I 

109TH CONGRESS 

1ST SESSION H. R. 1481 

To ensure reliability of electric service to provide for expansion of electricity 

transmission networks in order to support competitive electricity markets 

to modernize regulation, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 5, 2005 

Mr. WYNN (for himself and Mrs. MYRICK) introduced the following bill; which 

was referred to the Committee on Energy and Commerce, and in addition 

to the Committee on Ways and Means, for a period to be subsequently 

determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned 

A BILL 

To ensure reliability of electric service to provide for expansion of electricity transmission networks in order to support competitive electricity markets to modernize regulation, 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 AND TABLE OF CONTENTS. 

4 (a) SHORT TITLE.—This Act may be cited as the 

5 ‘‘Interstate Transmission Act’’. 

6 (b) TABLE OF CONTENTS.—The table of contents is 

7 as follows: 
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Sec. 1. Short title and table of contents. 

Sec. 2. Findings. 

Sec. 3. Transmission infrastructure investment. 

Sec. 3. Electric reliability standards. 

Sec. 5. Disposition of property. 

Sec. 6. Regional transmission organizations. 

Sec. 7. Siting of interstate electric transmission facilities. 

Sec. 8. Electric transmission property treated as 15-year property. 

1 SEC. 2. FINDINGS. 

2 Congress finds as follows: 

3 (1) The expansion, enhancement, and improve4 ment of transmission facilities are necessary to 

5 maintain and improve reliability of electric service. 

6 (2) Transmission networks are the backbone of 

7 reliable delivery of electric energy, increased inter8 state commerce in electricity, and competitive power 

9 markets. 

10 (3) Wholesale electric competition, already in 

11 effect across the nation, and retail electric competi12 tion, adopted by nearly half of the States, depend on 

13 adequate transmission networks to benefit electric 

14 consumers. 

15 (4) To maintain and improve reliability of elec16 tric service and support competitive power markets, 

17 the economics of the business of electric trans18 mission and the regulatory structures applicable 

19 thereto must be improved. 
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1 SEC. 3. TRANSMISSION INFRASTRUCTURE INVESTMENT. 

2 Part II of the Federal Power Act (16 U.S.C. 824 et 

3 seq.) is amended by adding at the end the following: 

4 ‘‘SEC. 215. TRANSMISSION INFRASTRUCTURE INVESTMENT. 

5 ‘‘(a) RULEMAKING REQUIREMENT.—Within 1 year 

6 after enactment of this section, the Commission shall es7 tablish, by rule, incentive-based, performance-based, par8 ticipant-funded, and cost-based (including, but not limited 

9 to performance-based) rate treatments for the trans10 mission of electric energy in interstate commerce by public 

11 utilities to benefit consumers by ensuring reliability and 

12 reducing the cost of delivered power by reducing trans13 mission congestion. Such rule shall— 

14 ‘‘(1) promote reliable and economically efficient 

15 transmission and generation of electricity by pro16 moting capital investment in the enlargement, im17 provement, maintenance and operation of facilities 

18 for the transmission of electric energy in interstate 

19 commerce; 

20 ‘‘(2) provide a return on equity that attracts 

21 new investment in transmission facilities (including 

22 related transmission technologies); 

23 ‘‘(3) encourage deployment of transmission 

24 technologies and other measures to increase the ca25 pacity and efficiency of existing transmission facili26 ties and improve the operation of such facilities; and 
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1 ‘‘(4) allow recovery of all prudently incurred 

2 costs necessary to comply with mandatory reliability 

3 standards issued pursuant to section 216 of this 

4 Act. 

5 The Commission may, from time to time, revise such rule. 

6 ‘‘(b) TRANSMISSION RATES AND RTO PARTICIPA7 TION.— The Commission shall provide for— 

8 ‘‘(1) recovery of all prudently incurred costs to 

9 develop and participate in any proposed or approved 

10 RTO, ISO, or independent transmission company; 

11 ‘‘(2) recovery of all costs previously approved by 

12 a State commission which exercised jurisdiction over 

13 the transmission facilities prior to the utility’s par14 ticipation in the RTO or ISO, including costs nec15 essary to honor preexisting transmission service con16 tracts, in a manner which does not reduce the reve17 nues the utility receives for transmission services for 

18 a reasonable transition period after the utility joins 

19 the RTO or ISO; 

20 ‘‘(3) recovery as an expense in rates of the 

21 costs prudently incurred to conduct transmission 

22 planning and reliability activities, including the costs 

23 of participating in RTO, ISO and other regional 

24 planning activities and design, study and other 
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1 precertification costs involved in seeking permits and 

2 approvals for proposed transmission facilities; 

3 ‘‘(4) a current return in rates for construction 

4 work in progress for transmission facilities and full 

5 recovery of prudently incurred costs for constructing 

6 transmission facilities; 

7 ‘‘(5) recovery of all prudently incurred capital, 

8 operation, and maintenance costs, and other costs 

9 necessary to operate and maintain transmission 

10 service, including generation and transmission based 

11 ancillary services and taxes; 

12 ‘‘(6) various rate structures, including formula 

13 transmission rates; and 

14 ‘‘(7) a maximum 15 year accelerated book de15 preciation on new transmission facilities for rate 

16 treatment purposes. 

17 The Commission shall ensure that any costs recoverable 

18 pursuant to this subsection may be recovered by such util19 ity through the transmission rates charged by such utility 

20 or through the transmission rates charged by the RTO 

21 or ISO that provides transmission service to such utility. 

22 ‘‘(c) JUST AND REASONABLE RATES.—All rates ap23 proved under the rules adopted pursuant to this section, 

24 including any revisions to such rules, are subject to the 

25 requirement of sections 205 and 206 that all rates, 
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1 charges, terms, and conditions be just and reasonable and 

2 not unduly discriminatory or preferential.’’. 

3 SEC. 4. ELECTRIC RELIABILITY STANDARDS. 

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

5 (16 U.S.C. 824 et seq.) is amended by adding the fol6 lowing new section at the end thereof: 

7 ‘‘SEC. 216. ELECTRIC RELIABILITY. 

8 ‘‘(a) DEFINITIONS.—For purposes of this section— 

9 ‘‘(1) The term ‘bulk-power system’ means— 

10 ‘‘(A) facilities and control systems nec11 essary for operating an interconnected electric 

12 energy transmission network (or any portion 

13 thereof); and 

14 ‘‘(B) electric energy from generation facili15 ties needed to maintain transmission system re16 liability. 

17 The term does not include facilities used in the local 

18 distribution of electric energy. 

19 ‘‘(2) The terms ‘Electric Reliability Organiza20 tion’ and ‘ERO’ mean the organization certified by 

21 ‘‘(3) The term ‘reliability standard’ means a re22 quirement, approved by the Commission under this 

23 section, to provide for reliable operation of the bulk24 power system. The term includes requirements for 

25 the operation of existing bulk-power system facilities 
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1 and the design of planned additions or modifications 

2 to such facilities to the extent necessary to provide 

3 for reliable operation of the bulk-power system, but 

4 the term does not include any requirement to en5 large such facilities or to construct new transmission 

6 capacity or generation capacity. 

7 ‘‘(4) The term ‘reliable operation’ means oper8 ating the elements of the bulk-power system within 

9 equipment and electric system thermal, voltage, and 

10 stability limits so that instability, uncontrolled sepa11 ration, or cascading failures of such system will not 

12 occur as a result of a sudden disturbance or unan13 ticipated failure of system elements. 

14 ‘‘(5) The term ‘Interconnection’ means a geo15 graphic area in which the operation of bulk-power 

16 system components is synchronized such that the 

17 failure of one or more of such components may ad18 versely affect the ability of the operators of other 

19 components within the system to maintain reliable 

20 operation of the facilities within their control. 

21 ‘‘(6) The term ‘transmission organization’ 

22 means a regional transmission organization, inde23 pendent system operator, independent transmission 

24 provider, or other transmission organization finally 
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1 approved by the Commission for the operation of 

2 transmission facilities. 

3 ‘‘(7) The term ‘regional entity’ means an entity 

4 having enforcement authority pursuant to subsection 

5 (e)(4). 

6 the Commission under subsection (c) the purpose of which 

7 is to establish and enforce reliability standards for the 

8 bulk-power system, subject to Commission review. 

9 ‘‘(b) JURISDICTION AND APPLICABILITY.—(1) The 

10 Commission shall have jurisdiction, within the United 

11 States, over the ERO certified by the Commission under 

12 subsection (c), any regional entities, and all users, owners, 

13 and operators of the bulk-power system, including but not 

14 limited to the entities described in section 201(f), for pur15 poses of approving reliability standards established under 

16 this section and enforcing compliance with this section. All 

17 users, owners, and operators of the bulk-power system 

18 shall comply with reliability standards that take effect 

19 under this section. 

20 ‘‘(2) The Commission shall issue a final rule to imple21 ment the requirements of this section not later than 180 

22 days after the date of enactment of this section. 

23 ‘‘(c) CERTIFICATION.—Following the issuance of a 

24 Commission rule under subsection (b)(2), any person may 

25 submit an application to the Commission for certification 
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1 as the Electric Reliability Organization (ERO). The Com2 mission may certify one such ERO if the Commission de3 termines that such ERO— 

4 ‘‘(1) has the ability to develop and enforce, sub5 ject to subsection (e)(2), reliability standards that 

6 provide for an adequate level of reliability of the 

7 bulk-power system; and 

8 ‘‘(2) has established rules that— 

9 ‘‘(A) assure its independence of the users 

10 and owners and operators of the bulk-power 

11 system, while assuring fair stakeholder rep12 resentation in the selection of its directors and 

13 balanced decisionmaking in any ERO com14 mittee or subordinate organizational structure; 

15 ‘‘(B) allocate equitably reasonable dues, 

16 fees, and other charges among end users for all 

17 activities under this section; 

18 ‘‘(C) provide fair and impartial procedures 

19 for enforcement of reliability standards through 

20 the imposition of penalties in accordance with 

21 subsection (e) (including limitations on activi22 ties, functions, or operations, or other appro23 priate sanctions); 

24 ‘‘(D) provide for reasonable notice and op25 portunity for public comment, due process, 
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1 openness, and balance of interests in developing 

2 reliability standards and otherwise exercising its 

3 duties; and 

4 ‘‘(E) provide for taking, after certification, 

5 appropriate steps to gain recognition in Canada 

6 and Mexico. 

7 ‘‘(d) RELIABILITY STANDARDS.—(1) The Electric 

8 Reliability Organization shall file each reliability standard 

9 or modification to a reliability standard that it proposes 

10 to be made effective under this section with the Commis11 sion. 

12 ‘‘(2) The Commission may approve by rule or order 

13 a proposed reliability standard or modification to a reli14 ability standard if it determines that the standard is just, 

15 reasonable, not unduly discriminatory or preferential, and 

16 in the public interest. The Commission shall give due 

17 weight to the technical expertise of the Electric Reliability 

18 Organization with respect to the content of a proposed 

19 standard or modification to a reliability standard and to 

20 the technical expertise of a regional entity organized on 

21 an Interconnection-wide basis with respect to a reliability 

22 standard to be applicable within that Interconnection, but 

23 shall not defer with respect to the effect of a standard 

24 on competition. A proposed standard or modification shall 

25 take effect upon approval by the Commission. 
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1 ‘‘(3) The Electric Reliability Organization shall 

2 rebuttably presume that a proposal from a regional entity 

3 organized on an Interconnection-wide basis for a reliability 

4 standard or modification to a reliability standard to be ap5 plicable on an Interconnection-wide basis is just, reason6 able, and not unduly discriminatory or preferential, and 

7 in the public interest. 

8 ‘‘(4) The Commission shall remand to the Electric 

9 Reliability Organization for further consideration a pro10 posed reliability standard or a modification to a reliability 

11 standard that the Commission disapproves in whole or in 

12 part. 

13 ‘‘(5) The Commission, upon its own motion or upon 

14 complaint, may order the Electric Reliability Organization 

15 to submit to the Commission a proposed reliability stand16 ard or a modification to a reliability standard that ad17 dresses a specific matter if the Commission considers such 

18 a new or modified reliability standard appropriate to carry 

19 out this section. 

20 ‘‘(6) The final rule adopted under subsection (b)(2) 

21 shall include fair processes for the identification and time22 ly resolution of any conflict between a reliability standard 

23 and any function, rule, order, tariff, rate schedule, or 

24 agreement accepted, approved, or ordered by the Commis25 sion applicable to a transmission organization. Such trans-
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1 mission organization shall continue to comply with such 

2 function, rule, order, tariff, rate schedule, or agreement 

3 accepted, approved, or ordered by the Commission until— 

4 ‘‘(A) the Commission finds a conflict exists be5 tween a reliability standard and any such provision; 

6 ‘‘(B) the Commission orders a change to such 

7 provision pursuant to section 206 of this part; and 

8 ‘‘(C) the ordered change becomes effective 

9 under this part. 

10 If the Commission determines that a reliability standard 

11 needs to be changed as a result of such a conflict, it shall 

12 order the ERO to develop and file with the Commission 

13 a modified reliability standard under paragraph (4) or (5) 

14 of this subsection. 

15 ‘‘(e) ENFORCEMENT.—(1) The ERO may impose, 

16 subject to paragraph (2), a penalty on a user or owner 

17 or operator of the bulk-power system for a violation of a 

18 reliability standard approved by the Commission under 

19 subsection (d) if the ERO, after notice and an opportunity 

20 for a hearing— 

21 ‘‘(A) finds that the user or owner or operator 

22 has violated a reliability standard approved by the 

23 Commission under subsection (d); and 

24 ‘‘(B) files notice and the record of the pro25 ceeding with the Commission. 
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1 ‘‘(2) A penalty imposed under paragraph (1) may 

2 take effect not earlier than the 31st day after the electric 

3 reliability organization files with the Commission notice of 

4 the penalty and the record of proceedings. Such penalty 

5 shall be subject to review by the Commission, on its own 

6 motion or upon application by the user, owner, or operator 

7 that is the subject of the penalty filed within 30 days after 

8 the date such notice is filed with the Commission. Applica9 tion to the Commission for review, or the initiation of re10 view by the Commission on its own motion, shall not oper11 ate as a stay of such penalty unless the Commission other12 wise orders upon its own motion or upon application by 

13 the user, owner, or operator that is the subject of such 

14 penalty. In any proceeding to review a penalty imposed 

15 under paragraph (1), the Commission, after notice and op16 portunity for hearing (which hearing may consist solely 

17 of the record before the electric reliability organization and 

18 opportunity for the presentation of supporting reasons to 

19 affirm, modify, or set aside the penalty), shall by order 

20 affirm, set aside, reinstate, or modify the penalty, and, 

21 if appropriate, remand to the electric reliability organiza22 tion for further proceedings. The Commission shall imple23 ment expedited procedures for such hearings. 

24 ‘‘(3) On its own motion or upon complaint, the Com25 mission may order compliance with a reliability standard 
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1 and may impose a penalty against a user or owner or oper2 ator of the bulk-power system, if the Commission finds, 

3 after notice and opportunity for a hearing, that the user 

4 or owner or operator of the bulk-power system has en5 gaged or is about to engage in any acts or practices that 

6 constitute or will constitute a violation of a reliability 

7 standard. 

8 ‘‘(4) The Commission shall establish regulations au9 thorizing the ERO to enter into an agreement to delegate 

10 authority to a regional entity for the purpose of proposing 

11 reliability standards to the ERO and enforcing reliability 

12 standards under paragraph (1) if— 

13 ‘‘(A) the regional entity is governed by— 

14 ‘‘(i) an independent board; 

15 ‘‘(ii) a balanced stakeholder board; or 

16 ‘‘(iii) a combination independent and bal17 anced stakeholder board; 

18 ‘‘(B) the regional entity otherwise satisfies the 

19 provisions of subsection (c)(1) and (2); and 

20 ‘‘(C) the agreement promotes effective and effi21 cient administration of bulk-power system reliability. 

22 The Commission may modify such delegation. The ERO 

23 and the Commission shall rebuttably presume that a pro24 posal for delegation to a regional entity organized on an 

25 Interconnection-wide basis promotes effective and efficient 
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1 administration of bulk-power system reliability and should 

2 be approved. Such regulation may provide that the Com3 mission may assign the ERO’s authority to enforce reli4 ability standards under paragraph (1) directly to a re5 gional entity consistent with the requirements of this para6 graph. 

7 ‘‘(5) The Commission may take such action as is nec8 essary or appropriate against the ERO or a regional entity 

9 to ensure compliance with a reliability standard or any 

10 Commission order affecting the ERO or a regional entity. 

11 ‘‘(6) Any penalty imposed under this section shall 

12 bear a reasonable relation to the seriousness of the viola13 tion and shall take into consideration the efforts of such 

14 user, owner, or operator to remedy the violation in a time15 ly manner. 

16 ‘‘(f) CHANGES IN ELECTRICITY RELIABILITY ORGA17 NIZATION RULES.—The Electric Reliability Organization 

18 shall file with the Commission for approval any proposed 

19 rule or proposed rule change, accompanied by an expla20 nation of its basis and purpose. The Commission, upon 

21 its own motion or complaint, may propose a change to the 

22 rules of the Electric Reliability Organization. A proposed 

23 rule or proposed rule change shall take effect upon a find24 ing by the Commission, after notice and opportunity for 

25 comment, that the change is just, reasonable, not unduly 
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1 discriminatory or preferential, is in the public interest, and 

2 satisfies the requirements of subsection (c). 

3 ‘‘(g) RELIABILITY REPORTS.—The Electric Reli4 ability Organization shall conduct periodic assessments of 

5 the reliability and adequacy of the bulk-power system in 

6 North America. 

7 ‘‘(h) COORDINATION WITH CANADA AND MEXICO.— 

8 The President is urged to negotiate international agree9 ments with the governments of Canada and Mexico to pro10 vide for effective compliance with reliability standards and 

11 the effectiveness of the Electric Reliability Organization 

12 in the United States and Canada or Mexico. 

13 ‘‘(i) SAVINGS PROVISIONS.—(1) The Electric Reli14 ability Organization shall have authority to develop and 

15 enforce compliance with reliability standards for only the 

16 bulk-power system. 

17 ‘‘(2) This section does not authorize the Electric Reli18 ability Organization or the Commission to order the con19 struction of additional generation or transmission capacity 

20 or to set and enforce compliance with standards for ade21 quacy or safety of electric facilities or services. 

22 ‘‘(3) Nothing in this section shall be construed to pre23 empt any authority of any State to take action to ensure 

24 the safety, adequacy, and reliability of electric service 

25 within that State, as long as such action is not incon-
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1 sistent with any reliability standard, except that the State 

2 of New York may establish rules that result in greater 

3 reliability within that State, as long as such action does 

4 not result in lesser reliability outside the State than that 

5 provided by the reliability standards. 

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

7 Reliability Organization or other affected party, and after 

8 notice and opportunity for comment, the Commission shall 

9 issue a final order determining whether a State action is 

10 inconsistent with a reliability standard, taking into consid11 eration any recommendation of the Electric Reliability Or12 ganization. 

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

14 Electric Reliability Organization and the State taking ac15 tion, may stay the effectiveness of any State action, pend16 ing the Commission’s issuance of a final order. 

17 ‘‘(j) 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 load 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. A regional advisory body may provide 
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1 advice to the Electric Reliability Organization, a regional 

2 entity, or the Commission regarding the governance of an 

3 existing or proposed regional entity within the same re4 gion, whether a standard proposed to apply within the re5 gion is just, reasonable, not unduly discriminatory or pref6 erential, and in the public interest, whether fees proposed 

7 to be assessed within the region are just, reasonable, not 

8 unduly discriminatory or preferential, and in the public 

9 interest and any other responsibilities requested by the 

10 Commission. The Commission may give deference to the 

11 advice of any such regional advisory body if that body is 

12 organized on an Interconnection-wide basis. 

13 ‘‘(k) APPLICATION TO ALASKA AND HAWAII.—The 

14 provisions of this section do not apply to Alaska or Ha15 waii.’’. 

16 (b) STATUS OF ERO.—The Electric Reliability Orga17 nization certified by the Federal Energy Regulatory Com18 mission under section 215(c) of the Federal Power Act 

19 and any regional entity delegated enforcement authority 

20 pursuant to section 215(e)(4) of that Act are not depart21 ments, agencies, or instrumentalities of the United States 

22 Government. 

23 SEC. 5. DISPOSITION OF PROPERTY. 

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

25 824b) is repealed. 
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1 SEC. 6. REGIONAL TRANSMISSION ORGANIZATIONS. 

2 Part II of the Federal Power Act (16 U.S.C. 824 et 

3 seq.) is amended by adding at the end thereof the fol4 lowing new section: 

5 ‘‘SEC. 217. REGIONAL TRANSMISSION ORGANIZATIONS. 

6 ‘‘(a) IN GENERAL.—Among options for the formation 

7 of a transmission organization, the Commission shall pre8 fer those in which— 

9 ‘‘(1) participation in the organization by trans10 mitting utilities is voluntary; 

11 ‘‘(2) the form, structure, and operating entity 

12 of the organization are approved of by participating 

13 transmitting utilities; and 

14 ‘‘(3) market incentives exist to promote invest15 ment for expansion of transmission facilities and for 

16 the introduction of new transmission technologies 

17 within the territory of the organization. 

18 ‘‘(b) CONDITIONS.—No order issued under this Act 

19 shall require or shall be conditioned upon a requirement 

20 that a transmitting utility transfer control of jurisdictional 

21 facilities to a regional transmission organization.’’. 

22 SEC. 7. SITING OF INTERSTATE ELECTRIC TRANSMISSION 

23 FACILITIES. 

24 (a) AMENDMENT OF FEDERAL POWER ACT.—Part 

25 II of the Federal Power Act is amended by adding at the 

26 end the following: 
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1 ‘‘SEC. 218. SITING OF INTERSTATE ELECTRIC TRANS2 MISSION FACILITIES. 

3 ‘‘(a) DESIGNATION OF NATIONAL INTEREST ELEC4 TRIC TRANSMISSION CORRIDORS.— 

5 ‘‘(1) TRANSMISSION CONGESTION STUDY.— 

6 Within 1 year after the enactment of this section, 

7 and no less frequently than every 3 years thereafter, 

8 the Secretary of Energy, in consultation with af9 fected States, shall conduct a study of electric trans10 mission congestion. After considering alternatives 

11 and recommendations from interested parties, in12 cluding an opportunity for comment from affected 

13 States, the Secretary shall issue a report, based on 

14 such study, which may designate any geographic 

15 area experiencing or likely to experience electric en16 ergy transmission capacity constraints or congestion 

17 that adversely affects consumers as a national inter18 est electric transmission corridor. The Secretary 

19 shall rely upon information provided by regional 

20 transmission organizations developed in conjunction 

21 with States through regional transmission organiza22 tion planning processes, information provided by 

23 State public utility commissions, and such other in24 formation about transmission constraints, reliability, 

25 and prices for electric energy as the Secretary deems 

26 appropriate. 
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1 ‘‘(2) CONSIDERATIONS.—In determining wheth2 er to designate a national interest electric trans3 mission corridor referred to in paragraph (1) under 

4 this section, the Secretary shall consider, among 

5 other factors, the effect of additional transmission 

6 capacity on reliability, energy markets, economic 

7 growth, and national security. 

8 ‘‘(b) CONSTRUCTION PERMIT.—Except as provided 

9 in subsection (i), the Commission is authorized, upon its 

10 own motion or upon request, after notice and an oppor11 tunity for hearing, to issue a permit or permits for the 

12 construction or modification of electric transmission facili13 ties in a national interest electric transmission corridor 

14 designated by the secretary under subsection (a) if the 

15 Commission finds thatl 

16 ‘‘(1)(A) a State in which the transmission fa17 cilities are to be constructed or modified is without 

18 authority to— 

19 ‘‘(i) approve the siting of the facilities; or 

20 ‘‘(ii) consider the interstate benefits ex21 pected to be achieved by the proposed construc22 tion or modification of transmission facilities in 

23 the State; 

24 ‘‘(B) the applicant for a permit is a transmit25 ting utility under this Act but does not qualify to 
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1 apply for a permit or siting approval for the pro2 posed project in a State because the applicant does 

3 not serve end-use customers in the State; or 

4 ‘‘(C) a State commission or other entity that 

5 has authority to approve the siting of the facilities 

6 has— 

7 ‘‘(i) withheld approval for more than 1 

8 year after the filing of an application pursuant 

9 to applicable law seeking approval or 1 year 

10 after the designation of the relevant national in11 terest electric transmission corridor, whichever 

12 is later; or 

13 ‘‘(ii) conditioned its approval in such a 

14 manner that the proposed construction or modi15 fication will not significantly reduce trans16 mission congestion in interstate commerce or is 

17 not economically feasible; 

18 ‘‘(2) the facilities to be authorized by the per19 mit will be used for the transmission of electric en20 ergy in interstate commerce; 

21 ‘‘(3) the proposed construction or modification 

22 is consistent with the public interest; and 

23 ‘‘(4) the proposed construction or modification 

24 will significantly reduce transmission congestion in 
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1 interstate commerce and protects or benefits con2 sumers. 

3 ‘‘(c) PERMIT APPLICATIONS.—Applications for per4 mits to be issued pursuant to subsection (b) shall be made 

5 in writing to the Commission. The Commission shall issue 

6 rules setting forth the form of the application, the infor7 mation to be contained in the application, and the manner 

8 of service of notice of the permit application upon inter9 ested persons. 

10 ‘‘(d) COMMENTS.—The Commission shall afford each 

11 State in which a transmission facility covered by the per12 mit to be issued under subsection (b) is or will be located, 

13 each affected Federal agency and Indian tribe, private 

14 property owners, and other interested persons, a reason15 able opportunity to present their views and recommenda16 tions with respect to the need for and impact of a facility 

17 covered by the permit. 

18 ‘‘(e) RIGHTS-OF-WAY.—In the case of a permit under 

19 subsection (b) for electric transmission facilities to be lo20 cated on property other than property owned by the 

21 United States or a State, if the permit holder cannot ac22 quire by contract, or is unable to agree with the owner 

23 of the property to the compensation to be paid for, the 

24 necessary right-of-way to construct or modify such trans25 mission facilities, the permit holder may acquire the right- 
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1 of-way by the exercise of the right of eminent domain in 

2 the district court of the United States for the district in 

3 which the property concerned is located, or in the appro4 priate court of the State in which the property is located. 

5 The practice and procedure in any action or proceeding 

6 for that purpose in the district court of the United States 

7 shall conform as nearly as may be with the practice and 

8 procedure in similar action or proceeding in the courts of 

9 the State where the property is situated. 

10 ‘‘(f) STATE LAW.— Nothing in this section shall pre11 clude any person from constructing or modifying any 

12 transmission facility pursuant to State law. 

13 ‘‘(g) COORDINATION OF FEDERAL AUTHORIZATIONS

14 FOR TRANSMISSION AND DISTRIBUTION FACILITIES.— 

15 ‘‘(1) LEAD AGENCY.—If an applicant, or pro16 spective applicant, for a Federal authorization re17 lated to an electric transmission or distribution facil18 ity so requests, the Secretary of Energy (DOE) shall 

19 act as the lead agency for purposes of coordinating 

20 and assuring expeditious processing of all applicable 

21 Federal authorizations and related environmental re22 views of the facility. For purposes of this subsection, 

23 the term ‘Federal authorization’ means any author24 ization required under Federal law in order to site 

25 a transmission or distribution facility, including but 
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1 not limited to such permits, special use authoriza2 tions, certifications, opinions, or other approvals as 

3 may be required, whether issued by a Federal or a 

4 State agency. To the maximum extent practicable 

5 under applicable Federal law, the Secretary of En6 ergy shall coordinate this Federal authorization and 

7 review process with any Indian tribes, multi-State 

8 entities, and State agencies that are responsible for 

9 conducting any separate permitting and environ10 mental reviews of the facility, to ensure timely and 

11 efficient review and permit decisions. 

12 ‘‘(2) AUTHORITY TO SET DEADLINES.—As lead 

13 agency, the Secretary of Energy shall establish 

14 prompt and binding intermediate milestones and 

15 deadlines for the review of, and decisions relating to, 

16 the proposed facility, to enable completion of such 

17 review and decisions within one year of the request 

18 that the Secretary serve as lead agency. The Sec19 retary of Energy also shall provide an expeditious 

20 pre-application mechanism for prospective applicants 

21 to confer with the agencies involved to have each 

22 such agency determine and communicate to the pro23 spective applicant within 60 days of when the pro24 spective applicant submits a request for such infor25 mation concerning the likelihood of approval for a 
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1 potential facility, and key issues of concern to the 

2 agencies and public. 

3 ‘‘(3) CONSOLIDATED ENVIRONMENTAL REVIEW

4 AND RECORD OF DECISION.—As lead agency head, 

5 the Secretary of Energy, in consultation with the af6 fected agencies, shall prepare a single environmental 

7 review document, which shall be used as the basis 

8 for all decisions on the proposed project under Fed9 eral law. The document may be an environmental as10 sessment or environmental impact statement under 

11 the National Environmental Policy Act of 1969 if 

12 warranted, or such other form of analysis as may be 

13 warranted. The Secretary of Energy and the heads 

14 of other agencies shall streamline the review and 

15 permitting of transmission and distribution facilities 

16 within corridors designated under section 503 of the 

17 Federal Land Policy and Management Act (43 

18 U.S.C. 1763) by fully taking into account prior anal19 yses and decisions relating to the corridors. Such 

20 document shall include consideration by the relevant 

21 agencies of any applicable criteria or other matters 

22 as required under applicable laws. 

23 ‘‘(4) APPEALS.—In the event that any agency 

24 has denied a Federal authorization required for a 

25 transmission or distribution facility, or has failed to 
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1 act by the deadline established by the Secretary pur2 suant to this section for deciding whether to issue 

3 the authorization, the applicant or any State in 

4 which the facility would be located may file an ap5 peal with the Secretary, who shall, in consultation 

6 with the affected agency, review the denial or take 

7 action on the pending application. Based on the 

8 overall record and in consultation with the affected 

9 agency, the Secretary shall within 90 days issue the 

10 necessary authorization with any appropriate condi11 tions, or deny the appeal. In making a decision 

12 under this paragraph, the Secretary shall comply 

13 with applicable requirements of Federal law, includ14 ing any requirements of the Endangered Species 

15 Act, the Clean Water Act, the National Forest Man16 agement Act, the National Environmental Policy Act 

17 of 1969, and the Federal Land Policy and Manage18 ment Act. 

19 ‘‘(5) CONFORMING REGULATIONS AND MEMO20 RANDA OF UNDERSTANDING.—Not later than 18 

21 months after the date of enactment of this section, 

22 the Secretary of Energy shall issue regulations nec23 essary to implement this subsection. Not later than 

24 1 year after the date of enactment of this section, 

25 the Secretary and the heads of Federal agencies 
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1 with authority to issue Federal authorizations shall 

2 enter into Memoranda of Understanding to imple3 ment this section. 

4 ‘‘(6) DURATION AND RENEWAL.—Each Federal 

5 land use authorization for an electricity transmission 

6 or distribution facility shall be issued— 

7 ‘‘(A) for a duration, as determined by the 

8 Secretary of Energy, commensurate with the 

9 anticipated use of the facility, and 

10 ‘‘(B) with appropriate authority to manage 

11 the right-of-way for reliability and environ12 mental protection. 

13 Upon the expiration of any such authorization (in14 cluding an authorization issued prior to enactment 

15 of this section), the authorization shall be reviewed 

16 for renewal taking fully into account reliance on 

17 such electricity infrastructure, recognizing its impor18 tance for public health, safety and economic welfare 

19 and as a legitimate use of Federal lands. 

20 ‘‘(7) MAINTAINING AND ENHANCING THE

21 TRANSMISSION INFRASTRUCTURE.—In exercising the 

22 responsibilities under this section, the Secretary of 

23 Energy shall consult regularly with the Federal En24 ergy Regulatory Commission (FERC) and owners 
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1 and operators of electric transmission and distribu2 tion facilities. 

3 ‘‘(h) INTERSTATE COMPACTS.—The consent of Con4 gress is hereby given for 3 or more contiguous States to 

5 enter into an interstate compact, subject to approval by 

6 Congress, establishing regional transmission siting agen7 cies to facilitate siting of future electric energy trans8 mission facilities within such States and to carry out the 

9 electric energy transmission siting responsibilities of such 

10 States. The Secretary of Energy may provide technical as11 sistance to regional transmission siting agencies estab12 lished under this subsection. Such regional transmission 

13 siting agencies shall have the authority to review, certify, 

14 and permit siting of transmission facilities, including fa15 cilities in national interest electric transmission corridors 

16 (other than facilities on property owned by the United 

17 States). The Commission shall have no authority to issue 

18 a permit for the construction or modification of electric 

19 transmission facilities within a State that is a party to 

20 a compact, unless the members of a compact are in dis21 agreement and the Secretary makes, after notice and an 

22 opportunity for a hearing, the finding described in section 

23 (b)(1)(C). 

24 ‘‘(i) SAVINGS CLAUSE.—Nothing in this section shall 

25 be construed to affect any requirement of the environ-
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1 mental laws of the United States, including, but not lim2 ited to, the National Environmental Policy Act of 1969. 

3 Subsection (h)(3) of this section shall not apply to any 

4 Congressionally-designated components of the National 

5 Wilderness Preservation System, the National Wild and 

6 Scenic Rivers System, or the National Park system (in7 cluding National Monuments therein). 

8 ‘‘(j) ERCOT.—This section shall not apply within the 

9 area referred to in section 212(k)(2)(A).’’. 

10 (b) REPORTS TO CONGRESS ON CORRIDORS AND

11 RIGHTS OF WAY ON FEDERAL LAND.—The Secretary of 

12 the Interior, the Secretary of Energy, the Secretary of Ag13 riculture, and the Chairman of the Council on Environ14 mental Quality shall, within 90 days of the date of enact15 ment of this subsection, submit a joint report to Congress 

16 identifying each of the following: 

17 (1) All existing designated transmission and 

18 distribution corridors on Federal land and the status 

19 of work related to proposed transmission and dis20 tribution corridor designations under Title V of the 

21 Federal Land Policy and Management Act (43 

22 U.S.C. 1761 et. Seq.), the schedule for completing 

23 such work, any impediments to completing the work, 

24 and steps that Congress could take to expedite the 

25 process. 
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1 (2) The number of pending applications to lo2 cate transmission and distribution facilities on Fed3 eral lands, key information relating to each such fa4 cility, how long each application has been pending, 

5 the schedule for issuing a timely decision as to each 

6 facility, and progress in incorporating existing and 

7 new such rights-of-way into relevant land use and 

8 resource management plans or their equivalent. 

9 (3) The number of existing transmission and 

10 distribution rights-of-way on Federal lands that will 

11 come up for renewal within the following 5, 10, and 

12 15 year periods, and a description of how the Secre13 taries plan to manage such renewals. 

14 SEC. 8. ELECTRIC TRANSMISSION PROPERTY TREATED AS 

15 15-YEAR PROPERTY. 

16 (a) IN GENERAL.—Subparagraph (E) of section 

17 168(e)(3) of the Internal Revenue Code of 1986 (relating 

18 to classification of certain property) is amended by strik19 ing ‘‘and’’ at the end of clause (v), by striking the period 

20 at the end of clause (vi) and by inserting ‘‘, and’’, and 

21 by adding at the end the following new clause: 

22 ‘‘(vii) any section 1245 property (as defined in sec23 tion 1245(a)(3)) used in the transmission at 69 or more 

24 kilovolts of electricity for sale the original use of which 
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1 commences with the taxpayer after the date of the enact2 ment of this clause.’’. 

3 (b) ALTERNATIVE SYSTEM.— The table contained in 

4 section 168(g)(3)(B) is amended by inserting after the 

5 item relating to subparagraph (E)(vi) the following: 

‘‘(E)(vii) ................................................................................. 30’’. 

6 (c) EFFECTIVE DATE.—The amendments made by 

7 this section shall apply to property placed in service after 

8 the date of the enactment of this Act, in taxable years 

9 ending after such date. 

Æ