362
SEC. 934. COAL MINING TECHNOLOGIES. 
(a) ESTABLISHMENT.—The Secretary shall carry out 
a program of studies on coal mining technologies. The 
Secretary shall cooperate with appropriate Federal agen-
cies, coal producers, trade associations, equipment manu-
facturers, institutions of higher education with mining en-
gineering departments, and other relevant entities. 
(b) PROGRAM.—The activities carried out under this 
section shall—
(1) be guided by the mining priorities identified 
by the Mining Industry of the Future Program and 
in the recommendations from relevant reports of the 
National Academy of Sciences on mining tech-
nologies; and 
(2) include activities exploring minimization of 
contaminants in mined coal that contribute to envi-
ronmental concerns. 
SEC. 935. COAL AND RELATED TECHNOLOGIES PROGRAM. 
(a) IN GENERAL.—In addition to the programs au-
thorized under title IV, the Secretary shall conduct a pro-
gram of technology to study coal and power systems, in-
cluding programs to facilitate production and generation 
of coal-based power through—
(1) innovations for existing plants; 
(2) integrated gasification combined cycle; 
(3) advanced combustion systems;
363
(4) turbines for synthesis gas derived from coal; 
(5) carbon capture and sequestration; 
(6) coal-derived transportation fuels and chemi-
cals; 
(7) solid fuels and feedstocks; 
(8) advanced studies; 
(9) advanced separation technologies; and 
(10) a joint project for permeability enhance-
ment in coals for natural gas production and carbon 
dioxide sequestration. 
(b) COST AND PERFORMANCE GOALS.—In carrying 
out programs authorized by this section, the Secretary 
shall identify cost and performance goals for coal-based 
technologies that would permit the continued cost-com-
petitive use of coal for electricity generation, as chemical 
feedstocks, and as transportation fuel in 2007, 2015, and 
the years after 2020. In establishing such cost and per-
formance goals, the Secretary shall—
(1) consider activities and studies undertaken 
to date by industry in cooperation with the Depart-
ment in support of such assessment; 
(2) consult with interested entities, including 
coal producers, industries using coal, organizations 
to promote coal and advanced coal technologies, en-
364
vironmental organizations, and organizations rep-
resenting workers; 
(3) not later than 120 days after the date of 
enactment of this Act, publish in the Federal Reg-
ister proposed draft cost and performance goals for 
public comments; and 
(4) not later than 180 days after the date of 
enactment of this Act and every 4 years thereafter, 
submit to Congress a report describing final cost 
and performance goals for such technologies that in-
cludes a list of technical milestones as well as an ex-
planation of how programs authorized in this section 
will not duplicate the activities authorized under the 
Clean Coal Power Initiative authorized under sub-
title A of title IV. 
SEC. 936. COMPLEX WELL TECHNOLOGY TESTING FACIL-
ITY. 
The Secretary, in coordination with industry leaders 
in extended research drilling technology, shall establish a 
Complex Well Technology Testing Facility at the Rocky 
Mountain Oilfield Testing Center to increase the range of 
extended drilling technologies.
365
PART II—ULTRA-DEEPWATER AND UNCONVEN-
TIONAL NATURAL GAS AND OTHER PETRO-
LEUM RESOURCES 
SEC. 941. PROGRAM AUTHORITY. 
(a) IN GENERAL.—The Secretary shall carry out a 
program under this part regarding technologies for ultra-
deepwater and unconventional natural gas and other pe-
troleum resource exploration and production, including ad-
dressing the technology challenges for small producers, 
safe operations, and environmental mitigation (including 
reduction of greenhouse gas emissions and sequestration 
of carbon). 
(b) PROGRAM ELEMENTS.—The program under this 
part shall address the following areas, including improving 
safety and minimizing environmental impacts of activities 
within each area: 
(1) Ultra-deepwater technology, including drill-
ing to formations in the Outer Continental Shelf to 
depths greater than 15,000 feet. 
(2) Ultra-deepwater architecture. 
(3) Unconventional natural gas and other petro-
leum resource exploration and production tech-
nology, including the technology challenges of small 
producers.
366
(c) LIMITATION ON LOCATION OF FIELD ACTIVI-
TIES.—Field activities under the program under this part 
shall be carried out only—
(1) in—
(A) areas in the territorial waters of the 
United States not under any Outer Continental 
Shelf moratorium as of September 30, 2002; 
(B) areas onshore in the United States on 
public land administered by the Secretary of the 
Interior available for oil and gas leasing, where 
consistent with applicable law and land use 
plans; and 
(C) areas onshore in the United States on 
State or private land, subject to applicable law; 
and 
(2) with the approval of the appropriate Fed-
eral or State land management agency or private 
land owner. 
(d) CONSULTATION WITH SECRETARY OF THE INTE-
RIOR.—In carrying out this part, the Secretary shall con-
sult regularly with the Secretary of the Interior. 
SEC. 942. ULTRA-DEEPWATER PROGRAM. 
(a) IN GENERAL.—The Secretary shall carry out the 
activities under section 941(a), to maximize the use of the 
ultra-deepwater natural gas and other petroleum resources
367
of the United States by increasing the supply of such re-
sources, through reducing the cost and increasing the effi-
ciency of exploration for and production of such resources, 
while improving safety and minimizing environmental im-
pacts. 
(b) ROLE OF THE SECRETARY.—The Secretary shall 
have ultimate responsibility for, and oversight of, all as-
pects of the program under this section. 
(c) ROLE OF THE PROGRAM CONSORTIUM.—
(1) IN GENERAL.—The Secretary may contract 
with a consortium to—
(A) manage awards pursuant to subsection 
(f)(4); 
(B) make recommendations to the Sec-
retary for project solicitations; 
(C) disburse funds awarded under sub-
section (f) as directed by the Secretary in ac-
cordance with the annual plan under subsection 
(e); and 
(D) carry out other activities assigned to 
the program consortium by this section. 
(2) LIMITATION.—The Secretary may not as-
sign any activities to the program consortium except 
as specifically authorized under this section. 
(3) CONFLICT OF INTEREST.—
368
(A) PROCEDURES.—The Secretary shall 
establish procedures—
(i) to ensure that each board member, 
officer, or employee of the program consor-
tium who is in a decision-making capacity 
under subsection (f)(3) or (4) shall disclose 
to the Secretary any financial interests in, 
or financial relationships with, applicants 
for or recipients of awards under this sec-
tion, including those of his or her spouse 
or minor child, unless such relationships or 
interests would be considered to be remote 
or inconsequential; and 
(ii) to require any board member, offi-
cer, or employee with a financial relation-
ship or interest disclosed under clause (i) 
to recuse himself or herself from any re-
view under subsection (f)(3) or oversight 
under subsection (f)(4) with respect to 
such applicant or recipient. 
(B) FAILURE TO COMPLY.—The Secretary 
may disqualify an application or revoke an 
award under this section if a board member, of-
ficer, or employee has failed to comply with pro-
cedures required under subparagraph (A)(ii).
369
(d) SELECTION OF THE PROGRAM CONSORTIUM.—
(1) IN GENERAL.—The Secretary shall select 
the program consortium through an open, competi-
tive process. 
(2) MEMBERS.—The program consortium may 
include corporations, trade associations, institutions 
of higher education, National Laboratories, or other 
research institutions. After submitting a proposal 
under paragraph (4), the program consortium may 
not add members without the consent of the Sec-
retary. 
(3) TAX
STATUS.—The program consortium 
shall be an entity that is exempt from tax under sec-
tion 501(c)(3) of the Internal Revenue Code of 
1986. 
(4) SCHEDULE.—Not later than 180 days after 
the date of enactment of this Act, the Secretary 
shall solicit proposals from eligible consortia to per-
form the duties in subsection (c)(1), which shall be 
submitted not later than 360 days after the date of 
enactment of this Act. The Secretary shall select the 
program consortium not later than 18 months after 
such date of enactment.
370
(5) APPLICATION.—Applicants shall submit a 
proposal including such information as the Secretary 
may require. At a minimum, each proposal shall—
(A) list all members of the consortium; 
(B) fully describe the structure of the con-
sortium, including any provisions relating to in-
tellectual property; and 
(C) describe how the applicant would carry 
out the activities of the program consortium 
under this section. 
(6) CRITERION.—The Secretary shall consider 
the amount of the fee an applicant proposes to re-
ceive under subsection (g) in selecting a consortium 
under this section. 
(e) ANNUAL PLAN.—
(1) IN GENERAL.—The program under this sec-
tion shall be carried out pursuant to an annual plan 
prepared by the Secretary in accordance with para-
graph (2). 
(2) DEVELOPMENT.—
(A) 
SOLICITATION
OF
RECOMMENDA-
TIONS.—Before drafting an annual plan under 
this subsection, the Secretary shall solicit spe-
cific written recommendations from the pro-
gram consortium for each element to be ad-
371
dressed in the plan, including those described in 
paragraph (4). The Secretary may request that 
the 
program 
consortium 
submit 
its 
rec-
ommendations in the form of a draft annual 
plan. 
(B) SUBMISSION
OF
RECOMMENDATIONS; 
OTHER COMMENT.—The Secretary shall submit 
the recommendations of the program consor-
tium under subparagraph (A) to the Ultra-
Deepwater Advisory Committee established 
under section 945(a) for review, and such Advi-
sory Committee shall provide to the Secretary 
written comments by a date determined by the 
Secretary. The Secretary may also solicit com-
ments from any other experts. 
(C) CONSULTATION.—The Secretary shall 
consult regularly with the program consortium 
throughout the preparation of the annual plan. 
(3) PUBLICATION.—The Secretary shall trans-
mit to Congress and publish in the Federal Register 
the annual plan, along with any written comments 
received under paragraph (2)(A) and (B). 
(4) CONTENTS.—The annual plan shall describe 
the ongoing and prospective activities of the pro-
gram under this section and shall include—
372
(A) a list of any solicitations for awards 
that the Secretary plans to issue to carry out 
research, development, demonstration, or com-
mercial application activities, including the top-
ics for such work, who would be eligible to 
apply, selection criteria, and the duration of 
awards; and 
(B) a description of the activities expected 
of the program consortium to carry out sub-
section (f)(4). 
(5) ESTIMATES
OF
INCREASED
ROYALTY
RE-
CEIPTS.—The Secretary, in consultation with the 
Secretary of the Interior, shall provide an annual re-
port to Congress with the President’s budget on the 
estimated cumulative increase in Federal royalty re-
ceipts (if any) resulting from the implementation of 
this part. The initial report under this paragraph 
shall be submitted in the first President’s budget fol-
lowing the completion of the first annual plan re-
quired under this subsection. 
(f) AWARDS.—
(1) IN GENERAL.—The Secretary shall make 
awards to carry out activities under the program 
under this section. The program consortium shall
373
not be eligible to receive such awards, but members 
of the program consortium may receive such awards. 
(2) PROPOSALS.—The Secretary shall solicit 
proposals for awards under this subsection in such 
manner and at such time as the Secretary may pre-
scribe, in consultation with the program consortium. 
(3) REVIEW.—The Secretary shall make awards 
under this subsection through a competitive process, 
which shall include a review by individuals selected 
by the Secretary. Such individuals shall include, for 
each application, Federal officials, the program con-
sortium, and non-Federal experts who are not board 
members, officers, or employees of the program con-
sortium or of a member of the program consortium. 
(4) OVERSIGHT.—
(A) IN
GENERAL.—The program consor-
tium shall oversee the implementation of 
awards under this subsection, consistent with 
the annual plan under subsection (e), including 
disbursing funds and monitoring activities car-
ried out under such awards for compliance with 
the terms and conditions of the awards. 
(B) EFFECT.—Nothing in subparagraph 
(A) shall limit the authority or responsibility of 
the Secretary to oversee awards, or limit the
374
authority of the Secretary to review or revoke 
awards. 
(C) PROVISION
OF
INFORMATION.—The 
Secretary shall provide to the program consor-
tium the information necessary for the program 
consortium to carry out its responsibilities 
under this paragraph. 
(g) ADMINISTRATIVE COSTS.—
(1) IN GENERAL.—To compensate the program 
consortium for carrying out its activities under this 
section, the Secretary shall provide to the program 
consortium funds sufficient to administer the pro-
gram. This compensation may include a manage-
ment fee consistent with Department of Energy con-
tracting practices and procedures. 
(2) ADVANCE.—The Secretary shall advance 
funds to the program consortium upon selection of 
the consortium, which shall be deducted from 
amounts to be provided under paragraph (1). 
(h) AUDIT.—The Secretary shall retain an inde-
pendent, commercial auditor to determine the extent to 
which funds provided to the program consortium, and 
funds provided under awards made under subsection (f), 
have been expended in a manner consistent with the pur-
poses and requirements of this part. The auditor shall
375
transmit a report annually to the Secretary, who shall 
transmit the report to Congress, along with a plan to rem-
edy any deficiencies cited in the report. 
SEC. 943. UNCONVENTIONAL NATURAL GAS AND OTHER PE-
TROLEUM RESOURCES PROGRAM. 
(a) IN GENERAL.—The Secretary shall carry out ac-
tivities under subsection 941(b)(3), to maximize the use 
of the onshore unconventional natural gas and other petro-
leum resources of the United States, by increasing the 
supply of such resources, through reducing the cost and 
increasing the efficiency of exploration for and production 
of such resources, while improving safety and minimizing 
environmental impacts. 
(b) AWARDS.—
(1) IN
GENERAL.—The Secretary shall carry 
out this section through awards to consortia made 
through an open, competitive process. As a condition 
of award of funds, qualified consortia shall—
(A) demonstrate capability and experience 
in unconventional onshore natural gas or other 
petroleum technologies; 
(B) provide a research plan that dem-
onstrates how additional natural gas or oil pro-
duction will be achieved; and
376
(C) at the request of the Secretary, provide 
technical advice to the Secretary for the pur-
poses of developing the annual plan required 
under subsection (e). 
(2) PRODUCTION
POTENTIAL.—The Secretary 
shall seek to ensure that the number and types of 
awards made under this subsection have reasonable 
potential to lead to additional oil and natural gas 
production on Federal lands. 
(3) SCHEDULE.—To carry out this subsection, 
not later than 180 days after the date of enactment 
of this Act, the Secretary shall solicit proposals from 
consortia, which shall be submitted not later than 
360 days after the date of enactment of this Act. 
The Secretary shall select the first group of research 
consortia to receive awards under this subsection not 
later than 18 months after such date of enactment. 
(c) AUDIT.—The Secretary shall retain an inde-
pendent, commercial auditor to determine the extent to 
which funds provided under awards made under this sec-
tion have been expended in a manner consistent with the 
purposes and requirements of this part. The auditor shall 
transmit a report annually to the Secretary, who shall 
transmit the report to Congress, along with a plan to rem-
edy any deficiencies cited in the report.
377
(d) FOCUS AREAS FOR AWARDS.—
(1) UNCONVENTIONAL
RESOURCES.—Awards 
from allocations under section 949(d)(2) shall focus 
on areas including advanced coalbed methane, deep 
drilling, natural gas production from tight sands, 
natural gas production from gas shales, stranded 
gas, innovative exploration and production tech-
niques, enhanced recovery techniques, and environ-
mental mitigation of unconventional natural gas and 
other petroleum resources exploration and produc-
tion. 
(2) SMALL PRODUCERS.—Awards from alloca-
tions under section 949(d)(3) shall be made to con-
sortia consisting of small producers or organized pri-
marily for the benefit of small producers, and shall 
focus on areas including complex geology involving 
rapid changes in the type and quality of the oil and 
gas reservoirs across the reservoir; low reservoir 
pressure; unconventional natural gas reservoirs in 
coalbeds, deep reservoirs, tight sands, or shales; and 
unconventional oil reservoirs in tar sands and oil 
shales. 
(e) ANNUAL PLAN.—
(1) IN GENERAL.—The program under this sec-
tion shall be carried out pursuant to an annual plan
378
prepared by the Secretary in accordance with para-
graph (2). 
(2) DEVELOPMENT.—
(A) WRITTEN
RECOMMENDATIONS.—Be-
fore drafting an annual plan under this sub-
section, the Secretary shall solicit specific writ-
ten recommendations from the consortia receiv-
ing awards under subsection (b) and the Un-
conventional Resources Technology Advisory 
Committee for each element to be addressed in 
the plan, including those described in subpara-
graph (D). 
(B) CONSULTATION.—The Secretary shall 
consult regularly with the consortia throughout 
the preparation of the annual plan. 
(C) PUBLICATION.—The Secretary shall 
transmit to Congress and publish in the Fed-
eral Register the annual plan, along with any 
written comments received under subparagraph 
(A). 
(D) CONTENTS.—The annual plan shall 
describe the ongoing and prospective activities 
under this section and shall include a list of any 
solicitations for awards that the Secretary plans 
to issue to carry out activities, including the
379
topics for such work, who would be eligible to 
apply, selection criteria, and the duration of 
awards. 
(3) ESTIMATES
OF
INCREASED
ROYALTY
RE-
CEIPTS.—The Secretary, in consultation with the 
Secretary of the Interior, shall provide an annual re-
port to Congress with the President’s budget on the 
estimated cumulative increase in Federal royalty re-
ceipts (if any) resulting from the implementation of 
this part. The initial report under this paragraph 
shall be submitted in the first President’s budget fol-
lowing the completion of the first annual plan re-
quired under this subsection. 
SEC. 944. ADDITIONAL REQUIREMENTS FOR AWARDS. 
(a) DEMONSTRATION PROJECTS.—An application for 
an award under this part for a demonstration project shall 
describe with specificity the intended commercial use of 
the technology to be demonstrated. 
(b) FLEXIBILITY
IN LOCATING DEMONSTRATION 
PROJECTS.—Subject to the limitation in section 941(c), 
a demonstration project under this part relating to an 
ultra-deepwater technology or an ultra-deepwater architec-
ture may be conducted in deepwater depths. 
(c) INTELLECTUAL PROPERTY AGREEMENTS.—If an 
award under this part is made to a consortium (other than
380
the program consortium), the consortium shall provide to 
the Secretary a signed contract agreed to by all members 
of the consortium describing the rights of each member 
to intellectual property used or developed under the award. 
(d) TECHNOLOGY TRANSFER.—2.5 percent of the 
amount of each award made under this part shall be des-
ignated for technology transfer and outreach activities 
under this title. 
(e) COST SHARING REDUCTION FOR INDEPENDENT 
PRODUCERS.—In applying the cost sharing requirements 
under section 972 to an award under this part the Sec-
retary may reduce or eliminate the non-Federal require-
ment if the Secretary determines that the reduction is nec-
essary and appropriate considering the technological risks 
involved in the project. 
SEC. 945. ADVISORY COMMITTEES. 
(a) ULTRA-DEEPWATER ADVISORY COMMITTEE.—
(1) ESTABLISHMENT.—Not later than 270 days 
after the date of enactment of this Act, the Sec-
retary shall establish an advisory committee to be 
known as the Ultra-Deepwater Advisory Committee. 
(2) MEMBERSHIP.—The advisory committee 
under this subsection shall be composed of members 
appointed by the Secretary including—
381
(A) individuals with extensive experience or 
operational knowledge of offshore natural gas 
and other petroleum exploration and produc-
tion; 
(B) individuals broadly representative of 
the affected interests in ultra-deepwater natural 
gas and other petroleum production, including 
interests in environmental protection and safe 
operations; 
(C) no individuals who are Federal employ-
ees; and 
(D) no individuals who are board members, 
officers, or employees of the program consor-
tium. 
(3) DUTIES.—The advisory committee under 
this subsection shall—
(A) advise the Secretary on the develop-
ment and implementation of programs under 
this part related to ultra-deepwater natural gas 
and other petroleum resources; and 
(B) carry out section 942(e)(2)(B). 
(4) COMPENSATION.—A member of the advi-
sory committee under this subsection shall serve 
without compensation but shall receive travel ex-
penses in accordance with applicable provisions
382
under subchapter I of chapter 57 of title 5, United 
States Code. 
(b) UNCONVENTIONAL
RESOURCES
TECHNOLOGY 
ADVISORY COMMITTEE.—
(1) ESTABLISHMENT.—Not later than 270 days 
after the date of enactment of this Act, the Sec-
retary shall establish an advisory committee to be 
known as the Unconventional Resources Technology 
Advisory Committee. 
(2) MEMBERSHIP.—The advisory committee 
under this subsection shall be composed of members 
appointed by the Secretary including—
(A) a majority of members who are em-
ployees or representatives of independent pro-
ducers of natural gas and other petroleum, in-
cluding small producers; 
(B) individuals with extensive research ex-
perience or operational knowledge of unconven-
tional natural gas and other petroleum resource 
exploration and production; 
(C) individuals broadly representative of 
the affected interests in unconventional natural 
gas and other petroleum resource exploration 
and production, including interests in environ-
mental protection and safe operations; and
383
(D) no individuals who are Federal em-
ployees. 
(3) DUTIES.—The advisory committee under 
this subsection shall advise the Secretary on the de-
velopment and implementation of activities under 
this part related to unconventional natural gas and 
other petroleum resources. 
(4) COMPENSATION.—A member of the advi-
sory committee under this subsection shall serve 
without compensation but shall receive travel ex-
penses in accordance with applicable provisions 
under subchapter I of chapter 57 of title 5, United 
States Code. 
(c) PROHIBITION.—No advisory committee estab-
lished under this section shall make recommendations on 
funding awards to particular consortia or other entities, 
or for specific projects. 
SEC. 946. LIMITS ON PARTICIPATION. 
An entity shall be eligible to receive an award under 
this part only if the Secretary finds—
(1) that the entity’s participation in the pro-
gram under this part would be in the economic in-
terest of the United States; and 
(2) that either—
384
(A) the entity is a United States-owned en-
tity organized under the laws of the United 
States; or 
(B) the entity is organized under the laws 
of the United States and has a parent entity or-
ganized under the laws of a country that af-
fords—
(i) to United States-owned entities op-
portunities, comparable to those afforded 
to any other entity, to participate in any 
cooperative research venture similar to 
those authorized under this part; 
(ii) to United States-owned entities 
local investment opportunities comparable 
to those afforded to any other entity; and 
(iii) adequate and effective protection 
for the intellectual property rights of 
United States-owned entities. 
SEC. 947. SUNSET. 
The authority provided by this part shall terminate 
on September 30, 2014. 
SEC. 948. DEFINITIONS. 
In this part:
385
(1) 
DEEPWATER.—The 
term 
‘‘deepwater’’ 
means a water depth that is greater than 200 but 
less than 1,500 meters. 
(2) INDEPENDENT
PRODUCER
OF
OIL
OR 
GAS.—
(A) IN GENERAL.—The term ‘‘independent 
producer of oil or gas’’ means any person that 
produces oil or gas other than a person to 
whom subsection (c) of section 613A of the In-
ternal Revenue Code of 1986 does not apply by 
reason of paragraph (2) (relating to certain re-
tailers) or paragraph (4) (relating to certain re-
finers) of section 613A(d) of such Code. 
(B) RULES FOR APPLYING PARAGRAPHS (2) 
AND (4) OF SECTION 613A(d).—For purposes of 
subparagraph (A), paragraphs (2) and (4) of 
section 613A(d) of the Internal Revenue Code 
of 1986 shall be applied by substituting ‘‘cal-
endar year’’ for ‘‘taxable year’’ each place it ap-
pears in such paragraphs. 
(3) PROGRAM CONSORTIUM.—The term ‘‘pro-
gram consortium’’ means the consortium selected 
under section 942(d). 
(4) REMOTE OR INCONSEQUENTIAL.—The term 
‘‘remote or inconsequential’’ has the meaning given
386
that term in regulations issued by the Office of Gov-
ernment Ethics under section 208(b)(2) of title 18, 
United States Code. 
(5) SMALL PRODUCER.—The term ‘‘small pro-
ducer’’ means an entity organized under the laws of 
the United States with production levels of less than 
1,000 barrels per day of oil equivalent. 
(6) ULTRA-DEEPWATER.—The term ‘‘ultra-
deepwater’’ means a water depth that is equal to or 
greater than 1,500 meters. 
(7) ULTRA-DEEPWATER
ARCHITECTURE.—The 
term ‘‘ultra-deepwater architecture’’ means the inte-
gration of technologies for the exploration for, or 
production of, natural gas or other petroleum re-
sources located at ultra-deepwater depths. 
(8) ULTRA-DEEPWATER
TECHNOLOGY.—The 
term ‘‘ultra-deepwater technology’’ means a discrete 
technology that is specially suited to address 1 or 
more challenges associated with the exploration for, 
or production of, natural gas or other petroleum re-
sources located at ultra-deepwater depths. 
(9) UNCONVENTIONAL
NATURAL
GAS
AND 
OTHER PETROLEUM RESOURCE.—The term ‘‘uncon-
ventional natural gas and other petroleum resource’’ 
means natural gas and other petroleum resource lo-
387
cated onshore in an economically inaccessible geo-
logical formation, including resources of small pro-
ducers. 
SEC. 949. FUNDING. 
(a) IN GENERAL.—
(1) OIL AND GAS LEASE INCOME.—For each of 
fiscal years 2005 through 2014, from any Federal 
royalties, rents, and bonuses derived from Federal 
onshore and offshore oil and gas leases issued under 
the Outer Continental Shelf Lands Act and the Min-
eral Leasing Act which are deposited in the Treas-
ury, and after distribution of any such funds as de-
scribed in subsection (c), $50,000,000 shall be de-
posited into the Ultra-Deepwater and Unconven-
tional Natural Gas and Other Petroleum Research 
Fund (in this section referred to as the Fund). For 
purposes of this section, the term ‘‘royalties’’ ex-
cludes proceeds from the sale of royalty production 
taken in kind and royalty production that is trans-
ferred under section 27(a)(3) of the Outer Conti-
nental Shelf Lands Act (43 U.S.C. 1353(a)(3)). 
(2) AUTHORIZATION OF APPROPRIATIONS.—In 
addition to amounts described in paragraph (1), 
there are authorized to be appropriated to the Sec-
retary, to be deposited in the Fund, $150,000,000
388
for each of the fiscal years 2005 through 2014, to 
remain available until expended. 
(b) OBLIGATIONAL
AUTHORITY.—Monies in the 
Fund shall be available to the Secretary for obligation 
under this part without fiscal year limitation, to remain 
available until expended. 
(c) PRIOR DISTRIBUTIONS.—The distributions de-
scribed in subsection (a) are those required by law—
(1) to States and to the Reclamation Fund 
under the Mineral Leasing Act (30 U.S.C. 191(a)); 
and 
(2) to other funds receiving monies from Fed-
eral oil and gas leasing programs, including—
(A) any recipients pursuant to section 8(g) 
of the Outer Continental Shelf Lands Act (43 
U.S.C. 1337(g)); 
(B) the Land and Water Conservation 
Fund, pursuant to section 2(c) of the Land and 
Water Conservation Fund Act of 1965 (16 
U.S.C. 4601–5(c)); 
(C) the Historic Preservation Fund, pursu-
ant to section 108 of the National Historic 
Preservation Act (16 U.S.C. 470h); and 
(D) the Secure Energy Reinvestment 
Fund.
389
(d) ALLOCATION.—Amounts obligated from the Fund 
under this section in each fiscal year shall be allocated 
as follows: 
(1) 50 percent shall be for activities under sec-
tion 942. 
(2) 35 percent shall be for activities under sec-
tion 943(d)(1). 
(3) 10 percent shall be for activities under sec-
tion 943(d)(2). 
(4) 5 percent shall be for research under section 
941(d). 
(e) FUND.—There is hereby established in the Treas-
ury of the United States a separate fund to be known as 
the ‘‘Ultra-Deepwater and Unconventional Natural Gas 
and Other Petroleum Research Fund’’. 
Subtitle F—Energy Sciences 
SEC. 953. PLAN FOR FUSION ENERGY SCIENCES PROGRAM. 
(a) DECLARATION OF POLICY.—It shall be the policy 
of the United States to conduct a program of activities 
to ensure that the United States is competitive with other 
nations in providing fusion energy for its own needs and 
the needs of other nations. 
(b) PLANNING.—
(1) IN
GENERAL.—Not later than 180 days 
after the date of enactment of this Act, the Sec-
390
retary shall present to Congress a plan, with pro-
posed cost estimates, budgets, and potential inter-
national partners, for the implementation of the pol-
icy described in subsection (a). 
(2) COSTS AND SCHEDULES.—Such plan shall 
also address the status of and, to the degree pos-
sible, costs and schedules for—
(A) the design and implementation of 
international or national facilities for the test-
ing of fusion materials; and 
(B) the design and implementation of 
international or national facilities for the test-
ing and development of key fusion technologies. 
SEC. 954. SPALLATION NEUTRON SOURCE. 
(a) DEFINITION.—For the purposes of this section, 
the term ‘‘Spallation Neutron Source’’ means Department 
Project 99–E–334, Oak Ridge National Laboratory, Oak 
Ridge, Tennessee. 
(b) REPORT.—The Secretary shall report on the 
Spallation Neutron Source as part of the Department’s 
annual budget submission, including a description of the 
achievement of milestones, a comparison of actual costs 
to estimated costs, and any changes in estimated project 
costs or schedule.
391
(c) LIMITATIONS.—The total amount obligated by the 
Department, including prior year appropriations, for the 
Spallation Neutron Source shall not exceed—
(1) $1,192,700,000 for costs of construction; 
(2) $219,000,000 for other project costs; and 
(3) $1,411,700,000 for total project cost. 
SEC. 962. NITROGEN FIXATION. 
The Secretary shall conduct studies on biological ni-
trogen fixation, including plant genomics research relevant 
to the development of commercial crop varieties with en-
hanced nitrogen fixation efficiency and ability. 
Subtitle G—Energy and 
Environment 
SEC. 966. WASTE REDUCTION AND USE OF ALTERNATIVES. 
(a) GRANT AUTHORITY.—The Secretary may make 
a single grant to a qualified institution to examine burning 
post-consumer carpet in cement kilns as an alternative en-
ergy source. The purposes of the grant shall include deter-
mining—
(1) how post-consumer carpet can be burned 
without disrupting kiln operations; 
(2) the extent to which overall kiln emissions 
may be reduced; 
(3) the emissions of air pollutants and other 
relevant environmental impacts; and
392
(4) how this process provides benefits to both 
cement kiln operations and carpet suppliers. 
(b) QUALIFIED INSTITUTION.—For the purposes of 
subsection (a), a qualified institution is an institution of 
higher education with demonstrated expertise in the fields 
of fiber recycling and logistical modeling of carpet waste 
collection and preparation. 
(c) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Secretary for car-
rying out this section $500,000. 
SEC. 967. REPORT ON FUEL CELL TEST CENTER. 
(a) REPORT.—Not later than 1 year after the date 
of enactment of this Act, the Secretary shall transmit to 
Congress a report on the results of a study of the estab-
lishment of a test center for next-generation fuel cells at 
an institution of higher education that has available a con-
tinuous source of hydrogen and access to the electric 
transmission grid. Such report shall include a conceptual 
design for such test center and a projection of the costs 
of establishing the test center. 
(b) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Secretary for car-
rying out this section $500,000.
393
SEC. 968. ARCTIC ENGINEERING RESEARCH CENTER. 
(a) IN GENERAL.—The Secretary of Energy (referred 
to in this section as the ‘‘Secretary’’) in consultation with 
the Secretary of Transportation and the United States 
Arctic Research Commission shall provide annual grants 
to a university located adjacent to the Arctic Energy Of-
fice of the Department of Energy, to establish and operate 
a university research center to be headquartered in Fair-
banks and to be known as the ‘‘Arctic Engineering Re-
search Center’’ (referred to in this section as the ‘‘Cen-
ter’’). 
(b) PURPOSE.—The purpose of the Center shall be 
to conduct research on, and develop improved methods of, 
construction and use of materials to improve the overall 
performance of roads, bridges, residential, commercial, 
and industrial structures, and other infrastructure in the 
Arctic region, with an emphasis on developing—
(1) new construction techniques for roads, 
bridges, rail, and related transportation infrastruc-
ture and residential, commercial, and industrial in-
frastructure that are capable of withstanding the 
Arctic environment and using limited energy re-
sources as efficiently as possible; 
(2) technologies and procedures for increasing 
road, bridge, rail, and related transportation infra-
structure and residential, commercial, and industrial
394
infrastructure safety, reliability, and integrity in the 
Arctic region; 
(3) new materials and improving the perform-
ance and energy efficiency of existing materials for 
the construction of roads, bridges, rail, and related 
transportation infrastructure and residential, com-
mercial, and industrial infrastructure in the Arctic 
region; and 
(4) recommendations for new local, regional, 
and State permitting and building codes to ensure 
transportation and building safety and efficient en-
ergy use when constructing, using, and occupying 
such infrastructure in the Arctic region. 
(c) OBJECTIVES.—The Center shall carry out—
(1) basic and applied research in the subjects 
described in subsection (b), the products of which 
shall be judged by peers or other experts in the field 
to advance the body of knowledge in road, bridge, 
rail, and infrastructure engineering in the Arctic re-
gion; and 
(2) an ongoing program of technology transfer 
that makes research results available to potential 
users in a form that can be implemented. 
(d) AMOUNT OF GRANT.—For each of fiscal years 
2005 through 2010, the Secretary shall provide a grant
395
in the amount of $3,000,000 to the institution specified 
in subsection (a) to carry out this section. 
(e) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to carry out this section 
$3,000,000 for each of fiscal years 2005 through 2010. 
SEC. 970. WESTERN MICHIGAN DEMONSTRATION PROJECT. 
The Administrator of the Environmental Protection 
Agency, in consultation with the State of Michigan and 
affected local officials, shall conduct a demonstration 
project to address the effect of transported ozone and 
ozone precursors in Southwestern Michigan. The dem-
onstration program shall address projected nonattainment 
areas in Southwestern Michigan that include counties with 
design values for ozone of less than .095 based on years 
2000 to 2002 or the most current 3-year period of air 
quality data. The Administrator shall assess any difficul-
ties such areas may experience in meeting the 8 hour na-
tional ambient air quality standard for ozone due to the 
effect of transported ozone or ozone precursors into the 
areas. The Administrator shall work with State and local 
officials to determine the extent of ozone and ozone pre-
cursor transport, to assess alternatives to achieve compli-
ance with the 8 hour standard apart from local controls, 
and to determine the timeframe in which such compliance 
could take place. The Administrator shall complete this
396
demonstration project no later than 2 years after the date 
of enactment of this section and shall not impose any re-
quirement or sanction that might otherwise apply during 
the pendency of the demonstration project. 
SEC. 971. LOW-COST HYDROGEN PROPULSION AND INFRA-
STRUCTURE. 
(a) PROGRAM.—The Secretary of Energy shall—
(1) establish a program with respect to the fea-
sibility of using hydrogen propulsion in light-weight 
vehicles and the integration of the associated hydro-
gen production infrastructure using off-the-shelf 
components; and 
(2) identify universities and institutions that—
(A) have expertise in operating and testing 
vehicles fueled by hydrogen, methane, and other 
fuels; 
(B) have expertise in integrating off-the-
shelf components to minimize cost; and 
(C) within two years can test a vehicle 
based on an existing commercially available 
platform with a curb weight of not less than 
2,000 pounds before modifications, that—
(i) operates solely on hydrogen gas; 
(ii) can travel a minimum of 300 
miles under normal road conditions; and
397
(iii) uses hydrogen produced from 
water using only solar energy. 
(b) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Secretary of En-
ergy for carrying out this section $200,000 for fiscal year 
2006. Such sums shall remain available until expended. 
SEC. 972. CARBON-BASED FUEL CELL DEVELOPMENT. 
(a) GRANT AUTHORITY.—The Secretary of Energy is 
authorized to make a single grant to a qualified institution 
to design and fabricate a 5-kilowatt prototype coal-based 
fuel cell with the following performance objectives: 
(1) A current density of 600 milliamps per 
square centimeter at a cell voltage of 0.8 volts. 
(2) An operating temperature range not to ex-
ceed 900 degrees celsius. 
(b) QUALIFIED INSTITUTION.—For the purposes of 
subsection (a), a qualified institution is a research-inten-
sive institution of higher education with demonstrated ex-
pertise in the development of carbon-based fuel cells allow-
ing the direct use of high sulfur content coal as fuel, and 
which has produced a laboratory-scale carbon-based fuel 
cell with a proven current density of 100 milliamps per 
square centimeter at a voltage of 0.6 volts. 
(c) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Secretary of En-
398
ergy for carrying out this section $850,000 for fiscal year 
2006. 
Subtitle H—International 
Cooperation 
SEC. 981. UNITED STATES-ISRAEL COOPERATION. 
(a) FINDINGS.—The Congress finds that—
(1) on February 1, 1996, United States Sec-
retary of Energy Hazel R. O’Leary and Israeli Min-
ister of Energy and Infrastructure Gonen Segev 
signed the Agreement between the Department of 
Energy of the United States of America and the 
Ministry of Energy and Infrastructure of Israel Con-
cerning Energy Cooperation, to establish a frame-
work for collaboration between the United States 
and Israel in energy research and development ac-
tivities; 
(2) the Agreement entered into force in Feb-
ruary 2000; 
(3) in February 2005, the Agreement was auto-
matically renewed for one additional 5-year period 
pursuant to Article X of the Agreement; and 
(4) under the Agreement, the United States 
and Israel may cooperate in energy research and de-
velopment in a variety of alternative and advanced 
energy sectors.
399
(b) REPORT TO CONGRESS.—(1) The Secretary of 
Energy shall report to the Committee on Energy and 
Commerce of the House of Representatives and the Com-
mittee on Energy and Natural Resources of the Senate 
on—
(A) how the United States and Israel have co-
operated on energy research and development activi-
ties under the Agreement; 
(B) projects initiated pursuant to the Agree-
ment; and 
(C) plans for future cooperation and joint 
projects under the Agreement. 
(2) The report shall be submitted no later than three 
months after the date of enactment of this Act. 
(c) SENSE OF CONGRESS.—It is the sense of the Con-
gress that energy cooperation between the Governments 
of the United States and Israel is mutually beneficial in 
the development of energy technology. 
TITLE X—DEPARTMENT OF 
ENERGY MANAGEMENT 
SEC. 1001. ADDITIONAL ASSISTANT SECRETARY POSITION. 
(a) ADDITIONAL ASSISTANT SECRETARY POSITION 
TO ENABLE IMPROVED MANAGEMENT OF NUCLEAR EN-
ERGY ISSUES.—
400
(1) IN GENERAL.—Section 203(a) of the De-
partment of Energy Organization Act (42 U.S.C. 
7133(a)) is amended by striking ‘‘six Assistant Sec-
retaries’’ and inserting ‘‘7 Assistant Secretaries’’. 
(2) SENSE OF CONGRESS.—It is the sense of 
Congress that the leadership for departmental mis-
sions in nuclear energy should be at the Assistant 
Secretary level. 
(b) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) TITLE 5.—Section 5315 of title 5, United 
States Code, is amended by striking ‘‘Assistant Sec-
retaries of Energy (6)’’ and inserting ‘‘Assistant 
Secretaries of Energy (7)’’. 
(2) DEPARTMENT OF ENERGY ORGANIZATION 
ACT.—The table of contents for the Department of 
Energy Organization Act (42 U.S.C. 7101 note) is 
amended—
(A) by striking ‘‘Section 209’’ and insert-
ing ‘‘Sec. 209’’; 
(B) by striking ‘‘213.’’ and inserting ‘‘Sec. 
213.’’; 
(C) by striking ‘‘214.’’ and inserting ‘‘Sec. 
214.’’; 
(D) by striking ‘‘215.’’ and inserting ‘‘Sec. 
215.’’; and
401
(E) by striking ‘‘216.’’ and inserting ‘‘Sec. 
216.’’. 
SEC. 1002. OTHER TRANSACTIONS AUTHORITY. 
Section 646 of the Department of Energy Organiza-
tion Act (42 U.S.C. 7256) is amended by adding at the 
end the following: 
‘‘(g)(1) In addition to other authorities granted to the 
Secretary under law, the Secretary may enter into other 
transactions on such terms as the Secretary may deem 
appropriate in furtherance of research, development, or 
demonstration functions vested in the Secretary. Such 
other transactions shall not be subject to the provisions 
of section 9 of the Federal Nonnuclear Energy Research 
and Development Act of 1974 (42 U.S.C. 5908) or section 
152 of the Atomic Energy Act of 1954 (42 U.S.C. 2182). 
‘‘(2)(A) The Secretary shall ensure that—
‘‘(i) to the maximum extent the Secretary de-
termines practicable, no transaction entered into 
under paragraph (1) provides for research, develop-
ment, or demonstration that duplicates research, de-
velopment, or demonstration being conducted under 
existing projects carried out by the Department; 
‘‘(ii) to the extent the Secretary determines 
practicable, the funds provided by the Government 
under a transaction authorized by paragraph (1) do
402
not exceed the total amount provided by other par-
ties to the transaction; and 
‘‘(iii) to the extent the Secretary determines 
practicable, competitive, merit-based selection proce-
dures shall be used when entering into transactions 
under paragraph (1). 
‘‘(B) A transaction authorized by paragraph (1) may 
be used for a research, development, or demonstration 
project only if the Secretary makes a written determina-
tion that the use of a standard contract, grant, or coopera-
tive agreement for the project is not feasible or appro-
priate. 
‘‘(3)(A) The Secretary shall protect from disclosure, 
including disclosure under section 552 of title 5, United 
States Code, for up to 5 years after the date the informa-
tion is received by the Secretary—
‘‘(i) a proposal, proposal abstract, and sup-
porting documents submitted to the Department in 
a competitive or noncompetitive process having the 
potential for resulting in an award under paragraph 
(1) to the party submitting the information; and 
‘‘(ii) a business plan and technical information 
relating to a transaction authorized by paragraph 
(1) submitted to the Department as confidential 
business information.
403
‘‘(B) The Secretary may protect from disclosure, for 
up to 5 years after the information was developed, any 
information developed pursuant to a transaction under 
paragraph (1) which developed information is of a char-
acter that it would be protected from disclosure under sec-
tion 552(b)(4) of title 5, United States Code, if obtained 
from a person other than a Federal agency. 
‘‘(4) Not later than 90 days after the date of enact-
ment of this subsection, the Secretary shall prescribe 
guidelines for using other transactions authorized by para-
graph (1). Such guidelines shall be published in the Fed-
eral Register for public comment under rulemaking proce-
dures of the Department. 
‘‘(5) The authority of the Secretary under this sub-
section may be delegated only to an officer of the Depart-
ment who is appointed by the President by and with the 
advice and consent of the Senate and may not be delegated 
to any other person. 
‘‘(6)(A) Not later than September 31, 2006, the 
Comptroller General of the United States shall report to 
Congress on the Department’s use of the authorities 
granted under this section, including the ability to attract 
nontraditional government contractors and whether addi-
tional safeguards are needed with respect to the use of 
such authorities.
404
‘‘(B) In this section, the term ‘nontraditional Govern-
ment contractor’ has the same meaning as the term ‘non-
traditional defense contractor’ as defined in section 845(e) 
of the National Defense Authorization Act for Fiscal Year 
1994 (Public Law 103–160; 10 U.S.C. 2371 note).’’. 
SEC. 1003. UNIVERSITY COLLABORATION. 
Not later than 2 years after the date of enactment 
of this Act, the Secretary of Energy shall transmit to the 
Congress a report that examines the feasibility of pro-
moting collaborations between major universities and 
other colleges and universities in grants, contracts, and 
cooperative agreements made by the Secretary for energy 
projects. For purposes of this section, major universities 
are schools listed by the Carnegie Foundation as Doctoral 
Research Extensive Universities. The Secretary shall also 
consider providing incentives to increase the inclusion of 
small institutions of higher education, including minority-
serving institutions, in energy grants, contracts, and coop-
erative agreements. 
SEC. 1004. SENSE OF CONGRESS. 
It is the sense of the Congress that—
(1) the Secretary of Energy should develop and 
implement more stringent procurement and inven-
tory controls, including controls on the purchase 
card program, to prevent waste, fraud, and abuse of
405
taxpayer funds by employees and contractors of the 
Department of Energy; and 
(2) the Department’s Inspector General should 
continue to closely review purchase card purchases 
and other procurement and inventory practices at 
the Department. 
TITLE XII—ELECTRICITY 
SEC. 1201. SHORT TITLE. 
This title may be cited as the ‘‘Electric Reliability 
Act of 2005’’. 
Subtitle A—Reliability Standards 
SEC. 1211. ELECTRIC RELIABILITY STANDARDS. 
(a) IN GENERAL.—Part II of the Federal Power Act 
(16 U.S.C 824 et seq.) is amended by adding at the end 
the following: 
‘‘SEC. 215. ELECTRIC RELIABILITY. 
‘‘(a) DEFINITIONS.—For purposes of this section: 
‘‘(1) The term ‘bulk-power system’ means—
‘‘(A) facilities and control systems nec-
essary for operating an interconnected electric 
energy transmission network (or any portion 
thereof); and 
‘‘(B) electric energy from generation facili-
ties needed to maintain transmission system re-
liability.
406
The term does not include facilities used in the local 
distribution of electric energy. 
‘‘(2) The terms ‘Electric Reliability Organiza-
tion’ and ‘ERO’ mean the organization certified by 
the Commission under subsection (c) the purpose of 
which is to establish and enforce reliability stand-
ards for the bulk-power system, subject to Commis-
sion review. 
‘‘(3) The term ‘reliability standard’ means a re-
quirement, approved by the Commission under this 
section, to provide for reliable operation of the bulk-
power system. The term includes requirements for 
the operation of existing bulk-power system facilities, 
including cybersecurity protection, and the design of 
planned additions or modifications to such facilities 
to the extent necessary to provide for reliable oper-
ation of the bulk-power system, but the term does 
not include any requirement to enlarge such facilities 
or to construct new transmission capacity or genera-
tion capacity. 
‘‘(4) The term ‘reliable operation’ means oper-
ating the elements of the bulk-power system within 
equipment and electric system thermal, voltage, and 
stability limits so that instability, uncontrolled sepa-
ration, or cascading failures of such system will not
407
occur as a result of a sudden disturbance, including 
a cybersecurity incident, or unanticipated failure of 
system elements. 
‘‘(5) The term ‘Interconnection’ means a geo-
graphic area in which the operation of bulk-power 
system components is synchronized such that the 
failure of 1 or more of such components may ad-
versely affect the ability of the operators of other 
components within the system to maintain reliable 
operation of the facilities within their control. 
‘‘(6) The term ‘transmission organization’ 
means a Regional Transmission Organization, Inde-
pendent System Operator, independent transmission 
provider, or other transmission organization finally 
approved by the Commission for the operation of 
transmission facilities. 
‘‘(7) The term ‘regional entity’ means an entity 
having enforcement authority pursuant to subsection 
(e)(4). 
‘‘(8) The term ‘cybersecurity incident’ means a 
malicious act or suspicious event that disrupts, or 
was an attempt to disrupt, the operation of those 
programmable electronic devices and communication 
networks including hardware, software and data that
408
are essential to the reliable operation of the bulk 
power system. 
‘‘(b) JURISDICTION AND APPLICABILITY.—(1) The 
Commission shall have jurisdiction, within the United 
States, over the ERO certified by the Commission under 
subsection (c), any regional entities, and all users, owners 
and operators of the bulk-power system, including but not 
limited to the entities described in section 201(f), for pur-
poses of approving reliability standards established under 
this section and enforcing compliance with this section. All 
users, owners and operators of the bulk-power system 
shall comply with reliability standards that take effect 
under this section. 
‘‘(2) The Commission shall issue a final rule to imple-
ment the requirements of this section not later than 180 
days after the date of enactment of this section. 
‘‘(c) CERTIFICATION.—Following the issuance of a 
Commission rule under subsection (b)(2), any person may 
submit an application to the Commission for certification 
as the Electric Reliability Organization. The Commission 
may certify 1 such ERO if the Commission determines 
that such ERO—
‘‘(1) has the ability to develop and enforce, sub-
ject to subsection (e)(2), reliability standards that
409
provide for an adequate level of reliability of the 
bulk-power system; and 
‘‘(2) has established rules that—
‘‘(A) assure its independence of the users 
and owners and operators of the bulk-power 
system, while assuring fair stakeholder rep-
resentation in the selection of its directors and 
balanced decisionmaking in any ERO com-
mittee or subordinate organizational structure; 
‘‘(B) allocate equitably reasonable dues, 
fees, and other charges among end users for all 
activities under this section; 
‘‘(C) provide fair and impartial procedures 
for enforcement of reliability standards through 
the imposition of penalties in accordance with 
subsection (e) (including limitations on activi-
ties, functions, or operations, or other appro-
priate sanctions); 
‘‘(D) provide for reasonable notice and op-
portunity for public comment, due process, 
openness, and balance of interests in developing 
reliability standards and otherwise exercising its 
duties; and
410
‘‘(E) provide for taking, after certification, 
appropriate steps to gain recognition in Canada 
and Mexico. 
The total amount of all dues, fees, and other charges 
collected by the ERO in each of the fiscal years 
2006 through 2015 and allocated under subpara-
graph (B) shall not exceed $50,000,000. 
‘‘(d) RELIABILITY STANDARDS.—(1) The Electric 
Reliability Organization shall file each reliability standard 
or modification to a reliability standard that it proposes 
to be made effective under this section with the Commis-
sion. 
‘‘(2) The Commission may approve, by rule or order, 
a proposed reliability standard or modification to a reli-
ability standard if it determines that the standard is just, 
reasonable, not unduly discriminatory or preferential, and 
in the public interest. The Commission shall give due 
weight to the technical expertise of the Electric Reliability 
Organization with respect to the content of a proposed 
standard or modification to a reliability standard and to 
the technical expertise of a regional entity organized on 
an Interconnection-wide basis with respect to a reliability 
standard to be applicable within that Interconnection, but 
shall not defer with respect to the effect of a standard
411
on competition. A proposed standard or modification shall 
take effect upon approval by the Commission. 
‘‘(3) The Electric Reliability Organization shall 
rebuttably presume that a proposal from a regional entity 
organized on an Interconnection-wide basis for a reliability 
standard or modification to a reliability standard to be ap-
plicable on an Interconnection-wide basis is just, reason-
able, and not unduly discriminatory or preferential, and 
in the public interest. 
‘‘(4) The Commission shall remand to the Electric 
Reliability Organization for further consideration a pro-
posed reliability standard or a modification to a reliability 
standard that the Commission disapproves in whole or in 
part. 
‘‘(5) The Commission, upon its own motion or upon 
complaint, may order the Electric Reliability Organization 
to submit to the Commission a proposed reliability stand-
ard or a modification to a reliability standard that ad-
dresses a specific matter if the Commission considers such 
a new or modified reliability standard appropriate to carry 
out this section. 
‘‘(6) The final rule adopted under subsection (b)(2) 
shall include fair processes for the identification and time-
ly resolution of any conflict between a reliability standard 
and any function, rule, order, tariff, rate schedule, or
412
agreement accepted, approved, or ordered by the Commis-
sion applicable to a transmission organization. Such trans-
mission organization shall continue to comply with such 
function, rule, order, tariff, rate schedule or agreement ac-
cepted approved, or ordered by the Commission until—
‘‘(A) the Commission finds a conflict exists be-
tween a reliability standard and any such provision; 
‘‘(B) the Commission orders a change to such 
provision pursuant to section 206 of this part; and 
‘‘(C) the ordered change becomes effective 
under this part. 
If the Commission determines that a reliability standard 
needs to be changed as a result of such a conflict, it shall 
order the ERO to develop and file with the Commission 
a modified reliability standard under paragraph (4) or (5) 
of this subsection. 
‘‘(e) ENFORCEMENT.—(1) The ERO may impose, 
subject to paragraph (2), a penalty on a user or owner 
or operator of the bulk-power system for a violation of a 
reliability standard approved by the Commission under 
subsection (d) if the ERO, after notice and an opportunity 
for a hearing—
‘‘(A) finds that the user or owner or operator 
has violated a reliability standard approved by the 
Commission under subsection (d); and
413
‘‘(B) files notice and the record of the pro-
ceeding with the Commission. 
‘‘(2) A penalty imposed under paragraph (1) may 
take effect not earlier than the 31st day after the ERO 
files with the Commission notice of the penalty and the 
record of proceedings. Such penalty shall be subject to re-
view by the Commission, on its own motion or upon appli-
cation by the user, owner or operator that is the subject 
of the penalty filed within 30 days after the date such 
notice is filed with the Commission. Application to the 
Commission for review, or the initiation of review by the 
Commission on its own motion, shall not operate as a stay 
of such penalty unless the Commission otherwise orders 
upon its own motion or upon application by the user, 
owner or operator that is the subject of such penalty. In 
any proceeding to review a penalty imposed under para-
graph (1), the Commission, after notice and opportunity 
for hearing (which hearing may consist solely of the record 
before the ERO and opportunity for the presentation of 
supporting reasons to affirm, modify, or set aside the pen-
alty), shall by order affirm, set aside, reinstate, or modify 
the penalty, and, if appropriate, remand to the ERO for 
further proceedings. The Commission shall implement ex-
pedited procedures for such hearings.
414
‘‘(3) On its own motion or upon complaint, the Com-
mission may order compliance with a reliability standard 
and may impose a penalty against a user or owner or oper-
ator of the bulk-power system if the Commission finds, 
after notice and opportunity for a hearing, that the user 
or owner or operator of the bulk-power system has en-
gaged or is about to engage in any acts or practices that 
constitute or will constitute a violation of a reliability 
standard. 
‘‘(4) The Commission shall issue regulations author-
izing the ERO to enter into an agreement to delegate au-
thority to a regional entity for the purpose of proposing 
reliability standards to the ERO and enforcing reliability 
standards under paragraph (1) if—
‘‘(A) the regional entity is governed by—
‘‘(i) an independent board; 
‘‘(ii) a balanced stakeholder board; or 
‘‘(iii) a combination independent and bal-
anced stakeholder board. 
‘‘(B) the regional entity otherwise satisfies the 
provisions of subsection (c)(1) and (2); and 
‘‘(C) the agreement promotes effective and effi-
cient administration of bulk-power system reliability. 
The Commission may modify such delegation. The ERO 
and the Commission shall rebuttably presume that a pro-
415
posal for delegation to a regional entity organized on an 
Interconnection-wide basis promotes effective and efficient 
administration of bulk-power system reliability and should 
be approved. Such regulation may provide that the Com-
mission may assign the ERO’s authority to enforce reli-
ability standards under paragraph (1) directly to a re-
gional entity consistent with the requirements of this para-
graph. 
‘‘(5) The Commission may take such action as is nec-
essary or appropriate against the ERO or a regional entity 
to ensure compliance with a reliability standard or any 
Commission order affecting the ERO or a regional entity. 
‘‘(6) Any penalty imposed under this section shall 
bear a reasonable relation to the seriousness of the viola-
tion and shall take into consideration the efforts of such 
user, owner, or operator to remedy the violation in a time-
ly manner. 
‘‘(f) CHANGES IN ELECTRIC RELIABILITY ORGANIZA-
TION RULES.—The Electric Reliability Organization shall 
file with the Commission for approval any proposed rule 
or proposed rule change, accompanied by an explanation 
of its basis and purpose. The Commission, upon its own 
motion or complaint, may propose a change to the rules 
of the ERO. A proposed rule or proposed rule change shall 
take effect upon a finding by the Commission, after notice
416
and opportunity for comment, that the change is just, rea-
sonable, not unduly discriminatory or preferential, is in 
the public interest, and satisfies the requirements of sub-
section (c). 
‘‘(g) RELIABILITY REPORTS.—The ERO shall con-
duct periodic assessments of the reliability and adequacy 
of the bulk-power system in North America. 
‘‘(h) COORDINATION WITH CANADA AND MEXICO.—
The President is urged to negotiate international agree-
ments with the governments of Canada and Mexico to pro-
vide for effective compliance with reliability standards and 
the effectiveness of the ERO in the United States and 
Canada or Mexico. 
‘‘(i) SAVINGS PROVISIONS.—(1) The ERO shall have 
authority to develop and enforce compliance with reli-
ability standards for only the bulk-power system. 
‘‘(2) This section does not authorize the ERO or the 
Commission to order the construction of additional gen-
eration or transmission capacity or to set and enforce com-
pliance with standards for adequacy or safety of electric 
facilities or services. 
‘‘(3) Nothing in this section shall be construed to pre-
empt any authority of any State to take action to ensure 
the safety, adequacy, and reliability of electric service 
within that State, as long as such action is not incon-
417
sistent with any reliability standard, except that the State 
of New York may establish rules that result in greater 
reliability within that State, as long as such action does 
not result in lesser reliability outside the State than that 
provided by the reliability standards. 
‘‘(4) Within 90 days of the application of the Electric 
Reliability Organization or other affected party, and after 
notice and opportunity for comment, the Commission shall 
issue a final order determining whether a State action is 
inconsistent with a reliability standard, taking into consid-
eration any recommendation of the ERO. 
‘‘(5) The Commission, after consultation with the 
ERO and the State taking action, may stay the effective-
ness of any State action, pending the Commission’s 
issuance of a final order. 
‘‘(j) REGIONAL ADVISORY BODIES.—The Commis-
sion shall establish a regional advisory body on the petition 
of at least 2⁄3 of the States within a region that have more 
than 1⁄2 of their electric load served within the region. A 
regional advisory body shall be composed of 1 member 
from each participating State in the region, appointed by 
the Governor of each State, and may include representa-
tives of agencies, States, and provinces outside the United 
States. A regional advisory body may provide advice to the 
Electric Reliability Organization, a regional entity, or the
418
Commission regarding the governance of an existing or 
proposed regional entity within the same region, whether 
a standard proposed to apply within the region is just, 
reasonable, not unduly discriminatory or preferential, and 
in the public interest, whether fees proposed to be assessed 
within the region are just, reasonable, not unduly discrimi-
natory or preferential, and in the public interest and any 
other responsibilities requested by the Commission. The 
Commission may give deference to the advice of any such 
regional advisory body if that body is organized on an 
Interconnection-wide basis. 
‘‘(k) ALASKA AND HAWAII.—The provisions of this 
section do not apply to Alaska or Hawaii.’’. 
(b) STATUS OF ERO.—The Electric Reliability Orga-
nization certified by the Federal Energy Regulatory Com-
mission under section 215(c) of the Federal Power Act 
and any regional entity delegated enforcement authority 
pursuant to section 215(e)(4) of that Act are not depart-
ments, agencies, or instrumentalities of the United States 
Government. 
(c) LIMITATION
ON ANNUAL APPROPRIATIONS.—
There is authorized to be appropriated not more than 
$50,000,000 per year for fiscal years 2006 through 2015 
for all activities under the amendment made by subsection 
(a).
419
Subtitle B—Transmission 
Infrastructure Modernization 
SEC. 1221. SITING OF INTERSTATE ELECTRIC TRANS-
MISSION FACILITIES. 
(a) AMENDMENT OF FEDERAL POWER ACT.—Part 
II of the Federal Power Act is amended by adding at the 
end the following: 
‘‘SEC. 216. SITING OF INTERSTATE ELECTRIC TRANS-
MISSION FACILITIES. 
‘‘(a) DESIGNATION OF NATIONAL INTEREST ELEC-
TRIC TRANSMISSION CORRIDORS.—
‘‘(1) TRANSMISSION
CONGESTION
STUDY.—
Within 1 year after the enactment of this section, 
and every 3 years thereafter, the Secretary of En-
ergy, in consultation with affected States, shall con-
duct a study of electric transmission congestion. 
After considering alternatives and recommendations 
from interested parties, including an opportunity for 
comment from affected States, the Secretary shall 
issue a report, based on such study, which may des-
ignate any geographic area experiencing electric en-
ergy transmission capacity constraints or congestion 
that adversely affects consumers as a national inter-
est electric transmission corridor. The Secretary 
shall conduct the study and issue the report in con-
420
sultation with any appropriate regional entity ref-
erenced in section 215 of this Act. 
‘‘(2) CONSIDERATIONS.—In determining wheth-
er to designate a national interest electric trans-
mission corridor referred to in paragraph (1) under 
this section, the Secretary may consider whether—
‘‘(A) the economic vitality and development 
of the corridor, or the end markets served by 
the corridor, may be constrained by lack of ade-
quate or reasonably priced electricity; 
‘‘(B)(i) economic growth in the corridor, or 
the end markets served by the corridor, may be 
jeopardized by reliance on limited sources of en-
ergy; and 
‘‘(ii) a diversification of supply is war-
ranted; 
‘‘(C) the energy independence of the 
United States would be served by the designa-
tion; 
‘‘(D) the designation would be in the inter-
est of national energy policy; and 
‘‘(E) the designation would enhance na-
tional defense and homeland security. 
‘‘(b) CONSTRUCTION PERMIT.—Except as provided 
in subsection (i), the Commission is authorized, after no-
421
tice and an opportunity for hearing, to issue a permit or 
permits for the construction or modification of electric 
transmission facilities in a national interest electric trans-
mission corridor designated by the Secretary under sub-
section (a) if the Commission finds that—
‘‘(1)(A) a State in which the transmission fa-
cilities are to be constructed or modified is without 
authority to—
‘‘(i) approve the siting of the facilities; or 
‘‘(ii) consider the interstate benefits ex-
pected to be achieved by the proposed construc-
tion or modification of transmission facilities in 
the State; 
‘‘(B) the applicant for a permit is a transmit-
ting utility under this Act but does not qualify to 
apply for a permit or siting approval for the pro-
posed project in a State because the applicant does 
not serve end-use customers in the State; or 
‘‘(C) a State commission or other entity that 
has authority to approve the siting of the facilities 
has—
‘‘(i) withheld approval for more than 1 
year after the filing of an application pursuant 
to applicable law seeking approval or 1 year 
after the designation of the relevant national in-
422
terest electric transmission corridor, whichever 
is later; or 
‘‘(ii) conditioned its approval in such a 
manner that the proposed construction or modi-
fication will not significantly reduce trans-
mission congestion in interstate commerce or is 
not economically feasible; 
‘‘(2) the facilities to be authorized by the per-
mit will be used for the transmission of electric en-
ergy in interstate commerce; 
‘‘(3) the proposed construction or modification 
is consistent with the public interest; 
‘‘(4) the proposed construction or modification 
will significantly reduce transmission congestion in 
interstate commerce and protects or benefits con-
sumers; and 
‘‘(5) the proposed construction or modification 
is consistent with sound national energy policy and 
will enhance energy independence. 
‘‘(c) PERMIT APPLICATIONS.—Permit applications 
under subsection (b) shall be made in writing to the Com-
mission. The Commission shall issue rules setting forth 
the form of the application, the information to be con-
tained in the application, and the manner of service of no-
tice of the permit application upon interested persons.
423
‘‘(d) COMMENTS.—In any proceeding before the 
Commission under subsection (b), the Commission shall 
afford each State in which a transmission facility covered 
by the permit is or will be located, each affected Federal 
agency and Indian tribe, private property owners, and 
other interested persons, a reasonable opportunity to 
present their views and recommendations with respect to 
the need for and impact of a facility covered by the permit. 
‘‘(e) RIGHTS-OF-WAY.—In the case of a permit under 
subsection (b) for electric transmission facilities to be lo-
cated on property other than property owned by the 
United States or a State, if the permit holder cannot ac-
quire by contract, or is unable to agree with the owner 
of the property to the compensation to be paid for, the 
necessary right-of-way to construct or modify such trans-
mission facilities, the permit holder may acquire the right-
of-way by the exercise of the right of eminent domain in 
the district court of the United States for the district in 
which the property concerned is located, or in the appro-
priate court of the State in which the property is located. 
The practice and procedure in any action or proceeding 
for that purpose in the district court of the United States 
shall conform as nearly as may be with the practice and 
procedure in similar action or proceeding in the courts of 
the State where the property is situated.
424
‘‘(f) STATE LAW.—Nothing in this section shall pre-
clude any person from constructing or modifying any 
transmission facility pursuant to State law. 
‘‘(g) COMPENSATION.—Any exercise of eminent do-
main authority pursuant to this section shall be considered 
a taking of private property for which just compensation 
is due. Just compensation shall be an amount equal to 
the full fair market value of the property taken on the 
date of the exercise of eminent domain authority, except 
that the compensation shall exceed fair market value if 
necessary to make the landowner whole for decreases in 
the value of any portion of the land not subject to eminent 
domain. Any parcel of land acquired by eminent domain 
under this subsection shall be transferred back to the 
owner from whom it was acquired (or his heirs or assigns) 
if the land is not used for the construction or modification 
of electric transmission facilities within a reasonable pe-
riod of time after the acquisition. Other than construction, 
modification, operation, or maintenance of electric trans-
mission facilities and related facilities, property acquired 
under subsection (e) may not be used for any purpose (in-
cluding use for any heritage area, recreational trail, or 
park) without the consent of the owner of the parcel from 
whom the property was acquired (or the owner’s heirs or 
assigns).
425
‘‘(h) COORDINATION OF FEDERAL AUTHORIZATIONS 
FOR TRANSMISSION AND DISTRIBUTION FACILITIES.—
‘‘(1) LEAD AGENCY.—If an applicant, or pro-
spective applicant, for a Federal authorization re-
lated to an electric transmission or distribution facil-
ity so requests, the Department of Energy (DOE) 
shall act as the lead agency for purposes of coordi-
nating all applicable Federal authorizations and re-
lated environmental reviews of the facility. For pur-
poses of this subsection, the term ‘Federal author-
ization’ means any authorization required under 
Federal law in order to site a transmission or dis-
tribution facility, including but not limited to such 
permits, special use authorizations, certifications, 
opinions, or other approvals as may be required, 
whether issued by a Federal or a State agency. To 
the maximum extent practicable under applicable 
Federal law, the Secretary of Energy shall coordi-
nate this Federal authorization and review process 
with any Indian tribes, multi-State entities, and 
State agencies that are responsible for conducting 
any separate permitting and environmental reviews 
of the facility, to ensure timely and efficient review 
and permit decisions.
426
‘‘(2) AUTHORITY TO SET DEADLINES.—As lead 
agency, the Department of Energy, in consultation 
with agencies responsible for Federal authorizations 
and, as appropriate, with Indian tribes, multi-State 
entities, and State agencies that are willing to co-
ordinate their own separate permitting and environ-
mental reviews with the Federal authorization and 
environmental reviews, shall establish prompt and 
binding intermediate milestones and ultimate dead-
lines for the review of, and Federal authorization de-
cisions relating to, the proposed facility. The Sec-
retary of Energy shall ensure that once an applica-
tion has been submitted with such data as the Sec-
retary considers necessary, all permit decisions and 
related environmental reviews under all applicable 
Federal laws shall be completed within 1 year or, if 
a requirement of another provision of Federal law 
makes this impossible, as soon thereafter as is prac-
ticable. The Secretary of Energy also shall provide 
an expeditious pre-application mechanism for pro-
spective applicants to confer with the agencies in-
volved to have each such agency determine and com-
municate to the prospective applicant within 60 days 
of when the prospective applicant submits a request 
for such information concerning—
427
‘‘(A) the likelihood of approval for a poten-
tial facility; and 
‘‘(B) key issues of concern to the agencies 
and public. 
‘‘(3) CONSOLIDATED ENVIRONMENTAL REVIEW 
AND RECORD OF DECISION.—As lead agency head, 
the Secretary of Energy, in consultation with the af-
fected agencies, shall prepare a single environmental 
review document, which shall be used as the basis 
for all decisions on the proposed project under Fed-
eral law. The document may be an environmental as-
sessment or environmental impact statement under 
the National Environmental Policy Act of 1969 if 
warranted, or such other form of analysis as may be 
warranted. The Secretary of Energy and the heads 
of other agencies shall streamline the review and 
permitting of transmission and distribution facilities 
within corridors designated under section 503 of the 
Federal Land Policy and Management Act (43 
U.S.C. 1763) by fully taking into account prior anal-
yses and decisions relating to the corridors. Such 
document shall include consideration by the relevant 
agencies of any applicable criteria or other matters 
as required under applicable laws.
428
‘‘(4) APPEALS.—In the event that any agency 
has denied a Federal authorization required for a 
transmission or distribution facility, or has failed to 
act by the deadline established by the Secretary pur-
suant to this section for deciding whether to issue 
the authorization, the applicant or any State in 
which the facility would be located may file an ap-
peal with the Secretary, who shall, in consultation 
with the affected agency, review the denial or take 
action on the pending application. Based on the 
overall record and in consultation with the affected 
agency, the Secretary may then either issue the nec-
essary authorization with any appropriate condi-
tions, or deny the application. The Secretary shall 
issue a decision within 90 days of the filing of the 
appeal. In making a decision under this paragraph, 
the Secretary shall comply with applicable require-
ments of Federal law, including any requirements of 
the Endangered Species Act, the Clean Water Act, 
the National Forest Management Act, the National 
Environmental Policy Act of 1969, and the Federal 
Land Policy and Management Act. 
‘‘(5) CONFORMING REGULATIONS AND MEMO-
RANDA
OF
UNDERSTANDING.—Not later than 18 
months after the date of enactment of this section,
429
the Secretary of Energy shall issue any regulations 
necessary to implement this subsection. Not later 
than 1 year after the date of enactment of this sec-
tion, the Secretary and the heads of all Federal 
agencies with authority to issue Federal authoriza-
tions shall enter into Memoranda of Understanding 
to ensure the timely and coordinated review and per-
mitting of electricity transmission and distribution 
facilities. The head of each Federal agency with au-
thority to issue a Federal authorization shall des-
ignate a senior official responsible for, and dedicate 
sufficient other staff and resources to ensure, full 
implementation of the DOE regulations and any 
Memoranda. Interested Indian tribes, multi-State 
entities, and State agencies may enter such Memo-
randa of Understanding. 
‘‘(6) DURATION AND RENEWAL.—Each Federal 
land use authorization for an electricity transmission 
or distribution facility shall be issued—
‘‘(A) for a duration, as determined by the 
Secretary of Energy, commensurate with the 
anticipated use of the facility, and 
‘‘(B) with appropriate authority to manage 
the right-of-way for reliability and environ-
mental protection.
430
Upon the expiration of any such authorization (in-
cluding an authorization issued prior to enactment 
of this section), the authorization shall be reviewed 
for renewal taking fully into account reliance on 
such electricity infrastructure, recognizing its impor-
tance for public health, safety and economic welfare 
and as a legitimate use of Federal lands. 
‘‘(7) MAINTAINING
AND
ENHANCING
THE 
TRANSMISSION INFRASTRUCTURE.—In exercising the 
responsibilities under this section, the Secretary of 
Energy shall consult regularly with the Federal En-
ergy Regulatory Commission (FERC), FERC-ap-
proved electric reliability organizations (including re-
lated regional entities), and FERC-approved Re-
gional Transmission Organizations and Independent 
System Operators. 
‘‘(i) INTERSTATE COMPACTS.—The consent of Con-
gress is hereby given for 3 or more contiguous States to 
enter into an interstate compact, subject to approval by 
Congress, establishing regional transmission siting agen-
cies to facilitate siting of future electric energy trans-
mission facilities within such States and to carry out the 
electric energy transmission siting responsibilities of such 
States. The Secretary of Energy may provide technical as-
sistance to regional transmission siting agencies estab-
431
lished under this subsection. Such regional transmission 
siting agencies shall have the authority to review, certify, 
and permit siting of transmission facilities, including fa-
cilities in national interest electric transmission corridors 
(other than facilities on property owned by the United 
States). The Commission shall have no authority to issue 
a permit for the construction or modification of electric 
transmission facilities within a State that is a party to 
a compact, unless the members of a compact are in dis-
agreement and the Secretary makes, after notice and an 
opportunity for a hearing, the finding described in sub-
section (b)(1)(C). 
‘‘(j) SAVINGS CLAUSE.—Nothing in this section shall 
be construed to affect any requirement of the environ-
mental laws of the United States, including, but not lim-
ited to, the National Environmental Policy Act of 1969. 
Subsection (h)(4) of this section shall not apply to any 
Congressionally-designated components of the National 
Wilderness Preservation System, the National Wild and 
Scenic Rivers System, or the National Park system (in-
cluding National Monuments therein). 
‘‘(k) ERCOT.—This section shall not apply within 
the area referred to in section 212(k)(2)(A).’’. 
(b) REPORTS
TO CONGRESS
ON CORRIDORS
AND 
RIGHTS OF WAY ON FEDERAL LANDS.—The Secretary of
432
the Interior, the Secretary of Energy, the Secretary of Ag-
riculture, and the Chairman of the Council on Environ-
mental Quality shall, within 90 days of the date of enact-
ment of this subsection, submit a joint report to Congress 
identifying each of the following: 
(1) All existing designated transmission and 
distribution corridors on Federal land and the status 
of work related to proposed transmission and dis-
tribution corridor designations under Title V of the 
Federal Land Policy and Management Act (43 
U.S.C. 1761 et. Seq.), the schedule for completing 
such work, any impediments to completing the work, 
and steps that Congress could take to expedite the 
process. 
(2) The number of pending applications to lo-
cate transmission and distribution facilities on Fed-
eral lands, key information relating to each such fa-
cility, how long each application has been pending, 
the schedule for issuing a timely decision as to each 
facility, and progress in incorporating existing and 
new such rights-of-way into relevant land use and 
resource management plans or their equivalent. 
(3) The number of existing transmission and 
distribution rights-of-way on Federal lands that will 
come up for renewal within the following 5, 10, and
433
15 year periods, and a description of how the Secre-
taries plan to manage such renewals. 
SEC. 1222. THIRD-PARTY FINANCE. 
(a) EXISTING FACILITIES.—The Secretary of Energy 
(hereinafter in this section referred to as the ‘‘Secretary’’), 
acting through the Administrator of the Western Area 
Power Administration (hereinafter in this section referred 
to as ‘‘WAPA’’), or through the Administrator of the 
Southwestern Power Administration (hereinafter in this 
section referred to as ‘‘SWPA’’), or both, may design, de-
velop, construct, operate, maintain, or own, or participate 
with other entities in designing, developing, constructing, 
operating, maintaining, or owning, an electric power 
transmission facility and related facilities (‘‘Project’’) 
needed to upgrade existing transmission facilities owned 
by SWPA or WAPA if the Secretary of Energy, in con-
sultation with the applicable Administrator, determines 
that the proposed Project—
(1)(A) is located in a national interest electric 
transmission corridor designated under section 
216(a) of the Federal Power Act and will reduce 
congestion of electric transmission in interstate com-
merce; or
434
(B) is necessary to accommodate an actual or 
projected increase in demand for electric trans-
mission capacity; 
(2) is consistent with—
(A) transmission needs identified, in a 
transmission expansion plan or otherwise, by 
the appropriate Regional Transmission Organi-
zation or Independent System Operator (as de-
fined in the Federal Power Act), if any, or ap-
proved regional reliability organization; and 
(B) efficient and reliable operation of the 
transmission grid; and 
(3) would be operated in conformance with pru-
dent utility practice. 
(b) 
NEW
FACILITIES.—The 
Secretary, 
acting 
through WAPA or SWPA, or both, may design, develop, 
construct, operate, maintain, or own, or participate with 
other entities in designing, developing, constructing, oper-
ating, maintaining, or owning, a new electric power trans-
mission facility and related facilities (‘‘Project’’) located 
within any State in which WAPA or SWPA operates if 
the Secretary, in consultation with the applicable Adminis-
trator, determines that the proposed Project—
(1)(A) is located in an area designated under 
section 216(a) of the Federal Power Act and will re-
435
duce congestion of electric transmission in interstate 
commerce; or 
(B) is necessary to accommodate an actual or 
projected increase in demand for electric trans-
mission capacity; 
(2) is consistent with—
(A) transmission needs identified, in a 
transmission expansion plan or otherwise, by 
the appropriate Regional Transmission Organi-
zation or Independent System Operator, if any, 
or approved regional reliability organization; 
and 
(B) efficient and reliable operation of the 
transmission grid; 
(3) will be operated in conformance with pru-
dent utility practice; 
(4) will be operated by, or in conformance with 
the rules of, the appropriate (A) Regional Trans-
mission Organization or Independent System Oper-
ator, if any, or (B) if such an organization does not 
exist, regional reliability organization; and 
(5) will not duplicate the functions of existing 
transmission facilities or proposed facilities which 
are the subject of ongoing or approved siting and re-
lated permitting proceedings.
436
(c) OTHER FUNDS.—
(1) IN GENERAL.—In carrying out a Project 
under subsection (a) or (b), the Secretary may ac-
cept and use funds contributed by another entity for 
the purpose of carrying out the Project. 
(2) AVAILABILITY.—The contributed funds 
shall be available for expenditure for the purpose of 
carrying out the Project—
(A) without fiscal year limitation; and 
(B) as if the funds had been appropriated 
specifically for that Project. 
(3) ALLOCATION OF COSTS.—In carrying out a 
Project under subsection (a) or (b), any costs of the 
Project not paid for by contributions from another 
entity shall be collected through rates charged to 
customers using the new transmission capability pro-
vided by the Project and allocated equitably among 
these project beneficiaries using the new trans-
mission capability. 
(d) RELATIONSHIP TO OTHER LAWS.—Nothing in 
this section affects any requirement of—
(1) any Federal environmental law, including 
the National Environmental Policy Act of 1969 (42 
U.S.C. 4321 et seq.);
437
(2) any Federal or State law relating to the 
siting of energy facilities; or 
(3) any existing authorizing statutes. 
(e) SAVINGS CLAUSE.—Nothing in this section shall 
constrain or restrict an Administrator in the utilization 
of other authority delegated to the Administrator of 
WAPA or SWPA. 
(f) SECRETARIAL
DETERMINATIONS.—Any deter-
mination made pursuant to subsections (a) or (b) shall 
be based on findings by the Secretary using the best avail-
able data. 
(g) MAXIMUM FUNDING AMOUNT.—The Secretary 
shall not accept and use more than $100,000,000 under 
subsection (c)(1) for the period encompassing fiscal years 
2006 through 2015. 
SEC. 1223. TRANSMISSION SYSTEM MONITORING. 
Within 6 months after the date of enactment of this 
Act, the Secretary of Energy and the Federal Energy Reg-
ulatory Commission shall study and report to Congress on 
the steps which must be taken to establish a system to 
make available to all transmission system owners and Re-
gional Transmission Organizations (as defined in the Fed-
eral Power Act) within the Eastern and Western Inter-
connections real-time information on the functional status 
of all transmission lines within such Interconnections. In
438
such study, the Commission shall assess technical means 
for implementing such transmission information system 
and identify the steps the Commission or Congress must 
take to require the implementation of such system. 
SEC. 1224. ADVANCED TRANSMISSION TECHNOLOGIES. 
(a) AUTHORITY.—The Federal Energy Regulatory 
Commission, in the exercise of its authorities under the 
Federal Power Act and the Public Utility Regulatory Poli-
cies Act of 1978, shall encourage the deployment of ad-
vanced transmission technologies. 
(b) DEFINITION.—For the purposes of this section, 
the term ‘‘advanced transmission technologies’’ means 
technologies that increase the capacity, efficiency, or reli-
ability of existing or new transmission facilities, including, 
but not limited to—
(1) high-temperature lines (including super-
conducting cables); 
(2) underground cables; 
(3) advanced conductor technology (including 
advanced composite conductors, high-temperature 
low-sag conductors, and fiber optic temperature 
sensing conductors); 
(4) high-capacity ceramic electric wire, connec-
tors, and insulators;
439
(5) optimized transmission line configurations 
(including multiple phased transmission lines); 
(6) modular equipment; 
(7) wireless power transmission; 
(8) ultra-high voltage lines; 
(9) high-voltage DC technology; 
(10) flexible AC transmission systems; 
(11) energy storage devices (including pumped 
hydro, compressed air, superconducting magnetic en-
ergy storage, flywheels, and batteries); 
(12) controllable load; 
(13) distributed generation (including PV, fuel 
cells, microturbines); 
(14) enhanced power device monitoring; 
(15) direct system state sensors; 
(16) fiber optic technologies; 
(17) power electronics and related software (in-
cluding real time monitoring and analytical soft-
ware); and 
(18) any other technologies the Commission 
considers appropriate. 
(c) 
OBSOLETE
OR
IMPRACTICABLE
TECH-
NOLOGIES.—The Commission is authorized to cease en-
couraging the deployment of any technology described in
440
this section on a finding that such technology has been 
rendered obsolete or otherwise impracticable to deploy. 
SEC. 1225. ELECTRIC TRANSMISSION AND DISTRIBUTION 
PROGRAMS. 
(a) ELECTRIC TRANSMISSION
AND DISTRIBUTION 
PROGRAM.—The Secretary of Energy (hereinafter in this 
section referred to as the ‘‘Secretary’’) acting through the 
Director of the Office of Electric Transmission and Dis-
tribution shall establish a comprehensive research, devel-
opment, demonstration and commercial application pro-
gram to promote improved reliability and efficiency of 
electrical transmission and distribution systems. This pro-
gram shall include—
(1) advanced energy delivery and storage tech-
nologies, materials, and systems, including new 
transmission technologies, such as flexible alter-
nating current transmission systems, composite con-
ductor materials and other technologies that enhance 
reliability, operational flexibility, or power-carrying 
capability; 
(2) advanced grid reliability and efficiency tech-
nology development; 
(3) technologies contributing to significant load 
reductions;
441
(4) advanced metering, load management, and 
control technologies; 
(5) technologies to enhance existing grid compo-
nents; 
(6) the development and use of high-tempera-
ture superconductors to—
(A) enhance the reliability, operational 
flexibility, or power-carrying capability of elec-
tric transmission or distribution systems; or 
(B) increase the efficiency of electric en-
ergy generation, transmission, distribution, or 
storage systems; 
(7) integration of power systems, including sys-
tems to deliver high-quality electric power, electric 
power reliability, and combined heat and power; 
(8) supply of electricity to the power grid by 
small scale, distributed and residential-based power 
generators; 
(9) the development and use of advanced grid 
design, operation and planning tools; 
(10) any other infrastructure technologies, as 
appropriate; and 
(11) technology transfer and education. 
(b) PROGRAM PLAN.—Not later than 1 year after the 
date of the enactment of this legislation, the Secretary,
442
in consultation with other appropriate Federal agencies, 
shall prepare and transmit to Congress a 5-year program 
plan to guide activities under this section. In preparing 
the program plan, the Secretary may consult with utilities, 
energy services providers, manufacturers, institutions of 
higher education, other appropriate State and local agen-
cies, environmental organizations, professional and tech-
nical societies, and any other persons the Secretary con-
siders appropriate. 
(c) IMPLEMENTATION.—The Secretary shall consider 
implementing this program using a consortium of indus-
try, university and national laboratory participants. 
(d) REPORT.—Not later than 2 years after the trans-
mittal of the plan under subsection (b), the Secretary shall 
transmit a report to Congress describing the progress 
made under this section and identifying any additional re-
sources needed to continue the development and commer-
cial application of transmission and distribution infra-
structure technologies. 
(e) POWER DELIVERY RESEARCH INITIATIVE.—
(1) IN GENERAL.—The Secretary shall establish 
a research, development, demonstration, and com-
mercial application initiative specifically focused on 
power delivery utilizing components incorporating 
high temperature superconductivity.
443
(2) GOALS.—The goals of this initiative shall be 
to—
(A) establish facilities to develop high tem-
perature superconductivity power applications 
in partnership with manufacturers and utilities; 
(B) provide technical leadership for estab-
lishing reliability for high temperature super-
conductivity power applications including suit-
able modeling and analysis; 
(C) facilitate commercial transition toward 
direct current power transmission, storage, and 
use for high power systems utilizing high tem-
perature superconductivity; and 
(D) facilitate the integration of very low 
impedance high temperature superconducting 
wires and cables in existing electric networks to 
improve system performance, power flow control 
and reliability. 
(3) REQUIREMENTS.—The initiative shall in-
clude—
(A) feasibility analysis, planning, research, 
and design to construct demonstrations of 
superconducting links in high power, direct cur-
rent and controllable alternating current trans-
mission systems;