Federal Power Asset Privatization Act of 1995

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Federal Power Asset Privatization 
Act of 1995''.

SEC. 2. FINDINGS.

    The Congress finds that:
            (1) the Federal Power Marketing Administrations, over the 
        years, have served to help bring electricity to many areas in 
        the Nation;
            (2) they have done so with the investment of the American 
        taxpayer;
            (3) the necessity of federally owned power generation and 
        transmission facilities has passed and halting this practice is 
        in the best national interest of the United States;
            (4) in fairness to the longtime consumers of Federal Power 
        Marketing Administrations, any process of sale should be open 
        to them;
            (5) the taxpayers, through investing in the construction 
        and operation, have established equity in the facilities; and
            (6) this equity entitles the American taxpayer to expect 
        the highest possible return in the sale process.

SEC. 3. SALE OF ASSETS.

    (a) Sale of Assets.--The Secretary of Energy (hereinafter referred 
to as ``the Secretary'') is authorized and directed to take such steps 
as necessary to sell all electric power generation facilities and 
transmission facilities, that are currently owned and operated by 
Federal departments and agencies under the supervision of, or 
coordination with, the Federal Power Marketing Administrations. No 
foreign person or corporation may purchase any such facilities; such 
facilities may be sold only to a United States citizen or to a 
corporation or partnership organized under the laws of a State. After 
such sales are completed the Secretary shall terminate the operations 
of the Federal Power Marketing Administrations. The heads of other 
affected Federal departments and agencies shall assist the Secretary of 
Energy in implementing the sales authorized by this section.
    (b) Price; Structure of Sale.--
            (1) Price.--The Secretary shall obtain the highest possible 
        price for such facilities. In determining the highest possible 
        price, the value of future tax revenues shall be included.
            (2) Retention of financial advisor.--In order to conduct 
        the sales authorized by this section in such manner as will 
        produce the highest possible price for the facilities to be 
        sold consistent with this Act, within 30 days of enactment of 
        this section, the Secretary shall, through a competitive 
        bidding process, retain an experienced private sector firm to 
        serve as financial advisor to the Secretary with respect to 
        such sales.
            (3) Financial advisor's report.--Within 90 days of being 
        retained by the Secretary, the financial advisor shall provide 
        to the Secretary a report containing--
                    (A) a description of those assets described in 
                subsection (a) which, in the opinion of the financial 
                advisor, can be successfully transferred to private 
                sector ownership or operation;
                    (B) the value of each such asset, calculated on the 
                basis of the valuation method or methods which the 
                financial advisor deems most appropriate to a 
                particular asset;
                    (C) the appropriate alternative transactional 
                methods for transferring each such asset to private 
                sector ownership or operation;
                    (D) the amount of proceeds which the financial 
                advisor estimates would be paid to the United States 
                Government as a result of such transaction, including 
                the present value of future revenue from taxes and any 
                other future payments to be made to the United States 
                Government; and
                    (E) an estimate of the average market rate for 
                wholesale electric power sales within each region 
                served by a Federal Power Marketing Administration.
    (c) Time of Sale.--Sales of facilities under this section shall be 
conducted in accordance with the time of sale schedule set forth in 
section 4. At least one year before the date of any sale specified in 
such schedule, the Secretary, in consultation with the Secretary of the 
Army and the Secretary of the Interior, and based on the 
recommendations of the financial advisor, shall select the facilities 
or groups of facilities to be sold and establish the terms and 
conditions of the sale.
    (d) Former Employees of PMAS.--It is the sense of the Congress that 
the purchaser of any such facilities should offer to employ, where 
possible, former employees of the Federal Power Marketing 
Administrations in connection with the operation of the facilities 
following their purchase.
    (e) Proceeds.--The Secretary of Energy shall deposit sale proceeds 
in the Treasury of the United States to the credit of miscellaneous 
receipts.
    (f) Preparation.--The Secretary of Energy is authorized to use 
funds appropriated to the Department of Energy for the Federal Power 
Marketing Administrations and funds otherwise appropriated to other 
Federal agencies for power generation and related activities in order 
to prepare these assets for sale and conveyance. Such preparation shall 
provide sufficient title to ensure the beneficial use, enjoyment, and 
occupancy to the purchasers of the assets to be sold and shall include 
identification of all associated laws and regulations to be amended for 
the purpose of these sales. The Secretary of Energy shall undertake a 
study of the effect of sales of facilities under this Act on existing 
contracts for the sale of electric power generated at such facilities.
    (g) Reporting of Sales.--Not later than one year after the sale of 
the assets of each Federal Power Marketing Administration in accordance 
with this Act, the Secretary of Energy shall--
            (1) complete the business of, and close out, such 
        administration; and
            (2) prepare and submit to Congress a report documenting the 
        sales.
    (h) Treatment of Sales For Purposes of Certain Laws.--The sales of 
assets under this Act shall not be considered a disposal of Federal 
surplus property under the following provisions of law:
            (1) Section 203 of the Federal Property and Administrative 
        Services Act of 1949 (40 U.S.C. 484).
            (2) Section 13 of the Surplus Property Act of 1944 (50 
        U.S.C. App. 1622).

SEC. 4. TIME OF SALES.

    (a) Schedule.--During the next 5 years, the Secretary of Energy 
shall complete the sale of the electric power generation and 
transmission assets referred to in section 3 in accordance with the 
following schedule:


------------------------------------------------------------------------
           Power Administration                 Sale Completion Date    
------------------------------------------------------------------------
  Alaska                                      Before September 30, 1996 
  Southeastern                                Before September 30, 1997 
  Southwestern                                Before September 30, 1998 
  Western Area                                Before September 30, 1999 
  Bonneville                                  Before September 30, 2000 
------------------------------------------------------------------------

    (b) Unexpended Balances.--Following the sale of the assets of each 
of the Federal Power Marketing Administrations and their associated 
power generation facilities, the Secretary of Energy shall return the 
unexpended balances of funds appropriated for that administration to 
the Treasury of the United States.

SEC. 5. RATE STABILIZATION FOR AFFECTED CONSUMERS.

    So that the affected consumers of each Federal Power Marketing 
Administration are not impacted by severe rate increases, each 
purchaser of electric power generation facilities providing electric 
power to customers within any region shall be required, as part of the 
agreement to purchase such facilities, to insure that the price at 
which electric power is sold to such consumers does not increase above 
the baseline price at a rate greater than 10 percent annually. For 
purposes of this section, the term ``baseline price'' means the price 
for the sale of electric power to a consumer that is in effect on the 
date of the sale of the facility. The preceding sentence shall cease to 
apply when the price at which electric power is sold to a consumer is 
at least equal to the average market rate for wholesale electric power 
sales within the region concerned, as determined by the Financial 
Advisor.

SEC. 6. LICENSING OF PROJECTS TO PRESERVE CURRENT OPERATING CONDITIONS.

    (a) Original License.--Simultaneously with the sale of 
hydroelectric generation facility under this Act, the Federal Energy 
Regulatory Commission shall issue an original license under part 1 of 
the Federal Power Act (16 U.S.C. 791a-823b) to the purchaser for the 
construction, operation, and maintenance of such facility. Such license 
shall expire on the date 10 years after the date of the sale facility 
and shall contain standard terms and conditions for hydroelectric power 
licenses issued under part 1 of such Act for facilities installed at 
Federal water projects, together with such additional terms and 
conditions as the Commission deems necessary, in consultation with the 
department or agency which operates such water project, to further the 
project purposes and insure that the project will continue operations 
in the same manner and subject to the same procedures, contracts, and 
other requirements as were applicable prior to the sale. The Commission 
shall publish such license terms and conditions for each facility to be 
sold under this Act as promptly as practicable after the date of the 
enactment of this Act but not later than one year prior to the date 
established for the sale of the facility.
    (b) License Required.--Notwithstanding any other provision of law, 
the Federal Energy Regulatory Commission shall have jursidiction under 
part 1 of the Federal Power Act over any hydroelectric generation 
facility sold under this Act.

SEC. 7. ENABLING FEDERAL STUDIES.

    Section 505 of the Energy and Water Development Appropriations Act 
of 1993 (Public Law 102-377) is hereby repealed.

SEC. 8. DEFINITION OF POWER GENERATION FACILITY.

    For purposes of this Act, the term ``power generation facility'' 
means a facility used for the generation of electric energy. If any 
portion of a structure or other facility is used for flood control, 
water supply or other purposes in addition to the generation of 
electric energy, such term refers only to that portion of the structure 
or facility used exclusively for the generation of electric energy, 
including turbines, generators, controls, substations, and primary 
lines used for transmitting electric energy therefrom to the point of 
juncture with the interconnected primary transmission system. Such term 
shall not include any portion of a facility used for navigation, flood 
control, irrigation, water supply, or recreation.

Summary: Federal Power Asset Privatization Act of 1995 - Directs the Secretary of Energy to sell, at the highest possible price, all Federal electric power generation and transmission facilities supervised by, or coordinated with, the Federal Power Marketing Administrations. Restricts such sales to domestic entities or US citizens. Requires the Secretary to terminate Federal Power Marketing Administration operations upon completion of the sales. Directs the Secretary to retain a private sector firm through a competitive bidding process to serve as financial advisor with respect to such sales. Expresses the sense of the Congress that the purchaser of any such facilities should offer to employ former Federal Power Marketing Administration personnel. Mandates that sale proceeds be deposited into the Treasury. Sets forth a sales completion deadline for each Power Marketing Administration. Mandates that the pertinent sales agreements require each purchaser providing electric power to customers within any region to insure that the price of electric power does not increase above the baseline price at a rate greater than ten percent annually. Directs the Federal Energy Regulatory Commission (FERC) to issue to the purchaser of a hydroelectric generation facility a ten-year original license under the Federal Power Act to insure that the project will continue operations under the same conditions as were applicable prior to the sale. Grants FERC Federal Power Act jurisdiction over any such facility sold. Amends the Energy and Water Development Appropriations Act of 1993 to repeal the proscription against the use of appropriated funds for studies regarding a changeover from an at cost to a market rate or other noncost-based methodology for pricing hydroelectric power.