442 
ance with the requirements of the Commission’s Order 
No. 2000 sufficient to justify denial of approval by 
the Commission. 
(5) For all regional transmission organization 
applications filed pursuant to the Commission’s 
Order No. 2000, whether finally approved or not— 
(A) a discussion of that regional trans-
mission organization’s efforts to minimize rate 
seams between itself and— 
(i) other regional transmission organi-
zations; and 
(ii) entities not participating in a re-
gional transmission organization; 
(B) a discussion of the impact of such seams 
on consumers and wholesale competition; and 
(C) a discussion of minimizing cost-shifting 
on consumers. 
SEC. 1234. FEDERAL UTILITY PARTICIPATION IN REGIONAL 
TRANSMISSION ORGANIZATIONS. 
(a) DEFINITIONS.—For purposes of this section— 
(1) APPROPRIATE
FEDERAL
REGULATORY
AU-
THORITY.—The term ‘‘appropriate Federal regulatory 
authority’’ means— 
(A) with respect to a Federal power mar-
keting agency (as defined in the Federal Power
443 
Act), the Secretary of Energy, except that the 
Secretary may designate the Administrator of a 
Federal power marketing agency to act as the 
appropriate Federal regulatory authority with 
respect to the transmission system of that Fed-
eral power marketing agency; and 
(B) with respect to the Tennessee Valley Au-
thority, the Board of Directors of the Tennessee 
Valley Authority. 
(2) FEDERAL UTILITY.—The term ‘‘Federal util-
ity’’ means a Federal power marketing agency or the 
Tennessee Valley Authority. 
(3) TRANSMISSION SYSTEM.—The term ‘‘trans-
mission system’’ means electric transmission facilities 
owned, leased, or contracted for by the United States 
and operated by a Federal utility. 
(b) TRANSFER.—The appropriate Federal regulatory 
authority is authorized to enter into a contract, agreement 
or other arrangement transferring control and use of all or 
part of the Federal utility’s transmission system to an RTO 
or ISO (as defined in the Federal Power Act), approved 
by the Federal Energy Regulatory Commission. Such con-
tract, agreement or arrangement shall include— 
(1) performance standards for operation and use 
of the transmission system that the head of the Fed-
444 
eral utility determines necessary or appropriate, in-
cluding standards that assure recovery of all the Fed-
eral utility’s costs and expenses related to the trans-
mission facilities that are the subject of the contract, 
agreement or other arrangement; consistency with ex-
isting contracts and third-party financing arrange-
ments; and consistency with said Federal utility’s 
statutory authorities, obligations, and limitations; 
(2) provisions for monitoring and oversight by 
the Federal utility of the RTO’s or ISO’s fulfillment 
of the terms and conditions of the contract, agreement 
or other arrangement, including a provision for the 
resolution of disputes through arbitration or other 
means with the regional transmission organization or 
with other participants, notwithstanding the obliga-
tions and limitations of any other law regarding ar-
bitration; and 
(3) a provision that allows the Federal utility to 
withdraw from the RTO or ISO and terminate the 
contract, agreement or other arrangement in accord-
ance with its terms. 
Neither this section, actions taken pursuant to it, nor any 
other transaction of a Federal utility using an RTO or ISO 
shall confer upon the Federal Energy Regulatory Commis-
sion jurisdiction or authority over the Federal utility’s elec-
445 
tric generation assets, electric capacity or energy that the 
Federal utility is authorized by law to market, or the Fed-
eral utility’s power sales activities. 
(c) EXISTING
STATUTORY
AND
OTHER
OBLIGA-
TIONS.— 
(1) SYSTEM
OPERATION
REQUIREMENTS.—No 
statutory provision requiring or authorizing a Fed-
eral utility to transmit electric power or to construct, 
operate or maintain its transmission system shall be 
construed to prohibit a transfer of control and use of 
its transmission system pursuant to, and subject to 
all requirements of subsection (b). 
(2) OTHER OBLIGATIONS.—This subsection shall 
not be construed to— 
(A) suspend, or exempt any Federal utility 
from, any provision of existing Federal law, in-
cluding but not limited to any requirement or 
direction relating to the use of the Federal util-
ity’s transmission system, environmental protec-
tion, fish and wildlife protection, flood control, 
navigation, water delivery, or recreation; or 
(B) authorize abrogation of any contract or 
treaty obligation. 
(3) REPEAL.—Section 311 of title III of Appen-
dix B of the Act of October 27, 2000 (P.L. 106–377,
446 
section 1(a)(2); 114 Stat. 1441, 1441A–80; 16 U.S.C. 
824n) is repealed. 
SEC. 1235. STANDARD MARKET DESIGN. 
(a) REMAND.—The Commission’s proposed rule-
making entitled 
‘‘Remedying 
Undue 
Discrimination 
through Open Access Transmission Service and Standard 
Electricity Market Design’’ (Docket No. RM01–12–000) 
(‘‘SMD NOPR’’) is remanded to the Commission for recon-
sideration. No final rule mandating a standard electricity 
market design pursuant to the proposed rulemaking, includ-
ing any rule or order of general applicability within the 
scope of the proposed rulemaking, may be issued before Oc-
tober 31, 2006, or take effect before December 31, 2006. Any 
final rule issued by the Commission pursuant to the pro-
posed rulemaking shall be preceded by a second notice of 
proposed rulemaking issued after the date of enactment of 
this Act and an opportunity for public comment. 
(b) SAVINGS CLAUSE.—This section shall not be con-
strued to modify or diminish any authority or obligation 
the Commission has under this Act, the Federal Power Act, 
or other applicable law, including, but not limited to, any 
authority to— 
(1) issue any rule or order (of general or par-
ticular applicability) pursuant to any such authority 
or obligation; or
447 
(2) act on a filing or filings by 1 or more trans-
mitting utilities for the voluntary formation of a Re-
gional Transmission Organization or Independent 
System Operator (as defined in the Federal Power 
Act) (and related market structures or rules) or vol-
untary modification of an existing Regional Trans-
mission Organization or Independent System Oper-
ator (and related market structures or rules). 
SEC. 1236. NATIVE LOAD SERVICE OBLIGATION. 
Part II of the Federal Power Act (16 U.S.C. 824 et 
seq.) is amended by adding at the end the following: 
‘‘SEC. 217. NATIVE LOAD SERVICE OBLIGATION. 
‘‘(a) MEETING SERVICE OBLIGATIONS.—(1) Any load- 
serving entity that, as of the date of enactment of this sec-
tion— 
‘‘(A) owns generation facilities, markets the out-
put of Federal generation facilities, or holds rights 
under 1 or more wholesale contracts to purchase elec-
tric energy, for the purpose of meeting a service obli-
gation, and 
‘‘(B) by reason of ownership of transmission fa-
cilities, or 1 or more contracts or service agreements 
for firm transmission service, holds firm transmission 
rights for delivery of the output of such generation fa-
448 
cilities or such purchased energy to meet such service 
obligation, 
is entitled to use such firm transmission rights, or, equiva-
lent tradable or financial transmission rights, in order to 
deliver such output or purchased energy, or the output of 
other generating facilities or purchased energy to the extent 
deliverable using such rights, to the extent required to meet 
its service obligation. 
‘‘(2) To the extent that all or a portion of the service 
obligation covered by such firm transmission rights or 
equivalent tradable or financial transmission rights is 
transferred to another load-serving entity, the successor 
load-serving entity shall be entitled to use the firm trans-
mission rights or equivalent tradable or financial trans-
mission rights associated with the transferred service obli-
gation. Subsequent transfers to another load-serving entity, 
or back to the original load-serving entity, shall be entitled 
to the same rights. 
‘‘(3) The Commission shall exercise its authority under 
this Act in a manner that facilitates the planning and ex-
pansion of transmission facilities to meet the reasonable 
needs of load-serving entities to satisfy their service obliga-
tions, and enables load-serving entities to secure firm trans-
mission rights (or equivalent tradable or financial rights)
449 
on a long term basis for long term power supply arrange-
ments made, or planned, to meet such needs. 
‘‘(b) ALLOCATION OF TRANSMISSION RIGHTS.—Noth-
ing in subsections (a)(1) and (a) (2) of this section shall 
affect any existing or future methodology employed by an 
RTO or ISO for allocating or auctioning transmission 
rights if such RTO or ISO was authorized by the Commis-
sion to allocate or auction financial transmission rights on 
its system as of January 1, 2005, and the Commission de-
termines that any future allocation or auction is just, rea-
sonable and not unduly discriminatory or preferential, pro-
vided, however, that if such an RTO or ISO never allocated 
financial transmission rights on its system that pertained 
to a period before January 1, 2005, with respect to any 
application by such RTO or ISO that would change its 
methodology the Commission shall exercise its authority in 
a manner consistent with the Act and the policies expressed 
in subsections (a)(1) and (a)(2) as applied to firm trans-
mission rights held by a load serving entity as of January 
1, 2005, to the extent the associated generation ownership 
or power purchase arrangements remain in effect. 
‘‘(c) CERTAIN TRANSMISSION RIGHTS.—The Commis-
sion may exercise authority under this Act to make trans-
mission rights not used to meet an obligation covered by 
subsection (a) available to other entities in a manner deter-
450 
mined by the Commission to be just, reasonable, and not 
unduly discriminatory or preferential. 
‘‘(d) OBLIGATION TO BUILD.—Nothing in this Act 
shall relieve a load-serving entity from any obligation 
under State or local law to build transmission or distribu-
tion facilities adequate to meet its service obligations. 
‘‘(e) CONTRACTS.—Nothing in this section shall pro-
vide a basis for abrogating any contract or service agree-
ment for firm transmission service or rights in effect as of 
the date of the enactment of this subsection. If an ISO in 
the Western Interconnection had allocated financial trans-
mission rights prior to the date of enactment of this section 
but had not done so with respect to one or more load-serving 
entities’ firm transmission rights held under contracts to 
which the preceding sentence applies (or held by reason of 
ownership of transmission facilities), such load-serving en-
tities may not be required, without their consent, to convert 
such firm transmission rights to tradable or financial 
rights, except where the load-serving entity has voluntarily 
joined the ISO as a participating transmission owner (or 
its successor) in accordance with the ISO tariff. 
‘‘(f) WATER PUMPING FACILITIES.—The Commission 
shall ensure that any entity described in section 201(f) that 
owns transmission facilities used predominately to support 
its own water pumping facilities shall have, with respect
451 
to such facilities, protections for transmission service com-
parable to those provided to load-serving entities pursuant 
to this section. 
‘‘(g) FERC RULEMAKING
ON LONG-TERM TRANS-
MISSION RIGHTS IN ORGANIZED MARKETS.—Within one 
year after the date of enactment of this section and after 
notice and an opportunity for comment, the Commission 
shall by rule or order implement subsection (a)(3) in Com-
mission-approved RTOs and ISOs with organized elec-
tricity markets. 
‘‘(h) ERCOT.—This section shall not apply within the 
area referred to in section 212(k)(2)(A). 
‘‘(i) JURISDICTION.—This section does not authorize 
the Commission to take any action not otherwise within 
its jurisdiction. 
‘‘(j) EFFECT OF EXERCISING RIGHTS.—An entity that 
lawfully exercises rights granted under subsection (a) shall 
not be considered by such action as engaging in undue dis-
crimination or preference under this Act. 
‘‘(k) 
TVA 
AREA.—For 
purposes 
of 
subsection 
(a)(1)(B), a load-serving entity that is located within the 
service area of the Tennessee Valley Authority and that has 
a firm wholesale power supply contract with the Tennessee 
Valley Authority shall be deemed to hold firm transmission 
rights for the transmission of such power.
452 
‘‘(l) DEFINITIONS.—For purposes of this section: 
‘‘(1) The term ‘distribution utility’ means an 
electric utility that has a service obligation to end- 
users or to a State utility or electric cooperative that, 
directly or indirectly, through 1 or more additional 
State utilities or electric cooperatives, provides elec-
tric service to end-users. 
‘‘(2) The term ‘load-serving entity’ means a dis-
tribution utility or an electric utility that has a serv-
ice obligation. 
‘‘(3) The term ‘service obligation’ means a re-
quirement applicable to, or the exercise of authority 
granted to, an electric utility under Federal, State or 
local law or under long-term contracts to provide elec-
tric service to end-users or to a distribution utility. 
‘‘(4) The term ‘State utility’ means a State or 
any political subdivision of a State, or any agency, 
authority, or instrumentality of any 1 or more of the 
foregoing, or a corporation which is wholly owned, di-
rectly or indirectly, by any 1 or more of the foregoing, 
competent to carry on the business of developing, 
transmitting, utilizing or distributing power.’’.
453 
SEC. 1237. STUDY ON THE BENEFITS OF ECONOMIC DIS-
PATCH. 
(a) STUDY.—The Secretary of Energy, in coordination 
and consultation with the States, shall conduct a study 
on— 
(1) the procedures currently used by electric util-
ities to perform economic dispatch; 
(2) identifying possible revisions to those proce-
dures to improve the ability of nonutility generation 
resources to offer their output for sale for the purpose 
of inclusion in economic dispatch; and 
(3) the potential benefits to residential, commer-
cial, and industrial electricity consumers nationally 
and in each state if economic dispatch procedures 
were revised to improve the ability of nonutility gen-
eration resources to offer their output for inclusion in 
economic dispatch. 
(b) DEFINITION.—The term ‘‘economic dispatch’’ when 
used in this section means the operation of generation fa-
cilities to produce energy at the lowest cost to reliably serve 
consumers, recognizing any operational limits of generation 
and transmission facilities. 
(c) REPORT TO CONGRESS AND THE STATES.—Not 
later than 90 days after the date of enactment of this Act, 
and on a yearly basis following, the Secretary of Energy 
shall submit a report to Congress and the States on the re-
454 
sults of the study conducted under subsection (a), including 
recommendations to Congress and the States for any sug-
gested legislative or regulatory changes. 
Subtitle D—Transmission Rate 
Reform 
SEC. 1241. TRANSMISSION INFRASTRUCTURE INVESTMENT. 
Part II of the Federal Power Act (16 U.S.C. 824 et 
seq.) is amended by adding at the end the following: 
‘‘SEC. 218. TRANSMISSION INFRASTRUCTURE INVESTMENT. 
‘‘(a) RULEMAKING REQUIREMENT.—Within 1 year 
after the enactment of this section, the Commission shall 
establish, by rule, incentive-based (including, but not lim-
ited to performance-based) rate treatments for the trans-
mission of electric energy in interstate commerce by public 
utilities for the purpose of benefiting consumers by ensuring 
reliability and reducing the cost of delivered power by re-
ducing transmission congestion. Such rule shall— 
‘‘(1) promote reliable and economically efficient 
transmission and generation of electricity by pro-
moting capital investment in the enlargement, im-
provement, maintenance and operation of facilities 
for the transmission of electric energy in interstate 
commerce;
455 
‘‘(2) provide a return on equity that attracts 
new investment in transmission facilities (including 
related transmission technologies); 
‘‘(3) encourage deployment of transmission tech-
nologies and other measures to increase the capacity 
and efficiency of existing transmission facilities and 
improve the operation of such facilities; and 
‘‘(4) allow recovery of all prudently incurred 
costs necessary to comply with mandatory reliability 
standards issued pursuant to section 215 of this Act. 
The Commission may, from time to time, revise such rule. 
‘‘(b) ADDITIONAL INCENTIVES FOR RTO PARTICIPA-
TION.—In the rule issued under this section, the Commis-
sion shall, to the extent within its jurisdiction, provide for 
incentives to each transmitting utility or electric utility 
that joins a Regional Transmission Organization or Inde-
pendent System Operator. Incentives provided by the Com-
mission pursuant to such rule shall include— 
‘‘(1) recovery of all prudently incurred costs to 
develop and participate in any proposed or approved 
RTO, ISO, or independent transmission company; 
‘‘(2) recovery of all costs previously approved by 
a State commission which exercised jurisdiction over 
the transmission facilities prior to the utility’s par-
ticipation in the RTO or ISO, including costs nec-
456 
essary to honor preexisting transmission service con-
tracts, in a manner which does not reduce the reve-
nues the utility receives for transmission services for 
a reasonable transition period after the utility joins 
the RTO or ISO; 
‘‘(3) recovery as an expense in rates of the costs 
prudently incurred to conduct transmission planning 
and reliability activities, including the costs of par-
ticipating in RTO, ISO and other regional planning 
activities and design, study and other precertification 
costs involved in seeking permits and approvals for 
proposed transmission facilities; 
‘‘(4) a current return in rates for construction 
work in progress for transmission facilities and full 
recovery of prudently incurred costs for constructing 
transmission facilities; 
‘‘(5) formula transmission rates; and 
‘‘(6) a maximum 15 year accelerated deprecia-
tion on new transmission facilities for rate treatment 
purposes. 
The Commission shall ensure that any costs recoverable 
pursuant to this subsection may be recovered by such utility 
through the transmission rates charged by such utility or 
through the transmission rates charged by the RTO or ISO 
that provides transmission service to such utility.
457 
‘‘(c) JUST AND REASONABLE RATES.—All rates ap-
proved under the rules adopted pursuant to this section, in-
cluding any revisions to such rules, are subject to the re-
quirement of sections 205 and 206 that all rates, charges, 
terms, and conditions be just and reasonable and not un-
duly discriminatory or preferential.’’. 
Subtitle E—Amendments to PURPA 
SEC. 1251. NET METERING AND ADDITIONAL STANDARDS. 
(a) ADOPTION OF STANDARDS.—Section 111(d) of the 
Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 
2621(d)) is amended by adding at the end the following: 
‘‘(11) NET
METERING.—Each electric utility 
shall make available upon request net metering serv-
ice to any electric consumer that the electric utility 
serves. For purposes of this paragraph, the term ‘net 
metering service’ means service to an electric con-
sumer under which electric energy generated by that 
electric consumer from an eligible on-site generating 
facility and delivered to the local distribution facili-
ties may be used to offset electric energy provided by 
the electric utility to the electric consumer during the 
applicable billing period. 
‘‘(12) FUEL
SOURCES.—Each electric utility 
shall develop a plan to minimize dependence on 1 fuel 
source and to ensure that the electric energy it sells
458 
to consumers is generated using a diverse range of 
fuels and technologies, including renewable tech-
nologies. 
‘‘(13) FOSSIL FUEL GENERATION EFFICIENCY.— 
Each electric utility shall develop and implement a 
10-year plan to increase the efficiency of its fossil fuel 
generation.’’. 
(b) COMPLIANCE.— 
(1) TIME LIMITATIONS.—Section 112(b) of the 
Public Utility Regulatory Policies Act of 1978 (16 
U.S.C. 2622(b)) is amended by adding at the end the 
following: 
‘‘(3)(A) Not later than 2 years after the enactment of 
this paragraph, each State regulatory authority (with re-
spect to each electric utility for which it has ratemaking 
authority) and each nonregulated electric utility shall com-
mence the consideration referred to in section 111, or set 
a hearing date for such consideration, with respect to each 
standard established by paragraphs (11) through (13) of 
section 111(d). 
‘‘(B) Not later than 3 years after the date of the enact-
ment of this paragraph, each State regulatory authority 
(with respect to each electric utility for which it has rate-
making authority), and each nonregulated electric utility, 
shall complete the consideration, and shall make the deter-
459 
mination, referred to in section 111 with respect to each 
standard established by paragraphs (11) through (13) of 
section 111(d).’’. 
(2) FAILURE TO COMPLY.—Section 112(c) of the 
Public Utility Regulatory Policies Act of 1978 (16 
U.S.C. 2622(c)) is amended by adding at the end the 
following: 
‘‘In the case of each standard established by paragraphs 
(11) through (13) of section 111(d), the reference contained 
in this subsection to the date of enactment of this Act shall 
be deemed to be a reference to the date of enactment of such 
paragraphs (11) through (13).’’. 
(3) PRIOR STATE ACTIONS.— 
(A) IN GENERAL.—Section 112 of the Public 
Utility Regulatory Policies Act of 1978 (16 
U.S.C. 2622) is amended by adding at the end 
the following: 
‘‘(d) PRIOR STATE ACTIONS.—Subsections (b) and (c) 
of this section shall not apply to the standards established 
by paragraphs (11) through (13) of section 111(d) in the 
case of any electric utility in a State if, before the enact-
ment of this subsection— 
‘‘(1) the State has implemented for such utility 
the standard concerned (or a comparable standard);
460 
‘‘(2) the State regulatory authority for such 
State or relevant nonregulated electric utility has con-
ducted a proceeding to consider implementation of the 
standard concerned (or a comparable standard) for 
such utility; or 
‘‘(3) the State legislature has voted on the imple-
mentation of such standard (or a comparable stand-
ard) for such utility.’’. 
(B) CROSS
REFERENCE.—Section 124 of 
such Act (16 U.S.C. 2634) is amended by adding 
the following at the end thereof: ‘‘In the case of 
each standard established by paragraphs (11) 
through (13) of section 111(d), the reference con-
tained in this subsection to the date of enactment 
of this Act shall be deemed to be a reference to 
the date of enactment of such paragraphs (11) 
through (13).’’. 
SEC. 1252. SMART METERING. 
(a) IN GENERAL.—Section 111(d) of the Public Utility 
Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) is 
amended by adding at the end the following: 
‘‘(14) TIME-BASED METERING AND COMMUNICA-
TIONS.— 
‘‘(A) Not later than 18 months after the 
date of enactment of this paragraph, each electric
461 
utility shall offer each of its customer classes, 
and provide individual customers upon customer 
request, a time-based rate schedule under which 
the rate charged by the electric utility varies 
during different time periods and reflects the 
variance, if any, in the utility’s costs of gener-
ating and purchasing electricity at the wholesale 
level. The time-based rate schedule shall enable 
the electric consumer to manage energy use and 
cost through advanced metering and communica-
tions technology. 
‘‘(B) The types of time-based rate schedules 
that may be offered under the schedule referred 
to in subparagraph (A) include, among others— 
‘‘(i) time-of-use pricing whereby elec-
tricity prices are set for a specific time pe-
riod on an advance or forward basis, typi-
cally not changing more often than twice a 
year, based on the utility’s cost of gener-
ating and/or purchasing such electricity at 
the wholesale level for the benefit of the con-
sumer. Prices paid for energy consumed 
during these periods shall be pre-established 
and known to consumers in advance of such 
consumption, allowing them to vary their
462 
demand and usage in response to such 
prices and manage their energy costs by 
shifting usage to a lower cost period or re-
ducing their consumption overall; 
‘‘(ii) critical peak pricing whereby 
time-of-use prices are in effect except for 
certain peak days, when prices may reflect 
the costs of generating and/or purchasing 
electricity at the wholesale level and when 
consumers may receive additional discounts 
for reducing peak period energy consump-
tion; 
‘‘(iii) real-time pricing whereby elec-
tricity prices are set for a specific time pe-
riod on an advanced or forward basis, re-
flecting the utility’s cost of generating and/ 
or purchasing electricity at the wholesale 
level, and may change as often as hourly; 
and 
‘‘(iv) credits for consumers with large 
loads who enter into pre-established peak 
load reduction agreements that reduce a 
utility’s planned capacity obligations. 
‘‘(C) Each electric utility subject to sub-
paragraph (A) shall provide each customer re-
463 
questing a time-based rate with a time-based 
meter capable of enabling the utility and cus-
tomer to offer and receive such rate, respectively. 
‘‘(D) For purposes of implementing this 
paragraph, any reference contained in this sec-
tion to the date of enactment of the Public Util-
ity Regulatory Policies Act of 1978 shall be 
deemed to be a reference to the date of enactment 
of this paragraph. 
‘‘(E) In a State that permits third-party 
marketers to sell electric energy to retail electric 
consumers, such consumers shall be entitled to re-
ceive the same time-based metering and commu-
nications device and service as a retail electric 
consumer of the electric utility. 
‘‘(F) Notwithstanding subsections (b) and 
(c) of section 112, each State regulatory author-
ity shall, not later than 18 months after the date 
of enactment of this paragraph conduct an inves-
tigation in accordance with section 115(i) and 
issue a decision whether it is appropriate to im-
plement the standards set out in subparagraphs 
(A) and (C).’’. 
(b) STATE INVESTIGATION OF DEMAND RESPONSE AND 
TIME-BASED METERING.—Section 115 of the Public Utility
464 
Regulatory Policies Act of 1978 (16 U.S.C. 2625) is amend-
ed as follows: 
(1) By inserting in subsection (b) after the 
phrase ‘‘the standard for time-of-day rates established 
by section 111(d)(3)’’ the following: ‘‘and the stand-
ard for time-based metering and communications es-
tablished by section 111(d)(14)’’. 
(2) By inserting in subsection (b) after the 
phrase ‘‘are likely to exceed the metering’’ the fol-
lowing: ‘‘and communications’’. 
(3) By adding the at the end the following: 
‘‘(i) 
TIME-BASED
METERING
AND
COMMUNICA-
TIONS.—In making a determination with respect to the 
standard established by section 111(d)(14), the investiga-
tion requirement of section 111(d)(14)(F) shall be as fol-
lows: Each State regulatory authority shall conduct an in-
vestigation and issue a decision whether or not it is appro-
priate for electric utilities to provide and install time-based 
meters and communications devices for each of their cus-
tomers which enable such customers to participate in time- 
based pricing rate schedules and other demand response 
programs.’’. 
(c) FEDERAL ASSISTANCE ON DEMAND RESPONSE.— 
Section 132(a) of the Public Utility Regulatory Policies Act 
of 1978 (16 U.S.C. 2642(a)) is amended by striking ‘‘and’’
465 
at the end of paragraph (3), striking the period at the end 
of paragraph (4) and inserting ‘‘; and’’, and by adding the 
following at the end thereof: 
‘‘(5) technologies, techniques, and rate-making 
methods related to advanced metering and commu-
nications and the use of these technologies, techniques 
and methods in demand response programs.’’. 
(d) FEDERAL GUIDANCE.—Section 132 of the Public 
Utility Regulatory Policies Act of 1978 (16 U.S.C. 2642) 
is amended by adding the following at the end thereof: 
‘‘(d) DEMAND RESPONSE.—The Secretary shall be re-
sponsible for— 
‘‘(1) educating consumers on the availability, ad-
vantages, and benefits of advanced metering and com-
munications technologies, including the funding of 
demonstration or pilot projects; 
‘‘(2) working with States, utilities, other energy 
providers and advanced metering and communica-
tions experts to identify and address barriers to the 
adoption of demand response programs; and 
‘‘(3) not later than 180 days after the date of en-
actment of the Energy Policy Act of 2005, providing 
Congress with a report that identifies and quantifies 
the national benefits of demand response and makes
466 
a recommendation on achieving specific levels of such 
benefits by January 1, 2007.’’. 
(e) DEMAND RESPONSE AND REGIONAL COORDINA-
TION.— 
(1) IN GENERAL.—It is the policy of the United 
States to encourage States to coordinate, on a re-
gional basis, State energy policies to provide reliable 
and affordable demand response services to the public. 
(2) TECHNICAL ASSISTANCE.—The Secretary of 
Energy shall provide technical assistance to States 
and regional organizations formed by 2 or more 
States to assist them in— 
(A) identifying the areas with the greatest 
demand response potential; 
(B) identifying and resolving problems in 
transmission and distribution networks, includ-
ing through the use of demand response; 
(C) developing plans and programs to use 
demand response to respond to peak demand or 
emergency needs; and 
(D) identifying specific measures consumers 
can take to participate in these demand response 
programs. 
(3) REPORT.—Not later than 1 year after the 
date of enactment of the Energy Policy Act of 2005,