Sec. 402. Federal clean 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 further amended by adding after section 610 (as added by this Act) the following: In this section, as determined for each calendar year, the term retail electricity supplier means an entity in the United States that sold not fewer than 20 megawatt-hours of electric energy to electric consumers for purposes other than resale during the preceding calendar year. Effective beginning in the first compliance period of the program, and for each compliance period thereafter, each retail electricity supplier shall surrender clean electricity credits corresponding to the required percentage, as determined under paragraph (3), of the electric energy it sells to electric consumers.
The Secretary shall determine, and may adjust as needed, the required percentage for each compliance period, such that the power sector achieves, by 2050, a reduction in carbon dioxide emissions of 80 percent from emission levels in the year of enactment of this section, and that carbon dioxide emission levels are reduced linearly in each compliance period through 2050, provided that— in 2026, the Secretary shall make a projection of the electricity generated in 2030 that could qualify for clean electricity credits under subsection (d); the required percentage for the first compliance period shall be the greater of— the percentage of electricity generated that would qualify for issuance of clean electricity credits under subsection
(d)in the year of enactment of this section; and the Secretary’s projection for 2030 under subparagraph (A); and the required percentage shall be uniform for each retail electric supplier regulated under this section for any compliance period. Not later than two years after the date of enactment of this section, the Secretary shall make a projection of the required percentage for the first compliance period, extrapolating from the prior five years of electricity generation. A retail electric supplier shall meet the requirements of subsection
(a)for each compliance period by— submitting to the Secretary a number of clean electricity credits equal to the product of the required percentage for the compliance period times the volume of electric energy the retail electric supplier sold to consumers during the compliance period; paying an amount equal to the product of the alternative compliance payment, in the amount specified in subsection (h), times the number of clean electricity credits that would otherwise be due under paragraph
(1)in the compliance period; or taking a combination of the actions described in paragraphs
(1)and (2). Not later than 180 days after the program trigger date, the Secretary shall establish a Federal clean electricity credit accounting and trading program under which clean electricity credits may be acquired, sold, transferred, and held and electric utilities may submit to the Secretary clean electricity credits to comply with the requirements of this section. Each year, the Secretary shall issue to each generator of electric energy a quantity of clean electricity credits determined in accordance with subsection (d). Each clean electricity credit issued under this subsection shall be used only once for the purpose of complying with the requirements of this section. In carrying out this subsection, the Secretary may delegate— to the Commission, the implementation of some or all of the program established under paragraph (1); and to appropriate entities, the tracking of clean electricity credits. Clean electricity credits issued under subsection
(d)shall be valid for the compliance period in which the clean electricity credit is issued or in any subsequent compliance period. For each calendar year, starting with the year of the program effective date, the Secretary shall issue clean electricity credits to each electricity generator in the United States that has sold electricity and has an annual carbon intensity of less than 0.825 metric tons per megawatt-hour. The number of clean electricity credits issued under paragraph
(1)shall be equal to the product of— the number of megawatt-hours of electric energy sold from the electricity generator; and 1.0 minus the quotient obtained by dividing— the annual carbon intensity of the generator, as determined in accordance with paragraph (3), expressed in metric tons per megawatt-hour; by 0.82. With respect to paragraph (2)(B)(i), the Secretary shall determine, in consultation with the Administrator of the Environmental Protection Agency, the annual carbon intensity of each generator by dividing— the net annual carbon dioxide emissions of the generator; by the annual quantity of electric energy generated and sold by the generator. If the Secretary approves use of a dynamic crediting methodology or methodologies under section 612(c), the Secretary shall implement such methodology or methodologies in lieu of the crediting methodology established under subsection (d)(2) as a means of issuing clean electricity credits. Subject to paragraph (2), a retail electric supplier that fails to meet the requirements to submit clean electricity credits or make alternative compliance payments as required by subsection
(b)shall be subject to a civil penalty in an amount equal to the product obtained of— the number of megawatt-hours of electric energy sold by the retail electric supplier to electric consumers in violation of subsection (b); and 200 percent of the value of the applicable alternative compliance payment as determined under subsection (h). The Secretary shall assess a civil penalty under this subsection in accordance with the procedures for assessing a penalty against a person under section 333(d) of the Energy Policy and Conservation Act ( 42 U.S.C. 6303(d) ). Nothing in this section affects the authority of a State, or a political subdivision of a State, to adopt or enforce any law relating to— clean electricity or renewable energy; carbon dioxide emissions; or the regulation of a retail electric supplier. The alternative compliance payment for the first year of the first compliance period shall be $30 per megawatt hour. For each year after the first year of the first compliance period, the Secretary shall increase the amount of the alternative compliance payment from the amount for the prior year by 5 percent. The Secretary may make an additional annual adjustment to account for inflation, as the Secretary may determine necessary. Not later than 1 year after the date of enactment of this section, the Secretary shall promulgate regulations to implement this section. In this section: The term compliance period means the 3-year period starting on the program effective date and each 3-year period thereafter until 2050. The term program trigger date means January 1 of the first calendar year after the Secretary issues the certification under section 610(c). The term program effective date means the earlier of— January 1 of the first calendar year that starts two years after the program trigger date; or January 1 of the first calendar year that is more than 10 years after the date of enactment of this section. Not later than 2 years after the date of enactment of this section, the Secretary, in consultation with the Administrator of the Environmental Protection Agency, shall identify methodologies for calculating the carbon dioxide emissions from electricity generating resources that are avoided or displaced by increasing the generation from generating facilities eligible to receive clean electricity credits under section 611(d). In carrying out this subsection, the Secretary shall— identify methodologies that estimate in an accurate manner the net carbon dioxide emissions avoided or displaced due to the electricity generated by each specific generating facility in each generation dispatch interval; and identify such a methodology or methodologies, as appropriate for generation resources located within the region served by a regional transmission organization or independent system operator, as defined in section 3 of the Federal Power Act ( 16 U.S.C. 796 ), and for generation resources operating outside such regions. The Secretary shall share the identified dynamic crediting methodologies with the Commission. Not later than 120 days after its receipt of the dynamic crediting methodologies from the Secretary, the Commission shall hold a technical conference in partnership with State electric utility regulators to evaluate the dynamic crediting methodologies, including evaluation of alternatives. Not later than 180 days after the technical conference held pursuant to paragraph (2), and after providing an opportunity for public comment, the Commission shall provide a report to the Secretary on the technical conference and any Commission recommendations or evaluation concerning dynamic crediting methodologies. No later than 180 days following receipt of the report provided pursuant to subsection (b)(3), the Secretary, in consultation with the Administrator of the Environmental Protection Agency, shall approve use of one or more identified dynamic crediting methodologies to issue clean electricity credits if the Secretary determines that such use would— significantly enhance confidence that a clean electricity standard would achieve the carbon dioxide emission reduction targets set forth in section 611(a)(2); or significantly reduce the costs of achieving such targets. If the Secretary approves one or more identified dynamic crediting methodologies under subsection (c), the Secretary shall implement the approved methodology to determine the number of clean electricity credits to be issued to an electricity generator in lieu of the methodology provided in 611(d)(2). The Secretary shall apply a dynamic crediting factor approved under subsection
(c)for the first full calendar year after such approval, or for the first year of the first compliance period, whichever is later, except that the Secretary may delay use of approved dynamic crediting methodologies by one year if the Secretary finds that additional time is needed for the Secretary or the Commission to take actions necessary for implementation under subsection (e). The Secretary may, by rule, require that the regional transmission organizations, independent system operators, other balancing authorities, and other appropriate entities provide the Secretary with the information necessary for the Secretary to apply any approved dynamic crediting methodology. At the request of the Secretary, or upon its own initiative, the Commission shall consider whether changes to tariffs on file under section 205 of the Federal Power Act ( 16 U.S.C. 824d ) are necessary to implement the requirements of any rule promulgated by the Secretary under paragraph (1). .
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