article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Desalination Energy Consumption Reduction Act of 2006''. SEC. 2. DEFINITIONS. For purposes of this Act: (1) Qualified desalination facility.--The term ``qualified desalination facility'' means a facility that-- (A) produces for sale to domestic customers desalinated seawater, brackish groundwater, or surface water whose source water is greater than 1000 milligrams per liter total dissolved solids; (B) is owned or operated by-- (i) a State or any political subdivision, agency, authority, or instrumentality of a State; (ii) an Indian tribe; or (iii) a corporation responsible for providing municipal water service pursuant to State or tribal law; (C) is first used to produce commercial desalinated water for sale during the 10-year period beginning on October 1 of the first fiscal year occurring after the date of enactment of this Act; and (D) uses the best available technology as determined by the Secretary. (2) Indian tribe.--The term ``Indian tribe'' has the meaning given that term in section 4(e) of the Indian Self- Determination and Education Assistance Act (25 U.S.C. 450b(e)). (3) Secretary.--The term ``Secretary'' means the Secretary of Energy. (4) State.--The term ``State'' means the several States, the District of Columbia, Puerto Rico, American Samoa, the Virgin Islands, Guam, and the Northern Mariana Islands. SEC. 3. DESALINATED WATER ENERGY CONSUMPTION REDUCTION INCENTIVE PAYMENTS. (a) Incentive Payments.--The Secretary shall make incentive payments in an amount determined under subsection (d) to the owners of qualified desalination facilities to encourage the utilization of the best available technology to reduce the consumption of electrical energy in the desalination process. (b) Agreement; Deadline.--The Secretary may not make any payment to the owner or operator of a quailfied desalination facility under this section unless, not later than the end of fiscal year 2018, the Secretary enters into a written agreement with the owner or operator to make such payment. (c) Payment Period.--The Secretary may make payments to the owner or operator of a qualified desalination facility under this section for a period not to exceed 10 years-- (1) beginning on the date on which the facility is first used to produce desalinated water; and (2) ending not later than September 30, 2028. (d) Amount of Payment.-- (1) In general.--Payments made by the Secretary under this section to the owner or operator of any qualified desalination facility shall be based on the amount of electrical energy conserved by the facility below the benchmarks included in the formula established under paragraph (2) during the payment period described in subsection (c), adjusted as provided in paragraph (3). (2) Base payment.--The Secretary shall establish a formula for making incentive payments to owners of qualified desalination facilities producing potable water from source waters ranging from 1,000 to 35,000 milligrams per liter total dissolved solids or more. The payment shall range from 30 cents per 1,000 gallons of potable water produced for any facility that can demonstrate a savings of .25 kilowatt hours per gallon to 90 cents per 1,000 gallons of potable water produced for any facility that can demonstrate a savings of 4.75 kilowatt hours per gallon from a benchmark for energy consumption by such facilities that ranges along a linear scale from 1.8 kilowatt hours per gallon for facilities utilizing source water of 1,000 milligrams per liter total dissolved solids to 14 kilowatt hours per gallon for facilities utilizing source water of 35,000 milligrams per liter total dissolved solids or more. (3) Adjustments.--In the case of any payment made to any person under this subsection in a fiscal year beginning after calendar year 2008, the amount of such payment shall be adjusted by multiplying such amount by the inflation adjustment factor (determined under section 45K(d)(2) of the Internal Revenue Code of 1986 by substituting ``2008'' for ``1979'' in subparagraph (B) thereof) for the calendar year in which the payment is made. (e) Application.--The Secretary may not make a grant to the owner or operator of a qualified desalination facility under this section unless the facility submits an application to the Secretary in such form, at such time, and containing such information and assurances as the Secretary may require. Further, as a part of the application the applicant shall provide a written assurance to the Secretary that the financial benefit of any incentive payments received by the applicant will be utilized for the benefit of the rate payers. (f) Limitation.--In any fiscal year not more than 60 percent of the funds made available by the Secretary under this section shall be made available to the owners or operators of qualified desalination facilities that obtain source water directly from the sea, an estuary, or from in-bank extraction wells that are of seawater origin. (g) Priority.--In awarding incentive payments under this section, the Secretary shall give priority to any application for a project that-- (1) uses innovative technologies to reduce the energy demand of the project; (2) uses renewable energy supplies in the desalination process; (3) provides regional water supply benefits; (4) provides a secure source of new water supplies for national defense activities; (5) reduces the threat of a water supply disruption as a result of a natural disaster or acts of terrorism; (6) uses technologies that minimize the damage to marine life; or (7) provides significant water quality benefits. (h) Budget Act Compliance.--The authority provided by this section may be exercised only in such amounts or to such extent as is provided in advance in appropriations Acts. (i) Authorization of Appropriations.--There are authorized to be appropriated to the Secretary $200,000,000 to carry out this section for the period encompassing fiscal years 2008 through 2018.
summary: Desalination Energy Consumption Reduction Act of 2006 - Requires the Secretary of Energy to make specified incentive payments to the owners of qualified desalination facilities for up to ten years to encourage the utilization of the best available technology to reduce the consumption of electrical energy in the desalination process. Limits to 60% the amount of available funds to be provided to facilities that obtain source water directly from the sea, an estuary, or from in-bank extraction wells that are of seawater origin. Directs the Secretary, in awarding incentive payments, to give priority to projects that: (1) use innovative technologies to reduce its energy demand; (2) use renewable energy supplies; (3) provide regional water supply benefits; (4) provide a secure source of new water supplies for national defense activities; (5) reduce the threat of a water supply disruption as a result of a natural disaster or acts of terrorism; (6) use technologies that minimize the damage to marine life; or (7) provide significant water quality benefits.