II

106TH CONGRESS

1ST SESSION S. 1323

To amend the Federal Power Act to ensure that certain Federal power

customers are provided protection by the Federal Energy Regulatory

Commission, and for other purposes.

IN THE SENATE OF THE UNITED STATES

JULY 1, 1999

Mr. MCCONNELL (for himself and Mr. BUNNING) introduced the following bill;

which was read twice and referred to the Committee on Environment and

Public Works

A BILL

To amend the Federal Power Act to ensure that certain

Federal power customers are provided protection by the

Federal Energy Regulatory Commission, and for other

purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘TVA Customer Protec5 tion Act of 1999’’.

6 SEC. 2. INCLUSION IN DEFINITION OF PUBLIC UTILITY.

7 (a) IN GENERAL.—Section 201(e) of the Federal

8 Power Act (16 U.S.C. 824(e)) is amended by inserting be-
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1 fore the period at the end the following: ‘‘, and includes

2 the Tennessee Valley Authority’’.

3 (b) CONFORMING AMENDMENT.—Section 201(f) of

4 the Federal Power Act (16 U.S.C. 824(f)) is amended by

5 striking ‘‘foregoing, or any corporation’’ and inserting

6 ‘‘foregoing (other than the Tennessee Valley Authority) or

7 any corporation’’.

8 SEC. 3. DISPOSITION OF PROPERTY.

9 Section 203 of the Federal Power Act (16 U.S.C.

10 824b) is amended by adding at the end the following:

11 ‘‘(c) TVA EXCEPTION.—This section does not apply

12 to a disposition of the whole or any part of the facilities

13 of the Tennessee Valley Authority if—

14 ‘‘(1) the Tennessee Valley Authority discloses to

15 the Commission (on a form, and to the extent, that

16 the Commission shall prescribe by regulation) the

17 sale, lease, or other disposition of any part of its fa18 cilities that—

19 ‘‘(A) is subject to the jurisdiction of the

20 Commission under this Part; and

21 ‘‘(B) has a value of more than $50,000;

22 and

23 ‘‘(2) all proceeds of the sale, lease, or other dis24 position under paragraph (1) are applied by the
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1 Tennessee Valley Authority to the reduction of debt

2 of the Tennessee Valley Authority.’’.

3 SEC. 4. FOREIGN OPERATIONS; PROTECTIONS.

4 Section 208 of the Federal Power Act (16 U.S.C.

5 824g) is amended by adding at the end the following:

6 ‘‘(c) TENNESSEE VALLEY AUTHORITY.—

7 ‘‘(1) LIMIT ON CHARGES.—

8 ‘‘(A) NO AUTHORIZATION OR PERMIT.—

9 The Commission shall issue no order under this

10 Act that has the effect of authorizing or permit11 ting the Tennessee Valley Authority to make,

12 demand, or receive any rate or charge, or im13 pose any rule or regulation pertaining to a rate

14 or charge, that includes any costs incurred by

15 or for the Tennessee Valley Authority in the

16 conduct of any activities or operations outside

17 the United States.

18 ‘‘(B) UNLAWFUL RATE.—

19 ‘‘(i) IN GENERAL.—Any rate, charge,

20 rule, or regulation described in subpara21 graph (A) shall be deemed for the purposes

22 of this Act to be unjust, unreasonable, and

23 unlawful.

24 ‘‘(ii) NO LIMITATION ON AUTHOR25 ITY.—Clause (i) does not limit the author-
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1 ity of the Commission under any other pro2 vision of law to regulate and establish just

3 and reasonable rates and charges for the

4 Tennessee Valley Authority.

5 ‘‘(2) ANNUAL REPORT.—The Tennessee Valley

6 Authority shall annually—

7 ‘‘(A) prepare and file with the Commission,

8 in a form that the Commission shall prescribe

9 by regulation, a report setting forth in detail

10 any activities or operations engaged in outside

11 the United States by or on behalf of the Ten12 nessee Valley Authority; and

13 ‘‘(B) certify to the Commission that the

14 Tennessee Valley Authority has neither recov15 ered nor sought to recover the costs of activities

16 or operations engaged in outside the United

17 States by or on behalf of the Tennessee Valley

18 Authority in any rate, charge, rule, or regula19 tion on file with the Commission.’’.

20 SEC. 5. TVA POWER SALES AND PROPERTY VALUATION.

21 (a) IN GENERAL.—Part II of the Federal Power Act

22 (16 U.S.C. 824 et seq.) is amended by adding at the end

23 the following:
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1 ‘‘SEC. 215. TVA POWER SALES.

2 ‘‘(a) IN GENERAL.—The Tennessee Valley Authority

3 shall not sell electric power to a retail customer that will

4 consume the power within the area that, on the date of

5 enactment of this section, is assigned by law as the dis6 tributor service area, unless—

7 ‘‘(1) the customer (or predecessor in interest to

8 the customer) was purchasing electric power directly

9 from the Tennessee Valley Authority as a retail cus10 tomer on that date;

11 ‘‘(2) the distributor is purchasing firm power

12 from the Tennessee Valley Authority in an amount

13 that is equal to not more than 50 percent of the

14 total retail sales of the distributor; or

15 ‘‘(3) the distributor agrees that the Tennessee

16 Valley Authority may sell power to the customer.

17 ‘‘(b) RETAIL SALES.—Notwithstanding any other

18 provision of law, the rates, terms, and conditions of retail

19 sales of electric power by the Tennessee Valley Authority

20 that are not prohibited by subsection (a) shall be subject

21 to regulation under State law applicable to public utilities

22 in the manner and to the extent that a State commission

23 or other regulatory authority determines to be appro24 priate.

25 ‘‘(c) ASSURANCE OF ADEQUATE ELECTRIC GENERA26 TION CAPACITY.—
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1 ‘‘(1) IN GENERAL.—Notwithstanding any other

2 provision of law, after the date of enactment of this

3 section, the Tennessee Valley Authority shall not

4 construct or acquire by any means electric genera5 tion capacity, or sell the output of electric generation

6 capacity constructed or acquired after that date, un7 less the Commission has issued to the Tennessee

8 Valley Authority a certificate of public convenience

9 and necessity authorizing the construction or acqui10 sition of electric generation capacity.

11 ‘‘(2) CRITERIA FOR ISSUANCE OF CERTIFI12 CATE.—The Commission shall issue a certificate of

13 public convenience and necessity under paragraph

14 (1) only if the Commission finds, after affording an

15 opportunity for an evidentiary hearing, that—

16 ‘‘(A) the reserve power margin of the Ten17 nessee Valley Authority for the area within

18 which the Tennessee Valley Authority is per19 mitted by law to be a source of supply—

20 ‘‘(i) is less than 15 percent; and

21 ‘‘(ii) is expected to remain less than

22 15 percent for a period of at least 1 year

23 unless new capacity is constructed or ac24 quired;
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1 ‘‘(B) the Energy Information Administra2 tion has submitted to the Commission, with re3 spect to issuance of the certificate of public con4 venience and necessity, a determination that—

5 ‘‘(i) there is no commercially reason6 able option for the purchase of power from

7 the wholesale power market to meet the

8 needs of the area within which the Ten9 nessee Valley Authority is permitted by law

10 to be a source of supply; and

11 ‘‘(ii) the proposed construction or ac12 quisition is the only commercially reason13 able means to meet the firm contractual

14 obligations of the Tennessee Valley Au15 thority with respect to the area within

16 which the Tennessee Valley Authority is

17 permitted by law to be a source of supply;

18 ‘‘(C) the electric generation capacity or the

19 output of the capacity proposed to be author20 ized will not make the Tennessee Valley Au21 thority a direct or indirect source of supply in

22 any area with respect to which the Authority is

23 prohibited by law from being, directly or indi24 rectly, a source of supply; and
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1 ‘‘(D) the electric generation capacity pro2 posed to be authorized is completely subscribed

3 in advance for use by customers only within the

4 area for which the Tennessee Valley Authority

5 or distributors of the Authority were the pri6 mary source of power supply on July 1, 1957.

7 ‘‘SEC. 216. VALUATION OF CERTAIN TVA PROPERTY.

8 ‘‘(a) EVIDENTIARY HEARING.—Not later than 120

9 days after the date of enactment of this section, notwith10 standing any other provision of law, the Commission shall

11 commence a hearing on the record for the purpose of de12 termining the value of the property owned by the Ten13 nessee Valley Authority—

14 ‘‘(1) that is used and useful; and

15 ‘‘(2) the cost of which was prudently incurred

16 in providing electric service, as of July 1, 1999, to—

17 ‘‘(A) the distributors of the Authority; and

18 ‘‘(B) the customers that directly purchased

19 power from the Authority.

20 ‘‘(b) PROCEDURES AND STANDARDS.—In making the

21 determination under subsection (a), the Commission shall

22 use, to the maximum extent practicable, the procedures

23 and standards that the Commission uses in making simi24 lar determinations with respect to public utilities.
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1 ‘‘(c) TIMING OF FINAL ORDER.—The Commission

2 shall issue a final order with respect to the determination

3 under subsection (a)—

4 ‘‘(1) not later than 1 year after the date of

5 commencement of the hearing under subsection (a);

6 or

7 ‘‘(2) not later than a date determined by the

8 Commission by an order supported by the record.

9 ‘‘(d) TIMING OF ORDER AWARDING RECOVERY OF

10 STRANDED COSTS.—The Commission may issue an order

11 awarding recovery to the Tennessee Valley Authority of

12 costs rendered uneconomic by competition not earlier than

13 the date on which the Commission issues a final order with

14 respect to the determination under subsection (a).’’.

15 (b) TRANSITION.—Not later than 180 days after the

16 date of enactment of this Act, the Tennessee Valley Au17 thority shall file all rates and charges for the transmission

18 or sale of electric energy and the classifications, practices,

19 and regulations affecting those rates and charges, together

20 with all contracts that in any manner affect or relate to

21 contracts that are required to be filed under Part II of

22 the Federal Power Act (16 U.S.C. 824 et seq.) (as amend23 ed by subsection (a)) and that are in effect as of the date

24 of enactment of this Act.
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1 SEC. 6. FILING AND FULL DISCLOSURE OF TVA DOCU2 MENTS.

3 Part III of the Federal Power Act (16 U.S.C. 825

4 et seq.) is amended—

5 (1) by redesignating sections 319 through 321

6 as sections 320 through 322, respectively; and

7 (2) by inserting after section 318 the following:

8 ‘‘SEC. 319. FILING AND FULL DISCLOSURE OF TVA DOCU9 MENTS.

10 ‘‘(a) IN GENERAL.—The Tennessee Valley Authority

11 shall file and disclose the same documents and other infor12 mation that other public utilities are required to file under

13 this Act, as the Commission shall require by regulation.

14 ‘‘(b) REGULATION.—

15 ‘‘(1) TIMING.—The regulation under subsection

16 (a) shall be promulgated not later than 1 year after

17 the date of enactment of this section.

18 ‘‘(2) CONSIDERATIONS.—In promulgating the

19 regulation under subsection (a), the Commission

20 shall take into consideration the practices of the

21 Commission with respect to public utilities other

22 than the Tennessee Valley Authority.’’.

23 SEC. 7. APPLICABILITY OF THE ANTITRUST LAWS.

24 The Tennessee Valley Authority Act of 1933 (16

25 U.S.C. 831 et seq.) is amended by inserting after section

26 16 the following:
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1 ‘‘SEC. 17. APPLICABILITY OF THE ANTITRUST LAWS.

2 ‘‘(a) DEFINITION OF ANTITRUST LAWS.—In this sec3 tion, the term ‘antitrust laws’ means—

4 ‘‘(1) an antitrust law (within the meaning of

5 section (1) of the Clayton Act (15 U.S.C. 12));

6 ‘‘(2) the Act of June 19, 1936 (commonly

7 known as the ‘Robinson Patman Act’) (49 Stat.

8 1526, chapter 323; 15 U.S.C. 13 et seq.); and

9 ‘‘(3) section 5 of the Federal Trade Commis10 sion Act (15 U.S.C. 45), to the extent that the sec11 tion relates to unfair methods of competition.

12 ‘‘(b) APPLICABILITY.—Nothing in this Act modifies,

13 impairs, or supersedes the antitrust laws.

14 ‘‘(c) ANTITRUST LAWS.—

15 ‘‘(1) TVA DEEMED A PERSON.—The Tennessee

16 Valley Authority shall be deemed to be a person, and

17 not government, for purposes of the antitrust laws.

18 ‘‘(2) APPLICABILITY.—Notwithstanding any

19 other provision of law, the antitrust laws (including

20 the availability of any remedy for a violation of an

21 antitrust law) shall apply to the Tennessee Valley

22 Authority notwithstanding any determination that

23 the Tennessee Valley Authority is a corporate agen24 cy or instrumentality of the United States or is oth25 erwise engaged in governmental functions.’’.
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1 SEC. 8. SAVINGS PROVISION.

2 (a) DEFINITION OF TVA DISTRIBUTOR.—In this sec3 tion, the term ‘‘TVA distributor’’ means a cooperative or4 ganization or publicly owned electric power system that,

5 on January 2, 1998, purchased electric power at wholesale

6 from the Tennessee Valley Authority under an all-require7 ments power contract.

8 (b) EFFECT OF ACT.—Nothing in this Act or any

9 amendment made by this Act—

10 (1) subjects any TVA distributor to regulation

11 by the Federal Energy Regulatory Commission; or

12 (2) abrogates or affects any law in effect on the

13 date of enactment of this Act that applies to a TVA

14 distributor.

15 SEC. 9. PROVISION OF CONSTRUCTION EQUIPMENT, CON16 TRACTING, AND ENGINEERING SERVICES.

17 Section 4 of the Tennessee Valley Authority Act of

18 1933 (16 U.S.C. 831c) is amended by adding at the end

19 the following:

20 ‘‘(m) PROVISION OF CONSTRUCTION EQUIPMENT,

21 CONTRACTING, AND ENGINEERING SERVICES.—

22 ‘‘(1) IN GENERAL.—Notwithstanding any other

23 provision of this Act, except as provided in this sub24 section, the Corporation shall not have power to—

25 ‘‘(A) rent or sell construction equipment;
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1 ‘‘(B) provide a construction equipment

2 maintenance or repair service;

3 ‘‘(C) perform contract construction work;

4 or

5 ‘‘(D) provide a construction engineering

6 service;

7 to any private or public entity.

8 ‘‘(2) ELECTRICAL CONTRACTORS.—The Cor9 poration may provide equipment or a service de10 scribed in subparagraph (1) to a private contractor

11 that is engaged in electrical utility work on an elec12 trical utility project of the Corporation.

13 ‘‘(3) CUSTOMERS, DISTRIBUTORS, AND GOVERN14 MENTAL ENTITIES.—The Corporation may provide

15 equipment or a service described in subparagraph

16 (1) to—

17 ‘‘(A) a power customer served directly by

18 the Corporation;

19 ‘‘(B) a distributor of Corporation power; or

20 ‘‘(C) a Federal, State, or local government

21 entity;

22 that is engaged in work specifically related to an

23 electrical utility project of the Corporation.

24 ‘‘(4) USED CONSTRUCTION EQUIPMENT.—
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1 ‘‘(A) DEFINITION OF USED CONSTRUCTION

2 EQUIPMENT.—In this paragraph, the term

3 ‘used construction equipment’ means construc4 tion equipment that has been in service for

5 more than 2,500 hours.

6 ‘‘(B) DISPOSITION.—The Corporation may

7 dispose of used construction equipment by

8 means of a public auction conducted by a pri9 vate entity that is independent of the Corpora10 tion.

11 ‘‘(C) DEBT REDUCTION.—The Corporation

12 shall apply all proceeds of a disposition of used

13 construction equipment under subparagraph

14 (B) to the reduction of debt of the Corpora15 tion.’’.

16 SEC. 10. AUTHORIZATION OF APPROPRIATIONS.

17 There are authorized to be appropriated to the Fed18 eral Energy Regulatory Commission such sums as are nec19 essary to carry out this Act and the amendments made

20 by this Act.

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