703 
contract, agreement or other arrangement in accord-
ance with its terms. 
Neither this section, actions taken pursuant to it, nor any 
other transaction of a Federal utility using an RTO or 
ISO shall confer upon the Federal Energy Regulatory 
Commission jurisdiction or authority over the Federal util-
ity’s electric generation assets, electric capacity or energy 
that the Federal utility is authorized by law to market, 
or the Federal utility’s power sales activities. 
(c) EXISTING STATUTORY
AND OTHER OBLIGA-
TIONS.— 
(1) SYSTEM OPERATION REQUIREMENTS.—No 
statutory provision requiring or authorizing a Fed-
eral utility to transmit electric power or to construct, 
operate or maintain its transmission system shall be 
construed to prohibit a transfer of control and use 
of its transmission system pursuant to, and subject 
to all requirements of subsection (b). 
(2) OTHER
OBLIGATIONS.—This subsection 
shall not be construed to— 
(A) suspend, or exempt any Federal utility 
from, any provision of existing Federal law, in-
cluding but not limited to any requirement or 
direction relating to the use of the Federal util-
ity’s transmission system, environmental protec-
704 
tion, fish and wildlife protection, flood control, 
navigation, water delivery, or recreation; or 
(B) authorize abrogation of any contract 
or treaty obligation. 
(3) REPEAL.—Section 311 of title III of Appen-
dix B of the Act of October 27, 2000 (P.L. 106– 
377, section 1(a)(2); 114 Stat. 1441, 1441A–80; 16 
U.S.C. 824n) is repealed. 
SEC. 1235. STANDARD MARKET DESIGN. 
(a) REMAND.—The Commission’s proposed rule-
making entitled ‘‘Remedying Undue Discrimination 
through Open Access Transmission Service and Standard 
Electricity Market Design’’ (Docket No. RM01–12–000) 
(‘‘SMD NOPR’’) is remanded to the Commission for re-
consideration. No final rule mandating a standard elec-
tricity market design pursuant to the proposed rule-
making, including any rule or order of general applica-
bility within the scope of the proposed rulemaking, may 
be issued before October 31, 2006, or take effect before 
December 31, 2006. Any final rule issued by the Commis-
sion pursuant to the proposed rulemaking shall be pre-
ceded by a second notice of proposed rulemaking issued 
after the date of enactment of this Act and an opportunity 
for public comment.
705 
(b) SAVINGS CLAUSE.—This section shall not be con-
strued to modify or diminish any authority or obligation 
the Commission has under this Act, the Federal Power 
Act, or other applicable law, including, but not limited to, 
any authority to— 
(1) issue any rule or order (of general or par-
ticular applicability) pursuant to any such authority 
or obligation; or 
(2) act on a filing or filings by 1 or more trans-
mitting utilities for the voluntary formation of a Re-
gional Transmission Organization or Independent 
System Operator (as defined in the Federal Power 
Act) (and related market structures or rules) or vol-
untary modification of an existing Regional Trans-
mission Organization or Independent System Oper-
ator (and related market structures or rules). 
SEC. 1236. NATIVE LOAD SERVICE OBLIGATION. 
Part II of the Federal Power Act (16 U.S.C. 824 et 
seq.) is amended by adding at the end the following: 
‘‘SEC. 217. NATIVE LOAD SERVICE OBLIGATION. 
‘‘(a) MEETING SERVICE OBLIGATIONS.—(1) Any 
load-serving entity that, as of the date of enactment of 
this section— 
‘‘(A) owns generation facilities, markets the 
output of Federal generation facilities, or holds
706 
rights under 1 or more wholesale contracts to pur-
chase electric energy, for the purpose of meeting a 
service obligation, and 
‘‘(B) by reason of ownership of transmission fa-
cilities, or 1 or more contracts or service agreements 
for firm transmission service, holds firm trans-
mission rights for delivery of the output of such gen-
eration facilities or such purchased energy to meet 
such service obligation, 
is entitled to use such firm transmission rights, or, equiva-
lent tradable or financial transmission rights, in order to 
deliver such output or purchased energy, or the output of 
other generating facilities or purchased energy to the ex-
tent deliverable using such rights, to the extent required 
to meet its service obligation. 
‘‘(2) To the extent that all or a portion of the service 
obligation covered by such firm transmission rights or 
equivalent tradable or financial transmission rights is 
transferred to another load-serving entity, the successor 
load-serving entity shall be entitled to use the firm trans-
mission rights or equivalent tradable or financial trans-
mission rights associated with the transferred service obli-
gation. Subsequent transfers to another load-serving enti-
ty, or back to the original load-serving entity, shall be enti-
tled to the same rights.
707 
‘‘(3) The Commission shall exercise its authority 
under this Act in a manner that facilitates the planning 
and expansion of transmission facilities to meet the rea-
sonable needs of load-serving entities to satisfy their serv-
ice obligations. 
‘‘(b) ALLOCATION
OF
TRANSMISSION
RIGHTS.— 
Nothing in this section shall affect any methodology ap-
proved by the Commission prior to September 15, 2003, 
for the allocation of transmission rights by an RTO or 
ISO that has been authorized by the Commission to allo-
cate transmission rights. 
‘‘(c) CERTAIN TRANSMISSION RIGHTS.—The Com-
mission may exercise authority under this Act to make 
transmission rights not used to meet an obligation covered 
by subsection (a) available to other entities in a manner 
determined by the Commission to be just, reasonable, and 
not unduly discriminatory or preferential. 
‘‘(d) OBLIGATION TO BUILD.—Nothing in this Act 
shall relieve a load-serving entity from any obligation 
under State or local law to build transmission or distribu-
tion facilities adequate to meet its service obligations. 
‘‘(e) CONTRACTS.—Nothing in this section shall pro-
vide a basis for abrogating any contract or service agree-
ment for firm transmission service or rights in effect as 
of the date of the enactment of this subsection.
708 
‘‘(f) WATER PUMPING FACILITIES.—The Commis-
sion shall ensure that any entity described in section 
201(f) that owns transmission facilities used predomi-
nately to support its own water pumping facilities shall 
have, with respect to such facilities, protections for trans-
mission service comparable to those provided to load-serv-
ing entities pursuant to this section. 
‘‘(g) ERCOT.—This section shall not apply within 
the area referred to in section 212(k)(2)(A). 
‘‘(h) JURISDICTION.—This section does not authorize 
the Commission to take any action not otherwise within 
its jurisdiction. 
‘‘(i) EFFECT OF EXERCISING RIGHTS.—An entity 
that lawfully exercises rights granted under subsection (a) 
shall not be considered by such action as engaging in 
undue discrimination or preference under this Act. 
‘‘(j) TVA AREA.—For purposes of subsection 
(a)(1)(B), a load-serving entity that is located within the 
service area of the Tennessee Valley Authority and that 
has a firm wholesale power supply contract with the Ten-
nessee Valley Authority shall be deemed to hold firm 
transmission rights for the transmission of such power. 
‘‘(k) DEFINITIONS.—For purposes of this section: 
‘‘(1) The term ‘distribution utility’ means an 
electric utility that has a service obligation to end-
709 
users or to a State utility or electric cooperative 
that, directly or indirectly, through 1 or more addi-
tional State utilities or electric cooperatives, provides 
electric service to end-users. 
‘‘(2) The term ‘load-serving entity’ means a dis-
tribution utility or an electric utility that has a serv-
ice obligation. 
‘‘(3) The term ‘service obligation’ means a re-
quirement applicable to, or the exercise of authority 
granted to, an electric utility under Federal, State 
or local law or under long-term contracts to provide 
electric service to end-users or to a distribution util-
ity. 
‘‘(4) The term ‘State utility’ means a State or 
any political subdivision of a State, or any agency, 
authority, or instrumentality of any 1 or more of the 
foregoing, or a corporation which is wholly owned, 
directly or indirectly, by any 1 or more of the fore-
going, competent to carry on the business of devel-
oping, transmitting, utilizing or distributing power.’’. 
SEC. 1237. STUDY ON THE BENEFITS OF ECONOMIC DIS-
PATCH. 
(a) STUDY.—The Secretary of Energy, in coordina-
tion and consultation with the States, shall conduct a 
study on—
710 
(1) the procedures currently used by electric 
utilities to perform economic dispatch; 
(2) identifying possible revisions to those proce-
dures to improve the ability of nonutility generation 
resources to offer their output for sale for the pur-
pose of inclusion in economic dispatch; and 
(3) the potential benefits to residential, com-
mercial, and industrial electricity consumers nation-
ally and in each state if economic dispatch proce-
dures were revised to improve the ability of non-
utility generation resources to offer their output for 
inclusion in economic dispatch. 
(b) DEFINITION.—The term ‘‘economic dispatch’’ 
when used in this section means the operation of genera-
tion facilities to produce energy at the lowest cost to reli-
ably serve consumers, recognizing any operational limits 
of generation and transmission facilities. 
(c) REPORT TO CONGRESS AND THE STATES.—Not 
later than 90 days after the date of enactment of this Act, 
and on a yearly basis following, the Secretary of Energy 
shall submit a report to Congress and the States on the 
results of the study conducted under subsection (a), in-
cluding recommendations to Congress and the States for 
any suggested legislative or regulatory changes.
711 
Subtitle D—Transmission Rate 
Reform 
SEC. 1241. TRANSMISSION INFRASTRUCTURE INVESTMENT. 
Part II of the Federal Power Act (16 U.S.C. 824 et 
seq.) is amended by adding at the end the following: 
‘‘SEC. 218. TRANSMISSION INFRASTRUCTURE INVESTMENT. 
‘‘(a) RULEMAKING REQUIREMENT.—Within 1 year 
after the enactment of this section, the Commission shall 
establish, by rule, incentive-based (including, but not lim-
ited to performance-based) rate treatments for the trans-
mission of electric energy in interstate commerce by public 
utilities for the purpose of benefiting consumers by ensur-
ing reliability and reducing the cost of delivered power by 
reducing transmission congestion. Such rule shall— 
‘‘(1) promote reliable and economically efficient 
transmission and generation of electricity by pro-
moting capital investment in the enlargement, im-
provement, maintenance and operation of facilities 
for the transmission of electric energy in interstate 
commerce; 
‘‘(2) provide a return on equity that attracts 
new investment in transmission facilities (including 
related transmission technologies); 
‘‘(3) encourage deployment of transmission 
technologies and other measures to increase the ca-
712 
pacity and efficiency of existing transmission facili-
ties and improve the operation of such facilities; and 
‘‘(4) allow recovery of all prudently incurred 
costs necessary to comply with mandatory reliability 
standards issued pursuant to section 215 of this 
Act. 
The Commission may, from time to time, revise such rule. 
‘‘(b) ADDITIONAL INCENTIVES FOR RTO PARTICIPA-
TION.—In the rule issued under this section, the Commis-
sion shall, to the extent within its jurisdiction, provide for 
incentives to each transmitting utility or electric utility 
that joins a Regional Transmission Organization or Inde-
pendent System Operator. Incentives provided by the 
Commission pursuant to such rule shall include— 
‘‘(1) recovery of all prudently incurred costs to 
develop and participate in any proposed or approved 
RTO, ISO, or independent transmission company; 
‘‘(2) recovery of all costs previously approved by 
a State commission which exercised jurisdiction over 
the transmission facilities prior to the utility’s par-
ticipation in the RTO or ISO, including costs nec-
essary to honor preexisting transmission service con-
tracts, in a manner which does not reduce the reve-
nues the utility receives for transmission services for
713 
a reasonable transition period after the utility joins 
the RTO or ISO; 
‘‘(3) recovery as an expense in rates of the 
costs prudently incurred to conduct transmission 
planning and reliability activities, including the costs 
of participating in RTO, ISO and other regional 
planning activities and design, study and other 
precertification costs involved in seeking permits and 
approvals for proposed transmission facilities; 
‘‘(4) a current return in rates for construction 
work in progress for transmission facilities and full 
recovery of prudently incurred costs for constructing 
transmission facilities; 
‘‘(5) formula transmission rates; and 
‘‘(6) a maximum 15 year accelerated deprecia-
tion on new transmission facilities for rate treatment 
purposes. 
The Commission shall ensure that any costs recoverable 
pursuant to this subsection may be recovered by such util-
ity through the transmission rates charged by such utility 
or through the transmission rates charged by the RTO 
or ISO that provides transmission service to such utility. 
‘‘(c) JUST AND REASONABLE RATES.—All rates ap-
proved under the rules adopted pursuant to this section, 
including any revisions to such rules, are subject to the
714 
requirement of sections 205 and 206 that all rates, 
charges, terms, and conditions be just and reasonable and 
not unduly discriminatory or preferential.’’. 
SEC. 1242. VOLUNTARY TRANSMISSION PRICING PLANS. 
Part II of the Federal Power Act (16 U.S.C. 824 et 
seq.) is amended by adding at the end the following: 
‘‘SEC. 219. VOLUNTARY TRANSMISSION PRICING PLANS. 
‘‘(a) IN GENERAL.—Any transmission provider, in-
cluding an RTO or ISO, may submit to the Commission 
a plan or plans under section 205 containing the criteria 
for determining the person or persons that will be required 
to pay for any construction of new transmission facilities 
or expansion, modification or upgrade of transmission fa-
cilities (in this section referred to as ‘transmission service 
related expansion’) or new generator interconnection. 
‘‘(b) VOLUNTARY TRANSMISSION PRICING PLANS.— 
(1) Any plan or plans submitted under subsection (a) shall 
specify the method or methods by which costs may be allo-
cated or assigned. Such methods may include, but are not 
limited to: 
‘‘(A) directly assigned; 
‘‘(B) participant funded; or 
‘‘(C) rolled into regional or sub-regional rates.
715 
‘‘(2) FERC shall approve a plan or plans submitted 
under subparagraph (B) of paragraph (1) if such plan or 
plans— 
‘‘(A) result in rates that are just and reason-
able and not unduly discriminatory or preferential 
consistent with section 205; and 
‘‘(B) ensure that the costs of any transmission 
service related expansion or new generator inter-
connection not required to meet applicable reliability 
standards established under section 215 are assigned 
in a fair manner, meaning that those who benefit 
from the transmission service related expansion or 
new generator interconnection pay an appropriate 
share of the associated costs, provided that— 
‘‘(i) costs may not be assigned or allocated 
to an electric utility if the native load customers 
of that utility would not have required such 
transmission service related expansion or new 
generator interconnection absent the request for 
transmission service related expansion or new 
generator interconnection that necessitated the 
investment; 
‘‘(ii) the party requesting such trans-
mission service related expansion or new gener-
716 
ator interconnection shall not be required to 
pay for both— 
‘‘(I) the assigned cost of the upgrade; 
and 
‘‘(II) the difference between— 
‘‘(aa) the embedded cost paid for 
transmission services (including the 
cost of the requested upgrade); and 
‘‘(bb) the embedded cost that 
would have been paid absent the up-
grade; and 
‘‘(iii) the party or parties who pay for fa-
cilities necessary for the transmission service 
related expansion or new generator interconnec-
tion receives full compensation for its costs for 
the participant funded facilities in the form 
of— 
‘‘(I) monetary credit equal to the cost 
of the participant funded facilities (ac-
counting for the time value of money at 
the Gross Domestic Product deflator), 
which credit shall be pro-rated in equal in-
stallments over a period of not more than 
30 years and shall not exceed in total the 
amount of the initial investment, against
718 
‘‘(6) This section shall not apply within the area re-
ferred to in section 212(k)(2)(A). 
‘‘(7) The term ‘transmission provider’ means a public 
utility that owns or operates facilities that provide inter-
connection or transmission service in interstate com-
merce.’’. 
Subtitle E—Amendments to PURPA 
SEC. 1251. NET METERING AND ADDITIONAL STANDARDS. 
(a) ADOPTION OF STANDARDS.—Section 111(d) of 
the Public Utility Regulatory Policies Act of 1978 (16 
U.S.C. 2621(d)) is amended by adding at the end the fol-
lowing: 
‘‘(11) NET
METERING.—Each electric utility 
shall make available upon request net metering serv-
ice to any electric consumer that the electric utility 
serves. For purposes of this paragraph, the term 
‘net metering service’ means service to an electric 
consumer under which electric energy generated by 
that electric consumer from an eligible on-site gener-
ating facility and delivered to the local distribution 
facilities may be used to offset electric energy pro-
vided by the electric utility to the electric consumer 
during the applicable billing period. 
‘‘(12) FUEL
SOURCES.—Each electric utility 
shall develop a plan to minimize dependence on 1
719 
fuel source and to ensure that the electric energy it 
sells to consumers is generated using a diverse range 
of fuels and technologies, including renewable tech-
nologies. 
‘‘(13) 
FOSSIL
FUEL
GENERATION
EFFI-
CIENCY.—Each electric utility shall develop and im-
plement a 10-year plan to increase the efficiency of 
its fossil fuel generation.’’. 
(b) COMPLIANCE.— 
(1) TIME LIMITATIONS.—Section 112(b) of the 
Public Utility Regulatory Policies Act of 1978 (16 
U.S.C. 2622(b)) is amended by adding at the end 
the following: 
‘‘(3)(A) Not later than 2 years after the enactment 
of this paragraph, each State regulatory authority (with 
respect to each electric utility for which it has ratemaking 
authority) and each nonregulated electric utility shall com-
mence the consideration referred to in section 111, or set 
a hearing date for such consideration, with respect to each 
standard established by paragraphs (11) through (13) of 
section 111(d). 
‘‘(B) Not later than 3 years after the date of the en-
actment of this paragraph, each State regulatory authority 
(with respect to each electric utility for which it has rate-
making authority), and each nonregulated electric utility,
720 
shall complete the consideration, and shall make the deter-
mination, referred to in section 111 with respect to each 
standard established by paragraphs (11) through (13) of 
section 111(d).’’. 
(2) FAILURE TO COMPLY.—Section 112(c) of 
the Public Utility Regulatory Policies Act of 1978 
(16 U.S.C. 2622(c)) is amended by adding at the 
end the following: 
‘‘In the case of each standard established by paragraphs 
(11) through (13) of section 111(d), the reference con-
tained in this subsection to the date of enactment of this 
Act shall be deemed to be a reference to the date of enact-
ment of such paragraphs (11) through (13).’’. 
(3) PRIOR STATE ACTIONS.— 
(A) IN
GENERAL.—Section 112 of the 
Public Utility Regulatory Policies Act of 1978 
(16 U.S.C. 2622) is amended by adding at the 
end the following: 
‘‘(d) PRIOR STATE ACTIONS.—Subsections (b) and 
(c) of this section shall not apply to the standards estab-
lished by paragraphs (11) through (13) of section 111(d) 
in the case of any electric utility in a State if, before the 
enactment of this subsection— 
‘‘(1) the State has implemented for such utility 
the standard concerned (or a comparable standard);
721 
‘‘(2) the State regulatory authority for such 
State or relevant nonregulated electric utility has 
conducted a proceeding to consider implementation 
of the standard concerned (or a comparable stand-
ard) for such utility; or 
‘‘(3) the State legislature has voted on the im-
plementation of such standard (or a comparable 
standard) for such utility.’’. 
(B) CROSS REFERENCE.—Section 124 of 
such Act (16 U.S.C. 2634) is amended by add-
ing the following at the end thereof: ‘‘In the 
case of each standard established by paragraphs 
(11) through (13) of section 111(d), the ref-
erence contained in this subsection to the date 
of enactment of this Act shall be deemed to be 
a reference to the date of enactment of such 
paragraphs (11) through (13).’’. 
SEC. 1252. SMART METERING. 
(a) IN GENERAL.—Section 111(d) of the Public Utili-
ties Regulatory Policies Act of 1978 (16 U.S.C. 2621(d)) 
is amended by adding at the end the following: 
‘‘(14) TIME-BASED
METERING
AND
COMMU-
NICATIONS.— 
‘‘(A) Not later than 18 months after the 
date of enactment of this paragraph, each elec-
722 
tric utility shall offer each of its customer class-
es, and provide individual customers upon cus-
tomer request, a time-based rate schedule under 
which the rate charged by the electric utility 
varies during different time periods and reflects 
the variance, if any, in the utility’s costs of gen-
erating and purchasing electricity at the whole-
sale level. The time-based rate schedule shall 
enable the electric consumer to manage energy 
use and cost through advanced metering and 
communications technology. 
‘‘(B) The types of time-based rate sched-
ules that may be offered under the schedule re-
ferred to in subparagraph (A) include, among 
others— 
‘‘(i) time-of-use pricing whereby elec-
tricity prices are set for a specific time pe-
riod on an advance or forward basis, typi-
cally not changing more often than twice a 
year, based on the utility’s cost of gener-
ating and/or purchasing such electricity at 
the wholesale level for the benefit of the 
consumer. Prices paid for energy consumed 
during these periods shall be pre-estab-
lished and known to consumers in advance
723 
of such consumption, allowing them to 
vary their demand and usage in response 
to such prices and manage their energy 
costs by shifting usage to a lower cost pe-
riod or reducing their consumption overall; 
‘‘(ii) critical peak pricing whereby 
time-of-use prices are in effect except for 
certain peak days, when prices may reflect 
the costs of generating and/or purchasing 
electricity at the wholesale level and when 
consumers may receive additional discounts 
for reducing peak period energy consump-
tion; and 
‘‘(iii) real-time pricing whereby elec-
tricity prices are set for a specific time pe-
riod on an advanced or forward basis, re-
flecting the utility’s cost of generating and/ 
or purchasing electricity at the wholesale 
level, and may change as often as hourly. 
‘‘(C) Each electric utility subject to sub-
paragraph (A) shall provide each customer re-
questing a time-based rate with a time-based 
meter capable of enabling the utility and cus-
tomer to offer and receive such rate, respec-
tively.
724 
‘‘(D) For purposes of implementing this 
paragraph, any reference contained in this sec-
tion to the date of enactment of the Public Util-
ity Regulatory Policies Act of 1978 shall be 
deemed to be a reference to the date of enact-
ment of this paragraph. 
‘‘(E) In a State that permits third-party 
marketers to sell electric energy to retail elec-
tric consumers, such consumers shall be entitled 
to receive the same time-based metering and 
communications device and service as a retail 
electric consumer of the electric utility. 
‘‘(F) Notwithstanding subsections (b) and 
(c) of section 112, each State regulatory au-
thority shall, not later than 18 months after the 
date of enactment of this paragraph conduct an 
investigation in accordance with section 115(i) 
and issue a decision whether it is appropriate to 
implement the standards set out in subpara-
graphs (A) and (C).’’. 
(b) STATE INVESTIGATION OF DEMAND RESPONSE 
AND TIME-BASED METERING.—Section 115 of the Public 
Utilities Regulatory Policies Act of 1978 (16 U.S.C. 2625) 
is amended as follows:
725 
(1) By inserting in subsection (b) after the 
phrase ‘‘the standard for time-of-day rates estab-
lished by section 111(d)(3)’’ the following: ‘‘and the 
standard for time-based metering and communica-
tions established by section 111(d)(14)’’. 
(2) By inserting in subsection (b) after the 
phrase ‘‘are likely to exceed the metering’’ the fol-
lowing: ‘‘and communications’’. 
(3) By adding the at the end the following: 
‘‘(i) TIME-BASED
METERING
AND
COMMUNICA-
TIONS.—In making a determination with respect to the 
standard established by section 111(d)(14), the investiga-
tion requirement of section 111(d)(14)(F) shall be as fol-
lows: Each State regulatory authority shall conduct an in-
vestigation and issue a decision whether or not it is appro-
priate for electric utilities to provide and install time-based 
meters and communications devices for each of their cus-
tomers which enable such customers to participate in time- 
based pricing rate schedules and other demand response 
programs.’’. 
(c) 
FEDERAL
ASSISTANCE
ON
DEMAND
RE-
SPONSE.—Section 132(a) of the Public Utility Regulatory 
Policies Act of 1978 (16 U.S.C. 2642(a)) is amended by 
striking ‘‘and’’ at the end of paragraph (3), striking the
726 
period at the end of paragraph (4) and inserting ‘‘; and’’, 
and by adding the following at the end thereof: 
‘‘(5) technologies, techniques, and rate-making 
methods related to advanced metering and commu-
nications and the use of these technologies, tech-
niques and methods in demand response programs.’’. 
(d) FEDERAL GUIDANCE.—Section 132 of the Public 
Utility Regulatory Policies Act of 1978 (16 U.S.C. 2642) 
is amended by adding the following at the end thereof: 
‘‘(d) DEMAND RESPONSE.—The Secretary shall be 
responsible for— 
‘‘(1) educating consumers on the availability, 
advantages, and benefits of advanced metering and 
communications technologies, including the funding 
of demonstration or pilot projects; 
‘‘(2) working with States, utilities, other energy 
providers and advanced metering and communica-
tions experts to identify and address barriers to the 
adoption of demand response programs; and 
‘‘(3) not later than 180 days after the date of 
enactment of the Energy Policy Act of 2003, pro-
viding Congress with a report that identifies and 
quantifies the national benefits of demand response 
and makes a recommendation on achieving specific 
levels of such benefits by January 1, 2005.’’.
727 
(e) DEMAND RESPONSE AND REGIONAL COORDINA-
TION.— 
(1) IN GENERAL.—It is the policy of the United 
States to encourage States to coordinate, on a re-
gional basis, State energy policies to provide reliable 
and affordable demand response services to the pub-
lic. 
(2) TECHNICAL ASSISTANCE.—The Secretary of 
Energy shall provide technical assistance to States 
and regional organizations formed by 2 or more 
States to assist them in— 
(A) identifying the areas with the greatest 
demand response potential; 
(B) identifying and resolving problems in 
transmission and distribution networks, includ-
ing through the use of demand response; 
(C) developing plans and programs to use 
demand response to respond to peak demand or 
emergency needs; and 
(D) identifying specific measures con-
sumers can take to participate in these demand 
response programs. 
(3) REPORT.—Not later than 1 year after the 
date of enactment of the Energy Policy Act of 2003, 
the Commission shall prepare and publish an annual
728 
report, by appropriate region, that assesses demand 
response resources, including those available from all 
consumer classes, and which identifies and reviews— 
(A) saturation and penetration rate of ad-
vanced 
meters 
and 
communications 
tech-
nologies, devices and systems; 
(B) existing demand response programs 
and time-based rate programs; 
(C) the annual resource contribution of de-
mand resources; 
(D) the potential for demand response as 
a quantifiable, reliable resource for regional 
planning purposes; and 
(E) steps taken to ensure that, in regional 
transmission planning and operations, demand 
resources are provided equitable treatment as a 
quantifiable, reliable resource relative to the re-
source obligations of any load-serving entity, 
transmission provider, or transmitting party. 
(f) FEDERAL ENCOURAGEMENT
OF DEMAND RE-
SPONSE DEVICES.—It is the policy of the United States 
that time-based pricing and other forms of demand re-
sponse, whereby electricity customers are provided with 
electricity price signals and the ability to benefit by re-
sponding to them, shall be encouraged, and the deploy-
729 
ment of such technology and devices that enable electricity 
customers to participate in such pricing and demand re-
sponse systems shall be facilitated. It is further the policy 
of the United States that the benefits of such demand re-
sponse that accrue to those not deploying such technology 
and devices, but who are part of the same regional elec-
tricity entity, shall be recognized. 
(g) TIME LIMITATIONS.—Section 112(b) of the Pub-
lic Utility Regulatory Policies Act of 1978 (16 U.S.C. 
2622(b)) is amended by adding at the end the following: 
‘‘(4)(A) Not later than 1 year after the enact-
ment of this paragraph, each State regulatory au-
thority (with respect to each electric utility for which 
it has ratemaking authority) and each nonregulated 
electric utility shall commence the consideration re-
ferred to in section 111, or set a hearing date for 
such consideration, with respect to the standard es-
tablished by paragraph (14) of section 111(d). 
‘‘(B) Not later than 2 years after the date of 
the enactment of this paragraph, each State regu-
latory authority (with respect to each electric utility 
for which it has ratemaking authority), and each 
nonregulated electric utility, shall complete the con-
sideration, and shall make the determination, re-
730 
ferred to in section 111 with respect to the standard 
established by paragraph (14) of section 111(d).’’. 
(h) FAILURE TO COMPLY.—Section 112(c) of the 
Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 
2622(c)) is amended by adding at the end the following: 
‘‘In the case of the standard established by paragraph (14) 
of section 111(d), the reference contained in this sub-
section to the date of enactment of this Act shall be 
deemed to be a reference to the date of enactment of such 
paragraph (14).’’. 
(i) PRIOR STATE ACTIONS REGARDING SMART ME-
TERING STANDARDS.— 
(1) IN GENERAL.—Section 112 of the Public 
Utility Regulatory Policies Act of 1978 (16 U.S.C. 
2622) is amended by adding at the end the fol-
lowing: 
‘‘(e) PRIOR STATE ACTIONS.—Subsections (b) and 
(c) of this section shall not apply to the standard estab-
lished by paragraph (14) of section 111(d) in the case of 
any electric utility in a State if, before the enactment of 
this subsection— 
‘‘(1) the State has implemented for such utility 
the standard concerned (or a comparable standard); 
‘‘(2) the State regulatory authority for such 
State or relevant nonregulated electric utility has
732 
ity shall be required to enter into a new contract or 
obligation to purchase electric energy from a quali-
fying cogeneration facility or a qualifying small 
power production facility under this section if the 
Commission finds that the qualifying cogeneration 
facility or qualifying small power production facility 
has nondiscriminatory access to— 
‘‘(A)(i) independently administered, auc-
tion-based day ahead and real time wholesale 
markets for the sale of electric energy; and (ii) 
wholesale markets for long-term sales of capac-
ity and electric energy; or 
‘‘(B)(i) transmission and interconnection 
services that are provided by a Commission-ap-
proved regional transmission entity and admin-
istered pursuant to an open access transmission 
tariff that affords nondiscriminatory treatment 
to all customers; and (ii) competitive wholesale 
markets that provide a meaningful opportunity 
to sell capacity, including long-term and short- 
term sales, and electric energy, including long- 
term, short-term and real-time sales, to buyers 
other than the utility to which the qualifying fa-
cility is interconnected. In determining whether 
a meaningful opportunity to sell exists, the
733 
Commission shall consider, among other fac-
tors, evidence of transactions within the rel-
evant market; or 
‘‘(C) wholesale markets for the sale of ca-
pacity and electric energy that are, at a min-
imum, of comparable competitive quality as 
markets described in subparagraphs (A) and 
(B). 
‘‘(2) REVISED PURCHASE AND SALE OBLIGA-
TION FOR NEW FACILITIES.—(A) After the date of 
enactment of this subsection, no electric utility shall 
be required pursuant to this section to enter into a 
new contract or obligation to purchase from or sell 
electric energy to a facility that is not an existing 
qualifying cogeneration facility unless the facility 
meets the criteria for qualifying cogeneration facili-
ties established by the Commission pursuant to the 
rulemaking required by subsection (n). 
‘‘(B) For the purposes of this paragraph, the 
term ‘existing qualifying cogeneration facility’ means 
a facility that— 
‘‘(i) was a qualifying cogeneration facility 
on the date of enactment of subsection (m); or 
‘‘(ii) had filed with the Commission a no-
tice of self-certification, self recertification or
734 
an application for Commission certification 
under 18 C.F.R. 292.207 prior to the date on 
which the Commission issues the final rule re-
quired by subsection (n). 
‘‘(3) COMMISSION REVIEW.—Any electric utility 
may file an application with the Commission for re-
lief from the mandatory purchase obligation pursu-
ant to this subsection on a service territory-wide 
basis. Such application shall set forth the factual 
basis upon which relief is requested and describe 
why the conditions set forth in subparagraphs (A), 
(B) or (C) of paragraph (1) of this subsection have 
been met. After notice, including sufficient notice to 
potentially affected qualifying cogeneration facilities 
and qualifying small power production facilities, and 
an opportunity for comment, the Commission shall 
make a final determination within 90 days of such 
application regarding whether the conditions set 
forth in subparagraphs (A), (B) or (C) of paragraph 
(1) have been met. 
‘‘(4) REINSTATEMENT OF OBLIGATION TO PUR-
CHASE.—At any time after the Commission makes a 
finding under paragraph (3) relieving an electric 
utility of its obligation to purchase electric energy, 
a qualifying cogeneration facility, a qualifying small
735 
power production facility, a State agency, or any 
other affected person may apply to the Commission 
for an order reinstating the electric utility’s obliga-
tion to purchase electric energy under this section. 
Such application shall set forth the factual basis 
upon which the application is based and describe 
why the conditions set forth in subparagraphs (A), 
(B) or (C) of paragraph (1) of this subsection are 
no longer met. After notice, including sufficient no-
tice to potentially affected utilities, and opportunity 
for comment, the Commission shall issue an order 
within 90 days of such application reinstating the 
electric utility’s obligation to purchase electric en-
ergy under this section if the Commission finds that 
the conditions set forth in subparagraphs (A), (B) or 
(C) of paragraph (1) which relieved the obligation to 
purchase, are no longer met. 
‘‘(5) OBLIGATION TO SELL.—After the date of 
enactment of this subsection, no electric utility shall 
be required to enter into a new contract or obliga-
tion to sell electric energy to a qualifying cogenera-
tion facility or a qualifying small power production 
facility under this section if the Commission finds 
that—
736 
‘‘(A) competing retail electric suppliers are 
willing and able to sell and deliver electric en-
ergy to the qualifying cogeneration facility or 
qualifying small power production facility; and 
‘‘(B) the electric utility is not required by 
State law to sell electric energy in its service 
territory. 
‘‘(6) NO
EFFECT
ON
EXISTING
RIGHTS
AND 
REMEDIES.—Nothing in this subsection affects the 
rights or remedies of any party under any contract 
or obligation, in effect or pending approval before 
the appropriate State regulatory authority or non- 
regulated electric utility on the date of enactment of 
this subsection, to purchase electric energy or capac-
ity from or to sell electric energy or capacity to a 
qualifying cogeneration facility or qualifying small 
power production facility under this Act (including 
the right to recover costs of purchasing electric en-
ergy or capacity). 
‘‘(7) RECOVERY OF COSTS.—(A) The Commis-
sion shall issue and enforce such regulations as are 
necessary to ensure that an electric utility that pur-
chases electric energy or capacity from a qualifying 
cogeneration facility or qualifying small power pro-
duction facility in accordance with any legally en-
737 
forceable obligation entered into or imposed under 
this section recovers all prudently incurred costs as-
sociated with the purchase. 
‘‘(B) A regulation under subparagraph (A) shall 
be enforceable in accordance with the provisions of 
law applicable to enforcement of regulations under 
the Federal Power Act (16 U.S.C. 791a et seq.). 
‘‘(n) RULEMAKING FOR NEW QUALIFYING FACILI-
TIES.—(1)(A) Not later than 180 days after the date of 
enactment of this section, the Commission shall issue a 
rule revising the criteria in 18 C.F.R. 292.205 for new 
qualifying cogeneration facilities seeking to sell electric en-
ergy pursuant to section 210 of this Act to ensure— 
‘‘(i) that the thermal energy output of a new 
qualifying cogeneration facility is used in a produc-
tive and beneficial manner; 
‘‘(ii) the electrical, thermal, and chemical out-
put of the cogeneration facility is used fundamen-
tally for industrial, commercial, or institutional pur-
poses and is not intended fundamentally for sale to 
an electric utility, taking into account technological, 
efficiency, economic, and variable thermal energy re-
quirements, as well as State laws applicable to sales 
of electric energy from a qualifying facility to its 
host facility; and
738 
‘‘(iii) continuing progress in the development of 
efficient electric energy generating technology. 
‘‘(B) The rule issued pursuant to section (n)(1)(A) 
shall be applicable only to facilities that seek to sell electric 
energy pursuant to section 210 of this Act. For all other 
purposes, except as specifically provided in section 
(m)(2)(A), qualifying facility status shall be determined 
in accordance with the rules and regulations of this Act. 
‘‘(2) Notwithstanding rule revisions under paragraph 
(1), the Commission’s criteria for qualifying cogeneration 
facilities in effect prior to the date on which the Commis-
sion issues the final rule required by paragraph (1) shall 
continue to apply to any cogeneration facility that— 
‘‘(A) was a qualifying cogeneration facility on 
the date of enactment of subsection (m), or 
‘‘(B) had filed with the Commission a notice of 
self-certification, self-recertification or an application 
for Commission certification under 18 C.F.R. 
292.207 prior to the date on which the Commission 
issues the final rule required by paragraph (1).’’. 
(b) ELIMINATION OF OWNERSHIP LIMITATIONS.— 
(1) QUALIFYING
SMALL
POWER
PRODUCTION 
FACILITY.—Section 3(17)(C) of the Federal Power 
Act (16 U.S.C. 796(17)(C)) is amended to read as 
follows:
739 
‘‘(C) ‘qualifying small power production fa-
cility’ means a small power production facility 
that the Commission determines, by rule, meets 
such requirements (including requirements re-
specting fuel use, fuel efficiency, and reliability) 
as the Commission may, by rule, prescribe;’’. 
(2) QUALIFYING
COGENERATION
FACILITY.— 
Section 3(18)(B) of the Federal Power Act (16 
U.S.C. 796(18)(B)) is amended to read as follows: 
‘‘(B) 
‘qualifying 
cogeneration 
facility’ 
means a cogeneration facility that the Commis-
sion determines, by rule, meets such require-
ments (including requirements respecting min-
imum size, fuel use, and fuel efficiency) as the 
Commission may, by rule, prescribe;’’. 
Subtitle F—Repeal of PUHCA 
SEC. 1261. SHORT TITLE. 
This subtitle may be cited as the ‘‘Public Utility 
Holding Company Act of 2004’’. 
SEC. 1262. DEFINITIONS. 
For purposes of this subtitle: 
(1) AFFILIATE.—The term ‘‘affiliate’’ of a com-
pany means any company, 5 percent or more of the 
outstanding voting securities of which are owned,
740 
controlled, or held with power to vote, directly or in-
directly, by such company. 
(2) ASSOCIATE COMPANY.—The term ‘‘associate 
company’’ of a company means any company in the 
same holding company system with such company. 
(3) COMMISSION.—The term ‘‘Commission’’ 
means the Federal Energy Regulatory Commission. 
(4) COMPANY.—The term ‘‘company’’ means a 
corporation, partnership, association, joint stock 
company, business trust, or any organized group of 
persons, whether incorporated or not, or a receiver, 
trustee, or other liquidating agent of any of the fore-
going. 
(5) ELECTRIC
UTILITY
COMPANY.—The term 
‘‘electric utility company’’ means any company that 
owns or operates facilities used for the generation, 
transmission, or distribution of electric energy for 
sale. 
(6) EXEMPT
WHOLESALE
GENERATOR
AND 
FOREIGN
UTILITY
COMPANY.—The terms ‘‘exempt 
wholesale generator’’ and ‘‘foreign utility company’’ 
have the same meanings as in sections 32 and 33, 
respectively, of the Public Utility Holding Company 
Act of 1935 (15 U.S.C. 79z–5a, 79z–5b), as those
741 
sections existed on the day before the effective date 
of this subtitle. 
(7) GAS
UTILITY
COMPANY.—The term ‘‘gas 
utility company’’ means any company that owns or 
operates facilities used for distribution at retail 
(other than the distribution only in enclosed portable 
containers or distribution to tenants or employees of 
the company operating such facilities for their own 
use and not for resale) of natural or manufactured 
gas for heat, light, or power. 
(8) HOLDING
COMPANY.—The term ‘‘holding 
company’’ means— 
(A) any company that directly or indirectly 
owns, controls, or holds, with power to vote, 10 
percent or more of the outstanding voting secu-
rities of a public-utility company or of a holding 
company of any public-utility company; and 
(B) any person, determined by the Com-
mission, after notice and opportunity for hear-
ing, to exercise directly or indirectly (either 
alone or pursuant to an arrangement or under-
standing with 1 or more persons) such a con-
trolling influence over the management or poli-
cies of any public-utility company or holding 
company as to make it necessary or appropriate
742 
for the rate protection of utility customers with 
respect to rates that such person be subject to 
the obligations, duties, and liabilities imposed 
by this subtitle upon holding companies. 
(9) HOLDING
COMPANY
SYSTEM.—The term 
‘‘holding company system’’ means a holding com-
pany, together with its subsidiary companies. 
(10) JURISDICTIONAL RATES.—The term ‘‘ju-
risdictional rates’’ means rates accepted or estab-
lished by the Commission for the transmission of 
electric energy in interstate commerce, the sale of 
electric energy at wholesale in interstate commerce, 
the transportation of natural gas in interstate com-
merce, and the sale in interstate commerce of nat-
ural gas for resale for ultimate public consumption 
for domestic, commercial, industrial, or any other 
use. 
(11) NATURAL GAS COMPANY.—The term ‘‘nat-
ural gas company’’ means a person engaged in the 
transportation of natural gas in interstate commerce 
or the sale of such gas in interstate commerce for 
resale. 
(12) PERSON.—The term ‘‘person’’ means an 
individual or company.
743 
(13) PUBLIC UTILITY.—The term ‘‘public util-
ity’’ means any person who owns or operates facili-
ties used for transmission of electric energy in inter-
state commerce or sales of electric energy at whole-
sale in interstate commerce. 
(14) PUBLIC-UTILITY
COMPANY.—The term 
‘‘public-utility company’’ means an electric utility 
company or a gas utility company. 
(15) STATE
COMMISSION.—The term ‘‘State 
commission’’ means any commission, board, agency, 
or officer, by whatever name designated, of a State, 
municipality, or other political subdivision of a State 
that, under the laws of such State, has jurisdiction 
to regulate public utility companies. 
(16) SUBSIDIARY COMPANY.—The term ‘‘sub-
sidiary company’’ of a holding company means— 
(A) any company, 10 percent or more of 
the outstanding voting securities of which are 
directly or indirectly owned, controlled, or held 
with power to vote, by such holding company; 
and 
(B) any person, the management or poli-
cies of which the Commission, after notice and 
opportunity for hearing, determines to be sub-
ject to a controlling influence, directly or indi-
744 
rectly, by such holding company (either alone or 
pursuant to an arrangement or understanding 
with 1 or more other persons) so as to make it 
necessary for the rate protection of utility cus-
tomers with respect to rates that such person 
be subject to the obligations, duties, and liabil-
ities imposed by this subtitle upon subsidiary 
companies of holding companies. 
(17) VOTING SECURITY.—The term ‘‘voting se-
curity’’ means any security presently entitling the 
owner or holder thereof to vote in the direction or 
management of the affairs of a company. 
SEC. 1263. REPEAL OF THE PUBLIC UTILITY HOLDING COM-
PANY ACT OF 1935. 
The Public Utility Holding Company Act of 1935 (15 
U.S.C. 79 et seq.) is repealed. 
SEC. 1264. FEDERAL ACCESS TO BOOKS AND RECORDS. 
(a) IN GENERAL.—Each holding company and each 
associate company thereof shall maintain, and shall make 
available to the Commission, such books, accounts, memo-
randa, and other records as the Commission determines 
are relevant to costs incurred by a public utility or natural 
gas company that is an associate company of such holding 
company and necessary or appropriate for the protection 
of utility customers with respect to jurisdictional rates.
745 
(b) AFFILIATE COMPANIES.—Each affiliate of a hold-
ing company or of any subsidiary company of a holding 
company shall maintain, and shall make available to the 
Commission, such books, accounts, memoranda, and other 
records with respect to any transaction with another affil-
iate, as the Commission determines are relevant to costs 
incurred by a public utility or natural gas company that 
is an associate company of such holding company and nec-
essary or appropriate for the protection of utility cus-
tomers with respect to jurisdictional rates. 
(c) HOLDING COMPANY SYSTEMS.—The Commission 
may examine the books, accounts, memoranda, and other 
records of any company in a holding company system, or 
any affiliate thereof, as the Commission determines are 
relevant to costs incurred by a public utility or natural 
gas company within such holding company system and 
necessary or appropriate for the protection of utility cus-
tomers with respect to jurisdictional rates. 
(d) CONFIDENTIALITY.—No member, officer, or em-
ployee of the Commission shall divulge any fact or infor-
mation that may come to his or her knowledge during the 
course of examination of books, accounts, memoranda, or 
other records as provided in this section, except as may 
be directed by the Commission or by a court of competent 
jurisdiction.
746 
SEC. 1265. STATE ACCESS TO BOOKS AND RECORDS. 
(a) IN GENERAL.—Upon the written request of a 
State commission having jurisdiction to regulate a public- 
utility company in a holding company system, the holding 
company or any associate company or affiliate thereof, 
other than such public-utility company, wherever located, 
shall produce for inspection books, accounts, memoranda, 
and other records that— 
(1) have been identified in reasonable detail in 
a proceeding before the State commission; 
(2) the State commission determines are rel-
evant to costs incurred by such public-utility com-
pany; and 
(3) are necessary for the effective discharge of 
the responsibilities of the State commission with re-
spect to such proceeding. 
(b) LIMITATION.—Subsection (a) does not apply to 
any person that is a holding company solely by reason of 
ownership of 1 or more qualifying facilities under the Pub-
lic Utility Regulatory Policies Act of 1978 (16 U.S.C. 
2601 et seq.). 
(c) CONFIDENTIALITY OF INFORMATION.—The pro-
duction of books, accounts, memoranda, and other records 
under subsection (a) shall be subject to such terms and 
conditions as may be necessary and appropriate to safe-
747 
guard against unwarranted disclosure to the public of any 
trade secrets or sensitive commercial information. 
(d) EFFECT ON STATE LAW.—Nothing in this sec-
tion shall preempt applicable State law concerning the pro-
vision of books, accounts, memoranda, and other records, 
or in any way limit the rights of any State to obtain books, 
accounts, memoranda, and other records under any other 
Federal law, contract, or otherwise. 
(e) COURT JURISDICTION.—Any United States dis-
trict court located in the State in which the State commis-
sion referred to in subsection (a) is located shall have ju-
risdiction to enforce compliance with this section. 
SEC. 1266. EXEMPTION AUTHORITY. 
(a) RULEMAKING.—Not later than 90 days after the 
effective date of this subtitle, the Commission shall issue 
a final rule to exempt from the requirements of section 
1264 (relating to Federal access to books and records) any 
person that is a holding company, solely with respect to 
1 or more— 
(1) qualifying facilities under the Public Utility 
Regulatory Policies Act of 1978 (16 U.S.C. 2601 et 
seq.); 
(2) exempt wholesale generators; or 
(3) foreign utility companies.
748 
(b) OTHER AUTHORITY.—The Commission shall ex-
empt a person or transaction from the requirements of 
section 1264 (relating to Federal access to books and 
records) if, upon application or upon the motion of the 
Commission— 
(1) the Commission finds that the books, ac-
counts, memoranda, and other records of any person 
are not relevant to the jurisdictional rates of a pub-
lic utility or natural gas company; or 
(2) the Commission finds that any class of 
transactions is not relevant to the jurisdictional 
rates of a public utility or natural gas company. 
SEC. 1267. AFFILIATE TRANSACTIONS. 
(a) COMMISSION AUTHORITY UNAFFECTED.—Noth-
ing in this subtitle shall limit the authority of the Commis-
sion under the Federal Power Act (16 U.S.C. 791a et seq.) 
to require that jurisdictional rates are just and reasonable, 
including the ability to deny or approve the pass through 
of costs, the prevention of cross-subsidization, and the 
issuance of such rules and regulations as are necessary 
or appropriate for the protection of utility consumers. 
(b) RECOVERY OF COSTS.—Nothing in this subtitle 
shall preclude the Commission or a State commission from 
exercising its jurisdiction under otherwise applicable law 
to determine whether a public-utility company, public util-
749 
ity, or natural gas company may recover in rates any costs 
of an activity performed by an associate company, or any 
costs of goods or services acquired by such public-utility 
company from an associate company. 
SEC. 1268. APPLICABILITY. 
Except as otherwise specifically provided in this sub-
title, no provision of this subtitle shall apply to, or be 
deemed to include— 
(1) the United States; 
(2) a State or any political subdivision of a 
State; 
(3) any foreign governmental authority not op-
erating in the United States; 
(4) any agency, authority, or instrumentality of 
any entity referred to in paragraph (1), (2), or (3); 
or 
(5) any officer, agent, or employee of any entity 
referred to in paragraph (1), (2), (3), or (4) acting 
as such in the course of his or her official duty. 
SEC. 1269. EFFECT ON OTHER REGULATIONS. 
Nothing in this subtitle precludes the Commission or 
a State commission from exercising its jurisdiction under 
otherwise applicable law to protect utility customers.
750 
SEC. 1270. ENFORCEMENT. 
The Commission shall have the same powers as set 
forth in sections 306 through 317 of the Federal Power 
Act (16 U.S.C. 825e–825p) to enforce the provisions of 
this subtitle. 
SEC. 1271. SAVINGS PROVISIONS. 
(a) IN GENERAL.—Nothing in this subtitle, or other-
wise in the Public Utility Holding Company Act of 1935, 
or rules, regulations, or orders thereunder, prohibits a per-
son from engaging in or continuing to engage in activities 
or transactions in which it is legally engaged or authorized 
to engage on the date of enactment of this Act, if that 
person continues to comply with the terms (other than an 
expiration date or termination date) of any such author-
ization, whether by rule or by order. 
(b) EFFECT ON OTHER COMMISSION AUTHORITY.— 
Nothing in this subtitle limits the authority of the Com-
mission under the Federal Power Act (16 U.S.C. 791a et 
seq.) or the Natural Gas Act (15 U.S.C. 717 et seq.). 
SEC. 1272. IMPLEMENTATION. 
Not later than 12 months after the date of enactment 
of this subtitle, the Commission shall— 
(1) issue such regulations as may be necessary 
or appropriate to implement this subtitle (other than 
section 1265, relating to State access to books and 
records); and