Alaska Native Claims Settlement Act ( 43 U.S.C. 1601 et seq.) to any Native Corporation (as that term is defined in section 3 of that Act ( 43 U.S.C. 1602 )).

The term Indian tribe means any Indian tribe, band, nation, or other organized group or community (including any Native village, Regional Corporation, or Village Corporation (as those terms are defined in section 3 of the Alaska Native Claims Settlement Act ( 43 U.S.C. 1602 ))) that is recognized as eligible for the special programs and services provided by the United States to Indians because of their status as Indians. The term qualified hydropower means— energy produced from increased efficiency achieved, or additions of capacity made, on or after January 1, 2001, at a hydroelectric facility that— was placed in service before that date; and does not include additional energy generated as a result of operational changes not directly associated with efficiency improvements or capacity additions; or energy produced from generating capacity added to a dam on or after January 1, 2001, if the Commission certifies that— the dam— was placed in service before the date of enactment of this section; was operated for flood control, navigation, or water supply purposes; and was not producing hydroelectric power prior to the addition of the capacity; and the hydroelectric project installed on the dam— is licensed or is exempt from licensing by the Commission; is in compliance with— the terms and conditions of the license or exemption; and other applicable legal requirements for the protection of environmental quality, including applicable fish passage requirements; and 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 maintained, 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 waterway.

The term qualified renewable biomass means renewable biomass that, when combusted, yields, on a weighted-average basis, a 50-percent reduction in lifecycle greenhouse gas emissions (as defined in section 4(a) of the American Renewable Energy and Efficiency Act ) per unit of useful energy, as compared to the operation of a combined cycle natural gas electric generating facility using the most efficient commercially available technology, when calculated over a 20-year life cycle.

The term renewable biomass means— crop byproducts or crop residues harvested from actively managed or fallow agricultural land that is cleared prior to the date of enactment of this section; planted trees, brush, slash, and residues from an actively managed tree farm dedicated to energy crop production and located on land cleared prior to the date of enactment of this section; byproducts of wood or paper mill operations, including lignin in spent pulping liquors; algae; nonhazardous plant matter derived from waste— including separated yard waste, landscape right-of-way trimmings, or food waste; but not including municipal solid waste, recyclable waste paper, painted, treated or pressurized wood, or wood contaminated with plastic or metals; and vegetative matter removed from within 200 yards of any man-made structure or campground for the purposes of hazardous fuels thinning.

The term renewable electricity means electricity generated (including by means of a fuel cell) from a renewable energy resource. The term renewable energy resource means each of the following: Wind energy. Solar energy. Geothermal energy. Qualified renewable biomass. Biogas derived from qualified renewable biomass. Biofuels derived from qualified renewable biomass. Qualified hydropower. Marine and hydrokinetic renewable energy (as defined in section 632 of the Energy Independence and Security Act of 2007 ( 42 U.S.C. 17211 )).

Landfill gas. The term retail electric supplier means, for any calendar year, an electric utility that sells not fewer than 1,000,000 megawatt hours of electric energy to electric consumers for purposes other than resale during the preceding calendar year. For purposes of determining whether an electric utility qualifies as a retail electric supplier under subparagraph (A)— the sales made by any affiliate of the electric utility to electric consumers, other than sales to lessees or tenants of the affiliate, for purposes other than resale shall be considered to be sales made by the electric utility; and sales made by the electric utility to an affiliate, lessee, or tenant of the electric utility shall not be treated as sales to electric consumers.

In this paragraph, the term affiliate when used in relation to a person, means another person that directly or indirectly owns or controls, is owned or controlled by, or is under common ownership or control with, that person, as determined under regulations promulgated by the Commission. The term retail electric supplier's base quantity means the total quantity of electric energy sold by the retail electric supplier, expressed in megawatt hours, to electric customers for purposes other than resale during the relevant calendar year, excluding— electricity generated by a hydroelectric facility, other than qualified hydropower; and electricity generated by the combustion of municipal solid waste.

The terms retire and retirement with respect to a Federal renewable electricity credit, mean to disqualify the credit for any subsequent use under this section, regardless of whether the use is a sale, transfer, exchange, or submission in satisfaction of a compliance obligation. Except as otherwise provided in subsection (g), for each of calendar years 2019 through 2042, not later than March 31 of the following calendar year, 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 (e).

Not later than 1 year after the date of enactment of this section, the Commission shall promulgate regulations to implement and enforce the requirements of this section. In promulgating regulations under paragraph (1), the Commission shall, to the maximum extent practicable— preserve the integrity and incorporate best practices of existing State and tribal renewable electricity programs; rely on existing and emerging State, tribal, or regional tracking systems that issue and track non-Federal renewable electricity credits; and cooperate with States and Indian tribes— to facilitate coordination between State, tribal, and Federal renewable electricity programs; and to minimize administrative burdens and costs to retail electric suppliers.

For each of calendar years 2019 through 2042, the annual target of a retail electric supplier shall be equal to the product obtained by multiplying— the required annual percentage for that calendar year under paragraph (2); and the retail electric supplier’s base quantity for that calendar year. Subject to subparagraph (B), for each of calendar years 2019 through 2042, the required annual percentage shall be as follows: Required annual Year: percentage: 2019 10.0 2020 11.0 2021 12.0 2022 13.5 2023 15.0 2024 17.0 2025 19.0 2026 21.0 2027 23.0 2028 25.0 2029 27.5 2030 30.0 2031 32.5 2032–2042 35.0.

The Commission may issue orders increasing the required annual percentage amounts for each of calendar years 2032 through 2042 to reflect the maximum achievable level of renewable electricity generation potential, taking into account regional resource availability, economic feasibility, and technological capability. The regulations promulgated under this section shall include provisions governing the issuance, tracking, and verification of Federal renewable electricity credits.

Except as provided in paragraphs

(2)through (4), the Commission shall issue to each generator of renewable electricity, 1 Federal renewable electricity credit for each megawatt hour of renewable electricity generated by the generator after December 31, 2018. The Commission shall assign a unique serial number to each Federal renewable electricity credit. If renewable electricity is generated with the support of payments from a retail electric supplier pursuant to a State renewable electricity program (whether through State alternative compliance payments or through payments to a State renewable electricity procurement fund or entity), 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 supplier, as determined pursuant to regulations promulgated by the Commission. For any remaining portion of the relevant renewable electricity generation, the Commission shall issue Federal renewable electricity credits to the generator, as provided in paragraph (1), except that not more than 1 Federal renewable electricity credit shall be issued for the same megawatt hour of electricity. In determining how Federal renewable electricity credits will be apportioned among retail electric suppliers and generators under this paragraph, the Commission shall consider information and guidance issued by the applicable one or more States. Except as otherwise provided in paragraph (2), 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 section, and the contract does not provide for the determination of ownership of the Federal renewable electricity credits associated with the generation, the Commission shall issue the Federal renewable electricity credits to the retail electric supplier for the duration of the contract. Except as provided in subparagraph (B), the Commission shall issue— not more than 3 Federal renewable electricity credits for each megawatt hour of renewable electricity generated by a distributed renewable generation facility; not more than 2 Federal renewable electricity credits for each megawatt hour of renewable electricity generated on Indian land; and not more than 2 Federal renewable electricity credits for each megawatt hour of renewable electricity generated by a brownfield site generation facility. Except as provided in subparagraph (C), not later than January 1, 2021, and not less frequently than every 4 years thereafter, the Commission shall review the effect of this paragraph on the aggregate quantity of renewable electricity produced under the standard and shall, as necessary and after providing 1 year of notice, reduce the number of Federal renewable electricity credits per megawatt hour issued under this paragraph for any given energy source or facility, but not below one, to ensure that the number is no higher than the Commission determines is necessary— to incentivize incremental renewable energy generation on Indian land and brownfield sites; and to make distributed renewable generation facilities cost competitive with other sources of renewable electricity generation. For any renewable generation facility placed in service after the date of enactment of this section, subparagraph

(B)shall not apply for the first 10 years after the date on which the facility is placed in service. For each year during the 10-year period described in clause (i), 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 service. After the 10-year period described in clause (i), the Commission shall issue Federal renewable electricity credits to the facility in accordance with subparagraph (B). For purposes of this subsection, the number of Federal renewable electricity credits issued for qualified hydropower shall be calculated— based solely on the increase in average annual generation directly resulting from the efficiency improvements or capacity additions described in subsection (b)(6)(A); and using the same water flow information used to determine a historic average annual generation baseline for the hydroelectric facility, as certified by the Commission. If electricity is generated using both a renewable energy resource and an energy source that is not a renewable energy resource (such as cofiring of renewable biomass and fossil fuel), the Commission shall issue Federal renewable electricity credits based on the proportion of the electricity that is attributable to the renewable energy resource. The Commission shall ensure that— no Federal renewable electricity credit is used more than once for compliance with this section; and except as provided in paragraph (4), not more than 1 Federal renewable electricity credit is issued for any megawatt hour of renewable electricity. The lawful holder of a Federal renewable electricity credit may— sell, exchange, or transfer the credit; submit the credit for compliance under subsection (c); or submit the credit for retirement by the Commission. A Federal renewable electricity credit may be submitted in satisfaction of the compliance obligation under subsection

(c)for the compliance year in which the credit was issued or for any of the 3 immediately subsequent compliance years. The Commission shall retire any Federal renewable electricity credit that has not been retired by April 2 of the calendar year that is 3 years after the calendar year during which the credit was issued. The Commission shall retire a Federal renewable electricity credit immediately upon submission by the lawful holder of the credit, whether in satisfaction of a compliance obligation under subsection

(c)or for another reason. A retail electric supplier may satisfy the requirements of subsection

(c)in whole or in part by submitting in accordance with this subsection, in lieu of each Federal renewable electricity credit that would otherwise be due, a payment equal to $50, adjusted for inflation on January 1 of each year following calendar year 2019, in accordance with regulations promulgated by the Commission. Except as otherwise provided in this paragraph, payments made under this subsection shall be made directly to one or more States in which the retail electric supplier sells electric energy, in proportion to the portion of the retail electric supplier's base quantity that is sold within each applicable State, if— the payments are deposited directly into a fund of the State treasury established for that purpose; and the State uses the funds in accordance with paragraphs

(3)and (4). If the Commission determines that a State is in substantial noncompliance with paragraph

(3)or (4), 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 Treasury. As a condition of receipt of alternative compliance payments under this subsection, a State shall use the payments exclusively for— deploying technologies that generate electricity from renewable energy resources; or implementing cost-effective energy efficiency programs to achieve energy savings. As a condition of receipt of alternative compliance payments pursuant to this subsection, a State shall submit to the Commission an annual report, in accordance with regulations promulgated by the Commission, containing a full accounting of the use of the payments, including a detailed description of the activities funded by the payments and demonstrating compliance with the requirements of this subsection. A State shall submit a report under this paragraph— not later than 1 year after the date on which the first alternative compliance payment is received; and every 1 year thereafter until all alternative compliance payments are expended. The Commission may require any retail electric supplier, renewable electricity generator, or any other entity that the Commission determines appropriate, to provide any information the Commission determines appropriate to carry out this section. Any entity required to submit information under paragraph

(1)that fails to submit the information or submits false or misleading information shall be in violation of this section. If any person fails to comply with the requirements of subsection

(c)or (g), the person shall be liable to pay to the Commission a civil penalty equal to the product obtained by multiplying— double the alternative compliance payment calculated under subsection (g)(1); and 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

(c)and (g). The Commission shall assess a civil penalty under paragraph

(1)in accordance with the procedures described in section 31(d) of the Federal Power Act ( 16 U.S.C. 823b(d) ). 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 316A(b) of the Federal Power Act ( 16 U.S.C. 825o–1(b) ). The penalty under subparagraph

(A)shall be assessed by the Commission in the same manner as in the case of a violation referred to in section 316A(b) of that Act. Any person aggrieved by a final action taken by the Commission under this section, other than the assessment of a civil penalty under paragraphs

(1)through (3), may use the procedures for review described in section 313 of the Federal Power Act ( 16 U.S.C. 825 l ). For purposes of this paragraph, references to an order in section 313 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

(1)through (3). Nothing in this section— diminishes or qualifies any authority of a State, a political subdivision of a State, or an Indian tribe— to adopt or enforce any law or regulation respecting renewable electricity, including any law or regulation establishing requirements that are more stringent than those established by this section, provided that no such law or regulation may relieve any person of any requirement otherwise applicable under this section; or to regulate the acquisition and disposition of Federal renewable electricity credits by retail electric suppliers within the jurisdiction of the State, political subdivision, or Indian tribe, 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 section; or affects the application of or the responsibility for compliance with any other provision of law or regulation, including environmental and licensing requirements. The authority provided by this section expires on December 31, 2043. .

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