Sec. 40104. UTILITY DEMAND RESPONSE

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## SEC. 40104 UTILITY DEMAND RESPONSE ###

(a)Consideration of Demand-Response Standard ####

(1)In general Section 111(d) of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) is amended by adding at the end the following: > > #### “(20) Demand-response practices > > > ##### “(A) In general > > Each electric utility shall promote the use of demand-response and demand flexibility practices by commercial, residential, and industrial consumers to reduce electricity consumption during periods of unusually high demand. > > > ##### “(B) Rate recovery > > > ###### “(i) In general > > Each State regulatory authority shall consider establishing rate mechanisms allowing an electric utility with respect to which the State regulatory authority has ratemaking authority to timely recover the costs of promoting demand-response and demand flexibility practices in accordance with subparagraph (A). > > > ###### “(ii) Nonregulated electric utilities > > A nonregulated electric utility may establish rate mechanisms for the timely recovery of the costs of promoting demand-response and demand flexibility practices in accordance with subparagraph (A).” > . ####

(2)Compliance #####

(A)Time limitations Section 112(b) of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622(b)) is amended by adding at the end the following: > > #### “(7) > > > #####

(A)> > Not later than 1 year after the date of enactment of this paragraph, each State regulatory authority (with respect to each electric utility for which the State has ratemaking authority) and each nonregulated electric utility shall commence consideration under section 111, or set a hearing date for consideration, with respect to the standard established by paragraph

(20)of section 111(d). > > > ##### “(B) > > Not later than 2 years after the date of enactment of this paragraph, each State regulatory authority (with respect to each electric utility for which the State has ratemaking authority), and each nonregulated electric utility shall complete the consideration and make the determination under section 111 with respect to the standard established by paragraph

(20)of section 111(d).” > . #####

(B)Failure to comply ######

(i)In general Section 112(c) of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622(c)) is amended— ######

(I)by striking “such paragraph (14)” and all that follows through “paragraphs (16)” and inserting “such paragraph (14). In the case of the standard established by paragraph

(15)of section 111(d), the reference contained in this subsection to the date of enactment of this Act shall be deemed to be a reference to the date of enactment of that paragraph (15). In the case of the standards established by paragraphs (16)”; and ######

(II)by adding at the end the following: “In the case of the standard established by paragraph

(20)of section 111(d), the reference contained in this subsection to the date of enactment of this Act shall be deemed to be a reference to the date of enactment of that paragraph (20).”. ######

(ii)Technical correction **[**[16 U.S.C. 2622](/us/usc/t16/s2622)**]** Paragraph

(2)of section 1254(b) of the Energy Policy Act of 2005 (Public Law 109-58; 119 Stat. 971) is repealed and the amendment made by that paragraph (as in effect on the day before the date of enactment of this Act) is void, and section 112(d) of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622(d)) shall be in effect as if that amendment had not been enacted. #####

(C)Prior state actions ######

(i)In general Section 112 of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622) is amended by adding at the end the following: > > ### “(g) Prior State Actions > > Subsections

(b)and

(c)shall not apply to the standard established by paragraph

(20)of section 111(d) in the case of any electric utility in a State if, before the date of enactment of this subsection— > > > #### “(1) > > the State has implemented for the electric utility the standard (or a comparable standard); > > > #### “(2) > > the State regulatory authority for the State or the relevant nonregulated electric utility has conducted a proceeding to consider implementation of the standard (or a comparable standard) for the electric utility; or > > > #### “(3) > > the State legislature has voted on the implementation of the standard (or a comparable standard) for the electric utility.” > . ######

(ii)Cross-reference Section 124 of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2634) is amended— ######

(I)by striking “this subsection” each place it appears and inserting “this section”; and ######

(II)by adding at the end the following: “In the case of the standard established by paragraph

(20)of section 111(d), the reference contained in this section to the date of enactment of this Act shall be deemed to be a reference to the date of enactment of that paragraph (20).”. ###

(b)Optional Features of State Energy Conservation Plans Section 362(d) of the Energy Policy and Conservation Act (42 U.S.C. 6322(d)) is amended— ####

(1)in paragraph (16), by striking “and” at the end; ####

(2)by redesignating paragraph

(17)as paragraph (18); and ####

(3)by inserting after paragraph

(16)the following: > > #### “(17) > > programs that promote the installation and use of demand-response technology and demand-response practices; and” > . ###

(c)Federal Energy Management Program Section 543(i) of the National Energy Conservation Policy Act (42 U.S.C. 8253(i)) is amended— ####

(1)in paragraph (1)— #####

(A)in subparagraph (A), by striking “and” at the end; #####

(B)in subparagraph (B), by striking the period at the end and inserting “; and”; and #####

(C)by adding at the end the following: > > ##### “(C) > > to reduce energy consumption during periods of unusually high electricity or natural gas demand.” > ; and ####

(2)in paragraph (3)(A)— #####

(A)in clause (v), by striking “and” at the end; #####

(B)in clause (vi), by striking the period at the end and inserting “; and”; and #####

(C)by adding at the end the following: > > ###### “(vii) > > promote the installation of demand-response technology and the use of demand-response practices in Federal buildings.” > . ###

(d)Components of Zero-Net-Energy Commercial Buildings Initiative Section 422(d)(3) of the Energy Independence and Security Act of 2007 (42 U.S.C. 17082(d)) is amended by inserting “(including demand-response technologies, practices, and policies)” after “policies”.

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