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[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4297 Introduced in House (IH)]

104th CONGRESS
  2d Session
                                H. R. 4297

 To give all American electricity consumers the right to choose among 
     competitive providers of electricity in order to secure lower 
 electricity rates, higher quality services, and a more robust United 
                States economy, and for other purposes.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                           September 28, 1996

  Mr. DeLay introduced the following bill; which was referred to the 
                         Committee on Commerce

_______________________________________________________________________

                                 A BILL

 
 To give all American electricity consumers the right to choose among 
     competitive providers of electricity in order to secure lower 
 electricity rates, higher quality services, and a more robust United 
                States economy, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Consumers Electric 
Power Act of 1996''.
    (b) Table of Contents.--The table of Contents is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Consumer choice.
Sec. 4. State authority.
Sec. 5. Reliable and nondiscriminatory operation of transmission and 
                            distribution systems.
Sec. 6. Federal transmission tariff reform.
Sec. 7. Application of Public Utility Holding Company Act and Public 
                            Utility Regulatory Policies Act.
Sec. 8. Transition planning.
Sec. 9. Generating sources free to serve consumers and resellers.
Sec. 10. Applicability.
Sec. 11. Antitrust laws.
Sec. 12. Judicial review.
Sec. 13. Definitions.
Sec. 14. Federal power act.
Sec. 15. Effective date; savings provisions.
Sec. 16. Evaluation of effectiveness.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) Low-cost and reliable electric service is integral to 
        the vitality of the United States economy, the competitiveness 
        of domestically made goods, and the quality of life of all 
        Americans.
            (2) Americans consume electricity worth more than 
        $200,000,000,000 a year, approximately half of which is for 
        residential purposes, making the monthly electric bill one of 
        the largest expenses for most households.
            (3) The cost of electric service has a direct effect on the 
        price, profitability, and competitiveness of goods and services 
        produced in the United States.
            (4) Lower priced electric service can be realized by giving 
        all American consumers the right to choose among suppliers of 
        electric service in a competitive market, while maintaining, if 
        not improving the reliability of service those consumers have 
        come to expect.
            (5) The development of vibrant competition in the retail 
        market for electric energy will--
                    (A) reduce the costs of electric service to even 
                the smallest consumers of electricity;
                    (B) reduce the costs to consumers benefiting from 
                today's lowest regulated rates;
                    (C) create jobs as American businesses are able to 
                lower costs and better compete in world markets and 
                against foreign competition here at home;
                    (D) result in a more efficient utility industry; 
                and
                    (E) reduce environmental impacts.
            (6) Monopoly cost-of-service regulation of electricity has 
        failed. It has stifled competition, resulting in high electric 
        service rates for many consumers and few incentives for 
        technological innovation and good customer service by 
        utilities.
            (7) High electric service rates are regressive, placing a 
        disproportionate burden on poor ratepayers.
            (8) High electric service rates divert consumer dollars 
        that would otherwise be spent for purchasing necessary goods 
        and services, savings, or investments that benefit the economy 
        as a whole.
            (9) Congress has authority to enact laws, under the 
        Commerce Clause of the United States Constitution, regarding 
        the generation, transmission, distribution, and sale of 
        electric energy in interstate commerce at the wholesale and 
        retail level. Only Congress can ensure that a competitive 
        retail market is established throughout the United States on an 
        expeditious but orderly basis.
            (10) Regional and State variations require that State 
        regulatory authorities should receive deference in certain 
        decisions relating to electric service.
            (11) Consumers of all utilities, whether served by 
        regulated or nonregulated electric utilities (such as 
        municipally owned utilities or rural cooperatives), should have 
        the same rights to receive the benefits of competition and 
        consumer choice.
            (12) Consumer choice needed to produce renewable energy 
        development that is market driven fulfills customer desires for 
        clean energy supplies and encourages competition among 
        different renewable technologies. Subjecting renewable energy 
        technologies to the discipline of the free market will better 
        allocate renewable resources and speed the commercialization of 
        renewable technologies than traditional centralized government 
        resource planning.

SEC. 3. CONSUMER CHOICE.

    (a) Freedom of Choice.--(1) Each person has the right to purchase 
electric service from any electric service provider, notwithstanding 
any other law.
    (2) A Federal, State, or local authority may not deny or limit any 
person's right to purchase such energy from an electric service 
provider at a price and on terms and conditions freely arrived at.
    (3) A Federal, State, or local authority may not discriminate, or 
authorize the discrimination, against any person who exercises that 
person's right to purchase such energy, subject to subsection (b).
    (b) Ban on Exit Fees, Subsidies, or Other Penalties on Exercising 
Right of Choice.--A Federal, State, or local authority may not grant 
any preference or protection from competition to any electric service 
provider. For purposes of this subsection, the terms ``preference'' and 
``protection from competition'' include--
            (1) any direct or indirect subsidy; and
            (2) any exit fee or other levy imposed in connection with 
        any purchaser who terminates a purchasing relationship with any 
        seller, other than--
                    (A) a charge levied pursuant to provisions of a 
                service contract that were specifically and freely 
                negotiated and agreed upon by both parties (or 
                generally applicable contract law) to such contract; or
                    (B) a nondiscriminatory access charge for funding 
                service continuations under section 4(b) (relating to 
                lifeline source).
    (c) Effective Date.--The provisions of this section shall take 
effect on January 1, 1998.
    (d) Alternative Choices.--Nothing in this Act shall be construed to 
prohibit or otherwise restrict any electric energy purchaser from 
having that electric energy delivered through arrangements of the 
purchaser's choice. Any such alternative shall be consistent with 
regional or national reliability standards.

SEC. 4. STATE AUTHORITY.

    (a) Local Distribution Service.--Nothing in this Act shall affect 
the authority and responsibility of any State or local government 
concerning the obligation to connect consumers to the local 
distribution system and to ensure the adequate maintenance, safety, and 
reliability of such local distribution system.
    (b) Lifeline Service.--The authority under subsection (a) includes 
the authority to provide for the continuation of service to residential 
customers unable to afford electric energy service, including the 
authority to establish nondiscriminatory local distribution access 
charges on any power delivered sufficient to cover the cost of such 
continuation.
    (c) Certification of Electric Service Providers.--No State may 
establish discriminatory requirements or other obligations for 
certification of electric service providers within that State. Nothing 
in this subsection shall affect the ability of a State to impose 
requirements necessary to preserve universal service, protect the 
public safety and welfare, ensure the continued reliability of the 
distribution system, and safeguard the rights of consumers.
    (d) If Consumers Make No Selection of An Electric Service 
Provider.--In the case of a retail customer who fails to select an 
electric service provider, the State may establish rules under which 
the customer shall be initially assigned on a nondiscriminatory basis 
to one of a variety of electric service providers that have filed 
service terms with an appropriate State authority and met any 
requirements described in subsection (c).
    (e) Assurance of Appropriate Rates for Transition to Competition.--
In order to ensure uninterrupted local distribution service, if 
nondiscriminatory unbundled rates are not in effect by the effective 
date of this section, interim rates prescribed in the transition plan 
under section 7 shall apply for any local distribution service until 
such time as State rates take effect.
    (f) Additional State Authority.--State and local governments shall 
retain authority over any specific matter not otherwise addressed in 
this Act, including--
            (1) the continuation of universal service;
            (2) conservation programs and initiatives;
            (3) consumer choice with regard to renewable energy;
            (4) research and development programs and initiatives; and
            (5) any other matter deemed appropriate by a State or local 
        government.

SEC. 5. RELIABLE AND NONDISCRIMINATORY OPERATION OF TRANSMISSION AND 
              DISTRIBUTION SYSTEMS.

    (a) Operation of Transmission and Distribution Systems.--The 
Nation's transmission and distribution systems shall be operated to 
achieve the following objectives:
            (1) Organizational separation within remaining vertically 
        integrated firms, between individuals, assets, and systems 
        dedicated to the operation of transmission and distribution 
        systems and those involved in the provision of electric 
        service.
            (2) Nondiscriminatory access to the transmission and 
        distribution systems whether for wholesale or retail sale of 
        electric service.
            (3) The prevention of preferential treatment (or protection 
        from competition) by system operators toward affiliated service 
        providers.
            (4) Access to information on a nondiscriminatory basis 
        concerning--
                    (A) availability of transmission and distribution 
                service;
                    (B) operating conditions on transmission and 
                distribution systems; and
                    (C) rates, terms, and conditions of any arrangement 
                between, or information provided from, the transmission 
                and distribution system operators and their affiliated 
                electric service provider, if any.
            (5) Ensuring that the transmission and distribution system 
        operator--
                    (A) receives adequate and timely information from 
                electric service providers regarding physical flows and 
                physical transactions on the transmission and 
                distribution system;
                    (B) has access to assets and resources it needs to 
                maintain system balance in the event of unanticipated 
                events or the failure of an electric service provider 
                to perform; and
                    (C) has authority to implement Commission approved 
                sanctions and penalties for the failure of electric 
                service providers to conform to the tariffs governing 
                access to the transmission and distribution system.
    (b) Commission Authority.--In order to ensure consumers' ability to 
access competing electric service providers, the Commission shall have 
the authority, by rule, order, or decision, to provide for 
nondiscriminatory prices, terms and conditions to transmission and 
distribution services. With respect to distribution services, the 
Commission shall defer to State authorities with respect to the matter 
reserved to the States in section 4. The Commission shall also have the 
authority, by rule, order, or decision, to take the actions necessary 
to fulfill the obligations imposed on it by this Act.

SEC. 6. FEDERAL TRANSMISSION TARIFF REFORM.

    (a) Initial Tariff Reform.--By January 1, 1999, the Commission 
shall promulgate and make effective, rules which provide for 
nondiscriminatory access to transmission and distribution service as 
provided in this Act and which eliminate the barriers to competitive 
electric service presented by existing contracts and arrangements--
            (1) between and among transmitting utilities governing the 
        pricing, terms, and conditions of access to transmission and 
        distribution facilities; and
            (2) between transmitting utilities and any other entities 
        (directly connected to such transmitting utility's transmission 
        system) providing for the sale of power by such transmitting 
        utilities to any other entities.
    (b) Continuing Reform.--The Commission shall by rule, order, or 
decision ensure that the existing electric utilities are not permitted 
to exercise market power in the sale of electric service. The 
Commission shall initiate proceedings following enactment, to be 
concluded on or before January 1, 1999, in order to determine the 
extent to which existing utilities have market power in the sale of 
electric services; and to consider and determine the means for 
mitigating such market power. In making and enforcing such 
determinations, the Commission shall have the authority to--
            (1) restrict the ability of the electric utility, or its 
        affiliates, to sell such services at market-determined rates, 
        provided that such restrictions shall be limited to those areas 
        and services where the electric utility has market power; and
            (2) order the divestiture of assets and functions which are 
        the source of market power, to the extent reasonably necessary 
        to mitigate such market power, provided that such divestiture 
        may include a variety of alternatives including outright sale, 
        lease, or output contracts.

SEC. 7. APPLICATION OF PUBLIC UTILITY HOLDING COMPANY ACT AND PUBLIC 
              UTILITY REGULATORY POLICIES ACT .

    (a) PUHCA.--The Public Utility Holding Company Act of 1935 shall 
cease to apply to an electric utility subject to this Act or to any 
holding company (as defined in such Act) of such utility if each State 
in which such utility is providing electric energy services--
            (1) determines that the retail customers served by such 
        utility and its affiliates have the ability to purchase 
        electric energy services in accordance with the provisions of 
        section 3 of this Act; and
            (2) notifies the Commission and the Securities and Exchange 
        Commission of such determination.
    (b) PURPA.--The provisions of section 210 of the Public Utility 
Regulatory Policies Act of 1978 requiring electric utilities to offer 
to purchase electric energy from qualifying cogeneration facilities and 
qualifying small power production facilities at the incremental cost to 
the utility of alternative electric energy shall cease to apply to an 
electric utility if each State in which such utility is providing 
electric services--
            (1) determines that the retail customers served by such 
        utility have the ability to purchase electric energy services 
        in accordance with the provisions of section 3 of this Act; and
            (2) notifies the Commission of such determination.
Nothing in this subsection shall be construed to affect any obligation 
under a binding contract to purchase electric energy entered into 
before the date of enactment of this Act.

SEC. 8. TRANSITION PLANNING.

    (a) Commission Recommendations.--Within 3 months of enactment, the 
Commission shall make a report to Congress providing its plan for 
effectuating its obligations under this Act, including any potential 
obstacles it identifies that could inhibit full and reasonably 
expeditious implementation.
    (b) Commission Guidelines.--The Commission may publish preliminary, 
nonbinding guidelines to facilitate timely compliance with this Act by 
electric utilities. Such guidelines shall be calculated to give notice 
of the direction and substance of the Commission's implementation of 
this Act to facilitate orderly transition and timely compliance, but 
need not be entirely incorporated in the Commission's final rules.
    (c) Utility Compliance.--Nothing in this Act shall prevent 
utilities from submitting filings in advance of final Commission rules, 
nor prevent the Commission from making determinations on such filings 
subject to the final rules.

SEC. 9. GENERATING SOURCES FREE TO SERVE CONSUMERS AND RESELLERS.

    No Federal, State, or local government authority may--
            (1) regulate the pricing, terms, or conditions of service 
        offerings by electric service providers; or
            (2) except as provided in this Act, regulate who may engage 
        in selling electric energy.

SEC. 10. APPLICABILITY.

    This Act shall apply with respect to electric energy sold for use 
or resale within the 50 States and the District of Columbia.

SEC. 11. ANTITRUST LAWS.

    Nothing in this Act shall be construed to modify, impair, or 
supersede the applicability of the Sherman Antitrust Act (15 U.S.C. 1 
and following) and amendments thereto, the Clayton Act (15 U.S.C. 12 
and following), and amendments thereto, regulations promulgated under 
such laws, and United States court decisions interpreting such laws.

SEC. 12. JUDICIAL REVIEW.

    Judicial review of this Act, or any rule or order under this Act, 
within the meaning of section 551(4) of title 5, United States Code, 
may be obtained in the United States Court of Appeals for any 
appropriate circuit pursuant to the provisions of chapter 7 of title 5, 
United States Code, except that the second sentence of section 705 
thereof shall not apply.

SEC. 13. DEFINITIONS.

    For purposes of this Act--
            (1) Commission.--The term ``Commission'' means the Federal 
        Energy Regulatory Commission.
            (2) Electric service.--The term ``electric service'' shall 
        mean the provision or sale of electric energy and related goods 
        and services including but not limited to billing, metering, 
        equipment for monitoring, controlling, or managing the 
        consumption or quality of electric energy, generation of 
        electric energy, ancillary services, and other competitively 
        provided goods and services, but shall not include transmission 
        and distribution service.
            (3) Transmitting utility.--The term ``transmitting 
        utility'' has the meaning given such term in the Federal Power 
        Act, including any Federal power marketing agency, and any 
        other person, engaged in the business of electric energy 
        transmission.
            (4) Utility or electric utility.--The terms ``utility'' and 
        ``electric utility'' shall mean any entity which, as of the 
        date of enactment, owns assets for the transmission or 
        distribution of electric energy.
            (5) Transmission and distribution system operator.--The 
        term ``transmission and distribution system operator'' shall 
        mean the entity or part thereof with responsibility for 
        monitoring, contracting, and operating the transmission and 
        distribution system.

SEC. 14. FEDERAL POWER ACT.

    This Act shall supersede any provisions of part II of the Federal 
Power Act that are inconsistent with the provisions of this Act.

SEC. 15. EFFECTIVE DATE; SAVINGS PROVISIONS.

    (a) Effective Date.--The provisions of this Act shall take effect 
30 days after the date of enactment of this Act, except to the extent 
expressly provided otherwise in this Act.
    (b) Existing Contracts.--Nothing in this Act shall alter, diminish, 
or otherwise affect any rights or obligations under any contract 
existing as of the date of the enactment of this Act.

SEC. 16. EVALUATION OF EFFECTIVENESS.

    Not later than 30 months after the date of the enactment of this 
Act, the Commission shall conduct, by rule, an evaluation of this Act 
and submit a report on such evaluation to the Congress. Such evaluation 
shall include each of the following:
            (1) The extent to which electric energy rates have been 
        reduced, and the combined cost of electric energy delivered to 
        consumers, including the transmission costs.
            (2) The level of service reliability provided to purchasers 
        of electric energy.
            (3) The extent of competition in the electric energy 
        market.
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