UTILITY ENERGY EFFICIENCY PROGRAMS.

SEC. 532. UTILITY ENERGY EFFICIENCY PROGRAMS.(a) Electric Utilities.—Section 111(d) of the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) is amended by adding at the end the following:“(16) Integrated resource planning.—Each electric utility shall—121 STAT. 1666“(A) integrate energy efficiency resources into utility, State, and regional plans; and“(B) adopt policies establishing cost-effective energy efficiency as a priority resource.“(17) 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;“(v) allowing timely recovery of energy efficiency-related costs; and“(vi) offering home energy audits, offering demand response programs, publicizing the financial and environmental benefits associated with making home energy efficiency improvements, and educating homeowners about all existing Federal and State incentives, including the availability of low-cost loans, that make energy efficiency improvements more affordable.”.(b) Natural Gas Utilities.—Section 303(b) of the Public Utility Regulatory Policies Act of 1978 (15 U.S.C. 3203(b)) is amended by adding at the end the following:“(5) Energy efficiency.—Each natural gas utility shall—“(A) integrate energy efficiency resources into the plans and planning processes of the natural gas utility; and“(B) adopt policies that establish energy efficiency as a priority resource in the plans and planning processes of the natural gas utility.“(6) Rate design modifications to promote energy efficiency investments.—“(A) In general.—The rates allowed to be charged by a natural gas utility shall align utility incentives with the deployment of cost-effective energy efficiency.“(B) Policy options.—In complying with subparagraph (A), each State regulatory authority and each nonregulated utility shall consider—“(i) separating fixed-cost revenue recovery from the volume of transportation or sales service provided to the customer;“(ii) providing to utilities incentives for the successful management of energy efficiency programs, such 121 STAT. 1667 as allowing utilities to retain a portion of the cost-reducing benefits accruing from the programs;“(iii) promoting 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; and“(iv) adopting rate designs that encourage energy efficiency for each customer class.For purposes of applying the provisions of this subtitle to this paragraph, any reference in this subtitle to the date of enactment of this Act shall be treated as a reference to the date of enactment of this paragraph.”.(c) Conforming Amendment.—Section 303(a) of the Public Utility Regulatory Policies Act of 1978 (15 U.S.C. 3203(a)) is amended by striking “and (4)” inserting “(4), (5), and (6)”.