The initial language called for 20% traditional renewables, which effectively means wind, since that is the only of the conventional with enough mass to impact the %.  The non-windy states have always been hostile to such a provision, seeing it as a wealth transfer.  Many arguments about externalities notwithstanding, perception is reality, and this perception has stalled many a federal RPS over the last decade.  (Jobs in home districts always trump ideology in Congress, after all.)

When the House realized they didn't have the votes to get 20%, they tried again at 15% but still didn't have the votes.  This led to an amendment from Doyle & Terry suggesting that energy efficiency also be added into the mix, such that new EE and cogen (with the latter earning a credit only to the extent that the new facility is more efficient than the separate baseline) would also be able to trade up to 27% of the total RPS, or 27% x 15% = 4% of the total.  This got the votes to pass, in large part because now the industrial, non-windy states could participate.  

Politics being the art of the possible, we got it done, and done in a way that is really hard to game.  I rarely praise Washington energy bills, but this one so far looks really good.

Being able to count energy efficiency against the RPS implies that there is a standardized way to quantify the energy savings from EE projects.  As someone who works in building retrocommissioning, I know that this can be tricky, although there are various standards that can apply.

Does the House bill specify the measurement standard, or how EE savings are to be quantified for purposes of the RPS?

GreenEngineer,

It is fuzzy.  The good thing about it is that (unlike many EE bills I have seen) it does not explicitly exclude anything.  The bad thing is that it is not clear about how it decides what it says to include.

The broad eligibility is as follows:

EE - "electricity savings adjusted to reflect any associated increase[s]... at the facility."  Great spirit, but really hard to quantify, as you correctly point out.  The key on this will clearly be at the DOE on implementation, should it get through the Senate.

Recycled energy - "a reduction in electricity consumption that is attributable to electrical or mechanical power, or both, produced by modifying an industrial or commercial system that was in operation before July 1, 2007 in order to recapture energy that would otherwise be wasted".  This one is fairly straightforward, and easy to see how to quantify, since the relevant equipment is all metered.

Combined Heat and Power - "the increment of electricity output... that is attributable to the higher efficiency of the combined system (as compared to the efficiency of the separate production of the electricity and thermal outputs)  shall be considered electricity savings..."

For what it's worth, they do stipulate that the M&V protocols are to be developed by June 30, 2009, so there is time to set this up properly before then.