---
kind: "section"
citation: "42 U.S.C. § 6344"
title: "42"
title_heading: "The Public Health and Welfare"
number: "6344"
heading: "Additional incentives for recovery, use, and prevention of industrial waste energy"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/42/6344"
units:
  - "Chapter 77 — Energy Conservation"
  - "Subchapter III — Improving Energy Efficiency"
  - "Part C — Industrial Energy Efficiency"
---

# §6344. Additional incentives for recovery, use, and prevention of industrial waste energy

- (a) **Consideration of standard—**
  - (1) **In general—** Not later than 180 days after the receipt by a [State](/usc/42/6202.md?p=4) regulatory authority (with respect to each [electric utility](/usc/42/6341.md?p=9) for which the authority has ratemaking authority), or [nonregulated electric utility](/usc/42/6341.md?p=9), of a request from a [project](/usc/42/6341.md?p=4) sponsor or [owner](/usc/42/13641.md?p=4) or operator, the [State](/usc/42/6202.md?p=4) regulatory authority or [nonregulated electric utility](/usc/42/6341.md?p=9) shall—
    - (A) provide public notice and conduct a hearing respecting the standard established by [subsection (b)](#b); and
    - (B) on the basis of the hearing, consider and make a determination whether or not it is appropriate to implement the standard to carry out the purposes of this part.
  - (2) **Relationship to State law—** For purposes of any determination under [paragraph (1)](#a-1) and any review of the determination in any court, the purposes of this section supplement otherwise applicable [State](/usc/42/6202.md?p=4) law.
  - (3) **Nonadoption of standard—** Nothing in this part prohibits any [State](/usc/42/6202.md?p=4) regulatory authority or [nonregulated electric utility](/usc/42/6341.md?p=9) from making any determination that it is not appropriate to adopt any standard described in [paragraph (1)](#a-1), pursuant to authority under otherwise applicable [State](/usc/42/6202.md?p=4) law.
- (b) **Standard for sales of excess power—** For purposes of this section, the standard referred to in [subsection (a)](#a) shall provide that an [owner](/usc/42/13641.md?p=4) or operator of a [waste energy](/usc/42/6341.md?p=8) recovery [project](/usc/42/6341.md?p=4) identified on the [Registry](/usc/42/6341.md?p=6) that [generates](/usc/42/2021b.md?p=8) [net excess power](/usc/42/6341.md?p=3) shall be eligible to benefit from at least 1 of the options described in [subsection (c)](#c) for [disposal](/usc/42/2021b.md?p=7) of the [net excess power](/usc/42/6341.md?p=3) in accordance with the rate conditions and limitations described in [subsection (d)](#d).
- (c) **Options—** The options referred to in [subsection (b)](#b) are as follows:
  - (1) **Sale of net excess power to utility—** The [electric utility](/usc/42/6341.md?p=9) shall purchase the [net excess power](/usc/42/6341.md?p=3) from the [owner](/usc/42/13641.md?p=4) or operator of the eligible [waste energy](/usc/42/6341.md?p=8) recovery [project](/usc/42/6341.md?p=4) during the operation of the [project](/usc/42/6341.md?p=4) under a contract entered into for that purpose.
  - (2) **Transport by utility for direct sale to third party—** The [electric utility](/usc/42/6341.md?p=9) shall transmit the [net excess power](/usc/42/6341.md?p=3) on behalf of the [project](/usc/42/6341.md?p=4) [owner](/usc/42/13641.md?p=4) or operator to up to 3 separate locations on the system of the utility for direct sale by the [owner](/usc/42/13641.md?p=4) or operator to third parties at those locations.
  - (3) **Transport over private transmission lines—** The [State](/usc/42/6202.md?p=4) and the [electric utility](/usc/42/6341.md?p=9) shall permit, and shall waive or modify such laws as would otherwise prohibit, the [construction](/usc/42/300s–3.md?p=7) and operation of private electric wires constructed, owned, and operated by the [project](/usc/42/6341.md?p=4) [owner](/usc/42/13641.md?p=4) or operator, to transport the power to up to 3 purchasers within a 3-mile radius of the [project](/usc/42/6341.md?p=4), allowing the wires to use or cross public rights-of-way, without subjecting the [project](/usc/42/6341.md?p=4) to regulation as a public utility, and according the wires the same [treatment](/usc/42/11851.md?p=11) for safety, zoning, land use, and other legal privileges as apply or would apply to the wires of the utility, except that—
    - (A) there shall be no grant of any power of eminent domain to take or cross private property for the wires; and
    - (B) the wires shall be physically segregated and not interconnected with any portion of the system of the utility, except on the [customer](/usc/42/7275.md?p=5) side of the revenue meter of the utility and in a manner that precludes any possible export of the electricity onto the utility system, or disruption of the system.
  - (4) **Agreed on alternatives—** The utility and the [owner](/usc/42/13641.md?p=4) or operator of the [project](/usc/42/6341.md?p=4) may reach agreement on any alternate arrangement and payments or rates associated with the arrangement that is mutually satisfactory and in accord with [State](/usc/42/6202.md?p=4) law.
- (d) **Rate conditions and criteria—**
  - (1) **Definitions—** In this subsection:
    - (A) **Per unit distribution costs—** The term “per unit distribution costs” means (in kilowatt hours) the quotient obtained by dividing—
      - (i) the depreciated book-value distribution system costs of a utility; by
      - (ii) the volume of utility electricity sales or transmission during the previous year at the distribution level.
    - (B) **Per unit distribution margin—** The term “per unit distribution margin” means—
      - (i) in the case of a [State](/usc/42/6202.md?p=4)-regulated [electric utility](/usc/42/6341.md?p=9), a per-unit gross pretax profit equal to the product obtained by multiplying—
        - (I) the [State](/usc/42/6202.md?p=4)-approved percentage rate of return for the utility for distribution system assets; by
        - (II) the per unit distribution costs; and
      - (ii) in the case of a nonregulated utility, a per unit contribution to net revenues determined multiplying—
        - (I) the percentage (but not less than 10 percent) obtained by dividing—
          - (aa) the amount of any net revenue payment or contribution to the [owners](/usc/42/13641.md?p=4) or subscribers of the nonregulated utility during the prior year; by
          - (bb) the gross revenues of the utility during the prior year to obtain a percentage; by
        - (II) the per unit distribution costs.
    - (C) **Per unit transmission costs—** The term “per unit transmission costs” means the total cost of those transmission services purchased or provided by a utility on a per-kilowatt-hour basis as included in the retail rate of the utility.
  - (2) **Options—** The options described in paragraphs [(1)](#d-1) and [(2)](#d-2) in [subsection (c)](#c) shall be offered under purchase and transport rate conditions that reflect the rate components defined under [paragraph (1)](#d-1) as applicable under the circumstances described in [paragraph (3)](#d-3).
  - (3) **Applicable rates—**
    - (A) **Rates applicable to sale of net excess power—**
      - (i) **In general—** Sales made by a [project](/usc/42/6341.md?p=4) [owner](/usc/42/13641.md?p=4) or operator of a facility under the option described in [subsection (c)(1)](#c-1) shall be paid for on a per kilowatt hour basis that shall equal the full undiscounted retail rate paid to the utility for power purchased by the facility minus per unit distribution costs, that applies to the type of utility purchasing the power.
      - (ii) **Voltages exceeding 25 kilovolts—** If the [net excess power](/usc/42/6341.md?p=3) is made available for purchase at voltages that must be transformed to or from voltages exceeding 25 kilovolts to be available for resale by the utility, the purchase price shall further be reduced by per unit transmission costs.
    - (B) **Rates applicable to transport by utility for direct sale to third parties—**
      - (i) **In general—** Transportation by utilities of power on behalf of the [owner](/usc/42/13641.md?p=4) or operator of a [project](/usc/42/6341.md?p=4) under the option described in [subsection (c)(2)](#c-2) shall incur a transportation rate that shall equal the per unit distribution costs and per unit distribution margin, that applies to the type of utility transporting the power.
      - (ii) **Voltages exceeding 25 kilovolts—** If the [net excess power](/usc/42/6341.md?p=3) is made available for transportation at voltages that must be transformed to or from voltages exceeding 25 kilovolts to be transported to the designated third-party purchasers, the transport rate shall further be increased by per unit transmission costs.
      - (iii) **States with competitive retail markets for electricity—** In a [State](/usc/42/6202.md?p=4) with a competitive retail market for electricity, the applicable transportation rate for similar transportation shall be applied in lieu of any rate calculated under this paragraph.
  - (4) **Limitations—**
    - (A) **In general—** Any rate established for sale or transportation under this section shall—
      - (i) be modified over time with changes in the underlying costs or rates of the [electric utility](/usc/42/6341.md?p=9); and
      - (ii) reflect the same time-sensitivity and billing periods as are established in the retail sales or transportation rates offered by the utility.
    - (B) **Limitation—** No utility shall be required to purchase or transport a quantity of [net excess power](/usc/42/6341.md?p=3) under this section that exceeds the available capacity of the wires, meter, or other equipment of the [electric utility](/usc/42/6341.md?p=9) serving the site unless the [owner](/usc/42/13641.md?p=4) or operator of the [project](/usc/42/6341.md?p=4) agrees to pay necessary and reasonable upgrade costs.
- (e) **Procedural requirements for consideration and determination—**
  - (1) **Public notice and hearing—**
    - (A) **In general—** The consideration referred to in [subsection (a)](#a) shall be made after public notice and hearing.
    - (B) **Administration—** The determination referred to in [subsection (a)](#a) shall be—
      - (i) in writing;
      - (ii) based on findings included in the determination and on the evidence presented at the hearing; and
      - (iii) available to the public.
  - (2) **Intervention by Administrator—** The [Administrator](/usc/42/6341.md?p=1) may intervene as a matter of right in a proceeding conducted under this section—
    - (A) to calculate—
      - (i) the [energy](/usc/42/6291.md?p=3) and emissions likely to be saved by electing to adopt 1 or more of the options; and
      - (ii) the costs and benefits to ratepayers and the utility; and
    - (B) to advocate for the waste-[energy](/usc/42/6291.md?p=3) recovery opportunity.
  - (3) **Procedures—**
    - (A) **In general—** Except as otherwise provided in paragraphs [(1)](#e-1) and [(2)](#e-2), the procedures for the consideration and determination referred to in [subsection (a)](#a) shall be the procedures established by the [State](/usc/42/6202.md?p=4) regulatory authority or the [nonregulated electric utility](/usc/42/6341.md?p=9).
    - (B) **Multiple projects—** If there is more than 1 [project](/usc/42/6341.md?p=4) seeking consideration simultaneously in connection with the same utility, the proceeding may encompass all such [projects](/usc/42/6341.md?p=4), if full attention is paid to individual circumstances and merits and an individual judgment is reached with respect to each [project](/usc/42/6341.md?p=4).
- (f) **Implementation—**
  - (1) **In general—** The [State](/usc/42/6202.md?p=4) regulatory authority (with respect to each [electric utility](/usc/42/6341.md?p=9) for which the authority has ratemaking authority) or [nonregulated electric utility](/usc/42/6341.md?p=9) may, to the extent consistent with otherwise applicable [State](/usc/42/6202.md?p=4) law—
    - (A) implement the standard determined under this section; or
    - (B) decline to implement any such standard.
  - (2) **Nonimplementation of standard—**
    - (A) **In general—** If a [State](/usc/42/6202.md?p=4) regulatory authority (with respect to each [electric utility](/usc/42/6341.md?p=9) for which the authority has ratemaking authority) or [nonregulated electric utility](/usc/42/6341.md?p=9) declines to implement any standard established by this section, the authority or [nonregulated electric utility](/usc/42/6341.md?p=9) shall [state](/usc/42/6202.md?p=4) in writing the reasons for declining to implement the standard.
    - (B) **Availability to public—** The statement of reasons shall be available to the public.
    - (C) **Annual report—** The [Administrator](/usc/42/6341.md?p=1) shall include in an annual report submitted to Congress a description of the lost opportunities for waste-heat recovery from the [project](/usc/42/6341.md?p=4) described in [subparagraph (A)](#f-2-A), specifically identifying the utility and stating the quantity of lost [energy](/usc/42/6291.md?p=3) and emissions savings calculated.
    - (D) **New petition—** If a [State](/usc/42/6202.md?p=4) regulatory authority (with respect to each [electric utility](/usc/42/6341.md?p=9) for which the authority has ratemaking authority) or [nonregulated electric utility](/usc/42/6341.md?p=9) declines to implement the standard established by this section, the [project](/usc/42/6341.md?p=4) sponsor may submit a new petition under this section with respect to the [project](/usc/42/6341.md?p=4) at any time after the date that is 2 years after the date on which the [State](/usc/42/6202.md?p=4) regulatory authority or nonregulated utility declined to implement the standard.

## Source credit

(Pub. L. 94–163, title III, § 374, as added Pub. L. 110–140, title IV, § 451(a), Dec. 19, 2007, 121 Stat. 1628.)

## Notes

### Editorial Notes

### Prior Provisions

Prior sections 6344 and 6344a were repealed by Pub. L. 99–509, title III, § 3101(b), Oct. 21, 1986, 100 Stat. 1888.

Section 6344, Pub. L. 94–163, title III, § 374, Dec. 22, 1975, 89 Stat. 936; Pub. L. 95–619, title VI, § 691(b)(2), Nov. 9, 1978, 92 Stat. 3288, related to establishment of individual energy improvement targets for each of the 10 most energy-consumptive industries.

Section 6344a, Pub. L. 94–163, title III, § 374A, as added Pub. L. 95–619, title IV, § 461(c), Nov. 9, 1978, 92 Stat. 3273, related to targets for increased utilization of energy-saving recovered materials for specified industries.

### Statutory Notes and Related Subsidiaries

### Effective Date

Section effective on the date that is 1 day after Dec. 19, 2007, see section 1601 of Pub. L. 110–140, set out as a note under section 1824 of Title 2, The Congress.