This document provides a section-by-section analysis of the Renewable Energy Promotion Act of 2010, as introduced by Senators Bingaman, Brownback, Dorgan and Collins on September 21, 2010.
Sec. 1. Short title
This section names the short title of this bill as the Renewable Energy Promotion Act of 2010.
Sec. 2. Federal renewable electricity standard.
This section adds a new section at the end of Title IV  of the Public Utility Regulatory Policies Act of 1978:
“Sec. 610. Federal Renewable Electricity Standard.
This section creates a federal renewable electricity standard through regulations promulgated within 1 year of enactment. Renewable energy includes energy from solar, wind, geothermal, ocean, biomass, landfill gas, qualified incremental hydropower, marine and hydrokinetic, incremental geothermal, coal-mined methane, or qualified waste-to-energy sources or other innovative sources as determined through rulemaking.
Each electric utility that sells to consumers for a purpose other than resale will be required to obtain a minimum percentage of the base quantity of electricity the utility sells to consumers in any calendar year from renewable energy or energy efficiency, as specified below:
2012 through 2013: 3%
2014 through 2016: 6%
2017 through 2018: 9%
2019 through 2020: 12%
2021 through 2039: 15%
For the purposes of this standard the base quantity of electricity does not include electricity from hydropower (excluding qualified hydro), incineration of municipal solid waste, fossil fuels using carbon capture and storage (CCS) technology, new nuclear facilities or additional generation from existing nuclear facilities due to efficiency upgrades or capacity additions.
To comply with the standard, utilities are required to submit renewable energy credits to the Secretary, submit energy efficiency credits for up to 26.67 percent of the requirements of any calendar year, or make an alternative compliance payment of 2.1 cents/kWh (inflation-adjusted), or some combination of those three to ensure compliance. Renewable energy and energy efficiency credits will be tradable and may be banked for up to 3 years. Renewable energy credits issued by the federal government will be issued regardless of whether the energy is transmitted over the grid, only for electricity generated from renewable sources, to entities covered by state renewable electricity standards, so that a kilowatt hour credit is used only once for purposes of this Act, so that double credits are issued for generation on Indian land, so that triple credits are issued for small renewable distributed generators and generation of energy from algae, so that purchasers in a purchase agreement are issued the credit associated with the generation of renewable energy under contract, and so that credits for renewable energy from biomass are scaled to the efficiency of energy generation.
The Secretary may delegate to an appropriate market-making entity the creation and administration of a transparent, national credit market. Regional entities may also be delegated the tracking of dispatch of renewable generation.
Civil penalties are issued for failure to meet the requirements of this section in the amount of the product of the number of kilowatt-hours sold to consumers in violation of requirements of the standard and 200 percent of the value of the alternative compliance payment. This amount may be waived if compliance failure is determined to be out of reasonable control of the utility, and any payments made in penalty to a state for failure to comply with a state renewable electricity standard may be deducted from the penalty.
The Secretary may waive the requirements of this section for up to 5 years due to natural disasters. A utility may also petition the Secretary for a waiver for the following compliance year in order to limit the rate impact of the incremental cost of compliance to consumers to 4 percent. A state public utility commission or utility may request a variance for one or more years on the basis of transmission constraints preventing delivery of service.
Seventy-five percent of any alternative compliance payments are made directly to the state in which the utility is located and are expendable by the Governor for: increasing the quantity of renewable energy sources in the state; increasing nuclear and advanced coal technologies; promoting the development, deployment, and use of electric vehicles; and offsetting the costs of this section to consumers.
This section does not apply to utilities that sold less than 4 million megawatt-hours to consumers during the preceding calendar year (sales to affiliates, lessees, and tenants are not treated as sales to consumers) or in Hawaii.
Starting by January 15, 2017 and every five years thereafter, the Secretary will review and make recommendations in a report to Congress about the program established in this section. Specifically, the review will look at whether: the program has contributed to an economically harmful increase in electricity rates in geographical regions; the program has created economic benefits for the country; and new technologies and energy sources will advance the purposes of this section. Recommendations will be made on whether the percentage of credits for submission should be changed and whether the definition of “renewable energy” should be expanded.
Sec. 3. Federal purchase requirement amendments.
This section amends the federal purchase requirements of Sec. 203 of the Energy Policy Act of 2005. Certain definitions are added and the definition of biomass is expanded to include residues and byproducts from milled logs, wood and paper products that are not commonly recyclable, hazard trees removed to clear rights-of-way, brush cleared from the vicinity of buildings in wildfire-prone areas, controlled invasive species, animal waste and byproducts, food waste, algae, vegetation harvested from non-Federal or Indian land under certain conditions, crops from non-Federal land or Indian land under certain conditions, and nonhazardous materials sustainably harvested from Federal land in accordance with applicable law. The Secretaries of the Interior and Agriculture, with the Administrator of the EPA, will conduct a study with recommendation on the effects of harvesting biomass for energy.