[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 3626 Introduced in Senate (IS)]
111th CONGRESS
2d Session
S. 3626
To encourage the implementation of thermal energy infrastructure, and
for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
July 21, 2010
Mr. Franken (for himself and Mr. Bond) introduced the following bill;
which was read twice and referred to the Committee on Finance
_______________________________________________________________________
A BILL
To encourage the implementation of thermal energy infrastructure, and
for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Thermal Renewable
Energy and Efficiency Act of 2010''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Purpose.
Sec. 4. Statement of policy.
TITLE I--MODIFICATION OF CREDIT FOR ELECTRICITY PRODUCED FROM CERTAIN
RENEWABLE SOURCES
Sec. 101. Extension of renewable electricity credit to thermal energy.
TITLE II--EXEMPT FACILITY BONDS
Sec. 201. Exempt facility bonds.
TITLE III--ENERGY SUSTAINABILITY AND EFFICIENCY GRANTS FOR INSTITUTIONS
Sec. 301. Definition of institutional entity.
Sec. 302. Availability of grants.
Sec. 303. Authorization of appropriations for grants.
SEC. 2. FINDINGS.
Congress finds that--
(1) approximately 30 percent of the total quantity of
energy consumed in the United States is used to provide thermal
energy for heating and cooling building space, domestic hot
water, and industrial processes;
(2) thermal energy is an essential, but often overlooked,
segment of the national energy mix;
(3) district energy systems use 1 or more central plants to
provide thermal energy to multiple buildings that range in size
from campus applications to systems heating entire towns or
cities;
(4) district energy systems provide sustainable thermal
energy infrastructure by producing and distributing thermal
energy from combined heat power, sources of industrial or
municipal surplus heat, and from renewable sources such as
biomass, geothermal, and solar energy;
(5) as of 2009, the United States had approximately 2,500
operating district energy systems;
(6) district energy systems provide advantages that support
secure, affordable, renewable, and sustainable energy for the
United States, including--
(A) use of local fuels or waste heat sources that
keep jobs and energy dollars in local economies;
(B) stable, predictable energy costs for businesses
and industry;
(C) reduction in reliance on fossil fuels;
(D) reduction in emissions of greenhouse gases; and
(E) flexibility to modify fuel sources in response
to future changes in fuel availability and prices and
development of new technologies;
(7) district energy helps cut peak power demand and reduce
power transmission and distribution system constraints by--
(A) meeting air conditioning demand through
delivery of chilled water produced with heat from
combined heat and power or other energy sources; and
(B) shifting power demand through thermal storage
and, with combined heat and power, generating power
near load centers;
(8) combined heat and power systems increase energy
efficiency of power plants by capturing thermal energy and
using the thermal energy to provide heating and cooling, more
than doubling the efficiency of conventional power plants;
(9) according to the Oak Ridge National Laboratory, if the
United States was able to increase combined heat and power from
approximately 9 percent of total electric generation capacity
to 20 percent by 2030, the increase would--
(A) save as much energy as half of all household
energy consumption;
(B) create approximately 1,000,000 new jobs;
(C) avoid more than 800,000,000 metric tons of
carbon dioxide emissions annually, which is equivalent
to taking half of all United States passenger vehicles
off the road; and
(D) save hundreds of millions of barrels of oil
equivalent; and
(10) constraints to significant expansion of district
energy and combined heat and power include--
(A) the lack of economic value in the energy
marketplace for the environmental, grid support, energy
security, and local economic development benefits of
district energy systems;
(B) relatively high project development costs due
to the variety of institutional, legal, and technical
issues that must be addressed; and
(C) the high costs of debt service, particularly in
the early years of systems development before a broad
base of customers has connected.
SEC. 3. PURPOSE.
The purpose of this Act is to encourage the implementation of
thermal energy infrastructure order to--
(1) increase energy efficiency;
(2) increase use of renewable energy resources;
(3) revitalize the infrastructure of the cities and
institutions of the United States;
(4) reduce local and regional air pollution;
(5) reduce emissions of greenhouse gases;
(6) reduce emissions of ozone-depleting refrigerants; and
(7) enhance power grid reliability and overall energy
supply reliability and energy security.
SEC. 4. STATEMENT OF POLICY.
It is the policy of the United States that, in energy policy
development and program implementation, the following factors should be
considered:
(1) Thermal energy represents a significant part of the
energy requirements of the United States, providing building
heating and cooling, domestic hot water, and industrial process
energy.
(2) There are many opportunities for meeting thermal energy
requirements directly through renewable energy sources or
recycled energy (such as recovered waste heat), without
generation of electricity.
(3) Policies and incentives for encouraging renewable
energy and energy efficiency should address thermal energy as
well as electricity.
(4) District energy systems provide an important means of
delivering sustainable thermal energy to consumers, and provide
energy security benefits, by--
(A) cutting peak power demand;
(B) reducing power transmission and distribution
system constraints; and
(C) providing flexibility to modify fuel sources in
response to future changes in fuel availabilities and
prices and development of new technologies.
TITLE I--MODIFICATION OF CREDIT FOR ELECTRICITY PRODUCED FROM CERTAIN
RENEWABLE SOURCES
SEC. 101. EXTENSION OF RENEWABLE ELECTRICITY CREDIT TO THERMAL ENERGY.
(a) Credit To Include Production of Thermal Energy.--Section 45 of
the Internal Revenue Code of 1986 is amended by adding at the end the
following new subsection:
``(f) Credit for Production of Thermal Energy.--
``(1) In general.--In the case of a taxpayer who--
``(A) produces thermal energy from a qualified
energy resource described in subparagraph (B), (C),
(D), (G), (I), or (J) of subsection (c)(1) at a
qualified facility described in paragraph (2), (3),
(4), (6), (7), (11), or (12) of subsection (d), and
``(B) makes an election under this subsection with
respect to such facility,
subsection (a) shall be applied by substituting `each 3,412
Btus of thermal energy (or fraction thereof)' for `the kilowatt
hours of electricity' in paragraph (2) thereof.
``(2) Thermal energy.--For purposes of this section, the
term `thermal energy' means heat (in the form of hot water or
steam) or cooling (in the form of chilled water or ice).
``(3) Additional qualifications.--
``(A) Combined heat and power facility.--In the
case of a facility producing both electricity and
thermal energy, such facility shall not be treated as a
qualified facility unless such facility--
``(i) meets the requirements of section
48(c)(3)(A) (without regard to clause (iv)
thereof), and
``(ii) was originally placed in service
after the date of the enactment of the Thermal
Renewable Energy and Efficiency Act of 2010,
and before the date which is 5 years after such
date.
``(B) Thermal facility.--In the case of a facility
producing only thermal energy, such facility shall not
be treated as a qualified facility unless such
facility--
``(i) has an energy efficiency percentage
(as determined under section 48(c)(3)(C)) in
excess of 60 percent, and
``(ii) was originally placed in service
after the date of the enactment of the Thermal
Renewable Energy and Efficiency Act of 2010,
and before the date which is 5 years after such
date.
``(4) Denial of double benefit.--If an election under this
subsection is in effect with respect to any facility, no credit
shall be allowed under subsection (a) with respect to the
production of electricity at such facility.
``(5) Election.--
``(A) In general.--An election under this
subsection shall specify the facility to which the
election applies and shall be in such manner as the
Secretary may by regulations prescribe.
``(B) Election irrevocable.--Any election made
under this subsection may not be revoked except with
the consent of the Secretary.''.
(b) Naturally Occurring Cold Water Sources Treated as Qualified
Energy Resource.--Paragraph (1) of section 45(c) of the Internal
Revenue Code of 1986 is amended--
(1) by striking ``and'' at the end of subparagraph (H),
(2) by striking the period at the end of subparagraph (I)
and inserting ``, and'', and
(3) by adding at the end the following new subparagraph:
``(J) naturally occurring cold water sources which
are used to provide thermal energy for air
conditioning.''.
(c) Qualified Facilities.--Section 45(d) of the Internal Revenue
Code of 1986 is amended by adding at the end the following new
paragraph:
``(12) Natural air conditioning system facility.--In the
case of a facility providing thermal energy for air
conditioning from naturally occurring cold water sources, the
term `qualified facility' means any facility owned by the
taxpayer which is originally placed in service after the date
of the enactment of the Thermal Renewable Energy and Efficiency
Act of 2010, and before the date which is 5 years after such
date.''.
(d) Conforming Amendments.--
(1) Section 45(b)(4)(A) of the Internal Revenue Code of
1986 is amended by inserting ``or thermal energy'' after
``electricity''.
(2) Section 45(c)(2) of such Code is amended by inserting
``or thermal energy'' after ``electricity''.
(3) Section 45(d) of such Code is amended by inserting ``or
thermal energy'' after ``electricity'' each place it appears in
paragraphs (2), (3), (4), (6), (7), and (11).
(4) Section 45(e) of such Code is amended by inserting ``or
thermal energy'' after ``electricity'' each place it appears in
paragraphs (1), (4), and (9).
(5) The heading of section 45 of such Code is amended by
inserting ``and thermal energy'' after ``electricity''.
(6) The item relating to section 45 in the table of
sections for subpart D of part IV of subchapter A of chapter 1
of such Code is amended by inserting ``and thermal energy''
after ``Electricity''.
(e) Effective Date.--The amendments made by this section shall
apply to energy produced and sold after the date of the enactment of
this Act.
TITLE II--EXEMPT FACILITY BONDS
SEC. 201. EXEMPT FACILITY BONDS.
(a) Definition of Local District Heating and Cooling Facilities.--
Subparagraph (A) of section 142(g)(2) of the Internal Revenue Code of
1986 is amended by striking ``a pipeline or network (which may be
connected to a heating or cooling source) providing hot water, chilled
water, or steam'' and inserting ``equipment for producing thermal
energy in the form of hot water, chilled water or steam, distributing
that thermal energy in pipelines and transferring the thermal energy''.
(b) Public Use Requirement.--The Secretary shall promulgate
regulations establishing that a local district heating or cooling
facility will be treated in all events as serving a general public use
for purposes of the Internal Revenue Code of 1986.
TITLE III--ENERGY SUSTAINABILITY AND EFFICIENCY GRANTS FOR INSTITUTIONS
SEC. 301. DEFINITION OF INSTITUTIONAL ENTITY.
Section 399A(a)(5) of the Energy Policy and Conservation Act (42
U.S.C. 6371h-1(a)(5)) is amended by inserting a ``not-for-profit
district energy system,'' after ``utility,''.
SEC. 302. AVAILABILITY OF GRANTS.
Section 399A(f) of the Energy Policy and Conservation Act (42
U.S.C. 6371h-1(f)) is amended--
(1) in paragraph (2)--
(A) in subparagraph (A)(i), by striking ``$50,000''
and inserting ``$90,000'';
(B) in subparagraph (B)(i), by striking ``$90,000''
and inserting ``$150,000''; and
(C) in subparagraph (C)(i), by striking
``$250,000'' and inserting ``$600,000''; and
(2) in paragraph (3)--
(A) in subparagraph (A), by striking ``$1,000,000''
and inserting ``$20,000,000''; and
(B) in subparagraph (B), by striking ``60 percent''
and inserting ``30 percent''.
SEC. 303. AUTHORIZATION OF APPROPRIATIONS FOR GRANTS.
Section 399A(i)(1) of the Energy Policy and Conservation Act (42
U.S.C. 6371h-1(i)(1)) is amended by striking ``$250,000,000 for each of
fiscal years 2009 through 2013'' and inserting ``$500,000,000 for each
of fiscal years 2011 through 2015''.
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