I

106TH CONGRESS

1ST SESSION H. R. 1828

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

purposes.

IN THE HOUSE OF REPRESENTATIVES

MAY 17, 1999

Mr. BLILEY (for himself and Mr. DINGELL) (both by request) introduced the

following bill; which was referred to the Committee on Commerce, and

in addition to the Committees on Resources, Agriculture, Transportation

and Infrastructure, and the Judiciary, 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 provide for a more competitive electric power industry,

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 ‘‘Comprehensive Elec5 tricity Competition Act’’.

6 SEC. 2. TABLE OF CONTENTS.

Sec. 1. Short title.

Sec. 2. Table of contents.

TITLE I—RETAIL ELECTRIC SERVICE
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Sec. 101. Retail competition.

Sec. 102. Authority to impose reciprocity requirements.

Sec. 103. Aggregation for purchase of retail electric energy.

TITLE II—CONSUMER PROTECTION

Sec. 201. Consumer information.

Sec. 202. Access to electric service for low-income consumers.

Sec. 203. Unfair trade practices.

Sec. 204. Residential electricity consumer database.

Sec. 205. Model retail supplier code.

Sec. 206. Model electric utility worker code.

TITLE III—FACILITATING STATE AND REGIONAL REGULATION

Sec. 301. Clarification of State and Federal authority over retail transmission

services.

Sec. 302. Interstate compacts on regional transmission planning.

Sec. 303. Backup authority to impose a charge on an ultimate consumer’s receipt of electric energy.

Sec. 304. Authority to establish and require independent regional system operation.

TITLE IV—PUBLIC BENEFITS

Sec. 401. Public benefits fund.

Sec. 402. Federal renewable portfolio standard.

Sec. 403. Net metering.

Sec. 404. Reform of section 210 of PURPA.

Sec. 405. Interconnections for certain facilities.

Sec. 406. Rural and remote communities electrification grants.

Sec. 407. Indian tribe assistance.

Sec. 408. Office of Indian Energy Policy and Programs.

Sec. 409. Southeast Alaska electrical power.

TITLE V—REGULATION OF MERGERS AND CORPORATE

STRUCTURE

Sec. 501. Reform of holding company regulation under PUHCA.

Sec. 502. Electric company mergers.

Sec. 503. Remedial measures for market power.

TITLE VI—ELECTRIC RELIABILITY

Sec. 601. Electric reliability organization and oversight.

Sec. 602. Electricity outage investigation.

Sec. 603. Additional transmission capacity.

TITLE VII—ENVIRONMENTAL PROTECTION

Sec. 701. Nitrogen oxides cap and trade program.

TITLE VIII—FEDERAL POWER SYSTEMS

Subtitle A—Tennessee Valley Authority

Sec. 801. Definition.

Sec. 802. Application of Federal Power Act.

Sec. 803. Antitrust coverage.
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Sec. 804. TVA power sales.

Sec. 805. Renegotiation of long-term power contracts.

Sec. 806. Stranded cost recovery.

Sec. 807. Conforming amendments.

Subtitle B—Bonneville Power Administration

Sec. 811. Definitions.

Sec. 812. Application of Federal Power Act.

Sec. 813. Surcharge on transmission rates to recover otherwise non-recoverable

costs.

Sec. 814. Complaints.

Sec. 815. Review of commission orders.

Sec. 816. Conforming amendments.

Subtitle C—Western Area Power Administration and Southwestern Power

Administration

Sec. 821. Definitions.

Sec. 822. Application of Federal Power Act.

Sec. 823. Surcharge on transmission rates to recover otherwise non-recoverable

costs.

Sec. 824. Conforming amendments.

TITLE IX—OTHER PROVISIONS

Sec. 901. Treatment of nuclear decommissioning costs in bankruptcy.

Sec. 902. Energy Information Administration study of impacts of competition

in electricity markets.

Sec. 903. Antitrust savings clause.

Sec. 904. Elimination of antitrust review by the Nuclear Regulatory Commission.

Sec. 905. Environmental laws savings clause.

Sec. 906. Generating plant efficiency study.

Sec. 907. Conforming amendments.

1 TITLE I—RETAIL ELECTRIC

2 SERVICE

3 SEC. 101. RETAIL COMPETITION.

4 (a) RETAIL COMPETITION.—The Public Utility Regu5 latory Policies Act of 1978 (referred to in this Act as

6 PURPA) is amended by adding after section 608 the fol7 lowing new section:

8 ‘‘SEC. 609. RETAIL COMPETITION.

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

10 ‘retail stranded costs’ means the amount of net costs in-
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1 curred or obligations undertaken before the date of enact2 ment of the Comprehensive Electricity Competition Act by

3 a distribution utility that—

4 ‘‘(1) were incurred or undertaken by that dis5 tribution utility in order to comply with a legal obli6 gation on that utility to provide electricity to electric

7 consumers in its service territory, and

8 ‘‘(2) cannot be recovered because of implemen9 tation of retail competition under subsection (b).

10 ‘‘(b) RETAIL COMPETITION REQUIREMENT.—Except

11 as provided in subsection (c), not later than January 1,

12 2003, any distribution utility that has the capability to

13 deliver electric energy to an electric consumer over its fa14 cilities shall offer open access to those facilities for the

15 sale of electric energy to the consumer and shall do so

16 at rates, terms, and conditions that are not unduly dis17 criminatory or preferential, as determined by the appro18 priate regulatory authority.

19 ‘‘(c) OPT OUT.—(1) A State regulatory authority

20 (with respect to a distribution utility for which it has rate21 making authority) may direct a distribution utility not to

22 implement the retail competition requirement described in

23 subsection (b) if the State regulatory authority finds, after

24 notice and opportunity for hearing, that implementation

25 of the retail competition requirement by the distribution
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1 utility will have a negative impact on a class of customers

2 of that utility that cannot be mitigated.

3 ‘‘(2) A nonregulated distribution utility may deter4 mine not to implement the retail competition requirement

5 described in subsection (b) if it finds, after notice and op6 portunity for hearing, that implementation of the retail

7 competition requirement by the distribution utility will

8 have a negative impact on a class of customers of that

9 utility that cannot be mitigated.

10 ‘‘(3) The State regulatory authority (with respect to

11 a distribution utility for which it has ratemaking author12 ity) or nonregulated distribution utility shall publish the

13 determination and its basis and shall file a notice with

14 the Commission of its determination by January 1, 2002.

15 ‘‘(d) NOTICE OF RETAIL COMPETITION.—A State

16 regulatory authority (with respect to a distribution utility

17 for which it has ratemaking authority) or nonregulated

18 distribution utility shall file with the Commission a notice

19 that the distribution utility has implemented or will imple20 ment retail competition consistent with subsection (b).

21 The notice shall describe the implementation of retail com22 petition. The notice is effective for purposes of section

23 118, 119, 119A, and 119B of this Act and sections

24 212(h), 216, and 217 of the Federal Power Act on the

25 date the notice is filed or the date of implementation of
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1 retail competition consistent with subsection (b), which2 ever is later.

3 ‘‘(e) CONSIDERATION OF RECOVERY OF RETAIL

4 STRANDED COSTS.—(1) If a State regulatory authority or

5 nonregulated distribution utility conducts a public pro6 ceeding before a distribution utility implements retail com7 petition as required under subsection (b), as part of this

8 proceeding, the State regulatory authority or nonregulated

9 distribution utility shall consider the appropriate mecha10 nism to address recovery by a distribution utility for which

11 it has ratemaking authority of retail stranded costs that

12 are legitimate, prudent, and verifiable, if the utility has

13 taken all reasonable steps to mitigate the costs, including

14 assistance for workers who are employed or were most re15 cently employed by an electric utility and who may become

16 or have become unemployed as a result of the implementa17 tion of retail competition. A charge imposed for purposes

18 of recovering retail stranded costs or providing assistance

19 for unemployed workers should be imposed in a manner

20 so as to minimize to the fullest extent possible any effect

21 on an electric consumer’s choice among competing sup22 pliers or products.

23 ‘‘(2) If a State regulatory authority or nonregulated

24 utility imposes or allows a charge to recover retail strand25 ed costs under paragraph (1), it shall consider reducing
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1 the charge on an electric consumer who uses electric en2 ergy produced on-site when the charge results from the

3 use of new on-site generation produced by—

4 ‘‘(A) a fuel cell,

5 ‘‘(B) a facility with an efficiency rate of at least

6 50 percent,

7 ‘‘(C) a facility that uses a single fuel source to

8 produce at the point of use either electric or me9 chanical power and thermal energy and that has a

10 combined efficiency rate of at least 50 percent, or

11 ‘‘(D) a renewable resource.

12 ‘‘(f) ENFORCEMENT.—Any person may bring an ac13 tion in the appropriate State court against a State regu14 latory authority, a distribution utility, or a nonregulated

15 distribution utility for failure to comply with this section.

16 Filing an action challenging whether retail competition is

17 being implemented consistent with subsection (b) makes

18 a notice of retail competition ineffective for purposes of

19 section 118, 119, 119A, and 199B of this Act and sections

20 212(h), 216, and 217 of the Federal Power Act until final

21 resolution of the action. Notwithstanding any other law,

22 a court created under Article III of the Constitution does

23 not have jurisdiction over an action arising under this sec24 tion.’’.
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1 (b) DEFINITIONS.—Section 3 of PURPA is amended

2 by adding after paragraph (21) the following new para3 graphs:

4 ‘‘(22) The term ‘notice of retail competition’

5 means a notice filed under section 609(d).

6 ‘‘(23) The term ‘distribution utility’ means a

7 person, State agency, or any other non-federal entity

8 that owns or operates a local distribution facility

9 used for the sale of electric energy to an electric con10 sumer.

11 ‘‘(24) The term ‘nonregulated distribution util12 ity’ means a distribution utility not subject to the

13 ratemaking authority of a State regulatory author14 ity.’’

15 SEC. 102. AUTHORITY TO IMPOSE RECIPROCITY REQUIRE16 MENTS.

17 PURPA is amended by adding the following new sec18 tion after section 117:

19 ‘‘SEC. 118. AUTHORITY TO IMPOSE RECIPROCITY REQUIRE20 MENTS.

21 ‘‘(a) STATE REGULATORY AUTHORITY.—If a State

22 regulatory authority files a notice of retail competition

23 with respect to a distribution utility, beginning on the ef24 fective date of the notice, the State regulatory authority

25 may prohibit any other distribution utility located in the
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1 United States over which it does not have ratemaking au2 thority (and any affiliate of such a utility, as defined

3 under the Public Utility Holding Company Act of 1999)

4 from selling electric energy to electric consumers of a dis5 tribution facility covered by the notice of retail competi6 tion, unless a notice of retail competition has been filed

7 with respect to the other distribution utility.

8 ‘‘(b) NONREGULATED DISTRIBUTION UTILITY.—If a

9 nonregulated distribution utility files a notice of retail

10 competition, beginning on the effective date of the notice,

11 it may prohibit any other distribution utility located in the

12 United States (and any affiliate of such a utility, as de13 fined under the Public Utility Holding Company Act of

14 1999) from selling electric energy to electric consumers

15 of the nonregulated distribution utility covered by the no16 tice unless a notice of retail competition has been filed

17 with respect to the other distribution utility.’’.

18 SEC. 103. AGGREGATION FOR PURCHASE OF RETAIL ELEC19 TRIC ENERGY.

20 PURPA is amended by adding the following new sec21 tion after section 118 as added by section 102 of this Act:

22 ‘‘SEC. 119. AGGREGATION FOR PURCHASE OF RETAIL ELEC23 TRIC ENERGY.

24 ‘‘Notwithstanding any other provision of Federal or

25 State law, and subject to legitimate and nondiscriminatory
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1 State requirements imposed on retail electric suppliers, a

2 group of customers or any entity acting on behalf of such

3 group may acquire retail electric energy on an aggregate

4 basis if the group of customers is served by one or more

5 distribution utilities for which a State regulatory authority

6 or nonregulated distribution utility has filed a notice of

7 retail competition under section 609 of this Act for each

8 distribution utility.’’.

9 TITLE II—CONSUMER

10 PROTECTION

11 SEC. 201. CONSUMER INFORMATION.

12 PURPA is amended by adding the following new sec13 tion after section 119 as added by section 103 of this Act:

14 ‘‘SEC. 119A. CONSUMER INFORMATION DISCLOSURE.

15 ‘‘(a) DISCLOSURE RULES.—Not later than six

16 months after the date of enactment of this Act, the Sec17 retary, in consultation with the Commission, the Adminis18 trator of the Environmental Protection Agency, and the

19 Federal Trade Commission, shall issue rules prescribing

20 the form, content, placement, and timing of the supplier

21 disclosure required under subsections (b) and (c) of this

22 section. The rules shall be prescribed in accordance with

23 section 553 of title 5, United States Code.

24 ‘‘(b) DISCLOSURE TO ELECTRIC CONSUMERS.—An

25 electric utility that offers to sell electric energy to an elec-
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1 tric consumer shall provide the electric consumer, to the

2 extent practicable and in accordance with rules issued

3 under subsection (a), a statement containing the following

4 information:

5 ‘‘(1) The nature of the service being offered, in6 cluding information about interruptibility or curtail7 ment of service;

8 ‘‘(2) The price of the electric energy, including

9 a description of any variable charges;

10 ‘‘(3) A description of all other charges associ11 ated with the service being offered including, but not

12 limited to, access charges, exit charges, back-up

13 service charges, stranded cost recovery charges, and

14 customer service charges;

15 ‘‘(4) Information concerning the type of energy

16 resource used to generate the electric energy and the

17 environmental attributes of the generation (including

18 air emissions characteristics); and

19 ‘‘(5) Any other information the Secretary deter20 mines can be provided feasibly and would be useful

21 to consumers in making purchasing decisions.

22 ‘‘(c) DISCLOSURE TO WHOLESALE CUSTOMERS.—In

23 every sale of electric energy for resale, the seller shall pro24 vide to the purchaser the information respecting the type

25 of energy resource used to generate the electric energy and
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1 the environmental attributes of the generation required by

2 rules established under subsection (a).

3 ‘‘(d) FEDERAL TRADE COMMISSION ENFORCE4 MENT.—A violation of a rule prescribed under this section

5 shall constitute an unfair or deceptive act or practice in

6 violation of section 5 of the Federal Trade Commission

7 Act (15 U.S.C. 45) and shall be treated as a violation of

8 a rule under section 18 of the Federal Trade Commission

9 Act (15 U.S.C. 57a). All functions and powers of the Fed10 eral Trade Commission under the Federal Trade Commis11 sion Act are available to enforce compliance with this sec12 tion notwithstanding jurisdictional limitations in the Fed13 eral Trade Commission Act.

14 ‘‘(e) AUTHORITY TO OBTAIN INFORMATION.—Au15 thority to obtain information under section 11 of the En16 ergy Supply and Environmental Coordination Act of 1974

17 (15 U.S.C. 796) is available to the Secretary to administer

18 this section and to the Federal Trade Commission to en19 force this section. In order to carry out its duties under

20 this section, the Federal Trade Commission may use any

21 of its powers under sections 3, 6, 9, and 20 of the Federal

22 Trade Commission Act (15 U.S.C. 43, 46, 49, and 57b–

23 2) without regard to the limitations contained in section

24 20(b) of that Act (15 U.S.C. 57b–2(b)) or any jurisdic25 tional limitations contained in that Act.
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1 ‘‘(f) ENFORCEMENT BY STATES.—(1) When a State

2 determines that the interests of its residents have been

3 or are being threatened or adversely affected because any

4 person is violating or has violated a rule of the Secretary

5 under this section, the State may bring a civil action on

6 behalf of its residents in an appropriate district court of

7 the United States to—

8 ‘‘(A) enjoin the violation;

9 ‘‘(B) enforce compliance with the rule of the

10 Secretary;

11 ‘‘(C) obtain damages, restitution, or other com12 pensation on behalf of its residents; or

13 ‘‘(D) obtain other relief the court considers ap14 propriate.

15 ‘‘(2) The State shall serve prior written notice of any

16 civil action under this subsection upon the Federal Trade

17 Commission and provide the Federal Trade Commission

18 with a copy of its complaint, except that if it is not feasible

19 for the State to provide this prior notice, the State shall

20 serve the notice immediately upon instituting the action.

21 Upon receiving a notice respecting a civil action, the Fed22 eral Trade Commission may—

23 ‘‘(A) intervene in the action, and

24 ‘‘(B) upon so intervening, be heard on all mat25 ters arising in the action and file petition for appeal.
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1 ‘‘(3) For purposes of bringing any civil action under

2 this subsection, this section does not prevent a State offi3 cial from exercising the powers conferred by State law to

4 conduct investigations, administer oaths or affirmations,

5 or compel the attendance of witnesses or the production

6 of documentary and other evidence.

7 ‘‘(4) While a civil action instituted by or on behalf

8 of the Federal Trade Commission for violation of any rule

9 prescribed under this subsection is pending, a State may

10 not institute a civil action under this section against a de11 fendant named in the complaint in the pending action for

12 a violation alleged in the complaint.

13 ‘‘(5) A civil action brought under this subsection may

14 be brought in the district in which the defendant is found,

15 is an inhabitant, or transacts business or wherever venue

16 is proper under section 1391 of title 28, United States

17 Code. Process in such an action may be served in any dis18 trict in which the defendant is an inhabitant or in which

19 the defendant may be found.

20 ‘‘(6) This section does not prohibit a State from pro21 ceeding in State court on the basis of an alleged violation

22 of a State or criminal statute.’’.
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1 SEC. 202. ACCESS TO ELECTRIC SERVICE FOR LOW-INCOME

2 CONSUMERS.

3 PURPA is amended by adding the following new sec4 tion after section 119A as added by section 201 of this

5 Act.

6 ‘‘SEC. 119B. ACCESS TO ELECTRIC SERVICE FOR LOW-IN7 COME CONSUMERS.

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

9 ‘low-income residential consumer’ is a household, as de10 fined in section 2603(4) of the Low-Income Energy Assist11 ance Act of 1981 (42 U.S.C. 8622(4)), with an annual

12 income that—

13 ‘‘(1) does not exceed 60 percent of the State

14 median income, as defined in section 2603(9) of the

15 Low-Income Home Energy Assistance Act of 1981

16 (42 U.S.C. 8622(9)), of the State where the house17 hold is located, or

18 ‘‘(2) meets the eligibility criteria for a low-in19 come energy program operated by the State where

20 the household is located.

21 ‘‘(b) APPLICABILITY.—Each State regulatory author22 ity and nonregulated distribution utility that files a notice

23 of retail competition under section 609 of this Act shall

24 conduct a proceeding to determine whether to apply the

25 principles of subsection (c).
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1 ‘‘(c) PRINCIPLES.—The following are principles for

2 providing electric service to low-income residential con3 sumers:

4 ‘‘(1) A State regulatory authority or nonregu5 lated distribution utility shall assure that its low-in6 come residential consumers obtain benefits from re7 tail competition comparable to its other residential

8 consumers.

9 ‘‘(2) As a condition of offering retail service to

10 residential consumers in a State, a retail electric

11 supplier shall agree to—

12 ‘‘(A) offer, promote, and provide, upon re13 quest, retail electric service to a low-income res14 idential consumer on rates, terms, and condi15 tions comparable to those offered to other resi16 dential consumers located in the same area

17 where the low-income residential consumer is lo18 cated, and

19 ‘‘(B) share equitably with other retail elec20 tric suppliers in the State any costs necessary

21 to provide service to low-income residential con22 sumers under subparagraph (A).’’.
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1 SEC. 203. UNFAIR TRADE PRACTICES.

2 The Federal Trade Commission Act (15 U.S.C. 41

3 et seq.) is amended by inserting the following new section

4 after section 5:

5 ‘‘SEC. 5A. ELECTRICITY SUPPLY UNFAIR TRADE PRAC6 TICES.

7 ‘‘(a) DEFINITION.—For purposes of this section, ‘re8 tail electric supplier’ has the meaning given that term in

9 section 3(25) of the Public Utility Regulatory Policies Act

10 of 1978.

11 ‘‘(b) SLAMMING.—(1) The Federal Trade Commis12 sion shall establish rules in accordance with section 553

13 of title 5, United States Code for the submittal and

14 verification of a retail electric customer’s selection or

15 change in selection of a retail electric supplier and for the

16 assessment of penalties for violation of these rules. These

17 rules shall ensure that the customer receives electric serv18 ice from the retail electric supplier of the customer’s

19 choice.

20 ‘‘(2) A person shall not submit or change the selec21 tion made by a retail electric customer except in accord22 ance with procedures established in paragraph (1).

23 ‘‘(c) CRAMMING.—(1) The Federal Trade Commis24 sion shall establish rules in accordance with section 553

25 of title 5, United States Code for obtaining the consent

26 of a retail electric customer for purchase of goods and
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1 services other than those expressly authorized by law or

2 by the customer’s electricity supply and metering agree3 ment and for the assessment of penalties for violation of

4 these rules.

5 ‘‘(2) A person shall not charge a retail electric cus6 tomer for a particular service except in accordance with

7 procedures established in paragraph (1).

8 ‘‘(d) FEDERAL TRADE COMMISSION ENFORCE9 MENT.—Violation of this section or of a rule prescribed

10 under this section constitutes an unfair and deceptive act

11 or practice in violation of section 5 of this Act and shall

12 be treated as a violation of a rule under section 18 of this

13 Act. All functions and powers of the Federal Trade Com14 mission under this Act are available to the Federal Trade

15 Commission to enforce compliance with this section not16 withstanding any jurisdictional limitations in this Act.

17 ‘‘(e) STATE PROCEEDINGS AND OTHER REMEDIES.—

18 (1) This section does not preclude a State or State com19 mission from prescribing and enforcing additional laws,

20 regulations, or procedures regarding the practices which

21 are the subject of this section, so long as such laws, regu22 lations or procedures do not conflict with the provisions

23 of this section or with any rule prescribed by the FTC

24 pursuant to it.
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1 ‘‘(2) The remedies provided by this section are in ad2 dition to any other remedies available by law.’’.

3 SEC. 204. RESIDENTIAL ELECTRICITY CONSUMER DATA4 BASE.

5 PURPA is amended by adding the following new sec6 tion after section 119B as added by section 202 of this

7 Act:

8 ‘‘SEC. 119C. RESIDENTIAL ELECTRICITY CONSUMER DATA9 BASE.

10 ‘‘(a) DATABASE.—The Secretary is authorized to

11 compile a database to provide residential electric con12 sumers with information to compare the offers of various

13 retail electric suppliers.

14 ‘‘(b) INFORMATION.—A retail electric supplier who

15 provides electric consumers with information under section

16 119A shall provide the Secretary the same information

17 and any other information the Secretary considers appro18 priate for purposes of this section.

19 ‘‘(c) CONTENT.—The database under this program

20 shall—

21 ‘‘(1) compare the rates, terms, and conditions

22 of the service offered by the various retail electric

23 suppliers based on the information provided under

24 subsection (b);
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1 ‘‘(2) disseminate the comparison to consumers

2 through various communications channels, including

3 the Internet; and

4 ‘‘(3) provide other information the Secretary

5 considers appropriate to carry out the purposes of

6 this section.’’.

7 SEC. 205. MODEL RETAIL SUPPLIER CODE.

8 PURPA is amended by adding the following new sec9 tion after section 119C as added by section 204 of this

10 Act:

11 ‘‘SEC. 119D. MODEL CODE FOR RETAIL SUPPLIERS.

12 ‘‘The Secretary shall develop by rule and circulate

13 among the States for their consideration a model code for

14 the regulation of retail electric suppliers for the protection

15 of electric consumers.’’.

16 SEC. 206. MODEL ELECTRIC UTILITY WORKER CODE.

17 PURPA is amended by adding the following new sec18 tion after section 119D as added by section 205 of this

19 Act:

20 ‘‘SEC. 119E. MODEL CODE FOR ELECTRIC UTILITY WORK21 ERS.

22 ‘‘(a) The Secretary shall develop by rule and circulate

23 among the States for their consideration a model code con24 taining standards for electric facility workers to ensure

25 electric facility safety and reliability. The Secretary, in de-
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1 veloping these standards, shall consult with all interested

2 parties, including representatives of electric facility work3 ers.

4 ‘‘(b) In issuing a model code under this section, the

5 Secretary shall not, for purposes of section 653 of title

6 29, be deemed to be exercising statutory authority to pre7 scribe or enforce standards or regulations affecting occu8 pational safety and health.’’.

9 TITLE III—FACILITATING STATE

10 AND REGIONAL REGULATION

11 SEC. 301. CLARIFICATION OF STATE AND FEDERAL AU12 THORITY OVER RETAIL TRANSMISSION SERV13 ICES.

14 (a) NONPREEMPTION OF STATE AND NONREGU15 LATED UTILITY AUTHORITY TO ORDER RETAIL WHEEL16 ING AND TO IMPOSE LOCAL DELIVERY CHARGES.—Sec17 tion 201(b) of the Federal Power Act (referred to in this

18 Act as ‘‘the FPA’’) is amended by adding the following

19 new paragraph after paragraph (2):

20 ‘‘(3) This Act does not preempt or otherwise affect

21 any authority under the law of a State or municipality

22 to—

23 ‘‘(A) require unbundled transmission and local

24 distribution services for the delivery of electric en25 ergy directly to an ultimate consumer, but if
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1 unbundled transmission is in interstate commerce,

2 the rates, terms, and conditions of the transmission

3 are subject to the exclusive jurisdiction of the Com4 mission under this Part, or

5 ‘‘(B) impose a delivery charge on an ultimate

6 consumer’s receipt of electric energy.’’.

7 (b) OPEN ACCESS TRANSMISSION AUTHORITY; RE8 TAIL WHEELING IN RETAIL COMPETITION STATES.—

9 (1) APPLICABILITY OF OPEN ACCESS TRANS10 MISSION RULES.—Section 206 of the FPA is amend11 ed by adding the following new subsection after sub12 section (d):

13 ‘‘(e) OPEN ACCESS TRANSMISSION SERVICES.—(1)

14 Under section 205 and this section, the Commission may

15 require, by rule or order, public utilities to provide open

16 access transmission services, subject to section 212(h),

17 and may authorize recovery of stranded costs, as defined

18 by the Commission, arising from any requirement to pro19 vide open access transmission services. This section ap20 plies to any rule or order issued by the Commission before

21 the date of enactment of the Comprehensive Electricity

22 Competition Act.’’.

23 (2) AUTHORITY TO ORDER RETAIL WHEEL24 ING.—Section 212(h) of the FPA is amended—

25 (A) by inserting ‘‘(1)’’ before ‘‘No’’;
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1 (B) by striking ‘‘(1)’’, ‘‘(2)’’, ‘‘(A)’’, and

2 ‘‘(B)’’ and inserting in their places ‘‘(A)’’,

3 ‘‘(B)’’, ‘‘(i)’’, and ‘‘(ii)’’ respectively;

4 (C) by striking from redesignated para5 graph (1)(B)(ii) ‘‘the date of enactment of this

6 subsection’’ and inserting ‘‘October 24, 1992,’’

7 in its place; and

8 (D) by adding at the end a new paragraph

9 as follows:

10 ‘‘(2) Notwithstanding paragraph (1), the Com11 mission may issue an order that requires the trans12 mission of electric energy directly or indirectly to an

13 ultimate consumer if a notice of retail competition

14 under section 609 of the Public Utility Regulatory

15 Policies Act of 1978 has been filed and is in effect

16 with respect to the ultimate consumer’s distribution

17 utility or if a distribution utility offers open access

18 to its delivery facilities to the ultimate consumer.’’.

19 (3) CONFORMING AMENDMENTS.—

20 (A) Section 3(23) of the FPA is amended

21 to read as follows:

22 ‘‘(23) ‘transmitting utility’ means any entity

23 that owns, controls, or operates electric power trans24 mission facilities that are used for the sale of electric

25 energy in the 48 contiguous States and the District
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1 of Columbia, notwithstanding section 201(f) of this

2 Act;’’.

3 (B) Section 3(24) of the FPA is amended

4 to read as follows:

5 ‘‘(24) ‘transmission services’ means the trans6 mission of electric energy sold or to be sold;’’.

7 (C) Section 211(a) of the FPA is amended

8 by striking ‘‘for resale’’.

9 (D) Section 212(a) of the FPA is amended

10 by striking ‘‘wholesale’’ each time it appears,

11 except the last time.

12 (c) APPLICABILITY OF COMMISSION JURISDICTION

13 TO TRANSMITTING UTILITIES.—Section 206(e) of the

14 FPA as added by subsection (b)(1) of this section is

15 amended by adding the following new paragraphs after

16 paragraph (1):

17 ‘‘(2)(A) The Commission has jurisdiction over the

18 rates, terms, and conditions for transmission services pro19 vided by a transmitting utility that is not a public utility

20 or covered by section 201A, subject to section 212(h), and

21 may authorize recovery of stranded costs, as defined by

22 the Commission, by such transmitting utility. The Com23 mission may require, by rule or order, a transmitting util24 ity that is not a public utility or covered by section 201A
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1 to provide open access transmission services, subject to

2 section 212(h).

3 ‘‘(B) In exercising its authority under this Act, the

4 Commission—

5 ‘‘(i) shall take into account the different struc6 tural and operating characteristics of transmitting

7 utilities, including the multi-tier structure and the

8 not-for-profit operations of electric cooperatives;

9 ‘‘(ii) with respect to any transmitting utility

10 that has outstanding loans made or guaranteed by

11 the Rural Utilities Service, shall take into account

12 the policies of the Department of Agriculture in im13 plementing the Rural Electrification Act of 1936

14 and shall assure, to the extent practicable, that the

15 utility will be able to meet any loan obligations

16 under that Act; and

17 ‘‘(iii) shall not approve rates, terms, or condi18 tions the Commission determines would have the ef19 fect of jeopardizing the tax exempt status of non20 profit electric cooperatives under the Internal Rev21 enue Code of 1986.

22 ‘‘(C) Notwithstanding any other law, section 205,

23 this section, and part III apply to a transmitting utility

24 that is not a public utility or covered by section 201A for

25 purposes of this section.
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1 ‘‘(3) Any electric utility that owns, directly or indi2 rectly, generation facilities financed in whole or in part

3 with outstanding loans made or guaranteed by the Rural

4 Utilities Service may apply to the Commission to impose

5 a charge for the recovery of stranded costs as defined by

6 the Commission. If the Commission determines that the

7 proposed charge is just, reasonable, and not unduly dis8 criminatory or preferential, the Commission may issue an

9 order providing for the imposition of the charge on trans10 mission service by the applicant or by another transmit11 ting utility or on any electric utility or transaction subject

12 to the Commission’s jurisdiction.’’.

13 (d) NOTICE TO AND INTERVENTION OF SECRETARY

14 OF AGRICULTURE IN FERC PROCEEDINGS.—The FPA is

15 amended by adding after section 218, as added by section

16 601 of this Act, the following new section:

17 ‘‘NOTICE TO AND INTERVENTION OF SECRETARY OF

18 AGRICULTURE IN COMMISSION PROCEEDINGS

19 ‘‘SEC. 219. Any person filing a complaint or petition

20 for rulemaking under part II of the FPA that directly af21 fects an electric utility with loans made or guaranteed

22 under the Rural Electrification Act of 1936 shall provide

23 notice of such complaint or petition to the Secretary of

24 Agriculture. The Secretary of Agriculture may as a matter

25 of right intervene or otherwise participate in any pro26 ceeding before the Commission that directly affects an
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1 electric utility with loans made or guaranteed under the

2 Rural Electrification Act of 1936. The Secretary of Agri3 culture shall comply with rules of procedure of general ap4 plicability governing the timing of intervention or partici5 pation in such proceeding or activity and, upon inter6 vening or participating therein, shall comply with rules of

7 procedure of general applicability governing the conduct

8 thereof.’’.

9 SEC. 302. INTERSTATE COMPACTS ON REGIONAL TRANS10 MISSION PLANNING.

11 The FPA is amended by adding after section 214 the

12 following new section:

13 ‘‘INTERSTATE COMPACTS ON REGIONAL TRANSMISSION

14 PLANNING

15 ‘‘SEC. 215. (a) The consent of Congress is given for

16 an agreement to establish a regional transmission plan17 ning agency, if the Commission determines that the agree18 ment would—

19 ‘‘(1) facilitate coordination among the States

20 within a particular region with regard to the plan21 ning of future transmission, generation, and dis22 tribution facilities,

23 ‘‘(2) carry out State electric facility siting re24 sponsibilities more effectively,
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1 ‘‘(3) meet the other requirements of this section

2 and rules prescribed by the Commission under this

3 section, and

4 ‘‘(4) otherwise be consistent with the public in5 terest.

6 ‘‘(b)(1) If the Commission determines that an agree7 ment meets the requirements of subsection (a), the agency

8 established under the agreement has the authority nec9 essary or appropriate to carry out the agreement. This au10 thority includes authority with respect to matters other11 wise within the jurisdiction of the Commission, if expressly

12 provided for in the agreement and approved by the Com13 mission.

14 ‘‘(2) The Commission’s determination under this sec15 tion may be subject to any terms or conditions the Com16 mission determines are necessary to ensure that the agree17 ment is in the public interest.

18 ‘‘(c)(1) The Commission shall prescribe—

19 ‘‘(A) criteria for determining whether a regional

20 transmission planning agreement meets subsection

21 (a), and

22 ‘‘(B) standards for the administration of a re23 gional transmission planning agency established

24 under the agreement.
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1 ‘‘(2) The criteria shall provide that, in order to meet

2 subsection (a)—

3 ‘‘(A) a regional transmission planning agency

4 must operate within a region that includes all tribal

5 governments and all or part of each State that is a

6 party to the agreement,

7 ‘‘(B) a regional transmission planning agency

8 must be composed of one or more members from

9 each State and tribal government that is a party to

10 the agreement,

11 ‘‘(C) each participating State and tribal govern12 ment must vest in the regional transmission plan13 ning agency the authority necessary to carry out the

14 agreement and this section, and

15 ‘‘(D) the agency must follow workable and fair

16 procedures in making its decisions, in governing

17 itself, and in regulating parties to the agreement

18 with respect to matters covered by the agreement,

19 including a requirement that all decisions of the

20 agency be made by majority vote (or majority of

21 weighted votes) of the members present and voting.

22 ‘‘(3) The criteria may include any other requirement

23 for meeting subsection (a) that the Commission deter24 mines is necessary to ensure that the regional trans25 mission planning agency’s organization, practices, and
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1 procedures are sufficient to carry out this section and the

2 rules issued under it.

3 ‘‘(d) The Commission, after notice and opportunity

4 for comment, may terminate the approval of an agreement

5 under this section at any time if it determines that the

6 regional transmission planning agency fails to comply with

7 this section or Commission prescriptions under subsection

8 (c) or that the agreement is contrary to the public interest.

9 ‘‘(e) Section 313 applies to a rehearing before a re10 gional transmission planning agency and judicial review

11 of any action of a regional transmission planning agency.

12 For this purpose, when section 313 refers to ‘Commis13 sion’, substitute ‘regional transmission planning agency’

14 and when section 313(b) refers to ‘licensee or public util15 ity’, substitute ‘entity’.’’.

16 SEC. 303. BACKUP AUTHORITY TO IMPOSE A CHARGE ON

17 AN ULTIMATE CONSUMER’S RECEIPT OF

18 ELECTRIC ENERGY.

19 The FPA is amended by adding the following new

20 section after section 215 as added by section 302 of this

21 Act:

22 ‘‘BACKUP AUTHORITY FOR CHARGE ON RECEIPT OF

23 ELECTRIC ENERGY

24 ‘‘SEC. 216. (a) If a State regulatory authority that

25 has provided notice of retail competition under section 609

26 of the Public Utility Regulatory Policies Act of 1978 for
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1 a distribution utility determines that the utility should be

2 authorized or required to impose a charge on an ultimate

3 consumer’s receipt of electric energy but the State regu4 latory authority lacks authority to authorize or require im5 position of such a charge, the State regulatory authority

6 may apply to the Commission for an order providing for

7 the imposition of the charge. If the Commission deter8 mines that the imposition of the charge is just, reasonable,

9 and not unduly discriminatory or preferential; is con10 sistent with the State regulatory authority’s policy regard11 ing the imposition of the charge; and is not prohibited by

12 State law, the Commission may issue an order providing

13 for the imposition of the charge.

14 ‘‘(b) If a nonregulated utility that has outstanding

15 loans made or guaranteed by the Rural Utilities Service

16 and that has filed a notice of retail competition under sec17 tion 609 of the Public Utilities Regulatory Policies Act

18 of 1978 determines that it is appropriate to impose a

19 charge on an ultimate consumer’s receipt of electric en20 ergy, but lacks the authority to impose such a charge

21 under State law, the utility may apply to the Commission

22 for an order providing for the imposition of a charge. If

23 the Commission determines that the proposed charge is

24 just, reasonable, and not unduly discriminatory or pref-
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1 erential, the Commission may issue an order providing for

2 the imposition of the charge.’’.

3 SEC. 304. AUTHORITY TO ESTABLISH AND REQUIRE INDE4 PENDENT REGIONAL SYSTEM OPERATION.

5 Section 202 of the FPA is amended by adding the

6 following new subsections after subsection (g):

7 ‘‘(h) Upon its own motion or upon application or

8 complaint and after notice and an opportunity for a hear9 ing, the Commission may order the establishment of enti10 ties for the purpose of independent operation, control, and

11 planning of interconnected transmission facilities; order a

12 transmitting utility to relinquish control over operation of

13 its transmission facilities to an entity for the purpose of

14 independent operation, control, and planning of inter15 connected transmission facilities; subject generators to the

16 control of such entity consistent with other laws to the

17 extent necessary to permit reliable operation of the trans18 mission facilities; or take any combination of these actions,

19 if the Commission finds that—

20 ‘‘(1) this action is appropriate to promote com21 petitive electricity markets and efficient, economical,

22 and reliable operation of the interstate transmission

23 grid;

24 ‘‘(2) the entity established for the purpose of

25 independent operation, control, and planning of
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1 interconnected transmission facilities will operate,

2 control, and plan the transmission facilities in a

3 manner that assures that—

4 ‘‘(A) ownership of transmission facilities

5 provides no advantage in competitive electricity

6 markets;

7 ‘‘(B) the transmission customers of the

8 Tennessee Valley Authority (TVA), the Bonne9 ville Power Administration, the Southwestern

10 Power Administration (SWPA), and the West11 ern Area Power Administration (WAPA) will

12 not pay an unreasonable share of the entity’s

13 costs and will not experience unreasonable

14 transmission rate increases resulting from the

15 establishment of the entity; and

16 ‘‘(C) as applicable, the respective statutory

17 and treaty obligations and contractual obliga18 tions existing on the date of enactment of this

19 Act of the TVA Board of Directors, the Bonne20 ville Administrator, the SWPA Administrator,

21 the WAPA Administrator, the Bureau of Rec22 lamation, and the Corps of Engineers can be

23 met;

24 ‘‘(3) any transmitting utility ordered to transfer

25 control of its transmission facilities will receive just
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1 and reasonable compensation for the use of its facili2 ties, consistent with section 201A where applicable;

3 and

4 ‘‘(4) adequate reliability of the affected trans5 mission facilities will be maintained. Nothing in this

6 section limits States from addressing transmission

7 facility maintenance, planning, siting, and other util8 ity functions in a manner consistent with this Act or

9 Commission action under this Act.

10 ‘‘(i) If not ordered under subsection (h), TVA, the

11 Bonneville Administrator, the SWPA Administrator, or

12 the WAPA Administrator are authorized to participate in

13 a regional transmission system operation after conducting

14 a public process in the relevant service area to receive com15 ments. Notwithstanding any other law, participation may

16 include delegation of operation and control of the Author17 ity or Administration’s transmission system to that entity,

18 or other method of participation, under terms and condi19 tions the Authority or Administrator determines necessary

20 or appropriate, including being bound by operational and

21 other orders of the entity and by the results of arbitration

22 of disputes with the entity or with other participants.’’.
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1 TITLE IV—PUBLIC BENEFITS

2 SEC. 401. PUBLIC BENEFITS FUND.

3 PURPA is amended by adding after section 609, as

4 added by section 101 of this Act, the following new sec5 tion:

6 ‘‘SEC. 610. PUBLIC BENEFITS FUND.

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

8 ‘‘(1) the term ‘Board’ means the Joint Board

9 established under subsection (b)(1);

10 ‘‘(2) the term ‘eligible public purpose program’

11 means a program that supports one or more of the

12 following—

13 ‘‘(A) availability of affordable electricity

14 service to low-income customers,

15 ‘‘(B) implementation of energy conserva16 tion and energy efficiency measures and energy

17 management practices,

18 ‘‘(C) consumer education,

19 ‘‘(D) the development and demonstration

20 of an electricity generation technology that the

21 Secretary determines is emerging from research

22 and development, provides environmental bene23 fits, and—

24 ‘‘(i) has significant national commer25 cial potential, or
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1 ‘‘(ii) provides energy security or gen2 eration resource diversity benefits, or

3 ‘‘(E) rural assistance subsequent to a de4 termination made under subsection (d)(4);

5 ‘‘(3) the term ‘fiscal agent’ means the entity

6 designated under subsection (b)(2)(B);

7 ‘‘(4) the term ‘Fund’ means the Public Benefits

8 Fund established under subsection (b)(2)(A); and

9 ‘‘(5) the term ‘State’ means each of the 48 con10 tiguous States and the District of Columbia.

11 ‘‘(b) JOINT BOARD.—(1) A Joint Board is estab12 lished whose membership is composed of two officers or

13 employees of the United States Government appointed by

14 the Secretary, four State commissioners appointed by the

15 national organization of State commissions, and one mem16 ber of an Indian tribal government appointed by the Sec17 retary. The Secretary shall designate the Chair of the

18 Board.

19 ‘‘(2) The Board shall—

20 ‘‘(A) establish a Public Benefits Fund

21 upon petition of States and tribal governments

22 wishing to participate in the program under

23 this section,
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1 ‘‘(B) appoint a fiscal agent, from persons

2 nominated by the States and tribal governments

3 petitioning to establish the Fund, and

4 ‘‘(C) administer the Fund as set forth in

5 this section.

6 ‘‘(c) FISCAL AGENT.—The fiscal agent appointed by

7 the Board shall collect and disburse the amounts in the

8 Fund as set forth in this section.

9 ‘‘(d) SECRETARY.—The Secretary shall prescribe

10 rules for—

11 ‘‘(1) the determination of charges under sub12 section (e);

13 ‘‘(2) the collection of amounts for the Fund, in14 cluding provisions for overcollection or undercollec15 tion;

16 ‘‘(3) distribution of amounts from the Fund;

17 and

18 ‘‘(4) the criteria under which the Board deter19 mines whether a State or tribal government’s pro20 gram is an eligible public purpose program, includ21 ing a rural assistance program. A rural assistance

22 program shall be an eligible public purpose program

23 to the extent that the Secretary, in consultation with

24 the Secretary of Agriculture, determines by rule that

25 significant adverse economic effects on rural cus-
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1 tomers have occurred or will occur as a result of

2 electricity restructuring that meets the retail com3 petition requirements of this Act. After such a deter4 mination is made, the Secretary, in consultation with

5 the Secretary of Agriculture, shall specify by rule

6 the mechanism for distribution of funds to rural as7 sistance programs, amounts to be provided, and

8 variances to the overall requirements to the Public

9 Benefits Fund under this section, if any. For the

10 purposes of funding rural assistance programs, the

11 Secretary shall increase the charge for the Public

12 Benefit Fund as necessary, up to a maximum of .17

13 mills per kilowatt hour. Funding for rural assistance

14 programs under this section shall be provided exclu15 sively from this increase in the charge.

16 ‘‘(e) PUBLIC BENEFITS CHARGE.—(1) As a condition

17 of existing or future interconnection with facilities of any

18 transmitting utility, each owner of an electric generating

19 facility whose capacity exceeds one megawatt shall pay the

20 transmitting utility a public benefits charge determined

21 under paragraph (2), even if the generation facility and

22 the transmitting facility are under common ownership or

23 are otherwise affiliated. Each importer of electric energy

24 from Canada or Mexico, as a condition of existing or fu25 ture interconnection with facilities of any transmitting
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1 utility in the United States, shall pay this same charge

2 for imported electric energy. The transmitting utility shall

3 pay the amounts collected to the fiscal agent at the close

4 of each month, and the fiscal agent shall deposit the

5 amounts into the Fund as offsetting collections.

6 ‘‘(2)(A) The Board shall notify the Commission of

7 the sum of the requests of all States and tribal govern8 ments under subsection (f) within 30 days after receiving

9 the requests.

10 ‘‘(B) The Commission shall calculate the rate for the

11 public benefits charge for each calendar year at an

12 amount, not in excess of 1 mill per kilowatt-hour, equal

13 to the sum of the requests of all States and tribal govern14 ments under subsection (f) for programs described in sub15 section (a)(2)(A) through (a)(2)(D), but not to exceed $3

16 billion per year, divided by the estimated kilowatt hours

17 of electric energy to be generated by generators subject

18 to the charge. Amounts collected in excess of $3 billion

19 in a fiscal year shall be retained in the fund and the as20 sessment in the following year shall be reduced by that

21 amount. If there are more than de minimis receipts from

22 the sale of Renewable Energy Credits under section 611,

23 the Secretary shall direct the Commission to reduce the

24 charge to reflect the amount of receipts received from the

25 sale of Credits. The amount of the receipts from the sale
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1 of Renewable Energy Credits deposited in the Public Ben2 efits Fund may not exceed $3 billion per year adjusted

3 for inflation. Receipts from the sale of Renewable Energy

4 Credits in excess of $3 billion per year adjusted for infla5 tion shall be deposited in the General Fund of the Treas6 ury.

7 ‘‘(C) If a finding is made under subsection (d)(4) in

8 relation to rural customers, the public benefit charge shall

9 be increased as indicated under subsection (d)(4).

10 ‘‘(f) STATE AND TRIBAL GOVERNMENT PARTICIPA11 TION.—(1) Not later than 90 days before the beginning

12 of each calendar year, each State and tribal government

13 seeking to participate in the Fund shall submit to the

14 Board a request for payments from the Fund for the cal15 endar year in an amount not in excess of 50 percent of

16 the State or tribal government’s estimated expenditures

17 for eligible public purpose programs for the year, except

18 as provided under rules issued under subsection (d)(4) for

19 rural assistance programs.

20 ‘‘(2) To the extent a State or tribal government gen21 erates all or part of its funds for eligible public purpose

22 programs through a wires charge on an ultimate con23 sumer’s receipt of electric energy, the State or tribal gov24 ernment shall impose the charge on a non-discriminatory
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1 basis on all consumers within the State or tribal govern2 ment jurisdiction.

3 ‘‘(3) Notwithstanding subsection (a)(5)—

4 ‘‘(A) Alaska may participate in the Fund as a

5 State if it certifies to the Board that all generators

6 within Alaska with a nameplate capacity exceeding

7 one megawatt shall pay into the Fund at the rate

8 calculated by the Board during the year in which

9 Alaska seeks matching funds, and

10 ‘‘(B) Hawaii may participate in the Fund as a

11 State if it certifies to the Board that all generators

12 within Hawaii with a nameplate capacity exceeding

13 one megawatt shall pay into the Fund at the rate

14 calculated by the Board during the year in which

15 Hawaii seeks matching funds.

16 ‘‘(g) DISBURSAL FROM THE FUND.—(1) The Board

17 shall review State and tribal government submissions and

18 determine whether programs designated by the State or

19 tribal government are eligible public purpose programs,

20 using the criteria prescribed under subsection (d), and

21 whether there is reasonable assurance that spending quali22 fying as State or tribal government matching funds will

23 occur.

24 ‘‘(2) The fiscal agent shall disburse amounts in the

25 Fund to participating States and tribal governments to
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1 carry out eligible public programs in accordance with this

2 subsection and rules prescribed under subsection (d).

3 ‘‘(3) To the extent the aggregate amount of funds

4 requested by the States and tribal governments exceeds

5 the maximum aggregate revenues eligible to be collected

6 under subsection (e) and deposited as payment for Renew7 able Energy Credits under section 611, the fiscal agent

8 shall reduce each participating State and tribal govern9 ment’s request proportionately.

10 ‘‘(4)(A) The fiscal agent shall disburse amounts for

11 a calendar year from the Fund to a State or tribal govern12 ment in twelve equal monthly payments beginning two

13 months after the beginning of the calendar year. Amounts

14 disbursed may not exceed the lesser of the State or tribal

15 government’s request for the fiscal year, after any reduc16 tion required under paragraph (3), or 50 percent of the

17 State or tribal government’s documented expenditures for

18 eligible public purpose programs for the calendar year, ex19 cept as provided under rules issued under subsection

20 (d)(4) for rural assistance programs.

21 ‘‘(B) The fiscal agent shall make distributions to the

22 State or tribal government or to an entity designated by

23 the State or tribal government to receive payments. The

24 State or tribal government may designate a nonregulated

25 utility as an entity to receive payments under this section.
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1 ‘‘(C) A State or tribal government may use amounts

2 received only for the eligible public purpose programs the

3 State or tribal government designated in its submission

4 to the Board and the Board determined eligible.

5 ‘‘(h) REPORT.—One year before the date of expira6 tion of this section, the Secretary shall report to Congress,

7 after consultation with the Board, whether a public bene8 fits fund should continue to exist.

9 ‘‘(i) SUNSET.—This section expires at midnight on

10 December 31 of the fifteenth year after the year the Com11 prehensive Electricity Competition Act is enacted, except

12 with regard to charges and funding for rural assistance

13 programs.’’.

14 SEC. 402. FEDERAL RENEWABLE PORTFOLIO STANDARD.

15 (a) STANDARD.—PURPA is amended by adding after

16 section 610, as added by section 401 of this Act, the fol17 lowing new section:

18 ‘‘SEC. 611. FEDERAL RENEWABLE PORTFOLIO STANDARD.

19 ‘‘(a) MINIMUM RENEWABLE GENERATION REQUIRE20 MENT.—(1) For each calendar year beginning with 2000,

21 a retail electric supplier shall submit to the Secretary Re22 newable Energy Credits in an amount equal to the re23 quired annual percentage, specified in subsection (b), of

24 the total electric energy sold by the retail electric supplier

25 to electric consumers in the calendar year. The retail elec-
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1 tric supplier shall make this submission before April 1 of

2 the following calendar year.

3 ‘‘(2) For purposes of this section a ‘renewable energy’

4 resource means solar energy, wind, geothermal, or bio5 mass.

6 ‘‘(3) This section does not preclude a State from re7 quiring additional renewable energy generation in that

8 State.

9 ‘‘(b) REQUIRED ANNUAL PERCENTAGE.—(1) The

10 Secretary shall determine the required annual percentage

11 that is to be applied to all retail electric suppliers for cal12 endar years 2000–2004. This required annual percentage

13 shall be equal to the percent of the total electric energy

14 sold, during the most recent calendar year for which infor15 mation is available before the calendar year of the enact16 ment of this section, by retail suppliers to electric cus17 tomers in the United States that is renewable energy.

18 ‘‘(2) The Secretary shall determine the required an19 nual percentage for all retail electric suppliers for calendar

20 years 2005–2009. This percentage shall be above the per21 centage in paragraph (1) and below the percentage in

22 paragraph (3) and shall be selected to promote a smooth

23 transition to the level in paragraph (3).

24 ‘‘(3) For calendar years 2010–2015, the required an25 nual percentage is 7.5 percent.
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1 ‘‘(c) SUBMISSION OF CREDITS.—A retail electric sup2 plier may satisfy the requirements of subsection (a)

3 through the submission of—

4 ‘‘(1) Renewable Energy Credits issued under

5 subsection (d) for renewable energy generated by the

6 retail electric supplier in the calendar year for which

7 Credits are being submitted or any previous calendar

8 year,

9 ‘‘(2) Renewable Energy Credits issued under

10 subsection (d) to any renewable energy generator for

11 renewable energy generated in the calendar year for

12 which Credits are being submitted or a previous cal13 endar year and acquired by the retail electric sup14 plier, or

15 ‘‘(3) any combination of Credits under para16 graphs (1) and (2).

17 ‘‘(d) ISSUANCE OF CREDIT.—(1) The Secretary shall

18 establish, not later than one year after the date of enact19 ment of this section, a program to issue, monitor the sale

20 or exchange of, and track Renewable Energy Credits.

21 ‘‘(2) Under the program, an entity that generates

22 electric energy through the use of a renewable energy re23 source may apply to the Secretary for the issuance of Re24 newable Energy Credits. The application shall indicate—
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1 ‘‘(A) the type of renewable energy resource used

2 to produce the electricity,

3 ‘‘(B) the State in which the electric energy was

4 produced, and

5 ‘‘(C) any other information the Secretary deter6 mines appropriate.

7 ‘‘(3)(A) Except as provided in paragraph (B), the

8 Secretary shall issue to an entity one Renewable Energy

9 Credit for each kilowatt-hour of electric energy the entity

10 generates through the use of a renewable energy resource

11 in any State in 2000 and any succeeding year.

12 ‘‘(B) The Secretary shall issue two Renewable En13 ergy Credits for each kilowatt-hour of electric energy gen14 erated through the use of a renewable energy resource in

15 any State in 2000 and any succeeding year, if the gener16 ating facility is located on Indian land. For purposes of

17 this paragraph, renewable energy generated by biomass

18 cofired with other fuels is eligible for two credits only if

19 the biomass was grown on the land eligible under this

20 paragraph.

21 ‘‘(C) To be eligible for a Renewable Energy Credit,

22 the unit of a electricity generated through the use of a

23 renewable energy resource may be sold or may be used

24 by the generator. If both a renewable energy resource and

25 a non-renewable energy resource are used to generate the
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1 electric energy, the Secretary shall issue credits based on

2 the proportion of the renewable energy resource used. The

3 Secretary shall identify Renewable Energy Credits by type

4 of generation and by the State in which the generating

5 facility is located.

6 ‘‘(4) In order to receive a Renewable Energy Credit,

7 the recipient of a Renewable Energy Credit shall pay a

8 fee, calculated by the Secretary, in an amount that is

9 equal to the administrative costs of issuing, recording,

10 monitoring the sale of exchange of, and tracking the Cred11 it or does not exceed five percent of the dollar value of

12 the Credit, whichever is lower. The Secretary shall retain

13 the fee and use it to pay these administrative costs.

14 ‘‘(5) When a generator sells electric energy generated

15 through the use of a renewable energy resource to a retail

16 electric supplier under a contract subject to section 210

17 of this Act, the retail electric supplier is treated as the

18 generator of the electric energy for the purposes of this

19 section for the duration of the contract.

20 ‘‘(6) The Secretary shall disqualify an otherwise eligi21 ble renewable energy generator from receiving a Renew22 able Energy Credit if the generator has elected to partici23 pate in net metering under section 612.

24 ‘‘(7) If a generator using a renewable energy resource

25 receives matching funds under section 610, the Secretary
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1 shall reduce the number of Renewable Energy Credits the

2 generator receives under paragraphs (3) so that the aggre3 gate value of those Credits plus the matching funds re4 ceived under section 610 equals the aggregate value of the

5 Credits the generator would have received absent this

6 paragraph. For purposes of this paragraph, the Secretary

7 shall value a Credit at a price that is representative of

8 the price of a Credit in private transactions. In no event

9 shall the Secretary use a price to establish values for pur10 poses of this paragraph that exceeds the cost cap estab11 lished under subsection (f).

12 ‘‘(e) SALE OR EXCHANGE.—A Renewable Energy

13 Credit may be sold or exchanged by the entity to whom

14 issued or by any other entity who acquires the Credit. A

15 Renewable Energy Credit for any year that is not used

16 to satisfy the minimum renewable generation requirement

17 of subsection (a) for that year may be carried forward for

18 use in another year.

19 ‘‘(f) RENEWABLE ENERGY CREDIT COST CAP.—Be20 ginning January 1, 2000, the Secretary shall offer Renew21 able Energy Credits for sale. The Secretary shall charge

22 1.5 cents for each Renewable Energy Credit sold during

23 calendar year 2000, and on January 1 of each following

24 year, the Secretary shall adjust for inflation, based on the

25 Consumer Price Index, the price charged per Credit for
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1 that calendar year. The Secretary shall deposit in the Pub2 lic Benefits Fund established under section 610 the

3 amount received from a sale under this subsection.

4 ‘‘(g) ENFORCEMENT.—The Secretary may bring an

5 action in the appropriate United States district court to

6 impose a civil penalty on a retail electric supplier that does

7 not comply with subsection (a). A retail electric supplier

8 who does not submit the required number of Renewable

9 Energy Credits under subsection (a) is subject to a civil

10 penalty of not more than three times the value of the Re11 newable Energy Credits not submitted. For purposes of

12 this subsection, the value of a Renewable Energy Credit

13 is the price of a Credit determined under subsection (f)

14 for the year the Credits were not submitted.

15 ‘‘(h) INFORMATION COLLECTION.—The Secretary

16 may collect the information necessary to verify and

17 audit—

18 ‘‘(1) the annual electric energy generation and

19 renewable energy generation of any entity applying

20 for Renewable Energy Credits under this section,

21 ‘‘(2) the validity of Renewable Energy Credits

22 submitted by a retail electric supplier to the Sec23 retary, and

24 ‘‘(3) the quantity of electricity sales of all retail

25 electric suppliers.
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1 ‘‘(i) SUNSET.—This section expires December 31,

2 2015.’’.

3 (b) DEFINITIONS.—Section 3 of PURPA is amended

4 by adding after paragraph (24) as added by section 101

5 of this Act the following new paragraph:

6 ‘‘(25) The term ‘retail electric supplier’ means

7 a person, State agency, or Federal agency that sells

8 electric energy to an electric consumer.

9 ‘‘(26) The term ‘Indian land’ means (A) any

10 land within the limits of any Indian reservation,

11 pueblo or rancheria, (B) any land not within the lim12 its of any Indian reservation, pueblo or rancheria

13 title to which was on the date of passage of the

14 Comprehensive Electricity Competition Act either

15 held in trust by the United States for the benefit of

16 any Indian tribe or individual or held by any Indian

17 tribe or individual subject to restriction by the

18 United States against alienation, (C) any dependent

19 Indian community, and (D) any land conveyed to

20 any Alaska Native corporation under the Alaska Na21 tive Claims Settlement Act.

22 ‘‘(27) The term ‘Indian tribe’ means any Indian

23 tribe, band, group, or nation, including Alaska Indi24 ans, Aleuts, or Eskimos, or any Alaskan Native Vil25 lage of the United States, which is considered an eli-
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1 gible recipient under the Indian Self Determination

2 and Education Assistance Act (Public Law 93–638)

3 or was considered an eligible recipient under chapter

4 67 of title 31, United States Code, prior to the re5 peal of such chapter.’’.

6 SEC. 403. NET METERING.

7 PURPA is amended by adding the following new sec8 tion after section 611 as added by section 402 of this Act:

9 ‘‘SEC. 612. NET METERING FOR RENEWABLE ENERGY.

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

11 ‘‘(1) The term ‘eligible on-site generating facil12 ity’ means a facility on the site of an electric con13 sumer with a peak generating capacity of 20 kilo14 watts or less that is fueled solely by a renewable en15 ergy resource.

16 ‘‘(2) The term ‘renewable energy resource’

17 means solar energy, wind, geothermal, or biomass.

18 ‘‘(3) The term ‘net metering service’ means

19 service to an electric consumer under which elec20 tricity generated by that consumer from an eligible

21 on-site generating facility and delivered to the dis22 tribution system through the same meter through

23 which purchased electricity is received may be used

24 to offset electricity provided by the retail electric

25 supplier to the electric consumer during the applica-
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1 ble billing period so that an electric consumer is

2 billed only for the net electricity consumed during

3 the billing period, but in no event shall the net be

4 less than zero during the applicable billing period.

5 ‘‘(b) REQUIREMENT TO PROVIDE NET METERING

6 SERVICE.—Each retail electric supplier shall make avail7 able upon request net metering service to any retail elec8 tric consumer whom the supplier currently serves or solic9 its for service.

10 ‘‘(c) STATE AUTHORITY.—This section does not pre11 clude a State from imposing additional requirements con12 sistent with the requirements in this section, including the

13 imposition of a cap limiting the amount of net metering

14 available in the State. Nothing in this Act or any other

15 Federal law preempts or otherwise affects authority under

16 State law to require a retail electric supplier to make avail17 able net metering service to a retail electric consumer

18 whom the supplier serves or offers to serve.’’.

19 SEC. 404. REFORM OF SECTION 210 OF PURPA.

20 Section 210 of PURPA is amended by adding the fol21 lowing new subsection after subsection (l):

22 ‘‘(m) REPEAL OF MANDATORY PURCHASE REQUIRE23 MENT.—After the date of enactment of the Comprehensive

24 Electricity Competition Act, an electric utility shall not be
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1 required to enter into a new contract or obligation to pur2 chase electric energy under this section.’’.

3 SEC. 405. INTERCONNECTIONS FOR CERTAIN FACILITIES.

4 PURPA is amended by adding the following new sec5 tion after section 612 as added by section 403 of this Act:

6 ‘‘SEC. 613. INTERCONNECTIONS FOR CERTAIN FACILITIES.

7 ‘‘(a) DEFINITION.—As used in this section ‘facility’

8 means—

9 ‘‘(1) a small-scale electric power generation fa10 cility that is designed to serve customers at or near

11 the facility, or

12 ‘‘(2) a facility using a single fuel source to

13 produce at the point of use either electric or me14 chanical power and thermal energy.

15 ‘‘(b) INTERCONNECTION.—A distribution utility shall

16 allow a facility to interconnect with the distribution utility

17 if the facility owner is located in the distribution utility’s

18 service territory and complies with the final rule issued

19 under subsection (c).

20 ‘‘(c) Within one year from the date of enactment of

21 this section, the Secretary shall issue a final rule to imple22 ment subsection (b) and issue related safety and power

23 quality standards. To the extent feasible, the Secretary

24 shall develop the standards through a process involving in25 terested parties.
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1 ‘‘(d) The Commission shall enforce the rule estab2 lished under subsection (c) using its authority under this

3 Act.’’.

4 SEC. 406. RURAL AND REMOTE COMMUNITIES ELEC5 TRIFICATION GRANTS.

6 Section 313 of the Rural Electrification Act of 1936

7 (7 U.S.C. 940c) is amended by adding after subsection

8 (b) the following new subsections:

9 ‘‘(c) RURAL AND REMOTE COMMUNITIES ELEC10 TRIFICATION GRANTS.—The Secretary, in consultation

11 with the Secretary of Energy and the Secretary of the In12 terior, may provide grants to eligible borrowers under this

13 Act for the purpose of increasing energy efficiency, low14 ering, or stabilizing electric rates to end users, or pro15 viding or modernizing electric facilities for:

16 ‘‘(1) a unit of local government of a State or

17 territory, or

18 ‘‘(2) an Indian tribe

19 that has an average cost per kilowatt hour of electricity

20 that is at least 150 percent of the average retail price per

21 kilowatt hour for all consumers in the United States, as

22 determined by the Secretary using data provided by the

23 Department of Energy. The Secretary shall issue the

24 grants based on a determination of cost-effectiveness and
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1 most effective use of the funds to achieve the stated pur2 poses of this section.

3 ‘‘(d) DEFINITION.—For purposes of this section, the

4 term ‘Indian tribe’ means any Indian tribe, band, group,

5 or nation, including Alaska Indians, Aleuts, or Eskimos,

6 or any Alaskan Native Village of the United States, which

7 is considered an eligible recipient under the Indian Self

8 Determination and Education Assistance Act (Public Law

9 93–638) or was considered an eligible recipient under

10 chapter 67 of title 31, United States Code, prior to the

11 repeal of such chapter.

12 ‘‘(e) AUTHORIZATION.—There is authorized to be ap13 propriated for purposes of subsection (c) $20,000,000 for

14 each of the seven fiscal years following enactment of this

15 section.’’.

16 SEC. 407. INDIAN TRIBE ASSISTANCE.

17 Title XXVI of the Energy Policy Act of 1992 (25

18 U.S.C. 3501–3506) is amended by adding after section

19 2606 the following new section:

20 ‘‘SEC. 2607. TRIBAL ELECTRICITY ASSISTANCE.

21 ‘‘(a) The Secretary of Energy, in consultation with

22 the Secretary of the Interior and the Secretary of Agri23 culture, shall establish a program to assist an Indian tribe

24 to meet its electricity needs. Under the program, the Sec-
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1 retary shall provide, subject to appropriations, to an In2 dian tribe—

3 ‘‘(1) technical assistance and grants to analyze

4 tribal electricity needs, the availability of natural re5 sources for tribal generation of electricity, the oppor6 tunities for the improvement of transmission of elec7 tricity to the tribe, and the effect on the tribe of re8 tail competition in the sale or transmission of elec9 tricity, and

10 ‘‘(2) in an area that is not served or served in11 adequately by an electric utility, as defined in sec12 tion 3(4) of the Public Utility Regulatory Policies

13 Act of 1978, or distribution utility, as defined in sec14 tion 3(23) of the Public Utility Regulatory Policies

15 Act of 1978, grants to plan and construct or im16 prove facilities to generate, transmit, and distribute

17 electricity to serve tribal needs.

18 In exercising authority under this section, the Secretary

19 shall take into account the ability of entities with loans

20 made or guaranteed under the Rural Electrification Act

21 of 1936 to repay those loans. The Secretary shall issue

22 the grants based on a determination of cost-effectiveness

23 and most effective use of funds to achieve the stated pur24 poses of this section.
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1 ‘‘(b) DEFINITION.—For purposes of this section, the

2 term ‘Indian tribe’ means any Indian tribe, band, group,

3 or nation, including Alaska Indians, Aleuts, or Eskimos,

4 or any Alaskan Native Village of the United States, which

5 is considered an eligible recipient under the Indian Self

6 Determination and Education Assistance Act (Public Law

7 93–638) or was considered an eligible recipient under

8 chapter 67 of title 31, United States Code, prior to the

9 repeal of such chapter.

10 ‘‘(c) There are authorized to be appropriated to the

11 Department of Energy for each of the seven fiscal years

12 following enactment of this section, $5,000,000 to carry

13 out subsection (a)(1), and $15,000,000 to carry out sub14 section (a)(2).’’.

15 SEC. 408. OFFICE OF INDIAN ENERGY POLICY AND PRO16 GRAMS.

17 Title II of the Department of Energy Organization

18 Act is amended by adding the following new section after

19 section 212:

20 ‘‘SEC. 213. OFFICE OF INDIAN ENERGY POLICY AND PRO21 GRAMS.

22 ‘‘(a) The Secretary may establish within the Depart23 ment an Office of Indian Energy Policy and Programs.

24 The Office shall be headed by a Director appointed by the

25 Secretary.
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1 ‘‘(b) Subject to the supervision of the Secretary, the

2 Office is authorized to establish a program to provide, di3 rect, foster, coordinate and implement energy, energy

4 management, and energy conservation programs to—

5 ‘‘(1) promote tribal energy efficiency;

6 ‘‘(2) modernize tribal electric infrastructure;

7 ‘‘(3) preserve tribal sovereignty and self deter8 mination related to energy matters;

9 ‘‘(4) lower or stabilize energy costs; and

10 ‘‘(5) electrify tribal members’ homes.

11 ‘‘(c) There are authorized to be appropriated such

12 sums as may be necessary to implement this section.’’.

13 SEC. 409. SOUTHEAST ALASKA ELECTRICAL POWER.

14 There are authorized to be appropriated to the De15 partment of Energy up to a total sum of $20,000,000 for

16 the purpose of providing financial assistance to the State

17 of Alaska as necessary to ensure the availability of ade18 quate electrical power to the greater Ketchikan area in

19 southeast Alaska, including the construction of an intertie.
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1 TITLE V—REGULATION OF

2 MERGERS AND CORPORATE

3 STRUCTURE

4 SEC. 501. REFORM OF HOLDING COMPANY REGULATION

5 UNDER PUHCA.

6 Effective 18 months after the enactment of this Act,

7 the Public Utility Holding Company Act of 1935 is re8 pealed and the following is enacted in its place:

9 ‘‘SECTION 1. SHORT TITLE.

10 ‘‘This Act may be cited as the ‘Public Utility Holding

11 Company Act of 1999’.

12 ‘‘SEC. 2. DEFINITIONS.

13 ‘‘For purposes of this Act—

14 ‘‘(1) the term ‘affiliate’ of a company means

15 any company 5 percent or more of the outstanding

16 voting securities of which are owned, controlled, or

17 held with power to vote, directly or indirectly, by

18 such company;

19 ‘‘(2) the term ‘associate company’ of a company

20 means any company in the same holding company

21 system with such company;

22 ‘‘(3) the term ‘Commission’ means the Federal

23 Energy Regulatory Commission;

24 ‘‘(4) the term ‘company’ means a corporation,

25 partnership, association, joint stock company, busi-
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1 ness trust, or any organized group of persons,

2 whether incorporated or not, or a receiver, trustee,

3 or other liquidating agent of any of the foregoing;

4 ‘‘(5) the term ‘electric utility company’ means

5 any company that owns or operates facilities used

6 for the generation, transmission, or distribution of

7 electric energy for sale;

8 ‘‘(6) the terms ‘exempt wholesale generator’

9 and ‘foreign utility company’ have the same mean10 ings as in sections 32 and 33, respectively, of the

11 Public Utility Holding Company Act of 1935, as

12 those sections existed on the day before the effective

13 date of this Act;

14 ‘‘(7) the term ‘gas utility company’ means any

15 company that owns or operates facilities used for

16 distribution at retail (other than the distribution

17 only in enclosed portable containers, or distribution

18 to tenants or employees of the company operating

19 such facilities for their own use and not for resale)

20 of natural or manufactured gas for heat, light, or

21 power;

22 ‘‘(8) the term ‘holding company’ means—

23 ‘‘(A) any company that directly or indi24 rectly owns, controls, or holds, with power to

25 vote, 10 percent or more of the outstanding vot-
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1 ing securities of a public utility company or of

2 a holding company of any public utility com3 pany; and

4 ‘‘(B) any person, determined by the Com5 mission, after notice and opportunity for hear6 ing, to exercise directly or indirectly (either

7 alone or pursuant to an arrangement or under8 standing with one or more persons) such a con9 trolling influence over the management or poli10 cies of any public utility company or holding

11 company as to make it necessary or appropriate

12 for the rate protection of utility customers with

13 respect to rates that such person be subject to

14 the obligations, duties, and liabilities imposed

15 by this Act upon holding companies;

16 ‘‘(9) the term ‘holding company system’ means

17 a holding company, together with its subsidiary com18 panies;

19 ‘‘(10) the term ‘jurisdictional rates’ means

20 rates established by the Commission for the trans21 mission of electric energy, the sale of electric energy

22 at wholesale in interstate commerce, the transpor23 tation of natural gas, and the sale in interstate com24 merce of natural gas for resale for ultimate public
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1 consumption for domestic, commercial, industrial, or

2 any other use;

3 ‘‘(11) the term ‘natural gas company’ means a

4 person engaged in the transportation of natural gas

5 in interstate commerce or the sale of such gas in

6 interstate commerce for resale;

7 ‘‘(12) the term ‘person’ means an individual or

8 company;

9 ‘‘(13) the term ‘public utility’ means any person

10 who owns or operates facilities used for transmission

11 of electric energy or sales of electric energy at whole12 sale in interstate commerce;

13 ‘‘(14) the term ‘public utility company’ means

14 an electric utility company or a gas utility company;

15 ‘‘(15) the term ‘State commission’ means any

16 commission, board, agency, or officer, by whatever

17 name designated, of a State, municipality, or other

18 political subdivision of a State that, under the laws

19 of such State, has jurisdiction to regulate public util20 ity companies;

21 ‘‘(16) the term ‘subsidiary company’ of a hold22 ing company means—

23 ‘‘(A) any company, 10 percent or more of

24 the outstanding voting securities of which are

25 directly or indirectly owned, controlled, or held
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1 with power to vote, by such holding company;

2 and

3 ‘‘(B) any person, the management or poli4 cies of which the Commission, after notice and

5 opportunity for hearing, determines to be sub6 ject to a controlling influence, directly or indi7 rectly, by such holding company (either alone or

8 pursuant to an arrangement or understanding

9 with one or more other persons) so as to make

10 it necessary for the rate protection of utility

11 customers with respect to rates that such per12 son be subject to the obligations, duties, and li13 abilities imposed by this Act upon subsidiary

14 companies of holding companies; and

15 ‘‘(17) the term ‘voting security’ means any se16 curity presently entitling the owner or holder thereof

17 to vote in the direction or management of the affairs

18 of a company.

19 ‘‘SEC. 3. FEDERAL ACCESS TO BOOKS AND RECORDS.

20 ‘‘(a) IN GENERAL.—Each holding company and each

21 associate company thereof shall maintain, and shall make

22 available to the Commission, such books, accounts,

23 records, memoranda, and other records as the Commission

24 deems to be relevant to costs incurred by a public utility

25 or natural gas company that is an associate company of
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1 such holding company and necessary or appropriate for

2 the protection of utility customers with respect to jurisdic3 tional rates for the transmission of electric energy, the sale

4 of electric energy at wholesale in interstate commerce, the

5 transportation of natural gas in interstate commerce, and

6 the sale in interstate commerce of natural gas for resale

7 for ultimate public consumption for domestic, commercial,

8 industrial, or any other use.

9 ‘‘(b) AFFILIATE COMPANIES.—Each affiliate of a

10 holding company or of any subsidiary company of a hold11 ing company shall maintain, and make available to the

12 Commission, such books, accounts, memoranda, and other

13 records with respect to any transaction with another affil14 iate, as the Commission deems relevant to costs incurred

15 by a public utility or natural gas company that is an asso16 ciate company of such holding company and necessary or

17 appropriate for the protection of utility customers with re18 spect to jurisdictional rates.

19 ‘‘(c) HOLDING COMPANY SYSTEMS.—The Commis20 sion may examine the books, accounts, memoranda, and

21 other records of any company in a holding company sys22 tem, or any affiliate thereof, as the Commission deems rel23 evant to costs incurred by a public utility or natural gas

24 company within such holding company system and nec-
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1 essary or appropriate for the protection of utility cus2 tomers with respect to jurisdictional rates.

3 ‘‘(d) CONFIDENTIALITY.—No member, officer, or em4 ployee of the Commission shall divulge any fact or infor5 mation that may come to his or her knowledge during the

6 course of examination of books, accounts, memoranda, or

7 other records as provided in this section, except as may

8 be directed by the Commission or by a court of competent

9 jurisdiction.

10 ‘‘SEC. 4. STATE ACCESS TO BOOKS AND RECORDS.

11 ‘‘(a) IN GENERAL.—Upon the written request of a

12 State commission having jurisdiction to regulate a public

13 utility company in a holding company system, the holding

14 company or any associate company or affiliate thereof,

15 other than such public utility company, wherever located,

16 shall produce for inspection such books, accounts, memo17 randa, and other records that—

18 ‘‘(1) have been identified in reasonable detail in

19 a proceeding before the State commission;

20 ‘‘(2) the State commission deems are relevant

21 to costs incurred by such public utility company; and

22 ‘‘(3) are necessary for the effective discharge of

23 the responsibilities of the State commission with re24 spect to such proceeding.
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1 ‘‘(b) LIMITATION.—Subsection (a) does not apply to

2 any person that is a holding company solely by reason of

3 ownership of one or more qualifying facilities under the

4 Public Utility Regulatory Policies Act of 1978.

5 ‘‘(c) CONFIDENTIALITY OF INFORMATION.—The pro6 duction of books, accounts, memoranda, and other records

7 under subsection (a) shall be subject to such terms and

8 conditions as may be necessary and appropriate to safe9 guard against unwarranted disclosure to the public of any

10 trade secrets or sensitive commercial information.

11 ‘‘(d) EFFECT ON STATE LAW.—Nothing in this sec12 tion shall preempt applicable State law concerning the pro13 vision of books, records, or any other information, or in

14 any way limit the rights of any State to obtain books,

15 records, or any other information under any other Federal

16 law, contract, or otherwise.

17 ‘‘(e) COURT JURISDICTION.—Any United States dis18 trict court located in the State in which the State commis19 sion referred to in subsection (a) is located shall have ju20 risdiction to enforce compliance with this section.

21 ‘‘SEC. 5. EXEMPTION AUTHORITY.

22 ‘‘(a) RULEMAKING.—Not later than 90 days after the

23 effective date of this Act, the Commission shall promul24 gate a final rule to exempt from the requirements of sec-
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1 tion 3 any person that is a holding company, solely with

2 respect to one or more—

3 ‘‘(1) qualifying facilities under the Public Util4 ity Regulatory Policies Act of 1978;

5 ‘‘(2) exempt wholesale generators; or

6 ‘‘(3) foreign utility companies.

7 ‘‘(b) OTHER AUTHORITY.—If, upon application or

8 upon its own motion, the Commission finds that the books,

9 records, accounts, memoranda, and other records of any

10 person are not relevant to the jurisdictional rates of a pub11 lic utility or natural gas company, or if the Commission

12 finds that any class of transactions is not relevant to the

13 jurisdictional rates of a public utility or natural gas com14 pany, the Commission shall exempt such person or trans15 action from the requirements of section 3.

16 ‘‘SEC. 6. AFFILIATE TRANSACTIONS.

17 ‘‘Nothing in this Act shall preclude the Commission

18 or a State commission from exercising its jurisdiction

19 under otherwise applicable law to determine whether a

20 public utility company, public utility, or natural gas com21 pany may recover in rates any costs of an activity per22 formed by an associate company, or any costs of goods

23 or services acquired by such public utility company from

24 an associate company.
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1 ‘‘SEC. 7. APPLICABILITY.

2 ‘‘No provision of this Act shall apply to, or be deemed

3 to include—

4 ‘‘(1) the United States;

5 ‘‘(2) a State or any political subdivision of a

6 State;

7 ‘‘(3) any foreign governmental authority not op8 erating in the United States;

9 ‘‘(4) any agency, authority, or instrumentality

10 of any entity referred to in paragraph (1), (2), or

11 (3); or

12 ‘‘(5) any officer, agent, or employee of any enti13 ty referred to in paragraph (1), (2), or (3) acting as

14 such in the course of official duty.

15 ‘‘SEC. 8. EFFECT ON OTHER REGULATIONS.

16 ‘‘Nothing in this Act precludes the Commission or a

17 State commission from exercising its jurisdiction under

18 otherwise applicable law to protect utility customers.

19 ‘‘SEC. 9. ENFORCEMENT.

20 ‘‘The Commission shall have the same powers as set

21 forth in sections 306 through 317 of the Federal Power

22 Act (16 U.S.C. 825d–825p) to enforce the provisions of

23 this Act.

24 ‘‘SEC. 10. SAVINGS PROVISIONS.

25 ‘‘(a) IN GENERAL.—Nothing in this Act prohibits a

26 person from engaging in or continuing to engage in activi-
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1 ties or transactions in which it is legally engaged or au2 thorized to engage on the effective date of this Act.

3 ‘‘(b) EFFECT ON OTHER COMMISSION AUTHORITY.—

4 Nothing in this Act limits the authority of the Commission

5 under the Federal Power Act (16 U.S.C. 791a et seq.)

6 (including section 301 of that Act) or the Natural Gas

7 Act (15 U.S.C. 717 et seq.) (including section 8 of that

8 Act).

9 ‘‘SEC. 11. IMPLEMENTATION.

10 ‘‘Not later than 18 months after the date of enact11 ment of the Comprehensive Electricity Competition Act,

12 the Commission shall—

13 ‘‘(1) promulgate such regulations as may be

14 necessary or appropriate to implement this Act

15 (other than section 4); and

16 ‘‘(2) submit to the Congress detailed rec17 ommendations on technical and conforming amend18 ments to Federal law necessary to carry out this Act

19 and the amendments made by this Act.

20 ‘‘SEC. 12. TRANSFER OF RESOURCES.

21 ‘‘All books and records that relate primarily to the

22 functions transferred to the Commission under this Act

23 shall be transferred from the Securities and Exchange

24 Commission to the Commission.
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1 ‘‘SEC. 13. AUTHORIZATION OF APPROPRIATIONS.

2 ‘‘There are authorized to be appropriated such funds

3 as may be necessary to carry out this Act.

4 ‘‘SEC. 14. CONFORMING AMENDMENT TO THE FEDERAL

5 POWER ACT.

6 ‘‘Section 318 of the Federal Power Act (16 U.S.C.

7 825q) is repealed.’’.

8 SEC. 502. ELECTRIC COMPANY MERGERS.

9 Section 203(c) of the FPA is amended by—

10 (1) striking ‘‘public utility’’ each time it ap11 pears and inserting in its place ‘‘person or electric

12 utility company’’;

13 (2) inserting after the first sentence the fol14 lowing: ‘‘Except as the Commission otherwise pro15 vides, a holding company in a holding company sys16 tem that includes an electric utility company shall

17 not, directly or indirectly, purchase, acquire, or take

18 any security of an electric utility company or of a

19 holding company in a holding company system that

20 includes an electric utility company, with first secur21 ing an order of the Commission authorizing it to do

22 so.’’;

23 (3) striking ‘‘hearing’’ in the last sentence and

24 inserting ‘‘oral or written presentation of views’’;

25 (4) adding after ‘‘public interest’’ the following:

26 ‘‘including consideration of the effects on competi-
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1 tion in wholesale and retail electricity markets,’’;

2 and

3 (5) adding at the end the following: ‘‘For pur4 poses of this subsection, the terms ‘electric utility

5 company’, ‘holding company’, and ‘holding company

6 system’ have the meaning given them in the Public

7 Utility Holding Company Act of 1999.

8 Notwithstanding section 201(b)(1), generation facilities

9 are subject to the jurisdiction of the Commission for pur10 poses of this section, except as the Commission otherwise

11 may provide, provided that an entity that has existing

12 loans made or guaranteed under the Rural Electrification

13 Act of 1936 (5 U.S.C. 901 et seq.) is not jurisdictional

14 for purposes of this section.’’.

15 SEC. 503. REMEDIAL MEASURES FOR MARKET POWER.

16 The FPA is amended by adding the following new

17 section after section 216 as added by section 303 of this

18 Act:

19 ‘‘REMEDIAL MEASURES FOR MARKET POWER

20 ‘‘SEC. 217. (a) DEFINITIONS.—As used in this

21 section—

22 ‘‘(1) ‘market power’ means the ability of a pub23 lic utility or electric utility profitably to maintain

24 prices above competitive levels for a significant pe25 riod of time, and
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1 ‘‘(2) ‘notice of retail competition’ has the mean2 ing provided under section 3(22) of the Public Util3 ity Regulatory Policies Act of 1978.

4 ‘‘(b) COMMISSION JURISDICTIONAL SALES.—(1) If

5 the Commission determines that there are markets in

6 which a public utility that owns or controls generation fa7 cilities has market power in sales of electric energy for

8 resale in interstate commerce, the Commission shall order

9 that utility to submit a plan for taking necessary actions

10 to remedy its market power, which may include, but is

11 not limited to, conditions respecting operation or dispatch

12 of generation, independent operation of transmission fa13 cilities, or divestiture of ownership of one or more genera14 tion facilities.

15 ‘‘(2) in consultation with the Attorney General and

16 the Federal Trade Commission, the Commission shall re17 view the plan to determine if its implementation would

18 adequately mitigate the adverse competitive effects of

19 market power. The Commission may approve the plan

20 with or without modification. The plan takes effect upon

21 approval by the Commission. Notwithstanding any State

22 law, regulation, or order to the contrary and notwith23 standing any other provision of this Act or any other law,

24 the Commission has jurisdiction to order divestiture or
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1 other transfer of control of generation assets pursuant to

2 the plan.

3 ‘‘(c) STATE JURISDICTIONAL SALES.—(1) If a State

4 commission that has filed a notice of retail competition

5 has reason to believe that an electric utility doing business

6 in the State has market power, the State commission may

7 apply for an order under this section.

8 ‘‘(2) If, after receipt of such an application and after

9 notice and opportunity for a hearing, the Commission de10 termines that the electric utility has market power in the

11 sales of electric energy sold at retail in the State, this mar12 ket power would adversely affect competition in the State,

13 and the State commission lacks authority to effectively

14 remedy such market power, the Commission may order the

15 electric utility to submit a plan for taking necessary ac16 tions to remedy the electric utility’s market power. These

17 actions may include conditions respecting operation or dis18 patch of generation, competitive procurement of all gen19 eration capacity or energy, independent operation of trans20 mission facilities, or divestiture of ownership of one or

21 more generation facilities of the electric utility.

22 ‘‘(3) After consultation with the Attorney General

23 and the Federal Trade Commission, the Commission may

24 approve the plan with or without modification. The plan

25 shall take effect upon approval by the Commission.
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1 ‘‘(4) Notwithstanding any State law, regulation, or

2 order to the contrary and notwithstanding any other provi3 sion of this Act or any other law, the Commission has ju4 risdiction to order divestiture or other transfer of control

5 of generation assets pursuant to the plan.’’.

6 TITLE VI—ELECTRIC

7 RELIABILITY

8 SEC. 601. ELECTRIC RELIABILITY ORGANIZATION AND

9 OVERSIGHT.

10 (a) ELECTRIC RELIABILITY ORGANIZATION AND

11 OVERSIGHT.—The Federal Power Act is amended by add12 ing the following new section after section 217:

13 ‘‘ELECTRIC RELIABILITY ORGANIZATION AND OVERSIGHT

14 ‘‘SEC. 218. (a) PURPOSE.—The purpose of this sec15 tion is to provide for the establishment and enforcement

16 of mandatory reliability standards in order to ensure the

17 reliable operation of the bulk-power system.

18 ‘‘(b) DEFINITIONS.—As used in this section:

19 ‘‘(1) The term ‘Affiliated Regional Reliability

20 Entity’ means an entity delegated authority under

21 the provisions of subsection (i).

22 ‘‘(2) The term ‘Bulk-Power System’ means all

23 facilities and control systems necessary for operating

24 an interconnected transmission grid (or any portion

25 thereof), including high-voltage transmission lines,

26 substations, control centers, communications, data,
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1 and operations planning facilities, and the output of

2 generating units necessary to maintain transmission

3 system reliability.

4 ‘‘(3) The term ‘Electric Reliability Organiza5 tion’ or ‘Organization’ means the organization ap6 proved by the Commission under subsection (e)(4).

7 ‘‘(4) The term ‘Entity Rule’ means a rule

8 adopted by an Affiliated Regional Reliability Entity

9 for a specific region and designed to implement or

10 enforce one or more Organization Standards. An

11 Entity Rule shall be subject to approval by the Or12 ganization, and once approved, shall be treated as

13 an Organization Standard.

14 ‘‘(5) The term ‘Industry Sector’ means a group

15 of Users of the Bulk Power System with substan16 tially similar commercial interests, as determined by

17 the board of the Electric Reliability Organization.

18 ‘‘(6) The term ‘Interconnection’ means a geo19 graphic area in which the operation of Bulk-Power

20 System components is synchronized such that the

21 failure of one or more of such components may ad22 versely affect the ability of the operators of other

23 components within the Interconnection to maintain

24 safe and reliable operation of the facilities within

25 their control.
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1 ‘‘(7) The term ‘Organization Standard’ means a

2 policy or standard duly adopted by the Electric Reli3 ability Organization to provide for the reliable oper4 ation of a Bulk-Power System.

5 ‘‘(8) The term ‘Public Interest Group’ means

6 any non-profit private or public organization that

7 has an interest in the activities of the Electric Reli8 ability Organization, including, but not limited to,

9 ratepayer advocates, environmental groups, and

10 State and local government organizations that regu11 late market participants and promulgate government

12 policy.

13 ‘‘(9) The term ‘Variance’ means an exception or

14 variance from the requirements of an Organization

15 Standard (including a proposal for an Organization

16 standard where there is no Organization Standard)

17 that is adopted by an Affiliated Regional Reliability

18 Entity and applicable to all or a part of the region

19 for which the Affiliated Regional Reliability Entity is

20 responsible. A Variance shall be subject to approval

21 by the Organization, and once approved, shall be

22 treated as an Organization Standard.

23 ‘‘(10) The term ‘System Operator’ means any

24 entity that operates or is responsible for the oper25 ation of a Bulk-Power System, including but not
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1 limited to a control area operator, an independent

2 system operator, a transmission company, a trans3 mission system operator, or a regional security coor4 dinator.

5 ‘‘(11) The term ‘User of the Bulk-Power Sys6 tem’ means any entity that sells, purchases, or

7 transmits electric power over a Bulk-Power System,

8 or that owns, operates or maintains facilities or con9 trol systems that are part of a Bulk-Power System,

10 or that is a System Operator.

11 ‘‘(c) COMMISSION AUTHORITY.—Notwithstanding

12 any other provision of the Federal Power Act, within the

13 United States the Commission has jurisdiction over the

14 Electric Reliability Organization, all Affiliated Regional

15 Reliability Entities, all System Operators, and all Users

16 of the Bulk-Power System, for purposes of approving and

17 enforcing compliance with the requirements of this section.

18 ‘‘(d) EXISTING RELIABILITY STANDARDS.—Fol19 lowing enactment of this section, and prior to the approval

20 of an Organization under subsection (e), any person, in21 cluding the North American Electric Reliability Council

22 and its member Regional Reliability Councils, may file

23 with the Commission any reliability standard, guidance,

24 or practice, or any amendment thereto, that the person

25 would propose to be made mandatory and enforceable. The
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1 Commission, after allowing interested persons an oppor2 tunity to submit comments, may approve the proposed

3 mandatory standard, guidance, or practice, or any amend4 ment thereto, if it finds that the standard, guidance, or

5 practice, or amendment is just, reasonable, not unduly dis6 criminatory or preferential, and in the public interest.

7 Filed standards, guidance, or practices, including any

8 amendments thereto, shall be mandatory and applicable

9 according to their terms following approval by the Com10 mission and shall remain in effect until—

11 ‘‘(1) withdrawn, disapproval or superseded by

12 an Organization Standard, issued or approved by the

13 Electric Reliability Organization and made effective

14 by the Commission under section (f); or

15 ‘‘(2) disapproved or suspended by the Commis16 sion if, upon complaint or upon its own motion and

17 after notice and an opportunity for comment, the

18 Commission finds the standard, guidance, or prac19 tice unjust, unreasonable, unduly discriminatory or

20 preferential, or not in the public interest.

21 Standards, guidance, or practices in effect pursuant to the

22 provisions of this subsection shall be enforceable by the

23 Commission under Part III of this Act.

24 ‘‘(e) ORGANIZATION APPROVAL.—(1) Not later than

25 90 days after the date of enactment of this section, the
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1 Commission shall issue proposed rules specifying proce2 dures and requirements for an entity to apply for approval

3 as the Electric Reliability Organization. The Commission

4 shall provide notice and opportunity for comment on the

5 proposed rules. The Commission shall issue a final rule

6 under this subsection within 180 days after the date of

7 enactment of this section.

8 ‘‘(2) Following the issuance of a final Commission

9 rule under paragraph (1), an entity may submit an appli10 cation to the Commission for approval as the Electric Reli11 ability Organization. The applicant shall specify in its ap12 plication its governance and procedures, as well as its

13 funding mechanism and initial funding requirements.

14 ‘‘(3) The Commission shall provide public notice of

15 the application and afford interested parties an oppor16 tunity to comment.

17 ‘‘(4) The Commission shall approve the application

18 if the Commission determines that the applicant—

19 ‘‘(A) has the ability to develop, implement, and

20 enforce standards that provide for an adequate level

21 of reliability of the Bulk-Power System;

22 ‘‘(B) permits voluntary membership to any

23 User of the Bulk-Power System or Public Interest

24 Group;
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1 ‘‘(C) assures fair representation of its members

2 in the selection of its directors and fair management

3 of its affairs, taking into account the need for effi4 ciency and effectiveness in decisionmaking and oper5 ation and requirements for technical competency in

6 the development of Organization Standards and the

7 exercise of oversight of Bulk-Power System reli8 ability;

9 ‘‘(D) assures that no two Industry Sectors have

10 the ability to control, and no one Industry Sector

11 has the ability to veto, the Electric Reliability Orga12 nization’s discharge of its responsibilities (including

13 actions by committees recommending standards to

14 the board or other board actions to implement and

15 enforce standards);

16 ‘‘(E) provides for governance by a board of no

17 more than eleven members, one of whom shall be ap18 pointed by the Secretary of Energy;

19 ‘‘(F) provides a funding mechanism and re20 quirements that are just, reasonable, and not unduly

21 discriminatory or preferential and are in the public

22 interest, and which satisfies the requirements of sub23 section (n);

24 ‘‘(G) establishes procedures for development of

25 Organization Standards that provide reasonable no-
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1 tice and opportunity for public comment, taking into

2 account the need for efficiency and effectiveness in

3 decisionmaking and operations and the requirements

4 for technical competency in the development of Or5 ganization Standards, and which standards develop6 ment process has the following attributes: (i) open7 ness, (ii) balance of interests, and (iii) due process,

8 except that the procedures may include alternative

9 procedures for emergencies;

10 ‘‘(H) establishes fair and impartial procedures

11 for implementation and enforcement of Organization

12 Standards, either directly or through delegation to

13 an Affiliated Regional Reliability Entity, including

14 the imposition of penalties, limitations on activities,

15 functions, or operations, or other appropriate sanc16 tions;

17 ‘‘(I) establishes procedures for notice and op18 portunity for public observation of all meetings, ex19 cept that the procedures for public observation may

20 include alternative procedures for emergencies or for

21 the discussion of information the directors determine

22 should take place in closed session, such as litiga23 tion, personnel actions, or commercially sensitive in24 formation;
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1 ‘‘(J) provides for the consideration of rec2 ommendations of States and State commissions; and

3 ‘‘(K) addresses other matters that the Commis4 sion may deem necessary or appropriate to ensure

5 that the procedures, governances, and funding of the

6 Electric Reliability Organization are just, reason7 able, not unduly discriminatory or preferential, and

8 are in the public interest.

9 ‘‘(5) The Commission shall approve only one Electric

10 Reliability Organization. If the Commission receives two

11 or more timely applications that satisfy the requirements

12 of this subsection, the Commission shall approve only the

13 application it concludes will best implement the provisions

14 of this section.

15 ‘‘(f) ESTABLISHMENT OF AND MODIFICATIONS OF

16 ORGANIZATION STANDARDS.—(1) The Electric Reliability

17 Organization shall file with the Commission any new or

18 modified Organization Standards, including any Variances

19 or Entity Rules, and the Commission shall follow the pro20 cedures under paragraph (2) for review of that filing. Sub21 missions shall include:

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

23 proposal, and

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

25 with respect to the proposal.
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1 ‘‘(2) The Commission shall provide notice of the filing

2 of the proposal and afford interested persons a reasonable

3 time, but not more than 30 days, to submit comments.

4 The Commission, after taking into consideration any sub5 mitted comments, shall approve or disapprove the proposal

6 not later than 60 days after the deadline for the submis7 sion of comments except that—

8 ‘‘(A) the Commission may extend the 60-day

9 period for an additional 90 days for good cause, and

10 ‘‘(B) if the Commission does not act to approve

11 or disapprove a proposal within the periods set forth

12 in this paragraph, the proposal shall go into effect,

13 without prejudice to the authority of the Commission

14 thereafter to suspend or modify the proposal in ac15 cordance with the standards and requirements of

16 this section.

17 Proposals approved by the Commission take effect accord18 ing to their terms but not earlier than 30 days after the

19 effective date of the Commission’s order, except as pro20 vided in paragraph (3).

21 ‘‘(3)(A) In the exercise of its review responsibilities

22 under this subsection, the Commission shall give due

23 weight to the technical expertise of the Electric Reliability

24 Organization with respect to the content of a new or modi25 fied Organization Standard, but shall not defer to the Or-
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1 ganization with respect to the effect of the standard on

2 competition. The Commission shall approve a proposed

3 new or modified Organization Standard if it determines

4 the proposal to be just, reasonable, not unduly discrimina5 tory or preferential, and in the public interest.

6 ‘‘(B) The Commission, either upon complaint or upon

7 its own motion, shall suspend an existing Organization

8 Standard, if it determines the standard to be unjust, un9 reasonable, unduly discriminatory or preferential, or not

10 in the public interest.

11 ‘‘(C) An existing or proposed Organization Standard

12 which is disapproved or suspended in whole or in part by

13 the Commission shall be remanded to the Electric Reli14 ability Organization for further consideration.

15 ‘‘(D) 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 a new or modified Organization Standard necessary

21 or appropriate to further the purposes of this section. The

22 Electric Reliability Organization shall file any new or

23 modified Organization Standard in accordance with this

24 subsection.
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1 ‘‘(E) An Affiliated Regional Reliability Entity may

2 propose a Variance or Entity Rule to the Electric Reli3 ability Organization under subsection (i)(3). The Affili4 ated Regional Reliability Entity may request that the

5 Electric Reliability Organization expedite consideration of

6 the proposal, and may file a notice of this request with

7 the Commission, if expedited consideration is necessary to

8 provide for Bulk-Power System reliability. If the Electric

9 Reliability Organization fails to adopt the Variance or En10 tity Rule, either in whole or in part, the Affiliated Re11 gional Reliability Entity may request that the Commission

12 review such action. If the Commission determines, after

13 its review of such a request, that the action of the Electric

14 Reliability Organization did not conform to the applicable

15 standards and procedures approved by the Commission,

16 or if the Commission determines that the Variance or En17 tity Rule is just, reasonable, not unduly discriminatory or

18 preferential, and in the public interest, and that the Elec19 tric Reliability Organization has unreasonably rejected the

20 proposed Variance or Entity Rule, the Commission may

21 remand the proposed Variance or Entity Rule for further

22 consideration by the Electric Reliability Organization or

23 may direct the Electric Reliability Organization or the Af24 filiated Regional Reliability Entity to develop a Variance

25 or Entity Rule consistent with that requested by the Affili-
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1 ated Regional Reliability Entity. Such a Variance or Enti2 ty Rule proposed by an Affiliated Regional Reliability En3 tity shall be submitted to the Electric Reliability Organiza4 tion for review and filing with the Commission in accord5 ance with the procedures specified in this subsection.

6 ‘‘(F) 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 the proposed Organization Standard or

11 amendment take effect without notice or comment. The

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

14 file the emergency Organization Standard or amendment

15 with the Commission not later than five days following the

16 determination and shall include in the filing an expla17 nation of the need for the emergency standard. Subse18 quently, the Commission shall provide notice of the emer19 gency Organization Standard or amendment for comment,

20 and shall follow the procedures set out in paragraphs (2)

21 and (3) for review of a new or modified Organization

22 Standard. An emergency Organization Standard that has

23 gone into effect shall remain in effect unless and until sus24 pended or disapproved by the Commission. If the Commis25 sion determines at any time that the emergency Organiza-
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1 tion Standard or amendment is not necessary, the Com2 mission may suspend the emergency Organization Stand3 ard or amendment.

4 ‘‘(4) All Users of the Bulk-Power System shall com5 ply with any Organization Standard that takes effect

6 under this section.

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

8 The Electric Reliability Organization shall take all appro9 priate steps to gain recognition in Canada and Mexico.

10 Subject to the President’s authority with respect to for11 eign policy, the United States shall use its best efforts to

12 enter into international agreements with the appropriate

13 governments of Canada and Mexico to provide for effective

14 compliance with Organization Standards and to provide

15 for the effectiveness of the Electric Reliability Organiza16 tion in carrying out its mission and responsibilities. All

17 actions taken by the Electric Reliability Organization, any

18 Affiliated Regional Reliability Entity, and the Commission

19 shall be consistent with the provisions of such inter20 national agreements.

21 ‘‘(h) CHANGES IN PROCEDURES, GOVERNANCE, OR

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

23 file with the Commission any proposed change in its proce24 dures, governance, or funding, or any changes in the Af25 filiated Regional Reliability Entity’s procedures, govern-
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1 ance or funding relating to delegated functions, and shall

2 include with the filing an explanation of the basis and pur3 pose for the change.

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

5 90 days after filing with Commission if the change con6 stitutes a statement of policy, practice, or interpretation

7 with respect to the meaning or enforcement of an existing

8 procedure. Any other proposed procedural change takes ef9 fect only upon a finding by the Commission, after notice

10 and opportunity for comments, that the change is just,

11 reasonable, not unduly discriminatory or preferential, is

12 in the public interest, and satisfies the requirements of

13 subsection (e)(4).

14 ‘‘(3) A change in governance or funding does not take

15 effect unless the Commission finds that the change is just,

16 reasonable, not unduly discriminatory or preferential, and

17 is in the public interest, and satisfies the requirements of

18 subsection (e)(4).

19 ‘‘(4)(A) The Commission, either upon complaint or

20 upon its own motion, may suspend a procedure or govern21 ance or funding provision if it determines the procedure

22 or provision does not meet the requirements of subsection

23 (e)(4) or is unjust, unreasonable, unduly discriminatory

24 or preferential, or otherwise not in the public interest.
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1 ‘‘(B) The Commission, upon complaint or upon its

2 own motion, may require the Electric Reliability Organiza3 tion to amend the procedures, governance or funding if

4 the Commission determines that the amendment is nec5 essary to meet the requirements of this section. The Elec6 tric Reliability Organization shall file the amendment in

7 accordance with paragraph (1) of this subsection.

8 ‘‘(i) DELEGATIONS OF AUTHORITY.—(1) The Elec9 tric Reliability Organization shall, upon request by an en10 tity, enter into an agreement with the entity for the dele11 gation of authority to implement and enforce compliance

12 with Organization Standards approved by the Commission

13 in a specified geographic area if the Organization finds

14 that the entity requesting the delegation satisfies the re15 quirements of subsections (e)(4) (A), (B), (C), (D), (F),

16 and (K), and if the delegation promotes the effective and

17 efficient implementation and administration of Bulk18 Power System reliability The Electric Reliability Organi19 zation may enter into an agreement to delegate to the enti20 ty any other authority, except that the Electric Reliability

21 Organization shall reserve the right to set and approve

22 standards for the Bulk-Power System reliability.

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

24 with the Commission any agreement entered into under

25 this subsection and any information the Commission re-
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1 quires with respect to the Affiliated Regional Reliability

2 Entity to which authority is to be delegated. The Commis3 sion shall approve the agreement, following public notice

4 and an opportunity for comment, if it finds that the agree5 ment meets the requirements of paragraph (1), and is

6 just, reasonable, not unduly discriminatory or preferential,

7 and is in the public interest. A proposed delegation agree8 ment with an Affiliated Regional Reliability Entity orga9 nized on an Interconnection-wide basis shall be rebuttably

10 presumed by the Commission to promote the effective and

11 efficient implementation and administration of Bulk12 Power System reliability. No delegation by the Electric

13 Reliability Organization shall be valid unless approved by

14 the Commission.

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

16 this subsection shall specify the procedures for an Affili17 ated Regional Reliability Entity to propose Entity Rules

18 or Variances for review by the Electric Reliability Organi19 zation.

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

21 apply on an Interconnection-wide basis, the Electric Reli22 ability Organization shall presume the proposal valid if

23 made by an Interconnection-wide Affiliated Regional Reli24 ability Entity unless the Electric Reliability Organization

25 makes a written finding that the proposal—
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1 ‘‘(i) was not developed in a fair and open proc2 ess that provided an opportunity for all interested

3 parties to participate;

4 ‘‘(ii) has a significant adverse impact on reli5 ability or commerce in other Interconnections;

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

7 Bulk-Power System within the Interconnection such

8 that it would constitute a serious and substantial

9 threat to public health, safety, welfare, or national

10 security; or

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

12 on competitive markets within the Interconnection

13 that is not necessary for reliability.

14 ‘‘(C) With respect to a proposal that would apply only

15 to part of an Interconnection, the Electric Reliability Or16 ganization shall find the proposal valid if the Affiliated

17 Regional Reliability Entity or Entities making the pro18 posal demonstrate that it—

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

20 that provided an opportunity for all interested par21 ties to participate;

22 ‘‘(ii) would not have an adverse impact on com23 merce that is not necessary for reliability;

24 ‘‘(iii) provides a level of Bulk-Power System re25 liability adequate to protect public health, safety,
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1 welfare, and national security, and would not have

2 a significant adverse impact on reliability; and

3 ‘‘(iv) in the case of a Variance, is based on le4 gitimate differences between regions or between sub5 regions within the Affiliated Regional Reliability En6 tity’s geographic area.

7 ‘‘(D) The Electric Reliability Organization shall ap8 prove or disapprove the proposal within 120 days, or the

9 proposal is deemed approved. Following approval of a pro10 posal under this paragraph, the Electric Reliability Orga11 nization shall seek Commission approval pursuant to sub12 section (f). Affiliated Regional Reliability Entities may not

13 make requests for approval directly to the Commission ex14 cept pursuant to subsection (f)(3)(E).

15 ‘‘(4) If an Affiliated Regional Reliability Entity re16 quests, consistent with paragraph (1) of this subsection,

17 that the Electric Reliability Organization delegate author18 ity to it, but is unable within 180 days to reach agreement

19 with the Electric Reliability Organization with respect to

20 the requested delegation, the entity may seek relief from

21 the Commission. If, following notice and opportunity for

22 comment, the Commission determines that the delegation

23 to the entity would meet the requirements of paragraph

24 (1); that the delegation would be just, reasonable, not un25 duly discriminatory or preferential, and in the public inter-
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1 est; and that the Electric Reliability Organization has un2 reasonably withheld the delegation, the Commission may,

3 by order, direct the Electric Reliability Organization to

4 make the delegation.

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

6 or upon complaint, and with notice to the appropriate Af7 filiated Regional Reliability Entity or Entities, direct the

8 Electric Reliability Organization to propose a modification

9 to an agreement entered into under this subsection if the

10 Commission determines that—

11 ‘‘(i) the Affiliated Regional Reliability Entity no

12 longer has the capacity to carry out effectively or ef13 ficiently its implementation or enforcement respon14 sibilities under that agreement, has failed to meet its

15 obligations under that agreement, or has violated

16 any provision of this section,

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

18 Affiliated Regional Reliability Entity no longer pro19 vide for fair and impartial discharge of its imple20 mentation or enforcement responsibilities under the

21 agreement,

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

23 entity approved by the Commission is not wholly

24 within the boundary of an Affiliated Regional Reli25 ability Entity and such difference is inconsistent
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1 with the effective and efficient implementation and

2 administration of Bulk-Power System reliability, or

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

4 delegation agreement as a result of actions taken

5 under paragraph (4) of this subsection.

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

7 under paragraph (5)(A) of this subsection, the Commis8 sion may suspend the affected agreement if the Electric

9 Reliability Organization or the Affiliated Regional Reli10 ability Entity does not propose an appropriate and timely

11 modification. If the agreement is suspended, the Electric

12 Reliability Organization shall assume the previously dele13 gated responsibilities. The Commission shall allow the

14 Electric Reliability Organization and the Affiliated Re15 gional Reliability Entity an opportunity to appeal the sus16 pension.

17 ‘‘(j) ORGANIZATION MEMBERSHIP.—Every System

18 Operator shall be a member of the Electric Reliability Or19 ganization and shall be a member of any Affiliated Re20 gional Reliability Entity operating under an agreement ef21 fective pursuant to subsection (i) applicable to the region

22 in which the System Operator operates or is responsible

23 for the operation of a Bulk-Power System facility.

24 ‘‘(k) FEDERAL POWER SYSTEMS AND NUCLEAR

25 REGULATORY COMMISSION.—Any actions taken under
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1 this section by the Commission, the Electric Reliability Or2 ganization, and any Affiliated Regional Reliability Entity

3 shall be consistent with any statutory or treaty obligations

4 of a Federal Power Marketing Administration, the Ten5 nessee Valley Authority, the Bureau of Reclamation and

6 the Corps of Engineers and any Nuclear Regulatory Com7 mission requirements.

8 ‘‘(l) INJUNCTIONS AND DISCIPLINARY ACTION.—(1)

9 Consistent with the range of actions approved by the Com10 mission under subsection (e)(4)(H), the Electric Reli11 ability Organization may impose a penalty; may limit ac12 tivities, functions, or operations; or may take other dis13 ciplinary action the Electric Reliability Organization finds

14 appropriate against a User of the Bulk-Power System if

15 the Electric Reliability Organization, after notice and an

16 opportunity for interested parties to be heard, issues a

17 finding in writing that the User of the Bulk-Power System

18 has violated an Organization Standard approved by the

19 Commission. The Electric Reliability Organization shall

20 immediately notify the Commission of any disciplinary ac21 tion imposed with respect to an act or failure of a User

22 of the Bulk-Power System that affected or threatened to

23 affect Bulk-Power System facilities located in the United

24 States, and the sanctioned party shall have the right to

25 seek modification or rescission by the Commission of such
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1 disciplinary action. If the Organization finds it necessary

2 to prevent a serious threat to reliability, the Organization

3 may seek injunctive relief in a Federal Court in the dis4 trict in which the affected facilities are located.

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

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

7 Electric Reliability Organization files with the Commission

8 its written finding and record of proceedings before the

9 Electric Reliability Organization and the Commission

10 posts the Organization’s written finding, unless the Com11 mission, on its own motion or upon application by the

12 User of the Bulk-Power System which is the subject of

13 the action, suspends the action. The action shall remain

14 in effect or remain suspended unless and until the Com15 mission, after notice and opportunity for hearing, affirms,

16 sets aside, modifies, or reinstates the action, but the Com17 mission shall conduct such a hearing under procedures es18 tablished to ensure expedited consideration of the action

19 taken.

20 ‘‘(3) The Commission, on its own motion, may order

21 compliance with an Organization Standard and may im22 pose a penalty; may limit activities, functions, or oper23 ations; or may take such other disciplinary action as the

24 Commission finds appropriate, against a User of the Bulk25 Power System with respect to actions affecting or threat-
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1 ening to affect Bulk-Power System facilities located in the

2 United States if the Commission finds, after notice and

3 opportunity for a hearing, that the User of the Bulk4 Power System has violated or threatens to violate an Or5 ganization Standard.

6 ‘‘(4) The Commission may take such action as is nec7 essary against the Electric Reliability Organization or an

8 Affiliated Regional Reliability Entity to assure compliance

9 with an Organization Standard, or any Commission order

10 affecting the Electric Reliability Organization or an Affili11 ated Regional Reliability Entity.

12 ‘‘(m) RELIABILITY REPORTS.—The Electric Reli13 ability Organization shall conduct periodic assessments of

14 the reliability and adequacy of the interconnected Bulk15 Power System in North America and shall report annually

16 to the Secretary of Energy and the Commission its find17 ings and recommendations for monitoring or improving

18 system reliability and adequacy.

19 ‘‘(n) ASSESSMENT AND RECOVERY OF CERTAIN

20 COSTS.—The reasonable costs of the Electric Reliability

21 Organization, and the reasonable costs of each Affiliated

22 Regional Reliability Entity that are related to implementa23 tion and enforcement of Organization Standards or other

24 requirements contained in a delegation agreement, ap25 proved under subsection (i), shall be assessed by the Elec-
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1 tric Reliability Organization and each Affiliated Regional

2 Reliability Entity, respectively, taking into account the re3 lationship of costs to each region and based on an alloca4 tion that reflects an equitable sharing of the costs among

5 all end-users. The Commission shall provide by rule for

6 the review of such costs and allocations, pursuant to the

7 standards in this subsection and subsection (e)(4)(F).

8 ‘‘(o) RULE OF REASON STANDARD.—In any action

9 under the antitrust laws, the conduct of the Electric Reli10 ability Organization, of an Affiliated Regional Reliability

11 Entity operating under an agreement in effect under sub12 section (i), or a member of the Electric Reliability Organi13 zation or an Affiliated Regional Reliability Entity, to the

14 extent such conduct is undertaken to develop or implement

15 an Organization Standard which is approved by the Com16 mission under subsection (f), shall not be deemed illegal

17 per se. Such conduct shall be judged on the basis of its

18 reasonableness, taking into account all relevant factors af19 fecting competition. For purposes of this section, ‘anti20 trust laws’ has the meaning given it in subsection (a) of

21 the first section of the Clayton Act, except that such term

22 includes section 5 of the Federal Trade Commission Act

23 to the extent that such section 5 applies to unfair methods

24 of competition.’’.
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1 (b) CONFORMING AMENDMENTS.—(1) Section 316 of

2 the FPA is amended by striking ‘‘or 214’’ each place it

3 appears and inserting ‘‘214, or 218’’.

4 (2) Section 316A of the FPA is amended by striking

5 ‘‘section 211, 212, 213, or 214’’ each time it appears and

6 inserting ‘‘Part II of this Act’’.

7 SEC. 602. ELECTRICITY OUTAGE INVESTIGATION.

8 Title II of the Department of Energy Organization

9 Act is amended by adding the following new section after

10 section 213 as added by section 408:

11 ‘‘SEC. 214. ELECTRICITY OUTAGE INVESTIGATION BOARD.

12 ‘‘(a) ESTABLISHMENT; MEMBERSHIP; TERMS.—The

13 Secretary shall establish an Electricity Outage Investiga14 tion Board. The Board shall consist of five members, ap15 pointed by the Secretary. Each member shall serve a term

16 of three years.

17 ‘‘(b) DUTIES.—The Board shall—

18 ‘‘(1) investigate a major bulk-power system fail19 ure in the United States to determine its causes,

20 ‘‘(2) report to the Secretary the results of the

21 investigation, and

22 ‘‘(3) recommend to the Secretary actions to

23 minimize the possibility of a future bulk-power sys24 tem failure.
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1 ‘‘(c) FEDERAL ADVISORY COMMITTEE ACT.—The

2 Board shall not be subject to the Federal Advisory Com3 mittee Act (5 U.S.C. Appx.).’’.

4 SEC. 603. ADDITIONAL TRANSMISSION CAPACITY.

5 Section 209 of PURPA is amended by adding a new

6 subsection after subsection (c):

7 ‘‘(d) CONSIDERATION OF ADDITIONAL TRANS8 MISSION CAPACITY.—The Secretary may call and chair a

9 meeting of representatives of States in a region in order

10 to discuss provision of additional transmission capacity

11 and related concerns in such region.’’.

12 TITLE VII—ENVIRONMENTAL

13 PROTECTION

14 SEC. 701. NITROGEN OXIDES CAP AND TRADE PROGRAM.

15 (a) PURPOSE.—The purpose of this section is to fa16 cilitate the implementation of a regional strategy for re17 ducing ambient concentrations of ozone through regional

18 reductions in emissions of NOX.

19 (b) DEFINITIONS.—For purposes of this section—

20 (1) the term ‘‘Administrator’’ means the Ad21 ministrator of the Environmental Protection Agency,

22 (2) the term ‘‘NOX’’ means oxides of nitrogen,

23 (3) the term ‘‘NOX allowance’’ means an au24 thorization to emit a specified amount of NOX into

25 the atmosphere, and
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1 (4) the term ‘‘NOX allowance cap and trade

2 program’’ means a program under which, in accord3 ance with regulations issued by the Administrator,

4 the Administrator establishes the maximum number

5 of NOX allowances that may be allocated for speci6 fied control periods, allocates or authorizes a State

7 to allocate NOX allowances, allows the transfer of

8 NOX allowances for use in States subject to such a

9 program, requires monitoring and reporting of NOX

10 emissions that meet the requirements of section 412

11 of the Clean Air Act, and prohibits, and requires

12 penalties and offsets for, any emissions of NOX in

13 excess of the number of NOX allowances held.

14 (c) PROGRAM IMPLEMENTATION.—(1) If the Admin15 istrator determines under section 110(a)(2)(D) of the

16 Clean Air Act that any source or other type of emissions

17 activity in a State emits NOX in amounts that will con18 tribute significantly to nonattainment in, or interfere with

19 maintenance by, any other State with respect to any na20 tional ambient air quality standard for ozone, the Admin21 istrator shall establish by regulation, within 12 months of

22 the determination for primary standards and as expedi23 tiously as practicable for secondary standards, and shall

24 administer a NOX allowance cap and trade program in
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1 all States in which such a source or other type of emissions

2 activity is located.

3 (2) Any NOX allowance cap and trade program shall

4 contribute to providing for emissions reductions that miti5 gate adequately the contribution or interference and shall

6 be taken into account by the Administrator in determining

7 compliance with section 110(a)(2)(D) of the Clean Air

8 Act.

9 (3) For purposes of sections 113, 114, 304, and 307

10 of the Clean Air Act, regulations promulgated under this

11 section shall be treated as regulations promulgated under

12 title IV of the Clean Air Act (entitled Acid Deposition

13 Control). A requirement of regulations promulgated under

14 this section is considered an ‘‘emission standard’’ or

15 ‘‘emission limitation’’ within the meaning of section 302

16 of the Clean Air Act and an ‘‘emission standard or limita17 tion under this Act’’ within the meaning of section 304

18 of the Clean Air Act.

19 TITLE VIII—FEDERAL POWER

20 SYSTEMS

21 Subtitle A—Tennessee Valley

22 Authority

23 SEC. 801. DEFINITION.

24 Section 3 of the Federal Power Act is amended by

25 adding after paragraph (25) the following new paragraph:
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1 ‘‘(26) ‘TVA’ means the Tennessee Valley Au2 thority, an agency and instrumentality of the United

3 States created by the Tennessee Valley Authority

4 Act of 1933;’’.

5 SEC. 802. APPLICATION OF FEDERAL POWER ACT.

6 Part II of the Federal Power Act is amended by add7 ing the following new section after section 201:

8 ‘‘APPLICATION TO FEDERAL POWER SYSTEMS

9 ‘‘SEC. 201A. (a) After January 1, 2003, sections 202

10 (h) and (i), 203 (with respect to dispositions of trans11 mission facilities), 205, 206, 208, and 210 through 213

12 of this Part and sections 301 through 304, 306, 307 (ex13 cept the last sentence of paragraph (c)), 308, 309, 313,

14 and 317 of Part III apply to TVA’s transmission facilities

15 and transmission of electric energy and the provision of

16 necessary associated services over the TVA Transmission

17 System, except that any determination made by the Com18 mission under those provisions as to whether an action

19 or matter is just, reasonable, or not unduly discriminatory

20 or preferential shall be subject to any other laws applicable

21 to TVA, including the requirement that TVA recover its

22 costs.’’.

23 SEC. 803. ANTITRUST COVERAGE.

24 The Tennessee Valley Authority Act of 1933 (16

25 U.S.C. 831–831ee) is amended by adding the following

26 after section 21:
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1 ‘‘SEC. 21a. ANTITRUST LAWS.

2 ‘‘(a) Subject to subsection (b), effective January 1,

3 2003, the Tennessee Valley Authority is subject to the

4 antitrust laws of the United States with respect to the op5 eration of its electric power system. For purposes of this

6 section, ‘antitrust laws,’ has the meaning given it in sub7 section (a) of the first section of the Clayton Act (15

8 U.S.C. 12(a)), except that it includes the Act of June 19,

9 1936 (15 U.S.C. 13 et seq.), commonly known as the Rob10 inson-Patman Act, and section 5 of the Federal Trade

11 Commission Act (15 U.S.C. 45), to the extent that section

12 5 applies to unfair methods of competition.

13 ‘‘(b) No damages, interest on damages, costs, or at14 torney’s fees may be recovered under section 4, 4A, or 4C

15 of the Clayton Act (15 U.S.C. 15, 15a, or 15c) from the

16 Tennessee Valley Authority.’’.

17 SEC. 804. TVA POWER SALES.

18 The Tennessee Valley Authority Act of 1933 (16

19 U.S.C. 831–831ee) is amended by adding the following

20 after section 15d:

21 ‘‘SEC. 15e. SALE OF ELECTRIC POWER AT WHOLESALE AND

22 RETAIL.

23 ‘‘(a) For the purposes of this section:

24 ‘‘(1) ‘distributor’ means an electric power sys25 tem that—
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1 ‘‘(A) is owned by a cooperative organiza2 tion or by a municipality or other public body

3 (or any successor in interest), and

4 ‘‘(B) on the date of enactment of this sec5 tion, purchased electric power at wholesale from

6 the Tennessee Valley Authority under an all-re7 quirements power contract; and

8 ‘‘(2) ‘distributor service area’ means the geo9 graphic area within which a distributor is authorized

10 on the date of enactment of this section to provide

11 electric power at retail to the ultimate consumer.

12 ‘‘(b)(1) Effective January 1, 2003, the Tennessee

13 Valley Authority may sell electric power at wholesale to

14 any person.

15 ‘‘(2) Beginning January 1, 2003, the Tennessee Val16 ley Authority shall not sell power at retail, except it may

17 sell power to a retail customer who consumes that power

18 within a distributor service area, if—

19 ‘‘(A) the customer (or predecessor in interest)

20 purchased electric power directly from the Tennessee

21 Valley Authority as a retail customer on the date of

22 enactment of this section, or

23 ‘‘(B) the distributor’s firm power purchases

24 from the Tennessee Valley Authority are 50 percent

25 or less of its total retail sales, or
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1 ‘‘(C) the distributor agrees that the Tennessee

2 Valley Authority can sell power to the customer.

3 Nothing in this paragraph shall prohibit the Tennessee

4 Valley Authority from continuing to serve a retail cus5 tomer which the Tennessee Valley Authority was serving

6 on the date of enactment of this section that is not located

7 within a distributor service area.

8 ‘‘(3) Notwithstanding any other provision of law, the

9 rates, terms, and conditions of retail electric service, and

10 rates for the use of distribution lines are not subject to

11 regulation by the Tennessee Valley Authority.’’.

12 SEC. 805. RENEGOTIATION OF LONG-TERM POWER CON13 TRACTS.

14 Section 15e of the Tennessee Valley Authority Act

15 of 1933 (16 U.S.C. 831–831ee) as added by section 804

16 of this Act is amended by adding the following after sub17 section (b):

18 ‘‘(c)(1) Within one year following the date of enact19 ment of this section, the Tennessee Valley Authority and

20 the distributors shall renegotiate their existing long-term

21 contracts with respect to—

22 ‘‘(A) the remaining term;

23 ‘‘(B) the length of the termination notice;

24 ‘‘(C) the amount of power a distributor may

25 purchase from a supplier other than the Tennessee
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1 Valley Authority beginning January 1, 2003, and ac2 cess to the Tennessee Valley Authority transmission

3 system for that power; and

4 ‘‘(D) stranded cost recovery.

5 ‘‘(2) If the parties are unable to reach agreement

6 with regard to any of the issues under paragraph (1) with7 in the one-year period set forth in paragraph (1), they

8 shall submit the issue in dispute to the Federal Energy

9 Regulatory Commission for final resolution.’’.

10 SEC. 806. STRANDED COST RECOVERY.

11 (a) Section 206 of the Federal Power Act is

12 amended by adding the following new subsection after sub13 section (e) as added by section 301(b) of this Act:

14 ‘‘(f)(1) Within one year of the date of enactment of

15 this subsection, the Commission shall promulgate regula16 tions with respect to TVA’s recovery of stranded costs (as

17 defined by the Commission) imposed on TVA resulting

18 from wholesale or retail competition. These regulations

19 shall provide that—

20 ‘‘(A) a customer that did not cause costs to be

21 stranded is not obligated to pay those costs on be22 half of other customers;

23 ‘‘(B) no stranded investment recovery charge

24 shall have the effect of unfairly shifting costs among

25 distributors or TVA retail customers;
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1 ‘‘(C) for a stranded cost recovery charge TVA

2 assesses on a retail or wholesale customer, TVA

3 shall unbundle the charge from other retail or whole4 sale rates applicable to that customer and state the

5 charge separately on the customer’s bill; and

6 ‘‘(D) TVA shall not impose a stranded cost re7 covery charge after September 30, 2007, unless the

8 person against whom the charge is assessed agrees

9 otherwise.

10 ‘‘(2) After notice and opportunity for comment, TVA

11 shall submit a stranded cost recovery plan to the Commis12 sion for review and approval.

13 ‘‘(3) The Commission shall review the recovery plan

14 and shall approve the recovery plan if the Commission de15 termines the plan to be just and reasonable and not un16 duly discriminatory or preferential and consistent with the

17 requirements of regulations issued under paragraph (1).

18 TVA may recover stranded costs only pursuant to a recov19 ery plan approved by the Commission.’’.

20 (b) Section 15e of the Tennessee Valley Authority Act

21 of 1933 (16 U.S.C. 831–831ee) as added by section 804

22 of this Act is amended by adding the following after sub23 section (c) as added by section 805 of this Act:

24 ‘‘(d) Amounts recovered by the Tennessee Valley Au25 thority as stranded cost recovery charges under section
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1 206(f) of the Federal Power Act shall be used to pay down

2 TVA’s debt to the extent determined by the TVA Board

3 to be consistent with the proper financial management of

4 the TVA power system, provided that TVA may not use

5 amounts recovered to pay for additions to TVA’s gener6 ating capacity.’’.

7 (c) Section 9106 of Title 31, United States Code, is

8 amended by adding the following new subsection after sub9 section (b):

10 ‘‘(c) Beginning in Fiscal Year 2003, as part of the

11 annual management report submitted by the Tennessee

12 Valley Authority (TVA) to Congress under this section,

13 TVA shall also specifically report:

14 ‘‘(A) the status of TVA’s long-range financial

15 plans and the progress toward its goal of competi16 tively priced power, and a general discussion of

17 TVA’s prospects on meeting the objectives of the

18 Ten Year Business Outlook issued on July 22, 1997;

19 ‘‘(B) any changes in assumptions since the pre20 vious report that may have a material effect on

21 TVA’s long-range financial plans;

22 ‘‘(C) the source of funds used for any capacity

23 additions;

24 ‘‘(D) the use or other disposition of amounts re25 covered by TVA under this section;
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1 ‘‘(E) the amount by which TVA’s publicly-held

2 debt was reduced; and

3 ‘‘(F) the projected amount by which TVA’s

4 publicly-held debt will be reduced.’’.

5 SEC. 807. CONFORMING AMENDMENTS.

6 Effective January 1, 2003—

7 (1) section 15d(a) of the Tennessee Valley Au8 thority Act of 1933 (16 U.S.C. 831n–4(a)), which

9 limits the sales or delivery of electric power by TVA

10 or distributors outside a certain geographic area, is

11 repealed;

12 (2) subsections (f) and (j) of section 212 of the

13 Federal Power Act (16 U.S.C. 824k (f) and (j) are

14 repealed; and

15 (3) the third proviso of section 10 of the Ten16 nessee Valley Authority Act of 1933 (16 U.S.C.

17 831i) and the second and third provisos of section

18 12 of the Tennessee Valley Authority Act of 1933

19 (16 U.S.C. 831k) do not apply to a wholesale sale

20 of electric energy by the Tennessee Valley Authority.
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1 Subtitle B—Bonneville Power

2 Administration

3 SEC. 811. DEFINITIONS.

4 Section 3 of the Federal Power Act is amended by

5 adding the following new paragraphs after paragraph (26)

6 as added by section 801 of this Act:

7 ‘‘(27) ‘Bonneville Administrator’ means the Ad8 ministrator of the Bonneville Power Administration;

9 ‘‘(28) ‘Pacific Northwest’ has the meaning

10 given that term in section 3(14) of the Pacific

11 Northwest Electric Power Planning and Conserva12 tion Act (16 U.S.C. 839a(14));

13 ‘‘(29) ‘Bonneville Transmission System’ means

14 transmission facilities owned or leased by the United

15 States, acting through the Bonneville Administrator,

16 and operated by the Bonneville Administrator or an17 other entity under section 202 (h) or (i) of this

18 Act;’’.

19 SEC. 812. APPLICATION OF FEDERAL POWER ACT.

20 Section 201A of the Federal Power Act as added by

21 section 802 of this Act is amended by adding the following

22 new subsection after subsection (a):

23 ‘‘(b) BONNEVILLE POWER ADMINISTRATION.—After

24 September 30, 2001; sections 202 (h) and (i), 203 (with

25 respect to dispositions of transmission facilities), 205,
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1 206, 208, and 210 through 213 of this Part and sections

2 301 through 304, 306, 307 (except the last sentence of

3 paragraph (c)), 308, 309, 313, and 317 of Part III apply

4 to transmission facilities and transmission of electric en5 ergy and the provision of necessary associated services

6 over the Bonneville Transmission System, provided that—

7 ‘‘(1) any determination made under those sec8 tions as to whether an action or matter is just, rea9 sonable, not unduly discriminatory or preferential

10 shall be subject to—

11 ‘‘(A) phasing in Commission-ordered

12 changes in transmission rates or charges that

13 would cause unreasonable cost shift among

14 users of the Bonneville Transmission System if

15 implemented at once;

16 ‘‘(B) mitigating unreasonable adverse im17 pacts on remote transmission customers in the

18 Pacific Northwest that would otherwise result

19 from Commission-ordered changes in the his20 toric treatment of costs to acquire transmission

21 to serve customers historically served by Gen22 eral Transfer Agreements entered into between

23 the Bonneville Administrator and other trans24 mission providers;
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1 ‘‘(C) complying with requirements of other

2 laws applicable to the Bonneville Administrator;

3 ‘‘(D) assuring the Bonneville Administra4 tor’s transmission rates and charges are estab5 lished sufficient to—

6 ‘‘(i) recover existing and future Fed7 eral investment in the Bonneville Trans8 mission System over a reasonable number

9 of years after first meeting all the Bonne10 ville Administrator’s other transmission

11 costs and expenses; and

12 ‘‘(ii) produce the revenues necessary

13 to assure timely payment of all trans14 mission related costs and expenses, includ15 ing revenues to establish reserves;

16 ‘‘(E) rules established by the Commission

17 to—

18 ‘‘(i) assure transmission access is pro19 vided over the Bonneville Transmission

20 System for hydroelectric power that must

21 be generated and transmitted at a par22 ticular time in order to reduce spill and

23 levels of dissolved nitrogen gas harmful to

24 fish, and
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1 ‘‘(ii) govern compensation to adversely

2 affected transmission users when capacity

3 is made available for transmission of hy4 droelectric power in those circumstances;

5 and

6 ‘‘(F) subsection 205(g) of this Act; and

7 ‘‘(2) these sections shall not apply to—

8 ‘‘(A) the Bonneville Administrator’s activi9 ties other than transmission of electric energy

10 and provision of necessary associated services

11 over the facilities of the Bonneville Trans12 mission System; or

13 ‘‘(B) a contract in effect on the date of en14 actment of this Section, except for rates which

15 are adjustable by the Administrator under the

16 contract; a Treaty of the United States; or a

17 contract concerning the physical delivery of en18 ergy and capacity entered into by entities des19 ignated pursuant to such a Treaty.’’.

20 SEC. 813. SURCHARGE ON TRANSMISSION RATES TO RE21 COVER OTHERWISE NON-RECOVERABLE

22 COSTS.

23 Section 205 of the Federal Power Act is amended by

24 adding the following after subsection (f):
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1 ‘‘(g)(1) Subject to the requirements of paragraph (2),

2 the Bonneville Administrator shall propose and the Com3 mission shall establish a mechanism pursuant to this sec4 tion that enables the Administrator to place a surcharge

5 on rates or charges for transmission services over the Bon6 neville Transmission System when necessary in order to

7 recover power costs unable to be recovered through power

8 revenues in time to meet the cost recovery requirements

9 of section 7(a) of the Pacific Northwest Electric Power

10 Planning and Conservation Act (16 U.S.C. 839e(a)(1)).

11 ‘‘(2) The transmission surcharge mechanism set forth

12 in paragraph (1) shall—

13 ‘‘(A) recover not more than $600 million in

14 total and no more than $100 million in any fiscal

15 year;

16 ‘‘(B) be available only between October 1, 2001,

17 and October 1, 2016;

18 ‘‘(C) be implemented by the Bonneville Admin19 istrator only when the Bonneville Administrator

20 projects that available financial reserves attributable

21 to the power function will be less than $150 million;

22 and

23 ‘‘(D) to the fullest extent possible, be designed

24 and established to recover the costs from trans25 mission users in a manner that—
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1 ‘‘(i) minimizes any effect on transmission

2 users’ choices among competing suppliers or

3 products,

4 ‘‘(ii) does not apply to use of the Bonne5 ville Transmission System for power sales out6 side the Pacific Northwest, and

7 ‘‘(iii) minimizes bypass of the Bonneville

8 Transmission System by transmission users

9 seeking to avoid the surcharge.

10 ‘‘(3) The Bonneville Administrator shall have sole

11 discretion to determine whether to implement the cost re12 covery mechanism established by the Commission under

13 paragraph (1). Before imposing the surcharge, the Bonne14 ville Administrator shall conduct a public process in the

15 Pacific Northwest to receive comment on implementation

16 of the surcharge. As a part of that public process, the

17 Bonneville Administrator shall make available information

18 concerning the need for and amount of the surcharge. If

19 the Bonneville Administrator decides to implement a sur20 charge, it shall take effect on the Bonneville Administra21 tor’s proposed effective date, but no earlier than sixty days

22 following the Administrator’s filing of the proposed sur23 charge to the Commission for approval.

24 ‘‘(4)(A) Within 120 days after the effective date of

25 the surcharge, the Commission shall approve, reject, or
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1 modify the surcharge and communicate its decision to the

2 Bonneville Administrator. In conducting its review, the

3 Commission shall not consider the appropriateness of the

4 cost recovery mechanism established by the Commission

5 under paragraph (1).

6 ‘‘(B) If the Commission rejects or modifies the sur7 charge, the Commission may order the Bonneville Admin8 istrator to refund, with interest, the portion of the sur9 charge the Commission found not justified or the Commis10 sion may authorize the Bonneville Administrator to re11 cover amounts from customers who underpaid or did not

12 pay the surcharge. If the Commission orders modification

13 of the Bonneville Administrator’s surcharge, such modi14 fied charge shall be effective on the date and for the time

15 period specified by the Commission.

16 ‘‘(5) Any payment of power costs through application

17 of transmission revenues collected by surcharge or other18 wise shall be treated as a loan to the Bonneville Adminis19 trator’s power function. The Bonneville Administrator

20 shall repay the loan as soon as possible from power func21 tion revenues once the Bonneville Administrator is able

22 to meet other power cost recovery and Treasury repay23 ment obligations on an annual basis using power revenues

24 and, to the extent practicable, refund such revenues to all

25 transmission customers charged the surcharge. The bor-
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1 rowed revenues shall bear interest at a rate determined

2 appropriate by the Commission.

3 ‘‘(6) For the recovery of costs relating to any genera4 tion or conservation resources financed by debt issued by

5 a non-Federal party before October 1, 1998, and secured

6 by an obligation of the Bonneville Administrator to make

7 payments or net bill power and transmission service that

8 cannot be recovered through power rates and charges and

9 paid in accordance with the application of revenues and

10 the priority of payments specified by Section 13(b) of the

11 Federal Columbia River Transmission System Act of 1974

12 (16 U.S.C. 838k(b)), the provisions of this section apply,

13 except for the recovery limitations under paragraph (2)(A)

14 and the time limits under paragraph (2)(B), but only to

15 the extent such recovery would have been allow under laws

16 applicable to the Bonneville Administrator as of October

17 1, 1998. In reviewing this surcharge request, the Commis18 sion shall apply the standard of review applicable as of

19 October 1, 1998.’’.

20 SEC. 814. COMPLAINTS.

21 Section 306 of the Federal Power Act is amended by

22 inserting ‘‘agency or instrumentality of the United

23 States,’’ after ‘‘person,’’ in the first sentence.
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1 SEC. 815. REVIEW OF COMMISSION ORDERS.

2 Section 313 of the Federal Power Act is amended by

3 inserting ‘‘agency or instrumentality of the United

4 States,’’ after ‘‘person.’’ in the first sentence in subsection

5 (a).’’.

6 SEC. 816. CONFORMING AMENDMENTS.

7 (a) Section 201(f) of the Federal Power Act is

8 amended by striking ‘‘No’’ and inserting ‘‘(1) Except as

9 provided in sections 201A and 202(h)–(i), no’’.

10 (b) Section 212(i) of the Federal Power Act (16

11 U.S.C. 824(i)) is repealed.

12 (c) Section 6 of the Federal Columbia River Trans13 mission System Act (16 U.S.C. 838d) is repealed.

14 (d) Section 9 of the Federal Columbia River Trans15 mission System Act (16 U.S.C. 838g) is amended to read

16 as follows:

17 ‘‘RATES AND CHARGES

18 ‘‘SEC. 9. Schedules of rates and charges for the sale,

19 including dispositions to a Federal agency, of all electric

20 power made available to the Administrator pursuant to

21 section 8 of this Act or otherwise acquired shall be

22 established—

23 ‘‘(1) with a view to encouraging the widest pos24 sible diversified use of electric power at the lowest

25 possible rates to consumers consistent with sound

26 business principles;
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1 ‘‘(2) having regard to the recovery (upon the

2 basis of the application of such rate schedules to the

3 capacity of the electric facilities of the projects) of

4 the cost of producing such electric power, including

5 the amortization of the capital investment allocated

6 to power over a reasonable period of years and pay7 ments provided for in section 11(b)(9) of this Act;

8 and

9 ‘‘(3) at levels to produce such additional power

10 revenues as may be required, in the aggregate with

11 all other power revenues of the Administrator, to

12 pay when due the principal of, premiums, discounts,

13 and expenses in connection with the issuance of and

14 interest on all bonds issued and outstanding pursu15 ant to this Act for other than the construction, ac16 quisition, and replacement of the Federal trans17 mission system, and amounts required to establish

18 and maintain reserve and other funds and accounts

19 established in connection therewith.

20 Electric power rates under this section shall be established

21 by the Administrator in accordance with section 7 of the

22 Pacific Northwest Electric Power Planning and Conserva23 tion Act.’’.

24 (e) Section 10 of the Federal Columbia River Trans25 mission System Act (16 U.S.C. 838h) is repealed.
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1 (f) Section 6 of the Pacific Northwest Regional Pref2 erence Act (16 U.S.C. 837e) is amended by striking the

3 ‘‘Federal energy or’’ in the first sentence and by striking

4 the second sentence.

5 (g) Section 7(a)(1) of the Pacific Northwest Electric

6 Power Planning and Conservation Act (16 U.S.C.

7 839e(a)(1)) is amended to read as follows:

8 ‘‘(a)(1) The Administrator shall establish, and peri9 odically review and revise, rates for the sale and disposi10 tion of electric power and shall periodically review and,

11 if necessary, propose revisions to rates for the trans12 mission of electric power. Rates for the sale and disposi13 tion of electric power shall be established and, as appro14 priate, revised to recover, in accordance with sound busi15 ness principles, the costs associated with the acquisition

16 and conservation of electric power, including the amortiza17 tion of the Federal investment allocable to electric power

18 rates in the Federal Columbia River Power System (in19 cluding irrigation electric-power-related costs required to

20 be repaid out of electric power revenues) over a reasonable

21 period of years and the other costs and expenses incurred

22 by the Administrator pursuant to this Act and other provi23 sions of law. Rates for the sale and disposition of electric

24 power shall be established in accordance with section 9

25 of the Federal Columbia River Transmission System Act
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1 (16 U.S.C. 838g), section 5 of the Flood Control Act of

2 1944 (16 U.S.C. 825s), and this Act.’’.

3 (h) Section 7(a)(2) of the Pacific Northwest Electric

4 Power Planning and Conservation Act (16 U.S.C.

5 839e(a)(2)) is amended by—

6 (1) striking ‘‘Rates’’ and inserting ‘‘Power

7 rates’’;

8 (2) inserting ‘‘and’’ after the comma in sub9 paragraph (A);

10 (3) striking ‘‘, and’’ and inserting a period at

11 the end of subparagraph (B); and

12 (4) striking subparagraph (C).

13 (i) Section 7(i) of the Pacific Northwest Electric

14 Power Planning and Conservation Act (16 U.S.C. 839(i))

15 is amended by inserting ‘‘power’’ immediately after ‘‘es16 tablishing’’ in the first sentence.

17 (j) Section 9(d) of the Pacific Northwest Electric

18 Power Planning and Conservation Act (16 U.S.C.

19 839f(d)) is amended by striking ‘‘transmission access,’’

20 and inserting ‘‘power’’ immediately before ‘‘services’’ in

21 the second sentence.

22 (k) Section 9(i)(3) of the Pacific Northwest Electric

23 Power Planning and Conservation Act (16 U.S.C.

24 839f(i)(3)) is amended by inserting ‘‘power’’ immediately
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1 before ‘‘services’’ each time it appears, and by striking

2 ‘‘transmission,’’ in the first sentence.

3 (l) Section 2(e) of the Bonneville Project Act (16

4 U.S.C. 832a(e)) is amended by striking the colon and all

5 that follows and inserting a period.

6 Subtitle C—Western Area Power

7 Administration and South8 western Area Power Adminis9 tration

10 SEC. 821. DEFINITIONS.

11 Section 3 of the Federal Power Act is amended by

12 adding the following new paragraphs after paragraph (29)

13 as added by subsection 811:

14 ‘‘(30) ‘SWPA Administrator’ means the Admin15 istrator of the Southwestern Power Administration;

16 ‘‘(31) ‘SWPA Transmission System’ means

17 transmission facilities owned or controlled by the

18 United States and operated by the SWPA Adminis19 trator or an entity with authority over these facili20 ties under section 202 (h) or (i) of this Act;

21 ‘‘(32) ‘WAPA Administrator’ means the Admin22 istrator of the Western Area Power Administration;

23 and

24 ‘‘(33) ‘WAPA Transmission System’ means

25 transmission facilities owned or controlled by the
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1 United States and operated by the WAPA Adminis2 trator or an entity with authority over these facili3 ties under section 202 (h) or (i) of this Act.’’.

4 SEC. 822. APPLICATION OF FEDERAL POWER ACT.

5 Section 201A of the Federal Power Act as added by

6 section 802 of this Act is amended by adding the following

7 new subsection after subsection (b) as added by section

8 812 of this Act:

9 ‘‘(c) WESTERN AREA POWER ADMINISTRATION AND

10 SOUTHWESTERN POWER ADMINISTRATION.—After Sep11 tember 30, 2001, sections 202 (h) and (i), 203 (with re12 spect to dispositions of transmission facilities), 205, 206,

13 208, and 210 through 213 of this Part and sections 301

14 through 304, 306, 307 (except the last sentence of para15 graph (c)), 308, 309, 313, and 317 of Part III apply to

16 transmission facilities and transmission of electric energy

17 over the SWPA and WAPA Transmission Systems and the

18 provision of necessary associated services over the SWPA

19 and WAPA Transmission Systems, provided that—

20 ‘‘(1) any determination made under those sec21 tions as to whether an action or matter is just, rea22 sonable, not unduly discriminatory or preferential

23 shall be subject to—

24 ‘‘(A) phasing in Commission-ordered

25 changes in transmission rates or charges that
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1 would cause unreasonable cost shifts among

2 users of the SWPA and WAPA Transmission

3 Systems if implemented at once;

4 ‘‘(B) complying with requirements of other

5 laws applicable to the SWPA and WAPA Ad6 ministrators;

7 ‘‘(C) assuring the transmission rates and

8 charges of the SWPA and WAPA Administra9 tors are established sufficient to—

10 ‘‘(i) recover existing and future Fed11 eral investment in the transmission system

12 over a reasonable number of years after

13 first meeting all other transmission costs

14 and expenses; and

15 ‘‘(ii) produce the revenues necessary

16 to assure timely payment of all trans17 mission related costs and expenses, includ18 ing revenues to establish reserves;

19 ‘‘(D) subsection 205(h) of this Act; and

20 ‘‘(E) permitting the WAPA Administrator

21 to establish more than one rate for the trans22 mission facilities of its regions or projects; and

23 ‘‘(2) these sections shall not apply to—

24 ‘‘(A) activities of the SWPA and WAPA

25 Administrators other than transmission of elec-
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1 tric energy and provision of necessary associ2 ated services over the facilities of their respec3 tive systems; or

4 ‘‘(B) a contract in effect on the date of en5 actment of this Act, except for rates which are

6 adjustable by the Administrator under the con7 tract.’’.

8 SEC. 823. SURCHARGE ON TRANSMISSION RATES TO RE9 COVER OTHERWISE NON-RECOVERABLE

10 COSTS.

11 Section 205 of the Federal Power Act is amended by

12 adding the following after subsection (g) as added by sec13 tion 814 of this Act:

14 ‘‘(h)(1) the Commission shall establish rules for Com15 mission approval of a surcharge on rates or charges for

16 transmission services over the SWPA and WAPA trans17 mission systems, including a reasonable limitation on

18 amounts to be recovered under the surcharge and such

19 other rules necessary to ensure that the surcharge mini20 mizes any effect of transmission users’ choice among com21 peting suppliers or products and reflects cost causation,

22 in order to recover power costs unable to be recovered

23 through power revenues in time to meet statutory or regu24 latory cost recovery requirements.
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1 ‘‘(2) The SWPA and WAPA Administrators shall

2 have sole discretion to determine whether to implement

3 the cost recovery mechanism established by the Commis4 sion under paragraph (1) for their respective transmission

5 systems. Before imposing the surcharge, the Adminis6 trator shall conduct a public process to receive comment

7 on implementation of the surcharge. As a part of that pub8 lic process, the Administrator shall make available infor9 mation concerning the need for and amount of the sur10 charge. If the Administrator decides to implement a sur11 charge, it shall take effect on the Administrator’s proposed

12 effective date, but no earlier than sixty days following the

13 Administrator’s filing of the proposed surcharge to the

14 Commission for approval.

15 ‘‘(3)(A) Within 120 days after the effective date of

16 the surcharge, the Commission shall approve, reject, or

17 modify the surcharge and communicate its decision to the

18 Administrator. In conducting its review, the Commission

19 shall not consider the appropriateness of the cost recovery

20 mechanism established by the Commission under para21 graph (1).

22 ‘‘(B) If the Commission rejects or modifies the sur23 charge, the Commission may order the Administrator to

24 refund, with interest, the portion of the surcharge the

25 Commission found not justified or the Commission may
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1 authorize the Administrator to recover amounts from cus2 tomers who underpaid or did not pay the surcharge. If

3 the Commission orders modification of the Administrator’s

4 surcharge, such modified charge shall be effective on the

5 date and for the time period specified by the Commission.

6 ‘‘(4) Any payment of power costs through application

7 of transmission revenues collected by surcharge or other8 wise shall be treated as a loan to the Administrator’s

9 power function. The Administrator shall repay the loan

10 as soon as possible from power function revenues once the

11 Administrator is able to meet the power cost recovery and

12 Treasury repayment obligations on an annual basis using

13 power revenues, and, to the extent practicable, refund

14 such revenues to all transmission customers charged the

15 surcharge. The borrowed revenues shall bear interest at

16 a rate determined appropriate by the Commission.’’.

17 SEC. 824. CONFORMING AMENDMENTS.

18 (a) Section 302(a)(1) of the Department of Energy

19 Organization Act (42 U.S.C. 7152) is amended by—

20 (1) striking ‘‘There’’ and inserting in its place

21 ‘‘Except for the authority addressed in paragraph

22 (G) below, there’’, and

23 (2) adding the following new subparagraph

24 after subparagraph (E):
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1 ‘‘(F) Authority for the approval, rejection,

2 and modification of transmission rates for the

3 Southwestern and Western Area Power Admin4 istrations is transferred to the Federal Energy

5 Regulatory Commission.’’.

6 (b) Section 221 of the Reclamation Reform Act of

7 1982 (43 U.S.C. 390uu) is amended by—

8 (1) striking ‘‘executed pursuant to Federal rec9 lamation law’’, and

10 (2) inserting ‘‘as defined in section 202 of this

11 Act’’ after ‘‘contract’’.

12 TITLE IX—OTHER PROVISIONS

13 SEC. 901. TREATMENT OF NUCLEAR DECOMMISSIONING

14 COSTS IN BANKRUPTCY.

15 Section 523 of title 11, United States Code (section

16 523 of the Bankruptcy Code of 1978), is amended by add17 ing the following new subsection after subsection (e):

18 ‘‘(f) Obligations to comply with, and claims resulting

19 from compliance with, Nuclear Regulatory Commission

20 regulations or orders governing the decontamination and

21 decommissioning of nuclear power reactors licensed under

22 section 103 or 104 b. of the Atomic Energy Act of 1954

23 (42 U.S.C. 2133 and 2134(b)) shall be given priority and

24 shall not be rejected, avoided, or discharged under title

25 11 of the United States Code or in any liquidation, reorga-
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1 nization, receivership, or other insolvency proceeding

2 under State or Federal law.’’.

3 SEC. 902. ENERGY INFORMATION ADMINISTRATION STUDY

4 OF IMPACTS OF COMPETITION IN ELEC5 TRICITY MARKETS.

6 Section 205 of the Department of Energy Organiza7 tion Act (42 U.S.C. 7135) is amended by adding after sub8 section (1) the following new subsection:

9 ‘‘(m)(1) The Administrator shall collect and publish

10 information regarding the impact of wholesale and retail

11 competition on the electric power industry and consumers.

12 The Administrator shall prescribe forms for collecting this

13 information. Information to be collected may include, but

14 is not limited to—

15 ‘‘(A) the ownership and control of electric gen16 eration, transmission, distribution, and related facili17 ties;

18 ‘‘(B) electricity consumption and demand;

19 ‘‘(C) the transmission, distribution, and delivery

20 of electric services;

21 ‘‘(D) the price of competitive electric services;

22 ‘‘(E) the costs, revenues, and rates of regulated

23 electric services;

24 ‘‘(F) the reliability of the electric generation

25 and transmission system, including the availability
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1 of adequate generation and transmission capacity to

2 meet load requirements, generation and transmission

3 capacity additions and retirements, and fuel sup4 pliers and stocks for electric generation;

5 ‘‘(G) electric energy efficiency programs and

6 services and their impacts on energy consumption;

7 ‘‘(H) the development and use of renewable

8 electric energy resources; and

9 ‘‘(I) research, development and demonstration

10 activities to improve the nation’s electric system.

11 ‘‘(2) In carrying out the purposes of this subsection,

12 the Administrator shall take into account reporting bur13 dens and the protection of proprietary information as re14 quired by law.’’.

15 SEC. 903. ANTITRUST SAVINGS CLAUSE.

16 This Act and the amendments made by this Act shall

17 not be construed to modify, impair, or supersede the oper18 ation of the antitrust laws. For purposes of this section,

19 ‘‘antitrust laws’’ has the meaning given it in subsection

20 (a) of the first section of the Clayton Act (15 U.S.C.

21 12(a)), except that it includes section 5 of the Federal

22 Trade Commission Act (15 U.S.C. 45), to the extent that

23 section 5 applies to unfair methods of competition.
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1 SEC. 904. ELIMINATION OF ANTITRUST REVIEW BY THE NU2 CLEAR REGULATORY COMMISSION.

3 Section 105 of the Atomic Energy Act of 1954 (42

4 U.S.C. 2135) is amended by adding the following after

5 subsection c.:

6 ‘‘d. Following the effective date of this subsection,

7 subsection 105 c. shall not apply to any pending or future

8 application filed for a license to construct or operate a uti9 lization facility under sections 103 or 104 b. This Act shall

10 not affect the Commission’s authority to enforce antitrust

11 conditions included in licenses issued under sections 103

12 or 104 b. before the date of enactment of this sub13 section.’’.

14 SEC. 905. ENVIRONMENTAL LAWS SAVINGS CLAUSE.

15 Nothing in this Act alters or affects environmental

16 requirements imposed by Federal or State law, including,

17 but not limited to, the Clean Air Act (42 U.S.C. 7401

18 et seq.); the Federal Water Pollution Control Act (33

19 U.S.C. 1251 et seq.); the Comprehensive Environmental

20 Response, Compensation, and Liability Act of 1980 (42

21 U.S.C. 9601 et seq.); the Federal Power Act (16 U.S.C

22 791a et seq.); and the Endangered Species Act (16 U.S.C.

23 1531 et seq.).
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1 SEC. 906. GENERATING PLANT EFFICIENCY STUDY.

2 Part C of title VI of the Department of Energy Orga3 nization Act is amended by adding after section 662, the

4 following new section:

5 ‘‘GENERATING PLANT EFFICIENCY STUDY

6 ‘‘SEC. 663. Within three years following the date of

7 enactment of this section, the Secretary shall issue a re8 port comparing the impact of wholesale and retail competi9 tion on the efficiency of new and existing electric gener10 ating facilities.’’.

11 SEC. 907. CONFORMING AMENDMENTS.

12 (a) The Table of Contents of PURPA is amended

13 by—

14 (1) inserting after the listing for section 117

15 under subtitle B of title I:

‘‘Sec. 118. Authority to impose reciprocity requirements.

‘‘Sec. 119. Aggregation for purchase of retail electric energy.

‘‘Sec. 119A. Consumer information disclosure.

‘‘Sec. 119B. Access to electric service for low-income consumers.

‘‘Sec. 119C. Residential electricity consumer database.

‘‘Sec. 119D. Model code for retail suppliers.

‘‘Sec. 119E. Model code for electric utility workers.’’, and

16 (2) inserting after the listing for section 608:

‘‘Sec. 609. Retail competition.

‘‘Sec. 610. Public Benefits Fund.

‘‘Sec. 611. Federal renewable portfolio standard.

‘‘Sec. 612. Net metering for renewable energy.

‘‘Sec. 613. Interconnections for certain facilities.’’.

17 (b) The Table of Contents of the Energy Policy Act

18 of 1992 is amended by inserting after the listing for sec19 tion 2606:

‘‘Sec. 2607. Tribal electricity assistance.’’.
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1 (c) The Table of Contents of the Department of En2 ergy Organization Act is amended by—

3 (1) inserting after the listing for section 212:

‘‘Sec. 213. Office of Indian Energy Policy and Programs.

‘‘Sec. 214. Electricity Outage Investigation Board.’’, and

4 (2) inserting after the listing for section 662:

‘‘Sec. 663. Generating plant efficiency study.’’.

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