I

106TH CONGRESS

2D SESSION H. R. 4941

To amend the Federal Power Act to provide for the reliability of the electric

power transmission system in the United States, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JULY 24, 2000

Mr. WYNN (for himself, Mr. SHADEGG, Mr. PALLONE, Mr. BILBRAY, and Ms.

ESHOO) introduced the following bill; which was referred to the Committee on Commerce

A BILL

To amend the Federal Power Act to provide for the reliability

of the electric power transmission system in the United

States, 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 ‘‘National Electric Reli5 ability Act’’.

6 SEC. 2. ELECTRIC ENERGY TRANSMISSION RELIABILITY.

7 (a) ELECTRIC RELIABILITY ORGANIZATION AND

8 OVERSIGHT.—
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1 (1) IN GENERAL.—The Federal Power Act is

2 amended by adding the following new section after

3 section 214:

4 ‘‘SEC. 215. ELECTRIC RELIABILITY ORGANIZATION AND

5 OVERSIGHT.

6 ‘‘(a) DEFINITIONS.—As used in this section:

7 ‘‘(1) AFFILIATED REGIONAL RELIABILITY ENTI8 TY.—The term ‘affiliated regional reliability entity’

9 means an entity delegated authority under the provi10 sions of subsection (h).

11 ‘‘(2) BULK-POWER SYSTEM.—The term ‘bulk12 power system’ means all facilities and control sys13 tems necessary for operating an interconnected

14 transmission grid (or any portion thereof), including

15 high-voltage transmission lines; substations; control

16 centers; communications; data, and operations plan17 ning facilities; and the output of generating units

18 necessary to maintain transmission system reli19 ability.

20 ‘‘(3) ELECTRIC RELIABILITY ORGANIZATION, OR

21 ORGANIZATION.—The term ‘Electric Reliability Or22 ganization’ or ‘Organization’ means the organization

23 approved by the Commission under subsection

24 (d)(4).
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1 ‘‘(4) ENTITY RULE.—The term ‘entity rule’

2 means a rule adopted by an affiliated regional reli3 ability entity for a specific region and designed to

4 implement or enforce one or more Organization

5 Standards. An entity rule shall be approved by the

6 organization and once approved, shall be treated as

7 an Organization Standard.

8 ‘‘(5) INDUSTRY SECTOR.—The term ‘industry

9 sector’ means a group of users of the bulk power

10 system with substantially similar commercial inter11 ests, as determined by the Board of the Electric Re12 liability Organization.

13 ‘‘(6) INTERCONNECTION.—The term ‘inter14 connection’ means a geographic area in which the

15 operation of bulk-power system components is syn16 chronized such that the failure of one or more of

17 such components may adversely affect the ability of

18 the operators of other components within the inter19 connection to maintain safe and reliable operation of

20 the facilities within their control.

21 ‘‘(7) ORGANIZATION STANDARD.—The term

22 ‘Organization Standard’ means a policy or standard

23 duly adopted by the Electric Reliability Organization

24 to provide for the reliable operation of a bulk-power

25 system.
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1 ‘‘(8) PUBLIC INTEREST GROUP.—The term

2 ‘public interest group’ means any nonprofit private

3 or public organization that has an interest in the ac4 tivities of the Electric Reliability Organization, in5 cluding, but not limited to, ratepayer advocates, en6 vironmental groups, and State and local government

7 organizations that regulate market participants and

8 promulgate government policy.

9 ‘‘(9) VARIANCE.—The term ‘variance’ means an

10 exception or variance from the requirements of an

11 Organization Standard (including a proposal for an

12 Organization Standard where there is no Organiza13 tion Standard) that is adopted by an affiliated re14 gional reliability entity and applicable to all or a

15 part of the region for which the affiliated regional

16 reliability entity is responsible. A variance shall be

17 approved by the organization and once approved,

18 shall be treated as an Organization Standard.

19 ‘‘(10) SYSTEM OPERATOR.—The term ‘system

20 operator’ means any entity that operates or is re21 sponsible for the operation of a bulk-power system,

22 including but not limited to a control area operator,

23 an independent system operator, a regional trans24 mission organization, a transmission company, a
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1 transmission system operator, or a regional security

2 coordinator.

3 ‘‘(11) USER OF THE BULK-POWER SYSTEM.—

4 The term ‘user of the bulk-power system’ means any

5 entity that sells, purchases, or transmits electric

6 power over a bulk-power system, or that owns, oper7 ates, or maintains facilities or control systems that

8 are part of a bulk-power system, or that is a system

9 operator.

10 ‘‘(b) COMMISSION AUTHORITY.—(1) Within the

11 United States, the Commission shall have jurisdiction over

12 the Electric Reliability Organization, all affiliated regional

13 reliability entities, all system operators, and all users of

14 the bulk-power system, for purposes of approving and en15 forcing compliance with the requirements of this section.

16 ‘‘(2) The Commission may, by rule, define any other

17 term used in this section, provided such definition is con18 sistent with the definitions in, and the purpose and intent

19 of, this Act.

20 ‘‘(3) Not later than 90 days after the date of enact21 ment of this section, the Commission shall issue a pro22 posed rule for implementing the requirements of this sec23 tion. The Commission shall provide notice and opportunity

24 for comment on the proposed rule. The Commission shall
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1 issue a final rule under this subsection within 180 days

2 after the date of enactment of this section.

3 ‘‘(4) Nothing in this section shall be construed as lim4 iting or impairing any authority of the Commission under

5 any other provision of this Act, including its exclusive au6 thority to determine rates, terms, and conditions of trans7 mission services subject to its jurisdiction.

8 ‘‘(c) EXISTING RELIABILITY STANDARDS.—Fol9 lowing enactment of this section, and prior to the approval

10 of an organization under subsection (d), any entity, in11 cluding the North American Electric Reliability Council

12 and its member regional reliability councils, may file any

13 reliability standard, guidance, or practice that such entity

14 would propose to be made mandatory and enforceable. The

15 Commission, after allowing an opportunity to submit com16 ments, may approve any such proposed mandatory stand17 ard, guidance, or practice, or any amendment thereto, if

18 it finds that the standard, guidance, or practice, or

19 amendment is just, reasonable, not unduly discriminatory

20 or preferential, and in the public interest. The Commission

21 may, without further proceeding or finding, grant its ap22 proval to any standard, guidance, or practice for which

23 no substantive objections are filed in the comment period.

24 Filed standards, guidances, or practices, including any

25 amendments thereto, shall be mandatory and applicable
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1 according to their terms following approval by the Com2 mission and shall remain in effect until (1) withdrawn,

3 disapproved, or superseded by an Organization Standard,

4 issued or approved by the Electric Reliability Organization

5 and made effective by the Commission under subsection

6 (e); or (2) disapproved by the Commission if, upon com7 plaint or upon its own motion and after notice and an

8 opportunity for comment, the Commission finds the stand9 ard, guidance, or practice unjust, unreasonable, unduly

10 discriminatory, or preferential or not in the public inter11 est. Standards, guidances, or practices in effect pursuant

12 to the provisions of this subsection shall be enforceable

13 by the Commission.

14 ‘‘(d) ORGANIZATION APPROVAL.—(1) Following the

15 issuance of a final Commission rule under subsection

16 (b)(3), an entity may submit an application to the Com17 mission for approval as the Electric Reliability Organiza18 tion. The applicant shall specify in its application its gov19 ernance and procedures, as well as its funding mechanism

20 and initial funding requirements.

21 ‘‘(2) The Commission shall provide public notice of

22 the application and afford interested parties an oppor23 tunity to comment.

24 ‘‘(3) The Commission shall approve the application

25 if the Commission determines that the applicant—
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1 ‘‘(A) has the ability to develop, implement, and

2 enforce standards that provide for an adequate level

3 of reliability of the bulk-power system;

4 ‘‘(B) permits voluntary membership to any user

5 of the bulk-power system or public interest group;

6 ‘‘(C) assures fair representation of its members

7 in the selection of its directors and fair management

8 of its affairs, taking into account the need for effi9 ciency and effectiveness in decisionmaking and oper10 ations and the requirements for technical com11 petency in the development of Organization Stand12 ards and the exercise of oversight of bulk-power sys13 tem reliability;

14 ‘‘(D) assures that no two industry sectors have

15 the ability to control, and no one industry sector has

16 the ability to veto, the Electric Reliability Organiza17 tion’s discharge of its responsibilities (including ac18 tions by committees recommending standards to the

19 board or other board actions to implement and en20 force standards);

21 ‘‘(E) provides for governance by a board wholly

22 comprised of independent directors;

23 ‘‘(F) provides a funding mechanism and re24 quirements that are just, reasonable, and not unduly

25 discriminatory or preferential and are in the public
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1 interest, and which satisfy the requirements of sub2 section (l);

3 ‘‘(G) establishes procedures for development of

4 Organization Standards that provide reasonable no5 tice and opportunity for public comment, taking into

6 account the need for efficiency and effectiveness in

7 decisionmaking and operations and the requirements

8 for technical competency in the development of Or9 ganization Standards, and which standards develop10 ment process has the following attributes:

11 ‘‘(i) openness,

12 ‘‘(ii) balance of interests, and

13 ‘‘(iii) due process, except that the proce14 dures may include alternative procedures for

15 emergencies;

16 ‘‘(H) establishes fair and impartial procedures

17 for implementation and enforcement of Organization

18 Standards, either directly or through delegation to

19 an affiliated regional reliability entity, including the

20 imposition of penalties, limitations on activities,

21 functions, or operations, or other appropriate sanc22 tions;

23 ‘‘(I) establishes procedures for notice and op24 portunity for public observation of all meetings, ex25 cept that the procedures for public observation may
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1 include alternative procedures for emergencies or for

2 the discussion of information the directors determine

3 should take place in closed session, such as litiga4 tion, personnel actions, or commercially sensitive in5 formation;

6 ‘‘(J) provides for the consideration of rec7 ommendations of States and State commissions; and

8 ‘‘(K) addresses other matters that the Commis9 sion may deem necessary or appropriate to ensure

10 that the procedures, governance, and funding of the

11 Electric Reliability Organization are just, reason12 able, not unduly discriminatory or preferential, and

13 are in the public interest.

14 ‘‘(4) The Commission shall approve only one Electric

15 Reliability Organization. If the Commission receives two

16 or more timely applications that satisfy the requirements

17 of this subsection, the Commission shall approve only the

18 application it concludes will best implement the provisions

19 of this section.

20 ‘‘(e) ESTABLISHMENT OF AND MODIFICATIONS TO

21 ORGANIZATION STANDARDS.—(1) The Electric Reliability

22 Organization shall file with the Commission any new or

23 modified organization standards, including any variances

24 or entity rules, and the Commission shall follow the proce25 dures under paragraph (2) for review of that filing.
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1 ‘‘(2) Submissions under paragraph (1) shall

2 include—

3 ‘‘(A) a concise statement of the purpose of the

4 proposal, and

5 ‘‘(B) a record of any proceedings conducted

6 with respect to such proposal.

7 The Commission shall provide notice of the filing of such

8 proposal and afford interested entities 30 days to submit

9 comments. The Commission, after taking into consider10 ation any submitted comments, shall approve or dis11 approve such proposal not later than 60 days after the

12 deadline for the submission of comments, except that the

13 Commission may extend the 60-day period for an addi14 tional 90 days for good cause, and except further that if

15 the Commission does not act to approve or disapprove a

16 proposal within the foregoing periods, the proposal shall

17 go into effect subject to its terms, without prejudice to

18 the authority of the Commission thereafter to modify the

19 proposal in accordance with the standards and require20 ments of this section. Proposals approved by the Commis21 sion shall take effect according to their terms but not ear22 lier than 30 days after the effective date of the Commis23 sion’s order, except as provided in paragraph (3) of this

24 subsection.
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1 ‘‘(3)(A) In the exercise of its review responsibilities

2 under this subsection, the Commission shall give due

3 weight to the technical expertise of the Electric Reliability

4 Organization with respect to the content of a new or modi5 fied organization standard, but shall not defer to the orga6 nization with respect to the effect of the standard on com7 petition. The Commission shall approve a proposed new

8 or modified organization standard if it determines the pro9 posal to be just, reasonable, not unduly discriminatory or

10 preferential, and in the public interest.

11 ‘‘(B) An existing or proposed organization standard

12 which is disapproved in whole or in part by the Commis13 sion shall be remanded to the Electric Reliability Organi14 zation for further consideration.

15 ‘‘(C) The Commission, on its own motion or upon

16 complaint, may direct the Electric Reliability Organization

17 to develop an organization standard, including modifica18 tion to an existing organization standard, addressing a

19 specific matter by a date certain if the Commission con20 siders such new or modified organization standard nec21 essary or appropriate to further the purposes of this sec22 tion. The Electric Reliability Organization shall file any

23 such new or modified organization standard in accordance

24 with this subsection.
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1 ‘‘(D) An affiliated regional reliability entity may pro2 pose a variance or entity rule to the Electric Reliability

3 Organization. The affiliated regional reliability entity may

4 request that the Electric Reliability Organization expedite

5 consideration of the proposal, and may file a notice of such

6 request with the Commission, if expedited consideration

7 is necessary to provide for bulk-power system reliability.

8 If the Electric Reliability Organization fails to adopt the

9 variance or entity rule, either in whole or in part, the affili10 ated regional reliability entity may request that the Com11 mission review such action. If the Commission determines,

12 after its review of such a request, that the action of the

13 Electric Reliability Organization did not conform to the

14 applicable standards and procedures approved by the

15 Commission, or if the Commission determines that the

16 variance or entity rule is just, reasonable, not unduly dis17 criminatory or preferential, and in the public interest, and

18 that the Electric Reliability Organization has unreason19 ably rejected the proposed variance or entity rule, then

20 the Commission may remand the proposed variance or en21 tity rule for further consideration by the Electric Reli22 ability Organization or may direct the Electric Reliability

23 Organization or the affiliated regional reliability entity to

24 develop a variance or entity rule consistent with that re25 quested by the affiliated regional reliability entity. Any
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1 such variance or entity rule proposed by an affiliated re2 gional reliability entity shall be submitted to the Electric

3 Reliability Organization for review and filing with the

4 Commission in accordance with the procedures specified

5 in this subsection.

6 ‘‘(E) Notwithstanding any other provision of this sub7 section, a proposed organization standard or amendment

8 shall take effect according to its terms if the Electric Reli9 ability Organization determines that an emergency exists

10 requiring that such proposed organization standard or

11 amendment take effect without notice or comment. The

12 Electric Reliability Organization shall notify the Commis13 sion immediately following such determination and shall

14 file such emergency organization standard or amendment

15 with the Commission not later than 5 days following such

16 determination and shall include in such filing an expla17 nation of the need for such emergency standard. Subse18 quently, the Commission shall provide notice of the organi19 zation standard or amendment for comment, and shall fol20 low the procedures set out in paragraphs (2) and (3) for

21 review of the new or modified organization standard. Any

22 such organization standard that has gone into effect shall

23 remain in effect unless and until suspended or disapproved

24 by the Commission. If the Commission determines at any

25 time that the emergency organization standard or amend-
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1 ment is not necessary, the Commission may suspend such

2 emergency organization standard or amendment.

3 ‘‘(4) All users of the bulk-power system shall comply

4 with any organization standard that takes effect under

5 this section.

6 ‘‘(f) COORDINATION WITH CANADA AND MEXICO.—

7 The Electric Reliability Organization shall take all appro8 priate steps to gain recognition in Canada and Mexico.

9 The United States shall use its best efforts to enter into

10 international agreements with the appropriate govern11 ments of Canada and Mexico to provide for effective com12 pliance with organization standards and to provide for the

13 effectiveness of the Electric Reliability Organization in

14 carrying out its mission and responsibilities. All actions

15 taken by the Electric Reliability Organization, any affili16 ated regional reliability entity, and the Commission shall

17 be consistent with the provisions of such international

18 agreements.

19 ‘‘(g) CHANGES IN PROCEDURES, GOVERNANCE, OR

20 FUNDING.—(1) The Electric Reliability Organization shall

21 file with the Commission any proposed change in its proce22 dures, governance, or funding, or any changes in the affili23 ated regional reliability entity’s procedures, governance, or

24 funding relating to delegated functions, and shall include
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1 with the filing an explanation of the basis and purpose

2 for the change.

3 ‘‘(2) A proposed procedural change may take effect

4 90 days after filing with the Commission if the change

5 constitutes a statement of policy, practice, or interpreta6 tion with respect to the meaning or enforcement of an ex7 isting procedure. Otherwise, a proposed procedural change

8 shall take effect only upon a finding by the Commission,

9 after notice and opportunity for comments, that the

10 change is just, reasonable, not unduly discriminatory or

11 preferential, is in the public interest, and satisfies the re12 quirements of subsection (d)(4).

13 ‘‘(3) A change in governance or funding shall not

14 take effect unless the Commission finds that the change

15 is just, reasonable, not unduly discriminatory or pref16 erential, in the public interest, and satisfies the require17 ments of subsection (d)(4).

18 ‘‘(4) The Commission, upon complaint or upon its

19 own motion, may require the Electric Reliability Organiza20 tion to amend the procedures, governance, or funding if

21 the Commission determines that the amendment is nec22 essary to meet the requirements of this section. The Elec23 tric Reliability Organization shall file the amendment in

24 accordance with paragraph (1) of this subsection.
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1 ‘‘(h) DELEGATIONS OF AUTHORITY.—(1) The Elec2 tric Reliability Organization shall, upon request by an en3 tity, enter into an agreement with such entity for the dele4 gation of authority to implement and enforce compliance

5 with organization standards in a specified geographic area

6 if the organization finds that the entity requesting the del7 egation satisfies the requirements of subparagraphs (A),

8 (B), (C), (D), (F), (J), and (K) of subsection (d)(4), and

9 if the delegation promotes the effective and efficient imple10 mentation and administration of bulk-power system reli11 ability. The Electric Reliability Organization may enter

12 into an agreement to delegate to the entity any other au13 thority, except that the Electric Reliability Organization

14 shall reserve the right to set and approve standards for

15 bulk-power system reliability.

16 ‘‘(2) The Electric Reliability Organization shall file

17 with the Commission any agreement entered into under

18 this subsection and any information the Commission re19 quires with respect to the affiliated regional reliability en20 tity to which authority is to be delegated. The Commission

21 shall approve the agreement, following public notice and

22 an opportunity for comment, if it finds that the agreement

23 meets the requirements of paragraph (1), and is just, rea24 sonable, not unduly discriminatory or preferential, and is

25 in the public interest. A proposed delegation agreement
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1 with an affiliated regional reliability entity organized on

2 an interconnection-wide basis shall be rebuttably pre3 sumed by the Commission to promote the effective and

4 efficient implementation and administration of bulk-power

5 system reliability. No delegation by the Electric Reliability

6 Organization shall be valid unless approved by the Com7 mission.

8 ‘‘(3)(A) A delegation agreement entered into under

9 this subsection shall specify the procedures for an affili10 ated regional reliability entity to propose entity rules or

11 variances for review by the Electric Reliability Organiza12 tion. With respect to any such proposal that would apply

13 on an interconnection-wide basis, the Electric Reliability

14 Organization shall presume such proposal valid if made

15 by an interconnection-wide affiliated regional reliability

16 entity unless the Electric Reliability Organization makes

17 a written finding that the proposal—

18 ‘‘(i) was not developed in a fair and open proc19 ess that provided an opportunity for all interested

20 parties to participate;

21 ‘‘(ii) has a significant adverse impact on reli22 ability or commerce in other interconnections;

23 ‘‘(iii) fails to provide a level of reliability of the

24 bulk-power system within the interconnection such

25 that it would constitute a serious and substantial
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1 threat to public health, safety, welfare, or national

2 security; or

3 ‘‘(iv) creates a serious and substantial burden

4 on competitive markets within the interconnection

5 that is not necessary for reliability.

6 ‘‘(B) With respect to any such proposal that would

7 apply only to part of an interconnection, the Electric Reli8 ability Organization shall find such proposal valid if the

9 affiliated regional reliability entity or entities making the

10 proposal demonstrate that it—

11 ‘‘(i) was developed in a fair and open process

12 that provided an opportunity for all interested par13 ties to participate;

14 ‘‘(ii) would not have an adverse impact on com15 merce that is not necessary for reliability;

16 ‘‘(iii) provides a level of bulk-power system reli17 ability adequate to protect public health, safety, wel18 fare, and national security, and would not have a

19 significant adverse impact on reliability; and

20 ‘‘(iv) in the case of a variance, is based on le21 gitimate differences between regions or between sub22 regions within the affiliated regional reliability enti23 ty’s geographic area.

24 The Electric Reliability Organization shall approve or dis25 approve such proposal within 120 days, or the proposal
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1 shall be deemed approved. Following approval of any such

2 proposal under this paragraph, the Electric Reliability Or3 ganization shall seek Commission approval pursuant to

4 the procedures prescribed under subsection (e)(3). Affili5 ated regional reliability entities may not make requests for

6 approval directly to the Commission except pursuant to

7 subsection (e)(3)(D).

8 ‘‘(4) If an affiliated regional reliability entity re9 quests, consistent with paragraph (1) of this subsection,

10 that the Electric Reliability Organization delegate author11 ity to it, but is unable within 180 days to reach agreement

12 with the Electric Reliability Organization with respect to

13 such requested delegation, such entity may seek relief

14 from the Commission. If, following notice and opportunity

15 for comment, the Commission determines that a delega16 tion to the entity would meet the requirements of para17 graph (1) above, and that the delegation would be just,

18 reasonable, not unduly discriminatory or preferential, and

19 in the public interest, and that the Electric Reliability Or20 ganization has unreasonably withheld such delegation, the

21 Commission may, by order, direct the Electric Reliability

22 Organization to make such delegation.

23 ‘‘(5)(A) The Commission may, upon its own motion

24 or upon complaint, and with notice to the appropriate af25 filiated regional reliability entity or entities, direct the
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1 Electric Reliability Organization to propose a modification

2 to an agreement entered into under this subsection if the

3 Commission determines that—

4 ‘‘(i) the affiliated regional reliability entity no

5 longer has the capacity to carry out effectively or ef6 ficiently its implementation or enforcement respon7 sibilities under that agreement, has failed to meet its

8 obligations under that agreement, or has violated

9 any provision of this section;

10 ‘‘(ii) the rules, practices, or procedures of the

11 affiliated regional reliability entity no longer provide

12 for fair and impartial discharge of its implementa13 tion or enforcement responsibilities under the agree14 ment;

15 ‘‘(iii) the geographic boundary of a transmission

16 entity approved by the Commission is not wholly

17 within the boundary of an affiliated regional reli18 ability entity and such difference is inconsistent with

19 the effective and efficient implementation and ad20 ministration of bulk-power system reliability; or

21 ‘‘(iv) the agreement is inconsistent with another

22 delegation agreement as a result of actions taken

23 under paragraph (4) of this subsection.

24 ‘‘(B) Following an order of the Commission issued

25 under subparagraph (A), the Commission may suspend
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1 the affected agreement if the Electric Reliability Organiza2 tion or the affiliated regional reliability entity does not

3 propose an appropriate and timely modification. If the

4 agreement is suspended, the Electric Reliability Organiza5 tion shall assume the previously delegated responsibilities.

6 The Commission shall allow the Electric Reliability Orga7 nization and the affiliated regional reliability entity an op8 portunity to appeal the suspension.

9 ‘‘(i) ORGANIZATION MEMBERSHIP.—Every system

10 operator shall be required to be a member of the Electric

11 Reliability Organization and shall be required also to be

12 a member of any affiliated regional reliability entity oper13 ating under an agreement effective pursuant to subsection

14 (h) applicable to the region in which the system operator

15 operates or is responsible for the operation of bulk-power

16 system facilities.

17 ‘‘(j) INJUNCTIONS AND DISCIPLINARY ACTION.—(1)

18 Consistent with the range of actions approved by the Com19 mission under subsection (d)(4)(H), the Electric Reli20 ability Organization may impose a penalty, limitation of

21 activities, functions, operations, or other disciplinary ac22 tion the Electric Reliability Organization finds appropriate

23 against a user of the bulk-power system if the Electric

24 Reliability Organization, after notice and an opportunity

25 for interested parties to be heard, issues a finding in writ-
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1 ing that the user of the bulk-power system has violated

2 an organization standard. The Electric Reliability Organi3 zation shall immediately notify the Commission of any dis4 ciplinary action imposed with respect to an act or failure

5 to act of a user of the bulk-power system that affected

6 or threatened to affect bulk-power system facilities located

7 in the United States, and the sanctioned party shall have

8 the right to seek modification or rescission of such discipli9 nary action by the Commission. If the organization finds

10 it necessary to prevent a serious threat to reliability, the

11 organization may seek injunctive relief in a Federal court

12 in the district in which the affected facilities are located.

13 ‘‘(2) A disciplinary action taken under paragraph (1)

14 may take effect not earlier than the 30th day after the

15 Electric Reliability Organization files with the Commission

16 its written finding and record of proceedings before the

17 Electric Reliability Organization and the Commission

18 posts its written finding, unless the Commission, on its

19 own motion or upon application by the user of the bulk20 power system which is the subject of the action, suspends

21 the action. The action shall remain in effect or remain

22 suspended unless and until the Commission, after notice

23 and opportunity for hearing, affirms, sets aside, modifies,

24 or reinstates the action, but the Commission shall conduct
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1 such hearing under procedures established to ensure expe2 dited consideration of the action taken.

3 ‘‘(3) The Commission, on its own motion or on com4 plaint, may order compliance with an organization stand5 ard and may impose a penalty, limitation of activities,

6 functions, or operations, or take such other disciplinary

7 action as the Commission finds appropriate, against a user

8 of the bulk-power system with respect to actions affecting

9 or threatening to affect bulk-power system facilities lo10 cated in the United States if the Commission finds, after

11 notice and opportunity for a hearing, that the user of the

12 bulk-power system has violated or threatens to violate an

13 organization standard.

14 ‘‘(4) The Commission may take such action as is nec15 essary against the Electric Reliability Organization or an

16 affiliated regional reliability entity to assure compliance

17 with an organization standard, or any Commission order

18 affecting the Electric Reliability Organization or an affili19 ated regional reliability entity.

20 ‘‘(k) RELIABILITY REPORTS.—The Electric Reli21 ability Organization shall conduct periodic assessments of

22 the reliability and adequacy of the interconnected bulk23 power system in North America and shall report annually

24 to the Secretary of Energy and the Commission its find-
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1 ings and recommendations for monitoring or improving

2 system reliability and adequacy.

3 ‘‘(l) ASSESSMENT AND RECOVERY OF CERTAIN

4 COSTS.—The reasonable costs of the Electric Reliability

5 Organization, and the reasonable costs of each affiliated

6 regional reliability entity that are related to implementa7 tion and enforcement of organization standards or other

8 requirements contained in a delegation agreement ap9 proved under subsection (h), shall be assessed by the Elec10 tric Reliability Organization and each affiliated regional

11 reliability entity, respectively, taking into account the rela12 tionship of costs to each region and based on an allocation

13 that reflects an equitable sharing of the costs among all

14 end users. The Commission shall provide by rule for the

15 review of such costs and allocations, pursuant to the

16 standards in this subsection and subsection (d)(4)(F).

17 ‘‘(m) SAVINGS PROVISIONS.—(1) The Electric Reli18 ability Organization shall have authority to develop, imple19 ment and enforce compliance with standards for the reli20 able operation of only the Bulk Power System.

21 ‘‘(2) This section does not provide the Electric Reli22 ability Organization or the Commission with the authority

23 to set and enforce compliance with standards for adequacy

24 or safety of electric facilities or services.
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1 ‘‘(3) Nothing in this section shall be construed to pre2 empt any authority of any State to take action to ensure

3 the safety, adequacy, and reliability of electric service

4 within that State, as long as such action is not incon5 sistent with any Organization Standard.

6 ‘‘(4) Within 90 days of the application of the Electric

7 Reliability Organization or other affected party, the Com8 mission shall issue a final order determining whether a

9 state action is inconsistent with an Organization Stand10 ard, after notice and opportunity for comment, taking into

11 consideration any recommendations of the Electric Reli12 ability Organization.

13 ‘‘(5) The Commission, after consultation with the

14 Electric Reliability Organization, may stay the effective15 ness of any state action, pending the Commission’s

16 issuance of a final order.

17 ‘‘(n) REGIONAL ADVISORY BODIES.—The Commis18 sion shall establish a regional advisory body on the petition

19 of at least two-thirds of the States within a region that

20 have more than one-half of their electric loan served within

21 the region. A regional advisory body shall be composed of

22 one member from each participating State in the region,

23 appointed by the Governor of each State, and may include

24 representatives of agencies, States, and provinces outside

25 the United States, upon execution of an international
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1 agreement or agreements described in subsection (f). A

2 regional advisory body may provide advice to the electric

3 reliability organization, an affiliated regional reliability en4 tity, or the Commission regarding the governance of an

5 existing or proposed affiliated regional reliability entity

6 within the same region, whether an organization standard,

7 entity rule, or variance proposed to apply within the region

8 is just, reasonable, not unduly discriminatory or pref9 erential, and in the public interest, and whether fees pro10 posed to be assessed within the region are just, reasonable,

11 not unduly discriminatory or preferential, in the public in12 terest, and consistent with the requirements of subsection

13 (l). The Commission may give deference to the advice of

14 any such regional advisory body if that body is organized

15 on an interconnection-wide basis.

16 ‘‘(o) COORDINATION WITH REGIONAL TRANSMISSION

17 ORGANIZATIONS.—(1) Each regional transmission organi18 zation authorized by the Commission shall be responsible

19 for maintaining the short-term reliability of the bulk20 power system that it operates, consistent with organiza21 tion standards.

22 ‘‘(2) Except as provided in paragraph (5), in connec23 tion with a proceeding under subsection (e) to consider

24 a proposed organization standard, each regional trans25 mission organization authorized by the Commission shall
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1 report to the Commission, and notify the electric reliability

2 organization and any applicable affiliated regional reli3 ability entity, regarding whether the proposed organiza4 tion standard hinders or conflicts with that regional trans5 mission organization’s ability to fulfill the requirements of

6 any Commission-accepted, approved, or ordered rule, regu7 lation, order, tariff, rate schedule, or agreement. Where

8 such hindrance or conflict is identified, the Commission

9 shall address such hindrance or conflict, and the need for

10 any changes to such Commission-accepted, approved, or

11 ordered rule, order, tariff, rate schedule, or agreement in

12 its order under subsection (e) regarding the proposed

13 standard. Where such hindrance or conflict is identified

14 between a proposed organization standard and a provision

15 of any rule, order, tariff, rate schedule or agreement ac16 cepted, approved or ordered by the Commission applicable

17 to a regional transmission organization, nothing in this

18 section shall require a change in the regional transmission

19 organization’s obligation to comply with such provision un20 less the Commission orders such a change and the change

21 becomes effective. If the Commission finds that the tariff,

22 rate schedule, or agreement needs to be changed, the re23 gional transmission organization must expeditiously make

24 a section 205 filing to reflect the change. If the Commis25 sion finds that the proposed organization standard needs
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1 to be changed, it shall remand the proposed organization

2 standard to the electric reliability organization under sub3 section (e)(3)(B).

4 ‘‘(3) Except as provided in paragraph (5), to the ex5 tent hindrances and conflicts arise after approval of a reli6 ability standard under subsection (c) or organization

7 standard under subsection (e), each regional transmission

8 organization authorized by the Commission shall report to

9 the Commission, and notify the electric reliability organi10 zation and any applicable affiliated regional reliability en11 tity, regarding any reliability standard approved under

12 subsection (c) or organization standard that hinders or

13 conflicts with that regional transmission organization’s

14 ability to fulfill the requirements of any Commission-ac15 cepted, approved, or ordered rule, regulation, order, tariff,

16 rate schedule, or agreement. The Commission shall seek

17 to assure that such hindrances or conflicts are resolved

18 promptly. Where a hindrance or conflict is identified be19 tween a reliability standard or an organization standard

20 and a provision of any rule, order, tariff, rate schedule

21 or agreement accepted, approved or ordered by the Com22 mission applicable to a regional reliability organization,

23 nothing in this section shall require a change in the re24 gional transmission organization’s obligation to comply

25 with such provision unless the Commission orders such a
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1 change and the change becomes effective. If the Commis2 sion finds that the tariff, rate schedule or agreement needs

3 to be changed, the regional transmission organization

4 must expeditiously make a section 205 filing to reflect the

5 change. If the Commission finds that an organization

6 standard needs to be changed, it shall order the electric

7 reliability organization to develop and submit a modified

8 organization standard under subsection (e)(3)(C).

9 ‘‘(4) An affiliated regional reliability entity and a re10 gional transmission organization operating in the same ge11 ographic area shall cooperate to avoid conflicts between

12 implementation and enforcement of organization stand13 ards by the affiliated regional reliability entity and imple14 mentation and enforcement of Commission-accepted tar15 iffs, rate schedules, and agreements by the regional trans16 mission organization. In areas without an affiliated re17 gional reliability entity, the electric reliability organization

18 shall act as the affiliated regional reliability entity for pur19 poses of this paragraph.

20 ‘‘(5) Until 6 months after approval of applicable sub21 section (h)(3) procedures, any reliability standard, guid22 ance, or practice contained in Commission-accepted tar23 iffs, rate schedules, or agreements in effect of any Com24 mission-authorized independent system operator or re25 gional transmission organization shall continue to apply
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1 unless the Commission accepts an amendment thereto by

2 the applicable operator or organization, or upon complaint

3 finds them to be unjust, unreasonable, unduly discrimina4 tory or preferential, or not in the public interest. At the

5 conclusion of such transition period, any such reliability

6 standard, guidance, practice, or amendment thereto that

7 the Commission determines is inconsistent with organiza8 tion standards shall no longer apply.’’.

9 (2) ENFORCEMENT.—Sections 316 and 316A of

10 the Federal Power Act are each amended by striking

11 ‘‘or 214’’ each place it appears and inserting ‘‘214,

12 or 215’’.

13 (b) APPLICATION OF ANTITRUST LAWS.—Notwith14 standing any other provision of law, each of the following

15 activities are rebuttably presumed to be in compliance with

16 the antitrust laws of the United States:

17 (1) Activities undertaken by the Electric Reli18 ability Organization under section 215 of the Fed19 eral Power Act or affiliated regional reliability entity

20 operating under an agreement in effect under sec21 tion 215(h) of such Act.

22 (2) Activities of a member of the Electric Reli23 ability Organization or affiliated regional reliability

24 entity in pursuit of organization objectives under
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1 section 215 of the Federal Power Act undertaken in

2 good faith under the rules of the organization.

3 Primary jurisdiction, and immunities and other affirma4 tive defenses, shall be available to the extent otherwise ap5 plicable.

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