[House Report 110-305]
[From the U.S. Government Publishing Office]
110th Congress Rept. 110-305
HOUSE OF REPRESENTATIVES
1st Session Part 1
======================================================================
SMART GRID FACILITATION ACT OF 2007
_______
August 3, 2007.--Ordered to be printed
_______
Mr. Dingell, from the Committee on Energy and Commerce, submitted the
following
R E P O R T
[To accompany H.R. 3237]
The Committee on Energy and Commerce, to whom was referred
the bill (H.R. 3237) to facilitate the transition to a smart
electricity grid, having considered the same, report favorably
thereon without amendment and recommend that the bill do pass.
CONTENTS
Page
Purpose and Summary.............................................. 1
Background and Need for Legislation.............................. 2
Hearings......................................................... 3
Subcommitte Consideration........................................ 4
Committee Consideration.......................................... 4
Committee Votes.................................................. 4
Committee Oversight Findings..................................... 4
Statement of General Performance Goals and Objectives............ 4
New Budget Authority, Entitlement Authority, and Tax Expenditures 5
Earmarks and Tax and Tariff Benefits............................. 5
Committee Cost Estimate.......................................... 5
Congressional Budget Office Estimate............................. 5
Federal Mandates Statement....................................... 5
Advisory Committee Statement..................................... 5
Constitutional Authority Statement............................... 5
Applicability to Legislative Branch.............................. 6
Section-by-Section Analysis of the Legislation................... 6
Changes in Existing Law Made by the Bill, as Reported............ 7
Purpose and Summary
The purpose of H.R. 3237 is to facilitate and provide
Federal leadership for the transition of the Nation's
electricity sector to a ``smart grid'' and to encourage demand-
response activities that support and improve the reliability of
the grid. H.R. 3237 creates a Federal office in the Department
of Energy (DOE) to serve as the focal point for Federal efforts
to facilitate this transition, creates a Federal program to
provide grants matching one-fourth of qualifying ``smart grid''
investments made by private sector participants, and requires
the States to consider adopting policies that will foster a
``smart grid.'' The bill contains provisions for review and
encouragement of demand-response potential, including requiring
Federal agencies to monitor and reduce their own peak demands
for power through demand response.
Background and Need
Although the electric industry supplies the critical energy
required for our highly-computerized society, the industry's
own operations are not highly computerized. Adoption of ``smart
grid'' technologies will provide new options to the various
participants in the electricity sector, permit remote and
automatic controls to be programmed to respond to contingencies
or opportunities, and make more detailed information concerning
supply, demand, economics, and grid conditions available on a
real-time basis.
H.R. 3237 is intended to facilitate a transition toward a
``smart grid'' that participants in the electricity sector
appear to agree would be beneficial and is likely inevitable.
There is general recognition that the older analog and manual
information and control systems on which the grid still relies
eventually will be replaced with digital controls and
information.
To date, however, this evolution has encountered
institutional, economic, and practical barriers that the
Federal Government can help reduce. At present, electric
utilities are slow to make expensive ``smart grid'' investments
unless their customers are prepared to benefit from them. At
the same time, consumers are slow to purchase ``smart grid''
capable equipment when the grid does not accommodate or reward
such investments. Prompting and accelerating such a transition,
while not directing it to predetermined results in technology
or in regulatory structure, will serve the national interest by
helping the United States achieve a more resilient, efficient,
and reliable electricity grid.
``Smart grid'' technologies can provide signals about
costs, availability, and the ability of given power plants to
provide ancillary services to the grid, and can record the
performance of these facilities in response to those signals.
``Smart'' sensors and monitors installed along the transmission
and distribution systems can provide instant and pinpoint
notice of a disruption or contingency that could threaten
system reliability or operations. ``Smart'' meters can provide
information about consumption at frequent intervals to
utilities, supporting time-of-use pricing that reflects varying
electricity value over time. Simultaneously, they can provide
system information to electricity consumers and their
equipment, to allow them to manage their own consumption in an
economically optimum manner. For example, information provided
through a smart grid can permit temporary suspension of
operations at the utility's request to assure continuity of
service to more critical uses or enable consumers to schedule
their operations when prices are lowest.
These technologies may use varying modes of communication--
such as wire-line, power-line, wireless, or internet. They may
be owned and operated by various participants--utilities,
customers, or third-parties. The technologies, however, should
eventually complement each other and operate in harmony across
the interconnected electricity system. H.R. 3237 establishes a
Federal policy and role in fostering a common set of national
standards or protocols to achieve such interoperability.
The legislation is intended to help create the conditions
for widespread innovation and creation of new value in the
electricity sector, similar to the experience of recent decades
in telecommunications, computer science, biotechnology, and
other sectors. The Committee expects that electricity consumers
and participants in the industry will all benefit from such
innovation, but recognizes that it is likely there will be
false starts, technological dead-ends, and competition among
optional technologies. The Federal Government, however, should
not try to direct or determine specific outcomes of this
evolution. Similarly, the bill does not affect decisions by
State regulators with respect to costs associated with smart
grid investments.
Demand response practices enable electricity consumers to
become more active participants in power markets. Such programs
provide incentives to consumers to curtail their own uses for
the benefit of the broader system economics and reliability. As
a major electricity consumer, the Federal Government itself has
an opportunity and an obligation to be aware of its own peak
power consumption and, wherever feasible, to reduce its peak
demand or offer demand response. H.R. 3237 is intended to
create better understanding of the potential for demand
response and to foster demand response practices on the grid.
Coupled with the ``smart grid'' technologies that will make
such programs easy to administer and will make their market
value more transparent, demand response practices will improve
the economics and operation of the electricity infrastructure
that, provides a vital basis for a modem economy and society.
Hearings
There was one oversight hearing and one legislative hearing
held by the Subcommittee on Energy and Air Quality, Committee
on Energy and Commerce, in connection to the bill reported by
the Committee.
The Subcommittee on Energy and Air Quality held a hearing
on ``Facilitating the Transition to a Smart Electric Grid: on
Thursday, May 3, 2007. The Subcommittee received testimony from
the following: Michael W. Howard, Ph.D., P.E., Senior Vice
President, Research and Development, Electric Power Research
Institute; Mr. Dean Kamen, President, DEKA Research and
Development; Mr. Dan Delurey, Executive Director, Demand
Response and Advanced Metering Coalition, Mr. Kurt Yeager,
Executive Director, Galvin Electricity Initiative; Mr. Brad
Gammons, Vice President, IBM Global Energy and Utilities
Industry; Ms. Audrey A. Zibelman, Chief Operating Officer, PJM
Interconnection; Mr. John Bryson, Chairman, CEO and President,
Edison International; Mr. Kevin Kolevar, Director, Office of
Energy Delivery and Electricity Reliability, U.S. Department of
Energy; The Honorable Jon Wellinghoff, Commissioner, Federal
Energy Regulatory Commission; The Honorable Robert F.
Lieberman, Commissioner, Illinois Commerce Commission.
The Subcommittee held a legislative hearing entitled
``Legislative Hearing on Discussion Drafts concerning Energy
Efficiency, Smart Electricity Grid, Energy Policy Act of 2005
Title XVII Loan Guarantees, and Standby Loans for Coal-to-
Liquids Projects.'' The Subcommittee received testimony from
the following: Mr. David Rogers, Deputy Assistant Secretary for
Energy Efficiency, U.S. Department of Energy; Ms. Kateri
Callahan, President, Alliance to Save Energy; Mr. Jay Birnbaum,
Vice President and General Counsel, Current Group, LLC.; Ms.
Katharine A. Fredriksen, Principal Deputy Assistant Secretary
for Policy and International Affairs, U.S. Department ofEnergy;
Mr. Don Maley, Vice President, Leucadia International Corporation;
Daniel A. Lashof, Ph.D., Science Director, Climate Center, Natural
Resources Defense Council.
Subcommittee Consideration
Prior to the introduction of H.R. 3237, its text was
considered in the Committee as a Committee Print.
On Wednesday, June 20, 2007, the Subcommittee on Energy and
Air Quality met in open markup session and considered a
Committee Print to facilitate the transition to a smart
electricity grid. The Committee Print was favorably forwarded
to the full Committee, without amendment, by a recorded vote of
16-10. The Committee Print forwarded by the Subcommittee was
subsequently designated Committee Print #2 for full Committee
consideration.
Committee Consideration
On Wednesday, June 27, 2007, the full Committee met in open
markup session and ordered the Committee Print favorably
reported to the House, amended, by a voice vote. On July 31,
2007, a clean bill, H.R. 3237, was introduced with the approved
language of the Committee Print, and was referred to the full
Committee to be reported to the House without further
consideration.
Committee Votes
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. Mr.
Dingell moved that the Committee report the Committee Print,
amended, favorably to the House. The motion to report the
Committee Print favorably to the House was agreed to by a voice
vote. There were no recorded votes on this legislation in the
full Committee.
Committee Oversight Findings
Regarding clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the oversight findings of the
Committee on the bill are reflected in this report.
Statement of General Performance Goals and Objectives
The goals and objectives of H.R. 3237 are to facilitate the
transition to a smart electricity grid, to establish a Grid
Modernization Commission that will assess both progress towards
a smart grid, to require development of protocols and standards
for information management, to establish a smart grid
investment grant program, to require state regulatory
authorities to consider ways to encourage Smart Grid
implementation and energy efficiency to assess and achieve
demand response potential, and to establish programs to reduce
Federal peak electricity demand.
New Budget Authority, Entitlement Authority, and Tax Expenditures
Regarding compliance with clause 3(c)(2) of rule XIII of
the Rules of the House of Representatives, the Committee finds
that H.R. 3237 would result in no new or increased budget
authority, entitlement authority, or tax expenditures or
revenues.
Earmarks and Tax and Tariff Benefits
Regarding compliance with clause 9 of rule XXI of the Rules
of the House of Representatives, H.R. 3237 does not contain any
congressional earmarks, limited tax benefits, or limited tariff
benefits as defined in clause 9(d), 9(e), or 9(f) of Rule XXI.
Committee Cost Estimate
The Committee will adopt as its own the cost estimate
prepared by the Director of the Congressional Budget Office
pursuant to section 402 of the Congressional Budget Act of
1974.
Congressional Budget Office Estimate
Regarding clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, a cost estimate on H.R. 3237 by the
Congressional Budget Office pursuant to section 402 of the
Congressional Budget Act of 1974 was not available as of the
time of the filing of this report by the committee.
Federal Mandates Statement
The Committe will adopt as its own the estimate of Federal
mandates prepared by the Director of the Congressional Budget
Office pursuant to section 423 of the Unfunded Mandates Reform
Act.
Advisory Committee Statement
Regarding section 5(b) of the Federal Advisory Committee
Act, the bill does not establish any committee that is subject
to such Act.
Constitutional Authority Statement
Pursuant to clause 3(d)(1) of rule XIII of the Rules of the
House of Representatives, the Committee finds that the
Constitutional authority for this legislation is provided in
Article I, section 8, clause 3, which grants Congress the power
to regulate commerce with foreign nations, among the several
States, and with the Indian tribes, and in the provisions of
Article I, section 8, clause 1, that relate to expending funds
to provide for the general welfare of the United States.
Applicability to Legislative Branch
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
Section-by-Section Analysis of the Legislation
SUBTITLE A: SMART GRID FACILITATION
Section 101. Statement of Policy in Support of
Modernization of Electricity Grid--Establishes Federal policy
to support implementation of Smart Grid technologies.
Section 102. Grid Modernization Commission--Establishes a
Grid Modernization Commission (Commission) to lead the Federal
effort to implement Smart Grid technologies and to work with
States and utilities.
Section 103. Grid Assessment and Report--Instructs the
Commission to study barriers to compatible Smart Grid
technology implementation and to recommend means to assure
development of consistent national protocols and model
standards for Smart Grid technologies.
Section 104. Federal Matching Fund for Smart Grid
Investment Costs--Creates Federal matching grant program to
reimburse one-fourth of the costs of implementation of Smart
Grid technologies where consumers, utilities, States or other
participants contribute three-quarters of the costs.
Section 105. Smart Grid Technology Deployment Program--
Instructs DOE to develop programs to assist deployment of Smart
Grid technologies and to perform cooperative demonstration
projects with as many as five electric utilities.
Section 106. Smart Grid Information Requirements--Instructs
the Commission to work with States, utilities, and others to
determine the information required by consumers to utilize
Smart Grid technologies.
Section 107. State Consideration of Incentives for Smart
Grid--Amends the Public Utility Regulatory Policies Act of 1978
(PURPA) to require States to consider regulatory standards that
would (1) allow utilities to include Smart Grid investments in
rates; (2) ``decouple'' utility profits from the volume of
electricity throughput to consumers; and (3) require utilities
to make time-sensitive supply, cost, price, and other
information available to consumers to facilitate Smart Grid
technologies and demand response.
Section 108. DOE Study of Security Attributes of Smart Grid
Systems--Requires DOE to study the effects of Smart Grid
technologies on the security of the electricity grid and
infrastructure.
SUBTITLE B: DEMAND RESPONSE
Section 111. Electricity Sector Demand Response--Amends the
National Energy Conservation Policy Act by adding three new
sections:
(1) Federal Electricity Peak Demand Reduction Standard--
Requires Federal agencies to reduce their peak electricity
consumption by 2 percent per year for a 10-year period, or make
such demand available as demand response, and include results
in reports to Congress.
National Action Plan for Demand Response--Requires the
Commission to conduct an assessment of demand response
potential and to prepare a plan to achieve that potential
through assistance to States.
(3) Environmental Attributes and Impacts of Demand Response
and Smart Grid System--Requires an EPA Study of environmental
effects of demand response and Smart Grid implementation.
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italic, existing law in which no change is
proposed is shown in roman):
PUBLIC UTILITY REGULATORY POLICIES ACT OF 1978
* * * * * * *
TITLE I--RETAIL REGULATORY POLICIES FOR ELECTRIC UTILITIES
* * * * * * *
Subtitle B--Standards For Electric Utilities
SEC. 111. CONSIDERATION AND DETERMINATION RESPECTING CERTAIN RATEMAKING
STANDARDS.
(a) * * *
* * * * * * *
(d) Establishment.--The following Federal standards are
hereby established:
(1) * * *
* * * * * * *
(16) Utility investment in smart grid investments.--
Each electric utility shall prior to undertaking
investments in non-advanced grid technologies
demonstrate that alternative investments in advanced
grid technologies have been considered, including from
a standpoint of cost-effectiveness, where such cost-
effectiveness considers costs and benefits on a life-
cycle basis.
(17) Utility cost of smart grid investments.--Each
electric utility shall be permitted to--
(A) recover from ratepayers the capital and
operating expenditures and other costs of the
utility for qualified smart grid system,
including a reasonable rate of return on the
capital expenditures of the utility for a
qualified smart grid system, and
(B) recover in a timely manner the remaining
book-value costs of equipment rendered obsolete
by the deployment of a qualified smart grid
system, based on the remaining depreciable life
of the obsolete equipment.
(18) Rate design modifications to promote energy
efficiency investments.--
(A) In general.--The rates allowed to be
charged by any electric utility shall--
(i) align utility incentives with the
delivery of cost-effective energy
efficiency; and
(ii) promote energy efficiency
investments.
(B) Policy options.--In complying with
subparagraph (A), each State regulatory
authority and each nonregulated utility shall
consider--
(i) removing the throughput incentive
and other regulatory and management
disincentives to energy efficiency;
(ii) providing utility incentives for
the successful management of energy
efficiency programs;
(iii) including the impact on
adoption of energy efficiency as 1 of
the goals of retail rate design,
recognizing that energy efficiency must
be balanced with other objectives;
(iv) adopting rate designs that
encourage energy efficiency for each
customer class; and
(v) allowing timely recovery of
energy efficiency-related costs.
(19) Smart grid information.--
(A) Standard.--All electricity purchasers
shall be provided direct access, both in
written and electronic machine-readable form,
to information from their electricity provider
as provided in subparagraph (B).
(B) Information.--Information provided under
this section shall conform to the standardized
rules issued by the Commission on Grid
Modernization under section 106(b) of the
[SHORT TITLE Act of 2007] and shall include:
(i) Prices.--Purchasers and other
interested persons shall be provided
with information on:
(I) Time-based electricity
prices in the wholesale
electricity market; and
(II) Time-based electricity
retail prices or rates that are
available to the purchasers.
(ii) Usage.--Purchasers shall be
provided with the number of electricity
units, expressed in kwh, purchased by
them
(iii) Intervals and projections.--
Updates of information on prices and
usage shall be offered on not less than
a daily basis, shall include hourly
price and use information, where
available, and shall include a day-
ahead projection of such price
information to the extent available.
(iv) Sources.--Purchasers and other
interested person shall be provided
with written information on the sources
of the power provided by the utility,
to the extent it can be determined, by
type of generation, including
greenhouse gas emissions and criteria
pollutants associated each type of
generation, for intervals during which
such information is available on a
cost-effective basis, but not less than
monthly.
(C) Access.--Purchasers shall be able to
access their own information at any time
through the internet and on other means of
communication elected by that utility for Smart
Grid applications. Other interested persons
shall be able to access information not
specific to any purchaser through the Internet.
Information specific to any purchaser shall be
provided solely to that purchaser.
SEC. 112. OBLIGATIONS TO CONSIDER AND DETERMINE.
(a) * * *
(b) Time Limitations.--(1) * * *
* * * * * * *
(6)(A) Not later than 1 year after the enactment of this
paragraph, but not less than 3 years after the conclusion of
any prior review of such standards, each State regulatory
authority (with respect to each electric utility for which it
has ratemaking authority) and each nonregulated utility shall
commence the consideration referred to in section 111, or set a
hearing date for consideration, with respect to the standards
established by paragraphs (16) through (19) of section 111(d).
Not later than 6 months after the promulgation of rules by the
Commission on Grid Modernization under section 106(b) of the
[SHORT TITLE Act of 2007], each State regulatory authority
(with respect to each electric utility for which it has
ratemaking authority) and each nonregulated utility shall
commence the consideration referred to in section 111, or set a
hearing date for consideration, with respect to the standard
established by paragraph (19) of section 111(d).
(B) Not later than 2 years after the date of the enactment of
the this paragraph, but not less than 4 years after the
conclusion of any prior review of such standard, each State
regulatory authority (with respect to each electric utility for
which it has ratemaking authority), and each nonregulated
electric utility, shall complete the consideration, and shall
make the determination, referred to in section 111 with respect
to each standard established by paragraphs (16) through (18) of
section 111(d). Not later than 18 months after the promulgation
of rules by the Commission on Grid Modernization under section
106(b) of the [SHORT TITLE Act of 2007] each State regulatory
authority (with respect to each electric utility for which it
has ratemaking authority), and each nonregulated electric
utility, shall complete the consideration, and shall make the
determination, referred to in section 111 with respect to each
standard established by paragraph (19) of section 111(d).
(c) Failure To Comply.--Each State regulatory authority (with
respect to each electric utility for which it has ratemaking
authority) and each nonregulated electric utility shall
undertake the consideration, and make the determination,
referred to in section 111 with respect to each standard
established by section 111(d) in the first rate proceeding
commenced after the date three years after the date of
enactment of this Act respecting the rates of such utility if
such State regulatory authority or nonregulated electric
utility has not, before such date, complied with subsection
(b)(2) with respect to such standard. In the case of each
standard established by paragraphs (11) through (13) 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 such paragraphs (11) through (13). In
the case of the standard established by paragraph (14) 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 such paragraph (14). In
the case of the standard established by paragraph (15), 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 paragraph (15). In the case of the standards
established by paragraphs (16) through (19) 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 such paragraphs.
(d) Prior State Actions.--Subsections (b) and (c) of this
section shall not apply to the standards established by
paragraphs (11) through (13) and paragraphs (16) through (18)
of section 111(d) in the case of any electric utility in a
State if, before the enactment of this subsection--
(1) * * *
* * * * * * *
(g) Reconsideration of Prior Time-of-Day and Communication
Standards.--Not later than 1 year after the enactment of this
subsection, each State regulatory authority (with respect to
each electric utility for which it has ratemaking authority)
and each nonregulated utility shall commence a reconsideration
under section 111, or set a hearing date for reconsideration,
with respect to the standards established by paragraphs (3) and
(14) of section 111(d) to take into account Smart Grid
technologies. Not later than 2 years after the date of the
enactment of this subsection, each State regulatory authority
(with respect to each electric utility for which it has
ratemaking authority), and each nonregulated electric utility,
shall complete the reconsideration, and shall make the
determination, referred to in section 111 with respect to the
standards established by paragraphs (3) and (14) of section
111(d).
* * * * * * *
----------
NATIONAL ENERGY CONSERVATION POLICY ACT
* * * * * * *
TITLE I--GENERAL PROVISIONS
SEC. 101. SHORT TITLE AND TABLE OF CONTENTS.
(a) * * *
(b) Table of Contents.--
TITLE I--GENERAL PROVISIONS
Sec. 101. Short title and table of contents.
Sec. 102. Findings and statement of purposes.
* * * * * * *
TITLE V--FEDERAL ENERGY INITIATIVES
Part 1--Executive Agency Conservation Plan
Sec. 501. Conservation plan authorization.
* * * * * * *
Part 5--Peak Demand Reduction
Sec. 571. Definitions.
Sec. 572. Federal Electricity Peak Demand Reduction Standard.
Sec. 573. National action plan for demand response.
Sec. 574. Report on environmental attributes and impacts of demand
response and smart grid systems.
* * * * * * *
TITLE V--FEDERAL ENERGY INITIATIVE
* * * * * * *
PART 5--PEAK DEMAND REDUCTION
SEC. 571. DEFINITIONS
(a) Secretary.--As used in this part, the term ``Secretary''
means the Secretary of Energy.
(b) Federal Agency.--As used in this part, the term ``Federal
agency'' has the same meaning as provided by section 551 of
this Act.
SEC. 572. FEDERAL ELECTRICITY PEAK DEMAND REDUCTION STANDARD
(a) 2008 Agency Annual Energy Plan.--Each Federal agency
shall prepare, and include in its annual report under section
548(a) of this Act, each of the following:
(1) A determination of the agency's aggregate
electricity demand during the system peak hours for the
utilities providing electricity service to its
facilities during 2006 and 2007.
(2) A forecast for each year through 2018 of the
projected growth in such peak demand in light of
projected growth of facilities, staff, activities,
electric intensity of activities, and other relevant
factors.
(b) Federal Electricity Peak Demand Reduction Standard.--
(1) In general.--Except as provided in paragraph (2),
for calendar year 2009 and each calendar year
thereafter, each Federal agency shall reduce its
aggregate peak electricity demand or make such amounts
of electricity demand available in the form of demand
response, by the percentage amount specified in the
Federal Electricity Peak Demand Reduction Standard set
forth in the following table:
Federal Electricity Peak Demand Reduction Standard
------------------------------------------------------------------------
Calendar Year Reduction of Peak Demand Forecast
------------------------------------------------------------------------
2009........................... 2 percent of the peak demand forecast
for calendar year 2009
2010........................... 4 percent of the peak demand forecast
for calendar year 2010
2011........................... 6 percent of the peak demand forecast
for calendar year 2011
2012........................... 8 percent of the peak demand forecast
for calendar year 2012
2013........................... 10 percent of the peak demand forecast
for calendar year 2013
2014........................... 12 percent of the peak demand forecast
for calendar year 2014
2015........................... 14 percent of the peak demand forecast
for calendar year 2015
2016........................... 16 percent of the peak demand forecast
for calendar year 2016
2017........................... 18 percent of the peak demand forecast
for calendar year 2017
2018 and each calendar year 20 percent of the peak demand forecast
thereafter. for the applicable calendar year
------------------------------------------------------------------------
In the table above, the term ``forecast'' refers to the
forecast set forth in the 2008 report under section
548(a) of this Act as updated in accordance with
subsection in (c)(1)(C).
(2) Exception.--The standard under this subsection
shall not apply to any activity of a Federal agency
relating to defense or national security if compliance
with the standard would have an adverse mission impact
on the activity, as determined by the Secretary of
Defense or the Secretary of Homeland Security.
(c) Implementation of Standard.--
(1) In general.--Not later than January 1, 2010, and
each calendar year thereafter, each Federal agency
shall include in the annual energy plan of the Federal
agency each of the following:
(A) An assessment of whether the Federal
agency was in compliance with the standard
under subsection (b) for the preceding year.
(B) A description of--
(i) the method by which the Federal
agency proposes to comply with the
standard for the following calendar
year; and
(ii) the factors relied on by the
head of the Federal agency in
determining whether to participate in
demand response programs offered by an
electric utility or others during the
preceding calendar year; and
(iii) if the Federal agency did not
participate in a demand response
program offered by each utility
providing electric service to
facilities of the agency during the
preceding calendar year, an explanation
for the decision by the head of the
Federal agency to not participate.
(C) An update of the agency's prior forecast
for the remaining years in the period until
2018.
(2) Availability to public.--Not later than January
1, 2010, and each calendar year thereafter, the head of
each Federal agency shall make available to the public
a description of each provision included in the annual
energy plan of the Federal agency described in
subparagraphs (A) through (C) of paragraph (1).
(d) Modifications to Federal Energy Management Program.--The
Secretary shall make any modification to the Federal Energy
Management Program of the Department of Energy that the
Secretary determines to be necessary to
(1) incorporate the standard established under
subsection (b) into the Federal Energy Management
Program;
(2) assist any Federal agency to comply with the
standard established under subsection (b) through any
appropriate means, including conducting 1 or more
demonstration projects at Federal facilities.
(e) Annual Report.--Not later than March 1, 2010, and
annually thereafter, the Secretary shall submit to Congress a
report that evaluates the success of agencies in meeting the
standard established under subsection (b) and the success of
the Federal Energy Management Program in assisting agencies
with meeting the standard, and the costs and benefits of such
participation.
SEC. 573. NATIONAL ACTION PLAN FOR DEMAND RESPONSE
(a) National Assessment and Report.--The Grid Modernization
Commission established under subtitle A of title III of the
[SHORT TITLE Act of 2007] shall conduct a National Assessment
of Demand Response. The Commission shall, within 18 months of
the date on which the full Commission first meets, submit a
Report to Congress that includes each of the following:
(1) Estimation of nationwide demand response
potential in 5 and 10 year horizons, including data on
a State-by-State basis, and a methodology for updates
of such estimates on an annual basis.
(2) Estimation of how much of this potential can be
achieved within 5 and 10 years after the enactment of
this Act accompanied by specific policy recommendations
that if implemented can achieve the estimated
potential. Such recommendations shall include options
for funding and/or incentives for the development of
demand response resources. The Commission shall seek to
take advantage of preexisting research and ongoing
work, and shall assume that there is no duplication of
effort. The Commission shall further note any barriers
to demand response programs that are flexible, non-
discriminatory, and fairly compensatory for the
services and benefits made available and shall provide
recommendations for overcoming such barriers.
(b) National Action Plan on Demand Response.--The Grid
Modernization Commission shall further develop and implement a
National Action Plan on Demand Response. Such Plan shall be
completed within one year after the completion of the National
Assessment of Demand Response, and shall meet each of the
following objectives:
(1) Provision of adequate technical assistance to
States to allow them to maximize the amount of demand
response resources that can be developed and deployed.
(2) Implementation of a national communications
program that includes broad-based customer education
and support.
(3) Development and dissemination of tools,
information and other support mechanisms for use by
customers, states, utilities and demand response
providers.
(c) Authorization.--There are authorized to be appropriated
to carry out this section not more than $10,000,000 for each of
the fiscal years 2008 and 2009 and $20,000,000 for each of the
fiscal years 2010 through 2020.
SEC. 574. REPORT ON ENVIRONMENTAL ATTRIBUTES AND IMPACTS OF DEMAND
RESPONSE AND SMART GRID SYSTEMS
(a) Report.--The Administrator of the Environmental
Protection Agency shall solicit public input and, within 6
months after completion of the National Assessment of Demand
Response required by section 573, submit a report to Congress
that addresses each of the following:
(1) A quantitative assessment and determination of
the existing and potential impacts of demand response
and ``smart grid'' systems on air emissions and air
quality, including but not limited to carbon dioxide,
oxides of nitrogen and oxides of sulfur.
(2) An assessment and determination of the existing
and potential impacts of demand response and ``smart
grid'' systems on environmental parameters other than
emissions and air quality, including but not limited
to:
(A) Land use.
(B) Water use.
(C) Use of renewable energy.
(D) Effect on energy sources other than
electricity.
(3) A detailed plan for how Energy Efficiency and
Clean Energy programs administered by the Agency,
including the Energy Star Program, will incorporate and
encourage end-use efficiency, demand response and
``smart grid'' systems and technologies, including but
not limited to each of the following:
(A) Requirements that appliances and other
equipment are capable of manually and
automatically receiving and acting upon pricing
and control information and or instructions
provided by the customer, a load serving entity
or a third-party designated by the customer.
(B) Requirements for time-based valuation of
kilowatt hour reductions in planning and
evaluation of energy efficiency programs.
(C) Education and communication, including to
state energy officials and state regulators,
that build awareness of demand response and
smart grid systems and technologies and their
existing and potential relationship to such
Agency programs.
(b) Funding.--There are authorized to be appropriated to
carry out this section such sums as may be necessary for fiscal
year 2010, to remain available until expended.
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