SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Smart Grid Advancement Act''.

SEC. 2. DEFINITIONS.

    For purposes of this Act, the terms:
            (1) ``Secretary'' means the Secretary of Energy.
            (2) ``Administrator'' means the Administrator of the 
        Environmental Protection Agency.
            (3) ``Commission'' means Federal Energy Regulatory 
        Commission.
            (4) ``Smart grid'' has the meaning provided by section 1301 
        of the Energy Independence and Security Act of 2007 (15 U.S.C. 
        17381).
            (5) ``Peak demand reduction'' means the reduction in annual 
        peak demand as compared to a previous baseline year or period, 
        expressed in Megawatts (MW).
            (6) ``Peak 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.
            (7) ``Peak 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.
            (8) ``Load 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.
            (9) ``Applicable 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.
            (10) ``Peak load reduction plan'' means a plan developed by 
        or for a load serving entity that it will implement to meet its 
        peak demand management goals.

SEC. 3. INCORPORATION OF SMART GRID CAPABILITY IN ENERGY STAR PROGRAM.

    (a) Assessment.--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.
    (b) Analysis.--(1) 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:
                    (A) The products possessed full Smart Grid 
                capability.
                    (B) The products were utilized in an electricity 
                utility service area which had Smart Grid capability 
                and time-of-use electric rates.
                    (C) The time-of-use rates reflected national 
                average utility rates including average peak and valley 
                daily electricity costs to the utility.
                    (D) Consumers using such products took full 
                advantage of such capability.
    (2) The analysis under paragraph (1) shall be considered the ``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 ``cost 
effective'' means that the cumulative savings from using the product 
under the ``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.
    (3) 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:
            (A) Inform the manufacturer of such product of such 
        finding.
            (B) Make special note in a prominent manner on any Energy 
        Star label for any product actually including Smart Grid 
        capability that--
                    (i) Smart Grid capability is a feature of that 
                product;
                    (ii) 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
                    (iii) 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.
            (C) 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.

SEC. 4. SMART GRID PEAK DEMAND REDUCTION GOALS.

    (a) 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.
    (b) Baselines.--(1) 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.
    (2) 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.
    (3) 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.
    (c) Peak Demand Reduction Goals.--(1) 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.
    (2) 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.
    (3) 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.
    (4) The applicable peak demand reduction goals shall provide that--
            (A) 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;
            (B) 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
            (C) 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).
    (d) Plan.--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:
            (1) Direct reduction in megawatts of peak demand through 
        energy efficiency measures with reliable and continued 
        application during peak demand periods.
            (2) 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:
                    (A) Megawatts enrolled in demand response programs.
                    (B) Megawatts subject 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 demand (``dynamic peak management 
                control'').
                    (C) Megawatts available from distributed dynamic 
                electricity storage under agreement with the owner of 
                that storage.
                    (D) Megawatts committed from dispatchable 
                distributed generation demonstrated to be reliable 
                under peak period conditions.
                    (E) 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.
                    (F) 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.
            (3) 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.
            (4) 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.
    (e) 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.
    (f) Relief.--The Commission may, for good cause, grant relief to 
load serving entities from the requirements of this section.
    (g) Other Laws.--Except as provided in subsections (e) and (f), no 
law or regulation shall relieve any person of any requirement otherwise 
applicable under this section.
    (h) Compliance.--(1) 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.
    (2) 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.
    (3) 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.
    (4) 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.
    (i) Assistance and Funding.--
            (1) Assistance.--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.
            (2) Funding.--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.

SEC. 5. 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:
            (1) By amending the title heading to read ``ENERGY 
        EFFICIENCY AND SMART GRID PUBLIC INFORMATION INITIATIVE.''.
            (2) In subsection (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 practices''.
            (3) In subsection (a)(2) by striking ``benefits to 
        consumers of reducing'' and inserting ``economic and 
        environmental benefits to consumers and the United States of 
        optimizing''.
            (4) In subsection (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''.
            (5) In subsection (a)(4) by redesignating subparagraph (D) 
        as (E), by striking ``and'' at the end of subparagraph (C), and 
        by inserting after subparagraph (C) the following:
                    ``(D) purchasing and utilizing equipment that 
                includes smart grid features and capability; and''.
            (6) In subsection (c), by striking ``Not later than July 1, 
        2009,'' and inserting, ``For each year when appropriations 
        pursuant to the authorization in this section exceed 
        $10,000,000,''.
            (7) In subsection (d) by striking ``2010'' and inserting 
        ``2020''.
            (8) In subsection (e) by striking ``2010'' and inserting 
        ``2020''.

SEC. 6. INCLUSION OF SMART GRID FEATURES IN APPLIANCE REBATE PROGRAM.

    (a) Amendment.--Section 124 of the Energy Policy Act of 2005 (42 
U.S.C. 15821) is amended as follows:
            (1) By amending the section heading to read ``energy 
        efficient and smart appliance rebate program.''.
            (2) By redesignating paragraphs (4) and (5) as (5) and (6) 
        and inserting after paragraph (3) the following:
            ``(4) Smart appliance.--The term `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. 17381).''.
            (3) In subsection (b)(1) by inserting ``and smart'' after 
        ``efficient'' and by inserting after ``products'' the first 
        place it appears ``, including products designated as being 
        smart appliances,''.
            (4) In subsection (b)(3), by inserting ``the administration 
        of'' after ``carry out''.
            (5) In subsection (d), by inserting ``the administration 
        of'' after ``carrying 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 end.
            (6) In subsection (e)(3), by inserting ``with separate 
        consideration as applicable if the product is also a smart 
        appliance,'' after ``Energy Star product'' the first place it 
        appears and by inserting ``or smart appliance'' before the 
        period at the end.
            (7) In subsection (f), by striking ``$50,000,000'' through 
        the period at the end and inserting ``such sums as may be 
        necessary for each fiscal year from 2010 through 2015.''.
    (b) 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.''.
Smart Grid Advancement Act - Requires the Secretary of Energy and the Administrator of the Environmental Protection Agency (EPA) to: (1) assess the potential for cost-effective integration of Smart Grid technologies and capabilities in all products that are reviewed by the Department of Energy (DOE) and EPA for potential designation as Energy Star products; (2) conduct a best case smart grid analysis by analyzing the potential energy savings and electricity cost savings that could accrue for such products in specified circumstances; and (3) take specified actions when they find that including Smart Gird capability in products is cost effective in the best case.

Sets forth provisions concerning Smart Grid peak demand reduction goals, including requiring: (1) load serving entities or states to determine and publish demand reduction goals for such entities that have applicable baselines in excess of 250 megawatts; (2) the Federal Energy Regulatory Commission (FERC) to develop and publish 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 other factors external to peak load management; (3) the Secretary to develop a system for measuring and verifying demand reductions; and (4) each load serving entity to prepare a peak load reduction plan.

Authorizes the Secretary to make grants to offset the costs of carrying out responsibilities to be implemented under this Act.

Amends the Energy Policy Act of 2005 to revise: (1) the Energy Efficiency Public Information Initiative, including by renaming the program as the Energy Efficiency and Smart Grid Public Information Initiative and authorizing appropriations through FY2020; and (2) the Energy Efficient Appliance Rebate Program, including by renaming the program as the Energy Efficient and Smart Appliance Rebate Program and authorizing appropriations through FY2015.
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.