Shared savings incentive for grid-enhancing technologies

(a) Definition of developer In this section, the term developer, with respect to grid-enhancing technology, means the entity that pays to install the grid-enhancing technology. (b) Establishment of shared savings incentive Not later than 18 months after the date of enactment of this Act, the Commission shall promulgate a final rule to implement section 219(b)(3) of the Federal Power Act (16 U.S.C. 824s(b)(3)) by providing a shared savings incentive that returns a portion of the savings attributable to an investment in grid-enhancing technology to the developer of that grid-enhancing technology, in accordance with this section. (c) Requirements (1) In general The Commission shall determine the percentage of savings attributable to an investment in grid-enhancing technology that can be returned to the developer of that grid-enhancing technology pursuant to the shared savings incentive established under subsection (b), subject to the conditions that the percentage— (A) is not less than 10 percent and not more than 25 percent; (B) is not determined on a per-project, per-investment, or case-by-case basis; and (C) is applied consistently to all investments in grid-enhancing technology eligible for the shared savings incentive, regardless of the type of grid-enhancing technology installed. (2) Time period for recovery The shared savings incentive established under subsection (b) shall return a percentage, determined in accordance with paragraph (1), of the applicable savings to the developer of the applicable grid-enhancing technology over a period of 3 years. (d) Eligibility Subject to subsection (e), the shared savings incentive established under subsection (b) shall apply with respect to— (1) any developer, with respect to the investment of that developer in grid-enhancing technology that is installed as described in section 2(2)(B); and (2) any grid-enhancing technology, including— (A) grid-enhancing technology that relates to new transmission facilities or transmission technologies; and (B) grid-enhancing technology that relates to existing transmission facilities or transmission technologies. (e) Limitations (1) Minimum savings (A) In general The shared savings incentive established under subsection (b) shall apply with respect to an investment in grid-enhancing technology only if the expected savings attributable to the investment over the 3-year period described in subsection (c)(2), as determined by the Commission, are at least 4 times the cost of the investment. (B) Determination (i) In general The Commission shall determine how to quantify the cost of an investment and the expected savings attributable to an investment for purposes of subparagraph (A). (ii) Costs For purposes of subparagraph (A), the cost of an investment may include any costs associated with the permitting, installation, or purchase of the applicable grid-enhancing technology. (2) Already installed GETs The shared savings incentive established under subsection (b) may not be applied with respect to grid-enhancing technology that is already installed as of the date of enactment of this Act. (3) Consumer protection The Commission shall determine appropriate consumer protections for the shared savings incentive established under subsection (b). (f) Evaluation and sunset of shared savings incentive (1) Evaluation Not earlier than 7 years, and not later than 10 years, after the shared savings incentive is established under subsection (b), the Commission shall— (A) evaluate the necessity and efficacy of the shared savings incentive; and (B) determine whether to maintain, revise, or suspend the shared savings incentive. (2) Consideration of Order No. 1920 In conducting the evaluation under paragraph (1)(A), the Commission shall consider— (A) how the shared savings incentive aligns with the requirement that grid-enhancing technologies be considered in long-term regional transmission planning under Order No. 1920 of the Commission, entitled Building for the Future Through Electric Regional Transmission Planning and Cost Allocation (89 Fed. Reg. 49280 (June 11, 2024)) (or a successor order); (B) whether and how the shared savings incentive should be revised to further align with that requirement; and (C) whether, in light of that requirement, the shared savings incentive should be maintained or suspended. (3) Public comment In conducting the evaluation under paragraph (1)(A), the Commission shall provide an opportunity for public comment, including by stakeholders.