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[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 1047 Introduced in Senate (IS)]

106th CONGRESS
  1st Session
                                S. 1047

  To provide for a more competitive electric power industry, and for 
                            other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                              May 13, 1999

 Mr. Murkowski (for himself and Mr. Bingaman) (by request) introduced 
the following bill; which was read twice and referred to the Committee 
                    on Energy and Natural Resources

_______________________________________________________________________

                                 A BILL

 
  To provide for a more competitive electric power industry, and for 
                            other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Comprehensive Electricity 
Competition Act''.

SEC. 2 TABLE OF CONTENTS.

Sec. 1. Short title.
Sec. 2. Table of contents.
                    TITLE I--RETAIL ELECTRIC SERVICE

Sec. 101. Retail competition.
Sec. 102. Authority to impose reciprocity requirements.
Sec. 103. Aggregation for purchase of retail electric energy.
                     TITLE II--CONSUMER PROTECTION

Sec. 201. Consumer information.
Sec. 202. Access to electric service for low-income consumers.
Sec. 203. Unfair trade practices.
Sec. 204. Residential electricity consumer database.
Sec. 205. Model retail supplier code.
Sec. 206. Model electric utility worker code.
         TITLE III--FACILITATING STATE AND REGIONAL REGULATION

Sec. 301. Clarification of State and Federal authority over retail 
                            transmission services.
Sec. 302. Interstate compacts on regional transmission planning.
Sec. 303. Backup authority to impose a charge on an ultimate consumer's 
                            receipt of electric energy.
Sec. 304. Authority to establish and require independent regional 
                            system operation.
                       TITLE IV--PUBLIC BENEFITS

Sec. 401. Public benefits fund.
Sec. 402. Federal renewable portfolio standard.
Sec. 403. Net metering.
Sec. 404. Reform of section 210 of PURPA.
Sec. 405. Interconnections for certain facilities.
Sec. 406. Rural and remote communities electrification grants.
Sec. 407. Indian tribe assistance.
Sec. 408. Office of Indian Energy Policy and Programs.
Sec. 409. Southeast Alaska electrical power.
         TITLE V--REGULATION OF MERGERS AND CORPORATE STRUCTURE

Sec. 501. Reform of holding company regulation under PUHCA.
Sec. 502. Electric company mergers.
Sec. 503. Remedial measures for market power.
                     TITLE VI--ELECTRIC RELIABILITY

Sec. 601. Electric reliability organization and oversight.
Sec. 602. Electricity outage investigation.
Sec. 603. Additional transmission capacity.
                  TITLE VII--ENVIRONMENTAL PROTECTION

Sec. 701. Nitrogen oxides cap and trade program.
                   TITLE VIII--FEDERAL POWER SYSTEMS

                 Subtitle A--Tennessee Valley Authority

Sec. 801. Definition.
Sec. 802. Application of Federal Power Act.
Sec. 803. Antitrust coverage.
Sec. 804. TVA power sales.
Sec. 805. Renegotiation of long-term power contracts.
Sec. 806. Stranded cost recovery.
Sec. 807. Conforming amendments.
              Subtitle B--Bonneville Power Administration

Sec. 811. Definitions.
Sec. 812. Application of Federal Power Act.
Sec. 813. Surcharge on transmission rates to recover otherwise non-
                            recoverable costs.
Sec. 814. Complaints.
Sec. 815. Review of commission orders.
Sec. 816. Conforming amendments.
 Subtitle C--Western Area Power Administration and Southwestern Power 
                             Administration

Sec. 821. Definitions.
Sec. 822. Application of Federal Power Act.
Sec. 823. Surcharge on transmission rates to recover otherwise non-
                            recoverable costs.
Sec. 824. Conforming amendments.
                       TITLE IX--OTHER PROVISIONS

Sec. 901. Treatment of nuclear decommissioning costs in bankruptcy.
Sec. 902. Energy Information Administration study of impacts of 
                            competition in electricity markets.
Sec. 903. Antitrust savings clause.
Sec. 904. Elimination of antitrust review by the Nuclear Regulatory 
                            Commission.
Sec. 905. Environmental laws savings clause.
Sec. 906. Generating plant efficiency study.
Sec. 907. Conforming amendments.

                    TITLE I--RETAIL ELECTRIC SERVICE

SEC. 101. RETAIL COMPETITION.

    (a) Retail Competition.--The Public Utility Regulatory Policies Act 
of 1978 (referred to in this Act as PURPA) is amended by adding after 
section 608 the following new section:

``SEC. 609. RETAIL COMPETITION.

    ``(a) Definitions.--For purposes of this section, `retail stranded 
costs' means the amount of net costs incurred or obligations undertaken 
before the date of the enactment of the Comprehensive Electricity 
Competition Act by a distribution utility that--
            ``(1) were incurred or undertaken by that distribution 
        utility in order to comply with a legal obligation on that 
        utility to provide electricity to electric consumers in its 
        service territory, and
            ``(2) cannot be recovered because of implementation of 
        retail competition under subsection (b).
    ``(b) Retail Competition Requirement.--Except as provided in 
subsection (c), not later than January 1, 2003, any distribution 
utility that has the capability to deliver electric energy to an 
electric consumer over its facilities shall offer open access to those 
facilities for the sale of electric energy to the consumer and shall do 
so at rates, terms, and conditions that are not unduly discriminatory 
or preferential, as determined by the appropriate regulatory authority.
    ``(c) Opt Out.--(1) A State regulatory authority (with respect to a 
distribution utility for which it has ratemaking authority) may direct 
a distribution utility not to implement the retail competition 
requirement described in subsection (b) if the State regulatory 
authority finds, after notice and opportunity for hearing, that 
implementation of the retail competition requirement by the 
distribution utility will have a negative impact on a class of 
customers of that utility that cannot be mitigated.
    ``(2) A nonregulated distribution utility may determine not to 
implement the retail competition requirement described in subsection 
(b) if it finds, after notice and opportunity for hearing, that 
implementation of the retail competition requirement by the 
distribution utility will have a negative impact on a class of 
customers of that utility that cannot be mitigated.
    ``(3) The State regulatory authority (with respect to a 
distribution utility for which it has ratemaking authority) or 
nonregulated distribution utility shall publish the determination and 
its basis and shall file a notice with the Commission of its 
determination by January 1, 2002.
    ``(d) Notice of Retail Competition.--A State regulatory authority 
(with respect to a distribution utility for which it has ratemaking 
authority) or nonregulated distribution utility shall file with the 
Commission a notice that the distribution utility has implemented or 
will implement retail competition consistent with subsection (b). The 
notice shall describe the implementation of retail competition. The 
notice is effective for purposes of section 118, 119, 119A, and 119B of 
this Act and sections 212(h), 216, and 217 of the Federal Power Act on 
the date the notice is filed or the date of implementation of retail 
competition consistent with subsection (b) whichever is later.
    ``(e) Consideration of Recovery of Retail Stranded Costs.--(1) If a 
State regulatory authority or nonregulated distribution utility 
conducts a public proceeding before a distribution utility implements 
retail competition as required under subsection (b), as part of this 
proceeding, the State regulatory authority or nonregulated distribution 
utility shall consider the appropriate mechanism to address recovery by 
a distribution utility for which it has ratemaking authority of retail 
stranded costs that are legitimate, prudent, and verifiable, if the 
utility has taken all reasonable steps to mitigate the costs, including 
assistance for workers who are employed or were most recently employed 
by an electric utility and who may become or have become unemployed as 
a result of the implementation of retail competition. A charge imposed 
for purposes of recovering retail stranded costs or providing 
assistance for unemployed workers should be imposed in a manner so as 
to minimize to the fullest extent possible any effect on an electric 
consumer's choice among competing suppliers or products.
    ``(2) If a State regulatory authority or nonregulated utility 
imposes or allows a charge to recover retail stranded costs under 
paragraph (1), it shall consider reducing the charge on an electric 
consumer who uses electric energy produced on-site when the charge 
results from the use of new on-site generation produced by--
            ``(A) a fuel cell,
            ``(B) a facility with an efficiency rate of at least 50 
        percent,
            ``(C) a facility that uses a single fuel source to produce 
        at the point of use either electric or mechanical power and 
        thermal energy and that has a combined efficiency rate of at 
        least 50 percent, or
            ``(D) a renewable resource.
    ``(f) Enforcement.--Any person may bring an action in the 
appropriate State court against a State regulatory authority, a 
distribution utility, or a nonregulated distribution utility for 
failure to comply with this section. Filing an action challenging 
whether retail competition is being implemented consistent with 
subsection (b) makes a notice of retail competition ineffective for 
purposes of sections 118, 119, 119A, and 199B of this Act and sections 
212(h), 216, and 217 of the Federal Power Act until final resolution of 
the action. Notwithstanding any other law, a court created under 
Article III of the Constitution does not have jurisdiction over an 
action arising under this section.''.
    (b) Definitions.--Section 3 of PURPA is amended by adding after 
paragraph (21) the following new paragraphs:
            ``(22) The term `notice of retail competition' means a 
        notice filed under section 609(d).
            ``(23) The term `distribution utility' means a person, 
        State agency, or any other non-federal entity that owns or 
        operates a local distribution facility used for the sale of 
        electric energy to an electric consumer.
            ``(24) The term `nonregulated distribution utility' means a 
        distribution utility not subject to the ratemaking authority of 
        a State regulatory authority.''.

SEC. 102. AUTHORITY TO IMPOSE RECIPROCITY REQUIREMEMENTS.

    PURPA is amended by adding the following new section after section 
117:

``SEC. 118. AUTHORITY TO IMPOSE RECIPROCITY REQUIREMENTS.

    ``(a) State Regulatory Authority.--If a State regulatory authority 
files a notice of retail competition with respect to a distribution 
utility, beginning on the effective date of the notice, the State 
regulatory authority may prohibit any other distribution utility 
located in the United States over which it does not have ratemaking 
authority (and any affiliate of such a utility, as defined under the 
Public Utility Holding Company Act of 1999) from selling electric 
energy to electric consumers of a distribution facility covered by the 
notice of retail competition, unless a notice of retail competition has 
been filed with respect to the other distribution utility.
    ``(b) Nonregulated Distribution Utility.--If a nonregulated 
distribution utility files a notice of retail competition, beginning on 
the effective date of the notice, it may prohibit any other 
distribution utility located in the United States (and any affiliate of 
such a utility, as defined under the Public Utility Holding Company Act 
of 1999) from selling electric energy to electric consumers of the 
nonregulated distribution utility covered by the notice unless a notice 
of retail competition has been filed with respect to the other 
distribution utility.''.

SEC. 103. AGGREGATION FOR PURCHASE OF RETAIL ELECTRIC ENERGY.

    PURPA is amended by adding the following new section after section 
118 as added by section 102 of this Act:

``SEC. 119. AGGREGATION FOR PURCHASE OF RETAIL ELECTRIC ENERGY.

    ``Notwithstanding any other provision of Federal or State law, and 
subject to legitimate and nondiscriminatory State requirements imposed 
on retail electric suppliers, a group of customers or any entity acting 
on behalf of such group may acquire electric energy on an aggregate 
basis if the group of customers is served by one or more distribution 
utilities for which a State regulatory authority or nonregulated 
distribution utility has filed a notice of retail competition under 
section 609 of this Act for each distribution utility.''.

                     TITLE II--CONSUMER PROTECTION

SEC. 201. CONSUMER INFORMATION.

    PURPA is amended by adding the following new section after section 
119 as added by section 103 of this Act:

``SEC. 119A. CONSUMER INFORMATION DISCLOSURE.

    ``(a) Disclosure Rules.--Not later than six months after the date 
of enactment of this Act, the Secretary, in consultation with the 
Commission, the Administrator of the Environmental Protection Agency, 
and the Federal Trade Commission, shall issue rules prescribing the 
form, content, placement, and timing of the supplier disclosure 
required under subsections (b) and (c) of this section. The rules shall 
be prescribed in accordance with section 553 of title 5, United States 
Code.
    ``(b) Disclosure to Electric Consumers.--An electric utility that 
offers to sell electric energy to an electric consumer shall provide 
the electric consumer, to the extent practicable and in accordance with 
rules issued under subsection (a), a statement containing the following 
information:
            ``(1) The nature of the service being offered, including 
        information about interruptibility or curtailment of service.
            ``(2) The price of the electric energy, including a 
        description of any variable charges.
            ``(3) A description of all other charges associated with 
        the service being offered including, but not limited to, access 
        charges, exit charges, back-up service charges, stranded cost 
        recovery charges, and customer service charges.
            ``(4) Information concerning the type of energy resource 
        used to generate the electric energy and the environmental 
        attributes of the generation (including air emissions 
        characteristics).
            ``(5) Any other information the Secretary determines can be 
        provided feasibly and would be useful to consumers in making 
        purchasing decisions.
    ``(c) Disclosure to Wholesale Customers.--In every sale of electric 
energy for resale, the seller shall provide to the purchaser the 
information respecting the type of energy resource used to generate the 
electric energy and the environmental attributes of the generation 
required by rules established under subsection (a).
    ``(d) Federal Trade Commission Enforcement.--A violation of a rule 
prescribed under this section shall constitute an unfair or deceptive 
act or practice in violation of section 5 of the Federal Trade 
Commission Act (15 U.S.C. 45) and shall be treated as a violation of a 
rule under section 18 of the Federal Trade Commission Act (15 U.S.C. 
57a). All functions and powers of the Federal Trade Commission under 
the Federal Trade Commission Act are available to enforce compliance 
with this section notwithstanding jurisdictional limitations in the 
Federal Trade Commission Act.
    ``(e) Authority To Obtain Information.--Authority to obtain 
information under section 11 of the Energy Supply and Environmental 
Coordination Act of 1974 (15 U.S.C. 796) is available to the Secretary 
to administer this section and to the Federal Trade Commission to 
enforce this section. In order to carry out its duties under this 
section, the Federal Trade Commission may use any of its powers under 
sections 3, 6, 9, and 20 of the Federal Trade Commission Act (15 U.S.C. 
43, 46, 49, and 57b-2) without regard to the limitations contained in 
section 20(b) of that Act (15 U.S.C. 57b-2(b)) or any jurisdictional 
limitations contained in that Act.
    ``(f) Enforcement by States.--(1) When a State determines that the 
interests of its residents have been or are being threatened or 
adversely affected because any person is violating or has violated a 
rule of the Secretary under this section, the State may bring a civil 
action on behalf of its residents in an appropriate district court of 
the United States to--
            ``(A) enjoin the violation;
            ``(B) enforce compliance with the rule of the Secretary;
            ``(C) obtain damages, restitution, or other compensation on 
        behalf of its residents; or
            ``(D) obtain other relief the court considers appropriate.
    ``(2) The State shall serve prior written notice of any civil 
action under this subsection upon the Federal Trade Commission and 
provide the Federal Trade Commission with a copy of its complaint, 
except that if it is not feasible for the State to provide this prior 
notice, the State shall serve the notice immediately upon instituting 
the action. Upon receiving a notice respecting a civil action, the 
Federal Trade Commission may--
            ``(A) intervene in the action, and
            ``(B) upon so intervening, be heard on all matters arising 
        in the action and file petition for appeal.
    ``(3) For purposes of bringing any civil action under this 
subsection, this section does not prevent a State official from 
exercising the powers conferred by State law to conduct investigations, 
administer oaths or affirmations, or compel the attendance of witnesses 
or the production of documentary and other evidence.
    ``(4) While a civil action instituted by or on behalf of the 
Federal Trade Commission for violation of any rule prescribed under 
this subsection is pending, a State may not institute a civil action 
under this section against a defendant named in the complaint in the 
pending action for a violation alleged in the complaint.
    ``(5) A civil action brought under this subsection may be brought 
in the district in which the defendant is found, is an inhabitant, or 
transacts business or wherever venue is proper under section 1391 of 
title 28, United States Code. Process in such an action may be served 
in any district in which the defendant is an inhabitant or in which the 
defendant may be found.
    ``(6) This section does not prohibit a State from proceeding in 
State court on the basis of an alleged violation of a State civil or 
criminal statute.''.

SEC. 202. ACCESS TO ELECTRIC SERVICE FOR LOW-INCOME CONSUMERS.

    PURPA is amended by adding the following new section after section 
119A as added by section 201 of this Act:

``SEC. 119B. ACCESS TO ELECTRIC SERVICE FOR LOW-INCOME CONSUMERS.

    ``(a) Definitions.--For purposes of this section `low-income 
residential consumer' is a household, as defined in section 2603(4) of 
the Low-Income Home Energy Assistance Act of 1981 (42 U.S.C. 8622(4)), 
with an annual income that--
            ``(1) does not exceed 60 percent of the State median 
        income, as defined in section 2603(9) of the Low-Income Home 
        Energy Assistance Act of 1981 (42 U.S.C. 8622(9)), of the State 
        where the household is located, or
            ``(2) meets the eligibility criteria for a low-income 
        energy program operated by the State where the household is 
        located.
    ``(b) Applicability.--Each State regulatory authority and 
nonregulated distribution utility that files a notice of retail 
competition under section 609 of this Act shall conduct a proceeding to 
determine whether to apply the principles of subsection (c).
    ``(c) Principles.--The following are principles for providing 
electric service to low-income residential consumers:
            ``(1) A State regulatory authority or nonregulated 
        distribution utility shall assure that its low-income 
        residential consumers obtain benefits from retail competition 
        comparable to its other residential consumers.
            ``(2) As a condition of offering retail service to 
        residential consumers in a State, a retail electric supplier 
        shall agree to--
                    ``(A) offer, promote, and provide, upon request, 
                retail electric service to a low-income residential 
                consumer on rates, terms, and conditions comparable to 
                those offered to other residential consumers located in 
                the same area where the low-income residential consumer 
                is located, and
                    ``(B) share equitably with other retail electric 
                suppliers in the State any costs necessary to provide 
                service to low-income residential consumers under 
                subparagraph (A).''.

SEC. 203. UNFAIR TRADE PRACTICES.

    The Federal Trade Commission Act (15 U.S.C. 41 et seq.) is amended 
by inserting the following new section after section 5:

``SEC. 5A. ELECTRICITY SUPPLY UNFAIR TRADE PRACTICES.

    ``(a) Definition.--For purposes of this section, `retail electric 
supplier' has the meaning given that term in section 3(25) of the 
Public Utility Regulatory Policies Act of 1978.
    ``(b) Slamming.--(1) The Federal Trade Commission shall establish 
rules in accordance with section 553 of title 5, United States Code for 
the submittal and verification of a retail electric customer's 
selection or change in selection of a retail electric supplier and for 
the assessment of penalties for violation of these rules. These rules 
shall ensure that the customer receives electric service from the 
retail electric supplier of the customer's choice.
    ``(2) A person shall not submit or change the selection made by a 
retail electric customer except in accordance with procedures 
established in paragraph (1).
    ``(c) Cramming.--(1) The Federal Trade Commission shall establish 
rules in accordance with section 553 of title 5, United States Code for 
obtaining the consent of a retail electric customer for purchase of 
goods and services other than those expressly authorized by law or by 
the customer's electricity supply and metering agreement and for the 
assessment of penalties for violation of these rules.
    ``(2) A person shall not charge a retail electric customer for a 
particular service except in accordance with procedures established in 
paragraph (1).
    ``(d) Federal Trade Commission Enforcement.--Violation of this 
section or of a rule prescribed under this section constitutes an 
unfair and deceptive act or practice in violation of section 5 of this 
Act and shall be treated as a violation of a rule under section 18 of 
this Act. All functions and powers of the Federal Trade Commission 
under this Act are available to the Federal Trade Commission to enforce 
compliance with this section notwithstanding any jurisdictional 
limitations in this Act.
    ``(e) State Proceedings and Other Remedies.--(1) This section does 
not preclude a State or State commission from prescribing and enforcing 
additional laws, regulations, or procedures regarding the practices 
which are the subject of this section, so long as such laws, 
regulations or procedures do not conflict with the provisions of this 
section or with any rule prescribed by the FTC pursuant to it.
    ``(2) The remedies provided by this section are in addition to any 
other remedies available by law.''.

SEC. 204. RESIDENTIAL ELECTRICITY CONSUMER DATABASE.

    PURPA is amended by adding the following new section after section 
119B as added by section 202 of this Act:

``SEC. 119C. RESIDENTIAL ELECTRICITY CONSUMER DATABASE.

    ``(a) Database.--The Secretary is authorized to compile a database 
to provide residential electric consumers with information to compare 
the offers of various retail electric suppliers.
    ``(b) Information.--A retail electric supplier who provides 
electric consumers with information under section 119A shall provide 
the Secretary the same information and any other information the 
Secretary considers appropriate for purposes of this section.
    ``(c) Content.--The database under this program shall--
            ``(1) compare the rates, terms, and conditions of the 
        service offered by the various retail electric suppliers based 
        on the information provided under subsection (b);
            ``(2) disseminate the comparison to consumers through 
        various communications channels, including the Internet; and
            ``(3) provide other information the Secretary considers 
        appropriate to carry out the purposes of this section.''.

SEC. 205. MODEL RETAIL SUPPLIER CODE.

    PURPA is amended by adding the following new section after section 
119C as added by section 204 of this Act:

``SEC. 119D. MODEL CODE FOR RETAIL SUPPLIERS.

    ``The Secretary shall develop by rule and circulate among the 
States for their consideration a model code for the regulation of 
retail electric suppliers for the protection of electric consumers.''.

SEC. 206. MODEL ELECTRIC UTILITY WORKER CODE.

    PURPA is amended by adding the following new section after section 
119D as added by section 205 of this Act:

``SEC. 119E. MODEL CODE FOR ELECTRIC UTILITY WORKERS.

    ``(a) The Secretary shall develop by rule and circulate among the 
States for their consideration a model code containing standards for 
electric facility workers to ensure electric facility safety and 
reliability. The Secretary, in developing these standards, shall 
consult with all interested parties, including representatives of 
electric facility workers.
    ``(b) In issuing a model code under this section, the Secretary 
shall not, for purposes of section 653 of title 29, be deemed to be 
exercising statutory authority to prescribe or enforce standards or 
regulations affecting occupational safety and health.''.

         TITLE III--FACILITATING STATE AND REGIONAL REGULATION

SEC. 301. CLARIFICATION OF STATE AND FEDERAL AUTHORITY OVER RETAIL 
              TRANSMISSION SERVICES.

    (a) Nonpreemption of State and Nonregulated Utility Authority To 
Order Retail Wheeling and To Impose Local Delivery Charges.--Section 
201(b) of the Federal Power Act (referred to in this Act as ``the 
FPA'') is amended by adding the following new paragraph after paragraph 
(2):
    ``(3) This Act does not preempt or otherwise affect any authority 
under the law of a State or municipality to--
            ``(A) require unbundled transmission and local distribution 
        services for the delivery of electric energy directly to an 
        ultimate consumer, but if unbundled transmission is in 
        interstate commerce, the rates, terms, and conditions of the 
        transmission are subject to the exclusive jurisdiction of the 
        Commission under this part, or
            ``(B) impose a delivery charge on an ultimate consumer's 
        receipt of electric energy.''.
    (b) Open Access Transmission Authority; Retail Wheeling in Retail 
Competition States.--
            (1) Applicability of open access transmission rules.--
        Section 206 of the FPA is amended by adding the following new 
        subsection after subsection (d):
    ``(e) Open Access Transmission Services.--(1) Under section 205 and 
this section, the Commission may require, by rule or order, public 
utilities to provide open access transmission services, subject to 
section 212(h), and may authorize recovery of stranded costs, as 
defined by the Commission, arising from any requirement to provide open 
access transmission services. This section applies to any rule or order 
issued by the Commission before the date of enactment of the 
Comprehensive Electricity Competition Act.''.
            (2) Authority to order retail wheeling.--Section 212(h) of 
        the FPA is amended--
                    (A) by inserting ``(1)'' before ``No'';
                    (B) by striking ``(1)'', ``(2)'', ``(A)'', and 
                ``(B)'' and inserting in their places ``(A)'', ``(B)'', 
                ``(i)'', and ``(ii)'' respectively;
                    (C) by striking from redesignated paragraph 
                (1)(B)(ii) ``the date of enactment of this subsection'' 
                and inserting ``October 24, 1992,'' in its place; and
                    (D) by adding at the end a new paragraph as 
                follows:
            ``(2) Notwithstanding paragraph (1), the Commission may 
        issue an order that requires the transmission of electric 
        energy directly or indirectly to an ultimate consumer if a 
        notice of retail competition under section 609 of the Public 
        Utility Regulatory Policies Act of 1978 has been filed and is 
        in effect with respect to the ultimate consumer's distribution 
        utility or if a distribution utility offers open access to its 
        delivery facilities to the ultimate consumer.''.
            (3) Conforming amendments.--
                    (A) Section 3(23) of the FPA is amended to read as 
                follows:
            ``(23) `transmitting utility' means any entity that owns, 
        controls, or operates electric power transmission facilities 
        that are used for the sale of electric energy in the 48 
        contiguous States and the District of Columbia, notwithstanding 
        section 201(f) of this Act;''.
                    (B) Section 3(24) of the FPA is amended to read as 
                follows:
            ``(24) `transmission services' means the transmission of 
        electric energy sold or to be sold;''.
                    (C) Section 211(a) of the FPA is amended by 
                striking ``for resale''.
                    (D) Section 212(a) of the FPA is amended by 
                striking ``wholesale'' each time it appears, except the 
                last time.
    (c) Applicability of Commission Jurisdiction to Transmitting 
Utilities.--Section 206(e) of the FPA as added by subsection (b)(1) of 
this section is amended by adding the following new paragraphs after 
paragraph (1):
    ``(2)(A) The Commission has jurisdiction over the rates, terms, and 
conditions for transmission services provided by a transmitting utility 
that is not a public utility or covered by section 201A, subject to 
section 212(h), and may authorize recovery of stranded costs, as 
defined by the Commission, by such transmitting utility. The Commission 
may require, by rule or order, a transmitting utility that is not a 
public utility or covered by section 201A to provide open access 
transmission services, subject to section 212(h).
    ``(B) In exercising its authority under this Act, the Commission--
            ``(i) shall take into account the different structural and 
        operating characteristics of transmitting utilities, including 
        the multi-tier structure and the not-for-profit operations of 
        electric cooperatives;
            ``(ii) with respect to any transmitting utility that has 
        outstanding loans made or guaranteed by the Rural Utilities 
        Service, shall take into account the policies of the Department 
        of Agriculture in implementing the Rural Electrification Act of 
        1936 and shall assure, to the extent practicable, that the 
        utility will be able to meet any loan obligations under that 
        Act; and
            ``(iii) shall not approve rates, terms, or conditions the 
        Commission determines would have the effect of jeopardizing the 
        tax exempt status of nonprofit electric cooperatives under the 
        Internal Revenue Code of 1986.
    ``(C) Notwithstanding any other law, section 205, this section, and 
part III apply to a transmitting utility that is not a public utility 
or covered by section 201A for purposes of this section.
    ``(3) Any electric utility that owns, directly or indirectly, 
generation facilities financed in whole or in part with outstanding 
loans made or guaranteed by the Rural Utilities Service may apply to 
the Commission to impose a charge for the recovery of stranded costs as 
defined by the Commission. If the Commission determines that the 
proposed charge is just, reasonable, and not unduly discriminatory or 
preferential, the Commission may issue an order providing for the 
imposition of the charge on transmission service by the applicant or by 
another transmitting utility or on any electric utility or transaction 
subject to the Commission's jurisdiction.''.
    (d) Notice to and Intervention of Secretary of Agriculture in FERC 
Proceedings.--The FPA is amended by adding after section 218, as added 
by section 601 of this Act, the following new section:

``notice to and intervention of secretary of agriculture in commission 
                              proceedings

    ``Sec. 219. Any person filing a complaint or petition for 
rulemaking under part II of the FPA that directly affects an electric 
utility with loans made or guaranteed under the Rural Electrification 
Act of 1936 shall provide notice of such complaint or petition to the 
Secretary of Agriculture. The Secretary of Agriculture may as a matter 
of right intervene or otherwise participate in any proceeding before 
the Commission that directly affects an electric utility with loans 
made or guaranteed under the Rural Electrification Act of 1936. The 
Secretary of Agriculture shall comply with rules of procedure of 
general applicability governing the timing of intervention or 
participation in such proceeding or activity and, upon intervening or 
participating therein, shall comply with rules of procedure of general 
applicability governing the conduct thereof.''.

SEC. 302. INTERSTATE COMPACTS ON REGIONAL TRANSMISSION PLANNING.

    The FPA is amended by adding after section 214 the following new 
section:

        ``interstate compacts on regional transmission planning

    ``Sec. 215. (a) The consent of Congress is given for an agreement 
to establish a regional transmission planning agency, if the Commission 
determines that the agreement would--
            ``(1) facilitate coordination among the States within a 
        particular region with regard to the planning of future 
        transmission, generation, and distribution facilities,
            ``(2) carry out State electric facility siting 
        responsibilities more effectively,
            ``(3) meet the other requirements of this section and rules 
        prescribed by the Commission under this section, and
            ``(4) otherwise be consistent with the public interest.
    ``(b)(1) If the Commission determines that an agreement meets the 
requirements of subsection (a), the agency established under the 
agreement has the authority necessary or appropriate to carry out the 
agreement. This authority includes authority with respect to matters 
otherwise within the jurisdiction of the Commission, if expressly 
provided for in the agreement and approved by the Commission.
    ``(2) The Commission's determination under this section may be 
subject to any terms or conditions the Commission determines are 
necessary to ensure that the agreement is in the public interest.
    ``(c)(1) The Commission shall prescribe--
            ``(A) criteria for determining whether a regional 
        transmission planning agreement meets subsection (a), and
            ``(B) standards for the administration of a regional 
        transmission planning agency established under the agreement.
    ``(2) The criteria shall provide that, in order to meet subsection 
(a)--
            ``(A) a regional transmission planning agency must operate 
        within a region that includes all tribal governments and all or 
        part of each State that is a party to the agreement,
            ``(B) a regional transmission planning agency must be 
        composed of one or more members from each State and tribal 
        government that is a party to the agreement,
            ``(C) each participating State and tribal government must 
        vest in the regional transmission planning agency the authority 
        necessary to carry out the agreement and this section, and
            ``(D) the agency must follow workable and fair procedures 
        in making its decisions, in governing itself, and in regulating 
        parties to the agreement with respect to matters covered by the 
        agreement, including a requirement that all decisions of the 
        agency be made by majority vote (or majority of weighted votes) 
        of the members present and voting.
    ``(3) The criteria may include any other requirement for meeting 
subsection (a) that the Commission determines is necessary to ensure 
that the regional transmission planning agency's organization, 
practices, and procedures are sufficient to carry out this section and 
the rules issued under it.
    ``(d) The Commission, after notice and opportunity for comment, may 
terminate the approval of an agreement under this section at any time 
if it determines that the regional transmission planning agency fails 
to comply with this section or Commission prescriptions under 
subsection (c) or that the agreement is contrary to the public 
interest.
    ``(e) Section 313 applies to a rehearing before a regional 
transmission planning agency and judicial review of any action of a 
regional transmission planning agency. For this purpose, when section 
313 refers to `Commission', substitute `regional transmission planning 
agency' and when section 313(b) refers to `licensee or public utility', 
substitute `entity'.''.

SEC. 303. BACKUP AUTHORITY TO IMPOSE A CHARGE ON AN ULTIMATE CONSUMER'S 
              RECEIPT OF ELECTRIC ENERGY.

    The FPA is amended by adding the following new section after 
section 215 as added by section 302 of this Act:

      ``backup authority for charge on receipt of electric energy

    ``Sec. 216. (a) If a State regulatory authority that has provided 
notice of retail competition under section 609 of the Public Utility 
Regulatory Policies Act of 1978 for a distribution utility determines 
that the utility should be authorized or required to impose a charge on 
an ultimate consumer's receipt of electric energy but the State 
regulatory authority lacks authority to authorize or require imposition 
of such a charge, the State regulatory authority may apply to the 
Commission for an order providing for the imposition of the charge. If 
the Commission determines that the imposition of the charge is just, 
reasonable, and not unduly discriminatory or preferential; is 
consistent with the State regulatory authority's policy regarding the 
imposition of the charge; and is not prohibited by State law, the 
Commission may issue an order providing for the imposition of the 
charge.
    ``(b) If a nonregulated utility that has outstanding loans made or 
guaranteed by the Rural Utilities Service and that has filed a notice 
of retail competition under section 609 of the Public Utilities 
Regulatory Policies Act of 1978 determines that it is appropriate to 
impose a charge on an ultimate consumer's receipt of electric energy, 
but lacks the authority to impose such a charge under State law, the 
utility may apply to the Commission for an order providing for the 
imposition of a charge. If the Commission determines that the proposed 
charge is just, reasonable, and not unduly discriminatory or 
preferential, the Commission may issue an order providing for the 
imposition of the charge.''.

SEC. 304. AUTHORITY TO ESTABLISH AND REQUIRE INDEPENDENT REGIONAL 
              SYSTEM OPERATION.

    Section 202 of the FPA is amended by adding the following new 
subsections after subsection (g):
    ``(h) Upon its own motion or upon application or complaint and 
after notice and an opportunity for a hearing, the Commission may order 
the establishment of entities for the purpose of independent operation, 
control, and planning of interconnected transmission facilities; order 
a transmitting utility to relinquish control over operation of its 
transmission facilities to an entity for the purpose of independent 
operation, control, and planning of interconnected transmission 
facilities; subject generators to the control of such entity consistent 
with other laws to the extent necessary to permit reliable operation of 
the transmission facilities; or take any combination of these actions, 
if the Commission finds that--
            ``(1) this action is appropriate to promote competitive 
        electricity markets and efficient, economical, and reliable 
        operation of the interstate transmission grid;
            ``(2) the entity established for the purpose of independent 
        operation, control, and planning of interconnected transmission 
        facilities will operate, control, and plan the transmission 
        facilities in a manner that assures that--
                    ``(A) ownership of transmission facilities provides 
                no advantage in competitive electricity markets;
                    ``(B) the transmission customers of the Tennessee 
                Valley Authority (TVA), the Bonneville Power 
                Administration, the Southwestern Power Administration 
                (SWPA), and the Western Area Power Administration 
                (WAPA) will not pay an unreasonable share of the 
                entity's costs and will not experience unreasonable 
                transmission rate increases resulting from the 
                establishment of the entity; and
                    ``(C) as applicable, the respective statutory and 
                treaty obligations and contractual obligations existing 
                on the date of enactment of this Act of the TVA Board 
                of Directors, the Bonneville Administrator, the SWPA 
                Administrator, the WAPA Administrator, the Bureau of 
                Reclamation, and the Corps of Engineers can be met;
            ``(3) any transmitting utility ordered to transfer control 
        of its transmission facilities will receive just and reasonable 
        compensation for the use of its facilities, consistent with 
        section 201A where applicable; and
            ``(4) adequate reliability of the affected transmission 
        facilities will be maintained.
Nothing in this section limits States from addressing transmission 
facility maintenance, planning, siting, and other utility functions in 
a manner consistent with this Act or Commission action under this Act.
    ``(i) If not ordered under subsection (h), TVA, the Bonneville 
Administrator, the SWPA Administrator, or the WAPA Administrator are 
authorized to participate in a regional transmission system operation 
after conducting a public process in the relevant service area to 
receive comments. Notwithstanding any other law, participation may 
include delegation of operation and control of the Authority or 
Administration's transmission system to that entity, or other method of 
participation, under terms and conditions the Authority or 
Administrator determines necessary or appropriate, including being 
bound by operational and other orders of the entity and by the results 
of arbitration of disputes with the entity or with other 
participants.''.

                       TITLE IV--PUBLIC BENEFITS

SEC. 401. PUBLIC BENEFITS FUND.

    PURPA is amended by adding after section 609, as added by section 
101 of this Act, the following new section:

``SEC. 610. PUBLIC BENEFITS FUND.

    ``(a) Definitions.--For purposes of this section--
            ``(1) the term `Board' means the Joint Board established 
        under subsection (b)(1);
            ``(2) the term `eligible public purpose program' means a 
        program that supports one or more of the following--
                    ``(A) availability of affordable electricity 
                service to low-income customers,
                    ``(B) implementation of energy conservation and 
                energy efficiency measures and energy management 
                practices,
                    ``(C) consumer education,
                    ``(D) the development and demonstration of an 
                electricity generation technology that the Secretary 
                determines is emerging from research and development, 
                provides environmental benefits, and--
                            ``(i) has significant national commercial 
                        potential, or
                            ``(ii) provides energy security or 
                        generation resource diversity benefits, or
                    ``(E) rural assistance subsequent to a 
                determination made under subsection (d)(4);
            ``(3) the term `fiscal agent' means the entity designated 
        under subsection (b)(2)(B);
            ``(4) the term `Fund' means the Public Benefits Fund 
        established under subsection (b)(2)(A); and
            ``(5) the term `State' means each of the 48 contiguous 
        States and the District of Columbia.
    ``(b) Joint Board.--(1) A Joint Board is established whose 
membership is composed of two officers or employees of the United 
States Government appointed by the Secretary, four State commissioners 
appointed by the national organization of State commissions, and one 
member of an Indian tribal government appointed by the Secretary. The 
Secretary shall designate the Chair of the Board.
    ``(2) The Board shall--
            ``(A) establish a Public Benefits Fund upon petition of 
        States and tribal governments wishing to participate in the 
        program under this section,
            ``(B) appoint a fiscal agent, from persons nominated by the 
        States and tribal governments petitioning to establish the 
        Fund, and
            ``(C) administer the Fund as set forth in this section.
    ``(c) Fiscal Agent.--The fiscal agent appointed by the Board shall 
collect and disburse the amounts in the Fund as set forth in this 
section.
    ``(d) Secretary.--The Secretary shall prescribe rules for:
            ``(1) The determination of charges under subsection (e).
            ``(2) The collection of amounts for the Fund, including 
        provisions for overcollection or undercollection.
            ``(3) Distribution of amounts from the Fund.
            ``(4) The criteria under which the Board determines whether 
        a State or tribal government's program is an eligible public 
        purpose program, including a rural assistance program. A rural 
        assistance program shall be an eligible public purpose program 
        to the extent that the Secretary, in consultation with the 
        Secretary of Agriculture, determines by rule that significant 
        adverse economic effects on rural customers have occurred or 
        will occur as a result of electricity restructuring that meets 
        the retail competition requirements of this Act. After such a 
        determination is made, the Secretary, in consultation with the 
        Secretary of Agriculture, shall specify by rule the mechanism 
        for distribution of funds to rural assistance programs, amounts 
        to be provided, and variances to the overall requirements to 
        the Public Benefits Fund under this section, if any. For the 
        purposes of funding rural assistance programs, the Secretary 
        shall increase the charge for the Public Benefit Fund as 
        necessary, up to a maximum of .17 mills per kilowatt hour. 
        Funding for rural assistance programs under this section shall 
        be provided exclusively from this increase in the charge.
    ``(e) Public Benefits Charge.--(1) As a condition of existing or 
future interconnection with facilities of any transmitting utility, 
each owner of an electric generating facility whose capacity exceeds 
one megawatt shall pay the transmitting utility a public benefits 
charge determined under paragraph (2), even if the generation facility 
and the transmitting facility are under common ownership or are 
otherwise affiliated. Each importer of electric energy from Canada or 
Mexico, as a condition of existing or future interconnection with 
facilities of any transmitting utility in the United States, shall pay 
this same charge for imported electric energy. The transmitting utility 
shall pay the amounts collected to the facility agent at the close of 
each month, and the fiscal agent shall deposit the amounts into the 
Fund as offsetting collections.
    ``(2)(A) The Board shall notify the Commission of the sum of the 
requests of all States and tribal governments under subsection (f) 
within 30 days after receiving the requests.
    ``(B) The Commission shall calculate the rate for the public 
benefits charge for each calendar year at an amount, not in excess of 1 
mill per kilowatt-hour, equal to the sum of the requests of all States 
and tribal governments under subsection (f) for programs described in 
subsection (a)(2)(A) through (a)(2)(D), but not exceed $3 billion per 
year, divided by the estimated kilowatt hours of electric energy to be 
generated by generators subject to the charge. Amounts collected in 
excess of $3 billion in a fiscal year shall be retained in the fund and 
the assessment in the following year shall be reduced by that amount. 
If there are more than de minimis receipts from the sale of Renewable 
Energy Credits under section 611, the Secretary shall direct the 
Commission to reduce the charge to reflect the amount of receipts 
received from the sale of Credits. The amount of the receipts from the 
sale of Renewable Energy Credits deposited in the Public Benefits Fund 
may not exceed $3 billion per year adjusted for inflation. Receipts 
from the sale of Renewable Energy Credits in excess of $3 billion per 
year adjusted for inflation shall be deposited in the General Fund of 
the Treasury.
    ``(C) If a finding is made under subsection (d)(4) in relation to 
rural customers, the public benefit charge shall be increased as 
indicated under subsection (d)(4).
    ``(f) State and Tribal Government Participation.--(1) Not later 
than 90 days before the beginning of each calendar year, each State and 
tribal government seeking to participate in the Fund shall submit to 
the Board a request for payments from the Fund for the calendar year in 
an amount not in excess of 50 percent of the State or tribal 
government's estimated expenditures for eligible public purpose 
programs for the year, except as provided under rules issued under 
subsection (d)(4) for rural assistance programs.
    ``(2) To the extent a State or tribal government generates all or 
part of its funds for eligible public purpose programs through a wires 
charge on an ultimate consumer's receipt of electric energy, the State 
or tribal government shall impose the charge on a non-discriminatory 
basis on all consumers within the State or tribal government 
jurisdiction.
    ``(3) Notwithstanding subsection (a)(5)--
            ``(A) Alaska may participate in the Fund as a State if it 
        certifies to the Board that all generators within Alaska with a 
        nameplate capacity exceeding one megawatt shall pay into the 
        Fund at the rate calculated by the Board during the year in 
        which Alaska seeks matching funds, and
            ``(B) Hawaii may participate in the Fund as a State if it 
        certifies to the Board that all generators within Hawaii with a 
        nameplate capacity exceeding one megawatt shall pay into the 
        Fund at the rate calculated by the Board during the year in 
        which Hawaii seeks matching funds.
    ``(g) Disbursal From the Fund.--(1) The Board shall review State 
and tribal government submissions and determine whether programs 
designated by the State or tribal government are eligible public 
purpose programs, using the criteria prescribed under subsection (d), 
and whether there is reasonable assurance that spending qualifying as 
State or tribal government matching funds will occur.
    ``(2) The fiscal agent shall disburse amounts in the Fund to 
participating States and tribal governments to carry out eligible 
public purpose programs in accordance with this subsection and rules 
prescribed under subsection (d).
    ``(3) To the extent the aggregate amount of funds requested by the 
States and tribal governments exceeds to the maximum aggregate revenues 
eligible to be collected under subsection (e) and deposited as payment 
for Renewable Energy Credits under section 611, the fiscal agency shall 
reduce each participating State and tribal government's request 
proportionately.
    ``(4)(A) The fiscal agent shall disburse amounts for a calendar 
year from the Fund to a State or tribal government in twelve equal 
monthly payments beginning two months after the beginning of the 
calendar year. Amounts disbursed may not exceed the lesser of the State 
or tribal government's request for the fiscal year, after any reduction 
required under paragraph (3), or 50 percent of the State or tribal 
government's documented expenditures for eligible public purpose 
programs for the calendar year, except as provided under rules issued 
under subsection (d)(4) for rural assistance programs.
    ``(B) The fiscal agent shall make distributions to the State or 
tribal government or to an entity designated by the State or tribal 
government to receive payments. The State or tribal government may 
designate a nonregulated utility as an entity to receive payments under 
this section.
    ``(C) A State or tribal government may use amounts received only 
for the eligible public purpose programs the State or tribal government 
designated in its submission to the Board and the Board determined 
eligible.
    ``(h) Report.--One year before the date of expiration of this 
section, the Secretary shall report to Congress, after consultation 
with the Board, whether a public benefits fund should continue to 
exist.
    ``(i) Sunset.--This section expires at midnight on December 31 of 
the fifteenth year after the year the Comprehensive Electricity 
Competition Act is enacted, except with regard to charges and funding 
for rural assistance programs.''.

SEC. 402. FEDERAL RENEWABLE PORTFOLIO STANDARD.

    (a) Standard.--PURPA is amended by adding after section 610, as 
added by section 401 of this Act, the following new section:

``SEC. 611. FEDERAL RENEWABLE PORTFOLIO STANDARD.

    ``(a) Minimum Renewable Generation Requirement.--(1) For each 
calendar year beginning with 2000, a retail electric supplier shall 
submit to the Secretary Renewable Energy Credits in an amount equal to 
the required annual percentage, specified in subsection (b), of the 
total electric energy sold by the retail electric supplier to electric 
consumers in the calendar year. The retail electric supplier shall make 
this submission before April 1 of the following calendar year.
    ``(2) For purposes of this section a `renewable energy' resource 
means solar energy, wind, geothermal, or biomass.
    ``(3) This section does not preclude a State from requiring 
additional renewable energy generation in that State.
    ``(b) Required Annual Percentage.--(1) The Secretary shall 
determine the required annual percentage that is to be applied to all 
retail electric suppliers for calendar years 2000-2004. This required 
annual percentage shall be equal to the percent of the total electric 
energy sold, during the most recent calendar year for which information 
is available before the calendar year of the enactment of this section, 
by retail electric suppliers to electric customers in the United States 
that is renewable energy.
    ``(2) The Secretary shall determine the required annual percentage 
for all retail electric suppliers for calendar years 2005-2009. This 
percentage shall be above the percentage in paragraph (1) and below the 
percentage in paragraph (3) and shall be selected to promote a smooth 
transition to the level in paragraph (3).
    ``(3) For calendar years 2010-2015, the required annual percentage 
is 7.5 percent.
    ``(c) Submission of Credits.--A retail electric supplier may 
satisfy the requirements of subsection (a) through the submission of--
            ``(1) Renewable Energy Credits issued under subsection (d) 
        for renewable energy generated by the retail electric supplier 
        in the calendar year for which Credits are being submitted or 
        any previous calendar year,
            ``(2) Renewable Energy Credits issued under subsection (d) 
        to any renewable energy generator for renewable energy 
        generated in the calendar year for which Credits are being 
        submitted or a previous calendar year and acquired by the 
        retail electric supplier, or
            ``(3) any combination of Credits under paragraphs (1) and 
        (2).
    ``(d) Issuance of Credits.--(1) The Secretary shall establish, not 
later than one year after the date of enactment of this section, a 
program to issue, monitor the sale or exchange of, and track Renewable 
Energy Credits.
    ``(2) Under the program, an entity that generates electric energy 
through the use of a renewable energy resource may apply to the 
Secretary for the issuance of Renewable Energy Credits. The application 
shall indicate--
            ``(A) the type of renewable energy resource used to produce 
        the electricity,
            ``(B) the State in which the electric energy was produced, 
        and
            ``(C) any other information the Secretary determines 
        appropriate.
    ``(3)(A) Except as provided in paragraph (B), the Secretary shall 
issue to an entity one Renewable Energy Credit for each kilowatt-hour 
of electric energy the entity generates through the use of a renewable 
energy resource in any State in 2000 and any succeeding year.
    ``(B) The Secretary shall issue two Renewable Energy Credits for 
each kilowatt-hour of electric energy generated through the use of a 
renewable energy resource in any State in 2000 and any succeeding year, 
if the generating facility is located on Indian land. For purposes of 
this paragraph, renewable energy generated by biomass cofired with 
other fuels is eligible for two credits only if the biomass was grown 
on the land eligible under this paragraph.
    ``(C) To be eligible for a Renewable Energy Credit, the unit of 
electricity generated through the use of a renewable energy resource 
may be sold or may be used by the generator. If both a renewable energy 
resource and a non-renewable energy resource are used to generate the 
electric energy, the Secretary shall issue credits based on the 
proportion of the renewable energy resource used. The Secretary shall 
identify Renewable Energy Credits by type of generation and by the 
State in which the generating facility is located.
    ``(4) In order to receive a Renewable Energy Credit, the recipient 
of a Renewable Energy Credit shall pay a fee, calculated by the 
Secretary, in an amount that is equal to the administrative costs of 
issuing, recording, monitoring the sale or exchange of, and tracking 
the Credit or does not exceed five percent of the dollar value of the 
Credit, whichever is lower. The Secretary shall retain the fee and use 
it to pay these administrative costs.
    ``(5) When a generator sells electric energy generated through the 
use of a renewable energy resource to a retail electric supplier under 
a contract subject to section 210 of this Act, the retail electric 
supplier is treated as the generator of the electric energy for the 
purposes of this section for the duration of the contract.
    ``(6) The Secretary shall disqualify an otherwise eligible 
renewable energy generator from receiving a Renewable Energy Credit if 
the generator has elected to participate in net metering under section 
612.
    ``(7) If a generator using a renewable energy resource receives 
matching funds under section 610, the Secretary shall reduce the number 
of Renewable Energy Credits the generator receives under paragraph (3) 
so that the aggregate value of those Credits plus the matching funds 
received under section 610 equals the aggregate value of the Credits 
the generator would have received absent this paragraph. For purposes 
of this paragraph, the Secretary shall value a Credit at a price that 
is representative of the price of a Credit in private transactions. In 
no event shall the Secretary use a price to establish values for 
purposes of this paragraph that exceed the cost cap established under 
subsection (f).
    ``(e) Sale or Exchange.--A Renewable Energy Credit may be sold or 
exchanged by the entity to whom issued or by any other entity who 
acquires the Credit. A Renewable Energy Credit for any year that is not 
used to satisfy the minimum renewable generation requirement of 
subsection (a) for that year may be carried forward for use in another 
year.
    ``(f) Renewable Energy Credit Cost Cap.--Beginning January 1, 2000, 
the Secretary shall offer Renewable Energy Credit for sale. The 
Secretary shall charge 1.5 cents for each Renewable Energy Credit sold 
during calendar year 2000, and on January 1 of each following year, the 
Secretary shall adjust for inflation, based on the Consumer Price 
Index, the price charged per Credit for that calendar year. The 
Secretary shall deposit in the Public Benefits Fund established under 
section 610 the amount received from a sale under this subsection.
    ``(g) Enforcement.--The Secretary may bring an action in the 
appropriate United States district court to impose a civil penalty on a 
retail electric supplier that does not comply with subsection (a). A 
retail electric supplier who does not submit the required number of 
Renewable Energy Credits under subsection (a) is subject to a civil 
penalty of not more than three times the value of the Renewable Energy 
Credits not submitted. For purposes of this subsection, the value of a 
Renewable Energy Credit is the price of a Credit determined under 
subsection (f) for the year the Credits were not submitted.
    ``(h) Information Collection.--The Secretary may collect the 
information necessary to verify and audit--
            ``(1) the annual electric energy generation and renewable 
        energy generation of any entity applying for Renewable Energy 
        Credits under this section,
            ``(2) the validity of Renewable Energy Credits submitted by 
        a retail electric supplier to the Secretary, and
            ``(3) the quantity of electricity sales of all retail 
        electric suppliers.
    ``(i) Sunset.--This section expires December 31, 2015.''.
    (b) Definitions.--Section 3 of PURPA is amended by adding after 
paragraph (24) as added by section 101 of this Act the following new 
paragraph:
            ``(25) The term `retail electric supplier' means a person, 
        State agency, or Federal agency that sells electric energy to 
        an electric consumer.
            ``(26) The term `Indian land' means (A) any land within the 
        limits of any Indian reservation, pueblo or rancheria, (B) any 
        land not within the limits of any Indian reservation, pueblo or 
        rancheria title to which was on the date of passage of the 
        Comprehensive Electricity Competition Act either held by the 
        United States for the benefit of any Indian tribe or individual 
        or held by any Indian tribe or individual subject to 
        restriction by the United States against alienation, (C) any 
        dependent Indian community, and (D) any land conveyed to any 
        Alaska Native corporation under the Alaska Native Claims 
        Settlement Act.
            ``(27) The term `Indian tribe' means any Indian tribe, 
        band, group, or nation, including Alaska Indians, Aleuts, or 
        Eskimos, or any Alaskan Native Village of the United States, 
        which is considered an eligible recipient under the Indian Self 
        Determination and Education Assistance Act (Public Law 93-638) 
        or was considered an eligible recipient under chapter 67 of 
        title 31, United States Code, prior to the repeal of such 
        chapter.''.

SEC. 403. NET METERING.

    PURPA is amended by adding the following new section after section 
611 as added by section 402 of this Act:

``SEC. 612. NET METERING FOR RENEWABLE ENERGY.

    ``(a) Definitions.--For purposes of this section:
            ``(1) The term `eligible on-site generating facility' means 
        a facility on the site of an electric consumer with a peak 
        generating capacity of 20 kilowatts or less that is fueled 
        solely by a renewable energy resource.
            ``(2) The term `renewable energy resource' means solar 
        energy, wind, geothermal, or biomass.
            ``(3) The term `net metering service' means service to an 
        electric consumer under which electricity generated by that 
        consumer from an eligible on-site generating facility and 
        delivered to the distribution system through the same meter 
        through which purchased electricity is received may be used to 
        offset electricity provided by the retail electric supplier to 
        the electric consumer during the applicable billing period so 
        that an electric consumer is billed only for the net 
        electricity consumed during the billing period, but in no event 
        shall the net be less than zero during the applicable billing 
        period.
    ``(b) Requirement To Provide New Metering Service.--Each retail 
electric supplier shall make available upon request net metering 
service to any retail electric consumer whom the supplier currently 
serves or solicits for service.
    ``(c) State Authority.--This section does not preclude a State from 
imposing additional requirements consistent with the requirements in 
this section, including the imposition of a cap limiting the amount of 
net metering available in the State. Nothing in this Act or any other 
Federal law preempts or otherwise affects authority under State law to 
require a retail electric supplier to make available net metering 
service to a retail electric consumer whom the supplier serves or 
offers to serve.''.

SEC. 404. REFORM OF SECTION 210 OF PURPA.

    Section 210 of PURPA is amended by adding the following new 
subsection after subsection (l):
    ``(m) Repeal of Mandatory Purchase Requirement.--After the date of 
enactment of the Comprehensive Electricity Competition Act, an electric 
utility shall not be required to enter into a new contract or 
obligation to purchase electric energy under this section.''.

SEC. 405. INTERCONNECTIONS FOR CERTAIN FACILITIES.

    PURPA is amended by adding the following new section after section 
612 as added by section 403 of this Act:

``SEC. 613. INTERCONNECTIONS FOR CERTAIN FACILITIES.

    ``(a) Definition.--As used in this section `facility' means--
            ``(1) a small-scale electric power generation facility that 
        is designed to serve customers at or near the facility, or
            ``(2) a facility using a single fuel source to produce at 
        the point of use either electric or mechanical power and 
        thermal energy.
    ``(b) Interconnection.--A distribution utility shall allow a 
facility to interconnect with the distribution utility if the facility 
owner is located in the distribution utility's service territory and 
complies with the final rule issued under subsection (c).
    ``(c) Within one year from the date of enactment of this section, 
the Secretary shall issue a final rule to implement subsection (b) and 
issue related safety and power quality standards. To the extent 
feasible, the Secretary shall develop the standards through a process 
involving interested parties.
    ``(d) The Commission shall enforce the rule established under 
subsection (c) using its authority under this Act.''.

SEC. 406. RURAL AND REMOTE COMMUNITIES ELECTRIFICATION GRANTS.

    Section 313 of the Rural Electrification Act of 1936 (7 U.S.C. 
940c) is amended by adding after subsection (b) the following new 
subsections:
    ``(c) Rural and Remote Communities Electrification Grants.--The 
Secretary, in consultation with the Secretary of Energy and the 
Secretary of the Interior, may provide grants to eligible borrowers 
under this Act for the purposes of increasing energy efficiency, 
lowering or stabilizing electric rates to end users, or providing or 
modernizing electric facilities for--
            ``(1) a unit of local government of a State or territory, 
        or
            ``(2) an Indian tribe
that has an average cost per kilowatt hour of electricity that is at 
least 150 percent of the average retail price per kilowatt hour for all 
consumers in the United States, as determined by the Secretary using 
data provided by the Department of Energy. The Secretary shall issue 
the grants based on a determination of cost-effectiveness and most 
effective use of the funds to achieve the stated purposes of this 
section.
    ``(d) Definition.--For purposes of this section, the term `Indian 
tribe' means any Indian tribe, band, group, or nation, including Alaska 
Indians, Aleuts, or Eskimos, or any Alaskan Native Village of the 
United States, which is considered an eligible recipient under the 
Indian Self Determination and Education Assistance Act (Public Law 93-
638) or was considered an eligible recipient under chapter 67 of title 
31, United States Code, prior to the repeal of such chapter.
    ``(e) Authorization.--There is authorized to be appropriated for 
purposes of subsection (c) $20,000,000 for each of the seven fiscal 
years following enactment of this section.''.

SEC. 407. INDIAN TRIBE ASSISTANCE.

    Title XXVI of the Energy Policy Act of 1992 (25 U.S.C. 3501-3506) 
is amended by--
            (1) adding after section 2606 the following new section:

``SEC. 2607. TRIBAL ELECTRICITY ASSISTANCE.

    ``(a) The Secretary of Energy, in consultation with the Secretary 
of the Interior and the Secretary of Agriculture, shall establish a 
program to assist an Indian tribe to meet its electricity needs. Under 
the program, the Secretary shall provide, subject to appropriations, to 
an Indian tribe--
            ``(1) technical assistance and grants to analyze tribal 
        electricity needs, the availability of natural resources for 
        tribal generation of electricity, the opportunities for the 
        improvement of transmission of electricity to the tribe, and 
        the effect on the tribe of retail competition in the sale or 
        transmission of electricity, and
            ``(2) in an area that is not served or served inadequately 
        by an electric utility, as defined in section 3(4) of the 
        Public Utility Regulatory Policies Act of 1978, or distribution 
        utility, as defined in section 3(23) of the Public Utility 
        Regulatory Policies Act of 1978, grants to plan and construct 
        or improve facilities to generate, transmit, and distribute 
        electricity to serve tribal needs.
In exercising authority under this section, the Secretary shall take 
into account the ability of entities with loans made or guaranteed 
under the Rural Electrification Act of 1936 to repay those loans. The 
Secretary shall issue the grants based on a determination of cost-
effectiveness and most effective use of the funds to achieve the stated 
purposes of this section.
    ``(b) Definition.--For purposes of this section, the term `Indian 
tribe' means any Indian tribe, band, group, or nation, including Alaska 
Indians, Aleuts, or Eskimos, or any Alaskan Native Village of the 
United States, which is considered an eligible recipient under the 
Indian Self Determination and Education Assistance Act (Public Law 93-
638) or was considered an eligible recipient under chapter 67 of title 
31, United States Code, prior to the repeal of such chapter.
    ``(c) There are authorized to be appropriated to the Department of 
Energy for each of the seven fiscal years following enactment of this 
section, $5,000,000 to carry out subsection (a)(1), and $15,000,000 to 
carry out subsection (a)(2).''.

SEC. 408. OFFICE OF INDIAN ENERGY POLICY AND PROGRAMS.

    Title II of the Department of Energy Organization Act is amended by 
adding the following new section after section 212:

``SEC. 213. OFFICE OF INDIAN ENERGY POLICY AND PROGRAMS.

    ``(a) The Secretary may establish within the Department an Office 
of Indian Energy Policy and Programs. The Office shall be headed by a 
Director appointed by the Secretary.
    ``(b) Subject to the supervision of the Secretary, the Office is 
authorized to establish a program to provide, direct, foster, 
coordinate and implement energy, energy management, and energy 
conservation programs to--
            ``(1) promote tribal energy efficiency;
            ``(2) modernize tribal electric infrastructure;
            ``(3) preserve tribal sovereignty and self determination 
        related to energy matters;
            ``(4) lower or stabilized energy costs; and
            ``(5) electrify tribal members' homes.
    ``(c) There are authorized to be appropriated such sums as may be 
necessary to implement this section.''.

SEC. 409. SOUTHEAST ALASKA ELECTRICAL POWER.

    There is authorized to be appropriated to the Department of Energy 
up to a total sum of $20,000,000 for the purpose of providing financial 
assistance to the State of Alaska as necessary to ensure the 
availability of adequate electrical power to the greater Ketchikan area 
in southeast Alaska, including the construction of an intertie.

         TITLE V--REGULATION OF MERGERS AND CORPORATE STRUCTURE

SEC. 501. REFORM OF HOLDING COMPANY REGULATION UNDER PUHCA.

    Effective 18 months after the enactment of this Act, the Public 
Utility Holding Company Act of 1935 is repealed and the following is 
enacted in its place:

``SECTION 1. SHORT TITLE.

    ``This Act may be cited as the `Public Utility Holding Company Act 
of 1999'.

``SEC. 2. DEFINITIONS.

    ``For purposes of this Act--
            ``(1) the term `affiliate' of a company means any company 5 
        percent or more of the outstanding voting securities of which 
        are owned, controlled, or held with power to vote, directly or 
        indirectly, by such company;
            ``(2) the term `associate company' of a company means any 
        company in the same holding company system with such company;
            ``(3) the term `Commission' means the Federal Energy 
        Regulatory Commission;
            ``(4) the term `company' means a corporation, partnership, 
        association, joint stock company, business trust, or any 
        organized group of persons, whether incorporated or not, or a 
        receiver, trustee, or other liquidating agent of any of the 
        foregoing;
            ``(5) the term `electric utility company' means any company 
        that owns or operates facilities used for the generation, 
        transmission, or distribution of electric energy for sale;
            ``(6) the terms `exempt wholesale generator' and `foreign 
        utilities company' have the same meanings as in sections 32 and 
        33, respectively, of the Public Utility Holding Company Act of 
        1935, as those sections existed on the day before the effective 
        date of this Act;
            ``(7) the term `gas utility company' means any company that 
        owns or operates facilities used for distribution at retail 
        (other than the distribution only in enclosed portable 
        containers, or distribution to tenants or employees of the 
        company operating such facilities for their own use and not for 
        resale) of natural or manufactured gas for heat, light, or 
        power;
            ``(8) the term `holding company' means--
                    ``(A) any company that directly or indirectly owns, 
                controls, or holds, with power to vote, 10 percent or 
                more of the outstanding voting securities of a public 
                utility company or of a holding company of any public 
                utility company; and
                    ``(B) any person, determined by the Commission, 
                after notice and opportunity for hearing, to exercise 
                directly or indirectly (either alone or pursuant to an 
                arrangement or understanding with one or more persons) 
                such a controlling influence over the management or 
                policies of any public utility company or holding 
                company as to make it necessary or appropriate for the 
                rate protection of utility customers with respect to 
                rates that such person be subject to the obligations, 
                duties, and liabilities imposed by this Act upon 
                holding companies;
            ``(9) the term `holding company system' means a holding 
        company, together with its subsidiary companies;
            ``(10) the term `jurisdictional rates' means rates 
        established by the Commission for the transmission of electric 
        energy, the sale of electric energy at wholesale in interstate 
        commerce, the transportation of natural gas, and the sale in 
        interstate commerce of natural gas for resale for ultimate 
        public consumption for domestic, commercial, industrial, or any 
        other use;
            ``(11) the term `natural gas company' means a person 
        engaged in the transportation of natural gas in interstate 
        commerce or the sale of such gas in interstate commerce for 
        resale;
            ``(12) the term `person' means an individual or company;
            ``(13) the term `public utility' means any person who owns 
        or operates facilities used for transmission of electric energy 
        or sales of electric energy at wholesale in interstate 
        commerce;
            ``(14) the term `public utility company' means an electric 
        utility company or a gas utility company;
            ``(15) the term `State commission' means any commission, 
        board, agency, or officer, by whatever name designated, of a 
        State, municipality, or other political subdivision of a State 
        that, under the laws of such State, has jurisdiction to 
        regulate public utility companies;
            ``(16) the term `subsidiary company' of a holding company 
        means--
                    ``(A) any company, 10 percent or more of the 
                outstanding voting securities of which are directly or 
                indirectly owned, controlled, or held with power to 
                vote, by such holding company; and
                    ``(B) any person, the management of policies of 
                which the Commission, after notice and opportunity for 
                hearing, determines to be subject to a controlling 
                influence, directly or indirectly, by such holding 
                company (either alone or pursuant to an arrangement or 
                understanding with one or more other persons) so as to 
                make it necessary for the rate protection of utility 
                customers with respect to rates that such person be 
                subject to the obligations, duties, and liabilities 
                imposed by this Act upon subsidiary companies of 
                holding companies; and
            ``(17) the term `voting security' means any security 
        presently entitling the owner or holder thereof to vote in the 
        direction or management of the affairs of a company.

``SEC. 3. FEDERAL ACCESS TO BOOKS AND RECORDS.

    ``(a) In General.--Each holding company and each associate company 
thereof shall maintain, and shall make available to the Commission, 
such books, accounts, records, memoranda, and other records as the 
Commission deems to be relevant to costs incurred by a public utility 
or natural gas company that is an associate company of such holding 
company and necessary or appropriate for the protection of utility 
customers with respect to jurisdictional rates for the transmission of 
electric energy, the sale of electric energy at wholesale in interstate 
commerce, the transportation of natural gas in interstate commerce, and 
the sale in interstate commerce of natural gas for resale for ultimate 
public consumption for domestic, commercial, industrial, or any other 
use.
    ``(b) Affiliate Companies.--Each affiliate of a holding company or 
of any subsidiary company of a holding company shall maintain, and make 
available to the Commission, such books, accounts, memoranda, and other 
records with respect to any transaction with another affiliate, as the 
Commission deems relevant to costs incurred by a public utility or 
natural gas company that is an associate company of such holding 
company and necessary or appropriate for the protection of utility 
customers with respect to jurisdictional rates.
    ``(c) Holding Company Systems.--The Commission may examine the 
books, accounts, memoranda, and other records of any company in a 
holding company system, or any affiliate thereof, as the Commission 
deems relevant to costs incurred by a public utility or natural gas 
company within such holding company system and necessary or appropriate 
for the protection of utility customers with respect to jurisdictional 
rates.
    ``(d) Confidentiality.--No member, officer, or employee of the 
Commission shall divulge any fact or information that may come to his 
or her knowledge during the course of examination of books, accounts, 
memoranda, or other records as provided in this section, except as may 
be directed by the Commission or by a court of competent jurisdiction.

``SEC. 4. STATE ACCESS TO BOOKS AND RECORDS.

    ``(a) In General.--Upon the written request of a State commission 
having jurisdiction to regulate a public utility company in a holding 
company system, the holding company or any associate company or 
affiliate thereof, other than such public utility company, wherever 
located, shall produce for inspection such books, accounts, memoranda, 
and other records that--
            ``(1) have been identified in reasonable detail in a 
        proceeding before the State commission;
            ``(2) the State commission deems are relevant to costs 
        incurred by such public utility company; and
            ``(3) are necessary for the effective discharge of the 
        responsibilities of the State commission with respect to such 
        proceeding.
    ``(b) Limitation.--Subsection (a) does not apply to any person that 
is a holding company solely by reason of ownership of one or more 
qualifying facilities under the Public Utility Regulatory Policies Act 
of 1978.
    ``(c) Confidentiality of Information.--The production of books, 
accounts, memoranda, and other records under subsection (a) shall be 
subject to such terms and conditions as may be necessary and 
appropriate to safeguard against unwarranted disclosure to the public 
of any trade secrets or sensitive commercial information.
    ``(d) Effect on State Law.--Nothing in this section shall preempt 
applicable State law concerning the provision of books, records, or any 
other information, or in any way limit the rights of any State to 
obtain books, records, or any other information under any other Federal 
law, contract, or otherwise.
    ``(e) Court Jurisdiction.--Any United States district court located 
in the State in which the State commission referred to in subsection 
(a) is located shall have jurisdiction to enforce compliance with this 
section.

``SEC. 5. EXEMPTION AUTHORITY.

    ``(a) Rulemaking.--Not later than 90 days after the effective date 
of this Act, the Commission shall promulgate a final rule to exempt 
from the requirements of section 3 any person that is a holding 
company, solely with respect to one or more--
            ``(1) qualifying facilities under the Public Utility 
        Regulatory Policies Act of 1978;
            ``(2) exempt wholesale generators; or
            ``(3) foreign utility companies.
    ``(b) Other Authority.--If, upon application or upon its own 
motion, the Commission finds that the books, records, accounts, 
memoranda, and other records of any person are not relevant to the 
jurisdictional rates of a public utility or natural gas company, or if 
the Commission finds that any class of transactions is not relevant to 
the jurisdictional rates of a public utility or natural gas company, 
the Commission shall exempt such person or transaction from the 
requirements of section 3.

``SEC. 6. AFFILIATE TRANSACTIONS.

    ``Nothing in this Act shall preclude the Commission or a State 
commission from exercising its jurisdiction under otherwise applicable 
law to determine whether a public utility company, public utility, or 
natural gas company may recover in rates any costs of an activity 
performed by an associate company, or any costs of goods or services 
acquired by such public utility company from an associate company.

``SEC. 7. APPLICABILITY.

    ``No provision of this Act shall apply to, or be deemed to 
include--
            ``(1) the United States;
            ``(2) a State or any political subdivision of a State;
            ``(3) any foreign governmental authority not operating in 
        the United States;
            ``(4) any agency, authority, or instrumentality of any 
        entity referred to in paragraph (1), (2), or (3); or
            ``(5) any officer, agent, or employee of any entity 
        referred to in paragraph (1), (2), or (3) acting as such in the 
        course of official duty.

``SEC 8. EFFECT ON OTHER REGULATIONS.

    ``Nothing in this Act precludes the Commission or a State 
commission from exercising its jurisdiction under otherwise applicable 
law to protect utility customers.

``SEC. 9. ENFORCEMENT.

    ``The Commission shall have the same powers as set forth in 
sections 306 through 317 of the Federal Power Act (16 U.S.C. 825d-825p) 
to enforce the provisions of this Act.

``SEC. 10. SAVINGS PROVISIONS.

    ``(a) In General.--Nothing in this Act prohibits a person from 
engaging in or continuing to engage in activities or transactions in 
which it is legally engaged or authorized to engage on the effective 
date of this Act.
    ``(b) Effect on Other Commission Authority.--Nothing in this Act 
limits the authority of the Commission under the Federal Power Act (16 
U.S.C. 791a et seq.) (including section 301 of that Act) or the Natural 
Gas Act (15 U.S.C. 717 et seq.) (including section 8 of that Act).

``SEC. 11. IMPLEMENTATION.

    ``Not later than 18 months after the date of enactment of the 
Comprehensive Electricity Competition Act, the Commission shall--
            ``(1) promulgate such regulations as may be necessary or 
        appropriate to implement this Act (other than section 4); and
            ``(2) submit to the Congress detailed recommendations on 
        technical and conforming amendments to Federal law necessary to 
        carry out this Act and the amendments made by this Act.

``SEC. 12. TRANSFER OF RESOURCES.

    ``All books and records that relate primarily to the functions 
transferred to the Commission under this Act shall be transferred from 
the Securities and Exchange Commission to the Commission.

``SEC. 13. AUTHORIZATION OF APPROPRIATIONS.

    ``There are authorized to be appropriated such funds as may be 
necessary to carry out this Act.

``SEC. 14. CONFORMING AMENDMENT TO THE FEDERAL POWER ACT.

    ``Section 318 of the Federal Power Act (16 U.S.C. 825q) is 
repealed.''.

SEC. 502. ELECTRIC COMPANY MERGERS.

    Section 203(a) of the FPA is amended by--
            (1) striking ``public utility'' each time it appears and 
        inserting in its place ``person or electric utility company'';
            (2) inserting after the first sentence the following: 
        ``Except as the Commission otherwise provides, a holding 
        company in a holding company system that includes an electric 
        utility company shall not, directly or indirectly, purchase, 
        acquire, or take any security of an electric utility company or 
        of a holding company in a holding company system that includes 
        an electric utility company, without first securing an order of 
        the Commission authorizing it to do so.'';
            (3) striking ``hearing'' in the last sentence and inserting 
        ``oral or written presentation of views'';
            (4) adding after ``public interest'' the following: 
        ``including consideration of the effects on competition in 
        wholesale and retail electricity markets,''; and
            (5) adding at the end the following: ``For purposes of this 
        subsection, the terms `electric utility company', holding 
        company', and `holding company system' have the meaning given 
        them in the Public Utility Holding Company Act of 1999. 
        Notwithstanding section 201(b)(1), generation facilities are 
        subject to the jurisdiction of the Commission for purposes of 
        this section, except as the Commission otherwise may provide, 
        provided that an entity that has existing loans made or 
        guaranteed under the Rural Electrification Act of 1936 (5 
        U.S.C. 901 et seq.) is not jurisdictional for purposes of this 
        section.''.

SEC. 503. REMEDIAL MEASURES FOR MARKET POWER.

    The FPA is amended by adding the following new section after 
section 216 as added by section 303 of this Act:

                  ``remedial measures for market power

    ``Sec. 217. (a) Definitions.--As used in this section--
            ``(1) `market power' means the ability of a public utility 
        or electric utility profitably to maintain prices above 
        competitive levels for a significant period of time, and
            ``(2) `notice of retail competition' has the meaning 
        provided under section 3(22) of the Public Utility Regulatory 
        Policies Act of 1978.
    ``(b) Commission Jurisdictional Sales.--(1) If the Commission 
determines that there are markets in which a public utility that owns 
or controls generation facilities has market power in sales of electric 
energy for resale in interstate commerce, the Commission shall order 
that utility to submit a plan for taking necessary actions to remedy 
its market power, which may include, but is not limited to, conditions 
respecting operation or dispatch of generation, independent operation 
of transmission facilities, or divestiture of ownership of one or more 
generation facilities.
    ``(2) In consultation with the Attorney General and the Federal 
Trade Commission, the Commission shall review the plan to determine if 
its implementation would adequately mitigate the adverse competitive 
effects of market power. The Commission may approve the plan with or 
without modification. The plan takes effect upon approval by the 
Commission. Notwithstanding any State law, regulation, or order to the 
contrary and notwithstanding any other provision of this Act or any 
other law, the Commission has jurisdiction to order divestiture or 
other transfer of control of generation assets pursuant to the plan.
    ``(c) State Jurisdictional Sales.--(1) If a State commission that 
has filed a notice of retail competition has reason to believe that an 
electric utility doing business in the State has market power, the 
State commission may apply for an order under this section.
    ``(2) If, after receipt of such an application and after notice and 
opportunity for a hearing, the Commission determines that the electric 
utility has market power in the sales of electric energy sold at retail 
in the State, this market power would adversely affect competition in 
the State, and the State commission lacks authority to effectively 
remedy such market power, the Commission may order the electric utility 
to submit a plan for taking necessary actions to remedy the electric 
utility's market power. These actions may include conditions respecting 
operation or dispatch of generation, competitive procurement of all 
generation capacity or energy, independent operation of transmission 
facilities, or divestiture of ownership of one or more generation 
facilities of the electric utility.
    ``(3) After consultation with the Attorney General and the Federal 
Trade Commission, the Commission may approve the plan with or without 
modification. The plan shall take effect upon approval by the 
Commission.
    ``(4) Notwithstanding any State law, regulation, or order to the 
contrary and notwithstanding any other provision of this Act or any 
other law, the Commission has jurisdiction to order divestiture or 
other transfer of control of generation assets pursuant to the plan.''.

                     TITLE VI--ELECTRIC RELIABILITY

SEC. 601. ELECTRIC RELIABILITY ORGANIZATION AND OVERSIGHT.

    (a) Electric Reliability Organization and Oversight.--The Federal 
Power Act is amended by adding the following new section after section 
217:

           ``electric reliability organization and oversight

    ``Sec. 218. (a) Purpose.--The purpose of this section is to provide 
for the establishment and enforcement of mandatory reliability 
standards in order to ensure the reliable operation of the bulk-power 
system.
    ``(b) Definitions.--As used in this section:
            ``(1) The term `Affiliated Regional Reliability Entity' 
        means an entity delegated authority under the provisions of 
        subsection (i).
            ``(2) The term `Bulk-Power System' means all facilities and 
        control systems necessary for operating an interconnected 
        transmission grid (or any portion thereof), including high-
        voltage transmission lines, substations, control centers, 
        communications, data, and operations planning facilities, and 
        the output of generating units necessary to maintain 
        transmission system reliability.
            ``(3) The term `Electric Reliability Organization' or 
        `Organization' means the organization approved by the 
        Commission under subsection (e)(4).
            ``(4) The term `Entity Rule' means a rule adopted by an 
        Affiliated Regional Reliability Entity for a specific region 
        and designed to implement or enforce one or more Organization 
        Standards. An Entity Rule shall be subject to approval by the 
        Organization, and once approved, shall be treated as an 
        Organization Standard.
            ``(5) The term `Industry Sector' means a group of Users of 
        the Bulk Power System with substantially similar commercial 
        interests, as determined by the board of the Electric 
        Reliability Organization.
            ``(6) The term `Interconnection' means a geographic area in 
        which the operation of Bulk-Power System components is 
        synchronized such that the failure of one or more of such 
        components may adversely affect the ability of the operators of 
        other components within the Interconnection to maintain safe 
        and reliable operation of the facilities within their control.
            ``(7) The term `Organization Standard' means a policy or 
        standard duly adopted by the Electric Reliability Organization 
        to provide for the reliable operation of a Bulk-Power System.
            ``(8) The term `Public Interest Group' means any non-profit 
        private or public organization that has an interest in the 
        activities of the Electric Reliability Organization, including, 
        but not limited to, ratepayer advocates, environmental groups, 
        and State and local government organizations that regulate 
        market participants and promulgate government policy.
            ``(9) The term `Variance' means an exception or variance 
        from the requirements of an Organization Standard (including a 
        proposal for an Organization Standard where there is no 
        Organization Standard) that is adopted by an Affiliated 
        Regional Reliability Entity and applicable to all or a part of 
        the region for which the Affiliated Regional Reliability Entity 
        is responsible. A Variance shall be subject to approval by the 
        Organization, and once approved, shall be treated as an 
        Organization Standard.
            ``(10) The term `System Operator' means any entity that 
        operates or is responsible for the operation of a Bulk-Power 
        System, including but not limited to a control area operator, 
        an independent system operator, a transmission company, a 
        transmission system operator, or a regional security 
        coordinator.
            ``(11) The term `User of the Bulk-Power System' means any 
        entity that sells, purchases, or transmits electric power over 
        a Bulk-Power System, or that owns, operates or maintains 
        facilities or control systems that are part of a Bulk-Power 
        System, or that is a System Operator.
    ``(c) Commission Authority.--Notwithstanding any other provision of 
the Federal Power Act, within the United States the Commission has 
jurisdiction over the Electric Reliability Organization, all Affiliated 
Regional Reliability Entities, all System Operators, and all Users of 
the Bulk-Power System, for purposes of approving and enforcing 
compliance with the requirements of this section.
    ``(d) Existing Reliability Standards.--Following enactment of this 
section, and prior to the approval of an Organization under subsection 
(e), any person, including the North American Electric Reliability 
Council and its member Regional Reliability Councils, may file with the 
Commission any reliability standard, guidance, or practice, or any 
amendment thereto, that the person would propose to be made mandatory 
and enforceable. The Commission, after allowing interested persons an 
opportunity to submit comments, may approve the proposed mandatory 
standard, guidance, or practice, or any amendment thereto, if it finds 
that the standard, guidance, or practice, or amendment is just, 
reasonable, not unduly discriminatory or preferential, and in the 
public interest. Filed standards, guidance, or practices, including any 
amendments thereto, shall be mandatory and applicable according to 
their terms following approval by the Commission and shall remain in 
effect until--
            ``(1) withdrawn, disapproved or superseded by an 
        Organization Standard, issued or approved by the Electric 
        Reliability Organization and made effective by the Commission 
        under section (f); or
            ``(2) disapproved or suspended by the Commission if, upon 
        complaint or upon its own motion and after notice and an 
        opportunity for comment, the Commission finds the standard, 
        guidance, or practice unjust, unreasonable, unduly 
        discriminatory or preferential, or not in the public interest.
Standards, guidance, or practices in effect pursuant to the provisions 
of this subsection shall be enforceable by the Commission under Part 
III of this Act.
    ``(e) Organization Approval.--(1) Not later than 90 days after the 
date of enactment of this section, the Commission shall issue proposed 
rules specifying procedures and requirements for an entity to apply for 
approval as the Electric Reliability Organization. The Commission shall 
provide notice and opportunity for comment on the proposed rules. The 
Commission shall issue a final rule under this subsection within 180 
days after the date of enactment of this section.
    ``(2) Following the issuance of a final Commission rule under 
paragraph (1), an entity may submit an application to the Commission 
for approval as the Electric Reliability Organization. The applicant 
shall specify in its application its governance and procedures, as well 
as its funding mechanism and initial funding requirements.
    ``(3) The Commission shall provide public notice of the application 
and afford interested parties an opportunity to comment.
    ``(4) The Commission shall approve the application if the 
Commission determines that the applicant--
            ``(A) has the ability to develop, implement, and enforce 
        standards that provide for an adequate level of reliability of 
        the Bulk-Power System;
            ``(B) permits voluntary membership to any User of the Bulk-
        Power System or Public Interest Group;
            ``(C) assures fair representation of its members in the 
        selection of its directors and fair management of its affairs, 
        taking into account the need for efficiency and effectiveness 
        in decisionmaking and operations and the requirements for 
        technical competency in the development of Organization 
        Standards and the exercise of oversight of Bulk-Power System 
        reliability;
            ``(D) assures that no two Industry Sectors have the ability 
        to control, and no one Industry Sector has the ability to veto, 
        the Electric Reliability Organization's discharge of its 
        responsibilities (including actions by committees recommending 
        standards to the board or other board actions to implement and 
        enforce standards);
            ``(E) provides for governance by a board of no more than 
        eleven members, one of whom shall be appointed by the Secretary 
        of Energy;
            ``(F) provides a funding mechanism and requirements that 
        are just, reasonable, and not unduly discriminatory or 
        preferential and are in the public interest, and which satisfy 
        the requirements of subsection (n);
            ``(G) establishes procedures for development of 
        Organization Standards that provide reasonable notice and 
        opportunity for public comment, taking into account the need 
        for efficiency and effectiveness in decisionmaking and 
        operations and the requirements for technical competency in the 
        development of Organization Standards, and which standards 
        development process has the following attributes:
                    ``(i) openness,
                    ``(ii) balance of interests, and
                    ``(iii) due process, except that the procedures may 
                include alternative procedures for emergencies;
            ``(H) establishes fair and impartial procedures for 
        implementation and enforcement of Organization Standards, 
        either directly or through delegation to an Affiliated Regional 
        Reliability Entity, including the imposition of penalties, 
        limitations on activities, functions, or operations, or other 
        appropriate sanctions;
            ``(I) establishes procedures for notice and opportunity for 
        public observation of all meetings, except that the procedures 
        for public observation may include alternative procedures for 
        emergencies or for the discussion of information the directors 
        determine should take place in closed session, such as 
        litigation, personnel actions, or commercially sensitive 
        information;
            ``(J) provides for the consideration of recommendations of 
        States and State commissions, and
            ``(K) addresses other matters that the Commission may deem 
        necessary or appropriate to ensure that the procedures, 
        governance, and funding of the Electric Reliability 
        Organization are just, reasonable, not unduly discriminatory or 
        preferential, and are in the public interest.
    ``(5) The Commission shall approve only one Electric Reliability 
Organization. If the Commission receives two or more timely 
applications that satisfy the requirements of this subsection, the 
Commission shall approve only the application it concludes will best 
implement the provisions of this section.
    ``(f) Establishment of and Modifications to Organization 
Standards.--(1) The Electric Reliability Organization shall file with 
the Commission any new or modified Organization Standards, including 
any Variances or Entity Rules, and the Commission shall follow the 
procedures under paragraph (2) for review of that filing. Submissions 
shall include--
            ``(A) a concise statement of the purpose of the proposal, 
        and
            ``(B) a record of any proceedings conducted with respect to 
        the proposal.
    ``(2) The Commission shall provide notice of the filing of the 
proposal and afford interested persons a reasonable time, but not more 
than 30 days, to submit comments. The Commission, after taking into 
consideration any submitted comments, shall approve or disapprove the 
proposal not later than 60 days after the deadline for the submission 
of comments, except that:
            ``(A) the Commission may extend the 60 day period for an 
        additional 90 days for good cause, and
            ``(B) if the Commission does not act to approve or 
        disapprove a proposal within the periods set forth in this 
        paragraph, the proposal shall go into effect, without prejudice 
        to the authority of the Commission thereafter to suspend or 
        modify the proposal in accordance with the standards and 
        requirements of this section.
Proposals approved by the Commission take effect according to their 
terms but not earlier than 30 days after the effective date of the 
Commission's order, except as provided in paragraph (3).
    ``(3)(A) In the exercise of its review responsibilities under this 
subsection, the Commission shall give due weight to the technical 
expertise of the Electric Reliability Organization with respect to the 
content of a new or modified Organization Standard, but shall not defer 
to the Organization with respect to the effect of the standard on 
competition. The Commission shall approve a proposed new or modified 
Organization Standard if it determines the proposal to be just, 
reasonable, not unduly discriminatory or preferential, and in the 
public interest.
    ``(B) The Commission, either upon complaint or upon its own motion, 
shall suspend an existing Organization Standard, if it determines the 
standard to be unjust, unreasonable, unduly discriminatory or 
preferential, or not in the public interest.
    ``(C) An existing or proposed Organization standard which is 
disapproved or suspended in whole or in part by the Commission shall be 
remanded to the Electric Reliability Organization for further 
consideration.
    ``(D) The Commission, on its own motion or upon complaint, may 
direct the Electric Reliability Organization to develop an Organization 
Standard, including modification to an existing Organization Standard, 
addressing a specific matter by a date certain if the Commission 
considers a new or modified Organization Standard necessary or 
appropriate to further the purposes of this section. The Electric 
Reliability Organization shall file any new or modified Organization 
Standard in accordance with this subsection.
    ``(E) An Affiliated Regional Reliability Entity may propose a 
Variance or Entity Rule to the Electric Reliability Organization under 
subsection (i)(3). The Affiliated Regional Reliability Entity may 
request that the Electric Reliability Organization expedite 
consideration of the proposal, and may file a notice of this request 
with the Commission, if expedited consideration is necessary to provide 
for Bulk-Power System reliability. If the Electric Reliability 
Organization fails to adopt the Variance or Entity Rule, either in 
whole or in part, the Affiliated Regional Reliability Entity may 
request that the Commission review such action. If the Commission 
determines, after its review of such a request, that the action of the 
Electric Reliability Organization did not conform to the applicable 
standards and procedures approved by the Commission, or if the 
Commission determines that the Variance or Entity Rule is just, 
reasonable, not unduly discriminatory or preferential, and in the 
public interest, and that the Electric Reliability Organization has 
unreasonably rejected the proposed Variance or Entity Rule, the 
Commission may remand the proposed Variance or Entity Rule for further 
consideration by the Electric Reliability Organization or may direct 
the Electric Reliability Organization or the Affiliated Regional 
Reliability Entity to develop a Variance or Entity Rule consistent with 
that requested by the Affiliated Regional Reliability Entity. Such a 
Variance or Entity Rule proposed by an Affiliated Regional Reliability 
Entity shall be submitted to the Electric Reliability Organization for 
review and filing with the Commission in accordance with the procedures 
specified in this subsection.
    ``(F) Notwithstanding any other provision of this subsection, a 
proposed Organization Standard or amendment shall take effect according 
to its terms if the Electric Reliability Organization determines that 
an emergency exists requiring that the proposed Organization Standard 
or amendment take effect without notice or comment. The Electric 
Reliability Organization shall notify the Commission immediately 
following this determination and shall file the emergency Organization 
Standard or amendment with the Commission not later than five days 
following the determination and shall include in the filing an 
explanation of the need for the emergency standard. Subsequently, the 
Commission shall provide notice of the emergency Organization Standard 
or amendment for comment, and shall follow the procedures set out in 
paragraphs (2) and (3) for review of a new or modified Organization 
Standard. An emergency Organization Standard that has gone into effect 
shall remain in effect unless and until suspended or disapproved by the 
Commission. If the Commission determines at any time that the emergency 
Organization Standard or amendment is not necessary, the Commission may 
suspend the emergency Organization Standard or amendment.
    ``(4) All Users of the Bulk-Power System shall comply with any 
Organization Standard that takes effect under this section.
    ``(g) Coordination With Canada and Mexico.--The Electric 
Reliability Organization shall take all appropriate steps to gain 
recognition in Canada and Mexico. Subject to the President's authority 
with respect to foreign policy, the United States shall use its best 
efforts to enter into international agreements with the appropriate 
governments of Canada and Mexico to provide for effective compliance 
with Organization Standards and to provide for the effectiveness of the 
Electric Reliability Organization in carrying out its mission and 
responsibilities. All actions taken by the Electric Reliability 
Organization, any Affiliated Regional Reliability Entity, and the 
Commission shall be consistent with the provisions of such 
international agreements.
    ``(h) Changes in Procedures, Governance, or Funding.--(1) The 
Electric Reliability Organization shall file with the Commission any 
proposed change in its procedures, governance, or funding, or any 
changes in the Affiliated Regional Reliability Entity's procedures, 
governance or funding relating to delegated functions, and shall 
include with the filing an explanation of the basis and purpose for the 
change.
    ``(2) A proposed procedural change may take effect 90 days after 
filing with the Commission if the change constitutes a statement of 
policy, practice, or interpretation with respect to the meaning or 
enforcement of an existing procedure. Any other proposed procedural 
change takes effect only upon a finding by the Commission, after notice 
and opportunity for comments, that the change is just, reasonable, not 
unduly discriminatory or preferential, is in the public interest, and 
satisfies the requirements of subsection (e)(4).
    ``(3) A change in governance or funding does not take effect unless 
the Commission finds that the change is just, reasonable, not unduly 
discriminatory or preferential, and is in the public interest, and 
satisfies the requirements of subsection (e)(4).
    ``(4)(A) The Commission, either upon complaint or upon its own 
motion, may suspend a procedure or governance or funding provision if 
it determines the procedure or provision does not meet the requirements 
of subsection (e)(4) or is unjust, unreasonable, unduly discriminatory 
or preferential, or otherwise not in the public interest.
    ``(B) The Commission, upon complaint or upon its own motion, may 
require the Electric Reliability Organization to amend the procedures, 
governance or funding if the Commission determines that the amendment 
is necessary to meet the requirements of this section. The Electric 
Reliability Organization shall file the amendment in accordance with 
paragraph (1) of this subsection.
    ``(i) Delegations of Authority.--(1) The Electric Reliability 
Organization shall, upon request by an entity, enter into an agreement 
with the entity for the delegation of authority to implement and 
enforce compliance with Organization Standards approved by the 
Commission in a specified geographic area if the Organization finds 
that the entity requesting the delegation satisfies the requirements of 
subsection (e)(4) (A), (B), (C), (D), (F), and (K), and if the 
delegation promotes the effective and efficient implementation and 
administration of Bulk-Power System reliability. The Electric 
Reliability Organization may enter into an agreement to delegate to the 
entity any other authority, except that the Electric Reliability 
Organization shall reserve the right to set and approve standards for 
Bulk-Power System reliability.
    ``(2) The Electric Reliability Organization shall file with the 
Commission any agreement entered into under this subsection and any 
information the Commission requires with respect to the Affiliated 
Regional Reliability Entity to which authority is to be delegated. The 
Commission shall approve the agreement, following public notice and an 
opportunity for comment, if it finds that the agreement meets the 
requirements of paragraph (1), and is just, reasonable, not unduly 
discriminatory or preferential, and is in the public interest. A 
proposed delegation agreement with an Affiliated Regional Reliability 
Entity organized on an Interconnection-wide basis shall be rebuttably 
presumed by the Commission to promote the effective and efficient 
implementation and administration of Bulk-Power System reliability. No 
delegation by the Electric Reliability Organization shall be valid 
unless approved by the Commission.
    ``(3)(A) A delegation agreement entered into under this subsection 
shall specify the procedures for an Affiliated Regional Reliability 
Entity to propose Entity Rules or Variances for review by the Electric 
Reliability Organization.
    ``(B) With respect to any such proposal that would apply on an 
Interconnection-wide basis, the Electric Reliability Organization shall 
presume the proposal valid if made by an Interconnection-wide 
Affiliated Regional Reliability Entity unless the Electric Reliability 
Organization makes a written finding that the proposal--
            ``(i) was not developed in a fair and open process that 
        provided an opportunity for all interested parties to 
        participate;
            ``(ii) has a significant adverse impact on reliability or 
        commerce in other Interconnections;
            ``(iii) fails to provide a level of reliability of the 
        Bulk-Power System within the Interconnection such that it would 
        constitute a serious and substantial threat to public health, 
        safety, welfare, or national security; or
            ``(iv) creates a serious and substantial burden on 
        competitive markets within the Interconnection that is not 
        necessary for reliability.
    ``(C) With respect to a proposal that would apply only to part of 
an Interconnection, the Electric Reliability Organization shall find 
the proposal valid if the Affiliated Regional Reliability Entity or 
Entities making the proposal demonstrate that it--
            ``(i) was developed in a fair and open process that 
        provided an opportunity for all interested parties to 
        participate;
            ``(ii) would not have an adverse impact on commerce that is 
        not necessary for reliability;
            ``(iii) provides a level of Bulk-Power System reliability 
        adequate to protect public health, safety, welfare, and 
        national security, and would not have a significant adverse 
        impact on reliability; and
            ``(iv) in the case of a Variance, is based on legitimate 
        differences between regions or between subregions within the 
        Affiliated Regional Reliability Entity's geographic area.
    ``(D) The Electric Reliability Organization shall approve or 
disapprove the proposal within 120 days, or the proposal is deemed 
approved. Following approval of a proposal under this paragraph, the 
Electric Reliability Organization shall seek Commission approval 
pursuant to subsection (f). Affiliated Regional Reliability Entities 
may not make requests for approval directly to the Commission except 
pursuant to subsection (f)(3)(E).
    ``(4) If an Affiliated Regional Reliability Entity requests, 
consistent with paragraph (1) of this subsection, that the Electric 
Reliability Organization delegate authority to it, but is unable within 
180 days to reach agreement with the Electric Reliability Organization 
with respect to the requested delegation, the entity may seek relief 
from the Commission. If, following notice and opportunity for comment, 
the Commission determines that the delegation to the entity would meet 
the requirements of paragraph (1); that the delegation would be just, 
reasonable, not unduly discriminatory or preferential, and in the 
public interest; and that the Electric Reliability Organization has 
unreasonably withheld the delegation, the Commission may, by order, 
direct the Electric Reliability Organization to make the delegation.
    ``(5)(A) The Commission may, upon its own motion or upon complaint, 
and with notice to the appropriate Affiliated Regional Reliability 
Entity or Entities, direct the Electric Reliability Organization to 
propose a modification to an agreement entered into under this 
subsection if the Commission determines that--
            ``(i) the Affiliated Regional Reliability Entity no longer 
        has the capacity to carry out effectively or efficiently its 
        implementation or enforcement responsibilities under that 
        agreement, has failed to meet its obligations under that 
        agreement, or has violated any provision of this section,
            ``(ii) the rules, practices, or procedures of the 
        Affiliated Regional Reliability Entity no longer provide for 
        fair and impartial discharge of its implementation or 
        enforcement responsibilities under the agreement,
            ``(iii) the geographic boundary of a transmission entity 
        approved by the Commission is not wholly within the boundary of 
        an Affiliated Regional Reliability Entity and such difference 
        is inconsistent with the effective and efficient implementation 
        and administration of Bulk-Power System reliability, or
            ``(iv) the agreement is inconsistent with another 
        delegation agreement as a result of actions taken under 
        paragraph (4) of this subsection.
    ``(B) Following an order of the Commission issued under paragraph 
(5)(A) of this subsection, the Commission may suspend the affected 
agreement if the Electric Reliability Organization or the Affiliated 
Regional Reliability Entity does not propose an appropriate and timely 
modification. If the agreement is suspended, the Electric Reliability 
Organization shall assume the previously delegated responsibilities. 
The Commission shall allow the Electric Reliability Organization and 
the Affiliated Regional Reliability Entity an opportunity to appeal the 
suspension.
    ``(j) Organization Membership.--Every System Operator shall be a 
member of the Electric Reliability Organization and shall be a member 
of any Affiliated Regional Reliability Entity operating under an 
agreement effective pursuant to subsection (i) applicable to the region 
in which the System Operator operates or is responsible for the 
operation of a Bulk-Power System facility.
    ``(k) Federal Power Systems and Nuclear Regulatory Commission.--Any 
actions taken under this section by the Commission, the Electric 
Reliability Organization, and any Affiliated Regional Reliability 
Entity shall be consistent with any statutory or treaty obligations of 
a Federal Power Marketing Administration, the Tennessee Valley 
Authority, the Bureau of Reclamation and the Corps of Engineers and any 
Nuclear Regulatory Commission requirements.
    ``(l) Injunctions and Disciplinary Action.--(1) Consistent with the 
range of actions approved by the Commission under subsection (e)(4)(H), 
the Electric Reliability Organization may impose a penalty; may limit 
activities, functions, or operations; or may take other disciplinary 
action the Electric Reliability Organization finds appropriate against 
a User of the Bulk-Power System if the Electric Reliability 
Organization, after notice and an opportunity for interested parties to 
be heard, issues a finding in writing that the User of the Bulk-Power 
System has violated an Organization Standard approved by the 
Commission. The Electric Reliability Organization shall immediately 
notify the Commission of any disciplinary action imposed with respect 
to an act of failure to act of a User of the Bulk-Power System that 
affected or threatened to affect Bulk-Power System facilities located 
in the United States, and the sanctioned party shall have the right to 
seek modification or rescission by the Commission of such disciplinary 
action. If the Organization finds it necessary to prevent a serious 
threat to reliability, the Organization may seek injunctive relief in a 
Federal Court in the district in which the affected facilities are 
located.
    ``(2) A disciplinary action taken under paragraph (1) may take 
effect not earlier than the 30th day after the Electric Reliability 
Organization files with the Commission its written finding and record 
of proceedings before the Electric Reliability Organization and the 
Commission posts the Organization's written finding, unless the 
Commission, on its own motion or upon application by the User of the 
Bulk-Power System which is the subject of the action, suspends the 
action. The action shall remain in effect or remain suspended unless 
and until the Commission, after notice and opportunity for hearing, 
affirms, sets aside, modifies, or reinstates the action, but the 
Commission shall conduct such a hearing under procedures established to 
ensure expedited consideration of the action taken.
    ``(3) The Commission, on its own motion, may order compliance with 
an Organization Standard and may impose a penalty; may limit 
activities, functions, or operations; or may take such other 
disciplinary action as the Commission finds appropriate, against a User 
of the Bulk-Power System with respect to actions affecting or 
threatening to affect Bulk-Power System facilities located in the 
United States if the Commission finds, after notice and opportunity for 
a hearing, that the User of the Bulk-Power System has violated or 
threatens to violate an Organization Standard.
    ``(4) The Commission may take such action as is necessary against 
the Electric Reliability Organization or an Affiliated Regional 
Reliability Entity to assure compliance with an Organization Standard, 
or any Commission order affecting the Electric Reliability Organization 
or an Affiliated Regional Reliability Entity.
    ``(m) Reliability Reports.--The Electric Reliability Organization 
shall conduct periodic assessments of the reliability and adequacy of 
the interconnected Bulk-Power System in North America and shall report 
annually to the Secretary of Energy and the Commission its findings and 
recommendations for monitoring or improving system reliability and 
adequacy.
    ``(n) Assessment and Recovery of Certain Costs.--The reasonable 
costs of the Electric Reliability Organization, and the reasonable 
costs of each Affiliated Regional Reliability Entity that are related 
to implementation and enforcement of Organization Standards or other 
requirements contained in a delegation agreement approved under 
subsection (i), shall be assessed by the Electric Reliability 
Organization and each Affiliated Regional Reliability Entity, 
respectively, taking into account the relationship of costs to each 
region and based on an allocation that reflects an equitable sharing of 
the costs among all end-users. The Commission shall provide by rule for 
the review of such costs and allocations, pursuant to the standards in 
this subsection and subsection (e)(4)(F).
    ``(o) Rule of Reason Standard.--In any action under the antitrust 
laws, the conduct of the Electric Reliability Organization, of an 
Affiliated Regional Reliability Entity operating under an agreement in 
effect under subsection (i), or of a member of the Electric Reliability 
Organization or an Affiliated Regional Reliability Entity, to the 
extent such conduct is undertaken to develop or implement an 
Organization Standard which is approved by the Commission under 
subsection (f), shall not be deemed illegal per se. Such conduct shall 
be judged on the basis of its reasonableness, taking into account all 
relevant factors affecting competition. For purposes of this section, 
``antitrust laws'' has the meaning given it in subsection (a) of the 
first section of the Clayton Act, except that such term includes 
section 5 of the Federal Trade Commission Act to the extent that such 
section 5 applies to unfair methods of competition.''.
    (b) Conforming Amendments.--(1) Section 316 of the FPA is amended 
by striking ``or 214'' each place it appears and inserting ``214, or 
218''.
    (2) Section 316A of the FPA is amended by striking ``section 211, 
212, 213, or 214'' each time it appears and inserting ``Part II of this 
Act''.

SEC. 602. ELECTRICITY OUTAGE INVESTIGATION.

    Title II of the Department of Energy Organization Act is amended by 
adding the following new section after section 213 as added by section 
408:

``SEC. 214. ELECTRICITY OUTAGE INVESTIGATION BOARD.

    ``(a) Establishment; Membership; Terms.--The Secretary shall 
establish an Electricity Outage Investigation Board. The Board shall 
consist of five members, appointed by the Secretary. Each member shall 
serve a term of three years.
    ``(b) Duties.--The Board shall--
            ``(1) investigate a major bulk-power system failure in the 
        United States to determine its causes,
            ``(2) report to the Secretary the results of the 
        investigation, and
            ``(3) recommend to the Secretary actions to minimize the 
        possibility of a future bulk-power system failure.
    ``(c) Federal Advisory Committee Act.--The Board shall not be 
subject to the Federal Advisory Committee Act (5 U.S.C. Appx.).''.

SEC. 603. ADDITIONAL TRANSMISSION CAPACITY.

    Section 209 of PURPA is amended by adding a new subsection after 
subsection (c):
    ``(d) Consideration of Additional Transmission Capacity.--The 
Secretary may call and chair a meeting of representatives of States in 
a region in order to discuss provision of additional transmission 
capacity and related concerns in such region.''.

                  TITLE VII--ENVIRONMENTAL PROTECTION

SEC. 701. NITROGEN OXIDES CAP AND TRADE PROGRAM.

    (a) Purpose.--The purpose of this section is to facilitate the 
implementation of a regional strategy for reducing ambient 
concentrations of ozone through regional reductions in emissions of 
NO<INF>X</INF>.
    (b) Definitions.--For purposes of this section--
            (1) the term ``Administrator'' means the Administrator of 
        the Environmental Protection Agency.
            (2) the term ``NO<INF>X</INF>'' means oxides of nitrogen,
            (3) term ``NO<INF>X</INF> allowance'' means an 
        authorization to emit a specified amount of NO<INF>X</INF> into 
        the atmosphere, and
            (4) the term ``NO<INF>X</INF> allowance cap and trade 
        program'' means a program under which, in accordance with 
        regulations issued by the Administrator, the Administrator 
        establishes the maximum number of NO<INF>X</INF> allowances 
        that may be allocated for specified control periods, allocates 
        or authorizes a State to allocate NO<INF>X</INF> allowances, 
        allows the transfer of NO<INF>X</INF> allowances for use in 
        States subject to such a program, requires monitoring and 
        reporting of NO<INF>X</INF> emissions that meet the 
        requirements of section 412 of the Clean Air Act, and 
        prohibits, and requires penalties and offsets for, any 
        emissions of NO<INF>X</INF> in excess of the number of 
        NO<INF>X</INF> allowances held.
    (c) Program Implementation.--(1) If the Administrator determines 
under section 110(a)(2)(D) of the Clean Air Act that any source or 
other type of emissions activity in a State emits NO<INF>X</INF> in 
amounts that will contribute significantly to nonattainment in, or 
interfere with maintenance by, any other State with respect to any 
national ambient air quality standard for ozone, the Administrator 
shall establish by regulation, within 12 months of the determination 
for primary standards and as expeditiously as practicable for secondary 
standards, and shall administer a NO<INF>X</INF> allowance cap and 
trade program in all States in which such a source or other type of 
emissions activity is located.
    (2) Any NO<INF>X</INF> allowance cap and trade program shall 
contribute to providing for emissions reductions that mitigate 
adequately the contribution or interference and shall be taken into 
account by the Administrator in determining compliance with section 
110(a)(2)(D) of the Clean Air Act.
    (3) For purposes of sections 113, 114, 304, and 307 of the Clean 
Air Act, regulations promulgated under this section shall be treated as 
regulations promulgated under title IV of the Clean Air Act (entitled 
Acid Deposition Control). A requirement of regulations promulgated 
under this section is considered an ``emission standard'' or ``emission 
limitation'' within the meaning of section 302 of the Clean Air Act and 
an ``emission standard or limitation under this Act'' within the 
meaning of section 304 of the Clean Air Act.

                   TITLE VIII--FEDERAL POWER SYSTEMS

                 Subtitle A--Tennessee Valley Authority

SEC. 801. DEFINITION.

    Section 3 of the Federal Power Act is amended by adding after 
paragraph (25) the following new paragraph:
            ``(26) `TVA' means the Tennessee Valley Authority, an 
        agency and instrumentality of the United States created by the 
        Tennessee Valley Authority Act of 1933;''.

SEC. 802. APPLICATION OF FEDERAL POWER ACT.

    Part II of the Federal Power Act is amended by adding the following 
new section after section 201:

                 ``application to federal power systems

    ``Sec. 201A. (a) After January 1, 2003, sections 202 (h) and (i), 
203 (with respect to dispositions of transmission facilities), 205, 
206, 208, and 210 through 213 of this Part and sections 301 through 
304, 306, 307 (except the last sentence of paragraph (c)), 308, 309, 
313, and 317 of Part III apply to TVA's transmission facilities and 
transmission of electric energy and the provision of necessary 
associated services over the TVA Transmission System, except that any 
determination made by the Commission under those provisions as to 
whether an action or matter is just, reasonable, or not unduly 
discriminatory or preferential shall be subject to any other laws 
applicable to TVA, including the requirement that TVA recover its 
costs.''.

SEC. 803. ANTITRUST COVERAGE.

    The Tennessee Valley Authority Act of 1933 (16 U.S.C. 831-831ee) is 
amended by adding the following after section 21:

``SEC. 21A. ANTITRUST LAWS.

    ``(a) Subject to subsection (b), effective January 1, 2003, the 
Tennessee Valley Authority is subject to the antitrust laws of the 
United States with respect to the operation of its electric power 
system. For purposes of this section, `antitrust laws' has the meaning 
given it in subsection (a) of the first section of the Clayton Act (15 
U.S.C. 12(a)), except that it includes the Act of June 19, 1936 (15 
U.S.C. 13 et seq.), commonly known as the Robinson-Patman Act, and 
section 5 of the Federal Trade Commission Act (15 U.S.C. 45), to the 
extent that section 5 applies to unfair methods of competition.
    ``(b) No damages, interest on damages, costs, or attorney's fees 
may be recovered under section 4, 4A, or 4C of the Clayton Act (15 
U.S.C. 15, 15a, or 15c) from the Tennessee Valley Authority.''.

SEC. 804. TVA POWER SALES.

    The Tennessee Valley Authority Act of 1933 (16 U.S.C. 831-831ee) is 
amended by adding the following after section 15d:

``SEC. 15E. SALE OF ELECTRIC POWER AT WHOLESALE AND RETAIL.

    ``(a) For the purposes of this section:
            ``(1) `distributor' means an electric power system that--
                    ``(A) is owned by a cooperative organization or by 
                a municipality or other public body (or any successor 
                in interest), and
                    ``(B) on the date of enactment of this section, 
                purchased electric power at wholesale from the 
                Tennessee Valley Authority under an all-requirements 
                power contract; and
            ``(2) `distributor service area' means the geographic area 
        within which a distributor is authorized on the date of 
        enactment of this section to provide electric power at retail 
        to the ultimate consumer.
    ``(b)(1) Effective January 1, 2003, the Tennessee Valley Authority 
may sell electric power at wholesale to any person.
    ``(2) Beginning January 1, 2003, the Tennessee Valley Authority 
shall not sell power at retail, except it may sell power to a retail 
customer who consumes that power within a distributor service area, 
if--
            ``(A) the customer (or predecessor in interest) purchased 
        electric power directly from the Tennessee Valley Authority as 
        a retail customer on the date of enactment of this section, or
            ``(B) the distributor's firm power purchases from the 
        Tennessee Valley Authority are 50 percent or less of its total 
        retail sales, or
            ``(C) the distributor agrees that the Tennessee Valley 
        Authority can sell power to the customer.
Nothing in this paragraph shall prohibit the Tennessee Valley Authority 
from continuing to serve a retail customer which the Tennessee Valley 
Authority was serving on the date of enactment of this section that is 
not located within a distributor service area.
    ``(3) Notwithstanding any other provision of law, the rates, terms, 
and conditions of retail electric service, and rates for the use of 
distribution lines are not subject to regulation by the Tennessee 
Valley Authority.''.

SEC. 805. RENEGOTIATION OF LONG-TERM POWER CONTRACTS.

    Section 15e of the Tennessee Valley Authority Act of 1933 (16 
U.S.C. 831-831ee) as added by section 804 of this Act is amended by 
adding the following after subsection (b):
    ``(c)(1) Within one year following the date of enactment of this 
section, the Tennessee Valley Authority and the distributors shall 
renegotiate their existing long-term contracts with respect to--
            ``(A) the remaining term;
            ``(B) the length of the termination notice;
            ``(C) the amount of power a distributor may purchase from a 
        supplier other than the Tennessee Valley Authority beginning 
        January 1, 2003, and access to the Tennessee Valley Authority 
        transmission system for that power; and
            ``(D) stranded cost recovery.
    ``(2) If the parties are unable to reach agreement with regard to 
any of the issues under paragraph (1) within the one-year period set 
forth in paragraph (1), they shall submit the issue in dispute to the 
Federal Energy Regulatory Commission for final resolution.''.

SEC. 806. STRANDED COST RECOVERY.

    (a) Section 206 of the Federal Power Act is amended by adding the 
following new subsection after subsection (e) as added by section 
301(b) of this Act:
    ``(f)(1) Within one year of the date of enactment of this 
subsection, the Commission shall promulgate regulations with respect to 
TVA's recovery of stranded costs (as defined by the Commission) imposed 
on TVA resulting from wholesale or retail competition. These 
regulations shall provide that--
            ``(A) a customer that did not cause costs to be stranded is 
        not obligated to pay those costs on behalf of other customers;
            ``(B) no stranded investment recovery charge shall have the 
        effect of unfairly shifting costs among distributors or TVA 
        retail customers;
            ``(C) for a stranded cost recovery charge TVA assesses on a 
        retail or wholesale customer, TVA shall unbundle the charge 
        from other retail or wholesale rates applicable to that 
        customer and state the charge separately on the customer's 
        bill; and
            ``(D) TVA shall not impose a stranded cost recovery charge 
        after September 30, 2007, unless the person against whom the 
        charge is assessed agrees otherwise.
    ``(2) After notice and opportunity for comment, TVA shall submit a 
stranded cost recovery plan to the Commission for review and approval.
    ``(3) The Commission shall review the recovery plan and shall 
approve the recovery plan if the Commission determines the plan to be 
just and reasonable and not unduly discriminatory or preferential and 
consistent with the requirements of regulations issued under paragraph 
(1). TVA may recover stranded costs only pursuant to a recovery plan 
approved by the Commission.''.
    (b) Section 15e of the Tennessee Valley Authority Act of 1933 (16 
U.S.C. 831-831ee) as added by section 804 of this Act is amended by 
adding the following after subsection (c) as added by section 805 of 
this Act:
    ``(d) Amounts recovered by the Tennessee Valley Authority as 
stranded cost recovery charges under section 206(f) of the Federal 
Power Act shall be used to pay down TVA's debt to the extent determined 
by the TVA Board to be consistent with the proper financial management 
of the TVA power system, provided that TVA may not use amounts 
recovered to pay for additions to TVA's generating capacity.''.
    (c) Section 9106 of title 31, United States Code, is amended by 
adding the following new subsection after subsection (b):
    ``(c) Beginning in fiscal year 2003, as part of the annual 
management report submitted by the Tennessee Valley Authority (TVA) to 
Congress under this section, TVA shall also specifically report--
            ``(1) the status of TVA's long-range financial plans and 
        the progress toward its goal of competitively priced power, and 
        a general discussion of TVA's prospects on meeting the 
        objectives of the Ten Year Business Outlook issued on July 22, 
        1997;
            ``(2) any changes in assumptions since the previous report 
        that may have a material effect on TVA's long-range financial 
        plans;
            ``(3) the source of funds used for any capacity additions;
            ``(4) the use of other disposition of amounts recovered by 
        TVA under this section;
            ``(5) the amount by which TVA's publicly-held debt was 
        reduced; and
            ``(6) the projected amount by which TVA's publicly-held 
        debt will be reduced.''.

SEC. 807. CONFORMING AMENDMENTS.

    Effective January 1, 2003--
            (1) section 15d(a) of the Tennessee Valley Authority Act of 
        1933 (16 U.S.C. 831n-4(a)), which limit the sales or delivery 
        of electric power by TVA or distributors outside a certain 
        geographic area, is repealed;
            (2) subsections (f) and (j) of section 212 of the Federal 
        Power Act (16 U.S.C. 824k(f) and (j)) are repealed; and
            (3) the third provisos of section 10 of the Tennessee 
        Valley Authority Act of 1933 (16 U.S.C. 831i) and the second 
        and third provisos of section 12 of the Tennessee Valley 
        Authority Act of 1933 (16 U.S.C. 831k) do not apply to a 
        wholesale sale of electric energy by the Tennessee Valley 
        Authority.

              Subtitle B--Bonneville Power Administration

SEC. 811. DEFINITIONS.

    Section 3 of the Federal Power Act is amended by adding the 
following new paragraphs after paragraph (26) as added by section 801 
of this Act:
            ``(27) `Bonneville Administrator' means the Administrator 
        of the Bonneville Power Administration;
            ``(28) `Pacific Northwest' has the meaning given that term 
        in section 3(14) of the Pacific Northwest Electric Power 
        Planning and Conservation Act (16 U.S.C. 839a(14));
            ``(29) `Bonneville Transmission System' means transmission 
        facilities owned or leased by the United States, acting through 
        the Bonneville Administrator, and operated by the Bonneville 
        Administrator or another entity under section 202(h) or (i) of 
        this Act;''.

SEC. 812. APPLICATION OF FEDERAL POWER ACT.

    Section 201A of the Federal Power Act as added by section 802 of 
this Act is amended by adding the following new subsection after 
subsection (a):
    ``(b) Bonneville Power Administration.--After September 30, 2001, 
sections 202(h) and (i), 203 (with respect to dispositions of 
transmission facilities), 205, 206, 208, and 210 through 213 of this 
Part and sections 301 through 304, 306, 307 (except the last sentence 
of paragraph (c)), 308, 309, 313, and 317 of Part III apply to 
transmission facilities and transmission of electric energy and the 
provision of necessary associated services over the Bonneville 
Transmission System, provided that--
            ``(1) any determination made under those sections as to 
        whether an action or matter is just reasonable, not unduly 
        discriminatory or preferential shall be subject to--
                    ``(A) phasing in Commission-ordered changes in 
                transmission rates or charges that would cause 
                unreasonable cost shifts among users of the Bonneville 
                Transmission System if implemented at once;
                    ``(B) mitigating unreasonable adverse impacts on 
                remote transmission customers in the Pacific Northwest 
                that would otherwise result from Commission-ordered 
                changes in the historic treatment of costs to acquire 
                transmission to serve customers historically served by 
                General Transfer Agreements entered into between the 
                Bonneville Administrator and other transmission 
                providers;
                    ``(C) complying with requirements of other laws 
                applicable to the Bonneville Administrator;
                    ``(D) assuring the Bonneville Administrator's 
                transmission rates and charges are established 
                sufficient to--
                            ``(i) recover existing and future Federal 
                        investment in the Bonneville Transmission 
                        System over a reasonable number of years after 
                        first meeting all the Bonneville 
                        Administrator's other transmission costs and 
                        expenses; and
                            ``(ii) produce the revenues necessary to 
                        assure timely payment of all transmission 
                        related costs and expenses, including revenues 
                        to establish reserves;
                    ``(E) rules established by the Commission to--
                            ``(i) assure transmission access is 
                        provided over the Bonneville Transmission 
                        System for hydroelectric power that must be 
                        generated and transmitted at a particular time 
                        in order to reduce spill and levels of 
                        dissolved nitrogen gas harmful to fish, and
                            ``(ii) govern compensation to adversely 
                        affected transmission users when capacity is 
                        made available for transmission of 
                        hydroelectric power in those circumstances; and
                    ``(F) subsection 205(g) of this Act; and
            ``(2) these sections shall not apply to--
                    ``(A) the Bonneville Administrator's activities 
                other than transmission of electric energy and 
                provision of necessary associated services over the 
                facilities of the Bonneville Transmission System; or
                    ``(B) a contract in effect on the date of enactment 
                of this section, except for rates which are adjustable 
                by the Administrator under the contract; a Treaty of 
                the United States; or a contract concerning the 
                physical delivery of energy and capacity entered into 
                by entities designated pursuant to such a Treaty.''.

SEC. 813. SURCHARGE ON TRANSMISSION RATES TO RECOVER OTHERWISE NON-
              RECOVERABLE COSTS.

    Section 205 of the Federal Power Act is amended by adding the 
following after subsection (f):
    ``(g)(1) Subject to the requirements of paragraph (2), the 
Bonneville Administrator shall propose and the Commission shall 
establish a mechanism pursuant to this section that enables the 
Administrator to place a surcharge on rates for transmission services 
over the Bonneville Transmission System when necessary in order to 
recover power costs unable to be recovered through power revenues in 
time to meet the cost recovery requirements of section 7(a) of the 
Pacific Northwest Electric Power Planning and Conservation Act (16 
U.S.C. 839e(a)(1)).
    ``(2) The transmission surcharge mechanism set forth in paragraph 
(1) shall--
            ``(A) recover not more than $600 million in total and no 
        more than $100 million in any fiscal year;
            ``(B) be available only between October 1, 2001, and 
        October 1, 2016;
            ``(C) be implemented by the Bonneville Administrator only 
        when the Bonneville Administrator projects that available 
        financial reserves attributable to the power function will be 
        less than $150 million; and
            ``(D) to the fullest extent possible, be designed and 
        established to recover the costs from transmission users in a 
        manner that--
                    ``(i) minimized any effect on transmission users' 
                choices among competing suppliers or products,
                    ``(ii) does not apply to use of the Bonneville 
                Transmission System for power sales outside the Pacific 
                Northwest, and
                    ``(iii) minimizes bypass of the Bonneville 
                Transmission System by transmission users seeking to 
                avoid the surcharge.
    ``(3) The Bonneville Administrator shall have sole discretion to 
determine whether to implement the cost recovery mechanism established 
by the Commission under paragraph (1). Before imposing the surcharge, 
the Bonneville Administrator shall conduct a public process in the 
Pacific Northwest to receive comment on implementation of the 
surcharge. As a part of that public process, the Bonneville 
Administrator shall make available information concerning the need for 
and amount of the surcharge. If the Bonneville Administrator decides to 
implement a surcharge, it shall take effect on the Bonneville 
Administrator's proposed effective date, but no earlier than sixty days 
following the Administrator's filing of the proposed surcharge to the 
Commission for approval.
    ``(4)(A) Within 120 days after the effective date of the surcharge, 
the Commission shall approve, reject, or modify the surcharge and 
communicate its decision to the Bonneville Administrator. In conducting 
its review, the Commission shall not consider the appropriateness of 
the cost recovery mechanism established by the Commission under 
paragraph (1).
    ``(B) If the Commission rejects or modifies the surcharge, the 
Commission may order the Bonneville Administrator to refund, with 
interest, the portion of the surcharge the Commission found not 
justified or the Commission may authorize the Bonneville Administrator 
to recover amounts from customers who underpaid or did not pay the 
surcharge. If the Commission orders modification of the Bonneville 
Administrator's surcharge, such modified charge shall be effective on 
the date and for the time period specified by the Commission.
    ``(5) Any payment of power costs through application of 
transmission revenues collected by surcharge or otherwise shall be 
treated as a loan to the Bonneville Administrator's power function. The 
Bonneville Administrator shall repay the loan as soon as possible from 
power function revenues once the Bonneville Administrator is able to 
meet other power cost recovery and Treasury repayment obligations on an 
annual basis using power revenues and, to the extent practicable, 
refund such revenues to all transmission customers charged the 
surcharge. The borrowed revenues shall bear interest at a rate 
determined appropriate by the Commission.
    ``(6) For the recovery of costs relating to any generation or 
conservation resources financed by debt issued by a non-Federal party 
before October 1, 1998, and secured by an obligation of the Bonneville 
Administrator to make payments or net bill power and transmission 
service that cannot be recovered through power rates and charges and 
paid in accordance with the application of revenues and the priority of 
payments specified by Section 13(b) of the Federal Columbia River 
Transmission System Act of 1974 (16 U.S.C. 838K(b)), the provisions of 
this section apply, except for the recovery limitations under paragraph 
(2)(A) and the time limits under paragraph (2)(B), but only to the 
extent such recovery would have been allowed under laws applicable to 
the Bonneville Administrator as of October 1, 1998. In reviewing this 
surcharge request, the Commission shall apply the standard of review 
applicable as of October 1, 1998.''.

SEC. 814. COMPLAINTS.

    Section 306 of the Federal Power Act is amended by inserting 
``agency or instrumentality of the United States,'' after ``person,'' 
in the first sentence.

SEC 815. REVIEW OF COMMISSION ORDERS.

    Section 313 of the Federal Power Act is amended by inserting 
``agency or instrumentality of the United States,'' after ``person,'' 
in the first sentence in subsection (a).''.

SEC. 816. CONFORMING AMENDMENTS.

    (a) Section 201(f) of the Federal Power Act is amended by striking 
``No'' and inserting ``(1) Except as provided in sections 201A and 
202(h)-(i), no''.
    (b) Section 212(i) of the Federal Power Act (16 U.S.C. 824(i)) is 
repealed.
    (c) Section 6 of the Federal Columbia River Transmission System Act 
(16 U.S.C. 838d) is repealed.
    (d) Section 9 of the Federal Columbia River Transmission System Act 
(16 U.S.C. 838g) is amended to read as follows:

                          ``rates and charges

    ``Sec. 9. Schedules of rates and charges for the sale, including 
dispositions to a Federal agency, of all electric power made available 
to the Administrator pursuant to section 8 of this Act or otherwise 
acquired shall be established--
            ``(1) with a view to encouraging the widest possible 
        diversified use of electric power at the lowest possible rates 
        to consumers consistent with sound business principles;
            ``(2) having regard to the recovery (upon the basis of the 
        application of such rate schedules to the capacity of the 
        electric facilities of the projects) of the cost of producing 
        such electric power, including the amortization of the capital 
        investment allocated to power over a reasonable period of years 
        and payments provided for in section 11(b)(9) of this Act; and
            ``(3) at levels to produce such additional power revenues 
        as may be required, in the aggregate with all other power 
        revenues of the Administrator, to pay when due the principal 
        of, premiums, discounts, and expenses in connection with the 
        issuance of and interest on all bonds issued and outstanding 
        pursuant to this Act for other than the construction, 
        acquisition, and replacement of the Federal transmission 
        system, and amounts required to establish and maintain reserve 
        and other funds and accounts established in connection 
        therewith.
Electric power rates under this section shall be established by the 
Administrator in accordance with section 7 of the Pacific Northwest 
Electric Power Planning and Conservation Act.''.
    (e) Section 10 of the Federal Columbia River Transmission System 
Act (16 U.S.C. 838h) is repealed.
    (f) Section 6 of the Pacific Northwest Regional Preference Act (16 
U.S.C. 837e) is amended by striking the ``Federal energy or'' in the 
first sentence and by striking the second sentence.
    (g) Section 7(a)(1) of the Pacific Northwest Electric Power 
Planning and Conservation Act (16 U.S.C. 839e(a)(1)) is amended to read 
as follows:
    ``(a)(1) The Administrator shall establish, and periodically review 
and revise, rates for the sale and disposition of electric power and 
shall periodically review and, if necessary, propose revisions to rates 
for the transmission of electric power. Rates for the sale and 
disposition of electric power shall be established and, as appropriate, 
revised to recover, in accordance with sound business principles, the 
costs associated with the acquisition and conservation of electric 
power, including the amortization of the Federal investment allocable 
to electric power rates in the Federal Columbia River Power System 
(including irrigation electric-power related costs required to be 
repaid out of electric power revenues) over a reasonable period of 
years and the other costs and expenses incurred by the Administrator 
pursuant to this Act and other provisions of law. Rates for the sale 
and disposition of electric power shall be established in accordance 
with section 9 of the Federal Columbia River Transmission System Act 
(16 U.S.C. 838g), section 5 of the Flood Control Act of 1944 (16 U.S.C. 
825s), and this Act.''.
    (h) Section 7(a)(2) of the Pacific Northwest Electric Power 
Planning and Conservation Act (16 U.S.C. 839e(a)(2)) is amended by--
            (1) striking ``Rates'' and inserting ``Power rates'';
            (2) inserting ``and'' after the comma in subparagraph (A);
            (3) striking ``, and'' and inserting a period at the end of 
        subparagraph (B); and
            (4) striking subparagraph (C).
    (i) Section 7(i) of the Pacific Northwest Electric Power Planning 
and Conservation Act (16 U.S.C. 839(i)) is amended by inserting 
``power'' immediately after ``establishing'' in the first sentence.
    (j) Section 9(d) of the Pacific Northwest Electric Power Planning 
and Conservation Act (16 U.S.C. 839f(d)) is amended by striking 
``transmission access,'' and inserting ``power'' immediately before 
``services'' in the second sentence.
    (k) Section 9(i)(3) of the Pacific Northwest Electric Power 
Planning and Conservation Act (16 U.S.C. 839f(i)(3)) is amended by 
inserting ``power'' immediately before ``services'' each time it 
appears, and by striking ``transmission,'' in the first sentence.
    (l) Section 2(e) of the Bonneville Project Act (16 U.S.C. 832a(e)) 
is amended by striking the colon and all that follows and inserting a 
period.

  Subtitle C--Western Area Power Administration and Southwestern Area 
                          Power Administration

SEC. 821. DEFINITIONS.

    Section 3 of the Federal Power Act is amended by adding the 
following new paragraphs after paragraph (29) as added by subsection 
811:
            ``(30) `SWPA Administrator' means the Administrator of the 
        Southwestern Power Administration;
            ``(31) `SWPA Transmission System' means transmission 
        facilities owned or controlled by the United States and 
        operated by the SWPA Administrator or an entity with authority 
        over these facilities under section 202(h) or (i) of this Act;
            ``(32) `WAPA Administrator' means the Administrator of the 
        Western Area Power Administration; and
            ``(33) `WAPA Transmission System' means transmission 
        facilities owned or controlled by the United States and 
        operated by the WAPA Administrator or an entity with authority 
        over these facilities under section 202(h) or (i) of this 
        Act.''.

SEC. 822. APPLICATION OF FEDERAL POWER ACT.

    Section 201A of the Federal Power Act as added by section 802 of 
this Act is amended by adding the following new subsection after 
subsection (b) as added by section 812 of this Act:
    ``(c) Western Area Power Administration and Southwestern Power 
Administration.--After September 30, 2001, sections 202 (h) and (i), 
203 (with respect to dispositions of transmission facilities), 205, 
206, 208, and 210 through 213 of this Part and sections 301 through 
304, 306, 307 (except the last sentence of paragraph (c)), 308, 309, 
313, and 317 of Part III apply to transmission facilities and 
transmission of electric energy over the SWPA and WAPA Transmission 
Systems and the provision of necessary associated services over the 
SWPA and WAPA Transmission Systems, provided that--
            ``(1) any determination made under those sections as to 
        whether an action or matter is just, reasonable, not unduly 
        discriminatory or preferential shall be subject to--
                    ``(A) phasing in Commission-ordered changes in 
                transmission rates or charges that would cause 
                unreasonable cost shifts among users of the SWPA and 
                WAPA Transmission Systems if implemented at once;
                    ``(B) complying with requirements of other laws 
                applicable to the SWPA and WAPA Administrators;
                    ``(C) assuring the transmission rates and charges 
                of the SWPA and WAPA Administrators are established 
                sufficient to--
                            ``(i) recover existing and future Federal 
                        investment in the transmission system over a 
                        reasonable number of years after first meeting 
                        all other transmission costs and expenses; and
                            ``(ii) produce the revenues necessary to 
                        assure timely payment of all transmission 
                        related costs and expenses, including revenues 
                        to establish reserves;
                    ``(D) subsection 205(h) of this Act; and
                    ``(E) permitting the WAPA Administrator to 
                establish more than one rate for the transmission 
                facilities of its regions or projects; and
            ``(2) these sections shall not apply to--
                    ``(A) activities of the SWPA and WAPA 
                Administrators other than transmission of electric 
                energy and provision of necessary associated services 
                over the facilities of their respective systems; or
                    ``(B) a contract in effect on the date of enactment 
                of this Act, except for rates which are adjustable by 
                the Administrator under the contract.''.

SEC. 823. SURCHARGE ON TRANSMISSION RATES TO RECOVER OTHERWISE NON-
              RECOVERABLE COSTS.

    Section 205 of the Federal Power Act is amended by adding the 
following after subsection (g) as added by section 814 of this Act:
    ``(h)(1) The Commission shall establish rules for Commission 
approval of a surcharge on rates or charges for transmission services 
over the SWPA and WAPA transmission systems, including a reasonable 
limitation on amounts to be recovered under the surcharge and such 
other rules necessary to ensure that the surcharge minimizes any effect 
of transmission users' choice among competing suppliers or products and 
reflects cost causation, in order to recover power costs unable to be 
recovered through power revenues in time to meet statutory or 
regulatory cost recovery requirements.
    ``(2) The SWPA and WAPA Administrators shall have sole discretion 
to determine whether to implement the cost recovery mechanism 
established by the Commission under paragraph (1) for their respective 
transmission systems. Before imposing the surcharge, the Administrator 
shall conduct a public process to receive comment on implementation of 
the surcharge. As a part of that public process, the Administrator 
shall make available information concerning the need for and amount of 
the surcharge. If the Administrator decides to implement a surcharge, 
it shall take effect on the Administrator's proposed effective date, 
but no earlier than sixty days following the Administrator's filing of 
the proposed surcharge to the Commission for approval.
    ``(3)(A) Within 120 days after the effective date of the surcharge, 
the Commission shall approve, reject, or modify the surcharge and 
communicate its decision to the Administrator. In conducting its 
review, the Commission shall not consider the appropriateness of the 
cost recovery mechanism established by the Commission under paragraph 
(1).
    ``(B) If the Commission rejects or modifies the surcharge, the 
Commission may order the Administrator to refund, with interest, the 
portion of the surcharge the Commission found not justified or the 
Commission may authorize the Administrator to recover amounts from 
customers who underpaid or did not pay the surcharge. If the Commission 
orders modification of the Administrator's surcharge, such modified 
charge shall be effective on the date and for the time period specified 
by the Commission.
    ``(4) Any payment of power costs through application of 
transmission revenues collected by surcharge or otherwise shall be 
treated as a loan to the Administrator's power function. The 
Administrator shall repay the loan as soon as possible from power 
function revenues once the Administrator is able to meet other power 
cost recovery and Treasury repayment obligations on an annual basis 
using power revenues, and, to the extent practicable, refund such 
revenues to all transmission customers charged the surcharge. The 
borrowed revenues shall bear interest at a rate determined appropriate 
by the Commission.''.

SEC. 824. CONFORMING AMENDMENTS.

    (a) Section 302(a)(1) of the Department of Energy Organization Act 
(42 U.S.C. 7152) is amended by--
            (1) striking ``There'' and inserting in its place ``Except 
        for the authority addressed in paragraph (G) below, there'', 
        and
            (2) adding the following new subparagraph after 
        subparagraph (E):
                    ``(F) Authority for the approval, rejection, and 
                modification of transmission rates for the Southwestern 
                and Western Area Power Administrations is transferred 
                to the Federal Energy Regulatory Commission.''.
    (b) Section 221 of the Reclamation Reform Act of 1982 (43 U.S.C. 
390uu) is amended by--
            (1) striking ``executed pursuant to Federal reclamation 
        law'', and
            (2) inserting ``as defined in section 202 of this Act'' 
        after ``contract''.

                       TITLE IX--OTHER PROVISIONS

SEC. 901. TREATMENT OF NUCLEAR DECOMMISSIONING COSTS IN BANKRUPTCY.

    Section 523 of title 11, United States Code (section 523 of the 
Bankruptcy Code of 1978), is amended by adding the following new 
subsection after subsection (e):
    ``(f) Obligations to comply with, and claims resulting from 
compliance with, Nuclear Regulatory Commission regulations or orders 
governing the decontamination and decommissioning of nuclear power 
reactors licensed under section 103 or 104b. of the Atomic Energy Act 
of 1954 (42 U.S.C. 2133 and 2134(b)) shall be given priority and shall 
not be rejected, avoided, or discharged under title 11 of the United 
States Code or in any liquidation, reorganization, receivership, or 
other insolvency proceeding under State or Federal law.''.

SEC. 902. ENERGY INFORMATION ADMINISTRATION STUDY OF IMPACTS OF 
              COMPETITION IN ELECTRICITY MARKETS.

    Section 205 of the Department of Energy Organization Act (42 U.S.C. 
7135) is amended by adding after subsection (l) the following new 
subsection:
    ``(m)(1) The Administrator shall collect and publish information 
regarding the impact of wholesale and retail competition on the 
electric power industry and consumers. The Administrator shall 
prescribe forms for collecting this information. Information to be 
collected may include, but is not limited to--
            ``(A) the ownership and control of electric generation, 
        transmission, distribution, and related facilities;
            ``(B) electricity consumption and demand;
            ``(C) the transmission, distribution, and delivery of 
        electric services;
            ``(D) the price of competitive electric services;
            ``(E) the costs, revenues, and rates of regulated electric 
        services;
            ``(F) the reliability of the electric generation and 
        transmission system, including the availability of adequate 
        generation and transmission capacity to meet load requirements, 
        generation and transmission capacity additions and retirements, 
        and fuel suppliers and stocks for electric generation;
            ``(G) electric energy efficiency programs and services and 
        their impacts on energy consumption;
            ``(H) the development and use of renewable electric energy 
        resources; and
            ``(I) research, development and demonstration activities to 
        improve the nation's electric system.
    ``(2) In carrying out the purposes of this subsection, the 
Administrator shall take into account reporting burdens and the 
protection of proprietary information as required by law.''.

SEC. 903. ANTITRUST SAVINGS CLAUSE.

    This Act and the amendments made by this Act shall not be construed 
to modify, impair, or supersede the operation of the antitrust laws. 
For purposes of this section, ``antitrust laws'' has the meaning given 
it in subsection (a) of the first section of the Clayton Act (15 U.S.C. 
12(a)), except that it includes section 5 of the Federal Trade 
Commission Act (15 U.S.C. 45), to the extent that section 5 applies to 
unfair methods of competition.

SEC. 904. ELIMINATION OF ANTITRUST REVIEW BY THE NUCLEAR REGULATORY 
              COMMISSION.

    Section 105 of the Atomic Energy Act of 1954 (42 U.S.C. 2135) is 
amended by adding the following after subsection c.:
    ``d. Following the effective date of this subsection, subsection 
105 c. shall not apply to any pending or future application filed for a 
license to construct or operate a utilization facility under sections 
103 or 104b. This Act shall not affect the Commission's authority to 
enforce antitrust conditions included in licenses issued under sections 
103 or 104b. before the date of enactment of this subsection.''.

SEC. 905. ENVIRONMENTAL LAWS SAVINGS CLAUSE.

    Nothing in this Act alters or affects environmental requirements 
imposed by Federal or State law, including, but not limited to, the 
Clean Air Act (42 U.S.C. 7401 et seq.); the Federal Water Pollution 
Control Act (33 U.S.C. 1251 et seq.); the Comprehensive Environmental 
Response, Compensation, and Liability Act of 1980 (42 U.S.C. 9601 et 
seq.); the Federal Power Act (16 U.S.C. 791a et seq.); and the 
Endangered Species Act (16 U.S.C. 1531 et seq.).

SEC. 906. GENERATING PLANT EFFICIENCY STUDY.

    Part C of title VI of the Department of Energy Organization Act is 
amended by adding after section 662, the following new section:

                  ``generating plant efficiency study

    ``Sec. 663. Within three years following the date of enactment of 
this section, the Secretary shall issue a report comparing the impact 
of wholesale and retail competition on the efficiency of new and 
existing electric generating facilities.''.

SEC. 907. CONFORMING AMENDMENTS.

    (a) The Table of Contents of PURPA is amended by--
            (1) inserting after the listing for section 117 under 
        subtitle B of title I:

``Sec. 118. Authority to impose reciprocity requirements.
``Sec. 119. Aggregation for purchase of retail electric energy.
``Sec. 119A. Consumer information disclosure.
``Sec. 119B. Access to electric service for low-income consumers.
``Sec. 119C. Residential electricity consumer database.
``Sec. 119D. Model code for retail suppliers.
``Sec. 119E. Model code for electric utility workers.'',
        and
            (2) inserting after the listing for section 608:

``Sec. 609. Retail competition.
``Sec. 610. Public Benefits Fund.
``Sec. 611. Federal renewable portfolio standard.
``Sec. 612. Net metering for renewable energy.
``Sec. 613. Interconnections for certain facilities.''.
    (b) The table of contents of the Energy Policy Act of 1992 is 
amended by inserting after the listing for section 2606:

``Sec. 2607. Tribal electricity assistance.''.
    (c) The table of contents of the Department of Energy Organization 
Act is amended by--
            (1) inserting after the listing for section 212:

``Sec. 213. Office of Indian Energy Policy and Programs.
``Sec. 214. Electricity Outage Investigation Board.'', and
            (2) inserting after the listing for section 662:

``Sec. 663. Generating plant efficiency study.''.
                                 <all>
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