H. R. 1774
IN THE HOUSE OF REPRESENTATIVES
March 30, 2009
Mr. McNerney introduced the following bill; which was referred to the Committee on Energy and Commerce
To incorporate smart grid capability into the Energy Star Program, to reduce peak electric demand, to reauthorize energy efficiency public information program to include Smart Grid information, and for other purposes.
This Act may be cited as the
Smart Grid Advancement
For purposes of this Act, the terms:
Secretary means the
Secretary of Energy.
means the Administrator of the Environmental Protection Agency.
means Federal Energy Regulatory Commission.
Smart grid has the meaning
provided by section 1301 of the Energy Independence and Security Act of 2007
(15 U.S.C. 17381).
reduction means the reduction in annual peak demand as compared to a
previous baseline year or period, expressed in Megawatts (MW).
demand shall mean the highest point of electricity demand during any
hour on the system of a load serving entity during a annual calendar year,
expressed in megawatts, or more than one such high point of electricity demand
as a function of seasonal demand changes.
period shall mean the time period on the system of a load serving
entity relative to peak demand that may warrant special measures or electricity
resources to maintain system reliability while meeting peak demand.
serving entity means an entity that provides electricity directly to
retail consumers with the responsibility to assure power quality and
reliability, including such entities that are investor-owned, publicly owned,
owned by rural electric cooperatives, or other entities.
baseline shall mean the average of the highest three annual peak
demands a load serving entity has experienced during the 5 years immediately
prior to the date of enactment of this Act.
reduction plan means a plan developed by or for a load serving entity
that it will implement to meet its peak demand management goals.
Incorporation of smart grid capability in Energy Star Program
Within one year after the date of enactment of this Act, the Secretary and the Administrator shall each assess the potential for cost-effective integration of Smart Grid technologies and capabilities in all products that are reviewed by the Department of Energy and the Environmental Protection Agency, respectively, for potential designation as Energy Star products.
Within 2 years after the date of enactment of this Act, the Secretary and the Administrator shall each prepare an analysis of the potential energy savings and electricity cost savings that could accrue for each of the products referred to in subsection (a) in the following optimal circumstances:
The products possessed full Smart Grid capability.
The products were utilized in an electricity utility service area which had Smart Grid capability and time-of-use electric rates.
The time-of-use rates reflected national average utility rates including average peak and valley daily electricity costs to the utility.
Consumers using such products took full advantage of such capability.
The analysis under paragraph (1) shall be
best case Smart Grid analysis. On the basis of
such an analysis for each product, the Secretary and the Administrator shall
determine whether the installation of Smart Grid capability for such a product
would be cost effective. For purposes of this paragraph, the term
effective means that the cumulative savings from using the product
best case Smart Grid circumstances for a period of 5
years will be greater than the incremental cost of the Smart Grid features
included in the product.
To the extent that including Smart Grid capability in any products analyzed under paragraph (2) yielded a finding that doing so was cost effective in the best case, the Secretary and the Administrator shall, not later than 3 years after the date of enactment of this Act take each of the following actions:
Inform the manufacturer of such product of such finding.
Make special note in a prominent manner on any Energy Star label for any product actually including Smart Grid capability that—
Smart Grid capability is a feature of that product;
the use and value of those features depended on the Smart Grid capability of the utility system in which the product was installed and the use of those features by the customer; and
on a utility system with Smart Grid capability, the use of the product’s Smart Grid capability could potentially reduce the cost of the product’s annual operation by an estimated dollar amount representing the result of incremental energy and electricity cost savings that would result from the Smart Grid best case for that product.
Submit a report to Congress summarizing the results of the analyses for each class of products, and presenting the potential national energy and electricity cost savings that could be realized if cost-effective Smart Grid capability were installed in the relevant products reviewed by the Energy Star program.
Smart Grid Peak Demand Reduction Goals
Not later than one year after the date of enactment of this Act, load serving entities, or States, shall determine and publish peak demand reduction goals for any load serving entities that have an applicable baseline in excess of 250 megawatts.
The Commission, in consultation with the Secretary, shall develop and publish, after an opportunity for public comment, a methodology to provide for adjustments or normalization to a load serving entity’s applicable baseline over time to reflect changes in the number of customers served, weather conditions, general economic conditions, and any other appropriate factors external to peak load management, as determined by the Commission.
The Commission shall support load serving entities in determining their applicable baselines, and in developing their peak demand reduction goals, including any load serving entity with an applicable baseline of less than 250 megawatts that volunteers to participate in achieving the purposes of this Act.
The Secretary, in consultation with the Commission and the National Electric Reliability Corporation, shall develop a system and rules for measurement and verification of demand reductions.
Peak demand reduction goals
Peak demand reduction goals may be established for an individual load serving entity, or, at the determination of a State or regional entity, by that State or regional entity for a larger region that shares a common system peak demand and for which peak demand reduction measures would offer regional benefit.
A State or regional entity establishing peak demand reduction goals shall cooperate, as necessary and appropriate, with the Commission, the Secretary, State regulatory commissions, State energy offices, the National Electric Reliability Corporation, and other relevant authorities.
In determining the applicable peak demand reduction goals, States and other jurisdictional entities may utilize the results of the 2009 National Demand Response Potential Assessment, as authorized by section 529 of the Energy Independence and Security Act of 2007.
The applicable peak demand reduction goals shall provide that—
load serving entities will reduce or mitigate peak demand by a minimum percentage amount from the applicable baseline to a lower peak demand during calendar year 2012;
load serving entities will reduce or mitigate peak demand by a minimum percentage greater amount from the applicable baseline to a lower peak demand during calendar year 2015; and
the minimum percentage reductions selected are the percentage reductions that are realistically achievable with an aggressive effort to deploy smart grid and peak demand reduction technologies and methods, including but not limited to those listed in subsection (d).
Each load serving entity shall prepare a peak load reduction plan that demonstrates its ability to meet each applicable goal by any or a combination of the following options:
Direct reduction in megawatts of peak demand through energy efficiency measures with reliable and continued application during peak demand periods.
Demonstration that an amount of megawatts equal to a stated portion of the applicable goal is contractually committed to be available for peak reduction through one or more of the following:
Megawatts enrolled in demand response programs.
to the ability of a load serving entity to call on demand response programs,
smart appliances, smart electricity storage devices, distributed generation
resources on the entity’s customers’ premises, or other measures directly
capable of actively, controllably, reliably, and dynamically reducing peak
dynamic peak management control).
Megawatts available from distributed dynamic electricity storage under agreement with the owner of that storage.
Megawatts committed from dispatchable distributed generation demonstrated to be reliable under peak period conditions.
Megawatts available from smart appliances and equipment with smart grid capability available for direct control by the utility through agreement with the customer owning the appliances or equipment.
Megawatts from a demonstrated and assured minimum of distributed solar electric generation capacity in instances where peak period and peak load conditions are directly related to solar radiation and accompanying heat.
If any of the methods listed in subparagraph (C), (D), or (E) of paragraph (2) are relied upon to meet its peak demand reduction goals, the load serving entity must demonstrate this capability by operating a test during the applicable calendar year.
Nothing in this Act shall require the publication in peak demand reduction goals or in any peak demand reduction plan of any information that is confidential for competitive or other reasons or that identifies individual customers.
Existing authority and requirements
Nothing in this Act diminishes or supersedes any authority of a State or political subdivision of a State to adopt or enforce any law or regulation respecting peak load management, demand response, distributed storage, use of distributed generation, or the regulation of load serving entities. The Commission, in consultation with States having such peak management, demand response and distributed storage programs, shall to the maximum extent practicable, facilitate coordination between the Federal program and such State programs.
The Commission may, for good cause, grant relief to load serving entities from the requirements of this section.
Except as provided in subsections (e) and (f), no law or regulation shall relieve any person of any requirement otherwise applicable under this section.
The Commission shall within one year after the enactment of this Act establish a public domain website where the Commission will provide information and data demonstrating compliance by States, regional entities, and load serving entities with this Act, including the success of load serving entities in meeting applicable peak demand reduction goals.
The Commission shall, by April 1 of each year beginning in 2012, provide a report to Congress on compliance with this Act and success in meeting applicable peak demand reduction goals and, as appropriate, shall make recommendations as to how to increase peak demand reduction efforts.
The Commission shall note in each such report any State, political subdivision of a State, or load serving entity that has failed to comply with this Act, or is not a part of any region or group of load serving entities serving a region that has complied with this Act.
The Commission shall have and exercise the authority to take reasonable steps to modify the process of establishing peak demand reduction goals and to accept adjustments to them as appropriate when sought by load serving entities.
Assistance and funding
The Secretary may make grants to States and to other entities with responsibilities to be carried out under the Act to offset any documented costs of carrying out such responsibilities to the extent such costs are deemed burdensome or extraordinary by the Secretary.
There are authorized to be appropriated sums as may be necessary to the Commission, the Secretary, and the Administrator to carry out the provisions of this Act.
Reauthorization of energy efficiency public information program to include Smart Grid information
Section 134 of the Energy Policy Act of 2005 (42 U.S.C. 15832) is amended as follows:
By amending the
title heading to read
Efficiency and Smart Grid Public Information
(a)(1) by striking
reduce energy consumption during the 4-year period
beginning on the date of enactment of this Act and inserting
increase energy efficiency and to adopt Smart Grid technology and
(a)(2) by striking
benefits to consumers of reducing and
economic and environmental benefits to consumers and the
United States of optimizing.
(a)(3) by inserting at the beginning of that subsection
the effect of
energy efficiency and Smart Grid capability in reducing energy and electricity
prices throughout the economy, together with.
(a)(4) by redesignating subparagraph (D) as (E), by striking
at the end of subparagraph (C), and by inserting after subparagraph (C) the
purchasing and utilizing equipment that includes smart grid features and capability; and
In subsection (c),
Not later than July 1, 2009,” and inserting, “For each year
when appropriations pursuant to the authorization in this section exceed
In subsection (d)
2010 and inserting
In subsection (e)
2010 and inserting
Inclusion of Smart Grid Features in Appliance Rebate Program
Section 124 of the Energy Policy Act of 2005 (42 U.S.C. 15821) is amended as follows:
By amending the
section heading to read
Energy efficient and smart appliance rebate
By redesignating paragraphs (4) and (5) as (5) and (6) and inserting after paragraph (3) the following:
smart appliance means a product that the Administrator of the
Environmental Protection Agency or the secretary of Energy has determined
qualifies for such a designation in the Energy Star program pursuant to section
213 of the Smart Grid Advancement Act or that the Secretary or the
Administrator has separately determined includes the relevant Smart Grid
capabilities listed in section 1301 of the Energy Independence and Security Act
of 2007 (15 U.S.C.
(b)(1) by inserting
and smart after
by inserting after
products the first place it appears
including products designated as being smart appliances,.
(b)(3), by inserting
the administration of after
In subsection (d),
the administration of after
out and by inserting
, and up to 100 percent of the value of the
rebates provided pursuant to this section before the period at the
(e)(3), by inserting
with separate consideration as applicable if the
product is also a smart appliance, after
product the first place it appears and by inserting
appliance before the period at the end.
In subsection (f),
$50,000,000 through the period at the end and
such sums as may be necessary for each fiscal year from 2010
Table of contents
The item relating to section 124 in the table of contents for the Energy Policy Act of 2005 (42 U.S.C. 15801 and following) is amended to read as follows:
Sec. 124. Energy efficient and smart appliance rebate program.