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[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 2886 Placed on Calendar Senate (PCS)]

                                                       Calendar No. 690
106th CONGRESS
  2d Session
                                S. 2886

 To provide for retail competition for the sale of electric power, to 
 authorize States to recover transition costs, and for other purposes.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                             July 18, 2000

Mr. Gramm (for himself and Mr. Schumer) introduced the following bill; 
                     which was read the first time

                             July 19, 2000

            Read the second time and placed on the calendar

_______________________________________________________________________

                                 A BILL

 
 To provide for retail competition for the sale of electric power, to 
 authorize States to recover transition costs, 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Consumer 
Empowerment and Electricity Deregulation Act of 2000''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
    TITLE I--CONSUMER CHOICE AND COMPETITION FOR ELECTRIC SUPPLIERS

Sec. 101. Competition for retail electric sales.
Sec. 102. Termination of new contract requirement under section 210 of 
                            the Public Utility Regulatory Policies Act 
                            of 1978.
Sec. 103. Reliability and interstate transmission.
               TITLE II--PUBLIC UTILITY HOLDING COMPANIES

Sec. 201. Short title.
Sec. 202. Findings and purposes.
Sec. 203. Definitions.
Sec. 204. Repeal of the Public Utility Holding Company Act of 1935.
Sec. 205. Federal access to books and records.
Sec. 206. State access to books and records.
Sec. 207. Exemption authority.
Sec. 208. Affiliate transactions.
Sec. 209. Applicability.
Sec. 210. Effect on other regulations.
Sec. 211. Enforcement.
Sec. 212. Savings provisions.
Sec. 213. Implementation.
Sec. 214. Transfer of resources.
Sec. 215. Conforming amendment to the Federal Power Act.
Sec. 216. Authorization of appropriations.
Sec. 217. Effective date.
                       TITLE III--TAX PROVISIONS

Sec. 301. Tax-exempt bond financing of certain electric facilities.
Sec. 302. Modifications to special rules for nuclear decommissioning 
                            costs.
Sec. 303. Treatment of certain revenues of electric cooperatives.

    TITLE I--CONSUMER CHOICE AND COMPETITION FOR ELECTRIC SUPPLIERS

SEC. 101. COMPETITION FOR RETAIL ELECTRIC SALES.

    (a) Amendment of PURPA.--Title I of the Public Utility Regulatory 
Policies Act of 1978 (16 U.S.C. 2601 et seq.) is amended by adding at 
the end the following:

               ``Subtitle F--Retail Electric Competition

``SEC. 151. FINDINGS.

    ``Congress finds that--
            ``(1) the opportunity for all consumers to purchase 
        electric energy in interstate commerce from the supplier of 
        choice is essential to a dynamic, fully integrated, and 
        competitive national market for electric energy;
            ``(2) the establishment, maintenance, or enforcement of 
        exclusive rights to sell electric energy and other State action 
        that unduly discriminates against any consumer that seeks to 
        purchase electric energy in interstate commerce from the 
        supplier of its choice constitutes an unwarranted and 
        unacceptable discrimination against and burden on interstate 
        commerce;
            ``(3) in today's technologically driven marketplace, there 
        is no justification for the discrimination against and burden 
        imposed on interstate commerce by the granting of exclusive 
        rights to sell electric energy or other State action that 
        unduly discriminates against consumers that seek to purchase 
        electric energy in interstate commerce from the suppliers of 
        their choice;
            ``(4) the electric energy transmission and local 
        distribution facilities of all of the utilities of the United 
        States are essential facilities for the conduct of a 
        competitive interstate retail market in electric energy in 
        which all consumers have the opportunity to purchase electric 
        energy in interstate commerce from the suppliers of their 
        choice; and
            ``(5) in a competitive electricity generation market, it is 
        in the national interest to encourage the development of energy 
        technologies to promote energy efficiency and ensure energy 
        security.

``SEC. 152. DEFINITIONS.

    ``In this subtitle:
            ``(1) Consumer.--The term `consumer' means a person that 
        purchases or offers to purchase electric energy at retail.
            ``(2) Electric supplier.--The term `electric supplier' 
        means a person or entity that produces, generates, 
        manufactures, aggregates, markets, brokers, sells, or otherwise 
        supplies electric energy.
            ``(3) Local distribution company.--The term `local 
        distribution company' means a person that owns, controls, or 
        operates a local distribution facility.
            ``(4) Local distribution facility.--
                    ``(A) In general.--The term `local distribution 
                facility' means a facility used for the local 
                distribution of electric energy.
                    ``(B) Inclusion.--The term `local distribution 
                facility' includes a facility determined under section 
                201(b)(1) of the Federal Power Act (16 U.S.C. 
                824(b)(1)) to be used for the local distribution of 
                electric energy.
            ``(5) Local distribution service.--
                    ``(A) In general.--The term `local distribution 
                service' means service that is necessary to, or 
                customarily provided in the course of, the delivery of 
                electric energy to a consumer through a local 
                distribution facility.
                    ``(B) Inclusions.--The term `local distribution 
                service' includes service required for--
                            ``(i) the construction, maintenance, and 
                        operation of a local distribution facility; and
                            ``(ii) related management, accounting, and 
                        other services.
                    ``(C) Exclusion.--The term `local distribution 
                service' does not include the generation or sale of 
                electric energy.
            ``(6) Nonregulated local distribution company.--The term 
        `nonregulated local distribution company' means a local 
        distribution company that is not a State-regulated local 
        distribution company.
            ``(7) Person.--For the purposes of paragraphs (2) and (3), 
        the term `person' includes--
                    ``(A) the Federal Government;
                    ``(B) a State (including a municipality or any 
                other instrumentality, authority, or political 
                subdivision of a State); and
                    ``(C) any other entity (including an electric 
                cooperative and a foreign governmental entity).
            ``(8) State-regulated local distribution company.--The term 
        `State-regulated local distribution company' means a local 
        distribution company with respect to which a State regulatory 
        authority has ratemaking jurisdiction.
            ``(9) State regulatory authority.--The term `State 
        regulatory authority' means a State agency that has ratemaking 
        authority with respect to the provision of local distribution 
        services by any local distribution company.
            ``(10) Stranded cost.--The term `stranded cost' means a 
        cost allocable to the construction or upgrade of an electric 
        generation facility or to purchased electric power that an 
        electric supplier sustained while subject to cost-of-service 
        regulation but is unable to recover because--
                    ``(i) the electric supplier is unable to assess 
                consumers charges at the rate charged during calendar 
                year 2000;
                    ``(ii) the market value of the generation facility 
                is less than the depreciated value of the facility; or
                    ``(iii) the electric supplier is unable to mitigate 
                costs through the renegotiation of power supply 
                contracts and other means.

``SEC. 153. RETAIL ELECTRIC COMPETITION.

    ``(a) Requirements.--
            ``(1) In general.--Markets for the purchase of electric 
        energy by consumers in a State shall--
                    ``(A) separate (unbundle) all competitive electric 
                energy supply activities from the transmission and 
                local distribution of electric energy;
                    ``(B) allow each consumer in the State to select 
                from among competing electric suppliers; and
                    ``(C) require each local distribution company to 
                provide local distribution service under rates, 
                charges, terms, and conditions that--
                            ``(i) are just, reasonable, and not unduly 
                        discriminatory or preferential; and
                            ``(ii) identify, offer, and sell (directly 
                        or for resale) local distribution service 
                        separately from any sales of electric energy.
            ``(2) Nondiscrimination.--In the case of a local 
        distribution company that is also an electric supplier, the 
        rates, charges, terms, and conditions described in paragraph 
        (1)(B) shall be the same as those applicable to the use of a 
        local distribution facility by that local distribution company.
    ``(b) State-Regulated Local Distribution Companies.--
            ``(1) In general.--Not later than January 1, 2002, each 
        State legislature and State regulatory authority shall require 
        each State-regulated local distribution company in the State to 
        meet the requirements of subsection (a).
            ``(2) Failure to implement.--If a State fails to implement 
        paragraph (1) by January 1, 2002, each State-regulated local 
        distribution company in the State shall comply, by that date, 
        with the requirement applicable to nonregulated local 
        distribution companies under subsection (c).
    ``(c) Nonregulated Local Distribution Companies.--Not later than 
January 1, 2002, each nonregulated local distribution company shall 
meet the requirements of subsection (a).
    ``(d) Recovery of Stranded Costs.--
            ``(1) Applicability.--This subsection applies only in a 
        State in which the State legislature has not enacted, before 
        July 1, 2000, a stranded cost recovery scheme.
            ``(2) Authority to impose charge.--
                    ``(A) In general.--Until January 1, 2013, a State 
                regulatory authority may require each local 
                distribution company in the State to include in charges 
                to its customers a stranded cost recovery charge for 
                use as described in paragraph (3).
                    ``(B) Rate.--A stranded cost recovery charge--
                            ``(i) shall initially be set at a rate 
                        estimated to generate not more than a 
                        percentage determined by the State (not to 
                        exceed 50 percent) of the amount of stranded 
                        costs estimated to be sustained by each 
                        supplier in the State; and
                            ``(ii) shall be reviewed annually, and 
                        subsequently be reduced, to the extent that 
                        collections exceed the most recent estimate, or 
                        increased to the extent that the estimate 
                        exceeds the collections.
            ``(3) Stranded cost recovery payments.--Of amounts 
        collected under paragraph (2) for any billing period, each 
        electric supplier that sustained stranded costs for the billing 
        period shall be entitled to a stranded cost recovery payment 
        equal to--
                    ``(A) the amount of stranded costs that the 
                electric supplier sustained; multiplied by
                    ``(B) the percentage of stranded cost recovery 
                determined by the State under paragraph (2)(B).

``SEC. 154. PROHIBITION OF DISCRIMINATION.

    ``The calculation, assessment, or imposition of any fee or charge 
imposed under this Act or any other law shall not unduly discriminate 
among different classes or categories of electric utilities, local 
distribution companies, electric energy consumers, or electric 
suppliers.

``SEC. 155. ENFORCEMENT.

    ``(a) Administrative Proceeding.--The Commission may order a State 
regulatory authority, State regulated local distribution company, or 
nonregulated local distribution company to comply with this subtitle if 
the Commission determines, after notice and an opportunity for a 
hearing on the record, that the State regulatory authority, State 
regulated local distribution company, or nonregulated local 
distribution company does not comply with section 153(a).
    ``(b) Judicial Enforcement or Review.--A consumer, State regulatory 
authority, State regulated local distribution company, or nonregulated 
local distribution company may file a petition appealing a 
determination under subsection (a) in the United States court of 
appeals.''.
    (b) Conforming Amendment.--The table of contents in section 1(b) of 
the Public Utility Regulatory Policies Act of 1978 (16 U.S.C. prec. 
2601) is amended by inserting at the end of the items for title I the 
following:

               ``Subtitle F--Retail Electric Competition

``Sec. 151. Findings.
``Sec. 152. Definitions.
``Sec. 153. Retail electric competition.
``Sec. 154. Prohibition of discrimination.
``Sec. 155. Enforcement.''.

SEC. 102. TERMINATION OF NEW CONTRACT REQUIREMENT UNDER SECTION 210 OF 
              THE PUBLIC UTILITY REGULATORY POLICIES ACT OF 1978.

    Section 210 of the Public Utility Regulatory Policies Act of 1978 
(16 U.S.C. 824a-3) is amended by adding at the end the following:
    ``(m) Termination of New Contract Requirement.--
            ``(1) In general.--On or after the date of enactment of 
        this subsection, no electric utility shall be required to enter 
        into a new contract or obligation to purchase or to sell 
        electric energy or capacity under this section.
            ``(2) Existing rights and remedies not affected.--
                    ``(A) In general.--Nothing in this subsection 
                affects the rights or remedies of any party with 
                respect to the purchase or sale of electric energy or 
                capacity from or to a facility determined to be a 
                qualifying small power production facility or a 
                qualifying cogeneration facility under this section 
                under any contract or obligation to purchase or to sell 
                electric energy or capacity in effect on the date of 
                enactment of this subsection, including the right to 
                recover (consistent with section 153) the costs of 
                purchasing such electric energy or capacity.
                    ``(B) Exception.--Any contract entered into before, 
                on, or after the date of enactment of this Act by a 
                qualifying small power production facility or 
                qualifying cogeneration facility that provides for a 
                purchase or sale of electric energy or capacity on or 
                after the date that is 5 years after the date of 
                enactment of this subsection at a rate exceeding 150 
                percent of wholesale market rates prevailing during 
                calendar year 2000 shall become voidable by either 
                party to the contract on the date that is 5 years after 
                the date of enactment of this subsection.
            ``(3) Effect of subsection.--Nothing in this subsection 
        implies congressional ratification of any interpretation of 
        this Act or any action taken under this Act by any person 
        before the date of enactment of this subsection.''.

SEC. 103. RELIABILITY AND INTERSTATE TRANSMISSION.

    (a) Definitions.--Section 3 of the Federal Power Act (16 U.S.C. 
796) is amended by adding at the end the following:
            ``(26) Retail customer.--The term `retail customer' means a 
        person that purchases electric energy for use by the person 
        other than for resale to another person.
            ``(27) Wholesale customer.--The term `wholesale customer' 
        means a person that purchases electric energy for resale to 
        another person.
            ``(28) Bundled transmission service.--The term `bundled 
        transmission service' means transmission service in which 
        electric energy and transmission service are not sold 
        separately.
            ``(29) Unbundled transmission service.--The term `unbundled 
        transmission service' means transmission service in which 
        electric energy and transmission service are sold 
        separately.''.
    (b) Declaration of Policy; Application of Part II of the Federal 
Power Act.--Section 201 of the Federal Power Act (16 U.S.C. 824) is 
amended by striking subsections (a) and (b)(1) and inserting the 
following:
    ``(a) Declaration of Policy.--Congress declares that--
            ``(1) the business of transmitting and selling electric 
        energy for ultimate distribution to the public is affected with 
        a public interest; and
            ``(2) Federal regulation of matters relating to the 
        transmission of electric energy in interstate commerce 
        (including transmission service to wholesale customers, 
        unbundled transmission service to retail customers, and bundled 
        transmission service to retail customers) and to the sale of 
        such energy at wholesale in interstate commerce, is necessary 
        to establish just and reasonable rates and to prevent 
interference with interstate commerce and threats to the reliability of 
the interstate bulk power grid.
    ``(b) Applicability of Part.--
            ``(1) In general.--This part applies to--
                    ``(A) bundled transmission service in interstate 
                commerce;
                    ``(B) unbundled transmission service in interstate 
                commerce; and
                    ``(C) the sale of electric energy at wholesale in 
                interstate commerce.
            ``(2) Jurisdiction of the commission.--The Commission shall 
        have jurisdiction over all facilities used--
                    ``(A) to provide bundled or unbundled transmission 
                of electric energy in interstate commerce;
                    ``(B) to make sales of electric energy in which the 
                purchaser intends to resell the electric energy to 
                another person; or
                    ``(C) to establish and enforce reliability 
                standards implemented by a regional transmission 
                organization for the reliable operation of the bulk 
                power system.
            ``(3) Limit on jurisdiction.--Except as specifically 
        provided in this part and part III, the Commission shall not 
        have jurisdiction over--
                    ``(A) facilities used for the generation of 
                electric energy;
                    ``(B) facilities used in local distribution or used 
                only for the transmission of electric energy in 
                intrastate commerce; or
                    ``(C) facilities for the transmission of electric 
                energy consumed wholly by the transmitter.''.

               TITLE II--PUBLIC UTILITY HOLDING COMPANIES

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Public Utility Holding Company Act 
of 2000''.

SEC. 202. FINDINGS AND PURPOSES.

    (a) Findings.--Congress finds that--
            (1) the Public Utility Holding Company Act of 1935 (15 
        U.S.C. 79a et seq.) was intended to facilitate the work of 
        Federal and State regulators by placing certain constraints on 
        the activities of holding company systems;
            (2) developments since 1935, including changes in other 
        regulation and in the electric and gas industries, have called 
        into question the continued relevance of the model of 
        regulation established by that Act;
            (3) there is a continuing need for State regulation in 
        order to ensure the rate protection of utility customers; and
            (4) limited Federal regulation is necessary to supplement 
        the work of State commissions for the continued rate protection 
        of electric and gas utility customers.
    (b) Purposes.--The purposes of this title are--
            (1) to eliminate unnecessary regulation, yet continue to 
        provide for consumer protection by facilitating existing rate 
        regulatory authority through improved Federal and State 
        commission access to books and records of all companies in a 
        holding company system, to the extent that such information is 
        relevant to rates paid by utility customers, while affording 
        companies the flexibility required to compete in the energy 
        markets; and
            (2) to address protection of electric and gas utility 
        customers by providing for Federal and State access to books 
        and records of all companies in a holding company system that 
        are relevant to utility rates.

SEC. 203. DEFINITIONS.

    In this title:
            (1) Affiliate.--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 another company.
            (2) Associate company.--The term ``associate company'', in 
        relation to another company, means a company in the same 
        holding company system as the other company.
            (3) Commission.--The term ``Commission'' means the Federal 
        Energy Regulatory Commission.
            (4) Company.--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) Electric utility company.--The term ``electric utility 
        company'' means a company that owns or operates facilities used 
        for the generation, transmission, or distribution of electric 
        energy for sale.
            (6) Exempt wholesale generator.--The term ``exempt 
        wholesale generator'' has the meaning given the term in section 
        32(a) of the Public Utility Holding Company Act of 1935 (15 
        U.S.C. 79z-5a(a)), as in effect on the day before the effective 
        date of this title.
            (7) Foreign utility company.--The term ``foreign utility 
        company'' has the meaning given the term in section 33(b) of 
        the Public Utility Holding Company Act of 1935 (15 U.S.C. 79z-
        5b(b)), as in effect on the day before the effective date of 
        this title.
            (8) Gas utility company.--The term ``gas utility company'' 
        means a 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.
            (9) Holding company.--The term ``holding company'' means--
                    (A) a 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) a person, determined by the Commission, after 
                notice and opportunity for hearing, to exercise 
                directly or indirectly (either alone or under 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 the person be subject to the obligations, 
                duties, and liabilities imposed by this title on 
                holding companies.
            (10) Holding company system.--The term ``holding company 
        system'' means a holding company, together with its subsidiary 
        companies.
            (11) Jurisdictional rate.--The term ``jurisdictional rate'' 
        means a rate established by the Commission for--
                    (A) the transmission of electric energy in 
                interstate commerce, the sale of electric energy at 
                wholesale in interstate commerce;
                    (B) the transportation of natural gas in interstate 
                commerce; or
                    (C) the sale in interstate commerce of natural gas 
                for resale for ultimate public consumption for 
                domestic, commercial, industrial, or any other use.
            (12) Natural gas company.--The term ``natural gas company'' 
        means a person engaged in the transportation of natural gas in 
        interstate commerce or the sale of natural gas in interstate 
        commerce for resale.
            (13) Person.--The term ``person'' means an individual or 
        company.
            (14) Public utility.--The term ``public utility'' means a 
        person that owns or operates a facility used for transmission 
        of electric energy in interstate commerce or sales of electric 
        energy at wholesale in interstate commerce.
            (15) Public utility company.--The term ``public utility 
        company'' means an electric utility company or a gas utility 
        company.
            (16) State commission.--The term ``State commission'' means 
        a 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 the State, has 
        jurisdiction to regulate public utility companies.
            (17) Subsidiary company.--The term ``subsidiary company'', 
        in relation to a holding company, means--
                    (A) a 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 the holding company; and
                    (B) a person, the management or policies of which 
                the Commission, after notice and opportunity for 
                hearing, determines to be subject to a controlling 
                influence, directly or indirectly, by the holding 
                company (either alone or under an arrangement or 
                understanding with 1 or more other persons) so as to 
                make it necessary for the rate protection of utility 
                customers with respect to rates that the person be 
                subject to the obligations, duties, and liabilities 
                imposed by this title on subsidiary companies of 
                holding companies.
            (18) Voting security.--The term ``voting security'' means a 
        security presently entitling the owner or holder of the 
        security to vote in the direction or management of the affairs 
        of a company.

SEC. 204. REPEAL OF THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935.

    The Public Utility Holding Company Act of 1935 (15 U.S.C. 79a et 
seq.) is repealed.

SEC. 205. FEDERAL ACCESS TO BOOKS AND RECORDS.

    (a) In General.--Each holding company and each associate company of 
a holding company shall maintain, and shall make available to the 
Commission, such books, accounts, 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 the holding 
company and necessary or appropriate for the protection of utility 
customers with respect to jurisdictional rates for the transmission of 
electric energy in interstate commerce, 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 to be relevant to costs incurred by a public utility 
or natural gas company that is an associate company of the 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 of a holding company, as the 
Commission deems to be relevant to costs incurred by a public utility 
or natural gas company within the 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. 206. STATE ACCESS TO BOOKS AND RECORDS.

    (a) In General.--On 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 of the holding company, other than the public utility 
company, wherever located, shall produce for inspection 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 the public utility company; and
            (3) are necessary for the effective discharge of the 
        responsibilities of the State commission with respect to the 
        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 (16 U.S.C. 2601 et seq.).
    (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. 207. EXEMPTION AUTHORITY.

    (a) Rulemaking.--Not later than 90 days after the effective date of 
this title, the Commission shall promulgate a final rule to exempt from 
the requirements of section 205 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 (16 U.S.C. 2601 et seq.);
            (2) exempt wholesale generators; or
            (3) foreign utility companies.
    (b) Other Authority.--If, on application or on 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 the person or transaction from the requirements 
of section 205.

SEC. 208. AFFILIATE TRANSACTIONS.

    Nothing in this title precludes 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 the public utility company from an associate company.

SEC. 209. APPLICABILITY.

    Nothing in this title applies to or includes--
            (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. 210. EFFECT ON OTHER REGULATIONS.

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

SEC. 211. ENFORCEMENT.

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

SEC. 212. SAVINGS PROVISIONS.

    (a) In General.--Nothing in this title 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 title.
    (b) Effect on Other Commission Authority.--Nothing in this title 
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. 213. IMPLEMENTATION.

    Not later than 18 months after the date of enactment of this Act, 
the Commission shall--
            (1) promulgate such regulations as may be necessary or 
        appropriate to implement this title (other than section 206); 
        and
            (2) submit to Congress detailed recommendations on 
        technical and conforming amendments to Federal law necessary to 
        carry out this title and the amendments made by this title.

SEC. 214. TRANSFER OF RESOURCES.

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

SEC. 215. CONFORMING AMENDMENT TO THE FEDERAL POWER ACT.

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

SEC. 216. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated such sums as are necessary 
to carry out this title.

SEC. 217. EFFECTIVE DATE.

    This title takes effect on the date that is 18 months after the 
date of enactment of this Act.

                       TITLE III--TAX PROVISIONS

SEC. 301. TAX-EXEMPT BOND FINANCING OF CERTAIN ELECTRIC FACILITIES.

    (a) Permitted Open Access Transactions Not a Private Business 
Use.--Section 141(b)(6) of the Internal Revenue Code of 1986 (defining 
private business use) is amended by adding at the end the following:
                    ``(C) Permitted open access transactions not a 
                private business use.--
                            ``(i) In general.--For purposes of this 
                        subsection, the term `private business use' 
                        shall not include a permitted open access 
                        transaction.
                            ``(ii) Permitted open access transaction 
                        defined.--For purposes of clause (i), the term 
                        `permitted open access transaction' means any 
                        of the following transactions or activities 
                        with respect to an electric output facility (as 
                        defined in subsection (f)(4)(A)) owned by a 
                        governmental unit:
                                    ``(I) Providing open access 
                                transmission services and ancillary 
                                services that meet the reciprocity 
                                requirements of Federal Energy 
                                Regulatory Commission Order No. 888, or 
                                that are ordered by the Federal Energy 
                                Regulatory Commission, or that are 
                                provided in accordance with a 
                                transmission tariff of an independent 
                                system operator approved by such 
                                Commission, or are consistent with 
                                state administered laws, rules or 
                                orders providing for open transmission 
                                access.
                                    ``(II) Participation in an 
                                independent system operator agreement 
                                (which may include transferring control 
                                of transmission facilities to an 
                                independent system operator), in a 
                                regional transmission group, or in a 
                                power exchange agreement approved by 
                                such Commission.
                                    ``(III) Delivery on an open access 
                                basis of electric energy sold by other 
                                entities to end-users served by such 
                                governmental unit's distribution 
                                facilities.
                            ``(iii) Government-owned facility.--For 
                        purposes of this subparagraph, an electric 
                        output facility (as defined in subsection 
                        (f)(4)(A)) shall be treated as owned by a 
                        governmental unit only if the facility is owned 
                        by such governmental unit for the purposes of 
                        serving 1 or more customers to which such 
                        governmental unit had a service obligation on 
                        July 1, 2000.''.
    (b) Election To Terminate Tax Exempt Financing.--Section 141 of the 
Internal Revenue Code of 1986 (relating to private activity bond; 
qualified bond) is amended by adding at the end the following:
    ``(f) Election To Terminate Tax-Exempt Bond Financing for Certain 
Electric Output Facilities.--
            ``(1) In general.--An issuer may make an irrevocable 
        election under this paragraph to terminate certain tax-exempt 
        financing for electric output facilities. If the issuer makes 
        such election, then--
                    ``(A) except as provided in paragraph (2), no bond 
                the interest on which is exempt from tax under section 
                103 may be issued on or after the date of such election 
                with respect to an electric output facility; and
                    ``(B) notwithstanding paragraph (1) or (2) of 
                subsection (a) or paragraph (5) of subsection (b), with 
                respect to an electric output facility no bond that was 
                issued before the date of enactment of this subsection, 
                the interest on which was exempt from tax on such date, 
                shall be treated as a private activity bond, for so 
                long as such facility continues to be owned by a 
                governmental unit.
            ``(2) Exceptions.--
                    ``(A) In general.--An election under paragraph (1) 
                does not apply to--
                            ``(i) any bond issued to finance a 
                        qualifying T&D facility, or
                            ``(ii) any bond issued to finance equipment 
                        necessary to meet Federal or state 
                        environmental requirements applicable to 
                        electric output facilities in service on the 
                        date of enactment of this subsection.
                    ``(B) Increase in capacity.--For purposes of 
                subparagraph (A)(ii), equipment may not increase by 
                more than a de minimus degree the capacity of the 
                facility beyond its original design.
            ``(3) Form and effect of elections.--An election under 
        paragraph (1) shall be made in such a manner as the Secretary 
        prescribes and shall be binding on any successor in interest to 
        the electing issuer.
            ``(4) Definitions.--For purposes of this subsection--
                    ``(A) Electric output facility.--The term `electric 
                output facility' means an output facility that is an 
                electric generation, transmission, or distribution 
                facility.
                    ``(B) Qualifying t&d facility.--The term 
                `qualifying T&D facility' means--
                            ``(i) transmission facilities over which 
                        services described in subsection 
                        (b)(6)(C)(ii)(I) are provided, or
                            ``(ii) distribution facilities over which 
                        services described in subsection 
                        (b)(6)(C)(ii)(III) are provided.''.
    (c) Application With Other Laws.--Nothing in this section, or the 
amendments made by this section, shall be interpreted as affecting the 
requirement of a municipal facility to provide open access under 
section 153 of the Public Utilities Regulatory Policies Act of 1978 (as 
added by section 101(a)).
    (d) Effective Date and Transition Rules.--
            (1) Effective date.--The amendments made by this section 
        take effect on the date of enactment of this Act, except that a 
        governmental unit may elect to apply section 141(b)(6)(C) of 
        the Internal Revenue Code of 1986, as added by subsection (a), 
        with respect to permitted open access transactions on or after 
        July 9, 1996.
            (2) Transition rule for private business use.--Any activity 
        that was not a private business use prior to the effective date 
        of the amendment made by subsection (a) shall not be deemed to 
        be a private business use by reason of the enactment of such 
        amendment.

SEC. 302. MODIFICATIONS TO SPECIAL RULES FOR NUCLEAR DECOMMISSIONING 
              COSTS.

    (a) Repeal of Limitation on Deposits Into Fund Based on Cost of 
Service.--Subsection (b) of section 468A of the Internal Revenue Code 
of 1986 (relating to special rules for nuclear decommissioning costs) 
is amended to read as follows:
    ``(b) Limitation on Amounts Paid Into Fund.--The amount which a 
taxpayer may pay into the Fund for any taxable year shall not exceed 
the ruling amount applicable to such taxable year.''.
    (b) Clarification of Treatment of Fund Transfers.--Section 468A(e) 
of the Internal Revenue Code of 1986 (relating to Nuclear 
Decommissioning Reserve Fund) is amended by adding at the end the 
following:
            ``(8) Treatment of fund transfers.--If, in connection with 
        the transfer of the taxpayer's interest in a nuclear 
        powerplant, the taxpayer transfers the Fund with respect to 
        such powerplant to the transferee of such interest and the 
        transferee elects to continue the application of this section 
        to such Fund--
                    ``(A) the transfer of such Fund shall not cause 
                such Fund to be disqualified from the application of 
                this section, and
                    ``(B) no amount shall be treated as distributed 
                from such Fund, or be includible in gross income, by 
                reason of such transfer.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2000.

SEC. 303. TREATMENT OF CERTAIN REVENUES OF ELECTRIC COOPERATIVES.

    (a) In General.--Section 501(c)(12)(C) of the Internal Revenue Code 
of 1986 (relating to list of exempt organizations) is amended--
            (1) in clause (i), by striking ``or'' at the end;
            (2) in clause (ii), by striking the period at the end and 
        inserting ``, or'';
            (3) by adding at the end the following:
                            ``(iii) from revenues received from 
                        nonmembers solely as a result of conforming 
                        transmission and distribution operations to 
                        meet provisions of an applicable Federal or 
                        State plan designed to provide customer choice 
                        in electric power supply.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to amounts received after December 31, 2000.

                                                       Calendar No. 690

106th CONGRESS

  2d Session

                                S. 2886

_______________________________________________________________________

                                 A BILL

 To provide for retail competition for the sale of electric power, to 
 authorize States to recover transition costs, and for other purposes.

_______________________________________________________________________

                             July 19, 2000

            Read the second time and placed on the calendar
```