Thread by @JesseJenkins

Reading legislation is NOT fun. Reading formulas in leg text is much worse (why cant we just use algebra?).
So here's a plain English (I hope) explanation of what the Clean Electricity Performance Program from House Energy & Commerce (Subtitle D: energycommerce.house.gov/newsroom/press…) says...

CEPP creates a grant program for suppliers of retail electricity that achieve a 4% year on year increase in the share of clean electricity used to supply their customers.

It also collects a payment from suppliers of retail electricity that fall short of 4% YoY ⬆️ in clean share

"Clean electricity" in this bill means any source of electricity that produces less than 0.1 tons of CO2-equivalent greenhouse gas emissions per MWh of electricity generated.

Clean share = clean electricity supply / total retail electricity sales.

A supplier of "end use" electricity means any entity that generates/purchases electricity and sells/resells it to an electricity consumer. Could be competitive retailer, legacy distribution utility as default supplier, vertically integrated utility, or public utility (coop/muni).

Formula for grants paid by the Dept of Energy to qualifying suppliers that increase clean share YoY by 4% or more is:

$150/MWh x (YoY % increase in clean share - 1.5%) x total sales to end-use customers (retail sales).

Ex: 5% growth = $150/MWh x 3.5% x total retail sales.

Formula for payments collected by the Dept of Energy from suppliers that fall short of a 4% YoY growth in clean share is:

$40/MWh x (4% - YoY % increase in clean share) x total sales to end-use customers (retail sales).

Ex: 3% growth = $40/MWh x 1% x total retail sales.

Additionally, any electricity supplier that makes a payment to DOE for falling short in one year will have the threshold to qualify for payments in the next year increase by the amount of the shortfall.

Ex: 3% growth = next year (1% shortfall), 5% growth to qualify for payment.

The program starts in 2023 and runs to 2030 (with payments in 2031 for progress made in 2030).

The 1st year is special: 2023 progress is scored against average clean share in 2019 and 2020 as baseline to start progress. Every supplier "starts the race" at their historical level

Exception: A supplier that is >85% clean is exempt from paying any payments for failing to increase clean share by 4 percentage points year on year. They still need to increase by 4% or more to qualify for grants.

Finally, an electricity supplier can elect to defer tallying up of their performance over a 2 or 3 year period. Performance thresholds increase accordingly. Ex: 2 year period means average of clean share over 2 years has to be 8% higher than two years prior.

This deferal program provides multi-year flexibility allows smoothing out year-by-year variation in demand, wind/solar, hydro, nuclear etc.

Ex: Supplier w/2% growth 1 yr, instead of paying payment on 2% shortfall, can defer & achieve ~6% growth next yr & avoid payment/get grants

I think that's it. The gist at least. There are some details on what electricity suppliers have to do/submit to DOE to qualify etc. But that's the core of it.

No commentary here (ask me on Monday). Just a hopefully plain English explanation of what the legislation says.

@threadreaderapp please unroll.