H.R. 10139

[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 10139 Introduced in House (IH)]

<DOC>

118th CONGRESS
2d Session
H. R. 10139

To amend title VI of the Public Utility Regulatory Policies Act of 1978 
to establish a Federal renewable electricity standard for retail 
electricity suppliers, and for other purposes.

_______________________________________________________________________

IN THE HOUSE OF REPRESENTATIVES

November 15, 2024

Ms. Clarke of New York (for herself, Ms. Norton, Ms. Meng, Ms. 
Bonamici, Mr. Beyer, Ms. Barragan, and Ms. Schakowsky) introduced the 
following bill; which was referred to the Committee on Energy and 
Commerce

_______________________________________________________________________

A BILL

To amend title VI of the Public Utility Regulatory Policies Act of 1978 
to establish a Federal renewable electricity standard for retail 
electricity suppliers, 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.

This Act may be cited as the ``American Renewable Energy Act of 
2024''.

SEC. 2. FINDINGS.

Congress finds that--
(1) the Federal renewable electricity standard established 
by section 610 of the Public Utility Regulatory Policies Act of 
1978 (as added by this Act) establishes a market-based policy 
to create ongoing competition among renewable electricity 
generators across the United States and provide the greatest 
quantity of clean electricity for the lowest price; and
(2) the United States has vast wind, solar, hydropower, and 
geothermal resources that--
(A) are renewable;
(B) are dispersed widely across different regions 
of the United States;
(C) can be harnessed to generate a significant 
share of electricity in the United States; and
(D) when deployed, will significantly reduce and 
eliminate the emission of harmful greenhouse gases and 
criteria pollutants, which have historically been 
concentrated in underserved communities and communities 
of color, contributing to disproportionate burdens and 
environmental injustices.

SEC. 3. FEDERAL RENEWABLE ELECTRICITY STANDARD.

(a) In General.--Title VI of the Public Utility Regulatory Policies 
Act of 1978 (Public Law 95-617; 92 Stat. 3164) is amended by adding at 
the end the following:

``SEC. 610. FEDERAL RENEWABLE ELECTRICITY STANDARD.

``(a) Definitions.--In this section:
``(1) Base quantity of electricity.--The term `base 
quantity of electricity' means the total quantity of 
electricity, expressed in megawatt hours, sold by a retail 
electricity supplier to electric consumers during the relevant 
calendar year, excluding electricity generated by a 
hydroelectric facility (other than qualified hydropower).
``(2) Criteria air pollutant.--The term `criteria air 
pollutant' means an air pollutant for which a national ambient 
air quality standard has been promulgated under section 109 of 
the Clean Air Act (42 U.S.C. 7409).
``(3) Distributed generation.--The term `distributed 
generation' means a noncentralized renewable energy resource 
installation, or interconnected series of installations, that 
generates electricity near the point of use with a total 
generating capacity of 1 megawatt or less.
``(4) Environmental justice community.--
``(A) In general.--The term `environmental justice 
community' means a low-income or low-wealth community 
that is impacted by environmental injustice.
``(B) Inclusions.--The term `environmental justice 
community' includes any community that--
``(i) is located nearest to an existing 
area of significant environmental pollution and 
degradation;
``(ii) bears a burden of negative public 
health effects from pollution;
``(iii) includes 1 or more sites of--
``(I) a facility that is a part of 
a polluting industry;
``(II) a waste dump; or
``(III) a facility for fossil 
resource extraction;
``(iv) experiences a high incidence of 
climate change impacts and disasters;
``(v) has been excluded or harmed by racist 
or discriminatory policies that have resulted 
in disproportionate burdens of environmental 
pollution and related health and socioeconomic 
disparities;
``(vi) has a land-based or food subsistence 
culture that is experiencing ecosystem 
disruption and devastation;
``(vii) faces relocation and resettlement 
resulting from--
``(I) climate change; or
``(II) impacts to the environment 
and ecosystems; or
``(viii) is an Indigenous community.
``(5) Federal renewable electricity credit.--The term 
`Federal renewable electricity credit' means a credit that--
``(A) represents, for purposes of compliance with 
this section, 1 megawatt hour of renewable electricity; 
and
``(B) is issued pursuant to subsection (e).
``(6) Impacted community.--
``(A) In general.--The term `impacted community' 
means a community that is harmed by environmental, 
economic, or socioeconomic injustice.
``(B) Inclusions.--The term `impacted community' 
includes--
``(i) an environmental justice community; 
and
``(ii) a community that--
``(I) has a high concentration of 
low-income and low-wealth households, 
including households composed primarily 
of members of groups that have 
historically experienced discrimination 
on the basis of race, gender, national 
origin, or ethnicity (including Black, 
Indigenous, Latinx, Arab, Asian, and 
Pacific Islander communities);
``(II) has experienced or is 
experiencing economic transition, 
deindustrialization, historic 
underinvestment, and poverty; or
``(III) has high unemployment due 
to--
``(aa) a significant 
decline in coal mining 
activity; or
``(bb) the closure of a 
coal-fired power plant.
``(7) Indian tribe.--The term `Indian Tribe' means any 
Indian Tribe, band, nation, or other organized group or 
community (including any Native village, Regional Corporation, 
or Village Corporation (as those terms are defined in section 3 
of the Alaska Native Claims Settlement Act (43 U.S.C. 1602))) 
that is recognized as eligible for the special programs and 
services provided by the United States to Indians because of 
their status as Indians.
``(8) Qualified hydropower.--The term `qualified 
hydropower' means energy produced from generating capacity 
added to a dam on or after January 1, 2001, if the Commission 
certifies that--
``(A) the dam--
``(i) was placed in service before the date 
of enactment of this section;
``(ii) was operated for flood control, 
navigation, or water supply purposes; and
``(iii) was not producing hydroelectric 
power prior to the addition of the capacity; 
and
``(B) the hydroelectric project installed on the 
dam--
``(i) is licensed or is exempt from 
licensing by the Commission;
``(ii) is in compliance with--
``(I) the terms and conditions of 
the license or exemption; and
``(II) other applicable legal 
requirements for the protection of 
environmental quality, including 
applicable fish passage requirements; 
and
``(iii) is operated so that the water 
surface elevation at any given location and 
time that would have occurred in the absence of 
the hydroelectric project is maintained, 
subject to any license or exemption 
requirements that require changes in water 
surface elevation for the purpose of improving 
the environmental quality of the affected 
waterway.
``(9) Renewable electricity.--The term `renewable 
electricity' means electricity generated (including by means of 
a fuel cell) from a renewable energy resource.
``(10) Renewable energy resource.--The term `renewable 
energy resource' means each of the following:
``(A) Wind energy.
``(B) Solar energy.
``(C) Geothermal energy.
``(D) Biogas derived from--
``(i) anaerobic digestion at wastewater 
treatment facilities; or
``(ii) farm anaerobic digestion.
``(E) Qualified hydropower.
``(F) Marine energy (as defined in section 632 of 
the Energy Independence and Security Act of 2007 (42 
U.S.C. 17211)).
``(11) Retail electricity supplier.--
``(A) In general.--The term `retail electricity 
supplier' means, for any calendar year, an electric 
utility that sells not fewer than 1,000,000 megawatt 
hours of electricity to electric consumers during the 
preceding calendar year.
``(B) Inclusions and limitations.--For purposes of 
determining whether an electric utility qualifies as a 
retail electricity supplier under subparagraph (A)--
``(i) the sales made by any affiliate of 
the electric utility to electric consumers, 
other than sales to lessees or tenants of the 
affiliate, shall be considered to be sales made 
by the electric utility; and
``(ii) sales made by the electric utility 
to an affiliate, lessee, or tenant of the 
electric utility shall not be treated as sales 
to electric consumers.
``(C) Affiliate.--In this paragraph, the term 
`affiliate', when used in relation to an electric 
utility, means any person that directly or indirectly 
owns or controls, is owned or controlled by, or is 
under common ownership or control with, that electric 
utility, as determined under regulations promulgated by 
the Commission.
``(12) Retire and retirement.--The terms `retire' and 
`retirement', with respect to a Federal renewable electricity 
credit, mean to disqualify the credit for any subsequent use 
under this section, regardless of whether the use is a sale, 
transfer, exchange, or submission in satisfaction of a 
compliance obligation.
``(b) Annual Compliance Obligation.--
``(1) In general.--Except as otherwise provided in 
subsection (f), for each of calendar years 2025 through 2034, 
not later than March 31 of the following calendar year, each 
retail electricity supplier shall submit to the Commission a 
quantity of Federal renewable electricity credits that 
represents a quantity of megawatt hours of renewable 
electricity that is at least equal to the annual target of the 
retail electricity supplier under subsection (d).
``(2) Equity requirements.--
``(A) Distributed generation.--The Commission shall 
require that, of the quantity of Federal renewable 
electricity credits required to be submitted by a 
retail electricity supplier to comply with paragraph 
(1)--
``(i) for the period of calendar years 2025 
through 2028, at least 15 percent of those 
Federal renewable electricity credits represent 
megawatt hours of renewable electricity 
generated by distributed generation; and
``(ii) for the period of calendar years 
2029 through 2034, at least 20 percent of those 
Federal renewable electricity credits represent 
megawatt hours of renewable electricity 
generated by distributed generation.
``(B) Impacted communities.--The Commission shall 
require that, of the quantity of Federal renewable 
electricity credits required to be submitted by a 
retail electricity supplier to comply with paragraph 
(1)--
``(i) for the period of calendar years 2025 
through 2028, at least 15 percent of those 
Federal renewable electricity credits represent 
megawatt hours of renewable electricity 
generated in impacted communities; and
``(ii) for the period of calendar years 
2029 through 2034, at least 20 percent of those 
Federal renewable electricity credits represent 
megawatt hours of renewable electricity 
generated in impacted communities.
``(C) Distributed generation occurring in an 
impacted community.--For any calendar year, distributed 
generation that occurs in an impacted community may be 
used for purposes of complying with both subparagraph 
(A) and subparagraph (B).
``(c) Regulations.--
``(1) In general.--Not later than January 1, 2026, the 
Commission shall promulgate regulations to implement and 
enforce the requirements of this section.
``(2) Considerations.--In promulgating regulations under 
paragraph (1), the Commission shall, to the maximum extent 
practicable--
``(A) preserve the integrity and incorporate best 
practices of existing State and Tribal renewable 
electricity programs;
``(B) preserve the integrity of voluntary renewable 
energy markets;
``(C) design and implement those regulations in a 
manner that seeks to be equitable and just;
``(D) identify and prioritize measures to maximize 
reductions of emissions of greenhouse gases and 
criteria air pollutants in impacted communities;
``(E) ensure that activities undertaken to comply 
with those regulations result in a net decrease in 
emissions of criteria air pollutants in impacted 
communities;
``(F) ensure that the deployment of any new 
renewable electricity generation provides economic, 
health, and resiliency benefits to the communities and 
areas in which the applicable generation facility or 
resource is built or installed, including through the 
use of community benefit agreements or equivalent means 
as determined appropriate by the Commission;
``(G) prioritize measures that will incentivize or 
allow for distributed, community, and public ownership 
over renewable energy projects;
``(H) establish and delegate to an appropriate 
entity the administration of a national Federal 
renewable electricity credit trading market for the 
issuance and trade of Federal renewable electricity 
credits, relying on existing and emerging State, 
Tribal, or regional tracking systems that issue and 
track non-Federal renewable electricity credits;
``(I) establish and delegate to appropriate 
entities the administration of not fewer than 6 
regional, geographically-based, Federal renewable 
electricity credit trading markets, and determine the 
optimal levels of credit trading allowed within and 
between regions to maximize deployment of new renewable 
electricity generation within each region;
``(J) cooperate with States and Indian Tribes--
``(i) to facilitate coordination between 
State, Tribal, and Federal renewable 
electricity programs; and
``(ii) to minimize administrative burdens 
and costs to retail electricity suppliers; and
``(K) encourage strategic deployment of distributed 
generation to maximize system benefits that can lower 
costs for all customers, including siting generation 
resources in grid-constrained areas and colocation of 
renewable energy resources with energy storage.
``(d) Annual Compliance Requirement.--
``(1) Annual targets.--For each calendar year, the annual 
target of a retail electricity supplier shall be equal to the 
number of megawatt hours that is equal to the product obtained 
by multiplying--
``(A) the required annual percentage for that 
calendar year under paragraph (2) or (3), as 
applicable; and
``(B) the base quantity of electricity of that 
retail electricity supplier for that calendar year.
``(2) Required annual percentage for calendar years 2025 
through 2034.--For each of calendar years 2025 through 2034, 
the required annual percentage shall be as follows:

Required annual
``Year: percentage:
2025................................................... 20.0 
2026................................................... 24.5 
2027................................................... 29.0 
2028................................................... 34.0 
2029................................................... 39.0 
2030................................................... 45.0 
2031................................................... 51.0 
2032................................................... 57.0 
2033................................................... 63.5 
2034................................................... 70.0.

``(3) Required annual percentage for subsequent calendar 
years.--
``(A) Calendar years 2035 through 2044.--Not later 
than December 31, 2034, the Commission shall promulgate 
regulations establishing required annual percentages 
for each of calendar years 2035 through 2044.
``(B) Increase.--Except at provided in subparagraph 
(C), for each of calendar years 2035 through 2044, the 
required annual percentage shall be equal to the sum 
obtained by adding--
``(i) the required annual percentage for 
the previous calendar year; and
``(ii) 3 percentage points.
``(C) Feasibility.--
``(i) Adjustment.--Subject to clause (ii), 
for any of calendar years 2035 through 2044, 
the Commission may increase or decrease the 3 
percentage point increase required under 
subparagraph (B) if the Commission determines 
necessary based on technical and economic 
feasibility studies or other equivalent means.
``(ii) Requirement.--For each of calendar 
years 2035 through 2044, the percentage point 
increase required under this paragraph for the 
required annual percentage shall be greater 
than zero.
``(D) Minimum percentage.--In no case shall the 
required annual percentage for any calendar year after 
calendar year 2035 be less than the required annual 
percentage for calendar year 2035.
``(e) Federal Renewable Electricity Credits.--
``(1) In general.--
``(A) Issuance; tracking; verification.--The 
regulations promulgated under this section shall 
include provisions governing the issuance, tracking, 
and verification of Federal renewable electricity 
credits.
``(B) Credit ratio.--Except as provided in 
paragraphs (2) through (5), the Commission shall issue 
to each generator of renewable electricity 1 Federal 
renewable electricity credit for each megawatt hour of 
renewable electricity generated by the generator after 
December 31, 2024.
``(C) Serial number.--The Commission shall assign a 
unique serial number to each Federal renewable 
electricity credit.
``(2) Generation from certain state renewable electricity 
programs.--
``(A) In general.--If renewable electricity is 
generated with the support of payments from a retail 
electricity supplier pursuant to a State renewable 
electricity program (whether through State alternative 
compliance payments or through payments to a State 
renewable electricity procurement fund or entity)--
``(i) the Commission shall issue Federal 
renewable electricity credits to the retail 
electricity supplier for the portion of the 
relevant renewable electricity generation that 
is attributable to the payments made by the 
retail electricity supplier, as determined 
pursuant to regulations promulgated by the 
Commission; and
``(ii) for any remaining portion of the 
relevant renewable electricity generation, the 
Commission shall issue Federal renewable 
electricity credits to the generator, as 
provided in paragraph (1), subject to the 
condition that not more than 1 Federal 
renewable electricity credit shall be issued 
for any 1 megawatt hour of electricity.
``(B) State guidance.--In determining how Federal 
renewable electricity credits will be apportioned among 
retail electricity suppliers and generators under this 
paragraph, the Commission shall consider information 
and guidance issued by the applicable 1 or more States.
``(3) Certain power sales contracts.--Except as otherwise 
provided in paragraph (2), if a generator has sold renewable 
electricity to a retail electricity supplier under a contract 
for power from a facility placed in service before the date of 
enactment of this section, and the contract does not provide 
for the determination of ownership of the Federal renewable 
electricity credits associated with the generation, the 
Commission shall issue the Federal renewable electricity 
credits to the retail electricity supplier for the duration of 
the contract.
``(4) Credits based on qualified hydropower.--For purposes 
of this subsection, the number of megawatt hours of renewable 
electricity generation from qualified hydropower shall be 
calculated--
``(A) based solely on the increase in average 
annual generation directly resulting from the capacity 
additions described in subsection (a)(8); and
``(B) using the same water flow information used to 
determine a historic average annual generation baseline 
for the applicable hydroelectric facility, as certified 
by the Commission.
``(5) Credits based on farm anaerobic digestion.--For any 
calendar year, a generator may only receive Federal renewable 
electricity credits for renewable electricity generated from 
biogas that is derived from farm anaerobic digestion if--
``(A) any manure used for that anaerobic digestion 
is from a farm that only provides its manure for 
anaerobic digestion to 1 anaerobic digester system;
``(B) the anaerobic digester system used by that 
generator has a capacity of less than, or equal to, 1 
megawatt; and
``(C) during that calendar year, the total 
renewable electricity produced from biogas derived from 
farm anaerobic digestion in the applicable State 
represents not more than 10 percent of the total 
electricity usage in the State.
``(6) Generation from mixed renewable and nonrenewable 
resources.--If electricity is generated using both a renewable 
energy resource and an energy resource that is not a renewable 
energy resource, the Commission shall issue Federal renewable 
electricity credits based on the proportion that--
``(A) the electricity generated that is 
attributable to the renewable energy resource; bears to
``(B) the total electricity generated.
``(7) Prohibition against double-counting.--The Commission 
shall ensure that--
``(A) no Federal renewable electricity credit is 
used more than once for compliance with this section; 
and
``(B) not more than 1 Federal renewable electricity 
credit is issued for any megawatt hour of renewable 
electricity generated.
``(8) Trading.--The lawful holder of a Federal renewable 
electricity credit may--
``(A) sell, exchange, or transfer the credit;
``(B) submit the credit for compliance under 
subsection (b); or
``(C) submit the credit for retirement by the 
Commission.
``(9) Banking.--
``(A) In general.--A Federal renewable electricity 
credit may be submitted in satisfaction of the 
compliance obligation under subsection (b) for--
``(i) the compliance year for which the 
credit was issued; or
``(ii) the first or second compliance year 
thereafter.
``(B) Retirement.--The Commission shall retire any 
Federal renewable electricity credit that has not been 
retired by April 2 of the calendar year that is 2 years 
after the calendar year during which the credit was 
issued.
``(10) Retirement.--The Commission shall retire a Federal 
renewable electricity credit immediately upon submission by the 
lawful holder of the credit, whether in satisfaction of a 
compliance obligation under subsection (b) or for another 
reason.
``(f) Alternative Compliance Payments.--
``(1) In general.--A retail electricity supplier may 
satisfy the requirements of subsection (b) in whole or in part 
by submitting, in accordance with this subsection, in lieu of a 
Federal renewable electricity credit that would otherwise be 
submitted, an alternative compliance payment equal to $50, 
adjusted for inflation on January 1 of each year after calendar 
year 2024, in accordance with regulations promulgated by the 
Commission.
``(2) Payment to state funds.--
``(A) In general.--Except as provided in 
subparagraph (B), payments made under this subsection 
shall be made directly to the 1 or more States in which 
the applicable retail electricity supplier sells 
electricity, subject to the conditions that--
``(i) the amount of each payment shall be 
based on the proportion that--
``(I) the portion of the base 
quantity of electricity of the retail 
electricity supplier that is sold 
within the applicable State; bears to
``(II) the base quantity of 
electricity of the retail electricity 
supplier;
``(ii) the payments are deposited directly 
into a fund of the State treasury established 
for that purpose; and
``(iii) the State uses the funds in 
accordance with paragraphs (3) and (4).
``(B) Noncompliance.--If the Commission determines 
that a State is in substantial noncompliance with 
paragraph (3) or (4), the Commission shall direct that 
any future alternative compliance payments that would 
otherwise be paid to the State under this subsection 
shall instead be paid to the Commission and deposited 
in the Treasury.
``(3) State use of funds.--As a condition of receipt of 
alternative compliance payments pursuant to this subsection, a 
State shall--
``(A) use the payments exclusively for--
``(i) deploying technologies that generate 
electricity from renewable energy resources;
``(ii) deploying technologies that store 
electricity for use at a later time; or
``(iii) implementing cost-effective energy 
efficiency programs to achieve energy savings; 
and
``(B) invest or use the payments in a manner 
designed to ensure that impacted communities receive, 
or directly benefit from, at least 50 percent of the 
funds.
``(4) Reporting.--
``(A) In general.--As a condition of receipt of 
alternative compliance payments pursuant to this 
subsection, a State shall submit to the Commission an 
annual report, in accordance with regulations 
promulgated by the Commission, containing a full 
accounting of the use of the payments, including a 
detailed description of the activities funded by the 
payments, and demonstrating compliance with the 
requirements of this subsection.
``(B) Deadline.--A State shall submit a report 
under subparagraph (A)--
``(i) not later than 1 year after the date 
on which the first alternative compliance 
payment is received; and
``(ii) every year thereafter until all 
alternative compliance payments are expended.
``(g) Information Collection.--The Commission may require any 
retail electricity supplier, renewable electricity generator, or other 
entity that the Commission determines appropriate, to provide any 
information the Commission determines appropriate to carry out this 
section.
``(h) Enforcement and Judicial Review.--
``(1) Failure to submit credits.--
``(A) In general.--If any person fails to comply 
with the requirements of subsection (b) or (f) for a 
calendar year, the person shall be liable to pay to the 
Commission a civil penalty equal to the product 
obtained by multiplying--
``(i) double the alternative compliance 
payment calculated under subsection (f)(1) for 
that calendar year; and
``(ii) the aggregate quantity of Federal 
renewable electricity credits or equivalent 
alternative compliance payments that the person 
failed to submit in violation of the 
requirements of subsections (b) and (f) for 
that calendar year.
``(B) Enforcement.--The Commission shall assess a 
civil penalty under subparagraph (A) in accordance with 
the procedures described in section 31(d) of the 
Federal Power Act (16 U.S.C. 823b(d)).
``(2) Violation of other requirements.--
``(A) In general.--Any person who violates or fails 
or refuses to comply with any requirement of this 
section (including any regulation promulgated or order 
issued under this section), other than a requirement of 
subsection (b) or (f), shall be subject to a civil 
penalty under section 316A(b) of the Federal Power Act 
(16 U.S.C. 825o-1(b)).
``(B) Assessment.--The penalty under subparagraph 
(A) shall be assessed by the Commission in the same 
manner as in the case of a violation referred to in 
section 316A(b) of the Federal Power Act (16 U.S.C. 
825o-1(b)).
``(3) Judicial review.--
``(A) In general.--Any person aggrieved by a final 
action taken by the Commission under this section, 
other than the assessment of a civil penalty under 
paragraph (1) or (2), may use the procedures for review 
described in section 313 of the Federal Power Act (16 
U.S.C. 825l).
``(B) Reference.--For purposes of this paragraph, 
references to an order in section 313 of the Federal 
Power Act (16 U.S.C. 825l) shall be considered to refer 
also to all other final actions of the Commission under 
this section other than the assessment of a civil 
penalty under paragraph (1) or (2).
``(i) Administration.--Nothing in this section--
``(1) diminishes or qualifies any authority of a State, a 
political subdivision of a State, or an Indian Tribe--
``(A) to adopt or enforce any law (including 
regulations) respecting renewable electricity, 
including any law establishing requirements that are 
more stringent than those established by this section, 
subject to the condition that no such law may relieve 
any person of any requirement otherwise applicable 
under this section; or
``(B) to regulate the acquisition and disposition 
of Federal renewable electricity credits by retail 
electricity suppliers within the jurisdiction of the 
State, political subdivision, or Indian Tribe, 
including the authority to require a retail electricity 
supplier to acquire and submit to the Commission for 
retirement Federal renewable electricity credits in 
excess of those submitted under this section; or
``(2) affects the application of, or the responsibility 
for, compliance with any other provision of law (including 
regulations).''.
(b) Conforming Amendment.--The table of contents in section 1(b) of 
the Public Utility Regulatory Policies Act of 1978 (Public Law 95-617; 
92 Stat. 3118) is amended by adding at the end of the items relating to 
title VI the following:

``Sec. 609. Rural and remote communities electrification grants.
``Sec. 610. Federal renewable electricity standard.''.

SEC. 4. CLARIFYING STATE AUTHORITY TO ADOPT RENEWABLE ENERGY 
INCENTIVES.

Section 210 of the Public Utility Regulatory Policies Act of 1978 
(16 U.S.C. 824a-3) is amended by adding at the end the following:
``(o) Clarification of State Authority To Adopt Renewable Energy 
Incentives.--
``(1) Definition of state-approved production incentive 
program.--In this subsection, the term `State-approved 
production incentive program' means a requirement imposed 
pursuant to State law, or by a State regulatory authority 
acting within its authority under State law, that an electric 
utility purchase renewable energy (as defined in section 
609(a)) at a specified rate.
``(2) State authority to adopt renewable energy 
incentives.--Notwithstanding any other provision of this Act or 
the Federal Power Act (16 U.S.C. 791a et seq.), a State law or 
State regulatory authority may set the rates for a sale of 
electricity by a facility generating renewable energy (as 
defined in section 609(a)) pursuant to a State-approved 
production incentive program under which the facility 
voluntarily participates in the State-approved production 
incentive program.''.
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