I

104TH CONGRESS

2D SESSION H. R. 3878

To privatize the Federal Power Marketing Administrations and certain facilities of the Tennessee Valley Authority and, in the interim, to provide

for a transition to market-based rates for such power, and for other

purposes.

IN THE HOUSE OF REPRESENTATIVES

JULY 23, 1996

Mr. FRANKS of New Jersey (for himself, Mr. MEEHAN, Mr. ZIMMER, Mr.

MARTINI, Mr. FRELINGHUYSEN, Mr. SAXTON, Mr. FOLEY, Mr. KLUG,

Mr. KENNEDY of Massachusetts, and Mr. BARRETT of Wisconsin) introduced the following bill; which was referred to the Committee on Resources, and in addition to the Committees on Transportation and Infrastructure and Commerce, 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 privatize the Federal Power Marketing Administrations

and certain facilities of the Tennessee Valley Authority

and, in the interim, to provide for a transition to marketbased rates for such power, 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 ‘‘Power Marketing Ad5 ministration Privatization and Reform Act of 1996’’.
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1 SEC. 2. PURPOSE.

2 The purpose of this Act is to—

3 (1) dispose of, through a competitive bidding

4 procedure, all Federally-owned generation and trans5 mission facilities used to generate and transmit

6 power sold by the Federal Power Marketing Admin7 istrations and thereafter terminate the Federal

8 Power Marketing Administrations,

9 (2) to dispose of, through a competitive bidding

10 procedure, all the hydroelectric generation facilities

11 of the Tennessee Valley Authority, and

12 (3) in the interim period before full

13 privitazation of the Federally-owned generation and

14 transmission facilities used to generate and transmit

15 power sold by the Federal Power Marketing Admin16 istrations, to provide for full cost recovery rates for

17 power sold by Federal Power Marketing Administra18 tions and a transition to market-based rates for such

19 power.

20 TITLE I—FULL COST RECOVERY

21 AND MARKET RATES

22 SEC. 101. CONGRESSIONAL FINDINGS.

23 (a) EXISTING UNDER-ALLOCATIONS AND UNDER24 RECOVERY OF COSTS OF POWER MARKETING.—The Con25 gress finds that the use of fixed allocations of joint multi26 purpose project costs and the failure to provide for the
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1 recovery of actual interest costs and depreciation have re2 sulted in substantial failures to recover costs properly re3 coverable through power rates by the Federal Power Mar4 keting Administrations and have resulted in the imposition

5 of unreasonable burdens on the taxpaying public.

6 (b) MARKET PRICING PROPERLY ALLOCATES

7 COSTS.—The Congress further finds that, with the emer8 gence of open access to power transmission and competi9 tive bulk power markets, market prices will provide the

10 lowest reasonable rates consistent with sound business

11 principles, consistent with maximum recovery of costs

12 properly allocated to power production and consistent with

13 encouraging the most widespread use of power marketed

14 by Federal Power Marketing Administrations.

15 SEC. 102. MODIFICATION OF EXISTING POWER MARKETING

16 ADMINISTRATIONS.

17 (a) FULL COST RECOVERY RATES.—The Secretary

18 of Energy shall develop and implement interim and final

19 rates for power sales by Federal Power Marketing Admin20 istrations designed to recover all power related operations

21 and maintenance expenses and the project investment cost

22 pertaining to power production, such project power pro23 duction investment to include all powerhouse, water con24 duit, dams and appurtenant works and structures, all stor25 age, diverting, or forebay reservoirs connected therewith,
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1 the interconnected transmission system and switchyards,

2 all miscellaneous structures used and useful in connection

3 with power production and all water rights, rights-of-way,

4 ditches, dams, reservoirs, lands, or interests in land there5 of which are necessary or appropriate to the project power

6 production capability, the cost of which is to be deter7 mined according to generally accepted accounting prin8 ciples, including the accrual of actual interest costs during

9 construction and pending repayment. The Secretary of

10 Energy may reallocate project investment previously allo11 cated as joint costs to other functions in order to imple12 ment full power production cost recovery and full cost re13 covery rate schedules. Until market pricing for such power

14 sales is fully implemented, such full cost recovery rates

15 shall be implemented for all new contracts for power sales

16 by the Federal Power Marketing Administrator and for

17 existing contracts for power sales by Federal Power Mar18 keting Administrations.

19 (b) TRANSITION TO MARKET-BASED RATES.—If the

20 transition to full cost recovery rates would result in rates

21 that exceed market rates, the Secretary of Energy is au22 thorized to price power sold by Federal Power Marketing

23 Administrations at market rates if—

24 (1) operation and maintenance costs are recov25 ered;
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1 (2) the contribution toward recovery of invest2 ment pertaining to power production is maximized;

3 and

4 (3) purchasers of power under existing con5 tracts consent to the remarketing by the relevant

6 Federal Power Marketing Administration of such

7 power not later than 3 years thereafter through

8 competitive bidding. Competitive bidding shall be

9 utilized to remarket power that is not accepted by

10 existing customers under this section.

11 (c) MARKET-BASED PRICING.—The Secretary of

12 Energy shall develop and implement procedures to assure

13 that all power sold by Federal Power Marketing Adminis14 trations is sold at prices set by demand and supply within

15 the relevant bulk power supply market. The Secretary of

16 Energy shall establish through notice and comment rule17 making bid and auction procedures to implement market18 based pricing for power marketing, including power that

19 is under contract but which is declined by the party enti20 tled to purchase such power and remarketed and power

21 sold pursuant to any power sales contract entered into by

22 a Federal Power Marketing Administration after the en23 actment of this Act.

24 (d) ACCOUNTING.—Federal Power Marketing Admin25 istrations shall utilize generally accepted accounting prin-
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1 ciples, including the accrual of actual interest costs during

2 construction and pending repayment for any project and

3 recognition of depreciation expenses as well as generally

4 accepted accounting principles concerning cost recovery by

5 electic utilities. The Secretary of Energy may reallocate

6 project investment previously allocated as joint costs to

7 other functions in order to implement full power produc8 tion cost recovery and full cost recovery rate schedules,

9 and in order to disclose the full costs associated with Fed10 eral power production and marketing.

11 (e) PREFERENCE.—Public bodies and cooperatives

12 shall be given a preference to future power allocations or

13 reallocations of Federal power through a right of first re14 fusal at market prices. Power obtained through preference

15 rights shall be consumed by the preference customer or

16 resold for consumption by the constituent end-users of the

17 preference customer and may not be resold to other enti18 ties.

19 (f) REFORMS.—The Secretary of Energy shall re20 quire each Federal Power Marketing Administration to

21 implement—

22 (1) program management in order to assign

23 personnel and incur expenses for authorized power

24 marketing, reclamation, and flood control activities

25 only, and not diversification into ancillary activities
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1 including consulting or operating services for other

2 entities; and

3 (2) annual reporting plainly disclosing to the

4 American public, the activities of the Power Market5 ing Administration including, but not limited to, the

6 full cost of such power projects and power marketing

7 programs.

8 (g) CONTRACT RENEWAL.—After the enactment of

9 this Act, no Federal Power Marketing Administration may

10 enter into or renew any power marketing contract for a

11 term that exceeds 5 years.

12 (h) RESTRICTIONS.—Excepting only the Bonneville

13 Power Administration, each Federal Power Marketing Ad14 ministration shall be subject to the restrictions on the con15 struction of transmission and additional facilities estab16 lished by section 5 of the Flood Control Act of 1944.

17 (i) SUNSET.—The provisions of this section shall

18 cease to apply to a Federal Power Marketing Administra19 tion immediately following the sale under title II of all

20 electric power generation and transmission facilities used

21 to generate or transmit power sold by such Administra22 tion.
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1 SEC. 103. FEDERAL ENERGY REGULATORY COMMISSION

2 JURISDICTION OVER TRANSMISSION SERV3 ICE PROVIDED BY POWER MARKETING AD4 MINISTRATIONS AND TVA.

5 Transmission service provided by Federal Power

6 Marketing Administrations or the Tennessee Valley Au7 thority shall be provided on an open access basis and at

8 just and reasonable rates approved or established by the

9 Federal Energy Regulatory Commission under part II of

10 the Federal Power Act in the same manner as such service

11 is provided pursuant to Commission rules by any public

12 utility subject to the jurisdiction of the Commission under

13 such Part II. The preceding sentence shall not require any

14 Federal Power Marketing Administration to expand trans15 mission or interconnection capabilities or transmissions in

16 the absence of other authority of law.

17 SEC. 104. IMPLEMENTATION BY THE FEDERAL ENERGY

18 REGULATORY COMMISSION.

19 Pending the implementation of market-based pricing,

20 the Federal Energy Regulatory Commission shall have au21 thority to review and approve, reject, or revise power rate

22 schedules recommended for approval by the Secretary of

23 Energy, and existing rate schedules, for power sales by

24 the Federal Power Marketing Administrations. The Fed25 eral Energy Regulatory Commission shall base its ap26 proval of final rates upon the protection of the public in-
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1 terest and shall undertake to protect the interest of the

2 taxpaying public as well as the interests of consumers. The

3 Federal Energy Regulatory Commission may review the

4 factual basis for determinations made by the Secretary of

5 Energy and may revise or modify those findings as appro6 priate and may revise proposed or effective rate schedules

7 or remand the rate schedules to the Secretary of Energy

8 as the Federal Energy Regulatory Commission determines

9 is necessary to protect the public interest until a full tran10 sition is made to market-based rates for power sold by

11 Federal Power Marketing Administrations. The Federal

12 Energy Regulatory Commission is authorized to proceed

13 pursuant to informal notice and comment rulemaking pur14 suant to section 553(c) of title 5, United States Code. Any

15 affected party, including a taxpayer, bidder, preference

16 customer, or affected competitor may seek a rehearing and

17 judicial review of a final decision of the Federal Energy

18 Regulatory Commission pursuant to section 313 of the

19 Federal Power Act (16 U.S.C. 8251).

20 SEC. 105. AMENDMENT OF DEPARTMENT OF ENERGY ORGA21 NIZATION ACT.

22 The last sentence of section 302(a)(3) of the Depart23 ment of Energy Organization Act is repealed.
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1 SEC. 106. REPEAL.

2 Section 505 of Public Law 102–377 is hereby re3 pealed.

4 SEC. 107. EFFECTIVE DATE.

5 Except as otherwise specifically provided in this title,

6 the provisions of this title and the amendments made by

7 this title shall take effect on the date of enactment of this

8 Act.

9 TITLE II—PRIVATIZATION OF

10 PMA AND TVA ASSETS

11 SEC. 201. SALE OF FEDERAL HYDROELECTRIC GENERA12 TION AND TRANSMISSION FACILITIES.

13 (a) SALE OF PMA AND TVA FACILITIES.—

14 (1) PMA FACILITIES.—The Secretary of En15 ergy is authorized and directed to sell the hydro16 electric power generation facilities used to generate

17 the electric power marketed by the Federal Power

18 Marketing Administrations, together with all con19 tracts, marketing agreements, and any and all other

20 rights, interests, and obligations held or owed by the

21 Federal Power Marketing Administrations and all

22 electric power transmission facilities owned by the

23 United States and operated by a Federal Power

24 Marketing Administrations.

25 (2) TVA FACILITIES.—The Tennessee Valley

26 Authority is authorized and directed to sell the hy-
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1 droelectric power generation facilities owned and op2 erated by the Authority.

3 (b) WATER STORAGE RIGHTS.—Each sale under this

4 Act shall be subject to all existing water storage rights

5 in reservoirs used in connection with such power genera6 tion facilities which rights have been acquired by local in7 terests pursuant to the Water Supply Act of 1958 (Public

8 Law 85–500; 43 U.S.C. 390b) and sections 1, 2, and 3

9 of Public Law 88–140 (43 U.S.C. 390c through 390e) for

10 water supply or other purposes and all such rights shall

11 survive such sale. All obligations of the United States

12 under contracts with such local interests for the use of

13 such storage shall be assumed by any purchaser so that

14 such local interests may continue to operate and utilize

15 their storage in accordance with their existing contracts

16 with the United States without entering into an additional

17 contract with the United States or the purchaser, notwith18 standing any provision of law or contract to the contrary.

19 (c) COMPETITIVE BIDDING.—The Secretary and the

20 Authority shall restrict the sale of any Federal Power

21 Marketing Administration or Tennessee Valley Authority

22 asset to only domestic entities or United States citizens

23 who reside principally within the United States. In order

24 to assure that the facilities are transferred in a manner

25 that provides a reasonable payment to the United States,
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1 sales under this section shall be made through a competi2 tive bidding process open to all bidders determined by the

3 Secretary (or the Authority in the case of facilities sold

4 by the Authority) to be financially qualified and who have

5 the experience and resources necessary to manage the

6 transferred assets. No facility or group of facilities may

7 be sold for an amount less than the minimum bid estab8 lished and published by the Secretary (or the Authority

9 in the case of facilities sold by the Authority). The mini10 mum bid for any facility sold by the Secretary shall be

11 equal to the net present value of the outstanding debt re12 payable to the United States and attributable to the facil13 ity or group of facilities concerned.

14 (d) COOPERATION OF OTHER AGENCIES.—The heads

15 of other affected Federal departments and agencies shall

16 assist the Secretary and the Authority in implementing

17 the sales authorized by this section. Upon receiving a writ18 ten request from the Secretary or the Authority, the head

19 of any such department or agency having administrative

20 jurisdiction over any facility to be sold under this section

21 shall transfer (at such time as may be specified by the

22 Secretary or the Authority in such request) such facility

23 to the Secretary or the Authority for purposes of effectuat24 ing such sale.

25 (e) FINANCIAL AND BID MANAGEMENT ADVISOR.—
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1 (1) RETENTION OF ADVISOR.—Within 6

2 months after the date of enactment of this Act, the

3 Secretary (or the Authority in the case of facilities

4 sold by the Authority) shall retain an experienced

5 private sector firm to serve as financial, bid manage6 ment, and technical advisor (hereinafter referred to

7 in this Act as the ‘‘advisor’’) to the Secretary (or the

8 Authority) with respect to such sales. The advisor

9 shall not have any substantial financial interest in

10 the existing assets, their operation or the ultimate

11 purchasers.

12 (2) NOTICE.—Within 6 months after the date

13 of enactment of this Act, the Secretary and the Au14 thority shall each publish a notice in the Federal

15 Register soliciting all parties which have an oper16 ational or ownership interest in facilities to be sold

17 under this Act to provide evidence of such interest

18 within 90 days of the published notice.

19 (3) ADVISOR’S REPORT.—Within 6 months of

20 being retained by the Secretary or the Authority and

21 based on information provided by the Secretary or

22 the Authority and the information obtained in para23 graph (2), the advisor shall provide to the Secretary

24 (or the Authority in the case of facilities sold by the

25 Authority) a report containing each of the following:
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1 (A) A plan for the competitive sale of all

2 facilities and other assets and interests referred

3 to in subsection (a).

4 (B) An estimate of the net present value of

5 the income expected to be derived over the next

6 50 years from each facility or group of facilities

7 to be sold under this section.

8 (C) An estimate of the net present value of

9 the expenses expected to be incurred over the

10 next 50 years in connection with each facility or

11 group of facilities to be sold under this section.

12 (D) A comparison between the net of sub13 paragraphs (B) and (C) and the net present

14 value of the outstanding debt which the Federal

15 government attributes to the asset being sold.

16 (E) The options for the grouping of facili17 ties to be sold under this section. The transfer

18 shall be structured to transfer assets and inter19 ests by watershed or by project unless the Advi20 sor can provide satisfactory information to the

21 Secretary or the Authority that another alter22 native should be used. Groupings of assets shall

23 specifically be designed to transfer all assets in

24 a manner that provides reasonable payment to

25 the United States for all assets.
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1 (F) A plan that takes into consideration

2 the use of tax exempt and government financ3 ing for purposes of maximizing the return to

4 the American public.

5 (f) PROCEEDS.—The Secretary may use up to

6 $6,000,000 from unobligated balances available to the De7 partment of Energy to fund any sale preparation costs

8 provided for in this section, and shall provide an account9 ing of all sale preparation costs and studies to the Com10 mittee on Resources and the Committee on Transportation

11 and Infrastructure of the House of Representatives, and

12 to the Committee on Energy and Natural Resources and

13 the Committee on Public Works and the Environment of

14 the Senate within 60 days after completion of the sale.

15 The proceeds of any sale by the Secretary of a facility

16 or group of facilities under this section shall be used first

17 to offset the costs of carrying out such sale and the re18 maining net proceeds shall be deemed to extinguish the

19 outstanding debt repayable to the United States and at20 tributable to such facility or group of facilities. Any por21 tion of such net proceeds which exceeds the net present

22 value of the outstanding debt repayable to the United

23 States and attributable to the facility or group of facilities

24 concerned shall be deposited in the Treasury of the United

25 States as miscellaneous receipts.
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1 (g) TREATMENT OF SALES FOR PURPOSES OF CER2 TAIN LAWS.—The sales of assets under this Act shall not

3 be considered a disposal of Federal surplus property under

4 the following provisions of law:

5 (1) Section 203 of the Federal Property and

6 Administrative Services Act of 1949 (40 U.S.C.

7 484).

8 (2) Section 13 of the Surplus Property Act of

9 1944 (50 U.S.C. App. 1622).

10 (h) EXISTING CONTRACTS, USES, ETC.—All sales of

11 assets and rights under this section shall be subject to all

12 contracts, debt obligations to non-Federal entities, oper13 ational objectives, and other binding agreements which

14 apply, as of the date of such sale, to the facilities con15 cerned and to the sale of electric power from such facili16 ties. The purchaser of each such facility shall assume all

17 liabilities and obligations of the United States (including

18 the Tennessee Valley Authority) under such contracts, ob19 ligations or other agreements. Neither any Federal Power

20 Marketing Administration nor the Authority shall, after

21 the date of enactment of this Act, enter into a long-term

22 agreement, contract, or other long-term obligation or re23 sponsibility, except to the extent that such an obligation

24 will significantly enhance or maintain the value of a facil25 ity after it is transferred. The United States (including
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1 the Tennessee Valley Authority) shall remain responsible

2 for concluding all lawsuits associated with the assets which

3 are the subject of a transfer and which are extant as of

4 the date of the enactment of this Act, whether in its capac5 ity of plaintiff or defendant. Any right, title, or interest

6 of the United States (including the Tennessee Valley Au7 thority) which exists at the conclusion of such lawsuits and

8 which would otherwise have been transferred, but for the

9 lawsuit, shall be transferred to the party in interest who

10 acquired the related asset from the United States (includ11 ing the Tennessee Valley Authority). The United States

12 shall remain responsible for any outstanding Indian trust

13 responsibilities, unless the transfer in question specifically

14 identifies the obligation being transferred.

15 (i) REPORT TO FERC.—Not later than June 30,

16 1997, the Secretary (or the Authority in the case of facili17 ties sold by the Authority) shall provide each of the follow18 ing to the Federal Energy Regulatory Commission:

19 (1) A description of—

20 (A) all the assets tangible and intangible

21 that comprise each power generation or trans22 mission facility or group of power generation or

23 transmission facilities to be sold under this sec24 tion;
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1 (B) the existing terms of operation with

2 respect to such facilities; and

3 (C) any other interest being proposed for

4 transfer.

5 (2) The information pertaining to such facilities

6 required by title 18 of the Code of Federal Regula7 tions, subparts B and F, or G, as appropriate, ex8 cept exhibit E.

9 (3) The date when an offer for purchase of the

10 assets must be submitted.

11 (j) NOTICE OF SALE AND SOLICITATION OF BIDS.—

12 Not later than March 31, 1998, the Secretary (or the Au13 thority in the case of facilities sold by the Authority) shall

14 publish a notice in the Federal Register which includes

15 each of the following:

16 (1) A description of—

17 (A) all the assets tangible and intangible

18 that comprise each power generation facility or

19 group of power generation facilities to be sold

20 under this section;

21 (B) the existing terms of operation with

22 respect to such facilities; and

23 (C) any other interest being proposed for

24 transfer.
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1 (2) The date, time, and conditions of the bids

2 that must be met to submit a successful bid for the

3 assets to be sold under this Act.

4 (3) The terms and conditions identified in the

5 proposed license provided from the Federal Energy

6 Regulatory Commission to the Secretary (or the Au7 thority in the case of facilities to be sold by the Au8 thority) under this Act.

9 (k) DATE OF SALE.—All sales under this section

10 shall be completed between July 1, 1999, and September

11 30, 1999.

12 (l) TERMINATION OF THE FEDERAL PMAS AND

13 TVA.—Following the sale of all facilities and other assets

14 referred to in the first sentence of subsection (a), the Sec15 retary shall complete the business of and close out the

16 Federal Power Marketing Administrations and return the

17 unexpended balances of funds appropriated for the Admin18 istrations to the Treasury of the United States. To the

19 extent practical, the purchasers under this section should,

20 consistent with good business practices, attempt to offer

21 to employ those former employees of the United States

22 who are necessary to the continued operation of such fa23 cilities following the sale of the facilities.
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1 SEC. 202. FEDERAL ENERGY REGULATORY COMMISSION

2 JURISDICTION.

3 (a) REGULATION OF RATES AND CHARGES.—All

4 rates and charges established for the wholesale sale of

5 electric power from facilities sold under section 201 shall

6 be subject to part 2 of the Federal Power Act. This sub7 section shall take effect upon the expiration of any con8 tract which is applicable to the sale of such electric power

9 on the date of the sale of the facility concerned.

10 (b) ORIGINAL LICENSE.—Not later than January 1,

11 1998, the Federal Energy Regulatory Commission shall

12 provide the Secretary (or the Authority in the case of fa13 cilities to be sold by the Authority) with a proposed license

14 for each power generation facility to be sold under section

15 1. Not later than September 30, 1999, the Commission

16 shall issue to the purchaser of each power generation facil17 ity sold under section 1 a license under part I of the Fed18 eral Power Act (16 U.S.C. 791a–823b) authorizing the

19 continued operation and maintenance of such facility for

20 a term of 10 years. Such license shall—

21 (1) be for the project purposes established by

22 the existing terms of operation and shall be consist23 ent with the proposed license provided to the Sec24 retary or the Authority;

25 (2) be conditioned upon the requirement that

26 the licensed facility continue to be operated and
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1 maintained in accordance with the existing terms of

2 operation, except that the licensee may make im3 provements to the project which increase capacity

4 without amendment to the license so long as existing

5 minimum flows are not affected;

6 (3) be subject only to the appropriate standard

7 ‘‘L-Form’’ license conditions, published at 54 FPC

8 1792–1928 (1975), except that the license may not

9 be reopened for any purpose for the first 10 years

10 of the license;

11 (4) not be subject to: the word ‘‘constructed’’ in

12 section 3(10), the 4 provisos of section 4(e); section

13 6 to the extent it requires the licensee’s acceptance

14 of those terms and conditions of the Act that this

15 subsection waives; section 10(e) as it concerns an16 nual charges for the use and occupancy of Federal

17 lands and facilities; section 10(f), section 10(j), sec18 tion 18, section 19, section 20, and section 22 of the

19 Federal Power Act (16 U.S.C. 796(10), 797(e), 799,

20 803(e), 803(f), 803(j), 811, 812, 813, and 815); and

21 (5) contain minimum flow restrictions no more

22 restrictive than those currently in effect, if any, such

23 minimum flow restrictions may not be altered during

24 the primary term of the license.
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1 (c) ACTS APPLICABLE TO LICENSING.—The issuance

2 of a license pursuant to subsection (b) shall not be subject

3 to the provisions of the Federal Land Policy and Manage4 ment Act of 1976, section 2402 of the Energy Policy Act

5 of 1992, the National Environmental Policy Act of 1969,

6 the Endangered Species Act of 1973, the Wild and Scenic

7 Rivers Act, the Federal Water Pollution Control Act, the

8 National Historic Preservation Act, the Coastal Zone

9 Management Act, the Fish and Wildlife Coordination Act,

10 or any other Act otherwise applicable to the licensing of

11 the projects. Subsequent operations shall be consistent

12 with all applicable rules and regulations.

13 (d) EFFECT OF LICENSE.—A license issued under

14 subsection (b)—

15 (1) shall be deemed to meet the licensing stand16 ards of the Federal Power Act, including section

17 10(a) and the last sentence of section 4(e) (16

18 U.S.C. 797(e)); and

19 (2) shall constitute the sole and exclusive source

20 for transferred power generation facilities of author21 izations and requirements with respect to facility op22 eration.

23 (e) RESERVATIONS.—Any power site reservation es24 tablished by the President, the Department of the Interior,

25 or pursuant to section 24 of the Federal Power Act (16
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1 U.S.C. 818), or any other law, which exists on any lands,

2 whether Federally or privately owned, that are included

3 within the final project boundaries of a transferred hydro4 electric project as approved by the Commission shall be

5 vacated by operation of law upon issuance of a license for

6 such project.

7 (f) RELICENSING.—All requirements of part I of the

8 Federal Power Act and of any other Act applicable to the

9 licensing of a hydroelectric project shall apply to a trans10 ferred power generation facility upon expiration of an

11 original license issued under this section.

12 (g) DEFINITIONS.—For purposes of this section:

13 (1) The term ‘‘Commission’’ means the Federal

14 Energy Regulatory Commission.

15 (2) The term ‘‘existing terms of operation’’

16 means any applicable statutes, executive department

17 regulations, orders, rule curves and the like, memo18 randa of agreement, operating manuals, and con19 tractual arrangements pertaining to a transferred

20 power generation facility that were in effect as of

21 the date of enactment of this Act.

22 (3) The term ‘‘power generation facility’’ means

23 the facilities, real property interests, and other as24 sets sold or to be sold to a transferee under this Act,

25 including any such real property interests, facilities,
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1 or assets that comprise a project as defined in sec2 tion 3(11) of the Federal Power Act (16 U.S.C.

3 796(11)). If any portion of a structure or other fa4 cility is used for flood control, water supply or other

5 purposes in addition to the generation of electric en6 ergy, such term refers only to that portion of the

7 structure or facility used primarily for the genera8 tion of electric energy, including turbines, genera9 tors, controls, substations, and primary lines used

10 for transmitting electric energy therefrom to the

11 point of juncture with the interconnected primary

12 transmission system. Such term shall not include

13 any portion of a facility used for navigation, flood

14 control, irrigation, water supply, or recreation.

15 (4) The term ‘‘Secretary’’ means the Secretary

16 of Energy.

17 (5) The term ‘‘Authority’’ means the Tennessee

18 Valley Authority.

19 (6) The term ‘‘Federal Power Marketing Ad20 ministration’’ means the Southeastern Power Ad21 ministration, the Southwestern Power Administra22 tion, the Western Area Power Administration, and

23 the Bonneville Power Administration.

Æ