; or (B) $10 per million Btu of natural gas savings or alternative compliance payment that the retail natural gas supplier failed to achieve or make, respectively. (3) Offsetting State penalties The Secretary shall reduce the amount of any penalty under paragraph (2) by the amount paid by the relevant retail electricity supplier or retail natural gas supplier to a State for failure to comply with the requirements of a State energy efficiency resource standard during the same compliance period, if the State standard— (A) is comparable in type to the Federal performance standard established under this section; and (B) is more stringent than the applicable performance standard under subsection (c). (4) Use of payments (A) Definition of covered rate In this paragraph, the term covered rate means the proportion that— (i) the amount of penalty payments made by retail electricity suppliers and natural gas suppliers in a State under paragraph (2); bears to (ii) the total amount of penalty payments collected by the Secretary under that paragraph. (B) Use of payments Penalty payments collected under paragraph (2) by the Secretary shall be— (i) provided to each State at the covered rate for the State; and (ii) used by the State to implement cost-effective energy efficiency programs that— (I) to the maximum extent practicable, achieve electricity savings and natural gas savings in the State sufficient to make up the deficit associated with the penalty payments